<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-27024
METRO ONE TELECOMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OREGON 93-0995165
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
11200 MURRAY SCHOLLS PLACE, BEAVERTON, OREGON 97007
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(503) 643-9500
(ISSUER'S TELEPHONE NUMBER)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS (1) FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
--- ---
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF OCTOBER 15, 1999: 11,409,877
SHARES, NO PAR VALUE PER SHARE
<PAGE>
METRO ONE TELECOMMUNICATIONS, INC.
INDEX TO FORM 10-Q
<TABLE>
PART I FINANCIAL INFORMATION PAGE NO.
<S> <C> <C>
Item 1. Financial Statements
Condensed Statements of Operations (Unaudited)
for the three and nine months ended September 30, 1999 and 1998 1
Condensed Balance Sheets
as of September 30, 1999 (Unaudited) and December 31, 1998 2
Condensed Statements of Cash Flows (Unaudited)
for the nine months ended September 30, 1999 and 1998 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
<PAGE>
METRO ONE TELECOMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1999 1998 1999 1998
----------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 20,469 $ 11,312 $ 52,113 $ 31,280
----------- --------------- ------------ ------------
Costs and expenses:
Direct operating 12,136 5,786 30,481 16,104
General and administrative 7,374 4,622 19,795 13,099
----------- --------------- ------------ ------------
19,510 10,408 50,276 29,203
----------- --------------- ------------ ------------
Income from operations 959 904 1,837 2,077
Other income (expense) (3) 102 112 248
Interest expense and loan fees (253) (75) (425) (255)
----------- --------------- ------------ ------------
Income before income taxes 703 931 1,524 2,070
Income tax expense 26 15 60 44
----------- --------------- ------------ ------------
Net income $ 677 $ 916 $ 1,464 $ 2,026
=========== =============== ============ ============
Income per common share
Basic $ .06 $ .08 $ .13 $ .18
Diluted $ .06 $ .08 $ .12 $ .18
</TABLE>
The accompanying notes are an integral part of this statement.
1
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METRO ONE TELECOMMUNICATIONS, INC.
<TABLE>
<CAPTION>
BALANCE SHEETS (IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
------------------ -----------------
1999 1998
------------------ -----------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,491 $ 6,063
Short-term investments 400 1,507
Accounts receivable 8,700 7,428
Prepaid costs and other current assets 1,032 766
------------------ -----------------
Total current assets 13,623 15,764
Furniture, fixtures and equipment, net 33,660 19,982
Other assets 817 565
------------------ -----------------
$ 48,100 $ 36,311
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,245 $ 1,501
Accrued liabilities 2,731 1,992
Accrued payroll and related costs 2,427 1,852
Line of credit payable - 1,400
Current portion of capital lease obligations 193 365
Current portion of long-term debt 2,525 240
------------------ -----------------
Total current liabilities 10,121 7,350
Capital lease obligations 41 103
Long-term debt 6,439 616
------------------ -----------------
16,601 8,069
------------------ -----------------
Commitments and contingencies - -
Shareholders' equity:
Preferred stock, no par value; 10,000 shares
authorized, no shares issued or outstanding - -
Common stock, no par value; 50,000 shares
authorized, 11,410 and 11,188 shares,
respectively, issued and outstanding 40,270 38,477
Accumulated deficit (8,771) (10,235)
------------------ -----------------
Shareholders' equity 31,499 28,242
------------------ -----------------
$ 48,100 $ 36,311
================== =================
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE>
METRO ONE TELECOMMUNICATIONS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (IN THOUSANDS, UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------
1999 1998
------------------ -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,464 $ 2,026
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,293 2,706
Loss on disposal of fixed assets 48 32
Changes in certain assets and liabilities:
Accounts receivable (1,272) (830)
Prepaid expenses and other assets (608) (126)
Accounts payable, accrued liabilities and payroll costs 2,058 1,457
------------------ -----------------
Net cash provided by operating activities 5,983 5,265
------------------ -----------------
Cash flows from investing activities:
Capital expenditures (17,929) (5,371)
Sale of short-term investments 1,107 -
------------------ -----------------
Net cash used in investing activities (16,822) (5,371)
------------------ -----------------
Cash flows from financing activities:
Net payment on line of credit (1,400) -
Repayment of debt (1,142) (22)
Repayment of capital lease obligations (234) (643)
Proceeds from issuance of long-term debt 9,250 -
Proceeds from issuance of common stock upon exercise
of warrants and options 1,793 465
------------------ -----------------
Net cash provided by (used in) financing activities 8,267 (200)
------------------ -----------------
Net decrease in cash and cash equivalents (2,572) (306)
Cash and cash equivalents, beginning of period 6,063 8,554
------------------ -----------------
Cash and cash equivalents, end of period $ 3,491 $ 8,248
================== =================
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
METRO ONE TELECOMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- -------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
We have prepared the accompanying interim condensed financial statements
without audit and in conformity with generally accepted accounting principles
for interim financial information. Accordingly, certain financial information
and footnotes have been omitted or condensed. In our opinion, the condensed
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
interim periods. These condensed financial statements and notes thereto
should be read in conjunction with the audited financial statements included
in our Annual Report on Form 10-K for the year ended December 31, 1998. The
results of operations for the interim period shown in this report are not
necessarily indicative of results for any future interim period or the entire
fiscal year.
2. EARNINGS PER SHARE
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," requires dual presentation of basic and diluted earnings per share
("EPS"). Basic EPS is based on the weighted average number of common shares
outstanding. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock. There were no adjustments to net income for the
calculation of both basic and diluted earnings per share for all periods.
The calculation of weighted-average outstanding shares is as follows:
<TABLE>
<CAPTION>
(In thousands) THREE MONTHS ENDED SEPT. 30, NINE MONTHS ENDED SEPT. 30,
---------------------------- ----------------------------
1999 1998 1999 1998
-------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding
(used in computing Basic EPS) 11,405 11,062 11,383 11,039
Common stock equivalents 611 - 629 190
-------- --------- ----------- -----------
Weighted average common shares outstanding
(used in computing Diluted EPS) 12,016 11,062 12,012 11,229
======== ========= =========== ===========
</TABLE>
3. COMMITMENTS AND CONTINGENCIES
We are party to various legal actions and administrative proceedings arising
in the ordinary course of business. We believe the disposition of these
matters will not have a material adverse effect on our financial position,
results of operations or net cash flows.
4. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
(In thousands) NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1999 1998
-------------- -------------
<S> <C>
Cash paid for interest expense $ 347 $ 246
Cash paid for income taxes 59 55
</TABLE>
4
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METRO ONE TELECOMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- -------------------------------------------------------------------------------
5. INCOME TAXES
At December 31, 1998, we had approximately $13.3 million of net operating
loss carryforwards expiring during the years 2005 to 2010. Ownership changes
as defined by section 382 of the Internal Revenue Code could limit the amount
of net operating loss carryforwards used in any one year or in the aggregate.
During the quarter, we reduced our deferred tax valuation allowance to
reflect deferred tax assets used to reduce current year income taxes. Our
quarterly and annual operating results have in the past and may in the future
vary significantly depending on factors such as changes in the
telecommunications market, the addition or expiration of contracts, increased
competition, changes in pricing policies by us or our competitors, lengthy
sales cycles, lack of market acceptance or delays in the introduction of new
versions of our product or features, the timing of initiation of contracted
Enhanced Directory Assistance services, the timing of the initiation of
wireless services or their acceptance in new market areas by
telecommunications customers, the timing and expense of the expansion of our
national call center network, general economic conditions and other factors.
Given the variability in operating results, we will continue to review the
valuation allowance on a quarterly basis and make adjustments as appropriate.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
All statements and trend analyses contained in this item and
elsewhere in this report on Form 10-Q relative to the future constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject
to the business and economic risks faced by our company and our actual
results of operations may differ materially from those contained in the
forward looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Results of operations for the periods discussed below should not be
considered indicative of the results to be expected in any future period and
fluctuations in operating results may also result in fluctuations in the
market price of our common stock. Our quarterly and annual operating results
have in the past and may in the future vary significantly depending on
factors such as changes in the telecommunications market, the addition or
expiration of Enhanced Directory Assistance(R) ("EDA") contracts, increased
competition, changes in pricing policies by us or our competitors, lengthy
sales cycles, lack of market acceptance or delays in the introduction of new
versions of our product or features, the timing of initiation of contracted
EDA services, the timing of the initiation of wireless services or their
acceptance in new market areas by telecommunications customers, the timing
and expense of the expansion of our national call center network, general
economic conditions and other factors.
OVERVIEW
We are a leading independent developer and provider of enhanced directory
assistance and information services for the telecommunications industry. We
primarily contract with wireless carriers to provide enhanced directory
assistance and information services to their subscribers.
Under our contracts, the carriers agree to route some or all of their directory
assistance and/or text messaging calls to us. We are also able to offer our
services to multiple carriers within the same market. When a carrier's
subscribers dial a typical directory assistance number, such as "411,"
"555-1212" or "00," the calls are answered by our operators identifying the
service by that carrier's brand name, such as "AT&T Connect," "AirTouch 411
Connect" or "Sprint PCS Directory Assistance."
Each carrier establishes its own directory assistance fee structure for its
subscribers. Wireless subscribers typically pay fees ranging from $0.75 to $1.10
plus airtime charges for our services. We bear no subscriber collection risk.
We charge our carriers directly on a per call basis, with prices varying in
some cases based on call volume. Our long-term strategy is based in part on
reducing the price we charge our customers. We expect that our average price
per call will decrease in 1999 and 2000 as call volumes increase. We believe
this reduced pricing better positions us to retain and expand service with
existing carrier customers, to attract new wireless and landline carriers,
and to achieve, if we are able to increase call volume without incurring
substantial additional expense, greater operating margins over time.
In the fourth quarter of 1999, we will continue our aggressive call center
and network build out to prepare for significant new call volume from Nextel
Communications, AT&T Wireless Services and other carriers. We will also
continue to opportunistically pursue additional significant new business.
This build out will significantly increase our local service coverage and our
capacity to process additional call volume.
Our rapid growth plan involves both capital expenditures and operating expenses,
as we build infrastructure and recruit and train qualified personnel. To better
serve our customers and strengthen our relationships, we maintain the operating
readiness of our call centers even when our carrier customers experience
unexpected delays in transitioning call volume to us. Some of our carrier
customers have recently experienced these types of delays and may experience
some additional delays in the future. These delays increase our ongoing
operating expenses with no corresponding increase in revenues. The result under
these conditions has been, and will likely continue to be, near-term reported
earnings that vary widely. However, we intend to continue to pursue and prepare
for significant additional call volume in order to seek to achieve greater
earnings over the long-term.
On October 21, 1999, we announced that we entered into a multi-year contract
with ALLTEL Communications, Inc. to provide our enhanced directory assistance
services to substantially all of its wireless subscribers. Previously, we had
provided service to a limited number of ALLTEL subscribers.
6
`<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the items of
our statements of operations as a percentage of revenues.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Direct operating costs 59.3 51.1 58.5 51.5
General and administrative costs 36.0 40.9 38.0 41.9
------ ------ ------ ------
Income from operations 4.7 8.0 3.5 6.6
Other income 0.0 0.9 0.2 0.8
Interest and loan fees (1.3) (0.7) (0.8) (0.8)
------ ------ ------ ------
Income before income taxes 3.4 8.2 2.9 6.6
Income tax expense 0.1 0.1 0.1 0.1
------ ------ ------ ------
Net income 3.3 8.1 2.8 6.5
====== ====== ====== ======
</TABLE>
COMPARISON OF THIRD QUARTER OF 1999 TO THIRD QUARTER OF 1998
Revenues increased 80.9% from $11.3 million to $20.5 million. Call
volume grew from approximately 17 million calls in the third quarter of 1998
to approximately 37 million calls during the third quarter of 1999. The
increase in revenues was due primarily to increased call volume under
existing contracts and call volume from new contracts that commenced service
during the second half of 1998 and the third quarter of 1999.
Direct operating costs increased 109.7% from $5.8 million to $12.1
million. This increase was primarily due to servicing increased call volumes
and the cost of operating additional call centers in 1999. In addition,
during the third quarter of 1999 we incurred increased staffing and
infrastructure expenditures in preparation for additional scheduled call
volumes, some of which did not arrive as anticipated. As a percentage of
revenues, direct operating costs increased from 51.1% to 59.3%, due primarily
to increased personnel and data costs associated with the start-up of new
call centers, the increase in staffing in anticipation of additional call
volume from existing and new customers and a reduction in average price per
call.
General and administrative costs increased 59.5% from $4.6 million
to $7.4 million. This increase resulted primarily from the costs associated
with the start-up of new call centers and the investment in infrastructure
necessary to support additional call centers. As a percentage of revenues,
general and administrative costs decreased from 40.9% to 36.0%. This decrease
resulted primarily from efficiencies associated with the expansion of our
operations.
Depreciation and amortization increased by 69.3% from $1.0 million
to $1.6 million due primarily to equipment purchased for new call centers, for
upgrades for existing call centers and for corporate operations.
Other expense for the three months ended September 30, 1999 was
$3,000 and consisted primarily of losses upon disposition of assets offset by
interest income. Other income for the three months ended September 30, 1998
was $102,000 and consisted primarily of interest income.
Interest expense and loan fees increased 237.3% from $75,000 to
$253,000. This increase was attributable to the increase in average debt
outstanding, as we incurred borrowings under credit facilities to help fund
the expansion of our call center network.
Income tax expense for the three months ended September 30, 1999 was
$26,000, for an effective tax rate of approximately 3.7%. Income tax expense
for the three months ended September 30, 1998 was $15,000, for an effective
tax rate of approximately 1.6%. These rates differ from the combined federal
and state statutory rate of approximately 39% due to the use of net operating
loss carryforwards.
COMPARISON OF THE FIRST NINE MONTHS OF 1999 TO THE FIRST NINE MONTHS OF 1998
7
<PAGE>
Revenues increased 66.6%, from $31.3 million to $52.1 million. Call
volume grew from approximately 49 million calls to over 93 million calls.
This increase was due primarily to increased call volume under existing
contracts and call volume from new contracts that commenced service during
the second half of 1998 and the third quarter of 1999.
Direct operating costs increased 89.3%, from $16.1 million to $30.5
million. This increase was primarily due to servicing increased call volumes
and the cost of operating additional call centers in 1999. In addition,
during the second and third quarters of 1999 we elected to take on an
increased amount of staffing and infrastructure expenditures in preparation
for additional scheduled call volume, some of which did not arrive as
anticipated. As a percentage of revenues, direct operating costs increased
from 51.5% to 58.5%, due primarily to increased personnel and data costs
associated with the start-up of new call centers, the increase in staffing in
anticipation of additional call volume from existing customers and a
reduction in average price per call.
General and administrative costs increased 51.1%, from $13.1 million
to $19.8 million. This increase resulted primarily from the costs associated
with the start-up of new call centers and the investment in infrastructure
necessary to support, and the increase in depreciation expense associated
with, additional call centers. As a percentage of revenues, general and
administrative costs decreased from 41.9% to 38.0%. This decrease resulted
primarily from efficiencies associated with the expansion of our operations.
Depreciation and amortization increased by 58.6%, from $2.7 million
to $4.3 million, due primarily to equipment purchased for new call centers,
for upgrades for existing call centers and for corporate operations.
Other income for the first nine months of 1999 was $112,000 and
consisted primarily of interest income offset by losses upon the disposition
of assets. Other income for the first nine months of 1998 was $248,000 and
consisted primarily of interest income offset by losses upon the disposition
of assets.
Interest expense and loan fees increased 66.7%, from $255,000 to
$425,000. This increase was attributable to an increase in average debt
outstanding during 1999.
Income tax expense for the first nine months of 1999 was $60,000,
for an effective tax rate of approximately 3.9%. Income tax expense for the
first nine months of 1998 was $44,000, for an effective tax rate of
approximately 2.1%. These rates differ from the combined federal and state
statutory rate of approximately 39% due to the use of net operating loss
carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Our cash and cash equivalents and short-term investments are
recorded at cost that approximates their fair market value. As of September
30, 1999, we had $3.9 million in cash and cash equivalents and short-term
investments compared to $7.6 million at December 31, 1998, a decrease of $3.7
million primarily from capital expenditures incurred as part of the expansion
of our national call center network. Total capital expenditures were $17.9
million for the first nine months of 1999. We have funded the expansion of
our call center and network capacity with cash on hand, cash provided by
operating activities, proceeds from the exercise of options and borrowings
under credit facilities.
Working capital was $3.5 million at September 30, 1999 as compared
with $8.4 million at December 31, 1998. Our current ratio was 1.3:1 at
September 30, 1999 as compared with 2.1:1 at December 31, 1998. These
decreases were due primarily to costs associated with the continuing
build-out of our national network of call centers.
During the third quarter of 1999, we entered into a new loan
agreement with an equipment financing lender. The loan agreement provides us
with $10 million of borrowing capacity to fund the expansion of our call
center network and for other equipment needs. The agreement provides for
fixed or floating rate options and all assets purchased pursuant to the
agreement are pledged as collateral. Borrowings under the agreement have a
term of 48 months, and prepayment of outstanding borrowings is allowable
12 months after the funding date.
During the second quarter of 1999, we entered into a new loan
agreement with a commercial bank. The loan agreement consists of a $10
million revolving line of credit plus a $7.5 million equipment line. Total
borrowings under the two
8
<PAGE>
lines cannot exceed $15 million. The revolving line of credit expires in
April 2001 and advances under the equipment line are available through April
2000. Outstanding borrowings bear interest at the prime rate (8.25% at
September 30, 1999) and all of our assets are pledged to the bank as
collateral, other than assets previously pledged under existing financing and
lease agreements and assets that may be pledged pursuant to purchase money
agreements. The agreement contains minimum net worth, working capital and
profitability requirements, as well as certain other restrictive covenants,
and prohibits the payment of any dividends and other distributions and
redemptions of our stock exceeding 10% of our tangible net worth. As of
September 30, 1999, we did not meet one of the financial requirements under
this agreement. However we have received a waiver of this requirement for the
third quarter of 1999 from our bank.
CASH FLOW FROM OPERATIONS. Net cash from operations for the nine
months ended September 30, 1999 was $6.0 million, resulting primarily from
net income and the effect of non-cash depreciation and amortization.
CASH FLOW FROM INVESTING ACTIVITIES. Cash used in investing
activities was $16.8 million for the nine months ended September 30, 1999 and
was related primarily to capital expenditures for the purchase of equipment
for new call centers, the upgrade and expansion of existing call centers,
investment in corporate operations and our relocation to expanded corporate
headquarters. Cash used in investing activities was offset by proceeds from
the sale of short-term investments.
CASH FLOW FROM FINANCING ACTIVITIES. Net cash provided by financing
activities was $8.3 million for the nine months ended September 30, 1999,
resulting from the borrowing of $9.3 million under credit facilities and the
repayment of $2.8 million of debt obligations, and the receipt of cash
proceeds of $1.8 million from the exercise of options.
FUTURE CAPITAL NEEDS AND RESOURCES. The primary uses of our capital
in the near future are expected to be the development or acquisition of
technologies, services, features and content complementary to our business;
the funding of the expansion of our call center and network capacity to serve
existing and potential customers; the repayment of certain outstanding
indebtedness; and for general corporate purposes, including corporate
development activities and working capital. Under the terms of certain
contracts, we are required to open additional call centers in major
metropolitan areas in 1999 and 2000. We anticipate that our capital
expenditures will be approximately $21 million to $22 million in 1999 and
approximately $14 million to $16 million in 2000, resulting primarily from
the projected expansion and planned improvements. We believe our existing
cash and cash equivalents, credit facilities and cash from operations will be
sufficient to fund our operations through the end of fiscal 2000.
YEAR 2000 READINESS DISCLOSURE. The year 2000 issue exists because
many computer systems and applications, including those imbedded in equipment
and facilities, use two-digit rather than four-digit date fields to designate
an applicable year. As a result, the systems and applications many not
properly recognize the year 2000 or process data that includes it,
potentially causing data miscalculations or inaccuracies or operational
malfunctions or failures.
We recognize the importance of the year 2000 issue and have given
high priority to it. In the first quarter of 1998, we created a
corporate-wide year 2000 project, called the Y2K Program, to identify, fix,
test and develop contingency plans for the year 2000 issue.
The Y2K Program includes a review of:
- Information and other technology systems used in our internal
business;
- Our hardware and software products used to deliver service to
customers; and
- Applications and products provided by third party manufacturers and
suppliers.
System-level testing of the call center application configuration,
as designed for Metro One's nationwide network of call centers, was completed
in the third quarter of 1999. This configuration satisfied the requirements
of Metro One's year 2000 compliance testing program. Deployment of the
compliant, tested configuration into all of Metro One's call centers will be
completed during the remainder of 1999.
We do not separately track the internal costs incurred for the Y2K
Program, because there is little differentiation between costs that relate to
the normal upgrade and replacement of our operating systems and costs that
relate solely to year 2000 compliance-related issues. However, we do not
believe that the historical or anticipated costs of remediation have had, or
will have, a material effect on our financial condition or results of
operations.
9
<PAGE>
We intend to continue to monitor and test year 2000 compliance in
all of our new and existing business critical systems. The failure of our
systems, the systems of an entity that provides us essential services or
goods, or the systems of our carrier customers may have a material adverse
impact on our business, financial condition and results of operations. These
material adverse effects could include the delay or loss of revenue,
cancellation of customer contracts, diversion of development resources,
damage to our reputation and litigation costs.
Contingency plans are being developed in the event of a failure of
an entity that provides services or goods, such as a local electric
company. These plans will be finalized and implemented during the remainder
of 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Substantially all of our liquid investments are invested in money
market instruments, and therefore the fair market value of these investments
is affected by changes in market interest rates. However, substantially all
of our liquid investments mature within nine months. As a result, we believe
the market risk arising from our holdings of financial instruments is
minimal. In addition, we are exposed to interest rate risk primarily though
our use of short-term and long-term borrowings to finance operations. A
hypothetical 1% fluctuation in interest rates would not have a material
adverse effect on our financial position, results of operations or cash flows.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.1 Form of Enhanced Directory Assistance Agreement
10.14 Agreement for Enhanced Directory Assistance Services between
Metro One and AT&T Wireless Services, Inc. dated
May 2, 1997(1)
10.15 Loan Agreement with General Electric Capital Corporation,
dated September 10, 1999
27.1 Financial data schedule
(1) Certain portions of Exhibit 10.14 are the subject of a request
for confidential treatment and have been omitted from the Exhibit
and have been filed separately with the Commission
(b) REPORTS FILED ON FORM 8-K
There were no reports filed on Form 8-K during the quarter ended
September 30, 1999.
10
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
METRO ONE TELECOMMUNICATIONS, INC.
Registrant
Date: October 22, 1999
/s/ Stebbins B. Chandor, Jr.
-------------------------------------
Stebbins B. Chandor, Jr.
Senior Vice President
Chief Financial Officer
/s/ R. Tod Hutchinson
-------------------------------------
R. Tod Hutchinson
Vice President, Finance
Chief Accounting Officer
11
<PAGE>
ENHANCED DIRECTORY ASSISTANCE-REGISTERED TRADEMARK-
& ENHANCED TELECOM SERVICES-TM-
AGREEMENT
BETWEEN
CUSTOMER
AND
METRO ONE
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS..........................................................................................4
2. PROVISION OF EDA SERVICES............................................................................6
3. INTERFACE AND SUPPORT...............................................................................10
4. PERSONNEL...........................................................................................10
5. GOVERNMENT APPROVALS................................................................................10
6. COMPENSATION & TERM.................................................................................10
7. MARKETING...........................................................................................11
8. TRADEMARK & SERVICEMARK.............................................................................11
9. ASSISTANCE..........................................................................................12
10. RECORDS.............................................................................................12
11. COMPLAINTS..........................................................................................13
12. CONFIDENTIAL INFORMATION............................................................................13
13. INDEMNIFICATION.....................................................................................15
14. CALL MONITORING / RECORDING FEATURE.................................................................15
15. DISPUTE RESOLUTION.................................................................................177
16. TERMINATION.........................................................................................19
17. ASSIGNMENT..........................................................................................20
18. UCC.................................................................................................20
19. SERVICE TESTING.....................................................................................20
20. SURVIVAL OF OBLIGATIONS.............................................................................20
21. CAPTIONS............................................................................................20
22. NOTICES.............................................................................................21
23. SEVERABILITY........................................................................................21
24. INDEPENDENT CONTRACTOR..............................................................................21
25. NO THIRD PARTY BENEFICIARIES........................................................................21
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-2
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26. FORCE MAJEURE.......................................................................................21
27. LIMITATION OF LIABILITY.............................................................................22
28. WAIVER..............................................................................................22
29. APPLICABLE LAW......................................................................................22
30. ENTIRE AGREEMENT....................................................................................22
EXHIBIT 1 CALL ORIGINATION AND COMPLETION AREAS......................................................24
EXHIBIT 2 NUMBERS EXPRESSLY PROHIBITED BY CUSTOMER...................................................25
EXHIBIT 3 TIMELINE TASKS.............................................................................26
EXHIBIT 4 INVOICE....................................................................................27
EXHIBIT 5 RATES......................................................................................29
EXHIBIT 6 FAILURE NOTICE.............................................................................30
EXHIBIT 7 PRINCIPLE SITES FOR PROVISION OF SERVICE...................................................31
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-3
</TABLE>
<PAGE>
ENHANCED DIRECTORY ASSISTANCE-REGISTERED TRADEMARK- AGREEMENT
THIS AGREEMENT is made this ____ day of __________, 1999, by and
between ____________("CUSTOMER"), a __________ Corporation and Metro One
Telecommunications, Inc., an Oregon Corporation ("Metro One").
WHEREAS, CUSTOMER provides telecommunications services in the Call
Origination Area, as defined below;
WHEREAS, Metro One provides directory assistance services; and
WHEREAS, CUSTOMER and Metro One desire for Metro One to provide
telephonic enhanced directory assistance services and enhanced telecom services
to CUSTOMER Callers, as defined below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the sufficiency of which are hereby acknowledged, CUSTOMER and
Metro One agree as follows:
1. DEFINITIONS.
a. AGREEMENT means this Agreement and all Exhibits hereto.
b. CUSTOMER NETWORK means the communications network provided by
CUSTOMER.
c. CALL ORIGINATION AND COMPLETION AREAS mean, in the case of
call origination, the geographic regions CUSTOMER defines as
its calling area which consists of the areas set forth in
Exhibit 1, as amended from time to time by mutual written
agreement of the parties and, in the case of call completion,
the call termination areas set forth in Exhibit 1.
d. CONFIDENTIAL INFORMATION means all information, not generally
known to the public, that relates to the business, technology
and network-related systems, Callers, finances, plans
(including marketing plans), proposals or practices of the
parties to this Agreement, and it includes, without
limitation, information relating to the System described in
Section 1.n ("Definitions") herein and the number,
destination, duration, or other call-related information, the
identities of all Callers, Customers and prospects, all
reports or other records provided pursuant to this Agreement,
all business plans and proposals, all marketing plans and
proposals, all technical plans and proposals, all research and
development, all budgets and projections, all nonpublic
financial information, all information designated as
"confidential" and/or "proprietary," and all other information
and matters not generally
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-4
<PAGE>
known to the public. In using the term "Confidential
Information", the provisions of this subsection shall apply to
every form whatsoever, including, without limitation,
information that exists, whether written, oral or
electronically stored on film, tape, computer disk or other
form of media.
e. ENHANCED DIRECTORY ASSISTANCE-REGISTERED TRADEMARK- (EDA) AND
ENHANCED TELECOM SERVICES mean the live-operator enhanced
directory assistance services provided by Metro One to
CUSTOMER and its Callers pursuant to this Agreement. EDA
includes, but is not necessarily limited to (i) call
completion by outpulsing to CUSTOMER's Switch the digits of
the Caller-requested number; (ii) provision of name, address
and telephone number when requested and when legally available
through Metro One's database and systems; and (iii) any other
product or features agreed upon between Metro One and
CUSTOMER.
f. LATA means local access and transport area.
g. LEC means a Local Exchange Carrier or Competitive Local
Exchange Carrier providing service in a Call Completion Area.
h. SWITCH means CUSTOMER'S or Metro One's telephone switching
equipment.
i. NPA means area code as defined by the Numbering Plan of the
American National Standards Institute.
j. NXX means the assigned local exchange within an area code.
k. OPERATORS means the live operators utilized by Metro One in
providing EDA to Callers.
l. CALLER means a person or entity to whom CUSTOMER provides
telecommunications service in the Call Origination Area,
including Customers of other telecommunications service
providers when such Customers are calling from within the Call
Origination Area and are using CUSTOMER's Switch.
m. STARBACK-REGISTERED TRADEMARK- means Metro One's proprietary,
patented feature and related technology that allows Callers
continuous access to live operators, when enabled, throughout
the entire call or calling session by pressing the star (*)
key for approximately one second. StarBack-REGISTERED
TRADEMARK- is a registered trademark of Metro One.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-5
<PAGE>
n. SYSTEM. Metro One has developed a proprietary system to enable
it to perform EDA services (the "System"). The System uses
business, residential and government databases, including
on-line national database system access and a backup database
connection to the LEC's database. The System utilizes an
automatic voice playback system and live operators.
o. EDA SERVICES NUMBERS. CUSTOMER shall route to Metro One all
411, 1-411, 555-1212, 1-555-1212, (NPA)-555-1212,
1-(NPA)-555-1212 calls or any other calls dialed to any other
standard Directory Assistance routing method that may be
assigned and/or used as its successor to the extent those
calls are generated from within the Call Origination Area. In
the event national numbering standards or direction from
competent jurisdiction should mandate a change to the above
listed directory assistance access numbers, CUSTOMER shall
route all calls to such successor numbers as described above.
p. SHORT MESSAGE SERVICES means services in which Metro One
facilitates transmission of short text messages through
assistance of its live operators. Short Messages may be
approximately 120 alphanumeric characters or less in length.
2. PROVISION OF EDA SERVICES.
a. STAFFING. Metro One shall utilize qualified, properly trained,
professional, and courteous Operators in providing the EDA
services to Callers.
b. GREETING AND CLOSING. Metro One shall answer all calls made to
the EDA Services Numbers with a greeting and closing to be
determined mutually by CUSTOMER and Metro One. Such greeting
shall not exceed five (5) seconds and such closing shall not
exceed twelve (12) seconds in length. All such greetings and
closings may be made by means of the automated voice playback
system.
c. HOURS OF OPERATION. Metro One shall staff twenty-four (24)
hours a day, seven (7) days a week, three hundred and
sixty-five (365) days a year (or three hundred and sixty-six
(366) days per year, as the case may be), with a sufficient
number of Operators to perform the services required
hereunder.
d. ANSWER STANDARD. Metro One shall, except as provided in
Section 26 ("Force Majeure") below, provide sufficient
Operators and equipment to ensure that 80% of the answered EDA
calls, within a given calendar month, shall be answered in
four (4) rings (24 seconds) or less. Metro One shall use
commercially reasonable efforts to answer all EDA calls within
four (4)
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-6
<PAGE>
rings (24 seconds) or less. Metro One shall report the
percentage to CUSTOMER monthly.
e. ABANDONED STANDARD. In no event, except as provided in Section
26 ("Force Majeure") below, shall Metro One allow more than
five (5) percent of the EDA calls within a given calendar
month, to be Abandoned. ABANDONED means calls that wait for
more than four (4) rings (24 seconds) and go unanswered. Metro
One shall report the percentage to CUSTOMER monthly.
f. STARBACK(R). In performing the Enhanced Directory
Assistance services, Metro One shall remain accessible to the
Caller throughout the call using StarBack(R), when enabled, or
by other means. Other than through its Call Monitoring /
Recording (Section 14), and other quality control procedures,
Metro One shall not otherwise monitor, record, listen to or
divulge the contents of any communication, or any other
information regarding Callers or calls.
g. CALL COMPLETION. At a Caller's request, Metro One shall use
good faith to perform the EDA services, provided the
residence, business or government related to the requested
service is located within the Call Completion Area and the
information is legally available in the Metro One System.
Under no circumstances shall Metro One knowingly perform call
completion services where the requested information relates to
a residence, business or government listing located outside
the Call Completion Area as then defined.
h. SYSTEM. At a minimum, Metro One shall use good faith efforts
to keep the System accurate to the same degree as the database
of the LEC for listings within the Call Completion Area.
Notwithstanding the foregoing, Metro One shall be excused from
performance to the extent that any LEC or other Metro
One-selected data provider does not make data available to
Metro One under commercially reasonable terms acceptable to
Metro One in its sole discretion. In the event Metro One does
not have sufficient information in the System to provide any
one of the EDA services, it shall utilize such other sources
as necessary to provide the requested EDA services, including,
without limitation, the back-up database provided as an
on-line service by the LEC or LEC operator delivered directory
assistance. In the event that either (i) a Caller requests the
LEC directory assistance operator, or (ii) Metro One cannot
provide any one of the requested EDA services, Metro One shall
route a Caller's telephone call to the LEC directory
assistance operator. In such a case, Metro One shall charge
CUSTOMER the per call fee in Section 6.a. (Compensation and
Term) only, not the LEC's fees.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-7
<PAGE>
i. SYSTEM AND SOFTWARE MAINTENANCE. Metro One shall maintain the
System in such a manner as to ensure an annual System
availability of 99.00%, excluding scheduled maintenance
downtime which shall be mutually agreed to in writing, within
a given service year for the provision of the EDA services
j. PROHIBITED NUMBERS. Metro One agrees to route Caller calls to
any number requested by Caller within the Call Completion Area
that is legally available through the Metro One System,
provided however, that such number or service is not expressly
prohibited by CUSTOMER (expressly prohibited numbers are set
forth in Exhibit 2). In the event Metro One should direct a
call to a prohibited number, Metro One shall be solely
responsible for fees associated with such call.
k. 911. CUSTOMER shall not route 911 calls to Metro One. If an
emergency call is received by Metro One the caller shall be
asked to dial "9-1-1" after disconnecting.
l. MULTIPLE REQUESTS. Callers shall be entitled to a maximum of
five (5) directory assistance requests per call. Use of any
EDA feature (such as StarBack(R)) that returns the Caller to
the Operator shall be counted as a directory assistance
request.
m. MULTIPLE LISTINGS. When the System indicates that more than
one address or telephone number pertains to a directory
assistance request, Metro One shall at the Callers request,
provide up to two multiple addresses and telephone numbers at
no additional charge.
n. ALTERNATE BILLING. Callers who request credit or "calling"
card services shall be advised to dial "0" or "00" after
disconnecting to reach the appropriate operator for such
services.
o. TIMELINE. Metro One and CUSTOMER shall mutually cooperate and
support one another to accomplish timeline tasks as outlined
in a form consistent with Exhibit 3. Upon mutual written
agreement, the timeline schedule as outlined in Exhibit 3 may
change with respect to any specified task. The "Go Live Date"
shall be specified in for each Call Origination Area as
appropriate.
p. DEFICIENCIES PROCEDURE. Any deficiencies which relate to the
provision of EDA services and do not pertain to failure of the
Metro One System shall be addressed in the following manner:
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-8
<PAGE>
i. Either party shall provide the other (the "Notified
Party") with written notice of the deficiency.
ii. The Notified Party shall acknowledge the receipt of
the deficiency notice in writing within two (2)
business days from receipt of notice to the other.
iii. Within seven (7) business days of notice of the
deficiency, the Notified Party shall propose a
solution to the deficiency to the other in writing.
Within seven (7) additional business days, if both
parties find the proposed solution acceptable, the
Notified Party shall agree in writing to remedy the
deficiency in the agreed manner on a mutually agreed
timeline.
iv. If either party finds the solution proposed by the
other to be unacceptable or if the Notified Party
fails to remedy a deficiency in a manner which is
acceptable to the other as set forth above, the
matter shall be submitted to binding arbitration
pursuant to Section 15 ("Dispute Resolution").
q. SYSTEM FAILURE. A System Failure is defined as the inability
of either party to provide EDA services to Callers for a
period of more than ten minutes, other than scheduled
maintenance as provided for in Section 2.i. ("Provision of EDA
Services"). During any System Failure, CUSTOMER may direct all
EDA calls to any third party selected by CUSTOMER.
Each party shall, as soon as it becomes aware of any System
Failure, notify the other of the System Failure by telephone
and facsimile (the "Failure Notice" as shown in Exhibit 6).
The prioritized list of all addresses, facsimile numbers and
telephone numbers for the parties related to the Failure
Notice is attached as Exhibit 6.
CUSTOMER and Metro One acknowledge and agree that minor,
occasional and infrequent deviations (including mechanical,
electronic, software, third party vendor and human deviations)
from Metro One's conformance with performance standards shall
not constitute material breach or default under this Agreement
r. CALL ROUTING. CUSTOMER shall route to Metro One all EDA calls
as defined in Section 1.o ("Definitions"). Any breach of this
Section 2.r. ("Provision of EDA Services") shall be material.
s. PRINCIPLE SITES FOR PROVISION OF SERVICE. Refer to Exhibit 7.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-9
<PAGE>
t. SHORT MESSAGE SERVICES. Metro shall provide Short Message
Services at the rates shown in Exhibit 5.
3. INTERFACE AND SUPPORT.
a. FACILITIES. Metro One shall maintain adequate and appropriate
office facilities, support facilities and other facilities and
equipment necessary to enable Metro One to perform its
obligations under this Agreement.
b. TELECOMMUNICATIONS EQUIPMENT. CUSTOMER shall, at its expense,
establish and maintain all T-1 trunk lines and other
telecommunications facilities and equipment needed for
adequate performance between CUSTOMER'S Switch and the
building minimum point of termination for Metro One's location
for purposes of performing the EDA services. Metro One shall
be responsible for establishing, maintaining, and paying for
all other telecommunications facilities and equipment
necessary to perform the EDA services, including but not
limited to those required for interconnection from Metro One
to the on-line LEC database.
4. PERSONNEL.
CUSTOMER may notify Metro One if, in CUSTOMER'S opinion, any Metro One
employee performing EDA services is unqualified, discourteous or fails
to conform to CUSTOMER'S standards for CUSTOMER service. Metro One
shall take such prompt action as it deems reasonable to correct such
non-conformance.
5. GOVERNMENT APPROVALS.
CUSTOMER shall obtain all necessary regulatory approvals required of it
for the provision of EDA services in the Call Origination Area. To the
extent necessary, Metro One and CUSTOMER shall reasonably cooperate
with each other in order to obtain such approvals.
6. COMPENSATION AND TERM.
a. RATE. CUSTOMER shall pay Metro One for the EDA services at the
rates listed in Exhibit 5. Billing and collecting from the
Callers for EDA services shall be CUSTOMER'S sole
responsibility.
b. CALL COUNTS. Metro One shall provide CUSTOMER with EDA call
count volume records in the format shown in Exhibit 4 by the
tenth of each month for the previous month's calls, which
records shall be made part of Metro One's invoice to CUSTOMER.
c. INVOICES AND PAYMENT TERMS. CUSTOMER shall pay Metro One
within thirty (30) days of the date of an invoice in the form
of Exhibit 4. Any invoice paid after thirty (30) days from the
date of invoice shall incur
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-10
<PAGE>
interest in the amount of 1.5% a month from thirty (30) days
of the date of invoice until paid. Invoices shall be mailed on
or before the tenth (10th) day of the month of the date of
invoice.
d. Invoice Address. CUSTOMER'S monthly invoice shall be mailed to
CUSTOMER on or before the tenth (10th) day of the month
following service at the following address:
[ ]
[ ]
[ ]
CUSTOMER
e. TERM. Except as provided in Section 16 ("Termination") below,
this Agreement shall be for a three-year term commencing on
the date EDA services are made commercially available to
Callers.
7. MARKETING.
CUSTOMER shall be responsible for the manner of and cost of its
publicizing, advertising and marketing the EDA services provided to it
in the Call Origination Area. Without limiting the generality of the
foregoing, CUSTOMER shall be responsible for the following:
a. Establishing the rates and other terms and conditions under
which the EDA services shall be available to Callers. The
rates are as set forth in Exhibit 5 which may be amended from
time to time by mutual written agreement of the parties.
b. Conducting such promotional programs and advertising of the
EDA services as is commercially reasonable after notifying
Metro One in writing of such promotional programs and
advertising.
8. TRADEMARK/SERVICE MARK.
a. CUSTOMER shall own its trademarks and service marks, and Metro
One shall acquire no rights in such marks, other than the
non-exclusive license set forth in this Agreement. Metro One
acknowledges the validity of CUSTOMER'S marks and shall not
challenge or assist others in challenging the validity and
CUSTOMER'S sole ownership of such marks.
b. Metro One shall own its trademarks and service marks,
including but not limited to the Metro One Telecommunications,
Inc.-REGISTERED TRADEMARK-, Enhanced Directory
Assistance-REGISTERED TRADEMARK-, The Enhanced Directory
Assistance People-REGISTERED TRADEMARK-, StarBack-REGISTERED
TRADEMARK-, SureConnect-REGISTERED TRADEMARK-,
AutoBack-REGISTERED TRADEMARK-, CallBack-TM-, MessageBack-TM-,
MetroDex-TM-,
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-11
<PAGE>
TeleConcierge-TM-, NumberBack-TM-, Enhanced Telecommunication
Services-TM-, Enhanced Telecom Services-TM-, and
db.One-TM-service marks, and CUSTOMER will acquire no
rights in such marks, other than the non-exclusive license set
forth in Section 8.e ("Trademark & Servicemark") of this
Agreement. CUSTOMER acknowledges the validity of Metro One's
marks and will not challenge or assist others in challenging
the validity and Metro One's sole ownership of such marks.
d. Each party acknowledges the goodwill associated with the
other's trademarks and service marks. Except as provided
herein, neither party will use any mark owned by the other
without prior written consent. Neither party shall register
any of the other party's trademarks, service marks or trade
names.
e. Metro One hereby grants CUSTOMER a non-exclusive license to
use the Metro One Telecommunications-REGISTERED TRADEMARK-,
Enhanced Directory Assistance-REGISTERED TRADEMARK-, The
Enhanced Directory Assistance People-REGISTERED TRADEMARK-,
StarBack-REGISTERED TRADEMARK-, SureConnect-REGISTERED
TRADEMARK-, AutoBack-REGISTERED TRADEMARK-, CallBack-TM-,
MessageBack-TM-, MetroDex-TM-, TeleConcierge-TM-,
NumberBack-TM-, Enhanced Telecommunication Services-TM-,
Enhanced Telecom Services-TM-, and db.One-TM- service marks in
CUSTOMER'S marketing of EDA services within the Call
Origination Area during the term of this Agreement.
f. All use of CUSTOMER'S marks by Metro One shall inure to the
benefit of CUSTOMER. All use of Metro One's marks by CUSTOMER
shall inure to the benefit of Metro One.
g. If a party uses a mark owned by the other, the use of the mark
shall be only in accordance with the guidance and directions
furnished by the owner of the mark, and the quality of any
associated goods or services must always be satisfactory to
the owner of the mark.
9. ASSISTANCE.
Each party shall provide the other reasonable assistance in any matters
affecting this Agreement before any insurer, governmental authority,
trade association or other organization. Such assistance may include
preparing and furnishing documents, providing advice and providing
qualified personnel to participate in hearings or other proceedings.
10. RECORDS.
During the term of this Agreement both parties shall maintain complete
and accurate records of each call using the EDA services, and shall
provide the other
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-12
<PAGE>
access to such records upon request. Records shall be in a
mutually agreed upon format. The records shall include the
following:
a. The time the call is received;
b. The telephone number of the Caller; and
c. The number to which the call is connected.
11. COMPLAINTS.
a. Both parties shall refrain from any action that could
reasonably be anticipated to discredit or damage the name,
reputation, goodwill or good public relations of the other.
Each party shall use its best efforts to investigate and
respond to all oral or written complaints received by CUSTOMER
or Metro One from any Caller arising out of or in connection
with such party's obligations under this Agreement. In
handling any complaints, each party shall use its best efforts
to maintain and promote the goodwill of and good public
relations of the other party.
b. Both parties shall document any and all complaints from
Callers and others, whether verbal or written, and notify the
other, in writing, within five (5) business days of receipt of
such complaint. Both parties' notice to each other shall set
forth the name and telephone number of the complaining party,
the time and nature of the complaint, and a description of any
action taken (or proposed to be taken) by both parties in
connection with the complaint. Both parties shall provide each
other with a copy of all written complaints. In handling any
complaint, both parties shall maintain and promote the
goodwill of Metro One and CUSTOMER.
12. CONFIDENTIAL INFORMATION.
a. With respect to Confidential Information provided to the
receiving party under this Agreement, the receiving party
agrees to (i) hold the Confidential Information in confidence
and to protect it; (ii) restrict disclosure of the
Confidential Information solely to those employees,
contractors and agents of the receiving party with a
need-to-know to carry out the respective obligations under
this Agreement and not disclose it to any third party
(including corporate affiliates not a party to this
Agreement); (iii) advise the employees, contractors and agents
of their obligations with respect to the Confidential
Information; and (iv) use the Confidential Information only
for the purposes set forth in this Agreement, except as may
otherwise be mutually agreed upon in writing. In any event,
Metro One and CUSTOMER expressly agree not to sell, license,
release or disclose the other party's Confidential Information
to any competitor or potential competitor of the other or to
any LEC or affiliate thereof. However, Metro One and
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-13
<PAGE>
CUSTOMER shall be permitted to disclose such information to
their accountants, legal, financial and marketing advisers as
are necessary for the performance of their respective duties,
or as required by law, provided that said advisers agree to be
bound by the provision of this Section 12 ("Confidential
Information"). In the event either party is requested or
required by lawful process to disclose Confidential
Information to any lawfully constituted authority, it is
agreed that the party requested or required to furnish the
Confidential Information shall provide the other party with
timely notice in order for that party to seek a protective
order or otherwise object.
b. Confidential Information shall not include information which
(i) was previously known to the receiving party free of any
obligation to keep it confidential and is so documented; (ii)
is disclosed to third parties by the disclosing party without
restriction; (iii) is or becomes publicly available by other
than unauthorized disclosure; or (iv) is independently
developed by the receiving party without use of the
Confidential Information and is so documented.
c. In the event either party is requested or required by oral
question, interrogatories, requests for information or
documents, subpoena or other lawful process, civil
investigative demand or similar process, to disclose
Confidential Information of the other to any lawfully
constituted authority, it is agreed that the party requested
or required to furnish the Confidential Information shall
provide the other party with timely notice in order for that
party to seek a protective order or otherwise object.
d. The provisions of this Section 12 ("Confidential Information")
shall survive two (2) years after the termination of this
Agreement, and, at the time of termination, the receiving
party shall upon request, return the Confidential Information
of the disclosing party which is in tangible form or certify
destruction of such Confidential Information.
e. All Confidential Information shall be considered trade secrets
and shall be entitled to all protections given by law to trade
secrets. In no event shall either party use the Confidential
Information of the other party to reverse engineer or
otherwise develop products or services functionally equivalent
to the products or services of the disclosing party.
f. The parties agree that it would be difficult to measure the
monetary damages that would be incurred by the other party by
reason of the failure of the other party to comply with the
terms of this Section 12 ("Confidential Information"). The
parties therefore agree that either party may seek
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-14
<PAGE>
injunctive relief which the parties agree is appropriate for
enforcement of this Section 12 ("Confidential Information").
13. INDEMNIFICATION.
a. CUSTOMER and Metro One agree to defend, indemnify, and hold
harmless the other (the "Indemnified Party"), its employees
and agents, its affiliates and its successors and assigns from
and against all losses, damages, and liability (including all
claims, actions, suits, fines, interest, penalties, costs and
expenses) incident, relative to or arising from (i) any claim
relating to the subject matter of a misrepresentation or
breach of covenant, representation or warranty of the
Indemnifying Party contained herein, and (ii) any claim of
infringement of a patent, copyright trademark or other legally
protected proprietary right of any third party and (iii) any
injury to any person (including death) or damage to tangible
property resulting from the acts or omissions of the
Indemnifying Party, its employees or agents, whether negligent
or otherwise.
b. NOTICE OF CLAIMS. The obligations of Indemnifying Party stated
in this Section 13.a. ("Indemnification") above, apply only if
(i) Indemnified Party shall promptly inform Indemnifying Party
in writing of any claim within the scope of Section 13.a.;
(ii) Indemnifying Party is given exclusive control of the
defense of such claim and all negotiations relating to its
settlement, except that Indemnified Party shall have final
approval of settlement provisions; and (iii) Indemnified Party
shall assist Indemnifying Party in all necessary respects in
conduct of the suit and settlement negotiations.
c. NO SPECIAL DAMAGES. Neither party will be liable to the other
for special, indirect, or consequential loss or damage,
whether or not such loss or damage is caused by the fault or
negligence of that party, its employees, agents, or
subcontractors.
d. SURVIVAL OF INDEMNITY. Indemnity obligations for acts arising
prior to expiration or termination of this Agreement under
this Section 13 ("Indemnification") will survive any
expiration or termination of this Agreement or the Orders
hereunder for a period of three (3) years following any
expiration or termination of this Agreement or the Orders
hereunder.
14. CALL MONITORING / RECORDING FEATURE
a. The CUSTOMER requests that Metro One provide access to
recordings of the operator assisted portion of EDA calls for
its Callers for purposes of monitoring of quality of EDA
service. Metro One will provide such access in locations
where, in its sole discretion, the law will permit the
recording of calls for limited purposes of performance
evaluation.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-15
<PAGE>
CUSTOMER agrees to provide notice to Callers through the
following agreed upon procedures:
(i) For the first three months after this Agreement
becomes effective, CUSTOMER will print a message in
the body of all bills to all Callers for wireless
service. That message will read as follows:
"Your directory assistance calls may be monitored /
recorded for quality assurance purposes. Only the
operator portion of the call will be monitored /
recorded"
(ii) Beginning with the effective date of this Agreement,
the CUSTOMER will add language in its Caller service
contracts that provides notice of call monitoring for
quality purposes. Such language will include the
following:
[PLEASE PROVIDE A COPY OF THE CALLER CONTRACT. METRO ONE WILL
SUGGEST LANGUAGE TO BE INSERTED IN THE AGREEMENT BETWEEN
CUSTOMER AND ITS CALLER FOR DISCUSSION.]
b. CUSTOMER shall indemnify and hold harmless Metro One and its
officers, directors, employees, and agents and their
successors and assigns against and from any and all losses,
liabilities, damages, claims, demands, and expenses (including
without limitation, reasonable attorneys' fees), arising out
of or in conjunction with recording of and access to recorded
EDA calls provided by Metro One to CUSTOMER.
CUSTOMER shall defend, at its sole cost and expense, any claim
or action of any kind against Metro One for alleged violation
or infringement of privacy rights. CUSTOMER shall also keep
Metro One fully informed as to the progress of such defense
and afford Metro One, at its own expense, an opportunity to
participate on an equal basis with CUSTOMER in the defense or
settlement of any such claim.
CUSTOMER acknowledges that it has read and understands the
policies of Metro One with regard to recorded call
information.
c. Upon receiving CUSTOMER request and verifying authenticity, a
Metro One System Administrator will issue a Digital
Certificate allowing access to the appropriate CUSTOMER
designee, identified in writing below. Such Digital
Certificate access may be changed periodically at the
discretion of the Metro One System Administrator. Upon
request, CUSTOMER agrees to
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-16
<PAGE>
confirm in writing to System Administrator, the continuing
appropriateness of the individual receiving access.
CUSTOMER also agrees to:
(i) Limit access to such Digital Certificate and to the
recorded EDA calls to that designee specifically
authorized herein and who has entered into
appropriate confidentiality agreements and
(ii) To inform Metro One of any malfunction or anomaly in
the access to recorded calls, including access to any
other recorded calls other than those of CUSTOMER.
CUSTOMER authorized designee to receive access to recorded EDA
calls:
Name:________________________
Title:_________________
CUSTOMER agrees that distribution of protected access will be
treated as confidential information. Changes in the authorized
designee will be identified in writing to Metro One at the
following address:
Manager - Customer Care
Metro One Telecommunications, Inc.
11200 Murray Scholls Place
Beaverton, OR 97007
d. CUSTOMER agrees that use of and access to recorded calls is
only for use in evaluation of the procedures by which Metro
One handles EDA calls or evaluation of specific Caller
complaints.
e. CUSTOMER agrees that no copies of recorded call information
shall be made, either in written, audio, or other electronic
form.
f. Metro One will not provide any copies of such recorded call
information to anyone except in response to legitimate legal
process or orders from courts or other regulatory agencies and
then only as is commercially feasible.
15. DISPUTE RESOLUTION.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Oregon, without regard to its
principles of conflicts of law. Any controversy or claim arising out of
or related to the provision of EDA Services hereunder provided under
this Agreement, or breach thereof, shall be settled as
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-17
<PAGE>
described below. The parties acknowledge that time is of the essence in
resolving disputes.
The parties desire to resolve disputes arising out of this Agreement
without litigation. Accordingly, except for action seeking a temporary
restraining order or injunction related to the purposes of this
Agreement or suit to compel compliance with this dispute resolution
process, or CUSTOMER's right to implead Metro One after any refusal to
comply with Section 13 ("Indemnification"), the parties agree to use
the following alternative dispute resolution procedure as their sole
remedy with respect to any controversy or claim arising out of or
relating to this Agreement or its breach.
At the written request of a party, each party shall appoint a
plenipotentiary to meet and negotiate in good faith to resolve any
dispute arising under this Agreement. Upon agreement, other alternative
dispute resolution procedures such as mediation to assist in the
negotiations may be utilized. All discussions and correspondence
arising out of these negotiations shall be treated as confidential
information developed for purposes of settlement, exempt from discovery
and production, which shall not be admissible in the arbitration
described below or in any lawsuit with the concurrence of all parties.
Documents identified in or provided with such communications, which are
not prepared for purposes of the negotiations, are not so exempted and
may, if otherwise admissible, be admitted in evidence in the
arbitration or lawsuit.
If the negotiations do not resolve the dispute within sixty (60) days
of the initial written request, the dispute shall be submitted to
binding arbitration as described below in accordance with the rules of
the American Arbitration Association.
Each party shall bear its own cost of these procedures. A party seeking
discovery shall reimburse the responding party the cost of production
of documents. The parties shall equally share the fees of the
arbitration and the arbitrator.
The board of arbitrators shall be composed of three (3) arbitrators.
Each party shall appoint one (1) arbitrator. The two (2) arbitrators so
designated shall designate the third arbitrator. If any party fails to
choose an arbitrator within fifteen (15) days after notice of
commencement of arbitration, the American Arbitration Association
shall, upon request of either party, appoint the arbitrator or
arbitrators to constitute or complete the panel as the case may be. The
arbitration shall be held in Portland, Oregon, and shall be conducted
in English. The award rendered by the arbitration panel shall apportion
the costs of arbitration. The panel need not be bound by the strict
rules of law in making its decision, but may reach conclusions and
render an award as a reasonable person.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-18
<PAGE>
Any controversy or claim relating to the provision of EDA services,
provided hereunder and arising after the expiration or termination of
this Agreement, shall be handled as described in Section 2.p
("Provisions of EDA Services"). If the parties can not reach an
acceptable resolution the matter shall be submitted to binding
arbitration pursuant to this Section 15 ("Dispute Resolution").
The arbitration award shall be final and binding on the parties and
judgment thereon may be entered in any court having jurisdiction
thereof or having jurisdiction over any of the parties or their assets.
16. TERMINATION.
a. CUSTOMER may terminate this Agreement immediately if Metro One
is in material breach of or default under this Agreement by
giving Metro One written notice of such termination. Any
failure by Metro One to perform any of its material
obligations in accordance with this Agreement, where such
failure continues for thirty (30) days after written notice to
Metro One shall constitute a material breach of and default
under this Agreement by Metro One.
b. Metro One may terminate this Agreement immediately if CUSTOMER
is in material breach of or default under this Agreement by
giving CUSTOMER written notice of such termination. The
occurrence of any of the following events shall constitute a
material breach of and default under this Agreement by
CUSTOMER:
i. Any failure by CUSTOMER to perform any of its
material obligations in accordance with this
Agreement, where such failure continues for thirty
(30) days after written notice to CUSTOMER; or
ii. If CUSTOMER fails to pay when due any invoice, where
such failure continues for thirty (30) days after
written notice to CUSTOMER; or
iii. If CUSTOMER fails to route to Metro One all calls
agreed herein in Section 2.q. ("Provisions of EDA
Services") above, where such failure continues for
ten (10) days after written notice to CUSTOMER.
c. Either party may terminate this Agreement if any circumstance
would render the continued performance of this Agreement by
either party in violation of any applicable law, statute, rule
or regulation despite the parties' good faith efforts to
rewrite the terms of this Agreement.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-19
<PAGE>
d. Upon termination or expiration of this Agreement, in addition
to any other rights or remedies of either party, Metro One
shall:
i. Cease to provide the EDA services to Callers; and
ii. Deliver to CUSTOMER a final invoice for amounts
payable under Section 6 ("Compensation and Term") of
this Agreement.
e. Upon termination of this Agreement both parties shall:
i. Promptly return to the other party all materials
containing any Confidential Information of such
party; and
ii. Cease all use of the other party's trademarks.
17. ASSIGNMENT.
Neither party may assign or transfer this Agreement or any of its
obligations hereunder without the prior written consent of the other,
which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing either party may upon thirty
(30) business days prior written notice to the other, assign all of its
rights, duties and obligations under this Agreement to any affiliate or
affiliates of that party or to a partnership or partnerships in which
that party or its affiliate has an interest.
18. UCC.
This Agreement shall be subject to the provisions of the Uniform
Commercial Code as adopted in Oregon.
19. SERVICE TESTING.
Unless CUSTOMER is prohibited by law, for each Call Origination Area,
CUSTOMER shall provide Metro One at CUSTOMER expense two (2) telephones
and access lines on CUSTOMER'S system for technical support and quality
control of the Metro One System.
20. SURVIVAL OF OBLIGATIONS.
The obligations set forth in Sections 8 ("Trademarks"), 12
("Confidential Information"), 15 ("Dispute Resolution") and in this
Section 20 ("Survival of Obligations"), shall survive any termination
or expiration of this Agreement.
21. CAPTIONS.
Section captions are inserted only for convenience and are in no way to
be construed as part of this Agreement.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-20
<PAGE>
22. NOTICES.
Notices required by this Agreement must be sent by certified mail,
return receipt requested, to the address listed below, or to such
address as the parties may from time to time by notice provide.
To Metro One: President
Metro One Telecommunications, Inc.
11200 Murray Scholls Place
Beaverton, OR 97007
To CUSTOMER:
Notice shall be deemed effective on the date the return receipt shows the notice
was accepted or refused.
23. SEVERABILITY.
If for any reason any provision of this Agreement shall be deemed by a
court of competent jurisdiction to be legally invalid or unenforceable,
the validity, legality and enforceability of the remainder of this
Agreement shall not be affected and such provision shall be deemed
modified to the minimum extent necessary to make such provision
consistent with applicable law, and, in its modified form, such
provision shall then be enforceable and enforced.
24. INDEPENDENT CONTRACTOR.
It is agreed and understood that Metro One and CUSTOMER are not agents,
representatives or employees of each other.
25. NO THIRD PARTY BENEFICIARIES.
Callers shall not be third party beneficiaries under this Agreement.
Nothing expressed or implied in this Agreement is intended or shall be
construed to confer or give any person other than CUSTOMER and Metro
One, their respective successors and permitted assigns any rights or
remedies under or by reason of this Agreement.
26. FORCE MAJEURE.
Neither party is responsible for delays in performance caused by wars,
fires, strike, embargoes, priority exclusion of either party's business
by government authorities, transportation conditions (including
telecommunication transmission failures), material shortages, natural
disasters, severe weather or other causes beyond its reasonable
control. Such delays shall not be construed as a breach under Section
16 ("Termination).
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-21
<PAGE>
27. LIMITATION OF LIABILITY.
a. In no event shall Metro One's liability to the CUSTOMER for
damages of any kind arising out of or in connection with this
Agreement, whether claimed in contract, equity, tort
(including negligence or strict liability), warranty or
otherwise, exceed the aggregate prices paid by CUSTOMER for
products and services under this Agreement.
b. In no event shall Metro One be liable to CUSTOMER for any
special, incidental, indirect or consequential damages of any
kind, or for the loss of profit, revenue or data of CUSTOMER
arising out of or in connection with this Agreement, even if
Metro One had been advised of the possibility of such
potential loss or damage. CUSTOMER further agrees that Metro
One shall not be liable for any claim or demand against Metro
One or CUSTOMER by any other party arising out of or in
connection with this Agreement.
c. It is agreed that the limitation of remedies/liability set
forth in this Section 27 ("Limitation of Liability"), and
elsewhere in this agreement, allocates the commercial risk
between Metro One and CUSTOMER arising out of or in connection
with this Agreement, including, but not limited to EDA Service
failure, and that the prices and other terms and conditions of
this agreement reflect this allocation of risk.
28. WAIVER.
The waiver or failure of any party to exercise any rights under this
Agreement shall not be deemed a waiver of any other right or any future
right.
29. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the law of the State of Oregon, without regard to its
principles of conflicts of law.
30. ENTIRE AGREEMENT.
This Agreement and the Exhibits attached hereto constitute the entire
agreement between the parties, and supersedes any and all prior
negotiations, representations, correspondence, understandings and
agreements with respect to the subject matter hereof. No amendment or
modification of any of the terms of this Agreement shall be effective
unless in writing signed by both parties.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-22
<PAGE>
Entered into as of the date first above written.
METRO ONE TELECOMMUNICATIONS, INC. CUSTOMER
By: By: __________________________
Name: Timothy A. Timmins Name: __________________________
Title: President Title: __________________________
Date: _____________________________ Date: __________________________
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-23
<PAGE>
EXHIBIT 1 CALL ORIGINATION AND COMPLETION AREAS
The Call Origination Area includes the area(s) listed below:
[to be supplied by CUSTOMER.]
The Call Completion Area includes the area(s) listed below:
All states and territories of the United States.
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-24
<PAGE>
EXHIBIT 2 NUMBERS EXPRESSLY PROHIBITED BY CUSTOMER
NPA - 976 - XXXX
976 - XXXX
700 - NXX - XXXX
900 - NXX - XXXX
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-25
<PAGE>
EXHIBIT 3 TIMELINE TASKS
The "Go Live Date" shall be ________________, 19___.
CUSTOMER RESPONSIBILITIES
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------------------------
DATE 1 DATE 2 DATE 3 DATE 4
- ------ ------ ------ ------
Terminate Trunks to Metro One
|----------------------------------|
Testing , Signaling & Billing
|-------------------------------------------------|
|----------------- >
"Go Live Date"
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
METRO ONE RESPONSIBILITIES
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------------------------
DATE 1 DATE 2 DATE 3 DATE 4
- ------ ------ ------ ------
Terminate CUSTOMER Provided Trunks
|----------------------------------|
Testing & Signaling
|----------------------------------------------|
|---------------- >
"Go Live Date"
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-26
<PAGE>
EXHIBIT 4 INVOICE
METROONE
Customer Account No. XXXX
EDA Customer
100 Main Street
Anywhere, USA
INVOICE SUMMARY
ENHANCED DIRECTORY ASSISTANCE CUSTOMER
JANUARY 1, 1999
SITE LOCATION: SPOKANE, WA
Previous Balance $8,076.40
Payments (8,076.40)
Interest on late payments 0.00
Current Charges 0.00
TOTAL DUE $0.00
Charges are due thirty (30) days from date of invoice.
A charge of 1.5% per month will be assessed on
accounts past 30 days.
Federal ID 93-0995165
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-27
<PAGE>
Page 1 of 2
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-28
<PAGE>
ENHANCED DIRECTORY ASSISTANCE CUSTOMER
DETAIL OF CURRENT MONTH'S CHARGES
<TABLE>
<CAPTION>
CALL CALL NET CALL NET
DAY DATE VOLUME CREDITS VOLUME CHARGE
- -------------------------------- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sat 01-Mar 0 0 0 0.00
Sun 02-Mar 0 0 0 0.00
Mon 03-Mar 0 0 0 0.00
Tue 04-Mar 0 0 0 0.00
Wed 05-Mar 0 0 0 0.00
Thu 06-Mar 0 0 0 0.00
Fri 07-Mar 0 0 0 0.00
Sat 08-Mar 0 0 0 0.00
Sun 09-Mar 0 0 0 0.00
Mon 10-Mar 0 0 0 0.00
Tue 11-Mar 0 0 0 0.00
Wed 12-Mar 0 0 0 0.00
Thu 13-Mar 0 0 0 0.00
Fri 14-Mar 0 0 0 0.00
Sat 15-Mar 0 0 0 0.00
Sun 16-Mar 0 0 0 0.00
Mon 17-Mar 0 0 0 0.00
Tue 18-Mar 0 0 0 0.00
Wed 19-Mar 0 0 0 0.00
Thu 20-Mar 0 0 0 0.00
Fri 21-Mar 0 0 0 0.00
Sat 22-Mar 0 0 0 0.00
Sun 23-Mar 0 0 0 0.00
Mon 24-Mar 0 0 0 0.00
Tue 25-Mar 0 0 0 0.00
Wed 26-Mar 0 0 0 0.00
Thu 27-Mar 0 0 0 0.00
Fri 28-Mar 0 0 0 0.00
Sat 29-Mar 0 0 0 0.00
Sun 30-Mar 0 0 0 0.00
Mon 31-Mar 0 0 0 0.00
TOTAL CURRENT
MONTHLY CHARGES 0 0 0 0.00
</TABLE>
Page 2 of 2
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-29
<PAGE>
EXHIBIT 5 RATES
The service(s) and product features outlined herein shall be provided at the
following rates:
<TABLE>
<CAPTION>
- ------------------------------------------------------ ----------------------------------------------------
ENHANCED DIRECTORY ASSISTANCE SHORT MESSAGE SERVICES
- ------------------------------------------------------ ----------------------------------------------------
<S> <C>
[ ] per call. [ ] per message.
- ------------------------------------------------------ ----------------------------------------------------
</TABLE>
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-30
<PAGE>
EXHIBIT 6 FAILURE NOTICE
METRO ONE TELECOMMUNICATIONS, INC.
Metro One Network Operations Center (7X24)
Beaverton, Oregon
(800) 423-7593
(503) 643-9600 Fax
(CITY) Call Center
- ------------
CITY, STATE
(NPA) NXX-XXXX
(NPA) NXX-XXXX Fax
CUSTOMER
[ ]
[ ]
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-31
<PAGE>
EXHIBIT 7 PRINCIPLE SITES FOR PROVISION OF SERVICE
[To be provided by Metro One and CUSTOMER.]
ENHANCED DIRECTORY ASSISTANCE AGREEMENT-32
<PAGE>
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. ASTERISK * DENOTES SUCH OMISSIONS.
AGREEMENT FOR ENHANCED
DIRECTORY ASSISTANCE SERVICES
THIS AGREEMENT, is made by and between Metro One Telecommunications,
Inc. ("Metro One") and AT&T Wireless Services, Inc., on behalf of certain of its
operating affiliates, as listed in Exhibit A, as may be amended from time to
time and any Licensed Carrier, as defined in Section 9(a) below (individually
and collectively referred to as "Mobile Carrier"), and is made as of this
__2nd___ day of __May__________________, 1997, (the "Agreement"). (Mobile
Carrier and Metro One are sometimes referred to individually as a "Party" or
jointly as "Parties").
WHEREAS, Mobile Carrier is licensed to provide Commercial Mobile
Radio Service in the Calling Area; and
WHEREAS, Metro One operates a business which includes, in part, the
provision of enhanced directory assistance services, as defined below; and
WHEREAS, Metro One wishes to provide such enhanced directory assistance
services to Mobile Carrier and its mobile telephone customers in the Calling
Area;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is mutually acknowledged, the Parties hereby agree as follows:
1. DEFINITIONS
a. CALLING AREA means, according to its context, the collection
of geographic Call Origination Areas and/or Call Completion
Areas set forth in Exhibit A or any individual geographic area
set forth in Exhibit A, as may be amended under the terms of
Section 8 below.
b. CALL ORIGINATION AREA means the Calling Area from which
Subscriber calls may originate.
c. CALL COMPLETION AREA means the Calling Area to which
Subscriber calls may be completed. For purposes of this
Agreement, all Call Completion Areas within the United States
are hereby preapproved by Metro One with respect to any and
all Mobile Carriers.
d. CHANGE shall have the meaning set forth in Section 2(h) below.
e. CLAIM shall have the meaning set forth in Section 15(a) below.
- -------------
1-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
f. SYSTEM means Metro One's proprietary system developed to
enable it to perform EDA services. The System uses business,
residential, government and other data and databases,
including on-line national database systems access and backup
connections to certain databases provided by local exchange
carriers.
g. CONFIDENTIAL INFORMATION means all information, not generally
known to the public, that relates to the business, technology,
programs, systems, subscribers, customers, finances, plans,
proposals or practices of the Parties to this Agreement, and
it includes (without limitation) information relating to call
destination, duration, or other call-related information, the
identities of all Subscribers, customers and prospects, all
business plans and proposals, all marketing plans and
proposals, all technical plans and proposals, all research and
development, all budgets and projections, all non-public
financial information, all information designated as
"confidential," and all trade secrets or other information and
matters not generally known to the public. In using the term
"Confidential Information" the provisions of this paragraph
shall apply to every form in which information shall exist,
whether written, film, tape, computer disk or other form of
media.
Notwithstanding the foregoing, Confidential Information shall
not include any information that: a) is or becomes publicly
available other than by unauthorized disclosure hereunder; b)
was previously known to the Receiving Party, as reasonably
documented by such Receiving Party, free of any similar
restrictions; c) is received from a third Party without
similar restrictions and without breach of this Agreement; d)
is independently developed by a Party at any time; e) is
disclosed to third Parties by the Furnishing Party without
similar restrictions; or f) is approved for release by written
authorization of the Furnishing Party.
h. EDA NUMBERS shall have the meaning set forth in Section 5(c)
below.
i. ENHANCED DIRECTORY ASSISTANCE ("EDA") SERVICES means the
live-Operator enhanced directory assistance services provided
by Metro One to Mobile Carrier and its Subscribers pursuant to
this Agreement. EDA includes, but is not necessarily limited
to (i) call completion (termination) by outpulsing to Mobile
Carrier's directed network the digits of the
Subscriber-requested number; (ii) provision of name, address,
and telephone number when requested and when legally available
through Metro One's System, and (iii) any other EDA product
features agreed upon between Metro One and Mobile Carrier and
listed in Exhibit C.
j. LATA means local access and transport area.
2-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
k. LEC means the local exchange carrier or competitive local
exchange carrier providing service in the Call Completion
Area.
l. MARKET means the area served by the Metro One call center
listed in Exhibit D.
m. MARKS shall have the meaning set forth in Section 12 below.
n. MOBILE CARRIER'S SYSTEM means the communications network of
Mobile Carrier.
o. MTSO means Mobile Carrier's Mobile Telephone Switching Office.
p. OPERATORS means the live operators utilized by Metro One in
providing EDA Services to Subscribers.
q. SUBSCRIBER (OR CUSTOMER) means any person or entity to whom
Mobile Carrier provides wireless services.
r. TOTAL CALL VOLUME shall have the meaning set forth in Section
9(b) below.
s. TRIAL PERIOD shall mean the period during which EDA services
shall be made available to a selected group of Subscribers or
Mobile Carrier employees pursuant to Section 10 of this
Agreement.
2. EDA SERVICES PROVIDED BY METRO ONE
EDA Services shall be provided by Metro One as set forth below:
a. BEST EFFORTS. Metro One's operators shall use their best
efforts to answer all calls made to the Metro One's EDA
Number(s).
b. EDA SERVICES. Metro One's operators will provide EDA services,
provided that EDA services or parts thereof (e.g. connection
to certain numbers or areas) are not expressly prohibited by
Mobile Carrier. In the event that the completion of the call
requires the transport of the call across a LATA such that the
services of an interexchange carrier is required, Metro One
shall route the call using the services of the Subscriber's
presubscribed wireless interexchange carrier * * *
c. HOURS OF OPERATION. Metro One shall staff the EDA lines 24
hours a day, 7 days a week, 365 days a year (or 366 days a
year as the case may be), with a sufficient number of
Operators to perform the services required hereunder.
3-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
d. ANSWER STANDARD. Metro One shall, except as provided in
Section 22 ("Force Majeure") below, provide sufficient
operators and equipment to ensure that at least 80% of the
calls within a calendar month within each Calling Area is
answered in four (4) rings (24 seconds) or less. Metro One
shall use commercially reasonable efforts to answer all calls
within four (4) rings (24 seconds) or less. Each call shall be
answered without the use of any on-hold time. Metro One shall
provide reports to Mobile Carrier monthly regarding its
performance under this paragraph for each Mobile Carrier.
e. ABANDONED STANDARD. In no event, except as provided in Section
22 ("Force Majeure") below, shall Metro One allow more than
five (5) percent of the EDA calls within a given calendar
month, to be Abandoned. Abandoned means calls that wait for
more than four (4) rings (24 seconds) and go unanswered. Metro
One shall report the percentage to Mobile Carriers monthly.
f. PROMPTNESS AND COURTESY. Metro One shall ensure that Metro
One's Operators provide courteous and prompt service to all
Subscribers in a professional manner.
g. SYSTEM ACCURACY. Metro One shall use all prudent business
measures to keep the System accurate to the same degree as the
database of the LEC for listings within the Call Completion
Area. In the event Metro One does not have sufficient
information in the System to provide basic listing data, it
shall utilize such other sources as commercially reasonable,
at no additional charge to the Mobile Carrier, to provide the
requested EDA services. Notwithstanding the foregoing, Metro
One shall be excused from performance to the extent that any
LEC or other Metro One selected data provider does not make
data available to Metro One under commercially reasonable
terms acceptable to Metro One in its sole discretion. In the
event Metro One does not have sufficient information in the
System to provide any one of the EDA services, it shall
utilize such other sources as necessary to provide the
requested EDA services, including, without limitation, the
back-up database provided as an on-line service by the LEC or
LEC operator delivered directory assistance. In the event that
either (i) a Caller requests the LEC directory assistance
operator, or (ii) Metro One cannot provide any one of the
requested EDA services, Metro One shall route a Caller's
telephone call to the LEC directory assistance operator. In
such a case, Metro One shall charge the Mobile Carrier the per
call fee in Section 9 (Payment) only, not the LEC's fees.
h. RAPID PROVISION OF SERVICES. Metro One shall ensure that
Subscribers obtain each desired telephone number or are
connected to such number without unnecessary delay after
requesting such number or connection from Metro One's
Operator. Metro One shall ensure that such data or connection
is provided to each
4-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
Subscriber as rapidly and accurately as possible except when
such connection cannot be made due to busy signal or other
impediment beyond Metro One's control.
i. CHANGE REQUESTS. Mobile Carrier may from time to time request
additions, enhancements, deletions, or other changes
("Change") to the EDA Services. Metro One shall promptly
implement the Change provided that (1) the technology required
to implement the Change is readily available and reliable and
commercially reasonable, and (2) the Parties have agreed in
writing to any rate adjustment resulting from such Change. The
Parties shall negotiate in good faith with respect to any rate
adjustment. Metro One is not obligated to provide any Change
without such written agreement.
j. CALL COMPLETION. Metro One's operators shall ensure that the
call is properly connected, but shall not otherwise monitor,
record, listen to or divulge the contents of any
communications, or any other information regarding Subscribers
or calls unless authorized by the Subscriber. Metro One and
Mobile Carrier may monitor Metro One processing portions of
calls solely for quality control purposes. Unless otherwise
requested by a Subscriber, Metro One shall remain accessible
to the Subscriber throughout the completed call through the
use of a system which will enable the Subscriber to recall
Metro One's operator.
k. GREETING AND CLOSING. Metro One shall answer all calls made to
the EDA Numbers with a greeting and closing to be provided by
each Mobile Carrier. Such greeting shall not exceed five (5)
seconds and such closing shall not exceed twelve (12) seconds
in length. All such greetings and closings may be delivered by
means of an automated voice playback system. Each Mobile
Carrier may change its greeting or closing upon thirty (30)
days' prior written notice to Metro One. Each Mobile Carrier
may change its greeting or closing no more than once in any
thirty-day period. The greetings or closings provided by each
Mobile Carrier shall not include the trade names, trademarks
or brands of any competitor of such Mobile Carrier, and shall
not contain negative characterizations of such competitor's
service or business.
l. MULTIPLE REQUESTS. Subscribers shall be entitled to a maximum
of four (4) directory assistance requests per call.
m. MULTIPLE LISTINGS. When there is more than one address or
telephone number applicable to a directory assistance request,
Metro One shall, at the Subscriber's request, provide up to
two multiple addresses and telephone numbers at no additional
charge.
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<PAGE>
n. ALTERNATE BILLING. Subscribers who request credit card or
calling services shall be advised to dial "0" or "00" after
disconnecting to reach the appropriate operator for such
services.
o. PRINCIPLE SITES FOR PROVISION OF SERVICE. Metro One shall
provide EDA services to Mobile Carriers from call centers
located in the areas listed in Exhibit D. * * *
p. 911. Mobile Carrier will not route 911 calls to Metro One. If
an emergency call is received by Metro One the Caller shall be
asked to dial "9-1-1" after disconnecting, except as otherwise
required by applicable law.
* * *
3. METRO ONE'S PERSONNEL
a. Metro One will employ only properly qualified, and trained
persons to perform the EDA Services. Metro One will assign
qualified management, customer service, technical support and
similar personnel as required to provide the EDA Services.
Metro One acknowledges that, in order to meet the expectations
and requirements of Mobile Carrier, Metro One will need to
provide a top quality, responsive team.
b. All personnel performing EDA Services are employees of Metro
One, and not of Mobile Carrier. Metro One will be responsible
for and shall properly withhold
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<PAGE>
and pay all federal tax, workers' compensation, pension,
deferred compensation, welfare, insurance and other employee
taxes or benefits payable to or on behalf of any person
engaged by Metro One performing the EDA Services.
c. Metro One shall ensure that all persons employed by it to
perform EDA Services hereunder are familiar with Mobile
Carrier's standards for customer service, provided that such
standards are provided in writing to Metro One. Mobile Carrier
shall from time to time provide Metro One with information
and/or training with respect to such standards at no cost to
Metro One.
d. Mobile Carrier may notify Metro One if, in Mobile Carrier's
opinion, any Metro One employee performing EDA Services is
unqualified, discourteous, or fails to conform to Mobile
Carrier's standards for customer service. Metro One shall take
such action as it deems reasonable to correct such
non-conformance.
4. COMPLAINTS
Both Parties shall refrain from any action that may tend to discredit
or damage the name, reputation, good will or good public relations of
the other. Metro One will give immediate attention to, investigate and
use its best efforts to promptly, courteously and equitably respond to,
adjust and settle (without incurring any obligation or liability on
behalf of Mobile Carrier), all oral or written complaints received by
Mobile Carrier or Metro One from any current or potential Subscriber or
anyone else arising out of or in connection with the EDA Services or
this Agreement. Both Parties will promptly notify the other of all
material complaints and of any action taken (or to be taken) in
connection with such complaints. In handling any complaints, both
Parties will use good faith efforts to maintain and promote the good
will of and good public relations of the other Party. In addition,
Metro One will respond promptly (and in no event in more than one
twenty-four (24) hour business day) with a proposed solution to correct
any problems in the EDA Services or the System identified by Mobile
Carrier in writing.
5. EDA NUMBER(S)
a. Mobile Carrier may establish and assign to Metro One one or
more "#XXX" number(s) or any other abbreviated dialing number,
including, but not limited to N11 numbers, for Mobile
Carrier's Subscribers to use in accessing Metro One's EDA
Services. Metro One acknowledges that it has no proprietary
interest in the "#XXX" or abbreviated dialing number(s) and
that Mobile Carrier may, from time to time and at its sole
discretion, change such number(s).
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<PAGE>
b. Mobile Carriers who have agreed to participate in this
Agreement, which participation is evidenced by listing in
Exhibit A or amendment thereto, shall route all Subscriber
calls to 555-1212, 1-555-1212, 1-NPA-555-1212, and 411 or
successor numbers to Metro One. Affiliates of AT&T Wireless
Services, Inc. not participating in this Agreement may
provision EDA Services from a provider of their choice other
than Metro One. * * *
c. The numbers referenced in 5(a) and (b) above shall
collectively be referred to as the "EDA Numbers."
6. FACILITIES AND EQUIPMENT
a. Metro One will maintain adequate and appropriate office
facilities, support facilities and other facilities to enable
Metro One to perform its obligations under this Agreement.
b. Mobile Carrier will at its expense establish, maintain and pay
for all T-1 trunk lines needed for adequate performance
between Mobile Carrier's MTSO and Metro One's System for
purposes of performing the EDA Services for all Subscriber
calls. Metro One shall be responsible for establishing,
maintaining and paying for all other telecommunications
facilities associated with providing the EDA Services
described herein.
c. Mobile Carrier shall determine the quantities of circuit
equipment and services needed and to provide blocking levels
in accordance with the Bellcore document SR-000191, TRUNK
TRAFFIC ENGINEERING CONCEPTS AND APPLICATIONS.
d. After EDA Services are installed, any Metro One problems or
deficiencies In Metro One's System will be promptly corrected
by Metro One at no additional cost to Mobile Carrier.
e. Metro One and Mobile Carrier will each do such maintenance
testing and inspection of its own systems as may be necessary
to ensure the proper functioning of the interconnection(s).
f. If one Party's System interferes with, creates hazards over,
or impairs the service of the other Party's System, the Party
interfered with will, where practicable,
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<PAGE>
notify the other Party and advise it that a temporary
disconnection or discontinuance of the equipment or service
may be required. If the interference is not cured in a
reasonable time, the Party whose network is interfered with
may temporarily disconnect or discontinue service until the
interference is rectified. When prior notice is not
practicable, the Party interfered with may temporarily
disconnect or discontinue the interconnection or traffic
interchange without prior notice if such action is reasonable
under the circumstances; provided, however, that such Party
provides notice of disconnection as soon as is reasonably
practicable under the circumstances.
7. REPORTS
a. For a period of three years with respect to each Mobile
Carrier, Metro One shall record and maintain call detail
records, in accordance with EMI record format, a sample of
which has been provided to Metro One, for each call answered
and/or completed by Metro One hereunder. Such call detail
records shall be sent by Metro One, at Metro One's expense, in
magnetic tape format, or such other format as is mutually
agreed to between the parties, to Cincinnati Bell Information
Systems at such times and in such frequency as instructed by
Mobile Carrier.
b. For a period of three years with respect to each Mobile
Carrier, Metro One shall also maintain complete and accurate
records of each call using the EDA Services, and shall provide
Mobile Carrier access to such records upon request. The
records shall include at a minimum the following:
(1) the time the call is received by Metro One;
(2) the number to which a call is connected;
(3) all complaints made by any Subscriber(s) concerning
the EDA Services;
(4) any other information routinely prepared by Metro One
and provided to Metro One's customers regarding the
EDA Services and/or any Subscribers; and
(5) the mobile telephone number used to make the call.
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<PAGE>
8. ADDITION AND DELETION OF CALLING AREAS
With the exception of the calculation of the per call service rates set
forth in Section 9 below, this Agreement shall have separate effect for
each Mobile Carrier. In order to add a new Mobile Carrier and Calling
Area to this Agreement, Mobile Carrier shall, by means of execution of
a Service Request Form provided as Exhibit B, provide Metro One with
ninety (90) days' prior written notice of the following items: (a) new
Calling Area (including NPA and NXX information), (b) new Mobile
Carrier, (c) effective date of the Agreement for the new Mobile
Carrier, and (d) the billing contact for the new Mobile Carrier. Such
Mobile Carrier shall be automatically incorporated into Exhibit A upon
execution of a Service Request Form provided as Exhibit B. Term of
participation for each Mobile Carrier shall be three years from
effective date of addendum to Exhibit A in the form provided in Exhibit
B. Metro One shall use its best efforts to commence service as soon as
commercially reasonable prior to the ninety days.
9. PAYMENT.
a. Each Mobile Carrier will pay Metro One based on the EDA call
count volume for such Mobile Carrier for the satisfactory
performance of the EDA Services at the rates set forth in
Exhibit E hereto * * * upon commencement of EDA Services
after the trial period. In the event a credit is issued by
such Mobile Carrier to its Customer based on Metro One
connecting that Customer to an incorrect telephone number,
Metro One will have in place a mechanism to provide, and
shall provide a credit to such Mobile Carrier for such
calls. In the event that any Mobile Carrier in which AT&T
Wireless Services, Inc. owns fifty percent (50%) or less
equity interest ("Licensed Carrier") participates in this
Agreement, such Licensed Carrier shall be separately liable
for all payment for EDA Services provided to it hereunder
and no other Mobile Carrier shall be obligated to make any
payments on behalf of such Licensed Carrier.
b. Metro One shall provide each Mobile Carrier with its EDA call
count volume records in an agreed upon format on the 15th day
of each month for the previous month's calls. Mobile Carriers
shall be provided with a report as to total call volumes for
all Mobile Carriers during the same month ("Total Call
Volume"). The Total Call Volume shall be used, together with
the Market call volumes to determine the per call rates to be
charged each Mobile Carrier.
c. Metro One shall send each Mobile Carrier an invoice to the
billing contact listed for such Mobile Carrier in Exhibit A.
Each Mobile Carrier shall pay Metro One within forty-five (45)
days of receipt of such invoice. Any payments received after
such forty-five (45) days will incur interest in the amount of
1.50% a month.
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<PAGE>
With respect to any Licensed Carrier, such Licensed Carrier
shall pay Metro One within sixty (60) days of its receipt of
the invoice for such Licensed Carrier.
d. The compensation set forth in Exhibit B shall be the entire
compensation due Metro One from Mobile Carrier on account of
the EDA Services provided under this Agreement. Each Mobile
Carrier shall be separately liable for its invoice and shall
not be liable for the charges incurred by other Mobile
Carriers.
e. Mobile Carrier may deduct any disputed amounts from the
applicable Metro One invoice. Metro One agrees that disputed
amounts shall not be considered late payments and may be
withheld from pending payments until such time as the Parties
agree to the disposition of the disputed amount or until the
dispute is resolved pursuant to Section 24 below. Disputed
amounts will be paid, if owed, within 15 days of the
resolution of the dispute.
* * *
10. COMMENCEMENT OF SERVICE
a. FULL SERVICE. On or before ninety (90) days after the date of
this Agreement, or, as the case may be, ninety (90) days of
the date of amendment pursuant to execution by both Parties of
a Service Request Form provided as Exhibit B, Metro One shall
be prepared to:
(1) answer all calls to the EDA Numbers;
(2) provide EDA Services throughout the Calling Area; and
(3) provide EDA Services for residential listings as well
as business listings.
* * *
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<PAGE>
* * *
c. EFFECTIVE DATE FOR MOBILE CARRIERS. For each Mobile Carrier
added to this Agreement under the terms of Section 8 above,
Metro One shall be provided with an effective date. Upon such
effective date, Metro One shall provide all EDA Services under
the terms and conditions of this Agreement to such Mobile
Carrier.
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<PAGE>
11. MARKETING
Mobile Carrier will have sole and exclusive control of the manner of
selling, publicizing, advertising and marketing to its subscribers the
EDA Services provided under this Agreement to Mobile Carrier in the
Calling Area. Without limiting the generality of the foregoing:
a. Mobile Carrier will determine any trademarks for the EDA
Services as a whole offered by Mobile Carrier to its
Subscribers in the Calling Area (references to individual
product features, if any, shall be made using their Metro One
trademarks, such as StarBack-REGISTERED TRADEMARK-);
b. Mobile Carrier will establish, from time to time, the rates
and other terms and conditions under which the EDA Services
will be available to Subscribers;
c. Mobile Carrier will be responsible for all billing to
Subscribers and collections from Subscribers with respect to
the EDA Services; and
d. Mobile Carrier will conduct such promotional programs and
advertising of the EDA Services provided under this Agreement
as Mobile Carrier deems appropriate. Metro One shall not refer
to Mobile Carrier or use any trade name, trademark or service
mark of AT&T Wireless Services, Inc. or any Mobile Carrier in
any advertisement, promotion, publication or other
communication (including, without limitation, press release,
presentations or materials submitted to any investors or
potential investors in Metro One, and presentations or
solicitations to any other wireless services provider made by
Metro One) without the prior written consent of AT&T Wireless
Services, Inc. Notwithstanding the foregoing, Metro One may
list AT&T Wireless Services, Inc. as a customer, if required,
in filings with governmental agencies or in financial
statements prepared in accordance with generally accepted
accounting principles.
e. Mobile Carrier agrees to use reasonable efforts to promote the
availability of EDA Services to Subscribers.
f. Metro One shall not misrepresent the nature or scope of this
Agreement or of the business relationship, if any, between
Metro One, AT&T Wireless Services, Inc. and the Mobile
Carrier(s).
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<PAGE>
12. TRADEMARKS
a. Each Party acknowledges the goodwill associated with the
other's trademarks, service marks and trade names ("Marks").
Each Party shall own its own respective Marks and will not
acquire rights in the Marks of the other Party. Neither Party
will use any Marks of the other without the other's prior
written consent, which may be withheld for any reason.
b. Metro One hereby grants Mobile Carriers a non-exclusive
license to use the Metro One Telecommunications-REGISTERED
TRADEMARK-, Enhanced Directory Assistance-REGISTERED
TRADEMARK-, The Enhanced Directory Assistance
People-REGISTERED TRADEMARK-, StarBack-REGISTERED TRADEMARK-,
SureConnect-TM-, AutoBack-TM-, CallBack-TM-, MessageBack-TM-,
TeleConcierGETM and NumberBack-TM- service marks in Mobile
Carriers' marketing of EDA services within the Call
Origination Area during the term of this Agreement.
13. LIMITATION OF LIABILITY
In no event shall either Party be liable to the other Party for any
incidental, indirect, special, exemplary, punitive or consequential
damages to the other Party (including, without limitation, lost
profits, loss of use, lost data or damages for any interruption of
business) arising out of or relating to the operation of the EDA
Services.
14. REPRESENTATIONS AND WARRANTIES
Metro One and Mobile Carrier each represent and warrant to the other
that:
a. Each Party is a corporation or partnership that is duly
organized, validly existing, in good standing, and fully
authorized to do business in and provide the service described
herein under the laws of the State in which the EDA service
will be provided and, as applicable, under federal law;
b. All corporate action on the parts of Metro One and Mobile
Carrier necessary for the authorization, execution, delivery
and performance by the parties under this Agreement and that
this Agreement when duly executed and delivered by both
Parties, shall constitute a valid and binding obligation for
each, enforceable in accordance with its terms; and
c. Metro One has good and clear title to or right to utilize, in
the provision of EDA Service to Mobile Carrier, the software,
facilities, equipment and other technical
14-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
or intellectual property elements that comprise or form a part
of the provisioning of EDA Service to Mobile Carrier.
15. INDEMNIFICATION
a. "Claim(s)" as used herein shall include but not be limited to
all actions, causes of action, liabilities, claims, suits,
judgments, liens, awards, and damages of any kind and nature
whatsoever.
b. Metro One shall indemnify, defend and hold Mobile Carrier
harmless from and against: (I) any and all Claims arising out
of any act or omission of Metro One, its officers, employees,
agents, contractors, suppliers, licensees or invitees in
connection with the EDA Services provided by Metro One
pursuant to this Agreement; (II) any and all third party
Claims of patent, copyright, trade secret, trademark or other
intellectual property or proprietary right infringement
arising out of or in any way related to the EDA Services; and
(III) any and all Claims that EDA Services as provided
hereunder are unlawful. Mobile Carrier shall promptly tender,
and Metro One shall accept, the defense of Mobile Carrier on
all such Claims with counsel reasonably acceptable to Mobile
Carrier. Metro One shall promptly reimburse Mobile Carrier for
all amounts reasonably paid by Mobile Carrier in satisfaction
of judgments or in settlement of any such Claim, providing
that Mobile Carrier shall not settle any Claim without the
consent of Metro One, which shall not be unreasonably
withheld. Metro One also shall reimburse Mobile Carrier for
all attorneys' fees and expenses incurred in defending against
or investigating any such Claim, but Metro One shall have no
liability for such fees and expenses if it accepts the defense
of Mobile Carrier within ten (10) days of the tender. Metro
One's obligations under this Section shall extend to Mobile
Carrier, its parent, subsidiaries and affiliates, and the
officers, directors, employees, representatives and agents of
each of them.
c. Mobile Carrier shall defend, indemnify and hold Metro One
harmless from any Claim brought by a third party for which
injury is solely caused by the negligent acts or omissions or
willful misconduct of Mobile Carrier or its employees, agents
or contractors in connection with the performance of this
Agreement. Metro One shall promptly tender, and Mobile Carrier
shall accept, the defense of Metro One on all such Claims with
counsel reasonably acceptable to Metro One. Mobile Carrier
shall promptly reimburse Metro One for all amounts reasonably
paid by Metro One in satisfaction of judgments or in
settlement of any such Claim, providing that Metro One shall
not settle any Claim without the consent of Mobile Carrier,
which shall not be unreasonably withheld. Mobile Carrier also
shall reimburse Metro One for all attorneys' fees and expenses
incurred in defending
15-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
against or investigating any such Claim, but Mobile Carrier
shall have no liability for such fees and expenses if it
accepts the defense of Metro One within ten (10) days of the
tender. Mobile Carrier's obligations under this Section shall
extend to Metro One, its parent, subsidiaries and affiliates,
and the officers, directors, employees, representatives and
agents of each of them.
16. CONFIDENTIAL INFORMATION
a. With respect to all Confidential Information, the Party
receiving such information shall, unless otherwise agreed to
in writing by the Party furnishing such information, use
reasonable efforts to: a) neither use nor permit any use of
the Confidential Information for any purpose except in
connection with providing EDA Services pursuant to this
Agreement and except as may otherwise be agreed to in writing
by the other Party; b) restrict disclosure solely to those
employees, contractors or agents having a need to know; and c)
advise those employees receiving Confidential Information of
their obligations with respect thereto.
b. Confidential Information shall be deemed the property of the
furnishing Party for the purposes of this Agreement. The
receiving Party shall not reproduce or copy Confidential
Information except as required for the purposes stated herein
unless otherwise authorized by the furnishing Party in
writing. The receiving Party shall return to the furnishing
Party, or shall destroy, all records containing the
Confidential Information upon the termination of this
Agreement and upon written request by the furnishing Party.
The requirements of use and confidentiality set forth herein
shall survive for three (3) years after termination of this
Agreement.
c. Nothing contained in this Agreement shall be construed as
granting or conferring any rights by license or otherwise in
any information disclosed.
d. In the event either Party is requested or required (by oral
question, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar
process) to disclose Confidential Information of the other to
any lawfully constituted authority, it is agreed that the
Party requested or required to furnish the Confidential
Information will provide the other Party with timely notice in
order for that Party to seek a protective order or otherwise
object.
e. The Parties agree that it would be difficult to measure the
monetary damages that would be incurred by the other Party by
reason of the failure of the other Party to comply with the
terms of this paragraph. The Parties therefore agree that
either
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<PAGE>
Party may seek injunctive relief, which the Parties
agree is appropriate for enforcement of this paragraph.
17. TERM
* * * The term of this Agreement shall be automatically extended
for additional period(s) of one (1) year each unless either Party
notifies the other Party, in writing, at least ninety (90) days in
advance of the end of the term then in effect, of that Party's
intent to terminate the Agreement at the end of the term then in
effect.
18. TERMINATION
a. Any Mobile Carrier may terminate this Agreement immediately if
Metro One is in material breach of or default under this
Agreement by giving Metro One written notice of such
termination. The occurrence of any of the following shall
constitute a material breach of and default under this
Agreement by Metro One:
(1) any failure by Metro One to perform any of its
material obligations in accordance with this
Agreement, where such failure continues for thirty
(30) days after written notice to Metro One or occurs
repeatedly after such written notice;
(2) the filing by Metro One of a petition in bankruptcy
or the making of any general assignment for the
benefit of creditors;
(3) any untruthfulness of any material information
provided by Metro One to Mobile Carrier relating to
this Agreement;
b. Metro One may terminate this Agreement immediately with
respect to a Mobile Carrier by providing such Mobile Carrier
with written notice of termination if such Mobile Carrier is
in material breach or default under this Agreement and such
breach or default continues for a period of thirty (30) days
after Metro One delivers written notice of such breach or
default to such Mobile Carrier; provided, however, that if
such breach or default is related to or arises out of a
disputed payment from such Mobile Carrier to Metro One, and
such disputed payment has been submitted for resolution under
Section 24 below, then Metro One shall have no right to
terminate this Agreement on the basis of such disputed
payment.
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<PAGE>
c. Either Party may terminate this Agreement if any circumstance
would render the continued performance of this Agreement by
either Party in violation of any applicable law, statute, rule
or regulation.
d. Upon termination or expiration of the term, in addition to any
other rights or remedies of Mobile Carrier, Metro One will:
(1) cease to provide the EDA Services to Subscribers; and
(2) deliver to Mobile Carrier a final invoice for amounts
payable under this Agreement;
e. Both Parties shall in addition upon termination or expiration
of the term:
(1) promptly return to the other Party all materials
containing any Confidential Information of such
Party; and
(2) cease all use, if any, of the other Party's Marks.
19. LAWFULNESS
This Agreement and the Parties' actions under this Agreement shall
comply with all applicable federal, state, and local laws, rules,
regulations, court orders, and governmental agency orders. If a court
or a governmental agency with proper jurisdiction determines that this
Agreement, or a provision of this Agreement, is unlawful, this
Agreement, or that provision of this Agreement, shall terminate on the
effective date of such court's determination. If a provision of this
Agreement is so terminated, but the Parties legally, commercially, and
practicably can continue this Agreement without the terminated
provision, the remainder of this Agreement shall continue in effect.
20. GOVERNMENT APPROVALS
Each Party shall obtain all necessary regulatory approvals required of
it and shall assist the other Party in obtaining all necessary
regulatory approvals required of the other Party for the provision of
EDA Services to Subscribers.
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<PAGE>
21. ASSISTANCE
Each Party will provide the other reasonable assistance in any matters
affecting this Agreement before any governmental authority, trade
association or other organization. Such assistance may include
preparing and furnishing documents, providing advice, and providing
qualified personnel to participate in hearings or other proceedings.
22. FORCE MAJEURE
Either Party shall be excused from performance if its performance is
prevented by acts or events beyond the Party's reasonable control,
including, but not limited to: severe weather and storms; earthquakes
or other natural occurrences; strikes or other labor unrest; power
failures; acts of legislative, judicial, executive or administrative
authorities.
23. ASSIGNMENT
Neither Party may assign or transfer this Agreement or any of its
obligations hereunder without the prior written consent of the other,
which consent will not be unreasonably withheld.
24. SERVICE TESTING
Metro One may negotiate with each Mobile Carrier for the provision of a
wireless telephone, wireless access line of landline access line to be
used to test the quality of Metro One's services for such Mobile
Carrier. Nothing in this Agreement shall require Metro One and any
Mobile Carrier to come to an agreement on this provisioning.
25. SURVIVAL OF OBLIGATIONS
The obligations set forth in Sections 12 ("Trademarks") and 16
("Confidential Information") and in this Section 25 hereof will survive
the termination or expiration of this Agreement, in addition to any
other provisions that, by their content, are intended to survive the
performance, termination, or cancellation of this Agreement.
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<PAGE>
26. DISPUTE RESOLUTION
a. The Parties desire to resolve disputes arising out of this
Agreement without litigation. Accordingly, except for an
action seeking a temporary restraining order or an injunction
related to the purposes of this Agreement, or an action to
compel compliance with this dispute resolution process, the
Parties agree to use the following dispute resolution
procedure as their sole remedy with respect to any controversy
or claim arising out of or relating to this Agreement or its
breach. The existence of a dispute, which is being resolved
under the procedures set forth herein, shall not be grounds
for termination of the agreement, and both parties shall
continue to perform under this Agreement while such dispute is
being resolved.
(1) At the written request of a Party to resolve a
dispute, each Party will appoint a knowledgeable,
responsible representative to meet and negotiate in
good faith to resolve any dispute arising under this
Agreement. The Parties intend that these negotiations
shall be conducted by non-lawyer, business
representatives. The location, format, frequency,
duration and conclusion of these discussions shall be
left to the discretion of the representatives. Upon
reaching agreement, the representatives may utilize
other alternative dispute resolution procedures, such
as mediation, to assist in the negotiations.
Discussion and correspondence among the
representatives for purposes of these negotiations
shall be treated as confidential information
developed for purposes of settlement, exempt from
discovery and production, and shall not be admissible
in the arbitration discussed below, or any
litigation, without the concurrence of both Parties.
Documents identified in or provided with such
communications, which are not prepared for purposes
of negotiations, are not so exempted and may, if
otherwise admissible, be admitted in evidence in the
arbitration of lawsuit.
(2) If the negotiations do not resolve the dispute within
sixty (60) days of the initial written request, the
dispute shall be submitted to binding arbitration by
a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration
Association. A Party may demand such arbitration in
accordance with the procedures set out in those
rules. Discovery shall be controlled by the
arbitrator and shall be permitted to the extent set
out in this subsection. Each Party may submit in
writing to a Party, and that Party shall so respond,
to a maximum of any combination of thirty-five (35)
(none of which may have subparts) of the following:
interrogatories, requests for production of
documents, and requests for admission. Each Party is
also entitled to take the oral deposition of up to
three individuals
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<PAGE>
of the other Party. Additional discovery may be
permitted upon mutual agreement of the Parties.
(3) The arbitration hearing shall be commenced within
ninety (90) days of the demand for arbitration. The
arbitration shall be held in Seattle, Washington, or
such other location as is agreed upon among the
arbitrator and the Parties. The arbitrator shall
control the schedule so as to process the matter
expeditiously. The Parties may submit written briefs
of no more than 25 pages in length, double spaced, 10
pitch, with left and right hand margins of at least
one inch. The arbitrator shall rule on the dispute by
issuing a written opinion within thirty (30) days of
the close of hearings. The times specified in this
subsection may be extended upon a showing of good
cause. Judgment upon the award rendered by the
arbitrator may be entered in any court having
jurisdiction.
(4) Each Party shall bear its own costs of these
procedures. A Party seeking discovery shall reimburse
the responding Party for the responding Party's
copying costs of reproducing the documents. The
Parties shall equally split the fees of the
arbitration and the arbitrator.
27. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
related to the subject matter hereof, and supersedes any and all prior
negotiations, representations, correspondence, understandings and
agreements with respect to the subject matter hereof. No amendment,
alteration, or modification of any of the terms of this Agreement will
be effective unless in a writing signed by both Parties.
28. NO THIRD PARTY BENEFICIARIES
Callers shall not be Third Party beneficiaries under this Agreement.
Nothing expressed or implied in this Agreement is intended or shall be
construed to confer or give any person other than Mobile Carrier and
Metro One, their respective successors and permitted assigns any rights
or remedies under or by reason of this Agreement.
29. WAIVER
The failure of either Party to enforce at any time any provision hereof
shall not be construed to be a waiver of such provision or the right
thereafter to enforce each and
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<PAGE>
every provision. No waiver by either Party to this Agreement, either
express or implied, or any breach of any term, condition or obligation
of this Agreement shall be construed as a waiver of any subsequent
breach of that term, condition or obligation, or of any other term,
condition or obligation of this Agreement.
30. APPLICABLE LAW
This Agreement will be governed by the laws of the State of Washington.
21. NOTICES
Any notices, demand or other communications under this Agreement given
by one Party to the other shall be in writing and shall be deemed to
have been duly delivered on the date delivered in person or sent via
telex, telecopier or cable or three (3) business days after the date
deposited. postage prepaid, in the United States mails via certified
mail, return receipt requested, addressed as set forth below:
To Metro One:
Metro One Telecommunications, Inc.
8405 SW Nimbus Avenue
Beaverton, Oregon 97008
Attn: President
To Mobile Carrier:
(1) to the appropriate billing contact set forth for such
Mobile Carrier in Exhibit A; and
(2) to:
AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Attn:
-----------------------------
(3) with a copy to:
AT&T Wireless Services, Inc.
5000 Carillon Point
22-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
Kirkland, WA 98033
Attn: Legal Department
Either Party may from time to time change such address and recipient by giving
the other Party notice of such change in accordance herewith. Any such
notice will be deemed given when received.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date set forth below.
AT&T WIRELESS SERVICES, INC.
By: /s/ Stewart B. Chapin
------------------------------
Name: Stewart B. Chapin
------------------------------
Title: Director
------------------------------
Dated: May 2,1997
------------------------------
METRO ONE TELECOMMUNICATIONS, INC.
By: /s/ Timothy A. Timmins
------------------------------
Name: Timothy A. Timmins
------------------------------
Title: President
------------------------------
Dated: April 28, 1997
------------------------------
23-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
EXHIBIT A
MOBILE CARRIERS AND CALLING AREAS
<TABLE>
<CAPTION>
MOBILE CARRIER AND EFFECTIVE
BILLING CONTACT CALL ORIGINATION AREA CALL COMPLETION AREA DATE
------------------ --------------------- -------------------- ---------
<S> <C> <C> <C>
</TABLE>
MOBILE CARRIERS AND/OR ADDITIONAL CALLING AREAS MAY BE ADDED TO THIS EXHIBIT A
BY MEANS OF EXECUTION BY BOTH PARTIES OF A SERVICE REQUEST FORM AS SHOWN IN
EXHIBIT B.
24-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
EXHIBIT B
SERVICE REQUEST FORM
MOBILE CARRIER NAME:
CALL ORIGINATION AREA:
(ATTACH MAP IF DESIRED)
CALL COMPLETION AREA:
(INCLUDE NPA AND NXX INFORMATION)
EFFECTIVE DATE:
IN WITNESS WHEREOF, the Parties have executed this Service Request Form on the
date set forth below, and agree to be bound by the terms and conditions of the
Agreement between AT&T Wireless Services, Inc. and Metro One Telecommunications,
Inc. relating to Enhanced Directory Assistance Services and dated
___________________________.
MOBILE CARRIER METRO ONE
TELECOMMUNICATIONS, INC.
_____________________________________
Mobile Carrier Name
By: ______________________________ By: ________________________________
Name: ______________________________ Name: _____________________________
Title: ______________________________ Title: _____________________________
Dated: ______________________________ Dated: _____________________________
25-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
EXHIBIT C
EDA SERVICES
For purposes of the Agreement to which this Exhibit C is an integral part, EDA
Services shall include, in addition to (i) call completion (termination) by
outpulsing to Mobile Carrier's directed network the digits of the
Subscriber-requested number; (ii) provision of name, address, and telephone
number when requested and when legally available through Metro One's System, the
following:
1. Category searches
2. Local event information
3. Movie and theater listings
4. StarBack
5. AutoBack
6. NumberBack
And when commercially available:
1. MessageBack
2. CallBack
THIS EXHIBIT MAY BE MODIFIED FROM TIME TO TIME BY MUTUAL WRITTEN AGREEMENT OF
THE PARTIES. EACH MOBILE CARRIER MAY CHOOSE TO RECEIVE ANY OR ALL OF THESE EDA
SERVICES.
26-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
EXHIBIT D
METRO ONE CALL CENTERS / MARKETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
CALL CENTER / MARKET CALL ORIGINATION AREA
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
1. Seattle Alaska, Washington, Montana
- ------------------------------------------------------------ ---------------------------------------------------------
2. Portland Oregon, Idaho
- ------------------------------------------------------------ ---------------------------------------------------------
3. Sacramento* Sacramento portion of Northern California, Northern
Nevada
- ------------------------------------------------------------ ---------------------------------------------------------
4. San Francisco* Bay Area portion of Northern California, Central Valley
- ------------------------------------------------------------ ---------------------------------------------------------
5. Los Angeles** Southern California except San Diego
- ------------------------------------------------------------ ---------------------------------------------------------
6. San Diego San Diego area
- ------------------------------------------------------------ ---------------------------------------------------------
7. Phoenix Southern Nevada, Arizona, New Mexico
- ------------------------------------------------------------ ---------------------------------------------------------
8. Denver Colorado, Utah, Wyoming
- ------------------------------------------------------------ ---------------------------------------------------------
9. Minneapolis Minnesota, North Dakota, South Dakota, Western Wisconsin
- ------------------------------------------------------------ ---------------------------------------------------------
10. Chicago Northern Illinois, Eastern Wisconsin
- ------------------------------------------------------------ ---------------------------------------------------------
11. Detroit Michigan
- ------------------------------------------------------------ ---------------------------------------------------------
12. St. Louis Eastern Missouri, Southern Illinois, Eastern Nebraska
- ------------------------------------------------------------ ---------------------------------------------------------
13. New Orleans* Louisiana, Mississippi, Alabama
- ------------------------------------------------------------ ---------------------------------------------------------
14. San Antonio* Southern Texas
- ------------------------------------------------------------ ---------------------------------------------------------
15. Atlanta* Georgia, North Carolina, South Carolina
- ------------------------------------------------------------ ---------------------------------------------------------
16. Cleveland/Cincinnati/Indianapolis* Ohio, Indiana, Western West Virginia
- ------------------------------------------------------------ ---------------------------------------------------------
17. Nashville* Tennessee, Kentucky
- ------------------------------------------------------------ ---------------------------------------------------------
18. Kansas City* Kansas, Western Missouri, Western Nebraska
- ------------------------------------------------------------ ---------------------------------------------------------
19. Dallas* Northern Texas, Oklahoma, Arkansas
- ------------------------------------------------------------ ---------------------------------------------------------
20. Philadelphia Pennsylvania, Delaware, Southern New Jersey
- ------------------------------------------------------------ ---------------------------------------------------------
21. New York** New York, Northern New Jersey, Western Connecticut
- ------------------------------------------------------------ ---------------------------------------------------------
22. Baltimore Maryland, Washington DC, Virginia, Eastern West
Virginia
- ------------------------------------------------------------ ---------------------------------------------------------
23. Boston* Eastern Massachusetts, Eastern Connecticut, Rhode
Island, New Hampshire, Maine
- ------------------------------------------------------------ ---------------------------------------------------------
24. Orlando/Jacksonville* Northern Florida, Tampa, Gulf Area
- ------------------------------------------------------------ ---------------------------------------------------------
25. Miami (Ft. Lauderdale) Southern Florida
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
The Call Origination Areas shown above constitute Markets for purposes of
pricing of and payment for EDA services covered by the Agreement.
* Not existing as of the date of Agreement.
** Under construction.
27-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
* * *
28-AGREEMENT FOR ENHANCED DIRECTORY ASSISTANCE SERVICES
<PAGE>
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of September 10, 1999
("AGREEMENT"), by and between GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation with an address at 4 NORTH PARK DRIVE, SUITE 500, HUNT
VALLEY, MARYLAND 21030, AND ITS ASSIGNS (together with is successors and
assigns, if any, "SECURED PARTY"), and METRO ONE TELECOMMUNICATIONS, INC., A
CORPORATION, organized and existing under the laws of the State of OREGON
with its chief executive offices located at 11200 MURRAY SCHOLLS PLACE,
BEAVERTON, OR 97008 ("DEBTOR").
In consideration of the promises herein contained and of certain other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Debtor and Secured Party hereby agree as follows:
1. CREATION OF SECURITY INTEREST.
Debtor hereby gives, grants and assigns to Secured Party, its successors
and assigns forever, a security interest in and against any and all property
listed on any collateral schedule now or hereafter annexed hereto or made a
part hereof ("COLLATERAL SCHEDULE"), and in and against any and all
additions, attachments, accessories and accessions thereto, any and all
substitutions, replacements or exchanges therefor, and any and all insurance
and/or other proceeds thereof (all of the foregoing being hereinafter
individually and collectively referred to as the "COLLATERAL"). The
foregoing security interest is given to secure the payment and performance of
any and all debts, obligations and liabilities of any kind, nature or
description whatsoever (whether primary, secondary, direct, contingent, sole,
joint or several, or otherwise, and whether due or to become due) of Debtor
to Secured Party, now existing or hereafter arising, including but not limited
to the payment and performance of certain Promissory Notes from time to time
identified on any Collateral Schedule (collectively "NOTES" and each a
"NOTE"), and any renewals, extensions and modifications of such debts,
obligations and liabilities (all of the foregoing being hereinafter referred
to as the "INDEBTEDNESS"). Notwithstanding the foregoing, and
notwithstanding anything to the contrary contained elsewhere in this
Agreement, to the extent that Secured Party asserts a purchase money security
interest in any items of Collateral ("PMSI COLLATERAL"): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in
or the use of such PMSI Collateral (the "PMSI INDEBTEDNESS"), and (ii) no
other Collateral shall secure the PMSI Indebtedness.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor hereby represents, warrants and covenants as of the date hereof
and as of the date of execution of each Collateral Schedule hereto that:
(a) Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the first paragraph of this
Agreement, has its chief executive offices at the location set forth in such
paragraph, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations;
(b) Debtor has adequate power and capacity to enter into, and to
perform its obligations, under this Agreement, each Note and any other
documents evidencing, or given in connection with, any of the Indebtedness (all
of the foregoing being hereinafter referred to as the "DEBT DOCUMENTS");
(c) This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid and
binding agreements enforceable under all applicable laws in accordance with
their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws;
(d) No approval, consent or withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into,
or performance by, Debtor of any of the Debt Documents, except such as may
have already been obtained;
(e) The entry into, and performance by, Debtor of the Debt Documents
will not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in
any breach of, constitute a default under, or result in the creation of any
lien, claim or encumbrance on any of Debtor's property (except for liens in
favor of Secured Party) pursuant to, any indenture mortgage, deed of trust,
bank loan, credit agreement, or other agreement or instrument to which Debtor
is a party;
(f) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or
affecting Debtor which could, in the aggregate, have a material adverse
effect on Debtor, its business or operations, or its ability to perform its
obligations under the Debt Documents;
(g) All financial statements delivered to Secured Party in connection
with the Indebtedness have been prepared in accordance with generally
accepted accounting principles, and since the date of the most recent
financial statement, there has been no material adverse change;
(h) The Collateral is not, and will not be, used by Debtor for
personal, family or household purposes;
(i) The Collateral is, and will remain, in good condition and repair
and Debtor will not be negligent in the care and use thereof;
(j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement; and
(k) The Collateral is, and will remain, free and clear of all liens,
claims and encumbrances of every kind, nature and description, except for (i)
liens in favor of Secured Party, (ii) liens for taxes not yet due or for
taxes being contested in good faith and which do not involve, in the
reasonable judgment of Secured Party, any risk of the sale, forfeiture or
loss of any of the Collateral, and (iii) inchoate materialmen's, mechanic's,
repairmen's and similar liens arising by operation of law in the normal
course of business for amounts which are not delinquent (all of such
permitted liens being hereinafter referred to as "PERMITTED LIENS").
3. COLLATERAL.
(a) Until the declaration of any default hereunder, Debtor shall remain
in possession of the Collateral; provided, however, that Secured Party shall
have the right to possess (i) any chattel paper or instrument that constitutes
a part of the Collateral, and (ii) any other Collateral which because of its
nature may require that Secured Party's security interest therein be
perfected by possession. Secured Party, its successors and assigns, and their
respective agents, shall have the
<PAGE>
right to examine and inspect any of the Collateral at any time during normal
business hours. Upon any request from Secured Party, Debtor shall provide
Secured Party with notice of the then current location of the Collateral.
(b) Debtor shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good condition and working order,
(iii) use and maintain the Collateral only in compliance with all applicable
laws, and (iv) keep all of the Collateral free and clear of all liens, claims
and encumbrances (except for Permitted Liens).
(c) Debtor shall not, without the prior written consent of Secured
Party, (i) part with possession of any of the Collateral (except to Secured
Party or for maintenance and repair), (ii) remove any of the Collateral from
the continental United States, or (iii) sell, rent, lease, mortgage, grant a
security interest in or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral.
(d) Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on the use thereof, or on this Agreement or any of the other Debt
Documents. At its option, Secured Party may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the
Collateral and may pay for the maintenance, insurance and preservation of the
Collateral or to effect compliance with the terms of this Agreement or any of
the other Debt Documents. Debtor shall reimburse Secured Party, on demand,
for any and all costs and expenses incurred by Secured Party in connection
therewith and agrees that such reimbursement obligation shall be secured
hereby.
(e) Debtor shall, at all times, keep accurate and complete records of
the Collateral, and Secured Party, its successors and assigns, and their
respective agents, shall have the right to examine, inspect, and make
extracts from all of Debtor's books and records relating to the Collateral at
any time during normal business hours.
(f) If agreed by the parties, Secured Party may, but shall in no event
be obligated to, accept substitutions and exchanges of property for property,
and additions to the property, constituting all or any part of the
Collateral. Such substitutions, exchanges and additions shall be
accomplished at any time and from time to time, by the substitution of a
revised Collateral Schedule for the Collateral Schedule now or hereafter
annexed. Any property which may be substituted, exchanged or added as
aforesaid shall constitute a portion of the Collateral and shall be subject
to the security interest granted herein. Additions to, reductions or
exchanges of, or substitutions for, the Collateral, payments on account of
any obligation or liability secured hereby, increases in the obligations and
liabilities secured hereby, or the creation of additional obligations and
liabilities secured hereby, may from time to time be made or occur without
affecting the provisions of this Agreement or the provisions of any
obligation or liability which this Agreement secures.
(g) Any third person at any time and from time to time holding all or any
portion of the Collateral shall be deemed to, and shall, hold the Collateral
as the agent of, and as pledge holder for, Secured Party. At any time and
from time to time, Secured Party may give notice to any third person holding
all or any portion of the Collateral that such third person is holding the
Collateral as the agent of, and as pledge holder for, the Secured Party.
4. INSURANCE.
The Collateral shall at all times be held at Debtor's risk, and Debtor
shall keep it insured against loss or damage by fire and extended coverage
perils, theft, burglary, and for any or all Collateral which are vehicles,
for risk of loss by collision, and where requested by Secured Party, against
other risks as required thereby, for the full replacement value thereof, with
companies, in amounts and under policies acceptable to Secured Party. Debtor
shall, if Secured Party so requires, deliver to Secured Party policies or
certificates of insurance evidencing such coverage. Each policy shall name
Secured Party as loss payee thereunder, shall provide for coverage to
Secured Party regardless of the breach by Debtor of any warranty or
representation made therein, shall not be subject to co-insurance, and shall
provide for thirty (30) days written notice to Secured Party of the
cancellation or material modification thereof. Debtor hereby appoints
Secured Party as its attorney in fact to make proof of loss, claim for
insurance and adjustments with insurers, and to execute or endorse all
documents, checks or drafts in connection with payments made as a result of
any such insurance policies. Proceeds of insurance shall be applied, at the
option of Secured Party, to repair or replace the Collateral or to reduce any
of the Indebtedness secured hereby.
5. REPORTS.
(a) Debtor shall promptly notify Secured Party in the event of (i) any
change in the name of Debtor, (ii) any relocation of its chief executive
offices, (iii) any relocation of any of the Collateral, (iv) any of the
Collateral being lost, stolen, missing, destroyed, materially damaged or worn
out, or (v) any lien, claim or encumbrance attaching or being made against
any of the Collateral other than Permitted Liens.
(b) Debtor will within ninety (90) days of the close of each fiscal
year of Debtor, deliver to Secured Party, Debtor's complete financial
statements, certified by a recognized firm of certified public accountants.
Debtor will, within thirty (30) days after the date on which they are filed,
deliver to Secured Party all Forms 10-K and 10-Q filed with the Securities
and Exchange Commission. Upon request Debtor will deliver to Secured Party
quarterly, within ninety (90) days of the close of each fiscal quarter of
Debtor, in reasonable detail, copies of Debtor's quarterly financial report
certified by the chief financial officer of Debtor. Upon request, Debtor
will deliver to Secured Party one copy of each financial statement, report,
notice or proxy statement sent by Debtor to shareholders generally and one
copy of each regular or periodic report, registration statement or
prospectus filed by Debtor with any securities exchange or the Securities
and Exchange Commission or any successor agency, such copies to be delivered
to Secured Party within thirty (30) days after they become available or are
otherwise filed. Any and all financial statements submitted and to be
submitted to Secured Party have and will have been prepared on a basis of
generally accepted accounting principles, and are and will be complete and
correct and fairly present Debtor's financial condition as at the date
thereof. Secured Party may at any reasonable time examine the books and
records of Debtor and make copies thereof.
(c) Within thirty (30) days after any request by Secured Party, Debtor
will furnish a certificate of an authorized officer of Debtor stating that he
has reviewed the activities of Debtor and that, to the best of his
knowledge, there exists no Event of Default (as described in Section 7) or
event which with notice or lapse of time (or both) would become an Event of
Default.
6. FURTHER ASSURANCES.
(a) Debtor shall, upon request of Secured Party, furnish to Secured
Party such further information, execute and deliver to Secured Party such
documents and instruments (including, without limitation, Uniform Commercial
Code financing statements) and do such other acts and things, as Secured
Party may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for the
purpose of carrying out the intent of this Agreement. Without limiting the
foregoing, Debtor shall cooperate and do all acts deemed necessary or
advisable by Secured Party to continue in Secured Party a perfected first
security interest in the Collateral, and shall obtain and furnish to Secured
Party any subordinations, releases, landlord, lessor, or mortgagee waivers,
and similar documents as may be from time to time requested by, and which are
in form and substance satisfactory to, Secured Party.
<PAGE>
(b) Debtor hereby grants to Secured Party the power to sign Debtor's
name and generally to act on behalf of Debtor to execute and file
applications for title, transfers of title, financing statements, notices of
lien and other documents pertaining to any or all of the Collateral. Debtor
shall, if any certificate of title be required or permitted by law for any of
the Collateral, obtain such certificate showing the lien hereof with respect
to the Collateral and promptly deliver same to Secured Party.
(c) Debtor shall indemnify and defend the Secured Party, its successors
and assigns, and their respective directors, officers and employees, from and
against any and all claims, actions and suits (including, without limitation,
related attorneys' fees) of any kind, nature or description whatsoever
arising, directly or indirectly, in connection with any of the Collateral.
7. EVENTS OF DEFAULT.
Debtor shall be in default under this Agreement and each of the other
Debt Documents upon the occurrence of any of the following "Event(s) of
Default";
(a) Debtor fails to pay any installment or other amount due or coming
due under any of the Debt Documents within ten (10) days after its due date;
(b) Any attempt by Debtor, without the prior written consent of Secured
Party, to sell, rent, lease, mortgage, grant a security interest in, or
otherwise transfer or encumber (except for Permitted Liens) any of the
Collateral;
(c) Debtor fails to procure, or maintain in effect at all times, any of
the insurance on the Collateral in accordance with Section 4 of this
Agreement;
(d) Debtor breaches any of its other obligations under any of the Debt
Documents and fails to cure the same within thirty (30) days after written
notice thereof;
(e) Any warranty, representation or statement made by Debtor in any of
the Debt Documents or otherwise in connection with any of the Indebtedness
shall be false or misleading in any material respect;
(f) Any of the Collateral being subjected to, or being threatened
with, attachment, execution, levy, seizure or confiscation in any legal
proceeding or otherwise;
(g) Any default by Debtor under any other agreement between Debtor and
Secured Party;
(h) Any insolvency or business failure of Debtor or any guarantor or
other obligor for any of the Indebtedness (collectively "GUARANTOR"), or if
Debtor or any Guarantor is a natural person, any death or incompetency of
Debtor or such Guarantor;
(i) The appointment of a receiver for all or of any part of the
property of Debtor or any Guarantor, or any assignment for the benefit of
creditors by Debtor or any Guarantor;
(j) The filing of a petition by Debtor or any Guarantor under any
bankruptcy, insolvency or similar law, or the filing of any such petition
against Debtor or any Guarantor if the same is not dismissed within thirty
(30) days of such filing;
(k) Any uncured default by Debtor under any obligation for borrowed
money, for the deferred purchase price of property or any lease if such
default allows for the acceleration of such obligations or repossession of
the collateral;
(l) Any dissolution, termination of existence, merger or consolidation
of Debtor or any Guarantor (such action being referred to as an "Event"),
unless not less than sixty (60) days prior to such Event: (x) such person is
organized and existing under the laws of the United States or any state, and
executes and delivers to Secured Party an agreement containing an effective
assumption by such person of the due and punctual performance of this
Agreement; and (y) Secured Party is reasonably satisfied as to the credit
worthiness of such person;
(m) If Debtor or any guarantor is a privately held corporation and
effective control of Debtor's or any guarantor's voting capital stock, issued
and outstanding from time to time, is not retained by the present
stockholders (unless Debtor shall have provided sixty (60) days' prior
written notice to Secured Party of the proposed disposition of stock and
Secured Party shall have consented thereto in writing); or
(n) If Debtor or any guarantor is a publicly held corporation as a
result of or in connection with a material change in the ownership of
Debtor's or any guarantor's capital stock, Debtor's or any guarantor's
debt-to-worth ratio equals or exceeds twice Debtor's or any guarantor's
debt-to-worth ratio as of the date of this Lease (unless Secured Party shall
have given its prior written consent thereto); or if Debtor or any guarantor
is a natural person, any death or incompetency of Debtor or such guarantor.
As used herein, "DEBT-TO-WORTH RATIO" shall mean the ratio of (x) total
liabilities which, in accordance with generally accepted accounting
principles ("GAAP") would be included in the liability side of a balance
sheet, to (y) tangible net worth including the sum of the par or stated value
of all outstanding capital stock, surplus and undivided profits, less any
amounts attributable to goodwill, patents, copyrights, mailing lists,
catalogs, trademarks, bond discount and underwriting expenses, organization
expense and other intangibles, all determined in accordance with GAAP.
8. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an Event of Default under this Agreement,
the Secured Party, at its option, may declare any or all of the Indebtedness,
including without limitation the Notes, to be immediately due and payable,
without demand or notice to Debtor or any Guarantor. The obligations and
liabilities accelerated thereby shall bear interest (both before and after
any judgment) until paid in full at the lower of eighteen percent (18%) per
annum or the maximum rate not prohibited by applicable law.
(b) Upon such declaration of default, Secured Party shall have all of
the rights and remedies of a Secured Party under the Uniform Commercial Code,
and under any other applicable law. Without limiting the foregoing, Secured
Party shall have the right to (i) notify any account debtor of Debtor or any
obligor on any instrument which constitutes part of the Collateral to make
payment to the Secured Party, (ii) with or without legal process, enter any
premises where the Collateral may be and take possession and/or remove said
Collateral from said premises, (iii) sell the Collateral at public or private
sale, in whole or in part, and have the right to bid and purchase at said
sale, and/or (iv) lease or otherwise dispose of all or part of the
Collateral, applying proceeds therefrom to the obligations then in default.
If requested by Secured Party, Debtor shall promptly assemble the Collateral
and make it available to Secured Party at a place to be designated by Secured
Party which is reasonably convenient to both parties. Secured Party may also
render any or all of the Collateral unusable at the Debtor's premises and may
<PAGE>
dispose of such Collateral on such premises without liability for rent or
costs. Any notice which Secured Party is required to give to Debtor under
the Uniform Commercial Code of the time and place of any public sale or the
time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if
such notice is given to the last known address of Debtor at least five (5)
days prior to such action.
(c) Proceeds from any sale or lease or other disposition shall be
applied: first, to all costs of repossession, storage, and disposition
including without limitation attorneys', appraisers', and auctioneers fees;
second, to discharge the obligations then in default; third, to discharge any
other Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable for any
deficiency.
(d) In the event this Agreement, any Note or any other Debt Documents
are placed in the hands of an attorney for collection of money due or to
become due or to obtain performance of any provision hereof, Debtor agrees to
pay all reasonable attorneys' fees incurred by Secured Party, and further
agrees that payment of such fees is secured hereunder.
(e) Secured Party's rights and remedies hereunder or otherwise arising
are cumulative and may be exercised singularly or concurrently. Neither the
failure nor any delay on the part of the Secured Party to exercise any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. Secured Party shall not be deemed to have waived any of its rights
hereunder or under any other agreement, instrument or paper signed by Debtor
unless such waiver be in writing and signed by Secured Party. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion.
(f) DEBTOR HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE
INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
(INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY
RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9. MISCELLANEOUS.
(a) This Agreement, any Collateral Schedules, any Note and/or any of
the other Debt Documents may be assigned, in whole or in part, by Secured
Party without notice to Debtor, and Debtor hereby waives any defense,
counterclaim or cross-complaint by Debtor against any assignee, agreeing that
Secured Party shall be solely responsible therefor. Debtor agrees that if
Debtor receives written notice of an assignment from Secured Party, Debtor
shall pay all payments and other amounts due under the assigned Note and
Collateral Schedule to such assignee or as instructed by Secured Party.
Debtor further agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by Assignee.
(b) All notices to be given in connection with this Agreement shall be
in writing, shall be addressed to the parties at their respective addresses
set forth hereinabove (unless and until a different address may be specified
in a written notice to the other party), and shall be deemed given (i) on the
date of receipt if delivered in hand or by facsimile transmission, (ii) on
the next business day after being sent by express mail, and (iii) on the
fourth business day after being sent by regular, registered or certified
mail. As used herein, the term "business day" shall mean and include any day
other than Saturdays, Sundays, or other days on which commercial banks in New
York, New York are required or authorized to be closed.
(c) Secured Party may correct patent errors herein and fill in all blanks
herein or in any Collateral Schedule consistent with the agreement of the
parties.
(d) Time is of the essence hereof. This Agreement shall be binding,
jointly and severally, upon all parties described as the "Debtor" and their
respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.
(e) This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior understandings (whether written, verbal or implied) with
respect thereto. This Agreement and its Collateral Schedules shall not be
changed or terminated orally or by course of conduct, but only by a writing
signed by both parties hereto. Section headings contained in this Agreement
have been included for convenience only, and shall not affect the
construction or interpretation hereof.
(f) This Agreement shall continue in full force and effect until all of
the Indebtedness has been indefeasibly paid in full to Secured Party. The
surrender, upon payment or otherwise, of any Note or any of the other
documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other Indebtedness as may
then exist or as it may be reasonably contemplated will exist in the future.
This Agreement shall automatically be reinstated in the event that Secured
Party is ever required to return or restore the payment of all or any portion
of the Indebtedness (all as though such payment had never been made).
IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.
SECURED PARTY: DEBTOR:
GENERAL ELECTRIC CAPITAL CORPORATION METRO ONE TELECOMMUNICATIONS, INC.
By: By: /s/ S.B. Chandor, Jr.
--------------------------------- -------------------------------
Title: Title: SVP & CFO
------------------------------ ----------------------------
/s/ R. Tod Hutchinson
R. TOD HUTCHINSON
VP, FINANCE
<PAGE>
PROMISSORY NOTE
September 15, 1999
(Date)
11200 MURRAY SCHOLLS PLACE, BEAVERTON, WASHINGTON CO., OR 97008
(Street Address of Maker) (Town) (County) (State)(Zip Code)
FOR VALUE RECEIVED, METRO ONE TELECOMMUNICATIONS, INC. ("Maker") promises,
jointly and severally if more than one, to pay to the order of FIRST SECURITY
BANK, N.A. or any subsequent holder hereof (each, a "Payee") at its office
located at 4949 S. W. MEADOWS ROAD, SUITE 150, OSWEGO, OR 97035 or at such
other place as Payee may designate, the principal sum of ONE MILLION SEVEN
HUNDRED FIFTY THOUSAND DOLLARS ($1,750,000.00), with interest thereon, from
the date hereof through and including the dates of payment, at a fixed
interest rate of EIGHT AND 77/100 PERCENT (8.77%) per annum, to be paid in
lawful money of the United States, in FORTY-SEVEN (47) consecutive monthly
installments of principal and interest of FORTY-THREE THOUSAND THREE HUNDRED
FIFTY-SEVEN AND 95/100 Dollars ($43,357.95) each (each, a "Periodic
Installment") and a final installment in the amount of $43,357.95. The first
Periodic Installment shall be due and payable on OCTOBER 15, 1999, and the
following Periodic Installments and the final installment shall be due and
payable on the same day of each succeeding month (each, a "Payment Date").
Such installments have been calculated on the basis of 360 day year of twelve
30-day months. Each payment may, at the option of the Payee, be calculated
and applied on an assumption that such payment would be made on its due date.
Payments shall be paid by wire transfer of immediately available funds to
Bankers Trust, New York, New York 10006. Account No.: 50-202-962, ABA No.
021-001-033, or to such other account as holder may request.
The acceptance by Payee of any payment which is less than payment in full of
all amounts due and owing at such time shall not constitute a waiver of
Payee's right to receive payment in full at such time or at any prior or
subsequent time.
The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof.
This Note is secured by Collateral Schedule No. F-1 to Master Security
Agreement dated September 10, 1999 ("Security Agreement.")
Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days
after its due date, the Maker agrees to pay, in addition to the amount of
each such installment or other sum, a late payment charge of five percent
(5%) of the amount of said installment or other sum, but not exceeding any
lawful maximum. In the event that (i) Maker fails to make payment of any
amount due hereunder within ten (10) days after the same becomes due and
payable; or (ii) Maker is in default under, or fails to perform under any
term or condition contained in any Security Agreement following any
applicable notice and/or cure period, then the entire principal sum remaining
unpaid, together with all accrued interest thereon and any other sum payable
under this Note or any Security Agreement, at the election of Payee, shall
immediately become due and payable, with interest thereon at the lesser of
500 basis points over the fixed interest rate payable hereunder or the
highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).
The Maker may prepay in full, but not in part, its entire indebtedness
hereunder upon payment of an additional sum as a premium equal to the
following percentages of the remaining principal balance for the indicated
period:
After the first anniversary and prior to the second annual
anniversary date of this Note: one percent (1)%
Prior to the third annual anniversary date of this Note: one
percent (1)%
Prior to the fourth annual anniversary date of this Note: one
percent (1)%
and zero percent (0%) thereafter, plus all other sums due hereunder
or under any Security Agreement
The Maker may not prepay the indebtedness prior to the first anniversary date
of this Note.
It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note
or any Security Agreement require the payment or permit the collection of
interest in excess of the maximum amount permitted by applicable law. If any
such excess interest is contracted for, charged or received under this Note
or any Security Agreement, or if all of the principal balance shall be
prepaid, so that under any of such circumstances the amount of interest
contracted for, charged or received under this Note or any Security Agreement
on the principal balance shall exceed the maximum amount of interest
permitted by applicable law, then in such event (a) the provisions of this
paragraph shall govern and control, (b) neither Maker nor any other person or
entity now or hereafter liable for the payment hereof shall be obligated to
pay the amount of such interest to the extent that it is in excess of the
maximum amount of interest permitted by applicable law, (c) any such excess
which may have been collected shall be either applied as a credit against the
then unpaid principal balance or refunded to Maker, at the option of the
Payee, and (d) the effective rate of interest shall be automatically reduced
to the maximum lawful contract rate allowed under applicable law as now or
hereafter construed by the courts having jurisdiction thereof. It is further
agreed that without limitation of the foregoing, all calculations of the rate
of interest contracted for, charged or received under this Note or any
Security Agreement which are made for the purpose of determining whether such
rate exceeds the maximum lawful contract rate, shall be made, to the extent
permitted by applicable law, by amortizing, prorating, allocating and
spreading in equal parts during the period of the full stated term of the
indebtedness evidenced hereby, all interest at any time contracted for,
charged or received from Maker or otherwise by Payee in connection with such
indebtedness; provided, however, that if any applicable state law is amended
or the law of the United States of America preempts any applicable state law,
so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective
date of such amendment or preemption, as the case may be, the lawful maximum
hereunder shall be increased to the maximum interest per annum rate allowed
by the amended state law or the law of the United States of America.
The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "Obligor") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all
substitutions or releases of, security or of any party primarily or
secondarily liable on this Note or any Security Agreement or any term and
provision of either, which may be made, granted or consented to by Payee, and
agree that suit may be brought and maintained against any one or more of
them, at the election of Payee without joinder of any other as a party
thereto, and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment of this
Note. The Maker and each Obligor hereby waives presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of
dishonor, and all other notices in connection herewith, as well as filing of
suit (if permitted by law) and diligence in collecting this Note or enforcing
any of the security hereof, and agrees to pay (if permitted by law) all
reasonable expenses incurred in collection, including Payee's actual
attorneys' fees.
<PAGE>
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN
MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY
RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN MAKER AND PAYEE. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. In the event of ligation, this Note may be filed as a written
consent to a trial by the court.
This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supersedes all
prior understandings, agreements and representations, express or implied.
No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and
for the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict
with any statute, law or applicable rule shall be deemed omitted, modified or
altered to conform thereto.
METRO ONE TELECOMMUNICATIONS, INC.
By: /s/ S.B. Chandor Jr. (L.S.)
- -------------------------------- -------------------------------
(Witness) Signature
S.B. Chandor Jr.
SVP & CFO
- -------------------------------- -------------------------------
(Print Name) Print name (and title, if applicable)
- -------------------------------- 93-0995165
(Address) Federal Tax ID Number
/s/ R. Tod Hutchinson
-------------------------------
R. TOD HUTCHINSON
VP, FINANCE
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF SEPT-30-1999 AND THE RELATED STATEMENTS OF OPERATIONS FOR THE THREE
AND NINE MONTH PERIODS THEN ENDED.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> JUL-01-1999 JAN-01-1999
<PERIOD-END> SEP-30-1999 SEP-30-1999
<CASH> 3,491 3,491
<SECURITIES> 400 400
<RECEIVABLES> 8,700 8,700
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 13,623 13,623
<PP&E> 45,521 45,521
<DEPRECIATION> 11,861 11,861
<TOTAL-ASSETS> 48,100 48,100
<CURRENT-LIABILITIES> 10,121 10,121
<BONDS> 6,480 6,480
0 0
0 0
<COMMON> 40,270 40,270
<OTHER-SE> (8,771) (8,771)
<TOTAL-LIABILITY-AND-EQUITY> 48,100 48,100
<SALES> 0 0
<TOTAL-REVENUES> 20,469 52,113
<CGS> 0 0
<TOTAL-COSTS> 19,510 50,276
<OTHER-EXPENSES> 3 (112)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 253 425
<INCOME-PRETAX> 703 1,524
<INCOME-TAX> 26 60
<INCOME-CONTINUING> 677 1,464
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 677 1,464
<EPS-BASIC> .06 .13
<EPS-DILUTED> .06 .12
</TABLE>
