Memorandum of Understanding - Fairpoint Broadband Inc. and Artera Group Inc.
MEMORANDUM OF UNDERSTANDING
Memorandum of Understanding, dated as of May 23, 2003 ("MOU"), between Fairpoint
Broadband, Inc. ("Fairpoint") and Artera Group, Inc. ("Artera"). Fairpoint and
Artera are parties to an Exclusive Marketing License Agreement, dated as of
October 11, 2002 (the "License Agreement"), under which Artera granted to
Fairpoint the right to market Artera's "Artera Turbo" service (the "Service")
under terms and conditions set forth in the License Agreement. The parties
intend to amend, amend and restate or enter into a new agreement to supersede,
the License Agreement (as applicable, the "New Agreement") to alter a number of
the terms and conditions of Fairpoint's marketing of the Service. The New
Agreement will be made effective as of the date hereof. Pending execution of the
New Agreement, however, the parties wish to record their mutual agreement
regarding the royalties Fairpoint will be obligated to pay to Artera under the
New Agreement and for the portion of May prior to the date of the New Agreement,
with respect each residential Service subscription and each individual user
within a business or governmental Service subscription (each such residential or
individual user, an "End User") covered by the New Agreement. Such royalty shall
be effective as of May 1, 2003, shall be payable for each calendar month of the
applicable Service subscription and shall be calculated on an End User basis, as
follows:
o $1.50 for each End User as to which Fairpoint or its reseller (i) provides
and operates the data center, (ii) performs billing and collections and
(iii) provides Level I Support (as defined in the License Agreement);
o An additional $.60 if, as to such End User, Artera or its designee provides
and operates the data center;
o An additional $.60 if, as to such End User, Artera or its designee performs
billing and collections; and
o An additional $.80 if, as to such End User, Artera or its designee provides
Level I Support.
If Artera and Fairpoint do not execute the New Agreement by June 30, 2003, then,
from July 1, 2003 to July 15, 2003, either of them may terminate the License
Agreement via written notice to the other. If such termination occurs, Artera
shall be deemed to have waived its right to License Fees (as defined in the
License Agreement) from Fairpoint under Section 3.1 of the License Agreement for
the period after April 30, 2003.
Nothing in this MOU shall constitute a waiver by either party of any of its
rights or remedies under the License Agreement, except with respect to (i) a
claim by Artera that royalties paid by Fairpoint for the marketing of the
Service after the date hereof do not satisfy the requirements of the License
Agreement, if such royalties paid do satisfy the provisions set forth above in
this MOU; and (ii) the possible waiver of License Fees by Artera as described in
the immediately preceding paragraph.
FAIRPOINT BROADBAND, INC. ARTERA GROUP, INC.
By: /s/ Peter G. Nixon By: /s/ Michael J. Parrella
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Name: Peter G. Nixon Name: Michael J. Parrella
Title: Chief Operating Officer Title: Chairman & President
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