ITFS EXCESS CAPACITY AIRTIME LEASE AGREEMENT
THIS AGREEMENT is made this 1st. day of July 2000 by Shekinah Network
(hereinafter referred to as "Lessor") having its principal place of business at
2995 Ardilla Road, Atascadero, CA 93422 and World Wide Wireless Communications,
Inc.,(hereinafter referred to as "Lessee") having its principal place of
business at 520 Third Street, Suite 101 Oakland, CA 94607
WHEREAS, the Federal Communications Commission ("FCC") has authorized
licenses for Instructional Television Fixed Service ("ITFS") channels and has
authorized the licensee to lease excess capacity to non-ITFS users; and
WHEREAS, Lessor has been granted an FCC License for (call sign) WNC-810
(the "License") for the Channel Group D1-4 (the "ITFS Channels" in Hilo, Hawaii
("The Market"); and
WHEREAS, Lessee is in the business of providing voice, video, data and
other services via microwave transmission in the Market Area and desires to
lease the excess ITFS capacity of the ITFS channels; and
WHEREAS, Lessor has determined that there will be excess airtime capacity
available on the ITFS Channels and desires to lease this excess airtime capacity
to Lessee.
NOW, THEREFORE, in consideration of the mutual promises, undertakings,
covenants and conditions set forth herein, the Lessor and Lessee do hereby agree
and warrant as follows:
1. TERM OF AGREEMENT.
A) Initial Term. This Agreement shall be effective upon the date of its
execution and shall extend for an initial term of five (5) years. (the "Initial
Term").
B) Renewal Term Provided that the License is renewed by the FCC, Lessee
shall have the right to extend this Agreement on its then existing terms and
conditions for one (1) additional five (5) year term (the "Renewal Term"). The
Renewal Term shall automatically go into effect upon the conclusion of the
Initial Term unless Lessee notifies Lessor at least one hundred eighty days
(180) before the end of the Initial Term that Lessee does not wish to extend
this Agreement.
C) New Lease Agreement/Right of First Refusal.
(1) Providing that Lessor's FCC license remains in good standing and/or
Lessor seeks to renew such license, Lessee and Lessor shall negotiate in good
faith for a new excess capacity airtime lease agreement (hereinafter referred to
as "New Lease Agreement") no later
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than one hundred eighty days (180) prior to the end of the latter of (i) Initial
Term or (ii) the Renewal Term if the Agreement is extended for the Renewal Term.
(2) If Lessor elects to not reasonably pursue a New Lease Agreement with
Lessee, then Lessor shall so notify Lessee in writing of such intent no later
than one hundred eighty (180) days prior to the end of the Renewal Term.
(3) If Lessor and Lessee do not enter into a New Lease Agreement, Lessor
grants Lessee a right of first refusal on any competing proposals for lease
agreements or transfers or assignments of any part of the ITFS Channels received
by Lessor during the twelve (12) months following the expiration of the latter
of (i) the Initial Term or (ii) the Renewal Term, if the Agreement is extended
for the Renewal Term. If any acceptable offer to lease or acquire the ITFS
Channels is made to Lessor, Lessor shall give written notice to Lessee
describing the person to whom the proposed lease or transfer is to be made, the
fees, charges, rental or other consideration to be received for the lease or
transfer, the terms thereof and generally the relevant other terms and
conditions of the lease or transfer. Lessee shall have a period of thirty (30)
days after its receipt of such notice from Lessor in which to elect, by giving
written notice to Lessor, to lease or, if eligible, obtain any or all of the
ITFS Channels for the same fees, charges, rental or other consideration for
which Lessor proposed to lease or transfer to the third person.
(i) The fees, charges, rental or consideration shall be paid by such third
person or Lessee in cash.
(ii) If Lessor does not believe Lessee's stated offer is in an amount
fairly equivalent to the fair value of the consideration payable by the third
person and so notifies Lessee in writing within seven (7) days after Lessor's
receipt of Lessee's notice of election to so lease or purchase, Lessee may
within five (5) days after its receipt of such notice from Lessor elect to refer
such question for determination by an impartial arbitrator and the right of
first refusal of Lessee shall then be held open until five (5) days after Lessee
is notified of such determination. Such arbitrator shall be chosen either by
agreement of Lessee and Lessor at the time such question arises, or, at the
option of either party, by referring the question to the American Arbitration
Association with instructions that the American Arbitration Association select a
single arbitrator under a request from the parties for expedited and accelerated
determination. The determination of the arbitrator chosen under either option
contained in this subparagraph shall be final and binding upon Lessee and
Lessor. The parties shall share equally in the costs and fees of the
arbitration.
(iii) In the event Lessee shall elect to exercise its right of first
refusal, the lease agreement or other transfer or assignment shall be
consummated within thirty (30) days of the latest of: (1) the day on which
Lessor received notice of Lessee's election to exercise the right of first
refusal; (2) the day upon which any question required to be determined by the
arbitrator hereunder has been determined; or (3) the date of any FCC approval in
the case of assignment or transfer; or at such other time as may be mutually
agreed. The right of first refusal is terminated either by the lease or other
transfer to Lessee as provided herein or by notice to Lessee of the Lessor's
proposal to lease or otherwise transfer the ITFS Channels or
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any part to a third person and Lessee's unwillingness or failure to meet and
accept such a bona fide offer pursuant to the times and procedures as set forth
above; provided that such proposed lease or transfer is consummated at the same
fees, charges, rental or other consideration and upon the same terms as to which
such right of first refusal applied, within thirty (30) days after Lessee's
right of first refusal had expired or had been specifically waived by written
notice given to Lessor by Lessee, or within thirty (30) days following FCC
approval in the case of assignment or transfer.
D) Operation During End of Term. If Lessor and Lessee do not enter into a
New Lease Agreement before the end of the Initial Term, Lessee shall cease
leasing the ITFS Channels on the last day of the Initial Term.
E) No Rights Beyond Term of Licenses. Lessor and Lessee agree that this
Agreement shall not give rise to any rights or remedies beyond the expiration of
any FCC license necessary for the continued operation of the ITFS Channels.
Provided, however, that while this Agreement is in effect, Lessor shall obtain
and maintain in force all licenses, permits and authorizations required or
desired in connection with the use of the ITFS Channels. Lessor shall take all
necessary steps to renew the licenses for the ITFS Channels and shall not commit
any act or engage in any activity which could reasonably be expected to cause
the FCC to impair, restrict, revoke, cancel, suspend or refuse to renew the ITFS
licenses. Lessor shall take all reasonable steps to comply with the
Communications Act of 1934, as amended and the rules and regulations of the FCC,
and shall file all reports, schedules and/or forms required by the FCC to be
filed by Lessor. All expenses, including attorneys fees and filing fees,
incurred in preparing and filing such reports, schedules and/or forms required
by the FCC shall be paid by the Lessee.
2. ALLOCATION OF AIRTIME.
A) Excess Capacity Airtime. To the extent allowed by the FCC rules and
regulations and any amendments thereof, Lessor agrees to lease to Lessee the
exclusive use of all excess capacity not utilized by Lessor ("Excess Capacity
Airtime").
B) Lessor's Primary Airtime. During analog transmission over the ITFS
Channels, Lessor reserves for its exclusive use a minimum of twenty (20) hours
of airtime per-channel per-week to be used for its ITFS scheduled programs.
During digital transmission over the ITFS Channels, Lessor shall have the
exclusive use of 12.5% of the total capacity available on the Lessor's ITFS
Channels. This airtime shall be known as "Lessor's Primary Airtime".
C) Schedule of Airtime. The schedule which depicts the agreement of the
parties as to use of Lessor's Channels shall be attached hereto and made a part
hereof as Exhibit A which is subject to change upon agreement by both parties.
D) Lessee's Use of its Excess Capacity Airtime. Lessee shall have the right
to utilize its Excess Capacity Airtime for any purpose allowed or authorized by
the FCC including but not limited to voice, video and data transmission.
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E) Alternate Use and Vertical Blanking Intervals. Lessor shall have the
right to use the second audio carrier ("SAP") and vertical blanking intervals.
("VBI") on which Lessor's ITFS programming is being transmitted. Lessee shall at
all times have the right to use the VBI and SAP not utilized by Lessor and 100%
of the response frequencies associated with the ITFS Channels. Lessor shall be
responsible for any equipment needed to utilize the VBI and/or SAP and such
equipment shall be compatible with Lessee's system.
F) Lessor's Use of ITFS Channels. Lessor agrees that its program services
and airtime use will not harm or interfere with Lessee's current or future
signal paths utilized within Lessee's System for program encryption, pilot
carrier signaling and other technical needs utilized for the operation of and
such services provided by Lessee's System. Nor will Lessor, by its own action,
or through a third party, utilize any part of its licensed frequency spectrum to
create or operate a service that is in competition with current, planned or
future services provided by Lessee's System. Lessor agrees to use its Primary
Airtime in accordance with the FCC's rules and regulations. Lessor shall not
take or fail to take any action which may have a material adverse effect on
Lessee's right to utilize its Excess Capacity Airtime.
G) Expanded System Capacity. Lessee shall have the right at anytime to
require Lessor to file with the FCC any necessary application to expand the
channel capacity to Lessor's station to enable it to carry more than one video
signal per channel or digital data services; provided however, before Lessee can
exercise this right, it must demonstrate to the Lessor's reasonable satisfaction
that such modification will not materially degrade the performance of the
station nor impair signal quality at the registered ITFS receive sites. Once
such modification has been constructed, the modified facilities shall
automatically be considered a part of this agreement and subject to all terms
and conditions hereof. It is understood that Lessee shall have the full-time use
of the Expanded Channels to the extent permitted by FCC rules.
3. TRANSMISSION SITE AND FACILITIES.
A) Primary Transmission Site. Lessor's ITFS Channels are located at Hilo.
Lessee agrees to provide Lessor space at the Primary Transmission site for
Lessor's audio and video transmission equipment which shall not exceed on rack.
Such space shall be leased to Lessor pursuant to Exhibit D hereto. This site
shall hereinafter be described as the "Primary Transmission Site". At Lessee's
sole expense, Lessee shall contract for a lease of space at the Transmission
Site upon such terms as the parties agree. The Transmission Site shall comply
with the standards, specifications and regulations of the FCC rules and orders
pertaining to Lessor's ITFS license.
B) Relocation of Transmission Site.
(1) Lessor acknowledges that the location of the Primary Transmission Site
for ITFS Channels is critical to the Lessee's business and agrees that it will
not relocate the transmission facilities for ITFS Channels from the Primary
Transmission Site without Lessee's prior written consent,
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(2) Lessor further acknowledges that possibility that, as a result of
currently unforeseen events, the Primary Transmission Site may not be the
optimum site for the location of the ITFS Channels or Lessee's business
throughout the term of this Lease Agreement. Lessor therefore agrees that if at
any time or from time to time Lessee requests in writing that the transmission
facilities for the ITFS Channels be relocated, Lessor shall file with the FCC
and any other regulatory body having jurisdiction over the ITFS Channels all
applications, amendments, and requests for modification that may be necessary to
obtain any necessary consents to permit such relocation to such location within
or adjacent to the Market as may be requested by Lessee; provided, however, that
Lessor shall not be obligated to submit or prosecute any application, amendment,
or request for modification that Lessor reasonably determines, upon advice of
counsel contained in a written opinion, would be in violation of the terms of
the License, any statute, rule, or regulations regarding the operation of the
ITFS Channels or the submission of materials to the FCC, or any of its
obligations as an ITFS licensee; and provided, further, that any such relocation
will not result in loss of service to Lessor's registered receive sites served
by the transmission facilities in the event that the authorization is obtained
to relocate the ITFS Channels to the location requested by Lessee, Lessor shall
relocate such channels to such new location as soon as reasonably possible after
authorization is obtained. Lessee shall bear reasonable costs associated with
such relocation, including engineering and construction, and all reasonable
costs associated with obtaining FCC or any other regulatory approval therefor.
(3) Lessor agrees to file modification applications requested by Lessee.
Such modifications may include but shall not be limited to the following: power
increase or decrease, polarization, transmit antenna patterns, digital, two-way
(return path) use of the ITFS Channels, boosters, beam benders or repeaters,
cells, sectorization, channel swaps, channel loading, channel shifting and
applications for secondary transmission sites. Lessor agrees to file any
modification application within five (5) business days of receipt of the
modification application from Lessee or during any FCC designated filing window.
Lessee will use reasonable efforts to provide Lessor with the engineering for
the modification thirty (30) days prior to the request for filing. If Lessor
believes that such modification will have an adverse effect on Lessor's ability
to provide its services to its receive sites, Lessor agrees to file the
modification application as presented by Lessee and within the time limit
requested by Lessee; however, Lessee agrees not to implement construction and
Lessor agrees not to withdraw the application until the parties have adequately
addressed and resolved the potential material adverse effect or the matter has
been submitted to arbitration pursuant to Section 16 and a final decision has
been rendered by the arbitrator. Although Lessee intends to file such
modification applications, it may elect not to construct the Channels in that
manner and may desire to utilize the Channels as currently licensed. A copy of
the modification application, bearing the FCC's date stamp, shall be mailed to
Lessee by Lessor, within fourteen (14) days of the filing of the modification
application. Lessee shall be solely responsible for all engineering and legal
costs associated with the preparation, review and filing of the modification
application. In the event that any license modification requested by Lessee
requires receive site upgrades in order for Lessor's receive sites to continue
to receive Lessor's services, then Lessee agrees to pay for all costs to
complete such upgrade prior to implementing the license modification.
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C) System Construction. Lessee shall within a reasonable period of time,
but not later than six (6) months after the FCC grant of digital authority for
the ITFS Channels, purchase equipment such as the antenna, waveguide or
transmitters specified on the authorization for the ITFS Channels. At Lessee's
expense, Lessee shall purchase and install such transmitters, transmission line,
modulators, antennas and other equipment as required to operate the ITFS
Channels in accordance with the provision of such authorization. Any equipment
so used in such construction shall be leased to Lessor pursuant to Paragraph 5
hereof. Such equipment is hereinafter referred to as the "Leased Equipment".
Lessee shall retain title to the Leased Equipment except as noted by Paragraph
15 herein.
D) Maintenance of Transmission Equipment. At Lessee's expense and subject
to Lessor's right to supervise the maintenance of this equipment, Lessee shall
maintain and operate the Leased Equipment during the terms of this Agreement for
a nominal fee. Lessee shall also pay all taxes and other charges assessed
against the Leased Equipment.
E) Transmission of Programming. At no cost or expense to Lessor, Lessee
shall provide the necessary labor and equipment capabilities to transmit on the
ITFS Channels programming required to be carried pursuant to this Agreement such
as Lessor's ITFS programming and TBN. Lessee shall also comply with Lessor's
instructions regarding the transmission of such programming such as the dates
and times to transmit programming.
F) Interference. Lessee shall operate the Leased Equipment so that such
operation does not create or increase interference with electronic transmission
of any other FCC licensees entitled to protection under FCC rules and
regulations. If Lessee's operation of the Leased Equipment does so create or
increase interference, Lessee shall pay all of the reasonable engineering and
legal fees necessary to resolve the interference problem so created.
G) Alterations and Attachments. Lessee, at its own expense, may make
alterations of or attachments to the ITFS equipment or the common equipment as
defined in Exhibit C (including the installation of encoding and/or addressing
equipment) as may be reasonably required from time to time by the nature of its
business; provided however, that such alterations or attachments do not
interfere with Lessor's signal or ongoing operations or violate any FCC rules or
regulations; and provided further that FCC authorization, if required, is
obtained in advance of any such alteration or attachment at the sole cost of
Lessee. To the extent any FCC authorization pertaining to the ITFS equipment is
required, Lessor agrees to use its best efforts to obtain such authorization.
H) Licensee Control and Liability. Nothing herein shall derogate from such
licensee control of operations of the ITFS Channels that Lessor, as an FCC
licensee, shall be required to maintain and Lessee acknowledges the reservation
by Lessor of such control. Lessor shall at all times retain ultimate and
exclusive responsibility for the operation and control of the ITFS Channels
including policy decisions.
4. LESSOR'S RECEIVE SITES.
Attached hereto as Exhibit B is a list of the registered receive sites
designated by Lessor to receive its ITFS programming and to be installed at the
expense of Lessee. Those
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receive sites so listed shall be installed with a Standard Installation. If as
the result of any relocation of the Primary Transmit Site, the equipment at
Lessor's existing registered receive sites must be reoriented, Lessee shall pay
the cost of same. As used herein for the purposes of this Agreement, the phrase
"Standard Installation" shall mean an installation consisting of the placement
of the ITFS/MMDS receiving antenna at an elevation (not to exceed thirty [30]
feet above the base mounting location), which could normally receive the
line-of-sight transmission from the Transmission Site; the coupling thereto of a
block-down converter; and a sufficient amount of transmission line (coaxial
cable) to connect the received ITFS programming to the input of (i) one
classroom designated by Lessor to receive the ITFS programming or (ii) the
receive site internal/external distribution system. Also, if as the result of
any relocation of the Transmit Site, the equipment at Lessor's existing receive
sites must be reoriented, Lessee shall pay the cost of same. Lessee also agrees
that for digital transmission of the ITFS Channels Lessee will purchase and
install at Lessee's expense, one single-point modem to receive its ITFS
programming.
5. LEASE OF EQUIPMENT.
A) Lessor's Lease of Leased Equipment. For a nominal fee, Lessor shall
lease from Lessee the Leased Equipment during the terms of this Agreement. A
list of this equipment is attached hereto as Exhibit C and incorporated by
reference herein. Lessor shall have no responsibility for the loss of or damage
to the Leased Equipment during the terms of this Agreement and Lessee shall bear
all such responsibility.
6. FEES.
A) Lessor's Service Fee. In consideration of the lease of the Leased
Equipment, and for its share of the projected costs to maintain the Transmission
Site and the Leased Equipment, Lessor shall pay Lessee an annual service fee
provided for in Exhibit D.
B) Subscriber Royalty Fees or Percentage. Beginning on the Execution Date
of this Agreement and continuing thereafter during the Initial Term of this
Agreement, Lessee shall pay to Lessor the Subscriber Royalty Fee, System
Percentage or monthly minimum, whichever is greater as set out in Exhibit D
which is attached herewith and incorporated by reference herein. If the
Execution Date shall be a date other than the first day of a calendar month or
this Agreement shall be terminated on a date other than the last day of a
calendar month, then the Subscriber Royalty Fee for that partial month shall be
paid on a proportionate basis. A late fee of 10% (ten percent) will be assessed
to past due accounts, and a finance charge of one and one-half percent (1.5%)
per month will be assessed in addition to the late fee until paid.
C) Notice of Construction and Required Certificate. Within thirty (30) days
of completion of construction at the Transmission Site, Lessee shall notify
Lessor of such completion of construction in writing. Within thirty (30) days of
the end of each month in which Excess Capacity Airtime is leased hereunder,
Lessee shall provide Lessor with a certificate, certified as accurate and
correct by an authorized agent of Lessee, showing the number of subscribers
served during such month.
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D) Right to Audit. Lessee shall for a period of three (3) years after their
creation, keep, maintain and preserve complete and accurate records and
accounts, including all invoices, correspondence, ledgers, financial and other
records pertaining to Lessee's use of Excess Capacity Airtime and Lessor's
charges hereunder; and such records and corporate accounts shall be available
for inspection and audit at Lessee's corporate offices or at Lessee's offices in
the Market, as designated by Lessee, at any time or times during the term of
this Agreement or within ninety (90) days thereafter, during reasonable business
hours, by Lessor or its nominee. In the event that there is discovered an
underpayment of the Subscriber Royalty Fee as defined in Paragraph 6 (B) above,
Lessee shall pay to Lessor a penalty equal to ten percent (10%) of the amount of
each such underpayment. All information obtained by Lessor during any audit
herein shall be maintained by Lessor in strict confidence.
7. PROGRAMMING.
A) Control Over Programming.
(1) Program Content. Lessee intends that only programming of a sort which
would not serve to place Lessor's reputation in the community in jeopardy will
be transmitted by Lessee on the ITFS Channels. In an attempt to minimize
disputes, recognizing the difficulties inherent in specifying exact standards
herein, it is agreed that Lessee shall have the right to market the programming
provided by the networks and services listed on Exhibit E. If, however, the
programming content of any of the networks and services listed on Exhibit E
materially changes, Lessor shall have the right, upon ninety (90) days notice,
to deny Lessee the right to continue transmitting such programming if Lessor
would have the right to deny Lessee the right to transmit such programming under
the provisions of this paragraph in the first instance. If Lessee proposes to
transmit the programming of any new programming service, the Lessee shall notify
Lessor in writing specifying in detail the nature of the new programming service
and Lessor shall have the right, upon written notice served upon Lessee within
thirty (30) days after Lessor's receipt of any such notice from Lessee, to deny
to Lessee the right to transmit such service if such programming is obscene
and/or contradicting local, state and/or federal laws or otherwise violates any
federal, state or local laws or regulations. If no such denial notice is
received by Lessee within such thirty (30) days, Lessee shall be authorized to
transmit all such services for which no denial notice is received. There shall
be no reduction in fees required under this Agreement for any such programming
not permitted to be transmitted.
B) Availability of Programming. It is understood by Lessee and Lessor that
there is expected to be no direct out-of-pocket annual costs for the acquisition
of the qualified ITFS educational programming for Lessor's use during Lessor's
Primary Airtime on the ITFS Channels, based on current plans. In the event that
this ITFS educational programming either; (1) ceases to be available, or, (2)
becomes available only at a fee, then Lessor may incur direct out-of-pocket
costs in Lessor's acquisition of ITFS programming. Lessee agrees to provide its
best efforts to assist Lessor in the acquisition of alternative programming, if
necessary. Additionally, Lessee agrees to make payment to Lessor for the actual,
direct programming costs incurred, if any; If Lessor, after expending its best
efforts, is unable to obtain suitable ITFS programming for a cost equal to the
amount to be paid by Lessee, Lessor and Lessee
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shall use their best efforts to reach agreement on modifications to this
Agreement to avoid any unreimbursed ITFS programming costs to Lessor. If no such
agreement can be reached, Lessor may terminate this agreement. In the case of
such termination, Lessor shall use its best efforts (with out-of-pocket costs of
Lessor to be paid by Lessee, with Lessee's prior approval) to transfer the
license for the ITFS Channels to another qualified educational entity, subject
to FCC approval, with the intent of assigning this Agreement from Lessor to the
new educational entity.
C) Integration of Lessor's Programming. Lessee agrees to integrate Lessor's
programming into the overall communications service offered to subscribers,
without cost to Lessor. This integration shall include, but not be limited to,
listing Lessor's material in any program guides produced by Lessee for
subscribers.
D) Carriage of TBN. In the event that Lessor's ITFS Channels are used for
analog video transmission and TBN is not transmitted on a local VHF or UHF
station, with a market coverage equivalent to both area and signal quality of
our ITFS channels, and Lessee does not have local off-air insertion as part of
its standard installation, then, if so designated by Lessor, Lessee agrees to
transmit on one of the ITFS Channels the programming of Trinity Broadcasting
Network ("TBN") during those time periods such channel is not used for Lessor's
ITFS programming ("TBN Airtime") provided that Lessee is not required to pay a
fee for carriage of TBN. In the event that Lessee is permitted to program the
hours previously occupied by TBN, then Lessee shall increase, in proportion to
the increase in Excess Capacity Airtime, the amount of minimum fees and
subscriber royalty fees payable under the provision 6 (B) of this agreement
during the remainder of the term(s) of the agreement. For purposes of
calculating any such proportionate increase, the parties acknowledge and agree
that the minimum fee and subscriber royalty fee agreed to herein are based on
Lessee's equivalent use of three full-time ITFS channels.
E) Station Identification. During Lessee's use of Lessor's excess channel
capacity, Lessee shall transmit Lessor's call sign for each respective station
as required by the FCC.
8. PROSECUTION OF PETITIONS, AUTHORIZATIONS AND LICENSES.
A) Best Efforts to Secure Approval of this Agreement. The parties recognize
that certain approvals will be required from the FCC in order to effectuate this
Agreement. Both parties shall use their best efforts to prepare, file and
prosecute before the FCC all petitions, waivers, applications and other
documents necessary to secure any FCC approval required to effectuate this
Agreement. Lessee shall assist in the preparation and prosecution of such
applications and as provided for herein, shall pay all filing fees, attorneys'
fees, engineering fees, and all other expenses in connection therewith. Lessor
also agrees to cooperate with Lessee's efforts to cause other ITFS, OFS, MDS and
MMDS operators to co-locate at the Transmission Site. Notwithstanding anything
in this Agreement to the contrary, it is understood that no filing shall be made
with the FCC with respect to this Agreement unless both parties have reviewed
such filing and consented in writing to its submission, such consent not to be
unreasonably withheld.
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B) Further Efforts. Throughout the Initial Term of this Agreement, Lessor
shall use its best efforts to obtain and maintain in force all licenses, permits
and authorizations required for Lessee and Lessor to use the ITFS Channels as
contemplated by this Agreement. Lessee shall be responsible for all cash
expenses incurred to obtain and maintain in force such licenses, permits and
authorizations. When mutually agreed by the parties and at Lessee's sole
expense, Lessor shall apply for, and use its best efforts to obtain those
reasonable license modifications which would assist Lessee in its business.
Lessor also shall consider filing, at Lessee's sole expense, such reasonable
protests, comments or other petitions to deny any other ITFS, MMDS, MDS and/or
OFS applications or amendments as may be requested by Lessee in the mutual best
interests of the parties and the public. Lessor and Lessee shall promptly notify
each other of any event of which it has knowledge that may affect any of the
licenses, permits or authorizations affecting the ITFS Channels.
C) Attorney's Fees. With respect to any legal work conducted pursuant to
Paragraphs 8(A) and (B) above, Lessee shall be responsible for all attorneys'
fees in connection therewith and shall make payments directly to the attorney.
However, any attorney fees paid by Lessee shall be approved in advance by
Lessee.
9. REPRESENTATIONS AND WARRANTIES.
A) Representations and Warranties of Lessor. Lessor represents and warrants
to Lessee as follows:
(1) Organization. Lessor is a non-profit organization duly organized and
existing in good standing under the laws of the State of California, and it has
full power and authority to carry out all of the transactions contemplated by
this Agreement and all other agreement, certificates or instruments executed and
delivered in connection herewith.
(2) No Violation. Neither the execution nor delivery of this agreement or
any other agreements, certificates or instruments executed and delivered
herewith, nor the performance of the transactions contemplated hereby constitute
or will constitute a violation of, be in conflict with, or a default under any
term or provision of the governing instruments of Lessor or any agreement or
commitment to which Lessor is bound, or any judgment, decree, order, regulation
or rule of any court or governmental authority, or consent of any federal, state
or local authority is required in connection with the execution and delivery of
this Agreement or any other agreements, certificates or instruments executed and
delivered herewith or with the performance of the transactions contemplated
hereby.
B) Representations and Warranties of Lessee. Lessee represents and warrants
to Lessor as follows:
(1) Organization. Lessee is duly organized, validly existing and in good
standing under the laws of the State of its incorporation and it has full power
and authority to own property and carry out all of the transactions contemplated
by this Agreement, and all other agreements, certificates or instruments
executed and delivered by Lessee in connection herewith.
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(2) Corporation Action; Valid and Binding Agreements. Lessee has taken all
corporate action necessary to authorize the execution and delivery of this
Agreement and all other agreements, certificates or instruments executed and
delivered in connection herewith. Upon execution and delivery, this Agreement
and all other agreements, certificates or instruments executed and delivered by
Lessee in connection herewith will constitute valid and binding agreements of
Lessee enforceable in accordance with their respective terms.
(3) Litigation and investigations. There is no action, suit, proceeding or
investigation pending or, to the best of Lessee's knowledge, threatened against
Lessee, its principals or related entities before any court, administrative
agency or other governmental body, and Lessee does not know nor is aware of any
reason for commencement of any such action, proceeding or investigation.
(4) Misrepresentation of Material Fact. To the best of Lessee's knowledge,
information and belief, no document or contract that was shown to Lessor and
which in any way affects any of the properties, assets or proposed transactions
of Lessee as such relates to this Agreement, no certificate or statement
furnished by or on behalf of Lessee in connection with this Agreement, nor this
Agreement itself contains any untrue statement of material fact or omits to
state a material fact which would make the statements contained herein
misleading.
C) Survival or Representations and Warranties. The representations and
warranties contained in this Agreement shall be deemed to be continuing during
the Initial terms of this Agreement, and each Party shall have the duty promptly
to notify the other of any event or circumstance which might reasonably be
deemed to constitute a breach of or lead to a breach of its warranties or
representations hereunder. The waiver by either Party of any breach of any
representation or warranty under this Agreement shall not constitute a waiver of
any other representation or warranty or of any failure in the future by the
other Party to fulfill such representation or warranty.
10. TERMINATION.
A) Termination of FCC Authorization. Without further liability to either
Lessor or Lessee, this Agreement shall terminate in the event that for any
reason (i) Lessor shall not be licensed on the leased ITFS Channels, or (ii) the
FCC shall terminate or diminish Lessor's authority to lease the ITFS Channels in
accordance with the terms of this Agreement.
B) Termination by Reason of Default or Nonperformance. At the option of the
non-defaulting party, this Agreement may be terminated upon the material breach
or default by the defaulting party of its duties and obligations hereunder if
such breach or default is not cured by such defaulting party and if such breach
or default shall continue for a period of thirty (30) consecutive days after
such defaulting party's receipt of notice thereof from the non-defaulting party.
It is understood and agreed that any failure on the part of Lessee to make any
payment required under Paragraph 6 hereof shall be a material breach of default
of its duties and obligations hereunder. It is also understood and agreed that
any consequences resulting from the loss of local participating receive sites
shall not be considered a material breach or default by Lessor of its duties and
obligations hereunder.
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C) Remedies to Continue. In the event of termination of this Agreement
pursuant to Paragraph 10(B), such termination shall not affect or diminish the
rights or claims or remedies available in equity or at law to the non-defaulting
party arising by reason of a breach or default of this Agreement. However, no
liability shall arise on the part of Lessor or Lessee upon termination of this
Agreement pursuant to Paragraph 10(A) except where the loss of the FCC license
occurs as a result of the default of either party.
11. TRANSFER OF RIGHTS AND OBLIGATIONS.
Lessee shall have the right to assign its rights under this lease as
collateral for any financing arrangements it makes. Lessee shall also have the
right to pledge the Leased Equipment as collateral security for any loans it
makes; provided, however, that any pledge of the Leased Equipment shall be made
subject to the provisions of this lease. Lessee shall further have the right to
subcontract any portion of its obligations under this Agreement to any
partnership, joint venture, corporation or entity which Lessee may choose,
provided that Lessee gives Lessor notice of any proposed subcontracting and,
provided further, that no such subcontracting shall release Lessee from
fulfilling all of its obligations under this Agreement. Lessee shall have the
right to assign or transfer its rights, benefits, duties and obligations under
this Agreement to a commonly-owned company without the prior consent of Lessor.
Apart from the foregoing, neither party may assign or transfer its rights,
benefits, duties or obligations under this Agreement without the prior written
consent of the other, which consent shall not be unreasonably withheld.
12. INDEMNIFICATION.
A) By Lessor. To the extent permitted by state and federal law and its
charter or by-laws, Lessor shall forever protect, save and keep Lessee and its
permitted successors and assigns harmless and indemnify Lessee against and from
any and all claims, demands, losses, costs, damages, suits, judgments,
penalties, expenses and liabilities of any kind or nature whatsoever, including
reasonable attorneys' fees, arising directly or indirectly out of (i) the
willful misconduct of Lessor, its agents or employees in connection with the
performance of this Agreement, or (ii) any programming transmitted by Lessor
during any of Lessor's Airtime.
B) By Lessee. To the extent permitted by state and federal law and its
charter or by-laws, Lessee shall forever protect, save and keep Lessor and its
permitted successors and assigns harmless and indemnify Lessor against and from
any and all claims, demands, losses, costs, damages, suits, judgments,
penalties, expenses and liabilities of any kind or nature whatsoever, including
reasonable attorneys' fees, which arise directly and indirectly out of (i) the
negligence or willful misconduct of Lessee, its agents or employees, in
connection with the performance of this Agreement; (ii) any programming
transmitted by Lessee pursuant to this Agreement; (iii) any and all dealings by
Lessee or any of its authorized agents or subcontractors with the public, third
parties and subscribers to the Lessee's programming service; or (iv) any
maintenance, installation or other work performed by Lessee or any authorized
agent or subcontractor under this Agreement.
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C) Notice of Claim; Defense of Claim. Each party shall notify the other of
any such claim promptly upon receipt of same. Either party (hereinafter referred
to as appropriate the "Indemnitor" or the "Indemnitee") shall have the option to
defend, at its own expense, any claims arising under this Paragraph. If
Indemnitor assumes the defense of any such claim, Indemnitee shall delegate
complete and sole authority to the Indemnitor to defend or settle same and
Indemnitee shall cooperate with Indemnitor in the defense thereof.
13. INSURANCE.
A) Policies Required. At its expense, Lessee shall secure and maintain with
financially reputable insurers, one or more policies of insurance insuring the
Leased Equipment and Lessee's utilization of the ITFS Channels against casualty
and other losses of the kinds customarily insured against by firms of
established reputations engaged in the same or similar line of business, or such
types and in such amounts as are customarily carried under similar circumstances
by such firms, including, without limitation: (i) "All Risk" property insurance
covering the ITFS Equipment and the common Equipment to the extent of one
hundred percent (100%) of its full replacement value without deduction for
depreciation: (ii) comprehensive general public liability insurance covering
liability resulting from Lessee's operation of the ITFS equipment on an
occurrence basis having minimum limits of liability in an amount of not less
than One Million Dollars ($1,000,000.00) for bodily injury, personal injury or
death to any person or persons in any one occurrence, and not less than Two
Million Dollars ($2,000,000.00) in the aggregate for all such losses during each
policy year, and not less than Three Hundred Thousand Dollars ($300,000.00) with
respect to damage to property; (ii) all workers compensation, automobile
liability and similar insurance required by law.
B) Insurance Policy Forms. All policies of insurance required by this
Paragraph shall, where appropriate, designate Lessor as either the insured party
or as a named additionally insured party, shall be written as primary policies,
not contributory with and not in excess of any coverage which Lessor shall
carry, and shall contain a provision that the issuer shall give to Lessor thirty
(30) days prior written notice of any cancellation or lapse of such insurance or
of any change in the coverage thereof.
C) Proof of Insurance. Executed copies of the policies of insurance
required under this section or certificates thereof shall be delivered to Lessor
not later than ten (10) after execution of this agreement. Lessee shall furnish
Lessor evidence of renewal of each such policy not later than thirty (30) days
prior to the expiration of the term thereof.
14. RELATIONSHIP OF PARTIES.
By the provisions of this Agreement, Lessor and Lessee intend to enter an
airtime lease relationship and not a joint venture. They will carry out this
Agreement to preserve that intent. Neither party shall represent itself as the
other party, nor as having any relationship with one another, except as Lessor
and Lessee under the terms of this Agreement.
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15. EQUIPMENT PURCHASE.
A) Lessor's Option to Purchase. In the event that this Agreement is
terminated, Lessor shall have the option to purchase the Leased Equipment used
exclusively for Lessor's ITFS license. Any equipment which is used in a shared
fashion (such as transmit antenna, decoders, and combiners) in providing signals
other than Lessor's signals are excluded from this option to purchase. The
intent of the purchase option provided for in Paragraphs 16(A) is to provide
Lessor with the capability to continue to perform on Lessor's ITFS license. The
purchase price shall be the market value of such equipment noted above as
determined by mutual agreement or by averaging the values obtained from two (2)
appraisals, with one appraiser each chosen by Lessor and Lessee.
B) Lessee's Option to Purchase. If during the terms of this Agreement the
FCC modifies its rules so as to enable Lessee to be licensed to operate the ITFS
frequencies, Lessee shall have a right of first refusal to acquire such licenses
subject to the same terms and conditions as the right provided for in Paragraph
1(B).
16. NON-DISCLOSURE.
Lessor acknowledges that there may be made available to it pursuant to this
Agreement proprietary information of Lessee relating to the encoding and/or
decoding system associated with the ITFS channel equipment and its patented
processes including, but not limited to, improvements, innovations, adaptation,
inventions, results of experimentation, processes and methods, whether or not
deemed patentable, and certain business and marketing techniques (all herein
referred to as "Confidential Information"). Lessor acknowledges that this
Confidential Information has been developed by Lessee at considerable effort and
expense and represents special, unique and valuable proprietary assets of
Lessee, the value of which may be destroyed by unauthorized dissemination.
Accordingly, Lessor covenants and agrees that, except as may be required for the
performance of this Agreement or by law or court order, neither it nor any of
its agents or affiliates shall disclose such Confidential Information to any
third person, firm, corporation or other entity for any reason whatsoever, such
undertaking to be enforceable by injunctive or other equitable relief to prevent
any violation or threatened violation thereof.
17. NON-COMPETITION.
During the term of this Agreement, Lessor agrees not to transmit
programming or to lease or sublease any channel capacity on its ITFS Facilities
for the transmission of programming that is competitive with the programming
transmitted by Lessee.
18. FORCE MAJEURE.
If by reason of Force Majeure either party is unable in whole or in part to
perform its obligations hereunder, the party shall not be deemed in violation of
default during the period of such inability. As used herein, the phrase "Force
Majeure", shall mean the following: act of God, acts of public enemies, orders
of any branch of the government of the United States of America, any state or
any political subdivisions, thereof which are not the result of a breach of this
Agreement, orders of any military authority, insurrections, riots, epidemics,
fires, civil
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disturbances, explosions, or any other cause or event not reasonably within the
control of the adversely affected party.
19. CONDITION PRECEDENT.
This Agreement is conditional on the issuance of a Final Order by the FCC
granting Lessor a construction permit for the ITFS Channels in the Market from
the Transmission Site. By "Final Order" the parties mean an action or order of
the FCC which is not reversed, stayed, enjoined, vacated, set aside, annulled or
suspended and with respect to which no timely-filed request for administrative
or judicial review is pending and as to which the time for filing any such
request, or for the FCC to set aside the action on its own motion, has expired.
20. NOTICE.
Any notice required to be given to Lessor under any provision of this
Agreement shall be delivered personally or by certified mail to Lessor at the
address first written above. Any notice required to be given to Lessee under any
provision of this Agreement shall be delivered personally or by certified mail
to Lessee at the address first written above.
21. SEVERABILITY.
Should any court or agency determine that any provision of this Agreement
is invalid, the remainder of the Agreement shall remain in effect.
22. WAIVER.
A waiver by either Lessor or Lessee of a breach of any provision of this
Agreement shall not be deemed to constitute a waiver of any preceding or
subsequent breach of the same provision or of any other provision.
23. PAYMENT OF EXPENSES AND SIGNING FEES.
A signing fee of One Dollar ($1) shall be paid to Lessor. Lessee shall pay
all costs and expenses incident to fulfilling or modifying this Agreement, such
as, attorneys' fees or, if necessary, any travel expenses approved in advance by
Lessee, FCC filing fees, and engineering costs.
24. VENUE AND GOVERNING LAW.
Venue for any cause of action brought by or between Lessor and/or Lessee
relating to this Agreement shall be in California and all provisions of this
Agreement shall be construed under the laws of the State of California and
County of Lessor.
25. COUNTERPARTS.
This Agreement may be executed in one or more counterparts each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument, and shall
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become effective when each of the parties hereto shall have delivered to it this
Agreement duly executed by each of the other parties hereto.
26. ENTIRE AGREEMENT.
This Agreement constitutes the entire Agreement between the parties and
supersedes all prior oral or written provisions of any kind. The parties further
agree that this Agreement may only be modified by written Agreement signed by
both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
day of July 1st, 2000.
SHEKINAH NETWORK
By:
------------------------------------------
Name: Charles J. McKee
--------------------------------------
Title: President
--------------------------------------
World Wide Wireless Communications, Inc.
By:
-----------------------------------------
Name: Douglas P. Haffer
--------------------------------------
Title: President
--------------------------------------
Address for Notices:
Shekinah Network
2995 Ardilla Road,
Atascadero, CA. 93422
(805) 466-7770
(805) 460-9292 Fax
E-Mail [email protected]
Attn: Charles McKee, President
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<PAGE>
Gardner, Carton & Douglas
Attn: Laura Mow
1301 K Street, N. W. Suite. 900
Washington, DC 20005
Phone: (202) 408-7100
Fax: (202) 289-1504
World Wide Wireless Communications, Inc.
520 Third Street Suite 101
Oakland, CA 94607
(510) 839-6100
(510) 530-5700
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EXHIBIT A
---------
Schedule of Airtime
-------------------
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EXHIBIT B
---------
Receive Sites
-------------
There shall be attached hereto and incorporated by reference a copy of FCC
Form 330 Section IV listing Lessor's receive sites.
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EXHIBIT C
---------
Leased Equipment
----------------
Noted below is a list of equipment that Lessee is leasing to Lessor.
(1) Four (4) ITFS transmitters and related hardware
(2) Lessor's ITFS receive site antennas and related hardware.
*(3) Combining network, transmission line and antenna
*Common Equipment
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EXHIBIT D
---------
Service and Royalty Fees
------------------------
1. Lessor's Service Fee
--------------------
Services Provided Annual Fee
----------------- ----------
(a) Lease of Leased Equipment [6(A)] $1.00
(b) Maintenance of Leased Equipment [3(D)] $1.00
(c) Lease of space at Primary Transmission Site [3(A)] $1.00
2. Lessee's Subscriber Royalty Fee
-------------------------------
Lessee shall pay Lessor a minimum monthly Transmission Fee 5% of the
system's Gross receipts or a monthly minimum payment of $500 per month whichever
is greater.
Payment shall be as follows: Commencing on the Execution (Effective) Date
and as defined in Paragraph 6) B, payments for each month shall be made by the
twentieth (20th) day of the following month.
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EXHIBIT E
---------
Programming
-----------
In addition to digital data services, such as the Internet or Intranet, the
following is a list of video programming services Lessee may provide over
Lessee's System.
TLC - The Learning Channel
TWC - The Weather Channel
Lifetime
ESPN - Sports
AMC - American Movie Classics
SCOLA
WHTN - World Harvest Television Network
ECO - Galavision
CNN - Cable News Network
CNN - Headline News
C-Span I
C-Span II
BET - Black Entertainment Network
CNBC - Consumer News & Business Channel
Nickelodeon
The Discovery Channel
A&E - Arts & Entertainment
The Family Channel
The Disney Channel
PBS - Public Broadcasting Service
TBN - Trinity Broadcasting Network
TNIN - The New Inspirational Network
ME/U - Mind Extension Network
The International Channel
BRAVO Network
The Travel Channel
Family Network
Keystone Inspirational Network
WwwcEclaFinal
7-1-00
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