LEASE AGREEMENT
BETWEEN
WORLD WIDE WIRELESS COMMUNICATIONS, INC.
AND
SHEKINAH NETWORK
Aspen, Colorado
ITFS EXCESS CAPACITY AIRTIME LEASE AGREEMENT
THIS AGREEMENT is made this 1st day of August 1999 by Shekinah Network
(hereinafter referred to as "Lessor") having its principal place of business at
14875 Powerline Road, Atascadero, CA 93422 and World Wide Wireless
Communications, Inc. (hereinafter referred to as "Lessee") having its principal
place of business at One Post Street, Suite 2600 San Francisco, CA 94104.
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-798
(the "License") for the Channel group C1-4 (the "ITFS Channels") in Aspen,
Colorado ("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:
3. 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
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.
(3) 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 fro 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.
(iv) 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 (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
(v) 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 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.
C) Operation During End of Term. If Lessor and Lessee do not enter into
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.
D) 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.
4. 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 ovr 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 know 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.
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
extend permitted by FCC rules.
3. TRANSMISSION SITE AND FACILITIES.
C. Primary Transmission Site. Lessor's ITFS Channels are located at Key
West, FL, 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.
D. Relocation of Transmission Site.
(i) 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.
(ii) 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 jurisdicition 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 procecute 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
therefore.
(iii) 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 application within five (5)
business days or 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 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.
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
entitles to protection under FCC rules and regulations. If
Lessee's entitled to protection under FCC rules and
regulations. If Lessee's operation of the Lease 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 list of the registered receive sites
designated by Lessor to receive its ITFS programming and to be installed at the
expense of Lessee. Those 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 Lease Equipment, Lessor shall pay Lessee an annual 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, then the Subscriber Royalty Fee for the
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.
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.
(i) 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 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 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 shall use their best efforts to reach agreement on
modifications to this Agreement to avoid any un-reimbursed 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. PROCECUTION 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 be
unreasonably withheld.
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 authorization affecting the ITFS Channels.
C) Attorneys' Fees. With respect to any legal work conducted pursuant
to Paragraph 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 Lesse as follows:
(i) 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.
(ii) 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 or 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 transaction contemplated
hereby.
B) Representations and Warranties of Lessee. Lessee represents and
warrants to Lessor as follows:
(ii) 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 all of the transactions
contemplated by this Agreement, and all other agreements, certificates or
instruments executed and delivered by Lessee in connection herewith.
(ii) 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.
(iii) 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.
(iv) Misrepresentation of Material Fact. To the best of Lessee's
knowledge, information and believe, 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 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
presentation 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 is such breach or default is not cured by such defaulting party and is
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.
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 witheld.
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 Lessor against and from
any and all claims, demands, losses, costs, damages, suits, judgments,
penalties, expenses and liabilities or 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; (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, Lessor shall forever protect, save and keep Lessee 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 or any kind or nature whatsoever, including
reasonable attorneys' fees, which arise directly or 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 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.
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 Indemnitee") shall have the
option to defend, at its own expense, any claims arising under this Paragraph.
In 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, whre 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.
27. 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.
28. EQUIPMENT PURCHASE.
C) 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.
D) 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).
29. 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.
30. 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.
31. 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 disturbances, explosions, or any other cause or event
not reasonably within control of the adversely affected party.
32. 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.
33. 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.
34. SEVERABILITY
Should any court or agency determine that any provision of this
Agreement is invalid, the remainder of the Agreement shall remain in effect.
35. 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.
36. 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.
37. 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.
38. 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 become effective when each of the parties hereto
shall have delivered to it this Agreement duly executed by each of the other
parties hereto.
39. 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, 1999.
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
14875 Powerline road
Atascadero, CA 93422
Phone/Fax: (805) 438-3341
Attn: Charles McKee, President
Gardner, Carton & Douglas
Attn: Laura Mow
1301 K Street, N.W., Suite 900
Washington, D.C. 20005
Phone: (202) 408-7100
Fax: (202) 289-1504
World Wide Wireless Communications, Inc.
One Post Street Suite 2600
San Francisco, CA 94104
Phone: (415) 981- 7777
Fax: (415) 391-3199
EXHIBIT A
Schedule of Airtime
EXHIBIT B
Receive Sites
There shall be attached hereto and incorporated by reference a copy of
FCC Form 330 Section IV listing Lessor" receive sites.
EXHIBIT C
Leased Equipment
Noted below is a list of equipment that Lessee is leasing to Lessor:
(3) Four (4) ITFS tansmitters and related hardware
(4) Lessor's ITFS receive site antennas and related hardware
*(3) Combining network, transmission line and antenna
*Common Equipment
EXHIBIT D
Service and Royalty Fees
1. Lessor's Service Fee
Services Provided Annual Fee
----------------- ----------
(d) Lease of Leased Equipment [6(A)] $1.00
(e) Maintenance of Leased Equipment [3(D)] $1.00
(f) Lease of space at Primary Transmission Site [3A)] $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.
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 Leaning 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 and 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