EXHIBIT 10.22
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions marked by [**] have been
separately filed with the Commission.
TRANSMISSION LEASE AGREEMENT
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THIS AGREEMENT, made and entered into this 31st day of January, 1995, by
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and between Microspace Communications Corporation, a North Carolina corporation
("Microspace"), and Muzak Limited Partnership, a limited partnership with
principal offices in Seattle, Washington ("Customer").
WITNESSETH:
WHEREAS, Microspace offers SCPC satellite transmission services; and
WHEREAS, Customer desires Microspace to provide such services; and
WHEREAS, Microspace desires to provide such services to Customer pursuant
to the terms and conditions hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein made, the Parties, intending to be legally bound, hereby
mutually agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings:
1.01 "Agreement" means this Agreement;
1.02 "Parties" means the signatories to this Agreement and a "Party" means
one of such signatories;
1.03 "Transmission Specifications" means those specifications for
transmission as defined in Exhibit A;
1.04 "Interruption of Service" shall mean any time the transmission fails
to meet any of the Transmission Specifications.
1.05 "Customer's Signal" means the complete intelligence to be transmitted
to Customer's Transponder on behalf of Customer pursuant to this Agreement.
ARTICLE II
SERVICE
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2.01 Transmission Service. Beginning March 1, 1994, Customer shall take
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full-time (i.e., 24 hours per day, 7 days a week) transmission service from
Microspace.
2.02 Uplink Facilities. Microspace shall provide transmitting equipment
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and related facilities (hereinafter "Uplink Facilities") sufficient to transmit
Customer's Signals from the ground to Microspace's Transponder subject to the
following conditions:
(a) The Uplink Facilities shall be located in or near Raleigh, North
Carolina;
(b) Microspace will provide, operate and maintain transmitting
equipment which will be capable of sending Customer's Signal to Microspace's
Transponder if Customer's Signal is configured so that it is technically
compatible with the transmitting equipment provided by Microspace;
(c) Microspace will operate the Uplink Facilities in a reasonable
manner consistent with the type of equipment located thereon. Unless Microspace
commits an intentional breach, it will not be liable for consequential damages
for breach of this provision. As used herein, "consequential damages" includes
revenues lost to Customer as a result of the inability of Customer to transmit
Customers Signal but does not mean the costs incurred by Customer in replacing
damaged property or in securing replacement facilities or replacement
transponder capacity;
(d) Customer will adhere to all reasonable rules and regulations
established by Microspace for the Uplink Facilities, including, but not limited
to, access by third persons;
(e) The Uplink Facilities provided by Microspace shall include
facilities to allow for the downlink of Customer's Signal from other satellites,
including those operating in C-band, for re-transmission to Microspace's
Transponder;
(f) Microspace will provide Customer space within a building at the
Uplink Facilities sufficient to accommodate standard Wegener or equivalent
modulation equipment required for transmission of Customer's channels as defined
in the Exhibits of this Agreement. Customer will pay no rent for said space.
Additional rack space will be leased to Customer, if requested, at rates to be
agreed upon, subject to space available:
The information below marked by [**] has been omitted pursuant to a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
(i) All taxes or assessments which are incurred as the result of the
installation and operation of Customer's equipment will be paid by Customer in a
timely manner;
(ii) Microspace will provide electric power and temporary emergency
backup electrical power for the operation of Customer's equipment without
charge. Microspace will use all reasonable efforts to maintain a suitable
environment within the building to support the operation of standard electrical
devices typically installed in Uplink Facilities;
(iii) Microspace will not be responsible for damage to or destruction
of Customer's equipment located at the Uplink Facilities unless the damage or
destruction is caused by Microspace's gross negligence or willful misconduct.
2.03 Option to Add Additional Channels. Customer shall have the option to
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add two (2) additional channels during the term of this Agreement.
ARTICLE III
SERVICE TERM
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3.01 Term. Customer shall begin taking service as provided herein for a
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term commencing on March 1, 1994, and ending Sixty (60) months after the start
date of this Agreement. Customer may terminate this Agreement during the first
eighteen (18) months of the Agreement term upon thirty (30) days written notice
to Microspace.
ARTICLE IV
MONTHLY CHARGE AND METHOD OF PAYMENT
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4.01 Monthly Charge. Customer shall pay to Microspace monthly, in
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advance, the sum of [**]
Customer shall have the option to add up to two (2) additional
channels, each at an additional [**] per month.
If the term should not commence on the first day of a month or end on
the last day of a month, the monthly charge for the fractional part of the month
shall be calculated at a daily rate of one-thirtieth of the monthly charge
specified in Paragraph 4.01.
The information below marked by [**] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commmission.
All payments shall be made to Microspace at its address as designated
in Section 8.06 and shall be deemed to be made upon receipt thereof by
Microspace.
4.02 [**] Microspace will not [**] to any other person or entity [**] than
those applicable to [**] hereunder. Should Microspace provide [**], this
Agreement shall be amended to provide Customer with [**] for the remainder of
the term of the Agreement; provided, however, that this provision will not apply
with respect to [**] Capital Broadcasting Company or any subsidiary thereof.
ARTICLE V
INTERRUPTION OF TRANSMISSIONS
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5.01 Outage Allowance. If applicable, Microspace shall grant Customer an
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Outage Allowance, as follows:
If an Interruption of Service occurs, then for each full hour of such
Interruption of Service, Microspace shall grant Customer a pro rata Outage
Allowance based on the monthly charge for Customer's Transmission Service and
the length of the Interruption of Service, calculated pursuant to the equation
below. Any such outage allowance shall be applied to the next succeeding
monthly billing to Customer and shall not in any case exceed one (1) month's
standard billing. As used herein, "Interruption of Service" shall mean the
aggregate period (in minutes) -- only where such aggregation exceeds thirty (30)
minutes in any consecutive thirty (30) day period -- during which an
Interruption of Service occurs. For purposes of this Agreement, an Interruption
of Service shall be measured from the time Microspace receives notice from
Customer of the Interruption of Service until the time transmission has been
restored.
Outage Allowance = Interruption of Service (in Minutes) X Monthly Lease
Payment
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43,200 Minutes/Month
In no case shall an Outage Allowance be made for any Interruption of
Service related to: (i) any failure on the part of Customer to perform its
transmission or other material or operational obligations pursuant to this
Agreement, (ii) failure of facilities provided by Customer, (iii) reasonable
periodic maintenance, (iv) interference from third party transmission or usage,
(v) cooperative testing or (vi) any other act or failure to act by Customer.
(c) An allowance will not be made where the interruption is a result
of, or attributable in whole or in part, to:
(1) The Customer's negligence or willful acts, or the negligence
or willful acts of its officers, directors, agents, employees, subsidiaries,
affiliates, customers, or any of them;
(2) The failure of the Signal provided by Customer or by carriers
other than Microspace in accordance with the Customer's instructions or the
failure of transmission lines or equipment provided by the Customer, its
customers, or any of them; or
(3) The failure or nonperformance of any earth station not
provided by Microspace.
5.03 Credit Memoranda. Creditable interruptions shall be acknowledged by
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Microspace through the issuance of credit memoranda. Such memoranda shall be
issued within fifteen (15) days of the close of each calendar month and shall
reflect all credit allowances accumulated by Customer during such month.
Customer may deduct from its next monthly payment the amount specified in the
credit memorandum received in the preceding month.
5.04 Resolution of Credit Disputes. In the event that Microspace and
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Customer cannot agree on the amount of credit due Customer following an
interruption, Customer may withhold payment of the disputed amount until
Microspace and Customer resolve the dispute; provided, however, that should a
credit dispute or disputes arise totalling two months service fees or more in
the aggregate, Microspace or Customer may cancel this Agreement on thirty (30)
days written notice and pursue all legal remedies available to resolve the
dispute, including claims of breach for wrongful termination.
ARTICLE VI
TERMINATION
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6.01 Termination by Customer. Anything set forth herein to the contrary
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notwithstanding, upon the occurrence of any of the following events Customer may
terminate this Agreement within ninety (90) days of actual knowledge of the
events giving rise to the right to termination:
(a) Breach or Default. If Microspace commits a material breach or
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default of any of the provisions of this Agreement and such breach or default
has not been cured within thirty (30) days after receipt by Microspace of
Customer's notice of such breach or default;
(b) Government Restrictions. If the performance of this Agreement
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pursuant to the terms hereof has been prohibited by any federal, state or local
court, governmental or regulatory body, and service has been interrupted for a
period of two hundred forty (240) hours or more as a result.
6.02 Termination by Microspace with Notice. Anything set forth herein to
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the contrary notwithstanding, upon the occurrence of any of the following events
Microspace may terminate this Agreement upon ten (10) days prior notice of
intent to terminate to Customer:
(a) Breach or Default. If Customer commits a material breach or
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default of any of the provisions of this Agreement, including, but not limited
to a failure to pay timely the monthly charge due under Article IV, and such
breach or default has not been cured within ten (10) days after receipt by
Customer of Microspace's notice of such breach or default;
(b) Governmental Restriction. If performance of this Agreement
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pursuant to the terms hereof has been prohibited by any federal, state or local
court, governmental or regulatory body, and performance by Customer has been
interrupted for a period of two hundred forty (240) hours or more as a result.
ARTICLE VII
INDEMNIFICATION AND LIMITATION OF LIABILITY
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7.01 Limitation of Liability.
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(a) Neither Party shall not be liable for any failure of performance
hereunder due to causes beyond its control, including but not limited to acts of
God; fire, flood or other catastrophes; any law, order, regulation, direction,
action or request of the United States government, or of any other government,
including state and local governments having jurisdiction over such Party, or of
any department, agency, commission, bureau, corporation or other instrumentality
of any one or more said governments, or of any civil or military authority,
national emergencies, insurrections; riots, wars, or strikes, lockouts, work
stoppages or other labor difficulties;
(b) The liability of Microspace for damages or losses of any kind
arising out of its furnishing service to the Customer and caused by Microspace
shall in no event exceed an amount equal to the proportionate part of its fixed
monthly charge allocable to the faulty service as specified in Section 5.01;
(c) Microspace shall not be liable for any act or omission of any
other entity furnishing to the Customer facilities or equipment used
with the service nor shall Microspace be liable for any damages or losses due to
the fault or negligence of the Customer or to the failure of Customer-provided
equipment or facilities.
(d) Except with respect to an intentional breach by Microspace of
Section 2.02, the liability of Microspace for damages or losses of any kind
arising out of its furnishing Service to the Customer hereunder shall not
include consequential damages, as defined in Section 2.02 above;
7.02 Indemnification by Customer. Customer shall indemnity and hold
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Microspace and its affiliates, its and their officers, employees or agents, or
any of them, whether acting through Microspace or otherwise, harmless from and
against:
(a) Use by Customer. All loss, liability, damage and expense,
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including reasonable counsel fees due to claims for libel, slander, infringement
of copyright arising from the material transmitted by Customer over Microspace's
facilities; and any other claim resulting from any negligent or wrongful act or
omission of Customer or patrons of Customer and relating to the Service
furnished by Microspace;
(b) Misrepresentation, Breach, etc. Any and all damages occasioned
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by, arising out of or resulting from any material misrepresentation, intentional
breach of warranty or covenant, or intentional default or intentional
nonfulfillment of any agreement on the part of Customer under this Agreement or
under any certificate, agreement, exhibit, schedule or other instrument
furnished to Microspace pursuant to this Agreement or in connection with any of
the transactions contemplated hereby;
(c) Defense of Third Party Claims. Microspace shall notify Customer
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within ten (10) days of its being served with a lawsuit, and otherwise within
thirty (30) days of its actual knowledge of the occurrence of any event, or of
its discovery of any facts, which in its opinion entitle or may entitle it to
indemnification from a third party claim under this Article. Microspace's
failure to do so shall preclude it from seeking indemnification hereunder unless
such failure has not prejudiced the Customer's ability to defend such claim.
Customer shall promptly defend such claim by counsel of its own choosing at its
own cost and expense and Microspace shall cooperate with Customer in the defense
of such claim including the settlement of the matter on the basis stipulated by
Customer (with Customer being responsible for all costs and expenses of such
settlement). If Customer within reasonable time after notice of a claim fails to
defend Microspace, Microspace shall be entitled to undertake the defense,
compromise or settlement of such claim at the expense of and for the account and
risk of Customer;
(d) Right to Defend. If there is a reasonable probability that
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resolution of a claim in the manner provided in paragraph (c) above will
materially and adversely affect Microspace, Microspace shall have the right, at
its own cost and expense, to defend, compromise or settle such claim against it;
(e) Claim Against Third Party. If the facts giving rise to
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indemnification hereunder shall involve a possible claim by Microspace against a
third party, Microspace shall have the right, at its own costs and expense, to
undertake the prosecution, compromise and settlement of such claim;
(f) Release. Customer shall not, without Microspace's consent, settle
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or compromise any claim or consent to any entry of judgment which does not
include as a term thereof an unconditional release by the claimant or plaintiff
of Microspace from all liability with respect to such claim.
ARTICLE VIII
MISCELLANEOUS
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8.01 Not Fiduciaries. Nothing contained in this Agreement shall be deemed
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or construed by the Parties hereto or by any third party to create any rights,
obligations or interests in third parties; to create the relationship of
principal and agent, partnership or joint venture or of any other fiduciary
relationship or association between the Parties.
8.02 Waiver. No failure on the part of either Party to notify the other
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Party of any noncompliance hereunder, and no failure on the part of either Party
to exercise its rights hereunder shall prejudice any remedy for any subsequent
noncompliance, and any waiver by either Party of any breach or noncompliance
with any term or condition of this Agreement shall be limited to the particular
instance and shall not operate or be deemed to waive any future breaches or
noncompliance with any term or condition. All remedies and rights hereunder and
those available in law or in equity shall be cumulative and the exercise by a
Party of any such right or remedy shall not preclude the exercise of any other
right or remedy available under this Agreement in law or in equity.
8.03 Assignment and Binding Effect. This Agreement may be assigned by
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either Party to a third party during the term of this Agreement without the
written consent of the other Party.
8.04 Expenses. Except as otherwise provided herein, each Party hereto
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shall bear its own expenses incurred in connection with the transactions
pursuant to this Agreement.
8.05 Construction. This Agreement shall be construed and enforced in
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accordance with the internal substantive laws of the State of North Carolina
except for conflicts of laws. The Parties hereby consent and submit to the
jurisdiction of the federal and state courts located in the State of North
Carolina, and any action or suit under this Agreement may be brought by the
Parties in any federal or state court with appropriate jurisdiction over the
subject matter established or sitting in the State of North Carolina. The
Parties shall not raise in connection therewith, and hereby waive, any defenses
based upon the venue, the inconvenience of the forum, the lack of personal
jurisdiction, the sufficiency of service of process or the like in any such
action or suit brought in the State of North Carolina. If any action or
proceeding is brought for the enforcement of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees and other costs incurred in the action or proceeding, in addition to any
other relief to which it or they may be entitled.
8.06 Notices. All necessary notices, demands, reports, orders and
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requests required or permitted hereunder shall be deemed to be duly given only
if and on the date mailed by certified or registered United States mail, postage
prepaid, or delivered by hand and addressed as follows:
(a) If to be given to Microspace:
Mr. Keith N. Smith
Microspace Communications Corporation
3100 Highwoods Blvd., Suite 120
Raleigh, NC 27604
and
Mr. James F. Goodmon
Capitol Broadcasting Company
711 Hillsborough Street
Box 12800, Raleigh, NC 27605
(b) If to be given to Customer:
Mr. Thomas J. Gentry
Muzak DBS Division
3100 Highwoods Blvd.
Raleigh, NC 27604
and
Mr. John R. Jester
Muzak Limited Partnership
400 North 34th Street
Suite 200
Seattle, WA 98103
or to such other addresses as the Parties may specify in writing.
8.07 Headings. The headings of the Articles, Sections, Paragraphs and
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Subparagraphs of this Agreement are inserted as a matter of convenience and for
reference purposes only, are of no binding effect, and in no respect define,
limit or describe the scope of this Agreement or the intent of any provision
hereof.
8.08 Exhibits. All Exhibits attached to this Agreement shall be deemed
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part of this Agreement and incorporated herein as if fully set forth therein,
and in the event of a variation or an inconsistency between this Agreement and
the Exhibits attached hereto, the Agreement shall govern.
8.09 Ambiguities. This Agreement and the Exhibits hereto have been
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drafted jointly by the Parties and in the event of any ambiguities in the
language hereof, there shall be no inference drawn in favor of either Party.
8.10 Entire Agreement. This Agreement, including the "WHEREAS" clauses on
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Page 1, and all Exhibits hereto, represent the entire understanding and
agreement between the Parties hereto with respect to the subject matter hereof,
supersede all prior negotiations between such Parties, and can be amended,
supplemented or changed only by an agreement in writing which makes specific
reference to this Agreement and which is signed by both Parties.
8.11 Counterparts. This Agreement may be signed in counterpart and in
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multiple copies, and each such copy having all signatures attached thereto shall
constitute an original hereof.
8.12 Public Notice, Confidentiality and Proprietary Information.
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Notwithstanding any termination of this Agreement, Microspace and Customer shall
hold in confidence the information contained in this Agreement, and Microspace
and Customer hereby acknowledge that all information related to this Agreement
is confidential and proprietary and is not to be disclosed to third persons,
without the prior consent of both Microspace and Customer. Neither Microspace
nor Customer shall disclose to any third party the existence of, or any of the
terms and provisions of, this Agreement except as provided in this Section 8.12.
Neither Party shall issue a public notice or a news release concerning this
Agreement and the transactions contemplated hereby without the prior approval of
the other Party, which approval shall include the right to approve the form,
content and timing of any such release. To the extent that either Party
discloses additional information which it considers proprietary, it shall
identify such information as proprietary when disclosing it to the other Party
by marking it clearly and conspicuously as proprietary information; provided,
however, that Microspace understands and agrees that the names and locations of
Customer's patrons and affiliates are confidential and proprietary and need not
be identified as such at the time of disclosure to Microspace. Any proprietary
disclosure to either Party, if made orally, shall be promptly confirmed in
writing and identified as proprietary information, if the disclosing Party
wishes to keep such information proprietary under this Agreement. Any such
information disclosed under this Agreement shall be used by the recipient
thereof only in its performance under this Agreement. Notwithstanding the
foregoing, neither Party shall be liable for disclosure or use of such
proprietary information (but shall notify the other Party prior to such
disclosure or use) which is:
(a) Applicable Law. Required to be disclosed to the extent necessary
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to comply with law or the valid order of a governmental agency or court of
competent jurisdiction;
(b) Internal Business Matter. Disclosed as part of its normal
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procedures to its officers, directors, parent company, auditors and attorneys,
each of whom shall agree to be bound by the provisions and spirit of this
Section;
(c) Enforcement of Rights. Disclosed in order to enforce its rights
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and perform its obligations pursuant to this Agreement;
(d) Financing and Disposition. Disclosed to the extent necessary as
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part of a sale, lease or financing arrangement, to its purchasers, lessees,
investment bankers, independent auditors or legal counsel and their agents,
representatives or independent contractors or
any financial institution; provided, however, that such parties shall agree in
writing to be bound by the provisions and spirit of this Section;
(e) Public Information. Available or becomes available to the public
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from a source other than the receiving Party before or during the period of this
Agreement, is lawfully obtained by the receiving Party from a third party or
parties, or is known by the receiving Party prior to such disclosure;
(f) Release. Released without restrictions in writing by the
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disclosing Party; or
(g) Independent Development. At any time developed by the receiving
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Party completely independently of and prior to any such disclosure or
disclosures from the disclosing Party when such development can be documented to
have occurred prior to a disclosure. No license to the other Party, under any
patents, is granted or implied by conveying proprietary information or other
information to that Party.
Notwithstanding the foregoing, the existence (but not the material
terms) of this Agreement may be disclosed to the patrons and affiliates of
Customer to the extent necessary to establish proper transmission of music and
other communications services to such individuals and entities through the
leased transponder channels.
8.13 Taxes. Customer shall not be responsible for any taxes and similar
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liabilities, including sales, use, income and personal property taxes, which may
be required under any federal, state or local laws with respect to the
Transponders used by Customer hereunder.
8.14 Expenses. Except as otherwise provided herein, each Party hereto
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shall bear its own expenses incurred in connection with the transactions
pursuant to this Agreement.
8.15 Technical Support. During the term of this Agreement, Microspace
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will provide technical and operational support to Customer with respect to
transmission frequency planning and equipment modulation configuration, transmit
channel additions, software interface requirements and headend equipment
interface standards.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
MICROSPACE COMMUNICATIONS CORPORATION
By: /s/ Keith N. Smith
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Keith N. Smith
Vice President and General Manager
Attest: [SIGNATURE ILLEGIBLE]
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MUZAK LIMITED PARTNERSHIP
By: /s/ Thomas J. Gentry
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Thomas J. Gentry
Vice President and General Manager
Muzak DBS Division
Attest: /s/ Susan A. Keith
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