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EXHIBIT 10.2
ITFS AIRTIME LEASE AGREEMENT WITH
APPLICATION FOR LICENSE PROVISIONS
THIS AIRTIME LEASE AGREEMENT (hereinafter referred to as the
"Agreement"), made and entered on this __________ day of ____________________
______________, 199_______ by [LESSOR'S NAME], having its
principal place of business at [LESSOR'S ADDRESS] ("Lessor") and HEARTLAND
WIRELESS COMMERCIAL CHANNELS, INC., a Delaware Corporation, having its
principal place of business at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxx, XX 00000
("Lessee").
WHEREAS, Lessor is an accredited educational entity or is otherwise
eligible under Federal Communications Commission ("FCC") Rules to hold an
Instructional Television Fixed Service ("ITFS") license;
WHEREAS, Lessor wishes to secure the appropriate authorizations from
the FCC to construct and operate an ITFS facility in the [CITY/ STATE] (the
"Market Area") on four (4) channels (the "Channels") in order to distribute
educational programs to the public;
WHEREAS, Lessor contemplates that some excess channel capacity will
be available to said facility;
WHEREAS, the FCC has authorized ITFS licensees to lease such excess
channel capacity to non-ITFS users;
WHEREAS, Lessee is in the business of providing channels for the
distribution of video programming via microwave transmissions known as the
Multichannel Multipoint Distribution Service ("MMDS") and is desirous of
leasing excess ITFS transmission capacity from Lessor; and
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WHEREAS, Lessor and Lessee believe that the combination of educational
programming and entertainment programming will be mutually advantageous and
provide a significant benefit to the general public in the Market Area.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, undertakings covenants, and conditions set forth herein, Lessor and
Lessee do hereby agree as follows:
1. TERM OF AGREEMENT.
(a) INITIAL TERM. Subject to the provisions for earlier
termination contained in Paragraph 10 hereof, the term of this
Agreement shall commence upon the date first written above and shall
continue in full force and effect for a period of ten (10) years from
the Start Date as defined in Paragraph 17 hereof (said period is
hereinafter referred to as the "Initial Term").
(b) RENEWAL TERM. If FCC rules permit at the time this
Agreement expires, and subject to the provisions for earlier
termination contained in Paragraph 10 hereof, this Agreement shall
automatically and without further notice be extended for two (2)
successive additional terms (each such additional term is hereinafter
referred to as a "Renewal Term") of ten (10) years each unless and
until Lessee shall have served written notice on Lessor at least
ninety (90) days prior to the expiration date of the Initial Term or
any Renewal Term (hereinafter referred to as the "Expiration Date"),
that it elects not to renew this Agreement for a Renewal Term. It is
acknowledged and agreed that Lessee shall have the absolute right not
to renew this Agreement within such notice period, notwithstanding any
provision hereof to the contrary.
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(c) ADDITIONAL RENEWALS. One hundred eighty (180) days
before the expiration of the final Renewal Term, Lessor and Lessee
shall meet to determine if Additional Renewals are in the best
interest of each party. If, within ninety (90) days after such
meeting, Lessor and Lessee are unable to reach an agreement to further
renew this Agreement on appropriate terms and conditions, this
Agreement shall terminate without further liability to either party.
(d) RIGHT OF FIRST REFUSAL TO LEASE. In the event that
this Agreement is not renewed, whether due to FCC restrictions on
automatic renewals or for any other reason, Lessor hereby grants to
Lessee, for a period of one (1) year commencing on the Expiration Date
hereof, a right of first refusal to enter into a new agreement for the
leasing of the airtime on Lessor's channels pursuant to the following
terms. If Lessor receives a bona fide written offer from a third
party to lease the airtime on Lessor's channels within said one (1)
year period, Lessor shall, within seven (7) business days, transmit
the same in writing to Lessee as Lessor's offer and Lessee shall then
have the right for sixty (60) days after its receipt of said offer to
accept said offer. If, during said sixty (60) day period, Lessee
shall fail to accept such offer, its option hereunder as to such offer
shall terminate and, then and only then, may Lessor agree to lease
such airtime to a party other than Lessee. Thereupon, Lessor shall
have the right to lease the airtime on its Channels to, and only to,
the aforesaid bona fide prospective Lessee at the identical price,
terms and conditions as were offered to Lessee. Lessor may not accept
said offer with any modification or alteration to its price, terms
and/or conditions in any respect without first again providing Lessee
with written notice of and the right to accept the modified or altered
offer for an additional sixty (60) day period.
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expense, Lessor shall file all necessary and appropriate applications
with the FCC and, as required by law, with any and all other local,
state, and federal governmental agencies to maintain and renew its
ITFS license and any associated authorization.
2. EXCESS CAPACITY. Lessor has determined that there will be
excess capacity available on the four (4) ITFS Channels to be utilized for
Lessor's educational needs and that this excess capacity is available for
entertainment or other commercial uses. Lessor has further determined that, by
combining its educational programming with Lessee's entertainment programming,
a significant increase may be achieved in the number of persons who will have
access to Lessor's educational programming at no additional transmission cost.
3. LEASE OF EXCESS CAPACITY.
(a) EXCESS CAPACITY AVAILABLE TO LESSEE. Lessor agrees
to lease to Lessee the "excess" capacity available on all four (4) of
its ITFS Channels for the Initial Term and any Renewal Terms
(collectively, the "Term") of this Agreement. The remaining time
available over and above the time utilized for Lessor's educational
programming shall be considered "excess capacity," as that term is
defined by the Rules of the FCC, specifically Section 74.931 or any
successor provision, and shall be available to Lessee for
entertainment or other commercial uses (hereinafter referred to as
"Lessee Time"). Unless otherwise prohibited by the Rules of the FCC,
Lessee Time shall include all capacity on all Channels made available
through the use of Comband, digital compression or other similar
technologies which allow the division or compression of an ITFS
channel into two or more discrete channels. Lessor agrees to permit
Lessee to channel map all channels or channel load its programming
subject to FCC rules and regulations. Lessor reserves for itself a
minimum of twenty (20) hours per week per ITFS channel between the
hours of 8:00 a.m. and 4:00 p.m. Monday through Saturday, to be used
for ITFS scheduled programming, including a minimum of three (3) hours
per day per channel per weekday (Monday through Friday, excluding
weekends and holidays) (such time is referred to herein as "Lessor's
Primary Time"). Lessor preserves for itself for any expanded ITFS
programming, an additional twenty (20) hours per
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week per channel (such time is referred to herein as "Lessor's
Preserved Time"). In the event Lessor wishes to modify the initial
number of hours to recapture additional hours from Lessee Time for the
provision of qualified ITFS programming, up to a maximum total of
forty-one (41) hours per week per ITFS channel, Lessor shall provide
Lessee with six (6) months advance written notice of the specific
airtime hours Lessor intends to utilize. Lessor agrees that Lessee
may carry Lessor's Preserved Time programming over any MDS or ITFS
Channel used by Lessee in the Market Area and that the Preserved Time
does not have to be carried on Lessor's Channels; provided, however,
that Lessee shall transmit Lessor's Preserved Time on Lessor's
Channels if the FCC changes its current policy on such transmissions.
Lessor's schedule of programming to be transmitted during Lessor's
Primary Time shall be attached hereto and made a part hereof as
Exhibit A within thirty (30) days of grant of a License to Lessor.
(b) TERMINATION DUE TO INSUFFICIENT CAPACITY. If at any
time during the Term of this Agreement, for any reason, there is a
significant reduction in Lessee's Time, Lessee may terminate this
Agreement without penalty or further liability to Lessor upon notice
to Lessor. Alternatively, Lessee may reduce in proportionate amount
the fees payable hereunder during the remainder of this Agreement.
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(c) USE OF SUBCARRIERS AND VERTICAL BLANKING INTERVALS.
Lessee shall have the use and control of the subcarrier(s) and
vertical blanking intervals on all of the Lessor's Channels at no
additional cost.
4. TECHNICAL CHANGES IN CHANNEL OPERATION AND EQUIPMENT FOR
LESSOR'S USE. Lessor recognizes the mutual benefits and technological
advantages of the use of encoding methods for program security, equipment
signaling and individual addressability control over unauthorized equipment
use. Lessor agrees that its program services and/or airtime use will not cause
harm or interfere with Lessee's current or future signal or other such
technical needs utilized for the operation and services provided by the system.
Furthermore, Lessor agrees that it will not, 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 Lessor's current, planned or
future service over the system.
5. TECHNICAL FACILITIES.
(a) TRANSMISSION POINT LOCATION. Upon execution of this
Agreement, Lessee shall, in consultation with Lessor, co-locate the
Transmission Point for provision of the services contemplated by this
Agreement with the MMDS and/or other facilities Lessee operates under
lease agreement in Lessor's designated market. At Lessee's expense,
Lessor shall prepare and file with the FCC any appropriate
applications or amendments to previously filed applications, to secure
a license to operate the four (4) Channels from said location. Lessee
shall provide all legal and/or engineering personnel for this purpose
or will have the right to approve any expenses incurred by Lessor in
advance of Lessor incurring such expenses. If, upon review of
Lessor's application, the FCC directs Lessor to amend, revise or
modify the application or the terms of this Agreement to comply with
FCC rules
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or policies, Lessor and Lessee shall cooperate to mutually agree upon
such changes and Lessor will expeditiously so amend its application.
Upon FCC grant of the application by Final Order, Lessee, or its
designee, shall construct the ITFS channel transmission facilities in
accordance and in compliance with said FCC authorization. Lessee or
its designee shall commence construction of the facilities within a
reasonable period of time following grant by Final Order of the
requisite authorization. Lessee or its designee shall timely
complete construction in accordance with the terms of Lessor's
authorization. Lessee and Lessor acknowledge that current FCC rules
require completion of construction within eighteen (18) months after
the date of a Final Grant of a conditional license or within such
additional period(s) of time the FCC may authorize following formal
request by the Lessor for additional time to construct. Lessor agrees
to cooperate with Lessee in the review, execution and filing of formal
requests for extension of the construction period as may be necessary.
At its expense, Lessee or its designee, shall design, engineer,
purchase, and install such transmitters, transmission line, antennas,
and receivers as are required to operate the ITFS channels in
accordance with the provision of such authorization(s). Any equipment
so used in said construction shall be leased to Lessor pursuant to
Paragraph 8 hereof (said equipment is hereinafter referred to as the
"Leased Equipment"). Lessee shall supervise and shall be responsible
for the installation of the Leased Equipment and shall retain title to
the Leased Equipment until transferred pursuant to Paragraph 14
hereof. Lessee shall maintain adequate casualty and liability
insurance to cover all Leased Equipment installed pursuant to this
Agreement. For purposes of this Agreement, a "Final Order" means a
written action or order for which public notice is provided by the FCC
granting the application and issuing a license for the Channels to
Lessor: (a) which has not been reversed, stayed, enjoined, set aside,
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annulled or suspended, and (b) with respect to which (i) no requests
have been filed for administrative or judicial review,
reconsideration, appeal or stay and the time for filing any such
requests, and the time for the FCC to set aside the action on its own
motion, has expired, or (ii) in the event of review, reconsideration
or appeal, the grant of the application and issuance of the
conditional license has been affirmed and the time for further review,
reconsideration or appeal has expired.
(b) MODIFICATION OF TRANSMISSION POINT. Lessor agrees to
change the Transmission Point specified in its application or FCC
authorization to any location requested by Lessee from which Lessor's
specified and protected ITFS receive sites will be served and, in such
event, to file with the FCC any necessary and permissible amendment to
the application for the Channels or any necessary and permissible
modification application or notification consistent with the FCC's
Rules. Lessee shall pay for Lessor's actual costs and expenses,
including legal and engineering fees, incurred by Lessor to prepare,
file and prosecute such amendment, application or notification,
provided that Lessee has approved the amount of such expenses in
writing prior to their having been incurred by Lessor and Lessor has
provided Lessee with satisfactory documentation of such expenses.
(c) RECEIVE FACILITIES. At Lessee's expense not to
exceed $[COST] per location, Lessee shall construct receive facilities
at up to [NO. OF LOCATIONS] locations in the Market Area to be
selected by Lessor and capable of receiving the signal transmitted
over the Channels, including one (1) location to be selected as
Lessor's studio or Market Area headquarters capable of simultaneously
receiving and monitoring all of Lessor's signals transmitted over the
Channels. In the event that Lessor requests construction of a receive
location that includes the wiring of a master antenna system or
similar multi-receiver
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configuration, Lessee shall install the extra wiring and equipment
required only if reimbursed by Lessor for its actual costs. Any
equipment so used in the construction of the aforesaid [NO. OF
LOCATIONS] locations shall, upon the initiation of operation of the
system, become the property of the Lessor. In addition, all equipment
installed at Lessor's expense shall remain the Lessor's property. All
other receive equipment will remain the property of Lessee.
(d) TRANSMISSION POINT FACILITIES. Lessee shall provide,
at its sole cost and expense, suitable space at the Transmission Point
for the ITFS channel antenna(s) and transmitters, and television
receive-only ("TVRO") satellite antenna. Lessor shall, where
possible, co-locate its production facility with Lessee's production
facilities. In the event that Lessee's production facility cannot be
co-located with the Transmission Point, Lessee shall arrange for
transmission from its facility to the antennas. However, if requested
by Lessee, Lessor will apply for and obtain any FCC authorizations
necessary for a sufficient number of microwave point-to-point
studio-to-transmitter links ("STLs") for such purpose. Upon receipt
of such authorizations, Lessee, at Lessee's expense will design,
obtain and install, at cost, the equipment necessary for such STLs.
Such equipment will become part of the Leased Equipment. Such STLs
will be available for use by Lessee for any purpose, including, but
not limited to, the transmission of data.
(e) POWER INCREASE. If Lessee so requests, Lessor will
file an amendment to its application for the Channels or a
modification application with the FCC seeking authority to increase
the output power of the Channels to a higher level requested by
Lessee, provided that such higher level will not be reasonably
anticipated to cause harmful electrical interference to any other
radio transmission facility for which an application has previously
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been accepted by the FCC or authorization granted by the FCC, and
which is entitled to protection from such interference under FCC
rules. In the event that said authorization for power increase is
obtained, Lessee, at its sole expense, shall provide and install
appropriate amplifiers and related equipment in order to effect said
power increase and such amplifiers and equipment shall thereupon
become part of the Leased Equipment. Lessee shall arrange for and pay
for all costs, including legal and engineering fees associated with
said application and power increase.
6. FEES
(a) APPLICATION FILING BONUS. Lessee shall pay Lessor an
application filing bonus of [AMOUNT] Dollars ($[AMOUNT]) within
fifteen (15) days after Lessor files its application for the Channels
with the FCC.
(b) SUBSCRIBER ROYALTY FEE; CPI ADJUSTMENT. Commencing
with the Start Date as such term is defined herein and until the
expiration or termination of this Agreement, Lessee shall pay to
Lessor the greater of (i) [AMOUNT] ($[AMOUNT]) per subscriber, as such
term is defined below, per month for each 6-MHZ Channel included on
the FCC's authorization for the License, or (ii) [AMOUNT] ($[AMOUNT])
per month during the first year of transmission over the Channels to
subscribers and [AMOUNT] ($[AMOUNT]) per month thereafter. The
royalty calculation shall be made monthly. Lessee shall pay Lessor to
Lessor the per subscriber fee or the minimum monthly fee, whichever is
greater. As used in this Paragraph, "subscriber" is defined as any
residential unit or commercial establishment in the Market Area that
receives service over the Channels under paid contract with Lessee.
Service (either video or non-video) must be received over the Channels
by a subscriber in order for such subscriber to be included in the
above calculation. Subscribers who receive
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internet, voice or other service over one of Lessee's commercial
frequencies will not be counted for purposes of calculating the fees
due to Lessor. All dollar amounts named in this paragraph shall be
adjusted each year, beginning on the third anniversary of commencement
of transmission to Subscribers, in the proportion as any increase in
the Consumer Price Index for the [AREA] MSA for the year preceding the
latest official published annual figure. Therefore, for example, if
transmissions to Subscribers begin on [DATE] and on [DATE], the latest
CPI figure for [AREA] reflects an increase of ______________% in the
preceding year, the monthly per Subscriber fee, from [DATE] to [DATE]
will be $_________________ or the monthly minimum payment will
increase to $__________________________.
(c) RIGHT TO AUDIT. Lessee and Lessor shall, while this
Agreement is in force, keep, maintain and preserve complete and
accurate records and accounts, including all invoices, correspondence,
ledgers, financial and other records pertaining the Lessee's and
Lessor's charges hereunder, and such records and accounts shall be
available for inspection and audit at the respective offices of Lessee
and Lessor at any time or times during the time service is being
provided to Lessee hereunder or within ninety (90) days thereafter,
during reasonable business hours, by Lessee or Lessor or their
respective nominees. Notwithstanding the foregoing, Lessee and Lessor
shall be entitled to only one audit of each other's records and
accounts during any six- months interval. Lessee and Lessor shall
provide each other with five (5) business days' advance written notice
of their intent to inspect said records and accounts prior to being
allowed to do so. Lessee and Lessor shall not interfere with each
other in the exercise of their respective rights of inspection and
audit set forth herein. The exercise in whole or in part at any time
or times of the right to audit records or accounts or of any rights
herein granted or the acceptance by Lessee or Lessor of any
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statement or remittance tendered by or on behalf of either Lessee or
Lessor shall be without prejudice to any rights or remedies of either
of them and shall not preclude Lessee or Lessor thereafter from
disputing the accuracy of any such statement or payment.
(d) PAYMENT OF FEES. Lessee shall arrange for and pay
Lessor's legal, engineering and related expenses actually incurred in
prosecuting its application for the authorizations and related
documents; provided, however, that Lessor agrees to permit Lessee's
attorneys and engineers prepare and file such documents, subject to
Lessor's review and approval at all times.
7. ARBITRATION OF DISPUTE. In the event that Lessee and Lessor
cannot resolve any dispute arising under this Agreement, such dispute may be
resolved pursuant to arbitration pursuant to the procedures of the American
Arbitration Association, and the decision of the Arbitrator as provided for
therein shall not in any way result in a default hereunder unless the award of
the Arbitrator is not complied with. All information obtained by Lessee or
Lessor during such disputes shall be maintained on a confidential basis.
The Lessee and Lessor shall each pick their own arbitrator. These two
arbitrators shall then pick a third arbitrator. Each party shall pay all costs
and expenses of their own selected arbitrator and shall share equally the costs
and expenses of the third arbitrator.
8. ITFS CHANNEL EQUIPMENT LEASE. Lessor shall lease from Lessee
all Leased Equipment. The terms of the lease agreement, to be entered into
prior to commencing construction shall include the following:
(a) RENT. Lessor shall pay to Lessee the total amount of
One Dollar ($1.00) per year for use of the Leased Equipment, it being
understood that Lessor's provision of the
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airtime at the rates provided in this Agreement is the major
consideration for Lessee's lease of the equipment to Lessor.
(b) TAXES. Lessee shall be required to pay all taxes and
other charges assessed against the Leased Equipment, without cost to
or reimbursement by Lessor. The Lessee shall be entitled to claim
depreciation and investment tax credits thereunder for income tax
purposes.
(c) MAINTENANCE AND OPERATING COSTS. Lessee shall be
required to bear all costs associated with maintaining, upgrading and
operating the Leased Equipment.
(d) TERM. The term of the equipment lease shall commence
upon the date actual construction begins and shall end upon the
termination of this Agreement.
9. CONTROL OVER PROGRAMMING. Lessee intends that only
programming of a sort which will not serve to place Lessor's reputation in the
community in jeopardy will be transmitted by Lessee on Lessor's channels. At
the present time, it is believed that this programming will be supplied by one
or more programming networks including, but not limited to, Home Box Office,
Showtime, The Movie Channel, ESPN, WTBS, Cable News Network. The parties
recognize the difficulties inherent in specifying exact standards in this
Paragraph, but believe that good-faith efforts on both sides can overcome
whatever differences may arise. Lessor shall have the absolute right to deny
Lessee the right to transmit on its leased channels any program which is
obscene as defined by the laws of the United States or which would violate the
rules and regulations of the FCC or which would violate any state or local law
or ordinance.
10. TERMINATION.
(a) TERMINATION BY REASON OF NO ITFS CHANNELS WITHIN
TWENTY-FOUR MONTHS. This Agreement may be terminated at the option of
Lessee upon thirty (30) days
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written notice to Lessor in the event that the FCC has not granted an
ITFS authorization for the Channels to Lessor within twenty-four (24)
months from the date this Agreement is signed.
(b) TERMINATION BY REASON OF REVOCATION OF FCC
AUTHORIZATION. If Lessor's FCC authorization is ever terminated or
revoked, this Agreement shall terminate. Should such termination
occur, each party shall be entitled to retain all equipment and
materials purchased or furnished by such party. In addition, there
shall be a final accounting of monies due under this Agreement, and
when completed and settled in full, there shall be no further
liability of one party to the other.
(c) TERMINATION BY REASON OF DEFAULT AND NONPERFORMANCE.
At the option of the non-defaulting party, this Agreement may be
terminated upon the material breach or default by the other party of
its duties and obligations hereunder if such breach or default shall
continue without being cured for a period of thirty (30) consecutive
days after such party's receipt of notice thereof from the
non-defaulting party. Failure to make any payment required under
Paragraph 6 hereof shall, if such failure continues for a period of
thirty (30) days after written notice thereof to Lessee, constitute a
material breach of this Agreement by Lessee and, in such event, Lessor
may elect to cancel and terminate this Agreement. In the event of
termination pursuant to this Subparagraph, such termination shall not
affect or diminish the rights of claims or remedies available in
equity or at law to the non-defaulting party arising by reason of such
breach or default. Lessor's failure to maintain its license
authorization with the FCC shall constitute a material default by
Lessor.
(d) TERMINATION BY FAILURE OF LESSEE'S BUSINESS PLANS.
Prior to starting actual construction of the Channels, Lessee shall
have the option to terminate this Agreement by
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notifying Lessor, in writing, that circumstances exist with reference
to the transaction contemplated by this Agreement which would
interfere with Lessee's business plan. In the event of such
termination, neither party shall have any further obligation to the
other, except that Lessee shall reimburse Lessor for any out-of-pocket
expenses previously approved by Lessee and incurred by Lessor.
(e) EARLY TERMINATION BY LESSEE. Lessee may terminate
this Agreement at any time for any reason by providing Lessor with six
(6) months prior written notice. In such event, Lessor shall have
rights to purchase Leased Equipment as defined in Paragraph 5(a)
hereof.
11. RIGHT OF FIRST REFUSAL. Notwithstanding the
foregoing, if, at any time after the date of the execution of this Agreement
and during the Term hereof, the FCC modifies its rules so as to permit Lessee
to be licensed to operate the Channels, Lessee shall have a right of first
refusal to acquire the rights to the Channels subject to the same terms and
conditions as the right provided for in Paragraph 1(d) hereof. If Lessor shall
determine to sell, convey, assign or otherwise dispose of the licenses and
authorizations for the ITFS Channels and FCC rules do not permit Lessee to hold
the authorization for the Channels, Lessee's designee then eligible to be
licensed to operate such Channels, shall have the right and option to acquire
or assign such licenses and authorizations, subject to the right of first
refusal provisions set forth herein and subject to FCC rules and regulations.
12. INDEMNIFICATION
(a) LESSEE. Lessee agrees, to the fullest extent
permitted by law, to hold Lessor harmless and to indemnify and defend
Lessor for all claims, demands, causes of action,
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losses, and judgments, including attorneys' fees (herein collectively
"claims") arising out of this Agreement, unless such claim arose out
of a negligent act or omission of Lessor.
(b) LESSOR. Lessor shall pay any and all claims
resulting from Lessor's breach of this Agreement or from any
negligence, omission or wrongful act by Lessor, its agents or
employees.
13. COOPERATION. Lessor and Lessee each warrant that it will take
no action that will unreasonably interfere, threaten or frustrate the other's
purposes or business activities. Lessor and Lessee each agree to keep the
other informed and to coordinate with the other any of its activities that may
have an adverse effect on the other.
14. EQUIPMENT PURCHASE OPTION. At the end of the Term or upon
early termination of this Agreement, Lessor shall have the right to purchase
the Leased Equipment used exclusively for Lessor's ITFS operation for the then
fair market value. Upon payment of said amount, title to such of the Leased
Equipment owned by Lessee shall transfer to Lessor and the Leased Equipment
shall become the property of Lessor. Any equipment which is used in a shared
fashion (such as transmit antenna, decoders, combiners) in providing signals
other than Lessor's signals is excluded from this purchase option. The intent
of this purchase option is to provide Lessor with the capability to continue to
perform on Lessor's ITFS license.
15. OBLIGATION TO TRANSMIT. Nothing in this Agreement shall be
construed to obligate or create a duty on the part of Lessee to transmit any
minimum number of hours of programming during the Lessee's Time.
16. LEASED EQUIPMENT. Lessee shall supply, at its sole cost and
expense, sufficient personnel to operate and maintain the Leased Equipment.
Such personnel shall at all times be under the supervision of Lessee but
subject to control of Lessor. Said personnel shall insure that the
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Leased Equipment meets the technical operating requirements of the Rules of the
FCC. Such operations and maintenance activities shall be undertaken at such
times as are consistent with the operating requirements of Lessee's business.
Lessor shall have overall responsibility for access to transmission facilities
during normal business hours and at other times upon twenty-four (24) hours
prior notice.
17. START DATE. For purposes of this Agreement, the Start Date
shall be the date upon which Lessee first provides service over the Channels to
a subscriber in the Market Area.
18. CONDITIONS PRECEDENT. All of the rights and obligations
hereunder shall be subject to the following conditions which conditions may be
waived in writing by the non-defaulting party:
(a) MATERIAL DOCUMENTS. Lessor will have made available
to Lessee for inspection all of the material documents and contracts
to which Lessor is a party which in any way affects the Channels.
(b) FCC APPLICATION. Lessor, to the extent required by
the FCC with the assistance of Lessee as herein set forth, shall have
applied to the FCC for a license to operate the ITFS Channel
facilities as described herein.
(c) FINAL ORDER. The FCC shall have issued a Final Order
granting Lessor the license to operate the Channels in accordance with
the terms of this Agreement.
(d) CONSTRUCTION. The Channels shall have been
constructed and licensed in accordance with the term of this
Agreement.
19. AGREEMENT TO DEFEND. Lessee agrees to defend any suit or
proceeding brought against Lessor based on a claim that any device made by
Lessor, designed and furnished hereunder constitutes an infringement of any
existing United States patent, provided Lessee is
ITFS LEASE AGT. (REV. 11/1/96) PAGE 17
[NAME OF ITFS LICENSEE]
18
notified promptly in writing and is given complete authority and information
required for the defense of same; and Lessee shall pay all damages and costs
awarded therein against Lessor, but shall not be responsible for any cost,
expense incurred or settlement made by Lessor without Lessee's prior written
consent. In the event any devise furnished hereunder is, in Lessee's or
Lessor's opinion, likely to or does become the subject of a claim for patent
infringement, Lessee shall at its own expense procure for Lessor the right to
continue using said device or modify it to become non- infringing; but in the
event use of such device is prevented by injunction and Lessee fails to modify
or otherwise procure for Lessor the right to continue using it, Lessee will
remove such device and shall substitute therefor other non-infringing, FCC
approved equipment.
20. 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, including, but not limited to, filings designed
to permit Lessee to carry additional video signals, voice, data, or other
information, consistent with the FCC's Rules ("Expanded Channel"); 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 ITFS
receive points. 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 at no additional cost to Lessee. It
is understood that Lessee shall have the full-time use of the Expanded Channels
to the extent permitted by FCC rules.
21. LESSOR ELECTS TO TERMINATE TELECOMMUNICATIONS ACTIVITIES.
Lessor reserves the right to terminate any further activity by Lessor in the
telecommunications activities covered by this Agreement. Such termination may
be for any reason
ITFS LEASE AGT. (REV. 11/1/96) PAGE 18
[NAME OF ITFS LICENSEE]
19
and shall only require that Lessor provide Lessee a sixty (60) day written
notice of such termination. Upon such termination Lessor shall be obligated to
execute an assignment of all of its rights to any ITFS Licenses or license
applications covered by this Agreement or other FCC authorizations directly
related to such ITFS licenses to any FCC-qualified entity designated by
Lessee. Upon completion of such assignment, all of Lessor's obligations under
this Agreement shall terminate and Lessor shall have no liability whatsoever to
Lessee. Should Lessor have incurred any out-of-pocket expenses directly
related to this Agreement which were reasonably contemplated by this Agreement
and approved in advance by Lessee, and which have not been paid to Lessor by
Lessee, Lessee shall be obligated to pay such expenses prior to Lessor
executing an assignment of its rights to FCC applications or authorizations.
22. NOTICE. Any notice to be given by either party to the other
party under any provision of this Agreement shall be by hand delivery or by
prepaid overnight express courier to the respective party's signatory to this
Agreement at the address of that party as provided in the first paragraph of
page 1 of this Agreement. Lessor or Lessee may change the address for notice
by sending a notification of said change to the other party in accordance with
the delivery methods specified in this paragraph.
23. SEVERABILITY. Should any court or agency, including the FCC,
determine that any provision of this Agreement is invalid, the remainder of the
Agreement shall remain in full force and effect and the parties agree to use
their best efforts to negotiate a replacement provision which is valid;
provided, however, that said replacement provision shall be as close as
practicable to the original provision, that provision being a reflection of the
parties' intent.
24. VENUE AND INTERPRETATION. This Agreement shall be governed
by, and construed and enforced in accordance with the Communications Act of
1934, as amended, the rules
ITFS LEASE AGT. (REV. 11/1/96) PAGE 19
[NAME OF ITFS LICENSEE]
20
and regulations of the FCC promulgated thereunder, and the laws of the State of
Texas, without regard to conflicts of law rules.
25. ENTIRE AGREEMENT; COUNTERPARTS. 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. This
Agreement may be executed by facsimile and in multiple counterparts, each of
which shall be deemed to be an original instrument.
26. ASSIGNMENT. Lessor or Lessee may assign, sublease, transfer
or sell their rights or obligations under this Agreement without the approval
of the other party; provided, however, that the assignee, sublessor, transferee
or purchaser agrees in writing to assume all obligations of the Lessor or
Lessee under this Agreement.
27. SPECIAL CONDITIONS. Notwithstanding any other provisions of
this Agreement to the contrary, Lessee agrees to provide such support to Lessor
as is reasonably necessary to assist Lessor in providing a minimum number of
hours per week of qualified educational programming as required by the FCC on
Lessor's channels.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
LESSOR: LESSEE:
[LESSOR'S NAME] HEARTLAND WIRELESS
COMMERCIAL CHANNELS, INC.
By: By:
--------------------------- --------------------------
NAME: NAME:
TITLE: TITLE:
ITFS LEASE AGT. (REV. 11/1/96) PAGE 20
[NAME OF ITFS LICENSEE]
