CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN
OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND
EXCHANGE COMMISSION.
AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT
BY AND BETWEEN
THE IRVINE COMPANY
AND
FIRSTWORLD ORANGE COAST
DATE: MARCH 5, 1998
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. DEMISE OF LEASED PREMISES.. . . . . . . . . . . . . . . . . . . . . . 2
2.1 Demise of Leased Premises. . . . . . . . . . . . . . . . . . . 2
2.2 Audit of Leased Premises; Hazardous Materials. . . . . . . . . 2
2.3 Additional Spectrum. . . . . . . . . . . . . . . . . . . . . . 2
2.4 Additional Areas . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Marking and Reporting of Tubes.. . . . . . . . . . . . . . . . 4
2.6 Return of Leased Premises. . . . . . . . . . . . . . . . . . . 4
2.7 Assignment of Contract Rights and Warranties.. . . . . . . . . 4
2.8 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . 4
2.9 Obligation to Restore. . . . . . . . . . . . . . . . . . . . . 5
2.10 Installation of Network. . . . . . . . . . . . . . . . . . . . 5
2.11 Multiple Networks; Switch Service. . . . . . . . . . . . . . . 6
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Basic Percentage Rent. . . . . . . . . . . . . . . . . . . . . 8
4.3 Bonus Percentage Rent. . . . . . . . . . . . . . . . . . . . . 8
4.4 Audit Rights . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. ADDITIONAL PAYMENTS BY FIRSTWORLD; IMPOSITION . . . . . . . . . . . . 10
5.1 Irvine's Net Return. . . . . . . . . . . . . . . . . . . . . . 10
5.2 Impositions. . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Assessments in Installments. . . . . . . . . . . . . . . . . . 10
5.4 Direct Payment by Irvine . . . . . . . . . . . . . . . . . . . 11
5.5 Right to Contest . . . . . . . . . . . . . . . . . . . . . . . 11
6. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Failure to Operate.. . . . . . . . . . . . . . . . . . . . . . 11
7. COMPLIANCE WITH APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . 12
8. MAINTENANCE AND ALTERATIONS . . . . . . . . . . . . . . . . . . . . . 12
8.1 Obligation to Maintain.. . . . . . . . . . . . . . . . . . . . 12
8.2 Firstworld's Right to Perform Alterations. . . . . . . . . . . 12
8.3 Right to Enter Into Operations and Maintenance Agreements. . . 13
9. INDEMNITY; INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . 13
9.1 Firstworld Indemnity . . . . . . . . . . . . . . . . . . . . . 13
9.2 Exemption of Irvine from Liability.. . . . . . . . . . . . . . 13
9.3 Irvine Indemnity.. . . . . . . . . . . . . . . . . . . . . . . 14
9.4 Firstworld Insurance . . . . . . . . . . . . . . . . . . . . . 14
9.5 Form of Policies . . . . . . . . . . . . . . . . . . . . . . . 15
9.6 Increase in Liability Limits . . . . . . . . . . . . . . . . . 16
9.7 Release and Waiver of Subrogation. . . . . . . . . . . . . . . 16
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10. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . 16
11. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.1 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.2 Temporary Condemnation.. . . . . . . . . . . . . . . . . . . . 17
11.3 Settlement or Compromise . . . . . . . . . . . . . . . . . . . 17
11.4 Prompt Notice. . . . . . . . . . . . . . . . . . . . . . . . . 17
12. TRANSFERS BY FIRSTWORLD . . . . . . . . . . . . . . . . . . . . . . . 18
12.1 Firstworld's Right to Assign . . . . . . . . . . . . . . . . . 18
12.2 Submittal for Consent. . . . . . . . . . . . . . . . . . . . . 18
12.3 Effect of Transfer.. . . . . . . . . . . . . . . . . . . . . . 18
12.4 Right of First Refusal . . . . . . . . . . . . . . . . . . . . 19
12.5 Permitted Transfers. . . . . . . . . . . . . . . . . . . . . . 19
12.6 Multiple Networks. . . . . . . . . . . . . . . . . . . . . . . 19
13. FINANCING BY FIRSTWORLD . . . . . . . . . . . . . . . . . . . . . . . 20
13.1 Financing Not Prohibited Transfer. . . . . . . . . . . . . . . 20
13.2 Cooperation with Lender Requirements.. . . . . . . . . . . . . 20
13.3 Notice of Financing. . . . . . . . . . . . . . . . . . . . . . 21
13.4 Notice of Default and Lender's Cure Rights . . . . . . . . . . 22
13.5 Obligations of Lender and Successors . . . . . . . . . . . . . 23
13.6 Lender Protections.. . . . . . . . . . . . . . . . . . . . . . 24
13.7 Reversionary Interest. . . . . . . . . . . . . . . . . . . . . 24
13.8 New Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13.9 Concurrent Exercise. . . . . . . . . . . . . . . . . . . . . . 25
14. IRVINE CURE RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.2 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . 25
14.3 Priority of Cure Rights. . . . . . . . . . . . . . . . . . . . 26
14.4 Irvine's Cure Rights . . . . . . . . . . . . . . . . . . . . . 26
14.5 Purchase of Financing Encumbrance; Subrogation . . . . . . . . 28
14.6 Right to Bid at Foreclosure Sale . . . . . . . . . . . . . . . 28
15. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
16. REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . 29
16.1 Title to Leased Premises . . . . . . . . . . . . . . . . . . . 29
16.2 No Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 29
17. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18. DEFAULTS; REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . 30
18.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 30
18.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
18.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.4 Late Payments. . . . . . . . . . . . . . . . . . . . . . . . . 32
18.5 Right to Perform.. . . . . . . . . . . . . . . . . . . . . . . 33
18.6 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 33
18.7 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . 34
18.8 Damages Limitation . . . . . . . . . . . . . . . . . . . . . . 34
19. PROTECTION OF CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . 34
19.1 Designation of Confidential Information. . . . . . . . . . . . 34
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20. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
21. NO BROKER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
22. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
23. WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
24. MEMORANDUM OF AGREEMENT; UCC FILING . . . . . . . . . . . . . . . . . 36
25. ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . 37
26. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.2 Documents in Recordable Form.. . . . . . . . . . . . . . . . . 38
26.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 38
26.4 Performance Under Protest. . . . . . . . . . . . . . . . . . . 38
26.5 No Third Party Beneficiaries.. . . . . . . . . . . . . . . . . 39
26.6 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 39
26.7 Delivery of Drafts . . . . . . . . . . . . . . . . . . . . . . 39
26.8 Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.9 Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . . 39
26.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 39
26.11 Amendments.. . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.12 Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . 39
26.13 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 40
26.14 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 40
26.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.16 Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.17 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.18 Negation of Partnership. . . . . . . . . . . . . . . . . . . . 40
26.19 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . 40
26.20 Relationships. . . . . . . . . . . . . . . . . . . . . . . . . 40
TABLE OF APPENDICES
APPENDIX 1: GLOSSARY OF DEFINED TERMS
APPENDIX 2: DEPICTION OF EXISTING SPECTRUM
APPENDIX 3: DEPICTION OF ADDITIONAL SPECTRUM
APPENDIX 4: EXISTING AVAILABLE SPECTRUM CONDUIT
APPENDIX 5: ADDITION MEMORANDUM
APPENDIX 6: PHASING PLAN
APPENDIX 7: MEMORANDUM OF LEASE
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AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT
THIS AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT (this
"Agreement") is dated as of March 5, 1998 and made by and between THE IRVINE
COMPANY, a Delaware corporation, ("Irvine") and FIRSTWORLD ORANGE COAST, a
California corporation ("FirstWorld").
RECITALS
X. Xxxxxx has constructed the Existing Available Spectrum Conduit
within the Existing Spectrum and will construct the Additional Available
Spectrum Conduit within the Additional Spectrum. Portions of the Additional
Spectrum and the Additional Available Spectrum Conduit may already be partially
developed or under development as of the date of this Agreement, but are not
being included within the Existing Spectrum or the Existing Available Spectrum
Conduit due to the Parties' desire to limit changes in the Existing Spectrum and
the Existing Available Spectrum Conduit during the negotiation of this
Agreement.
B. FirstWorld desires to build, own and operate within the Spectrum,
the Spectrum Network by installing Cable into the Available Spectrum Conduit.
For purposes of this Agreement, the Irvine Networks shall include all Cable
installed in Conduit or any portion thereof within the Spectrum or any
Additional Areas which may be incorporated into this Agreement in accordance
with the terms hereof, but shall exclude all Equipment installed by FirstWorld
to connect Cable to Buildings. The Irvine Networks will service properties
within the Spectrum, as well as such Additional Areas which are incorporated
into this Agreement in accordance with the terms hereof, including both
properties owned by Irvine and those not owned by Irvine, provided that
FirstWorld shall have the right to create additional Networks to service
portions of the Spectrum or Additional Areas in accordance with the terms and
provisions hereof.
X. Xxxxxx desires to lease to FirstWorld and FirstWorld desires to
lease from Irvine the space within the Conduit so that FirstWorld can install
the Network and provide service to the Serviced Buildings, on the terms and
provisions set forth herein.
D. Upon installation of Available Other Conduit in Additional Areas,
all or any portion of such Additional Areas may, but need not be, incorporated
into this Agreement in accordance with the terms and provisions hereof.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto agree as follows:
AGREEMENT
1.
DEFINITIONS
Initially capitalized terms used herein as defined terms shall have
the meanings given to them in the Glossary of Defined Terms attached hereto as
APPENDIX 1 (such definitions to be equally applicable to both the singular and
plural forms of the terms defined) or elsewhere in this Agreement.
2.
DEMISE OF LEASED PREMISES.
2.1 DEMISE OF LEASED PREMISES. Irvine hereby leases the Leased
Premises to FirstWorld and FirstWorld hereby takes and hires the Leased Premises
from Irvine for the purpose of installing, maintaining, operating, repairing,
replacing and augmenting the Cable necessary for the operation of the Irvine
Networks. The Leased Premises shall also include space within any additional
Conduit installed or constructed by FirstWorld within the Spectrum and any
Additional Areas, which additional Conduit shall upon construction thereof
become the property of Irvine and a portion of the Conduit. Irvine does not
currently anticipate that it will, and Irvine shall not be required to,
construct building entrance conduit systems as part of any Available Conduit.
2.2 AUDIT OF LEASED PREMISES; HAZARDOUS MATERIALS. FirstWorld hereby
acknowledges that the Existing Available Spectrum Conduit was installed by
Irvine over a period of years, and that portions of the same may have been
installed over ten (10) years ago. Prior to the date of this Agreement,
FirstWorld has undertaken a complete audit of the Existing Available Spectrum
Conduit and approved of the condition of the same. FirstWorld hereby accepts
the Leased Premises and the Existing Available Spectrum Conduit (as they exist
as of the date of this Agreement) in their as-is condition and acknowledges that
it has undertaken such reviews and investigations of the condition of the same
as it deems necessary or appropriate. From time to time after the date of this
Agreement, Irvine shall provide prompt notice to FirstWorld that Available
Conduit has been or is about to be constructed (except to the extent space
within such Available Conduit is already a part of the Leased Premises).
Notwithstanding the foregoing, FirstWorld shall have no obligation to remove or
remediate any Hazardous Materials located within the Leased Premises or
otherwise affecting any Conduit except to the extent caused, permitted or
contributed to by FirstWorld.
2.3 ADDITIONAL SPECTRUM. From time to time after the date of this
Agreement the Parties shall add to the Leased Premises, space within the
Additional Available Spectrum Conduit, as the same is constructed, by executing
an Addition Memorandum in the form of APPENDIX 5 attached hereto. The space
within a portion of any Additional Available Spectrum Conduit so added to the
Leased Premises shall be deemed to have been so added on the date which is
thirty (30) days after FirstWorld's receipt of notice that there is Additional
Available Spectrum Conduit. The Parties agree within ten (10) days after
receipt of notice to execute an
2
Addition Memorandum, provided, however, that no failure by the Parties to
execute an Addition Memorandum shall invalidate any addition to the Leased
Premises effected by a notice that there is Additional Available Spectrum
Conduit. The Additional Available Spectrum Conduit shall be constructed by
Irvine in the Additional Spectrum without gaps and in a good and workmanlike
manner. Any Additional Available Spectrum Conduit shall be constructed so that
the portion of the same which is closest to any then existing Available Spectrum
Conduit is not more than 1,000 feet from a portion of such then existing
Available Spectrum Conduit. If Irvine constructs Additional Available Spectrum
Conduit which is more than 1,000 feet from any then existing Available Spectrum
Conduit, then the Parties shall review the location of such Additional Available
Spectrum Conduit together and Irvine will add space within the same to the
Leased Premises if FirstWorld determines that it can and will build or lease
facilities at its expense to connect such Additional Available Spectrum Conduit
to the Spectrum Network. If FirstWorld determines that it cannot or will not so
connect such Additional Available Spectrum Conduit, then Irvine shall add space
within such Additional Available Spectrum Conduit to the Leased Premises at a
later date when it can be added within 1,000 feet from a portion of the then
existing Available Spectrum Conduit. All Additional Available Spectrum Conduit
constructed after the date hereof shall include at least *** tubes to assure
FirstWorld that it will have *** tubes available to it in the Additional
Spectrum areas in which Conduit has not yet been constructed. FirstWorld
acknowledges that there may be Additional Available Spectrum Conduit which has
been constructed or is in the process of being constructed by Irvine as of the
date of this Agreement with less than *** and that construction of such
Additional Available Spectrum Conduit with less than *** tubes shall not
constitute a violation by Irvine of its obligations under the foregoing
sentence, nor shall Irvine be obligated to add additional tubes to the same.
2.4 ADDITIONAL AREAS. From time to time after the date of this
Agreement, Irvine may elect by written notice to FirstWorld to add to the Leased
Premises, space within Available Other Conduit, which notice shall also
designate the Additional Area to be serviced by such Available Other Conduit.
If Irvine elects to add space within Available Other Conduit to the Leased
Premises, such space within the Available Other Conduit shall be added to the
Leased Premises effective upon the date which is thirty (30) days after Irvine's
notice of such election, and the Parties shall, within thirty (30) days after
Irvine's notice of such election, or upon subsequent request by either Party,
execute an Addition Memorandum in the form of APPENDIX 5 attached hereto. After
the addition of space within any Available Other Conduit in a particular
Additional Area to the Leased Premises by Irvine, space within any Available
Other Conduit thereafter constructed in such Additional Area shall automatically
be added to the Leased Premises effective thirty (30) days after FirstWorld's
receipt of notice that the same has been constructed, and the Parties shall
execute an Addition Memorandum with regard to the space within such Available
Other Conduit within ten (10) days after request by either Party.
Notwithstanding the foregoing, no failure by the Parties to execute an Addition
Memorandum shall invalidate any addition to the Leased Premises in accordance
with this Section 2.4. Available Other Conduit to be added to this Agreement
shall be constructed by Irvine without gaps and in a good and workmanlike
manner. All Available Other Conduit to be added to this Agreement which
------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
3
is constructed after the date hereof shall include at least *** tubes to assure
FirstWorld that it will have *** tubes available to it in the Additional Areas
in which Conduit has not yet been constructed.
2.5 MARKING AND REPORTING OF TUBES. FirstWorld shall at its expense
xxxx all of the Conduit utilized by it to distinguish the Conduit tubes utilized
by FirstWorld from the other tubes within telecommunications conduit installed
by Irvine in the same cluster or trench as the Conduit. FirstWorld shall also
register or report to an Underground Agency, the location of the Conduit
utilized by FirstWorld, including all additions thereto constructed by
FirstWorld.
2.6 RETURN OF LEASED PREMISES. Upon the expiration or sooner
termination of this Agreement, FirstWorld shall return the Leased Premises to
Irvine in at least its original condition free and clear of all liens and
encumbrances caused or permitted by FirstWorld, subject to reasonable wear and
tear, and subject to the provisions of this Agreement, casualty, acts of God and
condemnation. Upon such surrender, FirstWorld shall leave in place all Cable
and all Conduit installed by it or on its behalf, including the Cable located in
any Building between the point at which such Cable enters the Building and the
MDF in such Building.
2.7 ASSIGNMENT OF CONTRACT RIGHTS AND WARRANTIES. Without limiting
Irvine's right to assert warranty claims in connection with defects in the
construction of any Conduit, Irvine hereby agrees to enforce or to permit
FirstWorld to enforce for the Term of this Agreement, all of Irvine's rights
under any and all contracts relating to the construction and installation of the
Conduit, including without limitation all express or implied warranties of
manufacturers, fabricators, contractors and subcontractors.
2.8 RIGHT OF ENTRY. In connection with FirstWorld's use of the
Leased Premises, Irvine hereby agrees to permit FirstWorld to enter upon such
portions of the real property owned by Irvine within the Spectrum from time to
time and not leased to third parties (unless FirstWorld obtains the consent of
such third parties to such entry), or into such easement areas as to which
easements are held by Irvine which permit Irvine to allow a third party access
over the same, as may be designated by Irvine from time to time upon request by
FirstWorld for such entry, for the purposes of installing, maintaining,
operating, repairing, replacing and augmenting the Conduit, the Cable and the
Irvine Networks. Irvine will not unreasonably withhold, condition or delay its
consent to any entry by FirstWorld upon real property owned by Irvine or into
easement areas held by Irvine, where such entry is required by FirstWorld as an
access route to allow FirstWorld to install the Irvine Networks. To the extent
that Irvine is permitting FirstWorld to utilize easement rights held by Irvine,
FirstWorld agrees to be bound by the terms and conditions of said easements,
insofar as they pertain to FirstWorld's utilization of the same, and Irvine
shall provide FirstWorld with a copy of the instrument creating such easement
upon FirstWorld's request. FirstWorld agrees that as to any real property which
Irvine permits FirstWorld to enter upon pursuant to this Section 2.8, FirstWorld
will not unreasonably interfere with the use of such real property by the owner,
lessee or occupant thereof. FirstWorld shall have the right to rely upon
Irvine's statement that it owns a parcel of real property or holds
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*** CONFIDENTIAL TREATMENT REQUESTED
4
particular easement rights. The right of entry contemplated in this Section
2.8, is not intended to address the facilities which FirstWorld anticipates it
will require for installation of Equipment at various points along the Irvine
Networks, and which FirstWorld refers to as its access nodes. The Parties
anticipate that any space or facilities required by FirstWorld on Irvine
property for the same will be leased by FirstWorld from Irvine separately from
this Agreement upon terms to be agreed to between the Parties.
2.9 OBLIGATION TO RESTORE. FirstWorld shall restore any real
property which it enters upon in accordance with Section 2.8, above, to
substantially the same condition as prior to FirstWorld's entry, which
restoration shall include, without limitation, restoration of the surface of any
trenched areas, recompaction of soil used to fill any trenches, and restoration
of any removed, damaged or destroyed landscape.
2.10 INSTALLATION OF NETWORK.
2.10.1 FirstWorld shall construct the portion of the Spectrum
Network that is located within the Existing Spectrum by FirstWorld's
installation of Cable in the Existing Available Spectrum Conduit, and
installation of additional Conduit to serve areas of the Existing Spectrum which
do not have Existing Available Spectrum Conduit and installation of Cable in
such additional Conduit, and connecting all of the same to a fully operational
telecommunications service or an operational switching facility according to the
Phasing Plan attached to this Agreement as APPENDIX 6, which Phasing Plan has
been prepared by FirstWorld and approved by Irvine, and according to
construction drawings that will be prepared by FirstWorld and submitted from
time to time to the City (if so required by the City) and to Irvine for
approval. Irvine's approval of such construction drawings shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding any contrary
provision of this Agreement, if for any reason whatsoever and without regard to
any provisions of this Agreement as to Force Majeure or Unavoidable Delay,
FirstWorld fails to complete the construction of the portion of the Spectrum
Network that is located within the Existing Spectrum in accordance with this
Section 2.10.1 on or before the date which is eighteen (18) months after the
date of this Agreement (the "Initial Installation Date"), then upon notice from
Irvine given at any time after such date but prior to FirstWorld's completion of
such construction, Irvine may as its sole remedy for such failure terminate this
Agreement and the License Agreement.
2.10.2 Upon the addition of any space within Additional
Available Spectrum Conduit to the Leased Premises pursuant to Section 2.3,
FirstWorld shall prepare and submit to Irvine for its approval (which approval
shall not be unreasonably withheld, conditioned or delayed) a Phasing Plan for
the portion of the Additional Spectrum to be serviced by such Additional
Available Spectrum Conduit which provides for the completion of installation of
Cable within the main trunk line of such Additional Available Spectrum Conduit
not more than one hundred twenty (120) days after the addition of the same to
the Leased Premises (or, if such space within Additional Available Spectrum
Conduit is added prior to the Initial Installation Date, not later than one
hundred twenty (120) days after the Initial Installation Date), and shall
install Cable in such Additional Available Spectrum Conduit and cause the same
to be connected to (a) the Spectrum Network, (b) a fully operational
telecommunications service or (c) an operational switching facility, in
accordance with the approved Phasing Plan for the same and construction drawings
that will be prepared by FirstWorld and submitted from time to time to the City
(if so
5
required by the City) and to Irvine for approval. Irvine's approval of such
construction drawings shall not be unreasonably withheld, conditioned or
delayed. Upon the addition of space within any Available Other Conduit to the
Leased Premises pursuant to Section 2.4, FirstWorld shall prepare and submit to
Irvine for its approval (which approval shall not be unreasonably withheld,
conditioned or delayed) a Phasing Plan for the Additional Area to be serviced by
such Available Other Conduit which provides for the completion of installation
of Cable within the main trunk line of such Available Other Conduit within one
hundred eighty (180) days after the addition of the same to the Leased Premises
(or, if such space within Available Other Conduit is added prior to the Initial
Installation Date, not later than one hundred eighty (180) days after the
Initial Installation Date), and shall install Cable in such Available Other
Conduit and cause any new Network established for the added Additional Area or
portion thereof to be connected to a fully operational telecommunications
service or an operational switching facility in accordance with the approved
Phasing Plan for the same and construction drawings that will be prepared by
FirstWorld and submitted from time to time to the City (if so required by the
City) and to Irvine for approval. Irvine's approval of such construction
drawings shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing sentence, once an initial Phasing Plan for an
Additional Area to be served by Available Other Conduit has been prepared by
FirstWorld and approved by Irvine, any further additions of Available Other
Conduit within the same Additional Area, or an expansion thereof into contiguous
real property, shall provide for the completion of installation of Cable within
the main trunk line of such Available Other Conduit within one hundred twenty
(120) days after the addition of the same to the Leased Premises (or, if such
space within Available Other Conduit is added prior to the Initial Installation
Date, not later than one hundred twenty (120) days after the Initial
Installation Date).
2.10.3 Completion of a phase shall mean the completion of
installation of all Cable necessary to provide service for that phase of a
Network and connection of such phase to a fully operational telecommunications
service line or an operational switching facility, such that service could be
provided to any property abutting the Conduit within not more than sixty (60)
days after request for service by an occupant of such property. FirstWorld shall
have the right to revise any Phasing Plan from time to time in order to respond
to changes in technology and to Customer and User requirements and to achieve
operating efficiencies, or in the case of any Additional Spectrum area or any
Additional Area, to reflect a change in Irvine's anticipated development
schedule for the area. Any material changes to any Phasing Plan shall be
subject to Irvine's approval, which shall not be unreasonably withheld,
conditioned or delayed, provided, that it shall be reasonable for Irvine to
withhold its approval to any change to a Phasing Plan which would materially
reduce or delay the potential Basic and Bonus Percentage Rent which could be
earned by Irvine pursuant to this Agreement, or which would materially reduce
the prompt provision of fiber optic service to Buildings.
2.11 MULTIPLE NETWORKS; SWITCH SERVICE.
2.11.1 FirstWorld shall have the right to provide service to
the Spectrum Service Area through a single Network or through multiple Networks,
and may provide service to any Additional Area as to which space in Available
Other Conduit has been added to this Agreement from the Spectrum Network or from
an Additional Network. FirstWorld may provide service to any areas not covered
by this Agreement utilizing the Spectrum Network or any Additional Network, so
long as: (a) there is at all times adequate capacity in the Spectrum
6
Network or such Additional Network to provide service to Customers in the
Spectrum and the Additional Areas as to which space in Available Other Conduit
has then been added to the Leased Premises pursuant to this Agreement; (b) the
provision of service to such areas not covered by this Agreement (as to any
single area or in the aggregate) does not materially and adversely impact the
speed or quality of service provided to the Spectrum or such portions of the
Additional Areas; and (c) there will be at all times an alternative fiber optic
route to provide service to any such areas not covered by this Agreement without
use of the Spectrum Network or any Additional Network.
2.11.2 FirstWorld contemplates providing service to the
Spectrum Network from one of its Affiliate's switching facility in Anaheim or
any other switching facility which FirstWorld or any of its Affiliates may
hereafter control. Such facility is expected to be utilized in providing
service to multiple Networks, including Networks other than the Irvine Networks.
FWC may transfer such facility into a separate Affiliate after the date hereof,
and will enter into a separate agreement or agreements between such Affiliate
and FirstWorld with regard to the provision of service to the Irvine Networks
from such switching facility. No provision of this Agreement shall be construed
as causing such switching facility to be a part of the Spectrum Network or any
Additional Network, or requiring the transfer of such switching facility to a
separate Affiliate. In the event that Irvine succeeds to rights of FirstWorld
pursuant to the terms of this Agreement, including without limitation by
exercising any of its cure rights under Article 14 or its right of first refusal
under Section 12.4, Irvine shall have the option as to whether to assume any
agreement regarding the provision of service from such switching facility or to
terminate such agreement as to the Irvine Networks, and any such agreement
regarding any such switching facility shall acknowledge and affirm the rights of
Irvine under this Agreement as to agreements regarding switching facilities.
3.
TERM
The term of this Agreement shall commence on the date of this
Agreement (the "Commencement Date") and shall expire on December 31, 2027,
unless terminated sooner as provided herein.
4.
RENT
4.1 RENT. Commencing on the first Payment Date of the Term, and on
each Payment Date thereafter during the Term, FirstWorld shall pay the Rent to
Irvine, without notice or demand, in lawful money of the United States of
America. Rent shall be paid by FirstWorld to Irvine in arrears on each Payment
Date with respect to the immediately preceding calendar quarter at the address
for Irvine set forth in Section 26.1, below, or at such other address as Irvine
may from time to time specify by written notice in accordance with Section 26.1,
below. Concurrently with the payment of Rent, FirstWorld shall submit to Irvine
a report showing the information on which the amount of Rent paid by FirstWorld
was determined, and the calculation of Rent, each in reasonable detail to
provide Irvine a basis for verifying FirstWorld's determination of Rent.
7
4.2 BASIC PERCENTAGE RENT. The Basic Percentage Rent shall equal
*** percent (***%) of the Adjusted Gross Revenue from operation of the Irvine
Networks, whether to buildings owned by Irvine or by any other Person.
4.3 BONUS PERCENTAGE RENT.
4.3.1 The Bonus Percentage Rent payable for any calendar
quarter shall equal the sum of: (a) *** percent ( *** %) of the amount by which
Adjusted Gross Combined Revenue for the calendar quarter preceding the Payment
Date in question exceeds *** Dollars ($ *** ) but is less than or equal to ***
Dollars ($ *** ); (b) *** percent ( *** %) of the amount by which Adjusted Gross
Combined Revenue earned by FirstWorld for the calendar quarter preceding the
Payment Date in question exceeds *** Dollars ($ *** ) but is less than or equal
to *** Dollars ($ *** ); and (c) *** percent ( *** %) of the amount by which
Adjusted Gross Combined Revenue collected by FirstWorld for the calendar quarter
preceding the Payment Date in question exceeds *** Dollars ($ *** ).
4.3.2 Within sixty (60) days after the expiration of each
Fiscal Year, FirstWorld shall deliver to Irvine, FirstWorld's calculation of its
Adjusted Gross Revenue and Adjusted Gross Combined Revenue for such Fiscal Year.
If the Bonus Percentage Rent payable for such Fiscal Year exceeds the sum of all
quarterly payments made by FirstWorld pursuant to Section 4.3.1 with respect to
such Fiscal Year, then FirstWorld shall pay Irvine the amount of such excess
concurrently with FirstWorld's delivery to Irvine of FirstWorld's calculation of
its Adjusted Gross Revenue earned for such Fiscal Year. If the Bonus Percentage
Rent payable for such Fiscal Year is less than the sum of all quarterly payments
made by FirstWorld pursuant to Section 4.3.1 with respect to such Fiscal Year
then FirstWorld may credit such excess against the Bonus Percentage Rent next
payable under this Agreement, provided, however, that for the Fiscal Year ending
at or after the end of the Term, such excess, if any, shall be paid to
FirstWorld by Irvine within thirty (30) days after Irvine receives FirstWorld's
calculation of its Adjusted Gross Revenue and Adjusted Gross Combined Revenue
for such Fiscal Year. Bonus Percentage Rent payable for any Fiscal Year shall
be calculated as the sum of: (a) *** percent ( *** %) of the amount by which
Adjusted Gross Combined Revenue earned by FirstWorld for each Fiscal Year
exceeds *** Dollars ($ *** ) but is less than or equal to *** Dollars ($ *** );
(b) *** percent ( *** %) of the amount by which Adjusted Gross Combined Revenue
earned by FirstWorld for each Fiscal Year exceeds *** Dollars ($ *** ) but is
less than or equal to *** Dollars ($ *** ); and (c) *** percent ( *** %) of the
amount by which Adjusted
---------------------
*** CONFIDENTIAL TREATMENT REQUESTED
8
Gross Combined Revenue earned by FirstWorld for each Fiscal Year exceeds ***
Dollars ($***).
4.4 AUDIT RIGHTS. Irvine shall have the right from time to time, but
no more frequently than once every twelve (12) months, upon not less than three
(3) business days prior notice, during normal business hours, to undertake such
inspections and/or audits of FirstWorld's books and records as Irvine may deem
necessary or appropriate to audit FirstWorld's Gross Revenue, Adjusted Gross
Revenue, Adjusted Gross Combined Revenue, Basic Percentage Rent and/or Bonus
Percentage Rent, and any all revenues and expenses of FirstWorld related
thereto, including records of FirstWorld's affiliated, subsidiary or parent
entities to the extent necessary to understand any inter-company accounts shown
on the books and records of FirstWorld which would be relevant to such audit.
If it is ultimately determined in connection with any such audit that FirstWorld
has underpaid its Rent by more than *** ( *** ) percent, then FirstWorld shall
reimburse Irvine upon demand for Irvine's costs incurred in conducting such
audit. Irvine shall have the right to copy such books and records in connection
with such audit, provided, however, that Irvine hereby agrees that all
information obtained by Irvine in conducting any such audit shall constitute
Pre-Authorized Confidential Information, provided that the same may be disclosed
to the extent necessary: to enable Irvine to enforce its rights hereunder; or to
enable the review of such books and records by auditors and accountants retained
by Irvine in connection with such audit who will also treat such information as
Confidential Information. FirstWorld agrees to maintain good and accurate books
and records, and to maintain its accounting in accordance with generally
accepted accounting principles consistently applied. Any audit to be undertaken
by Irvine with regard to any Fiscal Year, or any calendar quarter within such
Fiscal Year, pursuant to this Section 4.4, shall be undertaken not later than
*** ( *** ) months following FirstWorld's delivery to Irvine of FirstWorld's
calculation of its Adjusted Gross Revenue and Adjusted Gross Combined Revenue
for such fiscal year pursuant to Section 4.3.2, above, and if Irvine does not
commence any such audit within such *** ( *** ) month period, Irvine shall
conclusively be deemed to have waived its right to an audit with respect to such
Fiscal Year, and any calendar quarter within any such Fiscal Year, and shall
thereafter be precluded from bringing any legal action or arbitration to compel
an audit for such Fiscal Year, or any calendar quarter during such Fiscal Year,
or to recover any amounts unpaid for such Fiscal Year or any calendar quarter
during such Fiscal Year. If any such audit discloses that FirstWorld has
underpaid its Rent, and FirstWorld disputes the results of such audit, then, to
the extent that the Parties cannot resolve such dispute between themselves
within a reasonable period of time, either Party may require such dispute to be
resolved by arbitration in accordance with the provisions of Article 20.
-------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
9
ADDITIONAL PAYMENTS BY FIRSTWORLD; IMPOSITIONS
5.1 IRVINE'S NET RETURN. The Parties intend that the Rent payable by
FirstWorld shall provide Irvine with net return for the Term, free of any
expenses or charges with respect to the Leased Premises, except as specifically
provided in this Agreement. Accordingly, except as otherwise provided in this
Agreement, FirstWorld shall pay as additional rent and discharge, before failure
to pay the same shall create a material risk of forfeiture or give rise to a
penalty, each and every item of expense, of every kind and nature whatsoever,
related to or arising from the Leased Premises, or by reason of or in any manner
connected with or arising from the insuring, operation, maintenance, repair, use
or occupancy of the Leased Premises or any portion of the Leased Premises.
Notwithstanding anything to the contrary in this Agreement, FirstWorld shall not
be required: to pay any construction costs, depreciation, amortization, or
financing or refinancing costs incurred by Irvine with respect to Conduit
installed by it (except for obligations of FirstWorld under Article 9 to repair
damage caused by FirstWorld or to indemnify Irvine); to incur any expense
arising from Irvine's breach of its obligations under this Agreement or the
material inaccuracy of any representations or warranties of Irvine set forth in
this Agreement; to maintain, repair, insure or incur any other expense with
respect to conduit or tubes that are not part of the Leased Premises (except for
obligations of FirstWorld under Article 9 to repair damage caused by FirstWorld
or to indemnify Irvine).
5.2 IMPOSITIONS. For any period within the Term of this Agreement
(with daily proration for periods partially within the Term and partially
outside the Term), FirstWorld shall pay and discharge all Impositions, related
to the Cable, the Equipment and any Conduit, before the same are delinquent.
FirstWorld shall also pay all interest and penalties assessed by any
Governmental Authority on account of late payment of any Imposition, unless such
late payment was caused by Irvine's failure to remit an Imposition (paid to
Irvine by FirstWorld), in which case Irvine shall pay such interest and
penalties. To the extent that any Imposition is allocable to both the Leased
Premises and other property of Irvine, Irvine shall allocate such Imposition on
a reasonable basis as determined by Irvine, and shall notify FirstWorld of its
allocable share of such Imposition. Concurrently with such notice, Irvine shall
provide FirstWorld with a copy of the xxxx for the same and such reasonable
information regarding Irvine's method of allocation as to permit FirstWorld to
evaluate the same. If the xxxx for any Imposition which is FirstWorld's
obligation to pay hereunder is sent to Irvine by the Governmental Authority,
Irvine shall deliver such xxxx to FirstWorld as soon as reasonably possible
after Irvine's receipt of the same. FirstWorld hereby acknowledges that it has
been informed by Irvine that Irvine does not believe that the Conduit or any of
the easements within which the Conduit is located on real property owned by
parties other than Irvine, have ever been subjected to any separate Impositions,
and FirstWorld acknowledges that the installation of the Cable and/or the Irvine
Networks, may cause a Governmental Authority to assess Impositions upon the
Conduit and/or certain of the easements held by Irvine within which the Conduit
is located. FirstWorld acknowledges that in such event, all such Impositions
will be allocated to the Conduit and will be a part of the Impositions for which
FirstWorld will be responsible pursuant to this Section 5.2.
5.3 ASSESSMENTS IN INSTALLMENTS. To the extent permitted by
Applicable Law, FirstWorld shall have the right to apply for conversion of any
assessment or Imposition to cause it
10
to be payable in installments. After such conversion, FirstWorld shall pay and
discharge only such installments of such assessment or Imposition as shall
become due and payable during the Term.
5.4 DIRECT PAYMENT BY IRVINE. If any Person entitled to receive
payment of an Imposition refuses to accept it from FirstWorld, then FirstWorld
shall give Irvine notice of such fact and shall remit payment of such Imposition
to Irvine in a timely manner, and Irvine shall thereafter be responsible for
remitting the same to such Person.
5.5 RIGHT TO CONTEST. Notwithstanding anything to the contrary in
this Agreement, FirstWorld shall have the right to contest, at its sole expense,
by appropriate legal proceedings diligently conducted in good faith, the amount
or validity of any Imposition or other tax or fee and the valuation, assessment
or reassessment (whether proposed or final) of the Leased Premises for purposes
of real estate and personal property taxes. FirstWorld may defer payment of the
contested amount pending the outcome of such contest, provided that such
deferral does not subject the Leased Premises or the Conduit or any other right
or asset of Irvine, to any risk of forfeiture or Irvine to any risk of criminal
liability. Irvine shall not be required to join in any such contest proceedings
unless such proceedings must be brought in the name of Irvine, provided however,
that Irvine shall have the right to participate in any such proceedings to the
extent it determines that such participation is necessary or appropriate to
protect its interests, and Irvine shall be entitled to be reimbursed by
FirstWorld upon demand for legal fees incurred by it in participating in any
such proceeding. If any such proceedings must be brought in Irvine's name,
Irvine shall cooperate with FirstWorld so as to permit such proceedings to be
brought in Irvine's name. FirstWorld shall pay all reasonable costs and
expenses (including reasonable attorneys' fees) incident to such proceedings.
FirstWorld shall be entitled to any refund of any contested amount (and
penalties and interest paid by FirstWorld) to the extent such refund is of
amounts previously paid by FirstWorld with regard to such contested amount,
whether such refund is made during or after the Term of this Agreement. Upon
termination of FirstWorld's contest of any amount, FirstWorld shall pay the
amount (if any) as has been finally determined in such proceedings to be due,
together with any costs, interest, penalties or other liabilities in connection
with such Imposition.
6.
USE
6.1 USE. FirstWorld may use the Leased Premises for the development,
construction, installation, operation, maintenance, repair, replacement,
augmentation, improvement and modification of the Irvine Networks.
6.2 FAILURE TO OPERATE. In the event that FirstWorld fails to
operate the Irvine Networks or otherwise provide fiber optic telecommunications
service on the Irvine Networks for a consecutive period of five (5) days or more
then, in addition to any other rights or remedies of Irvine hereunder and
subject to the rights and remedies of any Lender under Articles 13 and 14,
Irvine may until such failure is cured by FirstWorld (but shall not be obligated
to) either remedy such failure directly or cause another fiber optic service
provider to provide service, as an agent or contractor of Irvine, utilizing the
Irvine Networks. In either such case, FirstWorld shall upon Irvine's demand
bear all expenses for, or reimburse Irvine for, all costs incurred in connection
11
with, Irvine's exercise of its rights under this Section 6.2. If Irvine elects
to exercise its rights under this Section 6.2, Irvine shall also have the right
during any period in which it is exercising such remedy to utilize or to permit
another fiber optic service provider as an agent or contractor of Irvine to
utilize FirstWorld's Equipment.
7.
COMPLIANCE WITH APPLICABLE LAW
During the Term of this Agreement, FirstWorld shall, at its own
expense, observe and comply with all Applicable Laws affecting FirstWorld's use
of the Leased Premises. FirstWorld shall procure every permit or other
authorization required in connection with FirstWorld's use of the Leased
Premises or required in connection with the installation of any Cable within the
Conduit and comply with all such permits and other authorizations.
Notwithstanding the foregoing, FirstWorld shall have the right to contest any
such Applicable Law, so long as such contest does not subject the Leased
Premises to any risk of forfeiture or Irvine to any risk of criminal liability.
8.
MAINTENANCE AND ALTERATIONS
8.1 OBLIGATION TO MAINTAIN. During the Term, FirstWorld shall make,
or cause to be made, in a timely manner all repairs, restorations and
replacements (whether minor or not) required to maintain, at all times, the
Leased Premises and the Conduit, in good operating condition and repair.
8.2 FIRSTWORLD'S RIGHT TO PERFORM ALTERATIONS. Subject to Irvine's
prior written consent as set forth below, which consent shall not be
unreasonably withheld or conditioned, FirstWorld shall be entitled from time to
time to make, alter, modify or reconstruct, such improvements, alterations or
additions to the Conduit or portions thereof, as FirstWorld shall consider
necessary or appropriate to enable the efficient functioning of the Irvine
Networks. If FirstWorld desires to make any reconstruction, improvements, or
additions FirstWorld shall submit plans for the same showing the proposed
location and materials to be utilized to Irvine prior to the commencement of the
same for Irvine's review and approval, which approval shall not be unreasonably
withheld or conditioned. If Irvine fails to approve or disapprove of such plans
within thirty (30) days after its receipt of the same, Irvine shall be deemed to
have approved the same. In performing any work pursuant to this Section 8.2, or
in performing any repairs to or maintenance of the Conduit, FirstWorld shall
keep the Leased Premises and the Conduit free and clear of all liens for work
performed and materials provided. At least fifteen (15) days prior to
commencing any work FirstWorld will give Irvine notice that work will be
performed to enable Irvine to file notices of non-responsibility. Any
alterations, modifications, reconstruction, improvements, repairs, or additions,
including any building entrance conduit systems installed by FirstWorld under
this Agreement or the License Agreement, shall become a part of the Conduit and
the property of Irvine upon the completion thereof (and the space therein shall
then be a portion of the Leased Premises) and shall be surrendered with the
Leased Premises upon the expiration of the Term, or any earlier termination of
this Agreement.
12
8.3 RIGHT TO ENTER INTO OPERATIONS AND MAINTENANCE AGREEMENTS.
FirstWorld shall be entitled to enter into agreements with other Persons,
whether affiliated or non-affiliated, under which such other Persons may
undertake operational or maintenance duties associated with FirstWorld's rights
and/or obligations hereunder, including, without limitation, (a) sales, (b)
Conduit, Cable and/or Equipment installation, maintenance and repair, and (c)
other similar duties. Neither said agreements nor any performance thereunder
shall constitute a Transfer within the meaning of Section 12.1 hereof.
9.
INDEMNITY; INSURANCE
9.1 FIRSTWORLD INDEMNITY. FirstWorld shall indemnify, defend,
protect and hold harmless Irvine its principals, officers, directors, agents,
employees and servants from and against any and all losses, costs, expenses,
claims, liabilities and damages (including reasonable attorneys' fees) arising
directly or indirectly from (a) the use and operation of the Leased Premises and
the Conduit by FirstWorld or its employees, agents or contractors, (b) the
operation of the Networks, by FirstWorld or its employees, agents, or
contractors, (c) FirstWorld's breach of its obligations or representations under
this Agreement, (d) FirstWorld's exercise of any rights of entry periodically
provided to FirstWorld as contemplated by Section 2.8, above, or (e) the
construction, operation, maintenance and repair of Conduit and Cable, in each of
the above cases except to the extent ultimately proved to be caused by the sole
active negligence or willful misconduct of Irvine, its employees, agents or
contractors, or Irvine's breach of its obligations, representations or
warranties under this Agreement. In cases of alleged negligence, or any alleged
breach of an obligation, representation or warranty by Irvine under this
Agreement, asserted by third parties against Irvine which arise out of, are
occasioned by, or are in any way attributable to any of the matters specified in
clauses (a) through (e), above, FirstWorld shall accept any tender of defense
for Irvine and shall, notwithstanding any allegation of negligence or willful
misconduct on the part of Irvine, defend Irvine and pay all costs, expenses and
attorneys' fees incurred in connection with such litigation, provided that
FirstWorld shall not be liable for any such injury or damage, and Irvine shall
reimburse FirstWorld for the reasonable attorneys' fees and costs incurred by
FirstWorld, all to the extent and in the proportion that such injury or damage
is ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Irvine) to be attributable to the
sole active negligence or willful misconduct of Irvine, or Irvine's breach of
any its obligations, representations or warranties under this Agreement. The
provisions of this Section shall survive termination of this Agreement.
9.2 EXEMPTION OF IRVINE FROM LIABILITY. FirstWorld hereby agrees
that Irvine, including Irvine's officers, trustees, partners, affiliates,
directors, agents, management contractors and representatives (collectively
referred to as "Irvine's Affiliates"), shall not be liable for, and FirstWorld
hereby irrevocably waives any claim against such parties for, injury to
FirstWorld's business or loss of income therefrom or for damage to Cable and/or
Equipment or other property of FirstWorld, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, heating, ventilation, air conditioning or lighting
fixtures, or from any other cause; provided, however, that the foregoing shall
not limit Irvine's liability for a default by Irvine of an express
representation, warranty, covenant or obligation set
13
forth in this Agreement or the License Agreement or from the sole active
negligence of Irvine or its employees, agents or contractors. Irvine and
Irvine's Affiliates shall not be liable for any damage arising from any act or
neglect of any other tenant of any Building.
9.3 IRVINE INDEMNITY. Irvine shall indemnify, protect and hold
harmless FirstWorld, its principals, officers, directors, agents, employees and
servants from and against any and all losses, costs, expenses, claims,
liabilities and damages (including reasonable attorneys' fees) arising directly
or indirectly from the sole active negligence or willful misconduct of Irvine,
its employees, agents or contractors, or Irvine's breach of its obligations,
representations or warranties under this Agreement. The provisions of this
Section shall survive termination of this Agreement.
9.4 FIRSTWORLD INSURANCE. FirstWorld shall procure and maintain in
force, or cause to be procured and maintained in force, throughout the Term of
this Agreement, the following insurance coverage:
9.4.1 A Commercial General Liability policy with a combined
single limit of at least *** Dollars ($ *** ) per occurrence and *** Dollars ($
*** ) in the aggregate. Such Comprehensive General Liability policy shall
include a Broad Form Endorsement including: Broad Form Property Damage;
Contractual Liability; Products and Completed Operations; and Explosion,
Collapse and Underground.
9.4.2 A Business Auto Policy providing a liability limit of
at least ***Dollars ($ *** ) for each accident and covering owned and non-owned
and hired automobiles.
9.4.3 A Workers' Compensation and Employer's Liability policy
providing California statutory Workers' Compensation benefits, including
Employer's Liability with at least the following limits:
Bodily Injury by Accident: $ *** each accident
Bodily Injury by Disease: $ *** policy limit
Bodily Injury by Disease: $ *** each employee
In addition, each Workers' Compensation and Employer's Liability policy shall
contain an insurer's waiver of subrogation in favor of Irvine.
9.4.4 A Builder's Risk policy or a Course of Construction
policy providing a liability limit of at least *** Dollars ($ *** ) covering the
Conduit during the
---------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
14
course of construction (including, without limitation, installation of Cable
into the Conduit) against loss or damage caused by All Risk Builders Risk
perils.
9.4.5 Fire and All Risk insurance in an amount not less than
*** Dollars ($ *** ) per occurrence.
9.4.6 A Transmission and Distribution All Risk policy in an
amount not less than *** Dollars ($ *** ) with Replacement Cost Blanket
Endorsement and, for the Irvine Networks, an Agreed Amount Endorsement.
9.4.7 An All Risk Property Damage policy covering
FirstWorld's or its Affiliate's switching facility in Anaheim, as well as an
additional switching facilities in an amount not less than the full replacement
cost of the switching facilities and with an earthquake sublimit of not less
than *** ( *** ) percent of the replacement cost coverage amount.
9.4.8 Any combination of Primary, Umbrella and Excess
Liability policies which together provide total limits of at least *** Dollars
($ *** ) per occurrence and *** Dollars ($ *** ) in the aggregate.
9.4.9 As to any alterations, modifications, reconstruction,
improvements, or additions to the Conduit which involve a cost in excess of $
*** (which amount shall be increased from time to time by the same percentage
increase as the percentage increase in the CPI from and after the date of this
Agreement) and which involve construction of a building entrance link on real
property owned by Irvine, completion and performance bonds and guaranties
assuring the lien free completion of all improvements being installed or
constructed when improvements are under construction, if required by Irvine,
provided, however, that if at any time during the Term FirstWorld allows a lien
to be recorded on account of work performed by or on behalf of FirstWorld which
is not released within thirty (30) days after recordation of the same, then
Irvine may thereafter require bonds and guaranties for all work to be performed
by FirstWorld in connection with this Agreement.
9.5 FORM OF POLICIES. The insurance policies required to be
procured pursuant to paragraph 9.2 shall be written only with California
admitted insurance companies having a policyholder rating of A and a
financial rating of VII or better in the Best's Key Rating Guide and shall
contain the following provisions:
9.5.1 Each policy shall contain a provision that the
coverages afforded thereby will not be canceled, reduced or materially changed
without at least thirty (30) days' prior written notice to Irvine.
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*** CONFIDENTIAL TREATMENT REQUESTED
15
9.5.2 The Commercial General Liability and Umbrella/Excess
Liability policies shall name Irvine as an additional insured with the following
clauses added:
(i) The insurance afforded to the additional insureds
is primary insurance. If any of the additional insureds has other insurance
which is applicable to the loss, such other insurance shall be excess and
non-contributory with this insurance as respects claims or liability arising out
of or resulting from the acts or omissions of the named insured, or of others on
behalf of the named insured.
(ii) This insurance shall apply separately to each
insured except with respect to the limits of liability.
9.6 INCREASE IN LIABILITY LIMITS. Irvine may from time to time
require that the limits of liability for any insurance policy to be maintained
under this Article 9 be increased, provided that no such increase shall cause
the limits of liability to exceed the greater of: (a) the limits of liability
required by FirstWorld's Lenders; or (b) the limits of liability set forth in
this Article 9 increased by the same percentage increase as the percentage
increase in the CPI from and after the date of this Agreement.
9.7 RELEASE AND WAIVER OF SUBROGATION. Notwithstanding anything to
the contrary in this Agreement, the Parties release each other, and their
respective agents, employees and contractors, from any liability for damage to
the property of the waiving Party that arises out of or incident to any peril
covered by property insurance carried by the Parties or out of a peril of the
type to be covered by the property insurance required to be carried under the
terms of this Agreement, whether due to the negligence of Irvine or FirstWorld
or their respective agents, employees or contractors or any other cause. Each
Party shall cause each property insurance policy obtained by it to authorize the
foregoing waiver.
10.
DAMAGE OR DESTRUCTION
FirstWorld shall promptly give Irvine notice of any damage or loss to
the Irvine Networks. Except as may result from a decrease in Adjusted Gross
Revenue, there shall be no abatement or reduction of rent on account of such
damage or loss. Except to the extent of damage or loss caused by the sole
active negligence or willful misconduct of Irvine, its employees, agents or
contractors, FirstWorld shall, as soon as reasonably practicable, restore the
damage to the Irvine Networks as well as any damage to the Conduit as nearly as
may be practicable to its condition, quality, and class immediately prior to
such damage or loss, with such changes or alterations to the Irvine Networks as
FirstWorld may request that are approved by Irvine, which approval shall not be
unreasonably withheld, conditioned or delayed. If the damage or loss occurs
within the last three (3) years of the Term of this Agreement and the cost
reasonably estimated to repair the same exceeds ten (10) percent of the average
of the two prior years Adjusted Gross Revenue, and such damage or loss was not
caused by FirstWorld's sole active negligence, then FirstWorld may terminate
this Agreement by notice given in writing to Irvine on or before sixty (60) days
following the event causing the damage accompanied by the consent to such
termination of any Lender, which notice shall specify a termination date not
less than sixty (60) days nor more than one hundred eighty (180) days following
the event causing the damage. Notwithstanding the
16
foregoing, pending any such termination, FirstWorld shall use its reasonable
efforts to perform repairs to the Irvine Networks so that FirstWorld can provide
basic broadband fiber optic telecommunications service to FirstWorld's Customers
in the Spectrum and any Additional Areas then added to this Agreement.
11.
CONDEMNATION
CONDEMNATION. If a Condemnation of any portion of the Leased Premises
shall occur, then any award or awards shall be applied first to repair,
restoration or reconstruction of any remaining part of the Conduit not so taken.
FirstWorld, subject to Irvine's approval, which approval shall not be
unreasonably withheld, conditioned or delayed, shall perform such repair,
restoration or reconstruction in accordance with applicable requirements of this
Agreement. The balance of any condemnation award or awards remaining after the
repair, restoration or reconstruction shall belong to Irvine. Notwithstanding
the foregoing, FirstWorld shall be entitled to pursue and upon any recovery may
retain a separate award for the relocation costs, the interruption of
FirstWorld's business, and lost goodwill and profits (provided that Irvine shall
be entitled to a percentage of any award for lost profits equal to the amount of
Rent which would have been due on the basis of the same amount of Adjusted Gross
Revenues on which such profits are based unless Irvine has separately received
such an award on account of its interest as lessor under this Agreement). If all
of the Leased Premises is taken, or if a portion of the Leased Premises is taken
rendering the balance of the Leased Premises unsuitable, in FirstWorld's
reasonable opinion, for the continued operation of the Irvine Networks,
FirstWorld may terminate this Agreement (without affecting its rights to the
foregoing award) by notice given to Irvine of its election to do so within sixty
(60) days following the date of the Condemnation accompanied by the consent to
such termination of any Lender.
11.2 TEMPORARY CONDEMNATION. If a temporary Condemnation shall
occur with respect to use or occupancy of the Leased Premises, then all proceeds
of such temporary Condemnation (to the extent attributable to periods within the
Term of this Agreement) shall be paid to the Parties as their interests may
appear, and FirstWorld's obligations under this Agreement shall not be affected
in any way.
11.3 SETTLEMENT OR COMPROMISE. Irvine shall not settle or
compromise any Condemnation award with respect to the Leased Premises without
consent by FirstWorld, and by any Lender to whom FirstWorld has delegated such
consent rights under a Financing Encumbrance. Both FirstWorld and Irvine shall
be entitled to appear in such proceedings and claim such share of the award as
each is entitled to receive pursuant to this Agreement and Applicable Law.
Subject to the terms of its Financing Encumbrance, any Lender shall also be
entitled to appear in such proceedings and empowered to participate in any
settlement, arbitration or other proceeding involving any such Condemnation.
11.4 PROMPT NOTICE. If either Party becomes aware of any
Condemnation or threatened or contemplated Condemnation with respect to the
Leased Premises, then such Party shall promptly give notice thereof to the other
Party.
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12.
TRANSFERS BY FIRSTWORLD
12.1 FIRSTWORLD'S RIGHT TO ASSIGN. FirstWorld shall not either
voluntarily or by operation of law, assign, encumber (except in accordance with
Article 13, below) or otherwise transfer its rights under this Agreement, or
sublet or otherwise permit the use of the Leased Premises by anyone other than
FirstWorld (any of the foregoing being a "Transfer") without the prior written
consent of Irvine, which consent shall not be unreasonably withheld or
conditioned. For purposes of this Agreement, any sale of a controlling
percentage of the shares of FirstWorld (except by or to a Lender which is not an
Affiliated Lender in connection with the enforcement by such Lender of its
remedies), shall be deemed to constitute a Transfer of this Agreement. Any
purported Transfer without Irvine's consent shall be void and of no force or
effect. Except to the extent permitted under Section 12.6 and Article 13,
below, in no event shall FirstWorld have the right to Transfer the Leased
Premises separately from the Irvine Networks and the License Agreement, and any
attempted Transfer of the Leased Premises separate from the Irvine Networks or
the License Agreement shall be void and of no force or effect.
12.2 SUBMITTAL FOR CONSENT. If FirstWorld desires to Transfer
this Agreement, then, unless Irvine's consent is not required hereunder for such
Transfer, FirstWorld shall notify Irvine at least thirty (30) days in advance of
the proposed Transfer and shall submit to Irvine concurrently with such notice:
(a) the name and address of the proposed transferee, (b) financial statements
for the proposed transferee, (c) a description of the proposed transferee's
business experience in the telecommunications industry, (d) a copy of the
proposed instrument effecting the Transfer and (e) such other information as
Irvine may reasonably request in connection with its review of the proposed
Transfer. Within thirty (30) days after Irvine's receipt of such information,
Irvine may consent to the proposed Transfer or disapprove of the proposed
Transfer. If Irvine disapproves of the proposed Transfer, Irvine's notice of
disapproval shall specify its reasons for disapproving of the same. Any failure
by Irvine to consent to or disapprove such Transfer within such thirty (30) day
period shall be deemed to constitute Irvine's consent to such Transfer.
FirstWorld acknowledges that this Agreement is being entered into by Irvine to
provide telecommunications service to the Spectrum, and any Additional Areas,
and that it shall be reasonable for Irvine to withhold its consent to a proposed
Transfer if Irvine reasonably determines that the proposed transferee will be
unable to provide such service at such level and quality as is then reasonably
expected by occupants of Spectrum and any Additional Areas.
12.3 EFFECT OF TRANSFER. No Transfer, even with the consent of
Irvine, shall relieve FirstWorld of its obligations under this Agreement.
Except as provided in Article 13, each transferee of FirstWorld, shall be deemed
to assume all obligations of FirstWorld under this Agreement and shall be liable
jointly and severally with FirstWorld for the payment of all rent, and for the
due performance of all of FirstWorld's obligations, under this Agreement, except
that in the case of a sublease such assumption shall be limited to the
obligations relating to the subleased portion of the Leased Premises. Except as
provided in Article 13, no Transfer shall be binding on Irvine unless a document
memorializing the Transfer is delivered to Irvine and both the
assignee/subtenant and FirstWorld deliver to Irvine an executed consent to
transfer instrument in a form reasonably required by Irvine and consistent with
the requirements of this Article. The acceptance by Irvine of any payment due
under this Agreement from any other Person shall not be
18
deemed to be a waiver by Irvine of any provision of this Agreement or to be a
consent to any Transfer. Consent by Irvine to one or more Transfers shall not
operate as a waiver or estoppel to the future enforcement by Irvine of its
rights under this Agreement.
12.4 RIGHT OF FIRST REFUSAL. In the event that FirstWorld
desires to sell the Irvine Networks, or a direct controlling interest in
FirstWorld, Irvine shall have a continuing right of first refusal as to any such
transactions. FirstWorld agrees to provide Irvine with written notice of the
terms and provisions of any such proposed transaction. Irvine shall have
fifteen (15) days after its receipt of notice of such terms and provisions to
exercise its right of first refusal. If Irvine does not exercise the same
within such fifteen (15) day period, Irvine shall be deemed to have waived such
right as to the transaction for which notice was given, and FirstWorld shall
thereafter have the right for a period of one hundred eighty (180) days
thereafter to complete the proposed transaction at a price not less than
ninety-five (95) percent of that set forth in the notice given to Irvine and
with no material changes to other terms of the transaction which would
reasonably be considered to be monetary or financial terms of the transaction.
This right of first refusal shall not be construed to apply to any Financing, to
the pledge of FirstWorld's shares as security for a Financing, or to any
transfer by or to a Lender. Any information provided in connection with a
transaction to which this right of first refusal would apply shall be
Pre-Authorized Confidential Information, including, without limitation, any
notice of the terms and provisions of any proposed transaction. In the event
that FirstWorld intends to undertake a public offering of its shares, FirstWorld
shall have the right to notify Irvine prior to commencing efforts towards such
public offering and the parties shall for a period of thirty (30) days following
such notice attempt in good faith to negotiate a private transaction involving
the sale to Irvine of the shares of FirstWorld to be offered to the public. If
FirstWorld and Irvine are unable to negotiate such a transaction within such
thirty (30) day period, the Parties shall negotiate in good faith to establish a
procedure to apply the right of first refusal of Irvine set forth in this
Section 12.4 to the structure of the proposed public offering and shall use
their best efforts to conclude such negotiations within fifteen (15) days after
the end of such thirty (30) day period.
12.5 PERMITTED TRANSFERS. Notwithstanding any contrary provision
of Article 12, FirstWorld shall have the right, without obtaining the prior
consent of Irvine: (a) to assign this Agreement to an Affiliate, so long as such
assignment occurs concurrently with the assignment to such Affiliate of the
License Agreement and all of the Irvine Networks; (b) to assign this Agreement
in connection with a reorganization or merger, so long as concurrently with such
assignment the License Agreement and all of the Irvine Networks are assigned to
the same entity as this Agreement, and (c) to encumber its rights under this
Agreement in accordance with Article 13, below.
12.6 MULTIPLE NETWORKS. FirstWorld shall have the right to
provide service to the Spectrum Service Area through a single Network or through
multiple Networks, and may provide service to any Additional Area added to this
Agreement from the Spectrum Network or from an Additional Network. If
FirstWorld elects to provide service to any portion of the Spectrum Service Area
or any such Additional Area through more than one Network, FirstWorld may need
to assign or partially assign this Agreement to a separate Affiliate formed by
FirstWorld or by FWC for such purpose. In such event, the Parties shall work
together in good faith to determine a mutually satisfactory method for partially
assigning FirstWorld's rights under this Agreement to such Affiliate while
protecting both Parties rights and obligations hereunder. In
19
connection with such provision of service by any Additional Network, FirstWorld
may sublet a portion of the Leased Premises to an Affiliate formed by FirstWorld
or FWC for such purpose, provided, however, that Irvine shall be provided a copy
of any proposed sublease prior to the execution thereof and shall have the right
to require both FirstWorld and the proposed sublessee/Affiliate to enter into
such further agreements with regard to such sublease as Irvine may determine are
reasonably necessary to protect its rights under this Agreement. FirstWorld
shall reimburse Irvine for Irvine's costs, including attorneys' fees, incurred
in connection with any assignment or sublease pursuant to this Section 12.6.
13.
FINANCING BY FIRSTWORLD
13.1 FINANCING NOT PROHIBITED TRANSFER. Subject to and in
accordance with the terms and provisions of this Article 13, and notwithstanding
anything in this Agreement to the contrary, FirstWorld shall have the right,
without Irvine's consent, to encumber the Cable, this Agreement and FirstWorld's
interest in the Leased Premises (or a portion of foregoing) as security for any
Financing and to record any Financing Encumbrance given by FirstWorld as
security for any Financing. None of the following shall be deemed to constitute
a Transfer of FirstWorld's rights under this Agreement or to otherwise violate
any provision of this Agreement prohibiting the assignment, encumbrance, or
other transfer of this Agreement or FirstWorld's rights hereunder: (a)
FirstWorld's making of a Financing Encumbrance as security for any Financing;
(b) any sale of this Agreement and of FirstWorld's interest in the Leased
Premises and/or the Cable in any proceedings for the foreclosure of any
Financing Encumbrance; (c) any assignment, transfer or conveyance to Lender in
lieu of such foreclosure (or to a Lender's designated purchaser or assignee
which is a Permitted Assignee); or (d) any sale of this Agreement and of
FirstWorld's interest in the Leased Premises by Lender following Lender's
acquisition of the same in any proceedings for the foreclosure of any Financing
Encumbrance, so long as such sale is to a Person (a "Permitted Assignee"): (i)
which is not insolvent or the subject of any bankruptcy proceeding for
reorganization or liquidation or (ii) with which Irvine does not have material
litigation pending. Irvine shall recognize any purchaser of FirstWorld's
interests under this Agreement pursuant to a foreclosure sale under a Financing
Encumbrance, any transferee of FirstWorld's interests under this Agreement under
an assignment in lieu of foreclosure, or, if the Lender should be such purchaser
or assignee, a direct transferee of Lender that is a Permitted Assignee.
13.2 COOPERATION WITH LENDER REQUIREMENTS.
13.2.1 Irvine acknowledges that any Lender may require, among
other things, certain protections and agreements from FirstWorld and Irvine,
anticipated to include, without limitation, the following:
(a) Security interests in all Cable, equipment,
furniture, fixtures and other tangible and intangible property owned by
FirstWorld and incorporated into or used in connection with the Irvine Networks;
collateral assignments of all major construction and consulting contracts;
collateral assignments of FirstWorld's contracts with Customers and Users
20
and the rights to receive revenue thereunder; and collateral assignments of
FirstWorld's bank accounts, accounts receivable and other similar collateral
relating to the Irvine Networks.
(b) The creation of sinking funds and reserves, the
maintenance of specified financial ratios, and other similar covenants with
respect to the development and operation of the Irvine Networks that would
commonly be required in connection with non-recourse financing.
(c) That Irvine agree (i) to recognize such Lenders
and their successors, following a foreclosure on a Financing Encumbrance or a
transfer by deed in lieu of foreclosure, as parties having the rights and
obligations of FirstWorld under this Agreement, in the event such Lenders and
their successors elect to assume FirstWorld's rights and obligations hereunder,
and (ii) in the event of such an assumption, that such Lenders and their
successors, following a foreclosure on a Financing Encumbrance or a transfer by
deed in lieu of foreclosure, will not be obligated to cure any of FirstWorld's
non-monetary defaults arising prior to the foreclosure which are not reasonably
capable of being cured.
13.2.2 Irvine agrees to cooperate in good faith with
FirstWorld's efforts to obtain Financing. In particular, if required by a
Lender, Irvine agrees to enter into one or more commercially reasonable
agreements with one or more Lenders containing or permitting the provisions
contemplated pursuant to Section 13.2.1, and which may reflect that the Lenders
may succeed to the rights of FirstWorld hereunder and may thereby continue to
utilize the Cable and Conduit until termination of this Agreement in accordance
with the terms hereof. FirstWorld shall reimburse Irvine for Irvine's costs,
including attorney's fees, incurred in connection with the review and
negotiation of any such agreements with Lenders if Irvine is requested to review
more than one such agreement in any calendar year. Irvine shall not, however, be
required to consent to any provision that would obligate Irvine to repay or be
liable for any cost related to any Financing. Irvine's obligations under any
such agreement with any Lender shall be considered material obligations of this
Agreement enforceable by FirstWorld against Irvine as if fully set forth herein.
Irvine agrees that all information regarding the Lenders and their relationship
with FirstWorld shall constitute Pre-Authorized Confidential Information.
Irvine's failure to enter into any such agreement shall not limit or in any way
adversely affect the rights of any Lender pursuant to this Article 13.
13.2.3 Any Lender, by acceptance of any Financing Encumbrance,
agrees that it accepts the same subject to the rights of Irvine pursuant to
Article 14, below. Any agreements entered into with any Lenders pursuant to
Section 13.2.2., above, if any, shall contain provisions for the benefit of
Irvine acknowledging and confirming the rights of Irvine pursuant to the
provisions of Article 14, below, and that such Lender's rights in and to the
Conduit, including any Conduit installed by or on behalf of FirstWorld, and in
and to any Cable installed by or on behalf of FirstWorld pursuant to this
Agreement, shall be subordinate to Irvine's ownership of the Conduit and
Irvine's rights to the Cable as set forth in this Agreement upon the expiration
or any earlier termination of this Agreement.
13.3 NOTICE OF FINANCING. If FirstWorld enters into any Financing
Encumbrance(s), then the Lender(s) thereunder shall be entitled to the Lender
protections provided for under this Agreement only from and after such time as
FirstWorld or such Lender has given Irvine written notice of the name and
address of such Lender, accompanied by a copy of
21
the executed Financing Encumbrance. Irvine shall, upon request, acknowledge
receipt of the name and address of any Lender (or proposed Lender). Any Lender
shall provide Irvine written notice of any change in its address.
13.4 NOTICE OF DEFAULT AND LENDER'S CURE RIGHTS. If Irvine
shall give any notice of default or breach under this Agreement, then Irvine
shall (provided that Irvine has received notice of a Financing Encumbrance
pursuant to Section 13.3) at the same time and by the same means give a copy of
such notice to the Lender, which notice shall describe in reasonable detail the
alleged default. Upon receiving any notice of a default, any Lender shall have
the same cure period granted to FirstWorld under this Agreement, plus (so long
as such Lender is not an Affiliated Lender) the additional time provided for
below, within which to take (if such Lender so elects) whichever of the actions
set forth below shall apply with respect to the default described in such notice
of default (such actions, "Lender's Cure," and a Lender's rights to take such
actions, "Lender's Cure Rights"):
13.4.1 In the case of a monetary default, the Lender
shall be entitled (but not required) to cure such default within a cure period
following notice of such default consisting of the cure period allowed to
FirstWorld under this Agreement plus (so long as such Lender is not an
Affiliated Lender) an additional period of twenty (20) days.
13.4.2 In the case of any non-monetary default that a
Lender is reasonably capable of curing without obtaining possession of the
Leased Premises (other than a non-monetary default that is not reasonably
susceptible of being cured by a Lender, such as a bankruptcy of FirstWorld), the
Lender shall be entitled, but not required, to: (a) within a period following
notice of such default consisting of the cure period allowed to FirstWorld under
this Agreement plus (so long as such Lender is not an Affiliated Lender) an
additional period of thirty (30) days, advise Irvine of Lender's intention to
take all reasonable steps necessary to remedy such non-monetary default; and (b)
cure the same within such period or; (c) if the same is not reasonably
susceptible of being cured within such period, duly commence the cure of such
non-monetary default within such extended period and thereafter diligently
prosecute to completion the cure of such non-monetary default and complete such
cure within a reasonable time under the circumstances, subject to Unavoidable
Delay (except an Unavoidable Delay that causes Lender to be unable to obtain
possession of the Leased Premises).
13.4.3 In the case of a non-monetary default that is not
reasonably susceptible of being cured by a Lender without obtaining possession
of the Leased Premises, the Lender shall be entitled (but not required) to do
the following, so long as, with respect to any defaults other than those
referred to in this Section 13.4.3, such Lender has exercised or is exercising
the applicable Lender's Cure Rights as defined in this Agreement:
(a) At any time within sixty (60) days after
notice of default, Lender shall be entitled to (i) institute proceedings to (A)
obtain possession of the Leased Premises as mortgagee (including possession by a
receiver), or (B) acquire the Leased Premises by foreclosure proceedings or
otherwise, or (ii) unless the Lender is an Affiliated Lender, commence
negotiations for an assignment in lieu of foreclosure, and (subject to any stay
in any proceedings involving the bankruptcy, insolvency, or reorganization of
FirstWorld or the like, or any injunction, unless such stay or injunction is
lifted), prosecute the same or any combination of
22
the same to completion with commercially reasonable diligence subject to
Unavoidable Delay, for a period not to exceed a total of three hundred sixty
(360) days.
(b) Upon obtaining possession of the Leased
Premises (before or after expiration of any otherwise applicable cure period),
Lender shall be entitled (but not required) to commence and proceed with
reasonable diligence and reasonable continuity to cure such non-monetary
defaults as are then reasonably susceptible of being cured by such Lender,
subject to Unavoidable Delay.
13.4.4 In addition to the foregoing Lender's Cure Rights,
during any period following Irvine's notice of default, any Lender shall have an
additional period of ninety (90) days beyond the time in which FirstWorld would
be obligated to act, to take any action to install Cable or Conduit or to
provide service to any Additional Spectrum or any Additional Area as may then be
required under this Agreement. No provision of this Section 13.4.4 shall be
construed to relieve or delay FirstWorld's obligations hereunder to install
Cable or Conduit or provide service.
So long as the time period for a Lender to exercise Lender's Cure Rights with
respect to a non-monetary default by FirstWorld has not expired (and provided
that all monetary defaults are cured within Lender's cure period provided for
under this Agreement), Irvine shall not terminate this Agreement or such
Lender's right to cure a default or obtain title to the Leasehold Premises,
provided, however, that Irvine shall be permitted to proceed to seek damages on
account of such default from FirstWorld. A Lender shall not be required to
continue to exercise Lender's Cure Rights or otherwise proceed to obtain
possession if and when the default that such Lender was attempting to cure shall
have been cured. Upon such cure and the cure of any other defaults in
accordance with this Agreement, this Agreement shall continue in full force and
effect as if no default(s) had occurred. Nothing in the Lender protections
provided for in this Agreement shall be construed to either (i) extend the Term
beyond the expiration date provided for in this Agreement that would have
applied if no default had occurred or (ii) require any Lender to cure any
default by FirstWorld that is not reasonably capable of being cured by the
Lender (such as a bankruptcy of FirstWorld) in order to preserve its rights
under this Agreement.
13.5 OBLIGATIONS OF LENDER AND SUCCESSORS. No Lender, in the exercise
of its rights under this Agreement, shall solely on account of such exercise be
deemed to be an assignee or transferee or mortgagee in possession of the Leased
Premises so as to require such Lender to assume or otherwise be obligated to
perform any of FirstWorld's obligations under this Agreement except when, and
then only for matters accruing while, such Lender has entered into possession of
the Leased Premises in the exercise of its remedies under its Financing
Encumbrance (as distinct from its rights under this Agreement to cure any Events
of Default or exercise Lender's Cure Rights). Except for pre-existing uncured
monetary defaults of FirstWorld, which any Lender (or purchaser at foreclosure
sale) shall be obligated to cure upon becoming the owner of FirstWorld's rights
hereunder, no Lender (or purchaser at a foreclosure sale held pursuant to a
Financing Encumbrance) shall be liable under this Agreement unless and until
such time as it becomes, and in the case of the Lender only for matters accruing
while it remains, the owner of the interest of FirstWorld in and to the Leased
Premises under this Agreement after foreclosure or an assignment in lieu
thereof. During such time, and for matters accruing while any Lender is in
possession of the Leased Premises, Lender shall be fully liable and responsible
for all
23
obligations under the terms and provisions of this Agreement. Except as to
pre-existing uncured monetary defaults of FirstWorld, which any purchaser shall
be obligated to cure, any purchaser from a Lender after the Lender's foreclosure
or acceptance of an assignment in lieu of foreclosure shall only be liable under
this Agreement from and after the time it becomes the owner of the interests of
FirstWorld in and to the Leased Premises under this Agreement.
13.6 LENDER PROTECTIONS.
13.6.1 No voluntary cancellation, termination, surrender,
acceptance of surrender, or abandonment, of this Agreement, nor any amendment or
modification adversely affecting a Lender's rights under this Article 13, shall
bind a Lender (other than an Affiliated Lender) if done without notice to and
the written consent of such Lender.
13.6.2 Any Lender shall have the right, but not the
obligation, to take possession of the Leased Premises and to perform any
obligation of FirstWorld under this Agreement and to remedy any default by
FirstWorld. Irvine shall accept performance by or at the instigation of a
Lender in fulfillment of FirstWorld's obligations, for the account of FirstWorld
and with the same force and effect as if performed by FirstWorld.
13.6.3 A Lender shall in no event be required to cure or
commence to cure any default (if such default is provided for in this Agreement)
consisting of FirstWorld's failure to satisfy or discharge any lien, charge, or
encumbrance affecting the Leased Premises junior in priority to the lien of the
Financing Encumbrance held by such Lender.
13.6.4 Any payment made by a Lender to Irvine to cure any
claimed default shall be deemed to have been made without prejudice to
FirstWorld's or the Lender's recovery of such payment if Irvine's claim of a
default shall be determined by a court of competent jurisdiction to have been
erroneous.
13.6.5 Any Lender may exercise its rights under this
Agreement, or perform any action permitted to be taken by a Lender under this
Agreement, through an agent.
13.6.6 If more than one Lender desires to exercise
Lender's Cure Rights or if more than one Lender desires to exercise any other
right or privilege provided for Lenders under this Agreement, then the Party
against whom such rights or privileges are to be exercised shall be required to
recognize either: (a) only the Lender that desires to exercise such right or
privilege and whose Financing Encumbrance is most senior in lien (as against
other Financing Encumbrances of Lenders desiring to exercise such rights) or (b)
such other Lender, as has been designated in writing by all Lenders, to exercise
such right or privilege. In such case, Irvine shall be provided notice of the
priority of Financing Encumbrances, which notice shall consist of either (a) the
report or certificate of a title insurance company licensed to do business in
California or (b) joint written instructions of all Lenders.
13.7 REVERSIONARY INTEREST. No Financing Encumbrance shall
encumber or in any other way affect Irvine's reversionary interest in the
Leased Premises, or in any Cable or any portion of the Conduit, or limit or
restrict Irvine's rights and remedies under this Agreement except as
expressly provided in this Agreement.
24
13.8 NEW LEASE. In the event that this Agreement or any portion
hereof is irrevocably rejected by a trustee or debtor-in-possession in any
bankruptcy or insolvency proceeding, Irvine agrees that it will, upon the
request of the Lender whose Financing Encumbrance is most senior (as evidenced
by the notice required under Section 13.6.6, above) execute and deliver to such
senior Lender, a new agreement containing the same covenants, agreements, terms,
provisions and limitations set forth in this Agreement and for a term equal to
the then remaining Term hereof, so long as such Lender prior to or concurrently
with Irvine's execution and delivery of such new agreement: (a) executes and
delivers to Irvine a counterpart or counterparts of such new agreement and
agrees to be bound under the covenants, agreements, terms, provisions and
limitations thereof; (b) provides Irvine with such assurances as Irvine may
reasonably require confirming that this Agreement has been irrevocably rejected
and that no trustee in bankruptcy, debtor-in-possession, other Lender, or
FirstWorld or any of its Affiliates will assert the continuing effectiveness and
enforceability of this Agreement; (c) cures any then existing monetary defaults
under this Agreement through the effective date of such new agreement; (d)
agrees to indemnify Irvine or provide Irvine with such other assurances as may
be reasonably satisfactory to Irvine that such Lender is the Lender whose
Financing Encumbrance is most senior; and (e) reimburses Irvine for its
reasonable attorneys' fees in connection with entering into such new agreement.
13.9 CONCURRENT EXERCISE. Notwithstanding any contrary
provisions of this Article 13, any Lender exercising any of its rights under
this Article 13 with regard to any Financing Encumbrance, must concurrently
exercise its rights under Article 11 of the License Agreement with regard to the
same Financing Encumbrance, it being the intent of the Parties that in order to
succeed to the rights of FirstWorld under this Agreement, a Lender must also
succeed to the rights of FirstWorld under the License Agreement and that a
Lender may not receive the benefits of this Agreement separately from the
benefits and burdens of the License Agreement.
14.
IRVINE CURE RIGHTS
14.1 PURPOSE. Irvine desires to assure, to the extent feasible,
that (a) the Equipment installed by FirstWorld in connection with the Irvine
Networks remains in place and is not removed by Lender while Irvine exercises
its remedies for a default under a Financing Encumbrance or this Agreement in
the manner described in Section 14.4, or (b) that Irvine may effectively acquire
the Equipment by paying the outstanding obligations under the Financing to the
extent provided under Section 14.5, below, and thereafter foreclosing the
Financing Encumbrance.
14.2 NOTICE OF DEFAULT. Concurrently with the giving of any
notice of any default, breach or event of default under any Financing
Encumbrance (including, without limitation, any notice of acceleration of
foreclosure of the Financing Encumbrance for any reason) to FirstWorld, or to
the party obligated thereunder if it is not FirstWorld, the Lender shall at same
time and by the same means provide a copy of such notice to Irvine at Irvine's
address for notices set forth in this Agreement, which notice shall describe in
reasonable detail the alleged default. Irvine shall provide any Lender with
written notice of any change in its address. FirstWorld agrees to provide to
Irvine a copy of any notice of change of address received by FirstWorld from
25
any Lender, provided, however, that no failure by FirstWorld to provide Irvine a
copy of such notice shall adversely affect the rights of a Lender pursuant to
Article 13, above.
14.3 PRIORITY OF CURE RIGHTS. In any case where FirstWorld is in
default, has breached or there is any Event of Default, under both this
Agreement and any Financing Encumbrance, and both Lender and Irvine would
therefore have the right to exercise their respective Cure Rights hereunder,
then, notwithstanding any contrary provision of this Agreement:
14.3.1 So long as the Lender is operating or causing
FirstWorld or a third party to operate the Irvine Networks and is exercising
Lender's Cure Rights pursuant to Section 13.4, above (a) Irvine shall not be
entitled to terminate this Agreement or to exercise any of Irvine's Cure Rights
and (b) the Lender's Cure Rights shall be absolutely and unconditionally prior
and superior to Irvine's Cure Rights and Lender shall be entitled to exercise
the Lender's Cure Rights and its rights and remedies under its Financing
Encumbrance and other loan documents without any direct or indirect delay,
interference, impairment or prohibition by Irvine.
14.3.2 If (a) the Lender is exercising the Lender's Cure
Rights under Section 13.4, above, and is acting diligently to prosecute the same
to completion, or (b) the time period for exercising Lender's Cure Rights or
commencing to exercise Lender's Cure Rights pursuant to Section 13.4 above, has
not yet expired, and (c) in either such case, the Lender is not operating or
causing FirstWorld or a third party to operate the Irvine Networks, then Irvine
shall not be entitled to terminate this Agreement, but may exercise Irvine's
Cure Rights, provided that in the event of any conflict or inconsistency between
Irvine's Cure Rights and the Lender's Cure Rights, the Lender's Cure Rights
shall be superior to Irvine's Cure Rights, but only to the extent of such
conflict or inconsistency. During any such period, the Lender shall be entitled
to exercise the Lender's Cure Rights and its rights and remedies under its
Financing Encumbrance and other loan documents without any direct or indirect
delay, interference, impairment or prohibition by Irvine, except to the extent
reasonably necessary to permit Irvine to exercise Irvine's Cure Rights.
14.3.3 If the Lender fails to commence to exercise the
Lender's Cure Rights within the time periods set forth in Section 13.4, above,
or after commencing the same fails to diligently prosecute the same (including
without limitation, the Lender's failure to diligently prosecute any proceeding
to obtain possession of the Leased Premises or to acquire the Leased Premises by
foreclosure, if applicable), then Irvine shall have the right upon five (5)
business days notice to Lender to exercise Irvine's Cure Rights or to enforce
against FirstWorld all of Irvine's rights and remedies for a default under this
Agreement, or both, as Irvine may elect in its sole and absolute discretion, and
without any direct or indirect delay, interference, impairment or prohibition by
Lender.
14.4 IRVINE'S CURE RIGHTS. Subject to and in accordance with the
terms and provisions of this Article 14, upon receiving any notice of a default
under a Financing Encumbrance, Irvine shall have the right, but not the
obligation, to cure FirstWorld's default within the same cure period granted to
FirstWorld under such Financing Encumbrance, plus the additional time provided
for below, and the Lender thereunder shall accept such cure (such actions,
"Irvine's Cure," and Irvine's rights to take such actions, "Irvine's Cure
Rights"):
26
14.4.1 In the case of a monetary default, Irvine shall be
entitled (but not obligated) to cure such default within a cure period following
notice of such default consisting of the cure period allowed to FirstWorld (or
any other obligor under such Financing Encumbrance if FirstWorld is not the
obligor thereunder) plus an additional period of twenty (20) days; provided,
however, that if the Lender is in a position to conduct a foreclosure sale in
connection with such default prior to the expiration of said twenty (20) day
period, then Irvine's additional cure period (i.e., in addition to the cure
period allowed FirstWorld) shall be shortened from twenty (20) days to the
greater of ten (10) days or the number of days within said twenty (20) day
period prior to the date on which the Lender is in a position to conduct a
foreclosure sale.
14.4.2 In the case of any non-monetary default that
Irvine is reasonably capable of curing, Irvine shall be entitled (but not
obligated) to cure such default within a period following notice of such default
consisting of (a) the cure period allowed to FirstWorld (or any other obligor
under such Financing Encumbrance if FirstWorld is not the obligor thereunder)
under such Financing Encumbrance plus an additional thirty (30) days, or (b) if
the default is not reasonably susceptible of being cured within said thirty (30)
day period, to duly commence the cure of such non-monetary default within said
thirty (30) day period and thereafter diligently prosecute to completion the
cure of such non-monetary default and complete such cure within a reasonable
time under the circumstances, not to exceed a total of ninety (90) days after
the date a notice of such default was delivered to Irvine. Notwithstanding the
foregoing, if the Lender is in a position to conduct a foreclosure sale in
connection with such non-monetary default prior to the expiration of said thirty
(30) or ninety (90) day period, as applicable, then Irvine's additional cure
period (i.e., in addition to the cure period allowed FirstWorld) shall be
shortened from thirty (30) days or ninety (90) days, as applicable, to the
greater of ten (10) days or the number of days within said thirty (30) or ninety
(90) day period prior to the date on which the Lender is in a position to
conduct a foreclosure sale.
14.4.3 In the event that Irvine makes any payment to
Lender or otherwise expends any funds to cure any claimed default by FirstWorld
under a Financing, then FirstWorld shall be obligated upon Irvine's demand to
reimburse Irvine for all sums so expended by Irvine (including any premium over
par paid in connection with a partial release of the Irvine Network from the
lien of the Financing Encumbrance which affects any Networks in addition to
Irvine Networks, as provided in Section 14.5.1, but excluding amounts expended
in connection with Irvine's purchase of the Financing at par pursuant to Section
14.5), together with interest at an interest rate of *** percent ( *** %) per
annum, but in no event to exceed the maximum rate permitted by law, from the
date Irvine made any payment or otherwise expended funds through the date of
reimbursement.
14.4.4 Any payment made by Irvine to a Lender to cure any
claimed default shall be deemed to have been made without prejudice to
FirstWorld's or Irvine's recovery of such payment if such Lender's claim of a
default shall be determined by a court of competent jurisdiction to have been
erroneous.
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*** CONFIDENTIAL TREATMENT REQUESTED
27
14.5 PURCHASE OF FINANCING ENCUMBRANCE; SUBROGATION. In addition to
Irvine's Cure Rights as described in Section 14.4, upon receiving a notice of
default under a Financing Encumbrance, Irvine shall have the right to pay the
Financing Encumbrance (or the portion thereof determined as provided in Section
14.5.1 where the Financing which is secured by the Financing Encumbrance is
secured by assets of the obligor in addition to the Irvine Networks) in full
(including, without limitation, unless Lender is an Affiliated Lender, any
premium over par payable for a partial release as provided in Section 14.5.1,
late charges, default interest, default costs, prepayment penalties, and other
fees and charges imposed by the Lender), and in connection therewith to be
subrogated to and receive an assignment by Lender to Irvine of the rights of the
Lender against FirstWorld, including the rights of the Lender under its
Financing Encumbrance. Thereafter, Irvine shall be free to enforce its remedies
as holder of the Financing, including foreclosure of the Financing Encumbrance.
14.5.1 Any Financing Encumbrance which is given by FirstWorld
after the date of this Agreement to secure Financing which encumbers any
Networks in addition to Irvine Networks shall contain provisions permitting the
release of the Irvine Network from the lien of the Financing Encumbrance upon
payment of not more than *** % of those portions of the Financing allocable to
the Irvine Networks.
14.5.2 Irvine shall have the right (but not the obligation) to
negotiate with any Lender for an intercreditor agreement which would contain
provisions allowing Irvine to obtain, or to cause a third party who will provide
telecommunication service on the Irvine Networks and to whom Irvine may assign
its cure rights as contemplated by this Article 14 to obtain, financing for
Irvine's or said third party's acquisition of the Financing Encumbrance (or the
portion thereof determined as provided in Section 14.5.1) pursuant to Section
14.5, so long as Irvine or such assignee of Irvine is approved by Lender based
upon Lender's completion of its normal underwriting procedures. In such event:
(a) FirstWorld does not represent, warrant or guarantee that such Lender will
negotiate with Irvine or accept any of Irvine's proposals; (b) successful
completion of such negotiations shall not be a condition precedent, condition
concurrent or condition subsequent to any rights of FirstWorld or obligations of
Irvine under this Agreement, nor shall Irvine's failure to reach agreement with
such Lender constitute a default, or entitle Irvine to any remedy, hereunder;
(c) Irvine shall negotiate in good faith and shall not interfere with or in any
manner delay the closing by FirstWorld or any affiliate of FirstWorld of any
Financing; and (d) if Irvine is unsuccessful in negotiating any intercreditor
agreement, then Irvine shall have only the rights set forth in this Agreement,
and no other rights.
14.6 RIGHT TO BID AT FORECLOSURE SALE. In the event of
foreclosure of a Financing Encumbrance, Irvine shall be entitled to bid at such
sale on the same terms as, and without any priority or preference over, any
other third person bidder.
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*** CONFIDENTIAL TREATMENT REQUESTED
28
15.
QUIET ENJOYMENT
Irvine covenants that it has the right to lease the Leased Premises to
FirstWorld and that so long as this Agreement has not been terminated,
FirstWorld shall and may peaceably and quietly have, hold and enjoy the Leased
Premises for the Term without molestation or disturbance by or from Irvine or
anyone claiming by or through Irvine or having title to the Leased Premises or
any portion thereof paramount to Irvine. In the event any Person claiming
through Irvine attempts to disturb FirstWorld's quiet enjoyment of or right to
use or possess the Leased Premises, Irvine shall utilize its best efforts to
resolve any claims adverse to FirstWorld's rights hereunder.
16.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Irvine represents, warrants and covenants to FirstWorld the following:
16.1 TITLE TO LEASED PREMISES. Irvine owns good and marketable title
to the Leased Premises, and has the right to allow FirstWorld to use the Conduit
and the Leased Premises in accordance with the terms and provisions of this
Agreement.
16.2 NO LITIGATION. There is no existing or, to Irvine's knowledge,
pending or threatened litigation, suit, action or proceeding, including
condemnation proceedings, before any court or administrative agency against
Irvine, or the Leased Premises that would, if adversely determined, adversely
affect the Leased Premises or FirstWorld's ability to develop, own and operate
the Network.
17.
FORCE MAJEURE
No Party shall be considered to be in default in the performance of
any of its obligations under this Agreement (other than obligations of said
Party to pay any monetary sums due hereunder) when a failure of such performance
shall be due to an Unavoidable Delay. Nothing contained herein shall be
construed so as to require any Party to settle any strike or labor dispute in
which it may be involved. Any Party rendered unable to fulfill any of its
obligations under this Agreement by reason of an Unavoidable Delay shall give
prompt written notice of such fact to the other Party and shall exercise
reasonable diligence to remove such inability with all reasonable dispatch. If
an Unavoidable Delay shall have occurred, the Parties shall consult with one
another as soon as practicable concerning the effect of such delay upon their
performance hereunder. In the event that any Party's activity hereunder is
delayed, curtailed or prevented by any Unavoidable Delay, the time for carrying
out the activity thereby affected shall be extended for a period equal to the
total number of days during which such causes or their effects were operative,
and for such additional time, if any, as shall be necessary to make good the
time lost as a result of any Unavoidable Delay.
29
18.
DEFAULTS; REMEDIES
18.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall be deemed to be an event of default ("Event of Default") by a
Party in the performance of its duties and obligations arising under this
Agreement.
18.1.1 A Party breaches or defaults in the performance of any
of such Party's duties or obligations arising under this Agreement involving the
payment of money, and after receiving written notice thereof from the other
Party, fails within ten (10) days from receipt of such notice to have fully
cured and corrected such breach or default.
18.1.2 A Party breaches or defaults in the performance of any
of such Party's material duties or obligations arising under this Agreement that
do not involve the payment of money, and after receiving written notice thereof
from the other Party, fails within thirty (30) days from receipt of such notice
(or such longer time as may reasonably be required to cure the default so long
as the defaulting Party commences to cure such failure within such thirty (30)
day period and diligently prosecutes such cure to completion) to have fully
cured and corrected such breach or default;
18.1.3 A Party makes an assignment of its rights hereunder for
the benefit of its creditors.
18.1.4 The filing by or against a Party of a petition to have
a Party adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against a Party,
the same is dismissed within thirty (30) days).
18.1.5 A Person (other than the other Party) obtains an order
or decree in any court of competent jurisdiction enjoining or prohibiting a
Party from substantially performing its obligations under this Agreement, and
such decree is not vacated within sixty (60) days after the granting thereof.
18.1.6 All or substantially all of the assets of a Party are
assumed by a trustee or other Person pursuant to a judicial proceeding, unless
possession or control of its assets is returned to such Party within sixty (60)
days.
18.1.7 Any representation, warranty, certification or
statement made in this Agreement by a Party shall prove to have been incorrect
in any material respect when made.
18.1.8 Any Event of Default by a Party of its obligations
under the License Agreement.
18.2 WAIVER. No waiver of any Event of Default shall be valid or
effective unless in writing and signed by the waiving Party. Any waiver of any
one Event of Default shall not constitute, or be construed as creating, a waiver
of any other Event of Default.
30
18.3 REMEDIES. Upon the occurrence of an Event of Default, then,
subject to the rights of Lenders under Articles 13 and 14, the non-defaulting
Party shall have all remedies available at law or in equity, except as
specifically provided herein. Such remedies shall include, without limitation:
18.3.1 Irvine may terminate FirstWorld's right to possession
of the Leased Premises by any lawful means, in which case this Agreement shall
terminate and FirstWorld shall immediately surrender possession of the Leased
Premises to Irvine. Such termination shall not affect any accrued obligations
of FirstWorld under this Agreement. Upon termination, Irvine shall have the
right to retake possession of the Leased Premises. Irvine shall also be entitled
to recover from FirstWorld:
(a) The worth at the time of award of the unpaid rent
and additional rent which had been earned at the time of termination;
(b) The worth at the time of award of the amount by
which the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that
FirstWorld proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by
which the unpaid rent and additional rent for the balance of the Term after the
time of award exceeds the amount of such loss that FirstWorld proves could be
reasonably avoided;
(d) Any other amount necessary to compensate Irvine
for all the detriment proximately caused by FirstWorld's failure to perform its
obligations under this Agreement or which in the ordinary course of things would
be likely to result from FirstWorld's default, including, but not limited to,
the cost of recovering possession of the Leased Premises, commissions and other
expenses of reletting, including necessary repair, reasonable attorneys' fees,
and any other reasonable costs; and
(e) At Irvine's election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law.
The term "rent" as used in this Agreement shall be deemed to mean the Rent and
all other sums required to be paid by FirstWorld to Irvine pursuant to the terms
of this Agreement. Any sum, other than Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (a) and (b) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of *** percent
( *** %) per annum. As used in subparagraph (c) above, the "worth at the time
of award" shall be computed by *** the amount at the ***
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*** CONFIDENTIAL TREATMENT REQUESTED
31
rate of the Federal Reserve Bank of San Francisco at the time of award ***
percent ( *** %). For purposes of this Section 18.3.1, Rent shall be assumed to
equal, on a quarterly basis, the average of the quarterly Rent payments made by
FirstWorld hereunder for the two year period preceding FirstWorld's default.
18.3.2 Irvine may elect not to terminate FirstWorld's right
to possession of the Leased Premises, in which event Irvine may continue to
enforce all of its rights and remedies under this Agreement, including the
right to collect all rent as it becomes due. Efforts by Irvine to maintain,
preserve or relet the Leased Premises, or the appointment of a receiver to
protect the Irvine's interests under this Agreement, shall not constitute a
termination of the FirstWorld's right to possession of the Leased Premises.
In the event that Irvine elects to avail itself of the remedy provided by
this Section 18.3.2, Irvine shall not unreasonably withhold, condition or
delay its consent to an assignment or subletting of the Leased Premises
subject to the reasonable standards for and other provisions related to
Irvine's consent as are contained in this Agreement.
18.3.3 The non-defaulting Party shall not be under any
obligation to observe or perform any covenant of this Agreement on its part
to be observed or performed which accrues after the date of any default by
the other Party unless and until the default is cured by the defaulting
Party, other than those provisions which are for the benefit of any Lender.
18.3.4 No delay or omission of either Party to exercise any
right or remedy shall be construed as a waiver of the right or remedy or of
any default. The acceptance by Irvine of rent shall not be a (i) waiver of
any preceding breach or default by FirstWorld of any provision of this
Agreement, other than the failure of FirstWorld to pay the particular rent
accepted, regardless of Irvine's knowledge of the preceding breach or default
at the time of acceptance of rent, or (ii) a waiver of Irvine's right to
exercise any remedy available to Irvine by virtue of the breach or default.
The acceptance of any payment from a debtor in possession, a trustee, a
receiver or any other Person acting on behalf of a Party or its estate shall
not waive or cure a default under this Agreement. No payment by FirstWorld or
receipt by Irvine of a lesser amount than the rent required by this Agreement
shall be deemed to be other than a partial payment on account of the earliest
due rent, nor shall any endorsement or statement on any check or letter be
deemed an accord and satisfaction and Irvine shall accept the check or
payment without prejudice to Irvine's right to recover the balance of the
rent or pursue any other remedy available to it. No act or thing done or not
done by FirstWorld or Irvine or their agents during the Term shall be deemed
a surrender or an acceptance of a surrender of the Leased Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed
by Irvine and consented to by each Lender.
18.4 LATE PAYMENTS. Any Rent or other sums due under this
Agreement that are not paid to Irvine within five (5) days of the date when due
shall bear interest at the rate of *** % per annum, but in no event to exceed
the maximum rate permitted by law, from the date
---------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
32
due until fully paid. The payment of interest shall not cure any default by
FirstWorld under this Agreement. In addition, FirstWorld acknowledges that the
late payment by FirstWorld to Irvine of Rent or other sums will cause Irvine to
incur costs not contemplated by this Agreement, the exact amount of which will
be extremely difficult and impracticable to ascertain. Those costs may include,
but are not limited to, administrative, processing and accounting charges, and
late charges which may be imposed on Irvine by the terms of other agreements to
which Irvine is a party. Accordingly, if any rent due from FirstWorld shall not
be received by Irvine or Irvine's designee within five (5) days after the date
due, then FirstWorld shall pay to Irvine, in addition to the interest provided
above, a late charge in the amount of *** Dollars ($ *** ) for each delinquent
payment. Acceptance of a late charge by Irvine shall not constitute a waiver of
FirstWorld's default with respect to the overdue amount, nor shall it prevent
Irvine from exercising any of its other rights and remedies.
18.5 RIGHT TO PERFORM. All covenants and agreements to be
performed by either Party under this Agreement shall be performed at such
Party's sole cost and expense and without any abatement of rent or right of
set-off. If either Party fails to pay any sum of money, other than rent, or
fails to perform any other act on its part to be performed under this Agreement,
and the failure continues beyond any applicable grace period set forth in this
Agreement, then in addition to any other available remedies, the other Party
may, at its election make the payment or perform the other act on the part of
the Party which failed to pay or perform. Either Party's election to make a
payment or perform an act on the other Party's part shall not give rise to any
responsibility of the paying or performing Party to continue making the same or
similar payments or performing the same or similar acts. Any Party which fails
to pay any sum of money or perform any act required of it hereunder shall,
promptly upon demand by the other Party, reimburse the other Party for all sums
paid by the other Party, if any, and all necessary incidental costs, together
with interest at the rate of *** % per annum, but in no event to exceed the
maximum rate permitted by law, from the date of the payment by the other Party.
Each Party shall thereafter have the same rights and remedies for a failure to
pay those amounts as it would have in the event of a monetary default by the
other Party.
18.6 WAIVER OF JURY TRIAL. IRVINE AND FIRSTWORLD EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE
WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR
SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT, FIRSTWORLD'S USE OR OCCUPANCY OF THE
LEASED PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
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*** CONFIDENTIAL TREATMENT REQUESTED
33
18.7 LIMITATION. The obligations of Irvine hereunder do not
constitute the personal obligations of the individual partners, members,
trustees, directors, officers or shareholders of Irvine. Except for the
obligations of FWC pursuant to the Guaranty to be executed and delivered by FWC
in favor of Irvine concurrently with the execution and delivery of this
Agreement, the obligations of FirstWorld hereunder do not constitute the
personal obligations of the individual partners, members, trustees, directors,
officers or shareholders of FirstWorld.
18.8 DAMAGES LIMITATION. Neither Party shall be entitled to recover
from the other Party any award of punitive damages, or any award for profits
lost by such Party on account of the other Party's failure to perform its
obligations under this Agreement (other than the right of Irvine to recover
unpaid Rent due or Rent which would have become due under this Agreement after a
breach hereof by FirstWorld). Without limiting the generality of the foregoing,
the foregoing waiver of the right to recover lost profits shall apply (a) to any
claims by FirstWorld that it lost Customers or potential Customers due to a
breach by Irvine and (b) to any claims by Irvine that it lost tenants or
potential tenants for its properties due to a breach by FirstWorld. The
foregoing limitation shall not, however, be construed as a waiver of any rights
of Irvine to recover sums expended pursuant to Section 6.2, above.
19.
PROTECTION OF CONFIDENTIAL INFORMATION
19.1 DESIGNATION OF CONFIDENTIAL INFORMATION. Any Confidential
Information submitted to either Party by or on behalf of the other Party or its
Affiliates shall be labeled as "Proprietary" or "Confidential" by use of a
prominent legend, label or sticker, except that Pre-Authorized Confidential
Information need not be so labeled.
19.2 OBLIGATIONS OF CONFIDENTIALITY. Each Party shall treat and
hold the Confidential Information in confidence and shall undertake the
following obligations with respect thereto:
19.2.1 Each shall keep confidential all Confidential
Information disclosed to it, in accordance herewith, and to protect the
confidentiality thereof, in the same manner in which it protects the
confidentiality of similar information and data of its own (at all times
exercising at least a reasonable degree of care in the protection of
Confidential Information); provided, however, that neither shall have any
obligation with respect to the use or disclosure to others of any Confidential
Information that can be established to have: (a) been known publicly; (b) been
known generally in the industry before communication; (c) become known publicly,
without fault on the part of either Party; (d) been known otherwise before
communication; (e) been received without any obligation of confidentiality from
a source (other than a Party or its Affiliates) lawfully having possession of
such information; or (f) been required to be disclosed by law or court order;
(g) been reasonably necessary to disclose in connection with the enforcement of
a Party's rights under this Agreement; (h) been reasonably necessary to disclose
in connection with a Financing, a Transfer, a borrowing by FWC or FirstWorld,
the sale of shares of FirstWorld or FWC, or any similar transaction, whether of
FirstWorld, FWC or any Affiliate of either entity; or (i) been reasonably
necessary to disclose in connection with any
34
financing, sale of shares, transfer of a substantial portion of the assets of,
or any similar transaction of Irvine or any of its Affiliates.
19.2.2 All Confidential Information which may be furnished to
a Party shall continue to be the property of the Party furnishing the same, or
the Affiliate submitting such Confidential Information on such Party's behalf.
19.2.3 No rights or licenses, express or implied, are hereby
granted to any Confidential Information, including without limitation, any
patents, trademarks, service marks, trade names, copyrights or trade secrets, as
a result of or related to this Agreement.
20.
ARBITRATION
Any dispute between Irvine and FirstWorld under this Agreement shall
be resolved by binding arbitration by JAMS/ENDISPUTE, or its successor, in
Orange, California ("JAMS") as provided in this paragraph; provided that either
Party shall retain the right to pursue any equitable remedy available to it by
filing a separate action in a court of competent jurisdiction. Within ten (10)
business days following submission of any such claim or dispute to JAMS, JAMS
shall designate three (3) arbitrators and each Party may, within five (5)
business days thereafter, veto one of the three persons so designated. If two
different designated arbitrators have been vetoed, the third arbitrator shall
hear and decide the matter. If the Parties both veto the same arbitrator, the
two remaining arbitrators shall choose a third arbitrator. Any arbitration
pursuant to this paragraph shall be decided within sixty (60) days of submission
to JAMS. The decision of the arbitrator shall be final and binding on all
Parties. The arbitrator shall have the right to order such discovery as the
arbitrator deems reasonable in connection with such arbitration. All costs
associated with arbitration (including, without limitation, reasonable
attorneys' fees) shall be awarded to the prevailing Party as determined by the
arbitrator. Notice of the demand for arbitration may be filed by either Party
to this Agreement. The award rendered by the arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
21.
NO BROKER
Irvine and FirstWorld each represents and warrants that it did not
engage any broker or finder in connection with this Agreement and that no Person
is entitled to any commission or finder's fee on account of any agreements or
arrangements made by such Party with any broker or finder. Each Party shall
indemnify the other Party against any breach of the foregoing representation by
the indemnitor.
35
22.
SUBORDINATION
FirstWorld accepts the Leased Premises subject and subordinate to any
mortgage, deed of trust or other lien presently existing upon all or any portion
of the same, but FirstWorld agrees that the holder or beneficiary of any such
mortgage, deed of trust or lien shall have the right at any time to subordinate
such mortgage, deed of trust or other lien to this Agreement on such terms and
subject to such conditions as such holder or beneficiary may deem appropriate in
its discretion. This provision is hereby declared to be self-operative and no
further instrument shall be required to effect such subordination of this
Agreement, provided that FirstWorld shall upon request execute an instrument
submitted by Irvine confirming the same. FirstWorld agrees to subordinate its
rights under this Agreement to any mortgage, deed of trust or other lien created
after the effective date of this Agreement affecting the Leased Premises so long
as in connection with such subordination the holder of such mortgage, deed of
trust or other lien agrees in writing that in the event of the foreclosure
thereof this Agreement shall not be terminated as to any portion of the Leased
Premises affected and encumbered by such mortgage, deed of trust or other lien
and the holder thereof shall recognize the rights of FirstWorld created by this
Agreement as to the portion of the Leased Premises encumbered by such mortgage,
deed of trust or other lien, which recognition agreement shall be in a form
reasonably acceptable to FirstWorld and such holder.
23.
WAIVERS
Failure of either Party to complain of any act or omission on the part
of the other Party shall not be deemed a waiver by the noncomplaining Party of
any of its rights under this Agreement. No waiver by either Party at any time,
express or implied, of any breach of any provisions of this Agreement shall be a
waiver of a breach of any other provision of this Agreement or a consent to any
subsequent breach of the same or any other provision. No acceptance by Irvine
of any partial payment shall constitute an accord or satisfaction but shall only
be deemed a part payment on account.
24.
MEMORANDUM OF AGREEMENT; UCC FILING
Concurrently with the execution and delivery of this Agreement, the
Parties shall promptly execute, acknowledge and record a Memorandum of Lease in
the form of Appendix 7 attached hereto and made a part hereof. Upon the request
of either Party, the other Party shall promptly execute and deliver (and the
Parties shall file with the Secretary of State), a UCC statement in form
reasonably satisfactory to both Parties evidencing the rights and interests of
the Parties pursuant to this Agreement. Upon the request of either Party from
time to time, the other Party shall execute and deliver additional UCC
statements to be filed with the Secretary of State to cover space within
Additional Available Spectrum Conduit and Available Other Conduit which is added
to the Leased Premises pursuant to the terms of this Agreement.
36
25.
ESTOPPEL CERTIFICATES
At any time and from time to time, upon not less than twenty (20)
days' prior written request (an "Estoppel Certificate Request") by either Party
to this Agreement or any Lender to FirstWorld (the "Requesting Party"), the
other Party to this Agreement (the "Certifying Party") shall execute,
acknowledge and deliver an Estoppel Certificate in reasonable form to the
Requesting Party (or directly to a third party whose name and address are
provided by the Requesting Party). Any Estoppel Certificate may be relied upon
by any third party (but not by the Requesting Party) to whom an Estoppel
Certificate is required to be directed. If the Certifying Party fails to execute
and deliver within such twenty (20) day period to the Requesting Party (or its
attorneys or the third party(ies) designated by such Requesting Party) an
Estoppel Certificate, setting forth with reasonable specificity any alleged
exceptions to the statements requested to be contained in such Estoppel
Certificate, then the Certifying Party shall be deemed for all purposes, whether
or not this Agreement has been terminated or is otherwise in full force and
effect, to have executed and delivered to the third party and the Requesting
Party an Estoppel Certificate, dated as of the effective date of the Estoppel
Certificate Request, certifying that this Agreement is in full force and effect,
that there are no amendments or modifications hereof and that the Requesting
Party is not in default under this Agreement.
26.
MISCELLANEOUS
26.1 NOTICES. Any notice, request, demand, consent, approval or other
communication required or permitted hereunder or by law shall be given in
writing, addressed as follows:
If to Irvine: The Irvine Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Vice President, Industrial Operations
With a copy to: The Irvine Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: General Counsel - Office
If to FirstWorld: FirstWorld Orange Coast
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: G. Xxxxxxxx Xxxxxxxx
37
With a copy to: FirstWorld Communications
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: General Counsel
Any Party may from time to time, by written notice to the other, designate a
different address which shall be substituted for the address specified above or
designate additional Parties to receive copies of notices. Any notice shall be
delivered either personally, by certified mail (return receipt requested), by
Federal Express or similar overnight courier or by facsimile transmission. If
personally delivered, notices shall be deemed received at the time of delivery.
If sent by certified mail, return receipt requested, notices shall be deemed
fully delivered and received upon delivery or refusal of delivery. If delivered
by Federal Express or similar overnight courier, notices shall be deemed fully
delivered and received upon receipt or two (2) Business Days after deposited
with such courier prior to its deadline for next Business Day delivery. If sent
by facsimile transmission, notices shall be deemed fully delivered and received
upon receipt provided that the transmission is by a facsimile machine which
confirms completed transmission, and a copy of the notice is simultaneously sent
by another method permitted under this Agreement. Except as otherwise expressly
provided herein, notices shall be deemed fully delivered and received at the
time of actual receipt.
26.2 DOCUMENTS IN RECORDABLE FORM. Wherever this Agreement
requires either Party to deliver to the other a document in recordable form,
both Parties shall be deemed to have consented to the recording of such
document, at the sole expense of the Party that elects to record it. For
purposes of this Agreement, FirstWorld shall be deemed to be the Party requiring
recordation of a memorandum of this Agreement and UCC statements contemplated
under Article 24.
26.3 FURTHER ASSURANCES. Each Party shall fully support and
cooperate with the other Party in giving effect to the purpose and intent of
this Agreement, including, without limitation, in a Party's efforts to obtain
from any Governmental Authority or any other Person any permit, entitlement,
approval, authorization or other right necessary or convenient in connection
with such Party's activities or operations, provided that the cooperation
required under this Section 26.3 shall be at no expense to the Party requested
to provide its cooperation. Without limiting the generality of the foregoing,
each Party agrees to execute and deliver such further documents, and perform
such further acts, as may be reasonably necessary to achieve the intent of the
Parties as set forth in this Agreement.
26.4 PERFORMANCE UNDER PROTEST. If at any time a dispute shall
arise as to the amount of any payment to be made by a Party to the other under
this Agreement, then the Party against whom the obligation to pay is asserted
shall pay the entire amount billed, but shall have the right to make payment
"under protest." The Party making the payment shall continue to have the right
to seek recovery of such sum. To the extent that it shall be determined that
the Party making the payment "under protest" was not required to make such
payment, such Party shall be entitled to recover such sum or so much of such sum
as such Party was not legally required to pay pursuant to this Agreement.
38
26.5 NO THIRD PARTY BENEFICIARIES. Except as to the permitted
successors and assigns of each Party, nothing in this Agreement shall be deemed
to confer upon any Person (other than Irvine, FirstWorld or Lenders) any right
to insist upon, or to enforce against Irvine or FirstWorld, the performance or
observance by either Party of its obligations under this Agreement.
26.6 INTERPRETATION. No inference in favor of or against any
Party shall be drawn from the fact that such Party has drafted any portion of
this Agreement. The Parties have both participated substantially in the
negotiation, drafting and revision of this Agreement with representation by
counsel and such other advisors as they have deemed appropriate. The words
"include" and "including" shall be construed to be followed by the words:
"without limitation."
26.7 DELIVERY OF DRAFTS. Neither Irvine nor FirstWorld shall be
bound by this Agreement unless and until each Party shall have executed at least
one counterpart of this Agreement and delivered such executed counterpart to the
other Party. The submission of draft(s) of this Agreement or comment(s) on such
drafts shall not bind either Party in any way and such draft(s) and comment(s)
shall not be considered in interpreting this Agreement.
26.8 HEADINGS. Article and section headings have been inserted
in this Agreement as a matter of convenience and for reference only. Such
section headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
26.9 CUMULATIVE REMEDIES. Subject to the express limitations set
forth in this Agreement, the remedies to which either Party may resort under
this Agreement are cumulative and are not intended to be exclusive of any other
remedies to which such Party may lawfully be entitled in the event of any breach
or threatened breach by the other Party of any provision of this Agreement.
26.10 ENTIRE AGREEMENT. This Agreement, including all exhibits
and appendices hereto, together with the License Agreement, constitutes the
entire agreement between the Parties hereto pertaining to the subject matter
thereof, and the final, complete and exclusive expression of the terms and
conditions thereof. All prior agreements, representations, negotiations and
understandings of the Parties hereto, oral or written, express or implied, are
hereby superseded and merged herein.
26.11 AMENDMENTS. No addition to or modification of any provision
contained in this Agreement shall be effective unless fully set forth in a
writing signed by Irvine and FirstWorld.
26.12 PARTIAL INVALIDITY. If any term or provision of this
Agreement or the application of such term or provision to any Party or
circumstance shall to any extent be invalid or unenforceable, then the remainder
of this Agreement, or the application of such term or provision to Persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected by such invalidity or unenforceability, and each remaining term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by Applicable Law.
39
26.13 SUCCESSORS AND ASSIGNS. This Agreement shall bind and
benefit Irvine and FirstWorld and their successors and assigns, but the
foregoing shall not limit or supersede any transfer restrictions contained in
this Agreement.
26.14 GOVERNING LAW. This Agreement and its interpretation and
performance shall be governed, construed and regulated by the Applicable Law of
the State of California, without regard to principles of conflict of Applicable
Law.
26.15 COUNTERPARTS. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the Parties listed below shall
constitute a single binding agreement.
26.16 TIME PERIODS. Whenever this Agreement requires either Party
to perform any action within a specified period, or requires that a particular
event occur within a specified period, if the last day of such period is not a
Business Day, then the period shall be deemed extended through the close of
business on the first Business Day following such period as initially specified.
This paragraph shall in no event delay or defer the effective date of any Rent
adjustment or the commencement of any period with respect to which interest on a
payment shall accrue or the date for payment of any Rent.
26.17 WAIVERS. The consent by one Party to any act by another
Party shall not be deemed to imply consent, or waiver of the necessity of
obtaining such consent, for the same or any similar acts in the future. No
waiver or consent shall be implied from silence or from any failure of a Party
to act, except as otherwise specified in this Agreement.
26.18 NEGATION OF PARTNERSHIP. The covenants, obligations and
liabilities of the Parties are intended to be several and not joint or
collective and nothing herein contained shall ever be construed to create an
association, joint venture, trust or partnership, or to impose a trust or
partnership covenant, obligation or liability on or with regard to the Parties.
Each Party shall be individually responsible for its own covenants, obligations
and liabilities as herein provided. No Party shall be under the control of or
shall be deemed to control the other Party. No Party shall be the agent of or
have a right or power to bind the other Party without its express written
consent, except as expressly provided in this Agreement.
26.19 ATTORNEYS' FEES. Each Party shall bear its own attorney's
fees incurred in relation to the negotiation and execution of this Agreement.
In the event of any action instituted between the Parties in connection with
this Agreement, the prevailing Party shall be entitled to recover from the
losing Party, the prevailing Party's costs and expenses, including reasonable
attorneys' fees. The prevailing Party for the purpose of this paragraph shall
be determined by the trier of the facts.
26.20 RELATIONSHIPS. Irvine and FirstWorld acknowledge and agree
that the relationship between them is solely that of independent contractors,
and nothing herein shall be construed to constitute the Parties as
employer/employee, partners, joint venturers, co-owners, or otherwise as
participants in a joint or common undertaking. Neither Party, nor its
employees, agents or representatives shall have any right, power or authority to
act or create any obligation, express or implied, on behalf of the other.
40
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
FIRSTWORLD ORANGE COAST,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President & Chief
Operating Officer
By: /s/ G. Xxxxxxxx Xxxxxxxx
-----------------------------------
Name: G. Xxxxxxxx Xxxxxxxx
Title: Senior Vice President
THE IRVINE COMPANY,
a Delaware corporation
By: /s/ Xxxxxxx X. Sim
----------------------------------
Xxxxxxx X. Sim,
Executive Vice President
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxx, President
of Irvine Industrial Company, a
division of The Irvine Company
41
Appendix 1
GLOSSARY OF DEFINED TERMS
Appendix 1
GLOSSARY OF DEFINED TERMS
(CONDUIT LEASE)
"Addition Memorandum" means a memorandum in the form of Appendix 5
adding space within Additional Available Spectrum Conduit or Available Other
Conduit to the Leased Premises under the Conduit Lease, or Additional Buildings
to the License Agreement.
"Additional Areas" means other areas which Irvine may develop within
the cities of Irvine, Newport Beach and Tustin and within certain unincorporated
areas of the County of Orange.
"Additional Area Buildings" means any additional commercial,
industrial and retail buildings which Irvine owns and develops within those
Additional Areas as to which Available Other Conduit is added to the Leased
Premises in accordance with the terms and provisions of the Conduit Lease.
"Additional Available Spectrum Conduit" means additional multi-tube
telecommunications conduit located within the Additional Spectrum of
substantially similar capacity and configuration to the Existing Available
Spectrum Conduit, or such other configuration as may be required under the
Conduit Lease.
"Additional Buildings" means all of the Additional Spectrum Buildings,
the Additional Area Buildings and the Additional Other Buildings, to the extent
added to this Agreement pursuant to the terms and provisions hereof.
"Additional License Fee Base" shall have the meaning set forth in
Section 6.1 of the License Agreement.
"Additional Networks" means any Networks established by FirstWorld to
service any Additional Areas.
"Additional Other Buildings" means any additional commercial,
industrial and retail buildings which Irvine owns and which are now existing or
are hereafter constructed, and which are located in the State of California but
not in the Spectrum or any Additional Areas as to which space within Available
Other Conduit is added to the Leased Premises in accordance with the terms and
provisions of the Conduit Lease.
"Additional Spectrum" means additional areas which Irvine intends to
develop within or as part of the Irvine Spectrum as more particularly shown on
the map attached hereto as Appendix 3 or located adjacent to the Existing
Spectrum.
"Additional Spectrum Buildings" means any additional commercial,
industrial and retail buildings which Irvine develops and owns within the
Additional Spectrum.
"Adjusted Gross Combined Revenue" means Adjusted Gross Revenue plus,
for the relevant period, the remainder, if any, of the Other Building Gross
Revenues for the relevant
2
period less the sum of the following for the same period, to the extent
derived from Customers occupying the applicable Additional Other Buildings or
Users providing services through FirstWorld or one or more of its Affiliates
to the applicable Additional Other Buildings: (i) Service Provider Payments;
and (ii) FirstWorld Consulting Revenues.
"Adjusted Gross Revenue" means, for the relevant period, the
remainder, if any, of the Gross Revenues for the relevant period less the sum of
the following for the same period (a) Third Party Building Access Payments paid
with regard to buildings in the Spectrum and any Additional Areas as to which
space in Available Other Conduit has been added to the Leased Premises in
accordance with the terms and provisions of the Conduit Lease; and (b) to the
extent derived from Customers occupying buildings within the Spectrum and any
such Additional Areas or from Users providing services through the Irvine
Networks to such buildings: (i) Service Provider Payments; and (ii) FirstWorld
Consulting Revenues.
"Affiliate" means, with respect to Irvine, FirstWorld or any other
Person, any other Person that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with the
Person specified, or who holds or beneficially owns fifty percent (50%) or more
of the equity interest in the Person specified or fifty percent (50%) or more of
any class of voting securities of the Person specified.
"Affiliated Lender" means any Lender which is also an Affiliate of
FirstWorld.
"Agreement" means this Conduit Lease.
"Applicable Law" means any applicable law, statute, ordinance,
regulation, rule, notice requirement, court decision, agency guideline,
principle of law and order of any Governmental Authority, including, without
limitation, those related to energy, the environment, motor vehicle safety,
public utility, zoning, building and health codes, occupational safety and
health and laws respecting employment practices, employee documentation, terms
and conditions of employment, and wages and hours.
"Available Conduit" means the Available Spectrum Conduit together with
the Available Other Conduit.
"Available Other Conduit" means telecommunications conduit which
Irvine installs in Additional Areas and as to which space within the same is
added to the Leased Premises in accordance with the terms and provisions of the
Conduit Lease.
"Available Spectrum Conduit" means the Existing Available Spectrum
Conduit together with the Additional Available Spectrum Conduit to the extent
constructed from time to time.
"Basic Percentage Rent" shall have the meaning set forth in Section
4.2 of the Conduit Lease.
"Bonus Percentage Rent" shall have the meaning set forth in Section
4.3 of the Conduit Lease.
3
"Buildings" means the Existing Spectrum Buildings together with any
Additional Buildings to the extent added to the License Agreement pursuant to
the terms thereof.
"Business Day" means any day which is not a Saturday, a Sunday or a
day on which national banks are obligated by law, regulation or executive order
to be closed.
"Cable" means all fiber optic cable installed in the Available Conduit
by or on behalf of FirstWorld or any of its Affiliates whether installed within
Conduit or extending into a building to be connected to Equipment located
therein.
"Certifying Party" shall have the meaning set forth in Article 25 of
this Agreement.
"City" means the City of Irvine, provided, however, that with regard
to any Additional Areas, the City shall mean the city within which the
applicable Additional Area is located, or if such Additional Area is in an
unincorporated area of a county, the county within which the same is located.
"Commencement Date" is defined in Article 3 of this Agreement.
"Condemnation" means any action in eminent domain, brought with regard
to the Leased Premises or any portion thereof, or with regard to any Building or
any portion thereof, by any Governmental Authority, or any conveyance to a
Governmental Authority in lieu of, or in settlement of, a pending or threatened
action in eminent domain.
"Conduit" means ** tubes being a portion of the Available Conduit
together with the pull boxes serving such tubes within which FirstWorld utilizes
space, and together with all additional conduit which may be installed by
FirstWorld within the Spectrum and within any Additional Areas (including
building entrance conduit systems), and any alterations, repairs, modifications
and improvements of any of the same, provided, however, that for those portions
of the Available Conduit which include more than *** tube, the Conduit shall
consist of: (a) where the Available Conduit includes *** tubes, *** tube and ***
tube and (b) wherever the Available Conduit includes *** tubes, *** tubes.
"Conduit Lease" means that certain Agreement For Lease of
Telecommunications Conduit made and entered into by and between Irvine and
FirstWorld and dated as of March 5, 1998.
"Confidential Information" means all information and documents which
either party furnishes to the other on or after the date of this Agreement,
which such party designates as proprietary or confidential or which is
Pre-Authorized Confidential Information not required to be so designated.
---------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
4
"CPI" means the Consumer Price Index, All Urban Consumers, Subgroup
"All Items" for the Los Angeles-Anaheim-Riverside Region (Base Period 1993-95 =
100), which is currently being published monthly by the United States Department
of Labor, Bureau of Labor Statistics. If, however, the CPI is changed, revised
or discontinued for any reason, there shall be substituted in lieu thereof, and
the term "CPI" shall thereafter refer to, the most nearly comparable official
price index of the United States Government so as to obtain substantially the
same result as would have been obtained had the original CPI not been changed,
revised or discontinued, which alternative index shall be selected by Irvine and
shall be subject to FirstWorld's written approval.
"Customers" means any Person who subscribes with FirstWorld for
Network services as an end user (as opposed to Users who contract for access to
a Network in order to provide telecommunications services to their own
customers).
"Equipment" means switches, connectors, amplifiers, and other
equipment located in a building and not within the Conduit and required to
connect Cable to a building and/or provide telecommunications services to the
occupants thereof.
"Equipment Space" means a reasonable amount of equipment room space in
each Building, not to exceed 100 square feet, that is sufficient to enable
FirstWorld to install the Cable and Equipment needed by FirstWorld to deliver
the services described by this Agreement, which Equipment Space shall be in a
reasonable configuration taking into account the size and shape of the equipment
room in which the same will be located and the number of service providers
requiring space within such equipment room. Once Equipment is installed in any
Building, Equipment Space shall exclude equipment room space not utilized by
FirstWorld.
"Estoppel Certificate Request" shall have the meaning set forth in
Article 25 of this Agreement.
"Event of Default" shall have the meaning set forth in Section 18.1 of
this Agreement.
"Existing Available Spectrum Conduit" means a multi-tube
telecommunications conduit which Irvine has constructed within the Existing
Spectrum at the approximate locations shown on Appendix 4 attached hereto.
"Existing Spectrum" means certain developed areas in the area commonly
referred to as the Irvine Spectrum and more particularly shown on the map
attached hereto as Appendix 2.
"Existing Spectrum Buildings" means the commercial, industrial and
retail buildings which are owned by Irvine within the Existing Spectrum and
which are listed on Appendix 4 attached to the License Agreement.
"Fair Market License Fee" shall have the meaning set forth in Section
6.1.4. of the License Agreement.
"Financing" means any mortgage financing, project financing,
refinancing or borrowing, or any sale and leaseback transaction in which
FirstWorld has the right to repurchase
5
the Leased Premises, secured by a Financing Encumbrance, the proceeds of which
are utilized in whole or in part to finance the cost of the design,
construction, replacement, improvement, maintenance or operation of one or more
Irvine Networks.
"Financing Encumbrance" means any mortgage, deed of trust, assignment,
security agreement, pledge, financing statement, conveyance and lease (in the
case of a sale and leaseback transaction) or any other instrument(s) or
agreement(s) intended to grant security for any financing, that encumbers all of
the Leased Premises and FirstWorld's rights under the License Agreement and the
Conduit Lease (or any portion of the Leased Premises together with but not
separate from FirstWorld's rights under the License Agreement and the Conduit
Lease to the extent affecting Buildings and areas, respectively, served by the
portion of the Leased Premises encumbered by the applicable Financing
Encumbrance) (as well as such other assets or rights as may be encumbered by
such instruments) as the same may be renewed, modified, consolidated, amended,
extended or assigned from time to time.
"FirstWorld" means FirstWorld Orange Coast, a California corporation.
"FirstWorld Consulting Revenues" means payment for service related to
advice or other provision of consulting services which does not involve payment
for the transmission of information over a Network.
"FirstWorld Marks" shall have the meaning set forth in Section 19.1 of
the License Agreement.
"Fiscal Year" means the fiscal year of FirstWorld, ending on September
30, as the same may be changed from time to time.
"FWC" means FirstWorld Communications, Inc., a California corporation.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity.
"Gross Revenues" means, for any period, all revenues received by
FirstWorld or any of its Affiliates, assignees or sublessees with respect to the
operation of the Irvine Networks during such period that are attributable to the
following derived from Customers occupying buildings within the Spectrum and any
Additional Areas, or from Users providing services through the Irvine Networks
to any Person in the Spectrum or any Additional Areas: (a) fees for access
rights and other services sold by FirstWorld to such Customers, (b) ***, (c) ***
, (d) the lease or re-sale of lines or circuit paths within the Irvine Networks
to Users to access customers of said Users, and (e) the lease to Customers of
Customer premises equipment which is not generally available and which is
required by FirstWorld as a condition of service.
---------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
6
"Hazardous Materials" means all materials, substances and wastes,
variously designated as hazardous or toxic substances, materials or wastes
pursuant to all federal, state, and local laws, statutes, ordinances, rules and
regulations relating to the environment, including without limitation, the
federal Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Superfund Amendment and
Reathorization Act and the California Health and Safety Code, and shall also
include, PCB's, asbestos, radon and fractions of petroleum, whether or not so
designated therein.
"Imposition" means the sum of all of the following to the extent
imposed on the Leased Premises, the Conduit, the Cable, the Irvine Networks, any
Equipment installed in connection therewith, or the services to be provided by
FirstWorld to Customers and Users; (i) all real estate taxes and assessments or
personal property taxes and assessments, as such property taxes may be assessed
or reassessed from time to time ; (ii) any and all other taxes, charges and
assessments which are levied with respect to this Agreement or to any of the
foregoing, other than general net income and franchise taxes of Irvine; (iv)
all charges, fees, taxes, surcharges or assessments of any kind or nature which
are in the future levied by any Governmental Authority, in lieu of, in addition
to or as a replacement for any other Imposition; and (iv) costs and expenses
incurred in contesting the amount or validity of any Imposition by appropriate
proceedings.
"Initial Installation Date" shall have the meaning set forth in
Section 2.10.1 of the Conduit Lease.
"Irvine" means The Irvine Company, a Delaware corporation.
"Irvine Marks" shall have the meaning set forth in Section 19.1 of the
License Agreement.
"Irvine Networks" means the Spectrum Network and any Additional
Networks.
"Irvine's Cure" shall have the meaning set forth in Section 14.4 of
this Agreement.
"Irvine's Cure Rights" shall have the meaning set forth in Section
14.4 of this Agreement.
"Leased Premises" means the space within the tubes of the Conduit
together with the non-exclusive right to use undivided space within the pull
boxes serving such tubes.
"Lender" means any Person(s), including bondholder(s), and any
Affiliate of FirstWorld providing Financing for the ownership, design,
construction, improvement, maintenance, replacement or operation of one or more
Networks or any matter related thereto, including, without limitation, any
trustee or collateral agent appointed by any such Lender to represent its
interests.
"Lender's Cure" shall have the meaning set forth in Section 13.4 of
this Agreement.
"Lender's Cure Rights" shall have the meaning set forth in Section
13.4 of this Agreement.
7
"License Agreement" means that certain Telecommunications System
License Agreement dated as of March 5, 1998, by and between Irvine and
FirstWorld.
"License Fee" shall have the meaning set forth in Section 6.1.1 of the
License Agreement.
"Market Adjustment Date" shall have the meaning set forth in Section
6.1.4 of the License Agreement.
"Marks" means the FirstWorld Marks and the Irvine Marks.
"Memorandum of Lease" means a recordable memorandum of the Conduit
Lease in the form of Appendix 7 attached to the Conduit Lease to be executed
between the parties.
"Networks" means one or more neutral broadband fiber optic
telecommunications pathways which are available to all competing
telecommunication service providers for a fee on a non-discriminatory basis and
are inter-operable with an incumbent local telephone carrier, but excluding any
transport links between pathways and the applicable switching facility.
"Off Net" means that FirstWorld is providing service to the end user
over a third party's transport system.
"On Net" means that FirstWorld's Cable is connected to the applicable
building, and FirstWorld is providing service to the end user over such Cable.
"Other Building Gross Revenue" means, for any period, all revenues
received by FirstWorld or any of its Affiliates, assignees, or sublessees with
respect to services provided during such period that are attributable to the
following derived from Customers occupying Additional Other Buildings or Users
providing services to Persons occupying Additional Other Buildings: (a) fees for
access rights and other services sold by FirstWorld to such Customers, (b) ***,
(c) *** , (d) the lease or re-sale of lines or circuit paths to Users to access
customers of said Users in such Additional Other Buildings, and (e) the lease to
Customers of Customer premises equipment which is not generally available and
which is required by FirstWorld as a condition of service.
"Party" means Irvine or FirstWorld as a party to this Agreement.
"Payment Date" means each May 15, August 15, November 15 and February
15, or the next succeeding Business Day if such date is not a Business Day.
"Permitted Assignee" shall have the meaning set forth in Section 13.1
of this Agreement.
---------------------------
*** CONFIDENTIAL TREATMENT REQUESTED
8
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or any agency or political
subdivision thereof or any other entity.
"Phasing Plan" means the plans showing the phasing for installation of
the Irvine Networks or portions thereof. The initial Phasing Plan for the
Network to be installed in the Existing Spectrum is attached to this Agreement
as Appendix 6. Additional Phasing Plans will be prepared for any Additional
Spectrum areas and for any Additional Areas, in accordance with the terms and
provisions of the Conduit Lease.
"Plans" shall have the meaning set forth in Section 8.1 of the License
Agreement.
"Pre-Authorized Confidential Information" means Confidential
Information which pursuant to this Agreement is identified as Pre-Authorized
Confidential Information, and which shall be Confidential Information but need
not be so designated.
"Rent" means the sum of the Basic Percentage Rent and the Bonus
Percentage Rent.
"Requesting Party" shall have the meaning set forth in Article 25 of
this Agreement.
"Service Provider Payments" means all sums collected by FirstWorld or
any of its Affiliates, assignees or sublessees, on behalf of any Users or other
service providers.
"Serviced Buildings" means all buildings and other facilities within
both the Spectrum and such Additional Areas as may be incorporated into this
Agreement.
"Spectrum" means the Existing Spectrum together with the Additional
Spectrum to the extent developed from time to time.
"Spectrum Network" means the Network to be installed by FirstWorld
within the Spectrum. If FirstWorld elects to service the Spectrum with more
than one Network in accordance with terms and provisions of this Agreement, then
all such Networks shall collectively be the Spectrum Network.
"Spectrum Service Area" means the Existing Spectrum together with the
Additional Spectrum to the extent developed and added to the Conduit Lease from
time to time.
"Term" shall mean the period commencing on the Commencement Date and
continuing until December 31, 2027.
"Third Party Building Access Payments" means payments for access to
buildings for which FirstWorld does not have a right of entry pursuant to the
License Agreement.
"Transfer" shall have the meaning set forth in Section 12.1 of this
Agreement.
"Unavoidable Delay" means any cause beyond the reasonable control of
the party affected, including, without limitation, the following:
9
(a) Failures of or threats of failure of facilities, including
power failures and the failure of any component of a Network;
(b) Floods, earthquakes, tornadoes, storms, fires, lightning,
epidemics or other casualties;
(c) Acts of war, riots, civil disturbances or disobediences;
(d) Labor disputes, labor or material shortages (including the
inability to obtain Equipment necessary to provide service) or acts of sabotage;
(e) Restraint by court order or Governmental Authority;
(f) Any failure to obtain the necessary permits, authorizations
or approvals from any Governmental Authority not caused by the failure of a
Party to take the actions required of it to obtain the same; or
(g) The need to condemn or acquire property prior to performing
any act.
"Underground Agencies" means one or more underground utility
monitoring companies.
"Users" means any Person who contracts with FirstWorld for access to a
Network in order to provide telecommunications services to its own customers (as
opposed to Customers who contract with FirstWorld for Network services as end
users).
10
APPENDIX 2
DEPICTION OF EXISTING SPECTRUM
THIS APPENDIX CONTAINS A MAP OF THE EXISTING SPECTRUM
(AS DEFINED)
APPENDIX 3
DEPICTION OF ADDITIONAL SPECTRUM
THIS APPENDIX CONTAINS A MAP OF THE ADDITIONAL SPECTRUM
(AS DEFINED)
APPENDIX 4
EXISTING AVAILABLE SPECTRUM CONDUIT
THIS APPENDIX CONTAINS A SERIES OF MAPS OF THE AVAILABLE SPECTRUM CONDUIT
(AS DEFINED)
APPENDIX 5
ADDITION MEMORANDUM
ADDITON MEMORANDUM NO.
(CONDUIT LEASE)
THIS ADDITION MEMORANDUM is dated as of _____________,_____, and made by
and between THE IRVINE COMPANY, a Delaware corporation ("Irvine"), and
FIRSTWORLD ORANGE COAST, a California corporation ("FirstWorld").
A. Prior to the date hereof, Irvine and FirstWorld have entered into that
certain AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT dated as of
____________, 1998, (the "Conduit Lease") providing for, among other things, the
lease of space within certain Conduit to FirstWorld as more particularly set
forth in the Conduit Lease.
X. Xxxxxx now desires to add to the Leased Premises under the Conduit
Lease, space within additional Available Conduit in accordance with the terms,
provisions and conditions of the Conduit Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows;
1. DEFINITIONS. Capitalized terms used in this Addition Memorandum and
not otherwise defined herein shall have the meaning given to them in the Conduit
Lease.
2. ADDITIONAL BUILDING. Pursuant to the provisions of Article 2 of the
Conduit Lease, effective as of ______________,_____, (the "Effective Date"),
space within the additional Available Conduit more particularly identified in
Exhibit A attached hereto and incorporated herein by this reference is added to
the Leased Premises. The Available Conduit as to which space is hereby added to
the Leased Premises services that portion of the [Additional Spectrum/Additional
Area of ___________] shown on Exhibit B. From and after the Effective Date, for
purposes of determining Rent due pursuant to Sections 4.1, 4.2 and 4.3 of the
Conduit Lease, Gross Revenues shall include Gross Revenues attributable to the
[Additional Spectrum\Additional Area] shown on Exhibit B.
3. FORCE AND EFFECT. Except for the addition to the Leased Premises set
forth in this Addition Memorandum, and the inclusion of the [Additional
Spectrum\Additional Area] shown
Appendix 5
Page 1 of 2
in Exhibit B for purposes of determining Rent and calculating Gross Revenues,
the Conduit Lease shall remain unmodified and in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Addition Memorandum as
of the day and year first above written.
FIRSTWORLD ORANGE COAST,
a California corporation
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
THE IRVINE COMPANY,
a Delaware corporation
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
Appendix 5
Page 2 of 2
APPENDIX 6
PHASING PLAN
THIS APPENDIX CONTAINS A COLOR CODED MAP OF THE AREA IN WHICH
THE COMPANY'S FACILITIES ARE TO BE CONSTRUCTED AND INDICATES
WHICH AREAS MUST BE COMPLETED AT VARIOUS TIMES
APPENDIX 7
MEMORANDUM OF LEASE
RECORDED REQUESTED BY AND
WHEN RECORDED MAIL TO:
-------------------------
-------------------------
-------------------------
-------------------------
--------------------------------------------------------------------------------
MEMORANDUM OF CONDUIT LEASE
THIS MEMORANDUM OF AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT is
dated as of ______________, 1998, and made by and between THE IRVINE COMPANY, a
Delaware corporation ("Irvine"), and FIRSTWORLD ORANGE COAST, a California
corporation ("FirstWorld").
A. Prior to the date of this Memorandum, Irvine and FirstWorld have
entered into that certain AGREEMENT FOR LEASE OF TELECOMMUNICATIONS CONDUIT
dated as of ________________, 1998 (the "Conduit Lease").
X. Xxxxxx and FirstWorld now desire to execute this Memorandum and to
cause the same to be recorded in the Official Records of Orange County,
California, to provide record notice of the rights, interests and obligations
set forth in the Conduit Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
1. LEASED PREMISES. Irvine has leased to FirstWorld space within
certain, but not all, tubes of the Existing Available Spectrum Conduit, together
with the non-exclusive right to undivided space within the pull boxes serving
the same, subject to, upon and in accordance with the terms, provisions and
conditions set forth in the Conduit Lease. The approximate location of the
Existing Available Spectrum Conduit is more particularly shown on Exhibit "A"
attached hereto and incorporated herein by the reference.
2. TERM. The Term of the Lease is for the period commencing upon the
date of the Conduit Lease, and expiring on December 31, 2027, with no
extensions.
Appendix 7
Page 1 of 3
3. DEFINED TERMS. Initially capitalized terms used in this Memorandum
and not otherwise defined herein shall have the meanings given to them in the
Conduit Lease.
4. OTHER PROVISIONS. The purpose of this Memorandum is to provide record
notice of the rights, interests and obligations under the Conduit Lease, and all
of the terms, provisions and conditions of the Conduit Lease are incorporated in
this Memorandum as though the same were set forth herein in full. This
Memorandum shall in no way be construed to modify, amend, limit or expand, in
any manner whatsoever, the terms, provisions and conditions of the Conduit
Lease. In the event of any inconsistency between the terms, provisions and
conditions of this Memorandum and the terms, provisions and conditions of the
Conduit Lease, the terms, provisions and conditions of the Conduit Lease shall
prevail.
IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the day
and year first above written.
FIRSTWORLD ORANGE COAST,
a California corporation
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
THE IRVINE COMPANY,
a Delaware corporation
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Appendix 7
Page 2 of 3
STATE OF____________ )
) ss.
COUNTY OF___________ )
On ______________, ____, before me, ____________________________, Notary
Public, personally appeared _____________________________ and __________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------
Notary Public
STATE OF____________ )
) ss.
COUNTY OF___________ )
On ______________, ____, before me, ____________________________, Notary
Public, personally appeared _____________________________ and __________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------
Notary Public
Appendix 7
Page 3 of 3
