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EXHIBIT 10.14
LEASE/LICENSE AGREEMENT
THIS LEASE/LICENSE AGREEMENT (this "Agreement") is made on this 30th
day of April 1999 by and among HEBRON COMMUNICATIONS CORPORATION, a Florida
corporation ("Hebron"), and AMERIVISION COMMUNICATIONS, INC., an Oklahoma
corporation ("AmeriVision").
Recitals
Hebron owns and operates telecommunications switches in Chicago,
Illinois and Oklahoma City, Oklahoma providing switched-resold
telecommunications service (the "Telecommunications Business") and holds certain
licenses, permits and authorizations (the "FCC Authorizations") issued by the
Federal Communications Commission (the "FCC") and certain licenses, permits and
authorizations (the "State Authorizations") issued by certain state regulatory
agencies having jurisdiction over the Telecommunications Business (collectively,
the "State Commissions"). The State Authorizations and the FCC Authorizations
shall be referred to herein collectively as the "Regulatory Authorizations."
Hebron owns and operates certain assets in connection with an Internet
service provider project (the "Internet Business") heretofore conducted in
conjunction with AmeriVision. The Internet Business and the Telecommunications
Business shall be referred to herein collectively as the "Business."
Pursuant to the Asset Purchase Agreement of even date herewith (the
"Purchase Agreement"), Hebron has agreed to sell to AmeriVision, and AmeriVision
has agreed to purchase from Hebron, certain Assets that comprise the Business
under the terms and conditions set forth therein (any capitalized terms used
herein but not defined shall have the meaning set forth in the Purchase
Agreement). In the interim between the date hereof and the Closing Date under
the Purchase Agreement, Hebron and AmeriVision wish to transfer from Hebron to
AmeriVision custody and control of the Assets, which AmeriVision shall hold and
operate as if the Assets were owned by AmeriVision herein between the
Commencement Date (defined below) and the Closing Date (or such other date as
may be set forth herein), all as further set forth herein.
Agreement
NOW, THEREFORE, taking the foregoing into account, and in consideration
of the mutual covenants and agreements set forth herein, the parties, intending
to be legally bound, hereby agree as follows:
1. Term. The term of this Agreement (the "Term") shall be deemed to
have begun on February 1, 1999 (the "Commencement Date") and shall terminate,
unless earlier terminated in accordance with the terms herewith, upon the
earlier of the following: (1) the
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date of the consummation of the Closing of the Purchase Agreement; (2) one (1)
year after the date of the Purchase Agreement; (3) by either party in the event
of any adverse vote of the shareholders of Hebron on the transactions
contemplated by the Purchase Agreement; or (4) by the non-breaching party in the
event the Purchase Agreement is terminated under Section 11.1(f) or (h) thereof.
2. Lease and License of Assets. Hebron hereby leases to AmeriVision,
and AmeriVision hereby leases from Hebron, for the Term all of the Assets
(excluding the Intangible Property) on the terms and conditions set forth
herein. Hebron hereby grants to AmeriVision, and AmeriVision hereby accepts from
Hebron, for the Term an exclusive license to use all of the Intangible Property.
Hebron represents, warrants and covenants that AmeriVision shall have the
exclusive right to possess, use and control the Assets during the Term, free
from interference from Hebron or any person claiming by, through or under
Hebron.
3. Payments; Proceeds of Operation of Assets.
(a) During the Term, AmeriVision shall pay to Hebron a fee in the
amount of Three Hundred Ninety Four and 40/100 Dollars ($394.40) per day,
payable in arrears on the last day of each calendar month ending within, and on
the last day of the Term. Notwithstanding the foregoing, AmeriVision shall pay
to Hebron fees due hereunder from the period of February 1, 1999 to April 30,
1999 upon the satisfaction of the following: (i) successful completion of
approval by Hebron's shareholders to the transactions set forth in the Asset
Purchase Agreement between AmeriVision and Hebron dated as of April 30, 1999;
and (ii) delivery of documentation to AmeriVision reflecting such shareholder
approval.
(b) In consideration of the mutual promises and covenants contained
herein and the terms of the Asset Purchase Agreement, AmeriVision agrees to duly
execute and deliver to Hebron the Payables Note on the date of this Agreement.
(c) All revenue resulting from the operation of the Business or any
of the Assets shall be for the account of AmeriVision, and AmeriVision shall be
entitled to collect all accounts receivable arising therefrom. On the date of
this Agreement, in exchange for AmeriVision's execution and delivery of the
Payables Note, Hebron shall assign to AmeriVision all of Hebron's accounts
receivable that comprise the Remaining Buyer Debt.
4. Benefit, Assumption of Contracts.
(a) During the Term, AmeriVision shall pay and discharge in a timely
manner the obligations of Hebron under each of the Contracts listed on Schedule
2.8 of the Purchase Agreement. AmeriVision may, but shall not be obligated to,
assume any of the Contracts prior to the date of the consummation of the Closing
of the Purchase Agreement. If
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AmeriVision elects to assume any of the Contracts prior to such date, Hebron
shall assign such Contracts to AmeriVision and shall cooperate with AmeriVision
to effectuate such assignment, including without limitation by using its best
efforts to obtain consent to assignment from other parties to any Contracts
where such consents may be necessary or appropriate. In any event, Hebron shall
provide the benefits of each Contract to AmeriVision and shall take no action
and (other than with respect to AmeriVision's duty to pay and discharge Hebron's
obligations pursuant to such Contracts set forth herein) make no omission that
would cause or permit such contracts to lapse, go into default or otherwise no
longer be in full force and effect and available to AmeriVision.
(b) To the extent that any Contract that AmeriVision wishes to
assume is not capable of being sold, assigned, transferred, delivered or
subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, transfer, delivery or sublease thereof. In those cases where
consents, assignments, releases and/or waivers have not been obtained at or
prior to the Commencement Date to the transfer and assignment to AmeriVision of
the Contracts, this Agreement and any assignment executed pursuant hereto, to
the extent permitted by law, shall constitute an equitable assignment by Hebron
to AmeriVision of all of Hebron's rights, benefits, title and interest in and to
the Contracts, and where necessary or appropriate, AmeriVision shall be deemed
to be Hebron's agent for the purpose of obtaining all of Hebron's rights and
performing and discharging all of Hebron's liabilities arising after the
Commencement Date under such Contracts. Hebron shall use its best efforts to
provide AmeriVision with the financial and business benefits of such Contracts
(including, without limitation, permitting AmeriVision to enforce any rights of
Hebron arising under such Contracts), and AmeriVision shall, to the extent
AmeriVision is provided with the benefits of such Contracts, perform and in due
course pay and discharge in a timely fashion all debts, obligations and
liabilities of Hebron under such Contracts to the extent that AmeriVision was to
assume those obligations pursuant to the terms hereof.
5. Further Assurances. From time to time during the Term, each party
hereto will execute all such instruments and take all such actions as any other
party shall reasonably request, without payment of further consideration, in
connection with carrying out and effectuating the intent and purpose hereof and
all transactions contemplated by this Agreement, including without limitation
the execution and delivery of any and all confirmatory and other instruments,
and any and all actions which may reasonably be necessary to complete the
transactions contemplated hereby. The parties shall cooperate fully with each
other and with their respective counsel and accountants in connection with any
steps required to be taken as part of their respective obligations under this
Agreement.
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6. Representations and Warranties.
(a) Hebron represents and warrants as follows: (i) Hebron is
organized, existing and active under the laws of the jurisdiction of its
organization; (ii) Hebron has the requisite power and authority to execute,
deliver and perform this Agreement; (iii) the execution, delivery and
performance of this Agreement have been authorized and approved, subject to
further authorization or consent of Hebron's shareholders to the Closing under
the Purchase Agreement; (iv) the execution, delivery and performance of this
Agreement by Hebron does not conflict with any other agreement to which Hebron
is a party, other than Contracts as to which consent to assignment is required;
and (v) the execution, delivery and performance of this Agreement by Hebron does
not conflict with the terms and conditions set forth in Hebron's FCC
Authorizations or State Authorizations, including the statutes, rules,
regulations and policies of the FCC or the statutes, rules, regulations and
policies of each of the State Commissions applicable thereto.
(b) AmeriVision represents and warrants as follows: (i) AmeriVision
is organized, existing and in good standing under the laws of the jurisdiction
of its organization; (ii) AmeriVision has the requisite power and authority to
execute, deliver and perform this Agreement; (iii) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
of AmeriVision; (iv) the execution, delivery and performance of this Agreement
by AmeriVision does not conflict with any other agreement to which AmeriVision
is a party; (v) AmeriVision holds all the licenses and authorizations required
under the Communications Act of 1934, as amended (the "Communications Act"), or
the rules, regulations and policies of the FCC for, and used in the operation
of, the Assets, and the licenses and authorizations required under applicable
state statute, or the rules, regulations and policies of each of the State
Commissions for, and used in the operation of, the Assets (collectively, the
"AmeriVision Authorizations"); and (vi) the AmeriVision Authorizations are in
full force and effect and have not been revoked, suspended, canceled, rescinded
or terminated and have not expired.
7. Insurance; Maintenance Agreements. During the Term and to the extent
permitted under the Contracts listed on Schedule 2.8, AmeriVision shall: (i)
maintain in full force the types and levels of insurance coverage required under
the terms of each such Contract for the Assets; (ii) otherwise provide adequate
fire and other risk insurance covering the full replacement value of the Assets;
and (iii) perform all affirmative obligations required by any Contract necessary
to maintain in effect for the benefit of Hebron any maintenance or factory
support obligations of any other Contract party. To the extent that AmeriVision
reasonably determines that it may not perform any of the obligations set forth
above consistent with the terms of any of the Contracts, AmeriVision shall
reimburse Hebron for the reasonable costs associated with Hebron performing such
obligation provided that, should Hebron be required to maintain insurance
coverage for the Assets, it shall name AmeriVision as an additional
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insured or take such other action at AmeriVision's reasonable request to ensure
that AmeriVision is eligible to receive the economic benefit of such policy.
8. Risk of Loss. To the extent of the insurance coverage maintained by
AmeriVision with respect to the Assets, the risk of loss, damage or destruction
to any of the Assets shall be borne by AmeriVision at all times during the Term.
In the event of any such covered loss, damage, or destruction, the proceeds of
any claim for any loss payable under any insurance policy with respect thereto
shall be used to repair, replace, or restore any such property to its former
condition. In the event of any loss or damage to any of the Assets, AmeriVision
shall notify Hebron thereof in writing immediately. Such notice shall specify
with particularity the loss or damage incurred, the cause thereof (if known or
reasonably ascertainable), and the insurance coverage.
9. Operation of the Business.
(a) AmeriVision shall: (i) operate and care for the Assets, and keep
its books and accounts, records and files, in a commercially reasonable manner
consistent with past practice; (ii) operate the Assets in accordance with the
terms of the AmeriVision Authorizations and in compliance with the
Communications Act, FCC rules, regulations and policies, and all other
applicable state and other laws, rules and regulations, and State Commission
rules, and maintain the AmeriVision Authorizations in full force and effect and
timely file and prosecute any necessary applications for renewal of the
AmeriVision Authorizations; (iii) use best efforts to preserve the organization
of the Business intact, and preserve the goodwill of the Business's suppliers,
advertisers, customers and others having business relations with it; (iv) keep
all Tangible Personal Property and Real Property in good operating condition
(ordinary wear and tear excepted) and repair and maintain adequate and usual
supplies of inventory, office supplies, spare parts and other materials as have
been customarily maintained in the past; and (v) furnish to Hebron monthly
reports in the same form and approximately at the same time as the internally
prepared business statements submitted to Coast Business Credit under the LSA.
Nothing in this paragraph shall be deemed to require AmeriVision to make any
material investment in the Business.
(b) Hebron shall not, without the prior written consent of
AmeriVision: (i) sell, lease, transfer, alienate or encumber, or agree to sell,
lease, transfer, alienate or encumber any of the Assets; (ii) enter into any
contract of employment with any employee or employees of the Business; or (iii)
amend or terminate any of the Contracts or enter into any contract, lease or
agreement with respect to the Business.
10. Unwind. Upon a termination of this Agreement other than concurrent
with a Closing of the Purchase Agreement, AmeriVision and Hebron shall cooperate
to unwind the effect hereof, and Hebron shall reassume the contracts and leases
assigned to and assumed by AmeriVision, if any, and AmeriVision and Hebron shall
each execute such documents,
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instruments and agreements, and take such other action, as may be necessary to
implement any such transaction and carry out the intent of this Section,
provided, however, that nothing in this Section 10 shall be construed to require
AmeriVision to disgorge any of the economic benefits of operating the Assets
during the period from the Commencement Date through the date of such
termination.
11. Indemnification.
(a) AmeriVision shall indemnify, defend, and hold harmless Hebron
from and against any and all claims, losses, costs, liabilities, damages and
expenses (including reasonable attorneys' fees and other expenses incidental
thereto) of every kind, nature, and description arising out of: (i) any
misrepresentation or breach of any warranty of AmeriVision in this Agreement; or
(ii) any failure by AmeriVision to comply with its covenants or agreements set
forth in this Agreement.
(b) Hebron shall indemnify, defend, and hold harmless AmeriVision
from and against any and all claims, losses, costs, liabilities, damages, and
expenses (including reasonable attorneys' fees and other expenses incidental
thereto) of every kind, nature, and description arising out of: (i) any
misrepresentation or breach of any warranty of Hebron in this Agreement; or (ii)
any failure by Hebron to comply with its covenants or agreements set forth in
this Agreement.
12. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective
representatives, successors and assigns; provided, however, that neither party
may assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the other party, and any such attempted assignment or
delegation without such consent shall be void.
13. Amendments; Waiver. The terms, covenants, representations,
warranties and conditions of this Agreement may be changed, amended, modified,
waived, or terminated only by a written instrument executed by the party waiving
compliance. The failure of any party at any time or times to require performance
of any provision of this Agreement shall in no manner affect the right of such
party at a later date to enforce the same. No waiver by any party of any
condition or the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
14. Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly
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made and received when personally served or when delivered by Federal Express or
a similar overnight courier service, expenses prepaid, addressed as follows:
If to AmeriVision, to:
AmeriVision Communications, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
with a copy, which shall not constitute notice, to:
Wiley, Rein & Fielding
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Fax: 000-000-0000
If to Hebron, to:
Hebron Communications Corporation
0000 Xxxxxxxxx Xx., Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx X. Telling
Fax: (000) 000-0000
with a copy, which shall not constitute notice, to:
Xxxx Xxxx Xxxxxxx Xxxxxx & Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Fax: 000-000-0000
Any party may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section providing for the giving of notice.
15. Governing Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the State of Oklahoma, without giving
effect to principles of conflicts of laws.
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16. Entire Agreement. This Agreement and the Purchase Agreement
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof, and supersede all prior
agreements, understandings, inducements or conditions, express or implied, oral
or written, relating to the subject matter hereof and thereof. The express terms
hereof and thereof control and supersede any course of performance and/or usage
of trade inconsistent with any of the terms hereof or thereof. This Agreement
has been prepared by all of the parties hereto, and no inference of ambiguity
against the drafter of a document therefore applies against any party hereto.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE TO LEASE/LICENSE AGREEMENT
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
HEBRON COMMUNICATIONS CORPORATION
Attest: By: /s/ Xxxx X. Telling
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Xxxx X. Telling, President/CEO
AMERIVISION COMMUNICATIONS, INC.
Attest: By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
