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EXHIBIT 10.1
MMDS/MDS CHANNEL LEASE AGREEMENT
This MMDS/MDS Channel Lease Agreement (this "Agreement") is entered
into this ________________day of ___________, 19__________, between __________
__________________________a _______________________________Corporation, having
its principal place of business at ________________________________(hereinafter
referred to as "Lessor"), and Heartland Wireless Commercial Channels, Inc., a
Delaware corporation, having its principal place of business at 000 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000 (hereinafter referred to as "Lessee").
W I T N E S S E T H
WHEREAS, Lessor is the Federal Communications Commission (hereinafter
referred to as the "FCC") conditional licensee in FCC File No. _____________,
Call Sign _____________, for a Multichannel Multipoint Distribution Service
or Multipoint Distribution Service Station (hereinafter referred to as the
"Station"), to operate on the ___________________________Channels (hereinafter
referred to as the "Channels"), as designated by Subpart K of Part 21 of the
FCC's Rules or any successor thereto, serving the _____________________________
___________________area (hereinafter referred to as the "Market Area"), by
line-of-sight transmissions from the Station; and
WHEREAS, Lessor desires to lease service on all of the Channels to
Lessee and Lessee desires to lease such service from Lessor.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, undertakings, covenants and conditions set forth herein, the parties
hereto do hereby agree as follows:
1. USE OF THE CHANNELS.
(a) LEASED TIME. Lessor hereby leases to Lessee the
complete transmission capacity on all of the Channels 24 hours a day, seven
days a week, every week, as necessary for Lessee's use of the Channels for
transmission of Lessee provided video and audio programming, data and other
information in connection with Lessee's wireless cable business at reception
points selected by Lessee in the Market Area (the "Wireless System") commencing
on the day the Station is constructed and extending for the term of this
Agreement and any renewal(s) thereof.
(b) SCOPE OF USE. The transmission capacity may be used
by Lessee for any legal purpose as part of its Wireless System, without any
restriction on the substance, format or type of information or signal to be
transmitted thereover except that Lessee shall not transmit video and audio
programming, data and other information that does not comply with FCC rules and
policies or any other applicable federal, state or local requirements,
including, but not limited to, FCC policies concerning indecent or obscene
programming.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 1
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(C) OBLIGATION TO TRANSMIT. Nothing in this Agreement
shall be construed to obligate or create a duty on the part of Lessee to
actually provide to Lessor for transmission any minimum amount of video and
audio programming, data or other information during that air time covered
hereby or to transmit such programming to any minimum number of subscrivers.
(d) PREEMPTION. The use of the Channels leased hereunder
are subject to preemption by Lessor in accordance with any requirement or order
of the FCC or any other local, state or federal regulatory authority with
jurisdiction over the operation of the Channels. However, in the event such
preemption exceeds 168 consecutive hours on any one of the Channels or a total
of 336 hours in any thirty (30) day period on any or all of the Channels,
Lessee may terminate this Agreement without further liability to Lessor.
2. TERM.
(a) INITIAL TERM. Subject to the provisions for earlier
termination contained in Section ll hereof, the term of this Agreement shall
commence upon the date first written above and shall continue in full force and
effect for a period of ten (10) years from the Start Date as defined in Section
6 hereof. Said period is hereinafter referred to as the "Initial Term."
(b) RENEWAL TERM. Subject to the provisions for earlier
termination contained in Section ll hereof, the term of this Agreement shall
automatically be extended for up to two (2) successive additional terms of ten
(10) years each (such additional term(s) are hereinafter referred to as the
"Renewal Term(s)") unless Lessee shall have served written notice on Lessor at
least three (3) months prior to the expiration date of the then-current Initial
Term or Renewal Term that it elects not to renew this Agreement for the
subsequent Renewal Term. Commencing no later than three (3) months prior to
the expiration of the second Renewal Term, if this Agreement has been so
extended by Lessee, Lessor and Lessee shall attempt in good faith to negotiate
the terms of a further extension of the Agreement.
3. FACILITIES.
(a) TRANSMISSION POINT. Lessor's FCC application
specifies a transmitter site located at coordinates __________________________
___________________ in ___________________________(the "Present Transmission
Point"). Lessee has advised Lessor that it has obtained reasonable assurance
of the availability of a new Transmission Point (the "New Transmission Point"),
the coordinates of which are _____ degrees _____' _____" N latitude and
_____ degrees _____' _____" W longitude. Lessor must co-locate all of the
microwave transmission facilities, if necessary, to be utilized in Lessee's
Wireless System serving the Market Area at the New Transmission Point. Lessor
and Lessee agree that the Station shall be built at the New Transmission Point
if no FCC application for modification or amendment is required for such
construction provided, however, that if further FCC approval is required for
construction of the Station at the New Transmission Point, Lessor shall, within
thirty (30) days of the date of the Agreement, provide Lessee with an amendment
to its pending application or application for modification of conditional
license to specify the New Transmission Point for the
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 2
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Station and to conform the design and equipment of the Station to that of other
facilities Lessee intends to utilize in connection with its Wireless System in
the Market Area. Lessor shall submit such amendment/application to the FCC
within five (5) working days of completion thereof. It is the intent of the
parties that Lessee's design of the Station and Lessee's specification of
equipment shall be approved by Lessor unless Lessor reasonably believes that
the design of the Station or specification of equipment proposed by Lessee will
result in non-compliance with the rules or policies of the FCC or Lessor's
inability to provide service as contemplated by this Agreement. In the event
of such reasonable disapproval by Lessor, the parties shall utilize their best
efforts to redesign the Station to meet both the needs of Lessee's Wireless
System and Lessor's concerns.
(b) CONSTRUCTION SCHEDULE. Within fifteen (15) days
after the date of the Agreement, or if a Modified Conditional License is
necessary pursuant to which construction may be undertaken at the New
Transmission Point, within fifteen (15) days of the grant of a Modified
Conditional License, Lessee shall order the Transmission Equipment (as defined
in Section 3(d) hereof), utilizing its reasonable efforts to specify a delivery
schedule as necessary to ensure delivery of equipment and construction of the
Station by the earlier of ninety (90) days after such grant date or such date
that may be specified by the FCC for completion of construction of the Station.
In the event that Lessee is unable to complete construction of the Station
within such ninety (90) day period for causes reasonably beyond its control,
Lessee's time to complete construction shall be extended for an additional
thirty (30) day period or such other period as Lessor may specify.
(c) CERTIFICATION OF COMPLETION OF CONSTRUCTION. Within
three (3) workdays after completing construction of the Station, Lessee shall
notify Lessor in writing of such completion. Within the time specified in
21.44 (A) of the FCC Rules and in no event later than five (5) workdays of
receiving such notice, Lessor shall file a Certification of Completion of
Construction of the Station on FCC Form 494A or any successor form designated
by the FCC (the "Construction Certificate"), along with any other documentation
as may be necessary at the time to permit the commercial operation of the
Station. All FCC fees with respect to such certification shall be paid by
Lessee.
(d) TRANSMISSION EQUIPMENT. Lessee shall purchase and
install such transmitters and other equipment, including, without limitation,
transmitters, combiners and waveguide (hereinafter referred to as the
"Transmission Equipment"), which equipment may be shared with other stations,
as is required to operate the Channels in accordance with the provisions of FCC
rules and regulations and the Station's FCC license. Lessor's consent, which
shall not be unreasonably withheld, shall be required as to all Transmission
Equipment. Within ten (10) days after the date of this Agreement, Lessee shall
provide Lessor with a list of all proposed Transmission Equipment. Lessor
shall be considered to have consented thereto unless he states his reasons for
declining consent in writing within ten (10) days after receipt of any list of
Transmission Equipment has been provided to the Lessor by the Lessee. It is
the intent of the parties that Lessee's specifications of Transmission
Equipment shall be approved unless Lessor reasonably believes that use of the
Transmission Equipment specified by Lessor will result in non-compliance with
Lessor's FCC license, the rules or policies of the FCC or Lessor's ability to
provide service as required by this Agreement.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 3
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(e) LEASE OF TRANSMISSION EQUIPMENT. Lessor shall have
no ownership or security interest in the Transmission Equipment. All
Transmission Equipment shall be owned by Lessee and shall be leased to Lessor
for the sum of One Dollar ($1.00) per year for the entire Initial Term and any
renewal(s) thereof. In the event of termination (except as a result of
Lessor's breach) or non-renewal of this Agreement, Lessor shall have the right
to purchase the Transmission Equipment at fair market value except for such of
the Transmission Equipment as is shared with other FCC- licensed stations. In
the event that Lessee shall desire to replace any of the Transmission
Equipment, Lessor shall reasonably agree to such replacement and Lessor and
Lessee will cooperate to satisfy any FCC requirements with respect thereto.
(f) LEASE OF TRANSMISSION POINT. Lessee agrees to
utilize its best efforts to enter a binding lease or option for sufficient
space at the New Transmission Point for installation and operation of the
transmission facilities (the "New Transmission Point Space") within thirty (30)
days after execution of this Agreement and shall, in any event, secure such a
lease or option no later than the date on which the FCC grants a Modified
Conditional License. Such option and/or lease shall provide for (1) lease or
renewal terms, of such space for the entire Initial Term and any renewals
thereof, and (2) the right of Lessee to sublet such space to Lessor for the
entire term thereof. Copies of such option and lease shall be provided to
Lessor within ten (10) days of the execution thereof. Such lease shall provide
for full and equal rights to access by Lessor and by Lessee or by the
authorized representatives of either.
(g) SUBLEASE OF TRANSMISSION POINT SPACE. Lessee agrees
to sublease the New Transmission Point Space to Lessor during the term of the
Agreement for One Dollar ($1.00) per month, provided that Lessor shall have no
liability under Lessee's lease with the owner of the New Transmission Point
Space, and no liability to Lessee under the sublease except for the payment as
specified in this Section. In the event of termination (except as a result of
Lessor's breach) or non-renewal of this Agreement, Lessee if so requested by
Lessor and at Lessor's cost and expense, cooperate in seeking assignment of the
lease for that part of the Transmission Point used for operation of the
Transmission Equipment or in any efforts by Lessor to secure from the owner of
the New Transmission Point a lease for the space utilized for the Transmission
Equipment at the New Transmission Point.
(h) MODIFICATION OF LICENSE. Lessor and Lessee
acknowledge the possibility that the location and technical configuration of
the Station may from time to time prevent Lessee from optimizing its Wireless
System throughout the term of this Agreement. Lessor therefore agrees that if
at any time and from time to time Lessee so requests in writing, Lessor shall
use its best efforts to modify its FCC application(s) or license(s) to meet the
reasonable requirements of Lessee. Lessee shall pay all costs associated with
such modifications, except the initial modification, (including engineering and
legal fees, equipment costs and construction expenses), as provided in Section
5(d) hereof.
4. OPERATION OF THE CHANNELS.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 4
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(a) OPERATION OF THE TRANSMISSION EQUIPMENT. Lessee
shall supply, at its sole cost and expense, personnel to operate and maintain
the Transmission Equipment on a day-to-day basis. Said personnel shall insure
that the Transmission Equipment shall at all times meet the technical operating
requirements set forth in the FCC License and the rules and regulations of the
FCC. All operations, maintenance and repair activities shall be undertaken at
such times as are consistent with the operating requirements of Lessee's
business. Lessor and Lessee shall cooperate to insure that each of them at all
times is fully aware of any and all operational, maintenance and repair
activities on the Channels. All maintenance personnel shall be under the
technical direction, supervision and control of Lessor but shall be contracted
for and shall be supervised on a day-to-day basis by Lessee at Lessee's sole
expense. All repairs shall be completed as soon as reasonably possible
following notification by Lessor to Lessee of the need thereof. Lessee shall
have access to the station facilities at all times for any of the foregoing
activities. Lessor shall not be liable for any costs and/or liability
whatsoever arising as a result of Lessee's work on the Transmission Equipment
pursuant to this Agreement, except liability caused by Lessor's own negligence.
(b) OPERATION OF ADDITIONAL EQUIPMENT. Lessee, at its
own expense, and with the prior written approval of Lessor, which shall not be
unreasonably withheld, may make alterations and/or additions to the
Transmission Equipment (including, without limitation, encoding and/or
addressing equipment selected by it) as may be required by the exigencies of
its business from time to time, provided that such alterations and additions do
not violate any FCC rules or regulations. Any alterations/additions shall be
provided by Lessee and title thereto shall remain in Lessee. Lessee shall be
responsible for the operation, maintenance and repair of all equipment provided
by it and shall indemnify Lessor against and shall pay all costs, including
legal, engineering, equipment, construction, installation and other expenses
associated with any alterations or attachments to the Transmission Equipment,
provided, however, that Lessee has approved such costs in advance.
(c) INTERFERENCE WITH EXISTING OPERATIONS. Lessor and
Lessee will cooperate in the operation and maintenance of the Transmission
Equipment as well as any alterations or attachments added thereto, in such a
fashion as to insure that the Channels do not create impermissible interference
to any FCC applicants, permittees or licensees which are entitled to protection
from such interference under the rules and regulations of the FCC, provided
that Lessee shall be responsible at its sole expense for eliminating such
interference.
(d) RECEPTION EQUIPMENT. The parties contemplate that
the Station will be licensed and operated on a non-common carrier basis.
Therefore, the parties agree that Lessor has no responsibility hereunder to
acquire or provide any reception antennas, down converters, decoders,
descramblers, related power supplies or any associated equipment ("Reception
Equipment") required to display signals transmitted over the Channels on a
television set. Lessee may, in its sole discretion and on terms and conditions
of its choosing, from time to time, install or cause to be installed such
Reception Equipment as may be required in order for the general public, or any
member thereof, to view the programs to be transmitted over the Channels.
Title to all Reception Equipment provided by Lessee hereunder shall vest in
Lessee or its designee. Lessee shall be required to install Reception
Equipment only at particular locations selected by it. Reception equipment
shall be installed, maintained, operated and controlled by Lessee consistent
with FCC rules and regulations.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 5
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(e) PROGRAM ORIGINATION AND DELIVERY. Lessee shall be
solely responsible for the origination of all programming to be transmitted
over the Channels and the delivery of such programming to the New Transmission
Point, including but not limited to the costs of point-to-point microwave
channels and earth stations, if any, which it may require for such purpose.
Lessee shall bear all costs and expenses of purchasing, installing, operating
and maintaining those facilities. Any personnel required to install, operate
and maintain any program origination and delivery facilities shall be provided
by Lessee, at its sole cost and expense, and such personnel shall be under
Lessee's exclusive control.
(f) OPERATING EXPENSES. Lessee shall be solely
responsible for and shall indemnify and hold Lessor harmless from all operating
expenses resulting from provision of service over the Channels. Said operating
expenses shall include all expenses incurred by Lessor in providing service on
Lessee's behalf, provided such expenses are approved in advance by Lessee. Any
operating costs incurred by Lessor shall be passed through each month on a
dollar-for-dollar basis to Lessee and shall be due and payable as provided in
Section 5(d) hereof.
(g) COOPERATION OF LESSOR AND LESSEE. Lessor shall use,
operate and maintain the Transmission Equipment in such a way as not to
interfere with Lessee or cause damage to Lessee's facilities, equipment or
Wireless System. Lessee shall use, operate and maintain the equipment
(including any attachments installed to the Transmission Equipment) in such a
way as not to interfere with Lessor or cause damage to the Transmission
Equipment.
(h) MAINTENANCE OF AUTHORIZATION. Throughout the Initial
Term and any Renewal Term, Lessor shall maintain in force all licenses and
other authorizations required in connection with Lessee's use of the Channels
hereunder, and shall file and prosecute all necessary applications for license
renewal and all periodic reports required by the FCC. Lessor shall not assign,
transfer, sell, trade, dispose or otherwise encumber such licenses and other
authorizations or modify them in such a way as to impair Lessee's rights
hereunder without the prior written consent of Lessee.
(i) ADDITIONAL AUTHORIZATIONS. Where requested to do so
by Lessee in writing, Lessor shall utilize its best efforts to obtain and
maintain in force such additional or other authorization(s) as would help
Lessee in its business (including but not limited to modification of
Transmission Point, authorizations for relays, repeaters and boosters), obtain
all governmental authorizations and fulfill all other usual and customary
requirements associated with obtaining and maintaining such authorizations.
Lessee shall pay all reasonable costs, including legal, engineering, equipment,
construction, installation and other expenses associated with obtaining and
maintaining such authorization and constructing, operating, and maintaining the
authorized facilities as provided in Section 5(d) hereof, except the initial
modification and extension of time to construct as called for in this
Agreement.
(j) FURTHER EFFORTS. Lessor shall, at Lessee's expense,
file and diligently prosecute such reasonable petitions to deny or other
protests against applications of third parties for licenses as may be requested
by Lessee.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 6
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(k) PROSECUTION OF APPLICATIONS AND INITIAL MODIFICATION
AMENDMENTS. In the event any person petitions the FCC to deny or otherwise
challenges any application filed pursuant to this Agreement, or in the event
the FCC grants any application filed pursuant to this Agreement and any person
petitions for review or reconsideration of such grant before the FCC or seeks
judicial review of such grant, then Lessor and Lessee shall at Lessor's
expense, unless otherwise agreed to in writing, oppose such petition or
challenge before the FCC or defend such grant by the FCC diligently and in
absolute good faith. Should the FCC deny any application filed by Lessor
hereunder, Lessee and Lessor shall utilize their best efforts, at Lessor's
expense, to secure reconsideration or review of such denial and, should such
denial become a Final Order, shall utilize their best efforts to redesign the
Station in order to meet Lessee's legitimate business needs and to satisfy the
objections of the FCC. Any modifications, applications and amendments filed
after the FCC grants the initial modification shall be at the expense of
Lessee.
(l) COVENANT NOT TO AMEND OR MODIFY. Because the
location and configuration of the Station and other facilities constructed by
Lessee hereunder are critical to Lessee's business, Lessor shall not attempt to
further amend the pending Application other than as provided for in Section
3(h) hereof or to modify the Modified Conditional License, or any other
application filed hereunder or modify any license or other authorization
secured hereunder without the prior written consent of Lessee, which consent
shall not be unreasonably withheld.
5. CHARGES.
(a) TRANSMISSION FEE. Commencing on the Start Date and
continuing each month thereafter for the Initial and subsequent Renewal Terms
of this Agreement, Lessee shall pay to Lessor in consideration of lease of the
Channels provided to Lessee hereunder and the performance by Lessor of its
additional obligations hereunder, a minimum monthly fee (the "Transmission
Fee"), of ______________________________________ Dollars ($______________) in
each of the first twelve months following the Start Date, __________________
Dollars ($____________) in the thirteenth through twenty-fourth months and
______________________ Dollars ($______________) for each of remaining months
in the Initial and Renewal Term(s). The Transmission Fee shall only be paid
in those months in which the amount payable to Lessor as a Transmission Fee
pursuant to this provision is greater than the net amount due and payable to
Lessor as a Connection Fee pursuant to Section 5(b) hereof.
(b) CONNECTION FEE. Commencing on the Start Date and
continuing each month thereafter, Lessee shall pay to Lessor a monthly
connection fee (the "Connection Fee") which shall be the product of the number
of wireless cable subscribers receiving Lessee's wireless cable operation over
the Station in the Market Area during the previous calendar month and a per
subscriber fee of _____________ Cents ($0._____) per month. For the purposes
of computing the Connection Fee due for any month, the term "subscribers" shall
mean the number of subscribers in the Market Area who have received Lessee's
wireless cable programming over Lessor's Station during the prior month and
whose payment for such programming is not more than ten (10) days past due from
its original due date. For purposes of the definition of subscriber, (1) each
single family residential dwelling and each single business office or place
shall be considered one subscriber and
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 7
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(2) in those situations where programming is sold in bulk for viewing at
isolated locations in the same facility (e.g., where a number of viewing units
are grouped for billing purposes, such as may be the case with condominiums and
hotels) and the Lessee's rates therefor are less than its prevailing monthly
rate for the sale of the Lessee's programming over Lessee's Wireless System to
individual subscribers in the Market Area, the number of subscribers from such
bulk billing points shall be determined by dividing the total monthly revenues
derived from the sale of programming over Lessee's Wireless System to the bulk
billing point by the Lessee's then prevailing basic monthly rate for the sale
of programming to individual subscribers receiving wireless cable programming
over Lessor's Channels in the Market Area. The determination of the number of
subscribers in any given month may be subject to redetermination by the Lessee,
with notice to the Lessor, to take into account those subscribers who have not
paid for at least one full month's subscription fee and those who the Lessee
may have disconnected or terminated for lack of payment. In such event, the
Connection Fees for the applicable month shall be recalculated at any time
within three (3) months of the end of the month in question and deficiencies in
the Connection Fee for such month shall be paid promptly by the Lessee to the
Lessor and any excess in the Connection Fee for such month shall be applied to
offset against any then current payments due from the Lessee to the Lessor.
(c) REQUIRED CERTIFICATE, INVOICE AND PAYMENT PROCEDURE.
Lessee shall, within fifteen (15) days after the end of each month after the
Start Date, provide Lessor with a certificate showing the number of subscribers
for the preceding month, computed in accordance with Section 5(b). The
Connection Fee or Transmission Fee payable by Lessee to Lessor, as determined
in accordance with Sections 5(a) and 5(b) hereof, shall be computed on the
certificate, and Lessee shall forward said Connection Fee or Transmission Fee
to Lessor at the time of tendering the certificate. Lessee shall include on
the certificate any other information reasonably requested by Lessor so that
Lessor may accurately determine that the Connection Fee tendered by Lessee has
been calculated correctly pursuant to Section 5(b) hereof. Any other charges
to be paid by Lessee hereunder shall be invoiced to Lessee on a monthly basis
by Lessor. Said invoices shall contain an itemization of the charges contained
therein, and shall be paid by Lessee within twenty (20) days after the date of
receipt thereof.
(d) LESSOR'S EXPENSES. Lessee shall pay all reasonable
costs incurred by Lessor subsequent to the execution of this Agreement, except
initial modification application and any extension applications ("Lessor's
Expenses"), including filing fees, legal, engineering and consulting fees,
equipment, construction, installation and other expenses associated with
obtaining, protecting and maintaining Lessor's FCC authorization (including the
satisfaction of any conditions thereon), with performing under this Agreement,
and with constructing, operating and maintaining the authorized facilities, so
long as such expenses relate to activities required of Lessor under this
Agreement or are otherwise approved by Lessee, and so long as Lessee has
approved the engineering, legal, consulting or other firm used by Lessee.
(e) RIGHT TO AUDIT. Lessor and Lessee shall, while this
Agreement is in force, keep, maintain and preserve complete and accurate
records and accounts, including invoices, correspondence, ledgers, financial
and other records reasonably required to determine Lessor's and Lessee's
charges hereunder, and such records and accounts shall be available for
inspection and audit
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 8
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at the respective offices of Lessor and Lessee at any time or times during the
time service is being provided to Lessee hereunder or within ninety (90) days
thereafter, during reasonable business hours, by Lessor or Lessee or their
nominee(s). Lessor and Lessee shall provide each other with five (5) business
days' advance written notice of their intent to inspect said records and
accounts prior to being allowed to do so. In the event of any dispute to the
amount of Connection Fees due to Lessor, such dispute and no other dispute
arising under this Agreement, shall be resolved by arbitration before the
American Arbitration Association (the "AAA") on a fast track single arbitrator
basis. Such dispute shall not in any way result in a default hereunder unless
the award of the AAA is not complied with. All non-public information
obtained by Lessee or Lessor during any audit shall be maintained on a
confidential basis.
(f) PRORATION OF FEES. In the event that (i) the Start
Date shall be a date other than the first day of a calendar month, (ii) this
Agreement shall be terminated on a date other than the last day of a calendar
month and it is determined that such termination shall have occurred in a
manner not affecting Lessor's right to payments hereunder, the then
Transmission Fee or Connection Fee due Lessor in such month shall be pro rated.
(g) SUBSCRIBER CONTRACTS. Lessor shall not interfere
with the right of Lessee or its designee to lawfully modify, waive, rescind,
terminate, in whole or in part, or cancel any and all services or contracts
with Subscribers. In case any such services or contracts are rescinded,
terminated or canceled, Lessor shall not be entitled to any participation in
revenues or claims whatsoever with respect to the unperformed portion of any
such contract.
(h) CPI ADJUSTMENT. At the commencement of the fourth
year following the Start Date and each year thereafter, the Transmission and
Connection Fees shall be adjusted upward in the same percentage amount as the
U.S. Labor Department Index of Living Costs shall have increased in the
previous calendar year.
6. START DATE. The Start Date shall be the date upon which
Lessee first provides service over the Channels to a subscriber in the Market
Area.
7. UNAUTHORIZED RECEPTION OVER CHANNELS. Lessor if requested by
Lessee and to the extent requested, shall use its best efforts to prevent any
unauthorized individual or entity from receiving the signals transmitted over
the Channels. Lessee shall be responsible for and shall reimburse Lessor for
all costs, including legal, engineering, equipment, construction, installation
and other expenses associated with any prevention efforts regarding
unauthorized reception over the Channels initiated by Lessor on Lessee's behalf
provided that Lessee has approved such costs in advance.
8. INDEMNIFICATION. Each party shall forever protect, save,
defend and keep the other party harmless and indemnify said other party against
and from any and all claims, demands, losses, costs (including reasonable
attorneys' fees), damages, suits, judgments, penalties, expenses and
liabilities of any kind or nature whatsoever arising directly or indirectly our
of the acts, omissions, negligence or willful misconduct of the said party, its
employees or agents in connection with the
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 9
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performance of this Agreement. Moreover, Lessee shall forever protect, save,
defend and keep Lessor and its owners, employees and agents harmless and
indemnify them against (i) any and all claims, demands, losses, costs
(including reasonable attorneys' fees), damages, suits, judgments, penalties,
expenses and liabilities resulting from the transmission of programming or
other material over the Channels, including claims of indecency, obscenity,
libel, slander or the infringement of copyright or the unauthorized use of any
trademark, trade name, service xxxx or any other claimed harm or unlawfulness
arising from the transmission of any programming; and (ii) against claims for
infringement of patents arising from Lessor's or Lessee's use of the
Transmission Equipment in connection with apparatus or Wireless Systems of
Lessee. Where such indemnification is sought by a party (the "Claiming
Party"), (a) it shall notify the other party (the "Indemnifying Party")
promptly of any claim or litigation or threatened claim to which the
indemnification relates, (b) upon the Indemnifying Party's written
acknowledgment of its obligation to indemnify in such instance, in form and
substance satisfactory to the Claiming Party, the Claiming Party shall afford
the Indemnifying Party the opportunity to participate in and, at the option of
the Indemnifying Party, control, compromise, settle, defend or otherwise
resolve the claim or litigation (and the Claiming Party shall not effect any
such compromise or settlement without prior written consent of the Indemnifying
party) and (c) the Claiming Party shall cooperate with the reasonable requests
of the Indemnifying Party in its above-described participation in any
compromise, settlement, defense or resolution of such claim or litigation.
9. INSURANCE. The Lessee shall during the entire term of this
Agreement (and all renewal(s) thereof) carry insurance covering (i) general
liability, (ii) loss or damage to the Transmission Equipment, (iii) loss and
liability for accidents and other losses in such amounts as is reasonably
prudent in view of the potential losses covered. The Lessor shall be named as
co-insured on each of such policies and upon request the Lessee shall provide
the Lessor with certificates of insurance demonstrating such coverage and
co-insured status prior to commencement of construction as provided for in
Section 3(b) hereof.
10. REPRESENTATIONS AND WARRANTIES. Each of the parties hereto
represents and warrants to the other the following, with respect to facts and
issues relating to it:
(a) ORGANIZATION. Lessor has full power and authority to
carry out all of the transactions contemplated hereby. Lessee has full power
and authority to own property and to carry out all of the transactions
contemplated hereby.
(b) COMPLIANCE WITH LAW. Lessor and Lessee shall comply
with all material laws, rules and regulations governing the business, ownership
and operation of the Channels.
(c) REQUISITE AUTHORITY. All requisite resolutions and
other authorizations necessary for the execution, delivery, performance and
satisfaction of this Agreement by Lessor and Lessee have been duly adopted and
complied with.
(d) LITIGATION AND CLAIMS. No litigation, proceeding,
complaint, investigation or controversy is pending by or before any court or
regulatory agency or to the knowledge of Lessor
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 10
11
or Lessee is threatened that is material to this transaction, and there is no
basis known to it for any such litigation, proceeding, controversy or claim.
11. TERMINATION.
(a) TERMINATION OF FCC AUTHORIZATION. Either party may
terminate this Agreement upon prior written notice to the other that Lessor's
authority to provide all of the Channels in accordance with the terms of this
Agreement shall have terminated by the FCC. Such termination shall extinguish
and cancel this Agreement and its effect absolutely without further liability
on the part of either party to the other except that Lessee shall remain
obligated to pay all Transmission Fees, Connection Fees and monthly operating
charges through the date of such termination. If such FCC termination is
caused in whole or in part by a material breach of the Agreement by Lessee,
such termination shall not affect or diminish the rights, claims or remedies
available in equity or at law to Lessor.
(b) TERMINATION BY REASON OF DEFAULT AND NONPERFORMANCE.
At the option of a non-defaulting party, this Agreement may be terminated upon
the material breach or default by the other party of its duties and obligations
hereunder is such breach or default shall continue for a period of thirty (30)
consecutive days after such party's receipt of written notice thereof from the
non-defaulting party. Failure to make any payment of Transmission Fees,
Connection Fees or operating charges shall, if such failure continues for a
period of thirty (30) days after written notice thereof to Lessee, constitute a
material breach of this Agreement by Lessee. In such event, Lessor may elect
to cancel and terminate this Agreement without prejudice to any legal rights it
may otherwise enjoy, and Lessee shall remain obligated to pay all Transmission
Fees, Connection Fees and operating charges through the date of such
termination.
12. NOTICE. Any notice required to be given by any party to any
other party shall be deemed to have been sufficiently given it in writing,
deposited in the United States mail in a sealed envelope with postage thereon
prepaid and certified or registered, return receipt requested, addressed to
Lessor or to Lessee as the case may be, at their respective addresses set forth
in the preamble hereto, or, if different, at the last known principal business
address of each such party. A copy of any notice to Lessee shall be made in
the same manner to:
Heartland Wireless Commercial Channels, Inc.
000 X. Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Sr. Vice President-Operations
Heartland Wireless Communications, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: General Counsel
A copy of any notice to Lessor shall be made in the same manner to:
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 11
12
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13. MISCELLANEOUS.
(a) FORCE MAJEURE. Notwithstanding anything contained
herein to the contrary, no party shall be liable to any other for failure to
perform any obligation hereunder (nor shall any charges or payments be
obligated to be made n respect thereof) if prevented from doing so by reason of
fires, strikes, labor unrest, embargoes, civil commotion, rationing or other
orders or requirements, acts of civil or military authorities, acts of God or
other contingencies beyond the reasonable control of the parties, and all
requirements as to notice and other performance required hereunder within a
specified period of pendency of any such contingency which shall interfere with
such performance.
(b) ASSIGNMENT OF INTERESTS. Lessor may not assign its
rights or interests in the authorizations for the Channels or under this
Agreement except with the prior written consent of Lessee; provided, that
Lessor may assign the license for the Station to any entity whose majority
voting interests are owned by Lessor's present shareholders or family members
or heirs thereof, and which assignment requires only pro forma approval by the
FCC, without the prior written consent of Lessee. Lessee may assign or
sublease its rights and interests under this Agreement without the prior
written consent of Lessor.
(c) OPTION TO PURCHASE. Lessor hereby grants Lessee, or
its assignee, an option (the "Option") to acquire by assignment all of Lessor's
right, title and interest in and to the Channels and the Station. The price
for the assignment (the "Option Price") shall be ____________________
($______). This Option may be exercised by notice thereof any time after
twelve months from the execution of this Agreement. Each of Lessor and Lessee
shall join in and file such applications, notices and reports as may be
required or requested by the FCC to gain its consent to the assignment to
Lessee of such FCC license. The application therefor shall be prepared and
filed within thirty (30) days of Lessor's receipt of Lessee's notice of Option
exercise. Lessee shall be responsible for all costs and fees associated with
such application and prosecution of assignment. The license for the Station
shall be assigned to Lessee and Lessee shall pay Lessor the Option Price by
agreement of assignment reasonably satisfactory in form and substance to
Lessee, within thirty (30) days of the date the FCC's grant of its consent to
assignment is a Final Order.
(d) RIGHT OF FIRST REFUSAL. If at any time Lessor
receives and intends to accept a bona fide offer to purchase the Station, it
shall deliver to Lessee notice of the offer. The notice shall specify the
proposed purchase price for the Station and the terms for payment thereof. For
a period of thirty (30) days from receipt of such notice, Lessee shall have a
right to notify Lessor that it intends to purchase the Station at the price and
on the terms specified in the notice. If Lessee declines to exercise this
right, Lessor will be permitted to consummate the proposed sale or transfer,
subject to Lessee's prior and superseding interest as created and existing
under the terms and provisions of this Agreement. In the event that any
material term of the original offer is changed in
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 12
13
any respect or a material new offer is presented, before accepting such offer
Lessor must first follow the procedures specified in the foregoing, providing
Lessee notice with regard to the revised offer and giving it the opportunity to
exercise its right of first refusal thereto. At the commencement of any
negotiations with any party for the acquisition by that party of the
authorizations, Lessor will provide such party, in writing, with full
disclosure of Lessee's rights provided for in this Section and of Lessor's
intention to honor those rights. No such sale or transfer of the Station by
Lessor will have the effect of limiting, abbreviating or terminating the rights
and interests created in favor of Lessee under this Agreement.
(e) SEVERABILITY OF PROVISIONS. If any provision hereof
is held invalid, the remainder of this Agreement shall not be affected thereby.
(f) ENTIRE AGREEMENT. This Agreement states the entire
agreement as of this date between the parties with respect to the subject
matter hereof and supersedes all pre-existing oral, letter or other agreements
or commitments with respect thereto. This Agreement may be modified only by an
agreement in writing executed by all of the parties hereto.
(g) PAYMENT OF EXPENSES. Except as otherwise provided
herein, the parties shall pay their own expenses incident to the preparation
and carrying out of this Agreement, including all fees and expenses of their
respective counsel.
(h) FURTHER ACTION. From time to time after the date of
execution hereof, the parties shall take such further action and execute such
further documents, assurances and certificates as either party may reasonably
request of the other in order to effectuate the purposes hereof. In addition,
each party agrees that it will not take any action which would adversely affect
the rights granted by it to the other party hereunder.
(i) COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, and shall become
effective when each of the parties hereto shall have had delivered to it this
Agreement duly executed by the other party hereto.
(j) HEADINGS. The headings herein are inserted for
convenience only and shall not constitute a part hereof.
(k) DEALINGS WITH THIRD PARTIES. No party is, nor shall
any party hold itself out to be, vested with any power or right to
contractually bind, or act on behalf of any other as its contracting broker,
agent or otherwise for committing, selling, conveying or transferring any of
the other party's assets or property, contracting for or in the same of the
other party, or making any contractually binding representations as to the
other party which shall be deemed representations contractually binding such
party. In particular, Lessee shall not be identified as the FCC licensee or
permittee of the Channels and Lessor shall not be held out as the programmer of
the Channels.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 13
14
(l) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
AND EACH OF THE PARTIES CONSENTS AND SUBMITS TO ANY ASSERTION OF JURISDICTION
BY THE COURTS OF THE STATE OF TEXAS.
(m) FCC RULES. Anything contained herein to the contrary
notwithstanding, nothing herein shall in any way limit the rights and remedies
of Lessor or Lessee under FCC rules and regulations.
(n) FCC LICENSES. Nothing contained herein other than
specified herein, shall be construed as granting to Lessee any rights in or to
any FCC authorization(s) or license(s) which may be held by Lessor.
(o) TIME OF ESSENCE. Whenever this Agreement shall set
forth any time for the performance of an act, such time shall be deemed of the
essence.
(p) BENEFIT. This Agreement shall inure to the benefit
of and shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and, to the extent permissible hereunder,
assigns. Nothing in this Agreement expressed or implied, is intended to or
shall (a) confer on any person other than the parties hereto or their
respective heirs, legal representatives, successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, or
(b) constitute the parties hereto partners or participants in a joint venture.
(q) CONFIDENTIALITY. All non-public information
exchanged by the parties or acquired by them in connection with their
performance under this Agreement shall by kept confidential.
(r) REFORMATION. If the FCC or any other governmental
authority should (i) change its Rules or policies in a manner that would affect
the enforceability of this Agreement, (ii) directly or indirectly reject or
take action to challenge the enforceability of this Agreement, or (iii) take
any steps whatsoever, on its own initiative or by petition from another person,
to challenge or deny the authority heretofore granted by the FCC with regard to
the Channels, then the parties hereto shall promptly negotiate in good faith to
reform and amend this Agreement so as to eliminate or amend to make
unobjectionable any portion that is the subject of any FCC action. No party
shall take any action that contributes to such FCC action.
(s) SPECIFIC PERFORMANCE. The parties acknowledge and
agree that the rights reserved to each of them hereunder are of a special,
unique, unusual and extraordinary character, which gives them a particular
value, the loss of which cannot be adequately or reasonably compensated for in
damages in an action at law, and the breach by either of the parties of any of
the provisions hereof will cause the other parties irreparable injury and
damage. In such event, the non-defaulting party shall be entitled, as a matter
of right, to require of the defaulting party specific performance of all of the
acts, services and undertakings required hereunder including the reasonable
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 14
15
obtaining of all requisite authorizations to execute or perform this Agreement
and to obtain injunctive and other equitable relief in any competent court to
prevent the violation of any of the provisions hereof. Neither this provision
nor any exercise by any party or right to equitable relief or specific
performance herein granted shall constitute a waiver of any other rights which
it may have to damages or otherwise.
(t) WAIVER. The express or implied waiver by either
party of any breach of any representation or warranty or any failure to fulfill
any condition, covenant or other obligation or liability under this Agreement
shall not constitute a waiver of any other representation or warranty or of any
other failure in the future or in the past by the other party to fulfill such
representation, warranty, condition, covenant, obligation or liability
hereunder.
(u) WORD MEANINGS. As used in this Agreement, the term
"including" shall be deemed to mean "including, without limitation". All
pronouns and any variations therefore shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the context may require. A
"Final Order" means a written action or order issued by the FCC: (a) which has
not been reversed, stayed, enjoined, set aside, annulled or suspended; and (b)
with respect to which (i) no requests have been filed for administrative or
judicial review, reconsideration, appeal or stay and the time for filing any
such requests, and the time for the FCC to set aside the action on its own
motion, has expired, or (ii) in the event of review, reconsideration or appeal,
the action or order has been affirmed and the time for further review,
reconsideration or appeal has expired.
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 15
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
LESSOR: LESSEE:
----------------------------- Heartland Wireless Commercial
Channels, Inc.
By: By:
--------------------------- -----------------------------
Name: Name:
------------------------- ---------------------------
Title: Title:
------------------------ --------------------------
(MMDS/MDS CHANNEL LEASE AGREEMENT, REV. 10/23/96) PAGE 16
