Telstar 4 Transponder Sublease - Fifth Dimension Communications Holdings Inc. and Colorado Satellite Broadcasting Inc.
TRANSPONDER SUBLEASE
AGREEMENT BETWEEN
Fifth Dimension Communications Holdings, Inc.
AND
Colorado Satellite Broadcasting, Inc.
CONCERNING SKYNET TRANSPONDER SERVICE ON TELSTAR 4
THIS SUBLEASE is made on this _______ day of______ , 1997 by and between
Fifth Dimension Communications Holdings, Inc., a corporation organized and
existing under the laws of the State of Delaware and having its primary
Canadian place of business at 2500 Don Reid Drive, Ottawa, Ontario K1H 8P5
(hereinafter referred to as "5D") and Colorado Satellite Broadcasting, Inc.,
a corporation organized and existing under the laws of Colorado and having
its primary place of business at 1050 Walnut Street, Suite 301, Boulder,
Colorado 80302 (hereinafter referred to as "CSB").
RECITALS:
A. LORAL SKYNET, (hereinafter referred to as "SKYNET") operates a
domestic satellite system and offers services on such system in accordance
with FCC Tariff No. 7 ("Tariff") filed with the Federal Communications
Commission ("FCC").
B. Fifth Dimension Communications (Barbados) Inc. entered into an
Agreement with SKYNET dated November 21, 1996 (hereinafter "Master Lease"),
for SKYNET satellite service and is entitled to transponder service
consisting of service on one (1) C-Band 36MHz 16 Watt non-protected
preemptible transponder ("Bronze" transponders) on Telstar 402R for service
which began on January 1, 1997 and terminates December 31, 1999. Fifth
Dimension Communications (Barbados) Inc. has assigned that Master lease to 5D.
C. Fifth Dimension Communications (Barbados) Inc. has assigned its
rights and interest in the Master Lease to 5D.
D. 5D wishes to sublease to CSB and CSB wishes to sublease from 5D all
rights and obligations 5D has in the Master Lease dated November 21, 1996.
ACCORDINGLY, 5D, in consideration of the payment by CSB to SKYNET for the
satellite and transponder services and such other adequate consideration
which is hereby acknowledge, 5D agrees to sublease its rights under the
Master Lease as follows:
1
<PAGE>
AGREEMENT
1. AGREEMENT. 5D subleases its rights in the SKYNET satellite and
Transponder Service as granted to 5D pursuant to the Master Lease and
according to the terms and conditions set forth therein to CSB. The
provisions of the Master Lease, all amendments thereto and all applicable FCC
Tariffs filed with the Federal Communications Commission are incorporated
into this Agreement between 5D, as sublessor, and CSB, as sublessee as though
5D was SKYNET and as though CSB was lessee under the Master Lease. 5D shall
not be liable for breaches of the Master Lease by SKYNET, subject to
paragraph 6 herein.
2. TERM. The term of this sublease shall begin on the closing date of
the Asset Purchase Agreement dated September 5, 1997 between New Frontier
Media, Inc., and Colorado Satellite Broadcasting, Inc., as first parties, and
Fifth Dimension Communications (Barbados) Inc. and Merlin Sierra, Inc., as
second parties, ("Asset Purchase Agreement ) and shall end on December 31,
1999, unless renewed at CSB's option according to the terms and conditions of
the Master Lease.
3. PAYMENT. CSB shall pay for the Transponder Service in accordance
with the following:
Quantity Service Satellite Term Monthly Rate
-----------------------------------------------------------------------------
1 C-Band 36 MHz Telstar 4 December 31, 1999 $120,000.00
16 Watt
Payment under this Agreement shall be made, according to the terms and
conditions associated with SKYNET's billing for the services, directly to
SKYNET which shall receive payment at least five (5) days before the
beginning of each month. Confirmation of such payment shall be made to 5D
simultaneously with the payment to SKYNET at the following address:
Fifth Dimension Communications Holdings, Inc.
Stuart K. Duncan - President
2500 Don Reid Drive
Ottawa, Ontario K1H 8P5
4. DEPOSIT. CSB shall provide to 5D no later than the closing date of
the Asset Purchase Agreement a letter of credit on terms reasonably
acceptable to 5D in the amount of $USD120,000.00 to be used and applied as a
security in the event of a default by CSB under any of the terms and
conditions of this Agreement.
5. LIABILITY OF 5D. 5D's liability shall be limited to the extent it
acts as sublessor of the Master Lease. 5D shall not be liable for breaches of
the Master Lease by SKYNET, subject to paragraph 6 herein.
2
<PAGE>
6. AUTHORITY TO PROSECUTE CLAIMS. For so long as this Agreement shall
remain in effect, 5D hereby appoints CSB as attorney-in-fact of 5D for the
purpose of pursuing and prosecuting any claim deemed by CSB to be worthy of
pursuit or prosecution against SKYNET for any breach or potential breach of
the Master Lease or other conduct by SKYNET which, in the opinion of CSB
adversely or may adversely affect the interests of CSB hereunder. CSB, as
attorney-in-fact may prosecute or bring such action before any court, agency,
arbitral body or other entity which may have jurisdiction over such matter,
for and in the name of 5D, and such power, being coupled with an interest, is
irrevocable. Notice of any such prosecution or action by CSB must be given to
5D pursuant to section 10 herein. CSB agrees to indemnify and hold harmless
5D for any and all costs and attorneys fees directly incurred by or assessed
against 5D as a result of such prosecution or action brought by CSB. 5D
acknowledges that any breach or the Master Lease by SKYNET or other conduct
by SKYNET which adversely or may adversely affect the interests of CSB under
this Agreement, would cause 5D direct and actual damages or losses under the
terms of the Master Lease insofar as and to the extent CSB would suffer or
incur direct and/or actual damages as a result of said breach or adverse
conduct. The payment, settlement or other recovery by CSB as attorney-in fact
of 5D shall inure to the benefit of CSB.
7. REPRESENTATIONS OF 5D. 5D represents and warrants as follows:
a. That it is not currently in default of nor is it aware of any event
that with the notice or lapse of time, or both, would constitute a default of
any of its obligations, including the obligation of payment, under the Master
Lease;
b. That it will cooperate and exercise best efforts to obtain the
consent, approval and recognition of this Agreement by SKYNET, whether or not
required pursuant to the terms of the Master Lease or applicable Tariffs,
which consent, approval and recognition shall include consent and approval of
direct payment by CSB to SKYNET pursuant to section 3 herein and deposit of
the security deposit by CSB to SKYNET pursuant to section 4 herein.
c. That 5D does not currently have any other transponder leases or
other obligations with SKYNET other than those leases being subleased to CSB
and will not obtain any other transponder leases or obligations with SKYNET
or a third party which will in any way encumbers or would encumber or affect
the rights and obligations now existing under the Master Lease or the rights
of CSB under this Agreement.
d. That SKYNET has consented and approved of the assignment of the
Master Lease from Fifth Dimension Communications (Barbados) Inc. to 5D.
8. RENEWAL. To the extent available, CSB shall have any and all rights
and options to renew this Agreement as 5D has under the terms of the Master
Lease.
3
<PAGE>
9. MASTER LEASE. This Agreement and sublease is subject to the Master
Lease, as that term is defined in the recitals, and all amendments thereto.
The provisions of the Master Lease are applicable to this sublease as though
SKYNET, as lessor under the Master Lease, were the sublessor under this
Agreement and as though 5D as lessee under the Master Lease was sublessee CSB
under this Agreement. 5D shall not be liable for breaches of the Master Lease
by SKYNET, subject to paragraph 6 herein. CSB acknowledges that it has
received a copy of the Master Lease and represents that it will not cause or
allow to be caused any default under the Master Lease and that it will
indemnify 5D against any loss, liability, and expenses (including reasonable
attorneys' fees and costs) arising out of any default under the Master Lease
caused by CSB, and 5D will indemnify CSB against any loss, liability, and
expenses (including reasonable attorneys' fees and costs) arising out of any
default under the Master Lease caused by 5D.
10. NOTICES. All notices, demands, requests, or other communications
which may be or are required to be given, served, or sent by one party to the
other party pursuant to this Agreement shall be in writing and shall be
delivered by hand or mailed first-class, registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to 5D: Fifth Dimension Communications Holdings, Inc.
Stuart K. Duncan - President
2500 Don Ried Drive
Ottawa, Ontario K1M 8P5
If to CSB: Colorado Satellite Broadcasting, Inc.
Mark R. Kreloff- President
1050 Walnut Street, Suite 301
Boulder, CO 80302
11. INDEPENDENT CONTRACTOR. Except to the limited extent allowed under
section 6, nothing herein contained shall create any association,
partnership, joint venture, the relationship of principal and agent, or the
relationship of employer and employee between the parties hereto, it being
understood that 5D shall perform and provide as sublessor, all services
hereunder as an independent contractor.
12. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Colorado.
13. HEADINGS. The headings used throughout this Agreement are for
conveniences only and are not a part of this Agreement and shall have no
effect upon the construction and interpretation of this Agreement.
14. WAIVER. A waiver by either party of any of the terms and conditions
of this Agreement or any term and condition of the Master Lease in any
instance shall not be
4
<PAGE>
deemed or construed to be a waiver of such term and condition for the future,
or any subsequent breach thereof To the extent any waiver by 5D of any term
and condition of the Master Lease will or may adversely affect CSB's rights
hereunder, 5D must first obtain the written consent of CSB before any such
waiver.
15. SEVERALBILTY. If any provision of this Agreement, as applied to
either party or to any circumstance, shall be adjudged to be void or
unenforceable by any court, arbitral body, agency or other entity having
jurisdiction, the same shall in no way affect any other provision in any
other circumstances.
16. ASSIGNMENT AND TRANSFER. Either party may assign and/or transfer its
rights, duties and obligations under this Agreement in its entirety: (a) in
connection with the sale of all or substantially all of its assets; (b) to
its parent corporation, or (c) to any wholly owned affiliate or subsidiary of
the respective assignor, PROVIDED, however, that any such assignment or
transfer is in accordance with the terms and conditions of Master Lease.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
and sublease as of the day and year above written.
Fifth Dimension Communications Holdings, Inc.
By:
Title:
Colorado Satellite Broadcasting, Inc.
By:
Title: