Channel Sublease and Agreement - Ascutney Associates Inc. and New England Wireless
ASCUTNEY ASSOCIATES, INC.
NEW ENGLAND WIRELESS
BURLINGTON, VERMONT
CHANNEL SUBLEASE AND AGREEMENT
This Channel Sublease and Agreement ("Agreement") is made and entered
into by Ascutney Associates, Inc., ("Lessor"), having its principal place of
business at P.O. Box 186, Rexford, New York 12148, and New England Wireless,
56 Green Street, Bellows Falls, Vermont 05101 ("Lessee").
RECITALS
WHEREAS, the Federal Communications Commission ("FCC") has authorized
licensees of Instructional Television Fixed Service ("ITFS") channels to
lease "excess capacity" on such channels for non-ITFS use, subject to
certain regulatory restrictions, and has authorized licensees of Multipoint
Distribution Service ("MDS") channels and licensees of Multichannel
Multipoint Distribution Service ("MMDS") channels to lease all of the
channel capacity on such channels; and
WHEREAS, The Federal Communications Commission has granted radio
broadcast station licenses to the licensees named and specified in Schedule
A, attached hereto, and has before it applications for the grant of radio
broadcast station licenses as named and specified in Schedule A, attached
hereto; and
WHEREAS, Lessor has entered into Channel Lease Agreements with each of
the Licensees in the Burlington, Vermont, area identified in Schedule A,
attached hereto, contemplating lease by Lessor from such Licensees of
"excess capacity" on each of such channels; and
WHEREAS, Ascutney and Lessee are parties to a letter agreement dated
May 6, 1991, whereby Lessee is given access to the licenses in the Bellows
Falls market and a letter agreement dated September 25, 1991, whereby Lessee
is given access to the licenses in Burlington, Vermont, market; and
WHEREAS, Lessor desires to lease to Lessee the excess capacity on each
of the aforesaid ITFS channels (each of which has a bandwidth of six MHZ and
meets or will meet National Television System Committee (NTSC) color video
signal specifications for color television, as defined by the FCC) which
Lessor has acquired, or will acquire, from the FCC or the FCC licensee of
each such ITFS channel, as the case may be; and
WHEREAS, Lessee desires to lease from Lessor all of the channel
capacity which Lessor has acquired and/or will acquire on ITFS channels
specified on Schedule A hereto (the "ITFS Channels") in the markets, all
subject to the terms and conditions set forth herein, in order to operate a
subscription video programming service to be offered to subscribing members
of the public via transmission capacity provided through non-cable TV over-
the-air transmission technology through ITFS, MMDS and/or MDS channels
("subscription television business" or "subscription television service"),
NOW, THEREFORE, in consideration of the mutual promises, covenants and
warranties set forth herein, Lessor and Lessee hereby agree as follows:
1. Lease of Channel Capacity (a) Lessor hereby agrees to lease to
Lessee all of the excess capacity (as hereinafter defined) on the ITFS
channels in the market, specified in Schedule A, subject to the terms and
conditions set forth herein. Lessor further agrees to lease to Lessee all
of the channel capacity that Lessor has acquired, or will acquire, pursuant
to the leases annexed hereto, or to be annexed hereto, as Schedule B (the
"Channel Leases").
(b) As used in this Agreement, the term "Excess Capacity" shall refer
to all of the channel capacity of an ITFS channel (including, without
limitation, all video, audio and subcarrier capacity and all vertical
blanking interval capacity), twenty-four (24) hours per day, seven (7) days
per week, except for the minimum number of hours per ITFS channel per week
that the ITFS channel licensee is required, under Section 74-931(e) of the
FCC's Rules and Regulations, [47 C.F.R. 74.93 1 (e)] (together with any
amendment or successor thereto the "FCC Rules"), to transmit instructional,
cultural or educational programming (hereinafter "Instructional Time").
Consistent with the FCC Rules and FCC policies in effect as of the date
hereof, Instructional Time shall initially consist of no more than twenty
(20) hours per week on each ITFS channel. Not less than ninety (90) days
prior to the initiation of program service by Lessee in each new market
hereunder, Lessor shall notify Lessee in writing of the twenty (20) specific
air time hours for the forthcoming six (6) months that the respective
licensees of each of the ITFS channels intend to utilize in such market.
(c) After the initial establishment of the schedule of Instructional
Time on each ITFS channel, if an ITFS licensee subsequently wishes to
exclude additional hours from excess capacity relating to such licensee's
ITFS channel for inclusion into Instructional Time for the provision of
"substantial use" ITFS programming, as defined by the FCC in its Second
Report and Order in MM Docket No. 83-523, 58 RR2d 559 (1985), up to a
maximum of forty (40) hours per week per ITFS channel. Lessor shall give
Lessee at least six (6) months' advance written notice of such licensee's
revised schedule for the twenty-one (21) to forty (40) specific air time
hours that such licensee intends to so utilize, provided, however, that
Lessor shall not be obligated to give Lessee any more advance notice than
Lessor shall have actually received from such licensee.
2. Term. The term of this Agreement shall commence upon the date of
its execution and shall extend for a period of ten (10) years, provided,
however, that, at the option of Lessee, and subject, in all events to due
and timely grant and renewal of all FCC licenses and other authorizations
for each of the channels, this Agreement shall be extended for one (1)
additional consecutive ten (10) year period. In the event that Lessee
determines not to exercise its renewal option hereunder, Lessee shall give
Lessor written notice of such determination at lest six (6) months prior to
the expiration of the then-current term of this Agreement.
3 . ITFS Programming. The parties hereto recognize that It is the
obligation of each licensee of the ITFS channels to transmit qualified
instructional and/or educational programming to meet applicable FCC
requirements. To the extent that Lessee's subscription television service
includes programming services (e.g., Cable News Network, C-Span, Discovery
Channel) which, in the option on any of such licensee or Local Program
Committee, would qualify as "substantial use" ITFS programming for such
licensees, and to the extent that such licensees, in concert with the Local
Program Committee, desire to transmit such programming services to meet such
licensees' FCC obligations, Lessee agrees to make such programming services
available to such licensees, subject to availability of such programming and
subject to receipt of all required consents from programming suppliers, and
at no cost to either Lessor or to any of the licensees in question. Lessee
agrees to integrate the educational programming of such licensees into the
subscription television service to be offered by Lessee to its subscribers
at no cost to Lessor. This integration shall consist of listing such
educational programming in any program guides produced by Lessee for its
subscription television service subscribers.
4. Transmission Facilities. Upon execution of this Agreement, Lessor
and Lessee shall select a location at which to co-locate the transmitter
sites for each of the channels. The parties hereto agree that such co-
location of the transmitter sites of each of the ITFS channels is of the
essence of this Agreement. Lessor shall utilize its best efforts to secure
all necessary consents from each of the licensees of the channels and/or
FCC-License applicants for each of the channels, with respect to such co-
location of transmitter sites, and Lessor shall utilize its best efforts to
ensure that each of such licensees and/or FCC-license applicants files with
the FCC, as soon as practicable, and diligently prosecutes all necessary
applications to secure all necessary FCC consents and authorizations to
effectuate co-location of such transmitter designated by Lessee and Lessor.
Upon grant by the FCC of all necessary consents and authorizations for co-
location of such transmitter sites for the ITFS channels to be leased
hereunder, Lessee or its designee shall, within a reasonable period of time,
but in no event later than thirty (30) days following the date upon which
all such FCC consents and authorization shall have been granted, commence
construction of such transmission facilities in accordance with such FCC
consents and authorizations at the transmission site designated by Lessor
and Lessee. Lessee or its designee shall purchase and install such
transmitters, transmission lines, antennas and receivers as may be required
by Lessee in connection with its subscription television business and the
fulfillment of any of the requirements for receive site installations
contained in the Air Time Lease Agreements identified in Schedule B, as soon
as practicable, in accordance with the provisions of such FCC consents and
authorizations. Any equipment used in connection with said construction
shall be leased by Lessee to Lessor pursuant to Section 8 below. (Said
equipment is hereinafter referred to as the "Leased Equipment.") Lessee
shall be responsible for supervision of the Leased Equipment.
5. Rent. (a) Commencing on a date which is the first day of the first
full month following six (6) months of operations, 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 MMDS
station in the market area during the previous calendar month and a per-
subscriber fee of five cents ($0.05) per month per channel. For the
purposes of computing the Connection Fee due for any month, the term
"Subscribers" shall be deemed to mean the number of paid subscribers who
have received Lessee's wireless cable programming over Lessor's station
during the prior month. 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 (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 cable 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 cable
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 (1) 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.
(b) If the foregoing calculation fails to generate Rental Fees equal
to or in excess of the minimum rental fees set forth below, then the Lessor
shall be entitled to receive Rental Fees in accordance with the following
table:
Period Following the
Date of First Sale of Total Minimum
Subscription Television Service Monthly Rental Fee
in Each Market in Each Market
------------------------------- ------------------
Months 1 through 6 No payment
Months 7 through 12 $ 500 per month
Months 13 through 18 $1,500 per month
Months 19 through 24 $3,000 per month
Months 25 through 36 $4,500 per month
Months 37 and beyond $5,000 per month
The foregoing payments shall be due and payable on or before the first day
of the first month following the end of the respective periods set forth
above. In the event a payment is received later than three (3) days
following the due date, there shall be a seventy-five dollar ($75.00) late
fee and interest shall accrue at a rate of fifteen percent (15 %) APR.
(c) The monthly rental fee provided for in either Paragraph 5(a) or
Paragraph 5(b) shall be increased by the percentage increase in the Consumer
Price Index, All Urban Wage Earners and Clerical Workers, U.S. City Average,
published by the U.S. Department of Labor (or, if such index is no longer
completed, then such similar index then in service), such adjustment to
occur on the first day of the first month, and biannually thenceforth,
following the completion of thirty-six (36) months of service to
subscribers.
(d) Lessee shall, within fifteen (15) days after the end of each
month after the start date, provide Lessor with a Certificate signed by an
officer of Lessee showing the number of subscribers for the preceding month,
computed in accordance with Section 5(a). The Connection Fee or
Transmission Fee payable by Lessee to Lessor, as determined in accordance
with Sections 5(a) and/or 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 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.
6. Right to Audit. Upon ten (10) business days' advance notice of one
to the other, Lessee and Lessor shall have the right to inspect or audit (at
the sole expense of the requesting party) (a) in the case of the Lessor, all
subscriber records and accounts of Lessee with respect to provision by
Lessee of subscription television service in the market via the channels,
and (b) in the case of the Lessee, all expenses and liabilities of the
Lessor, in each case to the extent necessary to assure compliance with the
terms of this Agreement. (For purposes of this Agreement, a "Business Day"
shall mean any day other than a Saturday, Sunday or nationally recognized
holiday.) Said inspection or audit may be conducted by the party or its
designees. The parties agree that they and their designees shall maintain
the confidentiality of all information so obtained and that such information
shall not be used by the inspecting party, its designees or any of their
respective officers, directors, employees, agents, representatives or
affiliates for any purpose other than verification of the amounts properly
due and payable hereunder or compliance with the terms of this Agreement.
7. Maintenance and Operation. Lessee shall maintain and operate the
transmission equipment utilized in connection with each of the channels and
shall pay all costs associated with such maintenance and operation, without
cost to or reimbursement by Lessor.
8. Channel Equipment Lease. Lessor shall lease from Lessee all Leased
Equipment to be purchased and installed by Lessee pursuant to Section 4 of
this Agreement. The Leased Equipment shall be leased by the Lessee to the
Lessor in accordance with the following terms:
(a) Rent. Lessor shall pay to Lessee one dollar ($1.00) per year for
use of the Leased Equipment. The parties hereby acknowledge that Lessor's
lease to Lessee of the channels, at the Rental Fees set forth in this
Agreement, constitutes consideration for Lessee's lease of the Leased
Equipment to Lessor.
(b) Taxes. Lessee shall be required to pay all taxes and other
charges assessed against the Leased Equipment, without cost to or
reimbursement by Lessor, and Lessee shall be entitled to claim depreciation
and any investment tax credits for income tax purposes which may flow from
ownership of the Leased Equipment. Lessor shall not do any act or thing, or
fail to do any act or thing, which would result in imposition of any lien,
charge, encumbrance, mortgage, security interest or other claim against any
of the Leased Equipment.
(c) Term. The term of the lease for the Leased Equipment shall
commence on the date of installation of the Leased Equipment and shall end
upon the date of termination of this Agreement.
(d) Equipment Leases. Lessor acknowledges that Lessee may obtain the
Leased Equipment by lease rather than purchase. Lessor agrees that its
rights with respect to any such Leased Equipment shall be subject to the
rights of the equipment lessor.
9. Programming. Lessee acknowledges that only programming of a sort
which would not have a material adverse effect on its reputation or Lessor's
reputation in the market will be transmitted by Lessee on the channels.
Lessee will use its best efforts to provide programming supplied by one or
more nationally recognized programming networks, including, but not limited
to, HBO, Showtime, The Movie Channel, Cable News Network and ESPN. The
parties hereto acknowledge the difficulties inherent in specifying exact
standards in this Section 9, and agree to use their respective best efforts
to cooperate in defining mutually acceptable programming standards for the
Lessee's subscription television business. Lessor shall have the absolute
right to deny Lessee the right to transmit on any of the channels any
program that is "obscene" as such term is defined in the context of 18
U.S.C. 1464 or that would violate FCC Rules.
10. Lessor's Representations and Warranties. Lessor represents,
warrants, covenants and agrees to each of the following at the date hereof
and at all times during the terms of this Agreement:
(a) Due Incorporation. Lessor is a corporation duly organized,
validly existing and in good standing under the laws of the state of
organization.
(b) Authorization of Agreement: No Breach. The execution, delivery
and performance of this Agreement has been duly and validly authorized and
approved by Lessor's Board of Directors.
(c) Licenses and Authorizations. As of the date hereof, except for
the FCC-license applications pending before the FCC and identified on
Schedule A attached hereto, the FCC has granted all necessary construction
permits for construction of all transmission facilities contemplated under
this Agreement, which facilities are listed on such Schedule A. As of the
date hereof, and consistent with the information set forth in Schedule A,
each of the FCC construction permits described therein is in full force and
effect, and such construction permits constitute all licenses, permits and
authorizations from the FCC and other regulatory bodies that are required
for operation of the channels and said transmission facilities, except for
licenses or other equivalent FCC authority to operate such facilities after
construction thereof has been completed. To the best of Lessor's knowledge,
after diligent inquiry, no violation of the Communications Act of 1934, as
amended, nor any violation of any other federal, state or local law or
regulation, in respect of the operation or prospective operation of the
transmission facilities described in Schedule A exists, the effect of which,
individually or in the aggregate, would materially adversely affect the
business, prospects, profits, property or condition (financial or otherwise)
of either (i) the channels or such transmission facilities, or (ii) the
subscription television business of Lessee contemplated hereunder.
Consistent with Schedule A, Lessor shall utilize its best efforts to assure
that none of the construction permits issued by the FCC and described
therein will expire or lapse, and Lessor shall utilize its best efforts to
assure that, to the extent necessary, the permittees of the transmission
facilities in Schedule A duly and timely file with the FCC all required
applications for extension of the referenced construction permits and all
necessary or desirable applications for modification of such construction
permits to implement the purposes contemplated hereunder (including, without
limitation, the co-location of transmitter sites described in Section 4
hereof) and all necessary applications for FCC licenses and other
authorizations for operation of such transmission facilities, Lessor shall
utilize its best efforts to assure that any and all such FCC applications
shall be diligently and properly prosecuted in good faith toward grant.
Lessor shall utilize its best efforts to assure that renewals of all FCC
authorizations for such transmission facilities shall be timely filed with
the FCC and diligently prosecuted.
(d) Leases. Lessor has entered into leases providing for lease of
excess channel capacity on, or has obtained licenses to use, the channels,
copies of which leases and licenses are set forth in Schedule B attached
hereto. Said leases and licenses constitute valid and binding obligations
of Lessor and of each of the other respective parties thereto and are in
full force and effect as of the date hereof and will, throughout the term of
this Agreement, constitute the valid and binding obligations of Lessor and
of all such other parties thereto and will continue to be in full force and
effect. As of the date hereof, to the best of Lessor's knowledge, after due
inquiry, neither Lessor nor any other party to any of the aforementioned
leases or licenses is in material default under, or breach or violation of,
any such lease or license, and Lessor has not received nor given notice of
any such default, breach or violation under any such lease or license from
or to any of the other parties thereto and will not have received any such
notice during the term of this Agreement. Lessor has obtained valid and
binding consents, authorizations and approvals from any and all necessary
persons and other entities, with respect to the leasing by Lessor to Lessee
of the channel capacity provided for herein, so as to ensure that Lessee
will enjoy all of the rights and privileges of Lessor under each of the
leases and/or licenses described herein.
(e) No Litigation. Except as disclosed in Schedule C attached
hereto, as of the date hereof, there is no suit (at law or in equity),
action or legal, administrative, arbitration or other proceeding or
governmental investigation pending or as to which Lessor has received notice
which would, individually or in the aggregate, materially adversely affect
Lessee's rights under this Agreement or the channel leases or the operation
of the channels and transmission facilities relating thereto and/or the
Lessee's proposed subscription television business in the market.
(f) FCC Compliance, Except as disclosed in Schedule D attached
hereto, the channels shall, during the term of this Agreement, be operated
in accordance with their respective FCC construction permits, licenses and
other authorizations, the Communications Act of 1934, as amended, and the
FCC Rules and FCC policies in effect from time to time.
11. Lessee's Representations and Warranties. Lessee represents,
warrants and agrees as follows:
(a) Due Incorporation and Standing. Lessee is a corporation duly
organized and validly existing under the laws of the State of Vermont.
(b) Authorization of Agreement. Lessee has full power, right and
authority to execute, deliver and enter into and perform this Agreement, and
the execution, delivery and consummation of this Agreement have been fully
and effectively authorized by Lessee's Board of Directors.
(c) No Litigation. There is no litigation, action at law, suit in
equity, proceeding, arbitration or governmental investigation pending or, to
the best of Lessee's knowledge, threatened that could materially adversely
affect the Lessee or its assets or the transactions contemplated hereby.
(d) No Breach. The execution and delivery of this Agreement by Lessee
and the performance of its obligations and the transactions contemplated
hereby will not result in the breach or, or constitute a default under, or
violate the Certificate of Incorporation or Bylaws of Lessee or any other
agreement, lease or contract to which Lessee is bound or any order, writ or
decree of any court, agency or governmental body.
12. Negative Covenants of Lessor. During the term of this Agreement,
Lessor will not:
(a) Enter into, or negotiate or attempt to enter into, any agreement
or other arrangement with any other party or parties that would be
inconsistent with or materially aversely affect Lessee's rights hereunder.
(b) Procure, or attempt to procure, for Lessor's own use or for the
use of any person or entity other than Lessee or lease, or attempt to lease,
to any person or entity other than Lessee any other or additional six-MHz
channels in the market.
13. Further Covenant of Lessee. During the term of this Agreement,
if Lessee desires to use in connection with the operation of its
contemplated subscription television business in the markets any channels of
a bandwidth of six-MHz in excess of the number of channels, and Lessee
notifies Lessor in writing of such desire, for a period of three hundred
sixty (360) days following the date of such notice, Lessor shall be
authorized to act as Lessee's exclusive agent in leasing such additional
channels but subject, in all events, to the direction, supervision and
control of Lessee in relation to any and all negotiations concerning such
additional channels. During such period, Lessee shall not lease, or attempt
to lease, or negotiate to lease any such additional channels directly with
any party in contravention of Lessor's aforementioned exclusive agency. In
fulfilling its obligations as agent, Lessor shall utilize its best efforts
to procure as soon as practicable a lease of additional channels as directed
by Lessee and to represent and to protect Lessee's interests in connection
with such negotiations.
14. Rights of Indemnification; Cure. (a) The parties hereby
acknowledge and agree that Lessee does not assume and shall not be obligated
to pay any liabilities of Lessor, under any of the leases or licenses
annexed to Schedule B attached hereto or under any other contracts, leases
or agreements. Lessor hereby agrees to indemnify Lessee and hold Lessee and
its successors and assigns and their respective officers, directors,
shareholders, partners, employees, agents and other representatives
(collectively "Lessee Indemnified Parties" and each individually as "Lessee
Indemnified Party") harmless from and against any and all claims,
liabilities and obligations of every kind and description, contingent or
otherwise, arising from or related to any actions or inactions of Lessor or
any of its affiliates or arising from or related to the channel leases and
from any and all other contracts, agreements, understandings and leases to
which Lessor may be a party.
(b) Lessee hereby agrees to indemnify and hold Lessor and its
successors and assigns and their respective officers, directors,
shareholders, partners, employees, agents and other representatives
(collectively, "Lessor Indemnified Parties" and each individually as "Lessor
Indemnified Party") harmless from and against:
(i) Any and all claims, liabilities and obligations of every
kind and description, contingent or otherwise arising after the date
hereof, from or related to construction of the transmission facilities
relating to the channels as provided for herein, or arising from or
related to operation by Lessee of its contemplated subscription
television service in the market;
(ii) Any and all damage, loss, liability or deficiency
resulting from any (1) misrepresentation or breach of warranty by, or
non-performance of any duty or obligation of, the Lessee under this
Agreement, or (2) from any misrepresentation in or omission from any
certificate or other instrument executed and delivered to any Lessor
Indemnified Party pursuant to this Agreement or in connection with any
of the transactions contemplated hereunder, and
(iii) Any and all actions, suits, proceedings, damages,
assessments, judgments, costs and expenses, including reasonable
attorneys' fees, incurred by any Lessor Indemnified Party as a result
of Lessee's failure or refusal to defend or compromise any claim
incident to, or failure to comply with, this Paragraph 14(b).
(c) If any claim or liability shall be asserted against any Lessor
Indemnified Party which would give rise to a claim by any Lessor Indemnified
Party against Lessee for indemnification under the provisions of Paragraph
14(b) above, such Lessor Indemnified Party shall promptly notify Lessee of
the same and give all reasonable cooperation in the defense thereof, and
Lessee shall be entitled, at its own expense, to compromise or defend any
such claim.
(d) Lessor shall promptly give Lessee notice of any default or
threatened termination under any of the leases or licenses, and Lessor shall
provide Lessee with information reasonably requested by Lessee with respect
to any purported default or other event that may trigger early termination
under any such lease or license. Regardless of whether or not notice is
given, Lessee shall have the right, but not the obligation, to cure any such
default upon fifteen (15) days prior notice to Lessor (or such lesser period
as may be required to avoid termination).
15. Termination
A. By Lessee - At Lessee's option, this Agreement may be terminated
by Lessee upon thirty (30) days' written notice to Lessor:
(a) If the FCC or any other governmental entity determines that
Lessor is not authorized to lease any or all of the channels from the
respective licensees of such channels, and/or that Lessee is not
authorized to lease any or all such channels from Lessor and to
utilize such channels in the manner contemplated hereunder,
(b) If any of the channel leases is not renewed or extended, or
in the event that any of the FCC construction permits or other
authorizations for any of the transmission facilities relating to the
channels is not renewed in the ordinary course, or expires, lapses or
is revoked;
(c) In the event of any material breach by Lessor of any of its
warranties, representations or covenants hereunder.
(d) In the event of default, the non-defaulting party shall
have the right to acquire the assets of the defaulting party at fair
market value, minus any fees or revenues owed by the defaulting party
to the non-defaulting party. An event of default is defined to
include failure to perform the obligations set forth in Paragraphs 4,
10, 12 and 14.
B. By Lessor - This Agreement may be terminated by Lessor upon thirty
(30) days' written notice to Lessee:
(a) If Lessee is in violation of any FCC rule or regulation and
Lessee shall fail to cure such violation within thirty (30) days of
last due date;
(b) Failure of Lessee to pay any monies due hereunder within
thirty (30) days of last due date;
(c) In the event of any material breach by Lessee of any of its
warranties, representations or covenants hereunder,
(d) In the event of default, the non-defaulting party shall
have the right to acquire the assets of the defaulting party relative
to this Agreement, at fair market value, minus any fees or revenues
owed by the defaulting party to the non-defaulting parry. Events of
default are defined to include, but not be limited to, failure to
perform any obligations under Paragraphs 4, 5, 6, 7, 8a, 9, 11 and 13.
Unless otherwise specified, if termination of this Agreement occurs
under any of the circumstances set forth in this Paragraph 15, each party
hereto shall be entitled to retain all equipment and materials purchased by
or owned by such party. Upon termination of this Agreement under any of the
circumstances set forth in this Paragraph 15, there shall be a final
accounting of monies due under this Agreement and, when completed, there
shall be no further liability of one party to the other.
Should either party find it necessary to pursue legal remedies to
enforce the rights hereunder, they shall be entitled to recover all fees and
expenses incurred including, but not limited to, expert and attorney fees
from the other party as additional damages.
16. Rights of First Refusal. Lessee agrees to grant to Lessor a right
of first refusal to acquire rights to and to develop and operate a
subscription television business in this market should Lessee terminate its
business or make any form of transfer of substantially all of its assets.
This right of first refusal shall be equally applicable to any subsidiary
created by Lessee for the purpose of performing Lessee's obligations
hereunder.
17. Communications with Regulators: Cooperation. Each party shall
promptly inform the other of its communications with the FCC and other
applicable federal and state regulators with respect to the channel leases.
Lessor shall provide copies of all such communications upon Lessee's
request. Lessor and Lessee shall cooperate in approaching the FCC and other
regulators in order to maximize the terms of the leases and licenses and
otherwise to maximize the benefits available to both parties under this
Agreement.
18. Specific Performance. The parties hereto acknowledge and agree
that a breach by either party of any of the provisions hereof will cause the
other party irreparable injury and damage for which there is no adequate
remedy at law. Accordingly, the terms of this Agreement shall be
specifically enforced. Neither this provision nor any exercise by any party
of rights to equitable relief of specific performance herein granted shall
constitute a waiver of any other rights which it may have to damages or
otherwise.
19. Miscellaneous.
(a) Schedules and Exhibits. All schedules and exhibits attached
to this Agreement shall be deemed to be part of this Agreement and
incorporated herein, where applicable, as if fully set forth herein.
(b) Construction. This Agreement shall be construed and
enforced in accordance with the laws of the State of Vermont.
(c) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(d) Notices. Any notice or other communications shall be in
writing and shall be considered to have been duly given when
personally delivered or deposited as certified U.S. mail, postage
prepaid, return receipt requested, and addressed as follows:
If to Lessor:
Mr. George W. Bott
Ascutney Associates, Inc.
P.O. Box 186
Rexford, New York 12148
with a copy to:
Fleischman & Walsh, P.C.
1400 Sixteenth Street, N.W.
Washington, D.C. 20036
Attention: Charles Walsh, Esq.
If to Lessee:
Mr. Scott Wendell
New England Wireless
56 Green Street
Bellows Falls, Vermont 05101
with a copy to:
Mr. William M. Barnard, Esq.
McFadden, Evans & Sill
1726 Eye Street, N.W.
Suite 810
Washington, D.C. 20006
Any party hereto may, by giving written notice to the other parties
hereto, change the address to which notices are to be sent.
(e) Amendment. This Agreement shall not be amended or modified
in any manner except by a writing executed by all parties hereto.
(f) Severability. Notwithstanding anything contained herein to
the contrary, in the event that any part of this Agreement shall be
declared invalid by a court of competent jurisdiction, such
declaration shall not affect the remainder of said Agreement or any
part thereof.
(g) Fees and Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, each of the parties
hereto shall pay the fees and expenses of their respective counsel,
accountants and other experts and all other expenses incurred by them
incident to the negotiation, preparation and execution of this
Agreement and the performance by them of their obligations hereunder.
(h) Force Majeure. In the event that Lessee's performance of
any of the terms, conditions, obligations or requirements set forth in
this Agreement is prevented, hindered, impaired or delayed due to any
cause beyond Lessee's reasonable control or not reasonably
foreseeable, such delay in performance and/or non-performance shall be
deemed to be excused, and no penalties or sanctions shall be imposed
as a result thereof, provided that Lessee has notified Lessor within
sixty (60) days of its discovery of the occurrence of such an event.
Such causes beyond Lessee's reasonable control, or not reasonably
foreseeable, shall include, but shall not be limited to, acts of God,
war, acts of war, civil emergencies and labor unrest or strikes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
ATTEST: LESSOR: Ascutney Associates, Inc.
/S/______________________________ By: /S/_____________________________
George W. Bott
President
ATTEST: LESSEE: New England Wireless
/S/______________________________ By: /S/_____________________________
Scott Wendell
President
5/17/93