Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment to Form S-1 HTML 115K
2: EX-4.6 Investor Rights Agreement 14 77K
3: EX-9.1 Voting Agreement 10 44K
4: EX-10.10 Agreement 9 47K
5: EX-10.11 Amendment to Agreement 31 128K
6: EX-10.12 Agreement and Undertaking 2 14K
7: EX-10.25 Form of Subscription Agreement 45 169K
8: EX-10.26 Market Operation, Spectrum Lease and Sublicense 190 679K
Agreement
9: EX-10.29 Subscription Agreement 21 97K
10: EX-10.30 Master Supply Agreement 105 316K
11: EX-10.31 Side Agreement 17 77K
12: EX-10.39 Vendor Agreement 12± 50K
13: EX-10.40 Subscription Service Addendum to Vendor Agreement 39 100K
14: EX-10.41 Co-Marketing Agreement 22 86K
15: EX-10.42 Purchase and Sale Agreement 48 166K
16: EX-10.45 Bundled Wireless Broadband Services Agreement 32 83K
17: EX-10.46 Subscription Agreement 29 113K
18: EX-10.47 Side Agreement 3 21K
19: EX-10.48 Amended and Restated Limited Liability Company 58 207K
Agreement
20: EX-10.51 Common Stock Purchase Agreement 51 217K
21: EX-10.52 Mobile Wimax Network Collaboration Agreement 36 112K
22: EX-10.53 Stock Purchase Agreement 81 340K
23: EX-10.55 Wireless Broadband System Services Agreement 20 48K
24: EX-10.56 Wireless Broadband System Infrastructure Agreement 146 358K
25: EX-10.57 Wireless Broadband Cpe Supply Agreement 40 94K
26: EX-10.58 Side Letter Agreement 9 51K
27: EX-10.59 Master Royalty and Use Agreement 196 648K
28: EX-10.60 Master Royalty and Use Agreement 103 325K
29: EX-10.61 Membership Interest Purchase Agreement 51 181K
30: EX-10.62 Purchase Agreement 64 201K
31: EX-10.63 Educational Broadband Service Long Term De Facto 84 276K
Transfer Lease Agreement
32: EX-21.1 List of Subsidiaries 2± 13K
EX-10.63 — Educational Broadband Service Long Term De Facto Transfer Lease Agreement
Exhibit Table of Contents
Exhibit 10.63
Educational Broadband Service
Long Term De Facto Transfer Lease Agreement
By and Between
[***]
And
CLEARWIRE SPECTRUM HOLDINGS II LLC
Effective Date: December 22, 2006
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[Download Table]
1. DEFINITIONS............................................................ 1
2. LEASE TERM AND RENEWAL................................................. 7
3. COMPENSATION........................................................... 8
4. EXCLUSIVITY, RIGHT OF FIRST REFUSAL, RIGHT TO PARTICIPATE.............. 9
5. FREQUENCY BAND TRANSITION.............................................. 11
6. CAPACITY REQUIREMENTS AND USES......................................... 12
7. EXISTING EBS EQUIPMENT AND BUILD-OUT OF CLEARWIRE NETWORK.............. 14
8. SERVICES TO BE MADE AVAILABLE TO LICENSEE.............................. 16
9. INTERFERENCE CONSENTS.................................................. 17
10. APPLICATIONS AND EXPENSE REIMBURSEMENT................................. 18
11. ASSIGNMENTS AND SUBLEASING............................................. 19
12. TERMINATION OF AGREEMENT............................................... 21
13. REVENUES AND EXPENSES.................................................. 23
14. NON-COMPETITION........................................................ 23
15. CONFIDENTIALITY AND NON-DISCLOSURE..................................... 23
16. ASSUMPTION OF LIABILITIES.............................................. 24
17. FCC-MANDATED LEASING OBLIGATIONS....................................... 24
18. REPRESENTATIONS AND WARRANTIES......................................... 25
19. COVENANTS.............................................................. 27
20. INDEMNIFICATION........................................................ 30
21. NOTICES................................................................ 32
22. MISCELLANEOUS.......................................................... 33
23. INCLUDED EXHIBITS...................................................... 35
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EDUCATIONAL BROADBAND SERVICE
LONG-TERM DE FACTO TRANSFER LEASE AGREEMENT
THIS Educational Broadband Service ("EBS") Long-Term De Facto Transfer
Lease Agreement (the "AGREEMENT") is entered into as of December 22, 2006 (the
"EFFECTIVE DATE"), by and between [***] ("LICENSEE"), and Clearwire Spectrum
Holdings II LLC, a Nevada limited liability company with its principal offices
at 5808 Lake Washington Blvd., Suite 300, Kirkland, WA 98033 ("CLEARWIRE").
Licensee and Clearwire are each sometimes referred to as "PARTY" and
collectively as "PARTIES."
WHEREAS, the Federal Communications Commission ("FCC") has authorized
Licensee to operate EBS channels [***] (each a "CHANNEL" and collectively the
"CHANNELS") within their respective geographic service areas as specified in
Section 27.1206(a)(1) of Title 47 of the Code of Federal Regulations as such
geographic service areas may be amended from time-to-time by FCC Rules (as
defined in Section 1) or FCC actions or events affecting geographically adjacent
licenses and channels (the "GSAS");
WHEREAS, reference copies of the FCC licenses for the Channels are attached
hereto as Exhibit A (each a "LICENSE" and collectively the "LICENSES");
WHEREAS, Licensee makes use of the Channels in furtherance of its
educational mission and intends, subject to the terms of this Agreement, in the
future to expand and enhance its use of the Channels for educational, [***], and
other purposes and needs of [***] (as defined in Section 1);
WHEREAS, the FCC permits a portion of the capacity on the Channels to be
leased for commercial purposes and to support the educational mission of EBS
licensees;
WHEREAS, Clearwire intends to deploy advanced wireless broadband services
in the GSAs and surrounding areas using EBS and Broadband Radio Service ("BRS")
channels;
WHEREAS, Licensee desires to maximize the use of the Channels for
educational and commercial purposes; and
WHEREAS, Licensee wishes to lease a portion of the capacity on the Channels
to Clearwire pursuant to the terms of this Agreement and Clearwire wishes to
utilize Clearwire's Capacity (as defined in Section 1) for commercial use in the
GSAs in accordance with the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and covenants set forth in
this Agreement, and for good and valuable consideration, the sufficiency of
which is acknowledged by the Parties' signatures, the Parties agree as follows:
1. DEFINITIONS
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The following terms shall have the meanings set forth below and, as
defined, may be used in the singular or plural form, as appropriate.
"AFFILIATE" shall mean with respect to a Party hereto, another Person that,
directly or indirectly (whether or not through one or more intermediaries)
controls, is controlled by or is under common control with such Party, where
"control" means the power to direct or cause the direction of over fifty percent
(50%) of the voting power of the applicable Person or otherwise to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities or by contract or otherwise; provided,
that any such Person shall be deemed to be an Affiliate only so long as such
control exists.
"AGENTS" has the meaning specified in Section 15(a).
"AGREEMENT" has the meaning specified in the preamble.
"APPLICATIONS" has the meaning specified in Section 10(a).
[***]
"ASSIGNEE" has the meaning specified in Section 11(a).
"ASSIGNMENT" has the meaning specified in Section 11(a).
"BONA FIDE OFFER" shall mean a third party offer to Licensee to purchase,
assign, transfer or lease (or acquire via assignment from Licensee) the Licenses
or the Channels (or any portion of the Channels) or to otherwise use any of the
capacity on the Channels (or any part thereof) in any manner, or to acquire an
option to acquire, lease or otherwise use any of the capacity on the Channels
(or any part thereof), which offer is in writing and signed by a proposed
purchaser, assignee, lessee, or transferee, and specifies the price and material
terms and conditions of such proposed sale, assignment or lease.
"BRS" has the meaning specified in the recitals.
"BREACHING PARTY" has the meaning specified in Section 12(d).
"CHANNEL" and "CHANNELS" have the meanings specified in the recitals.
"CLEARWIRE" has the meaning specified in the preamble.
"CLEARWIRE'S CAPACITY" means all of the capacity on the Channels, other
than the Licensee's Reserved Capacity.
"CLEARWIRE NETWORK" means the facilities that are to be constructed and
controlled by Clearwire and used to provide Licensee's Service using Licensee's
Reserved Capacity and Clearwire's Service.
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"CLEARWIRE PARENT" shall mean Clearwire Corporation, a Delaware
corporation, or the successor Person or Persons which is or are the ultimate
corporate parent or parents of Clearwire or its successor, or of any Affiliate
of Clearwire that holds Clearwire Capacity.
"CLEARWIRE'S SERVICE" means the provision of wireless services over the
Clearwire Network including the provision of any content, service applications,
technical support, one-way or two-way digital communications, telephony, web
hosting, video, data, voice, Internet access, or other service using Clearwire's
Capacity, which service may or may not exist as of the Effective Date, but which
may be pursued and/or provided by Clearwire, its Affiliates or their successors
during the Term.
"COMMUNICATIONS ACT" has the meaning specified in Section 17(a).
"CONNECTION CALCULATION DATE" has the meaning specified in Section 8(b).
"CONNECTIONS" has the meaning specified in Section 8(a).
"COSTS AND EXPENSES" means any fees, costs, or expenses of any kind,
including legal fees, engineering fees, accounting fees, and consulting fees and
disbursements.
"DAMAGES" has the meaning specified in Section 20(a).
"DEDICATED EQUIPMENT" has the meaning specified in Section 7(e).
"DISCLOSING PARTY" has the meaning specified in Section 15(b).
"EBS" has the meaning specified in the preamble.
"EFFECTIVE DATE" has the meaning specified in the preamble.
"EXISTING EBS EQUIPMENT" has the meaning specified in Section 7(a).
"EXISTING SERVICE DISCONTINUANCE DATE" has the meaning specified in Section
7(a).
"FCC" has the meaning specified in the recitals.
"FCC LONG TERM LEASE APPLICATION" has the meaning specified in Section
10(d).
"FCC RULES" means Title 47 of the Code of Federal Regulations, as amended
from time to time, and FCC decisions, policies, reports and orders issued
pursuant to the adoption of such regulations.
"FINAL ORDER" means an order issued by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; and with respect to which
(a) no timely-filed 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,
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has expired, or (b) 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.
"FINAL ORDER DATE" means the date that FCC approval of the FCC Long Term
Lease Application becomes a Final Order.
"GOVERNMENTAL AUTHORITY" means any local, state, municipal or federal
court, or other local, state, municipal, or federal governmental authority,
department, commission, board, agency, body or other instrumentality (domestic
or foreign), including the FCC.
"GOVERNMENTAL AUTHORIZATIONS" means any license, permission, approval,
authority or consent required to be obtained from any Governmental Authority in
order to maintain the Licenses.
"GSAS" has the meaning specified in the recitals.
"INCLUDING" means including, without limitation.
"INDEMNIFIED PARTY" has the meaning specified in Section 20(c).
"INDEMNIFYING PARTY" has the meaning specified in Section 20(c).
"INFORMATION" has the meaning specified in Section 15(b).
"INITIAL LEASE PAYMENT" has the meaning specified in Section 3(a).
"INITIAL TERM" has the meaning specified in Section 2(a).
"INTERFERENCE CONSENT" means any agreement or arrangement with a third
party affecting the technical parameters of the Channels (excluding prior
agreements to lease capacity on the Channels), including an agreement or
arrangement concerning (a) acceptance of interference or signal strength from a
third party's transmitter in excess of the interference or signal strength such
third party is entitled to cause or transmit under FCC Rules, or limiting
interference or signal strength from any transmitter operating on the Channels
below what is allowed under FCC Rules; (b) the alteration of operating
parameters authorized under the Licenses or the licenses of any third party in
order to facilitate operations that would otherwise not be permitted under FCC
Rules; or (c) the coordination of adjacent market channel use or technical
operating parameters.
"JAMS RESOLUTION" means final and binding arbitration initiated and
conducted by JAMS, or a successor thereto, pursuant to its Comprehensive
Arbitration Rules and Procedures, with the Optional Appeal Procedure. The
arbitration shall be conducted in [***] before a single neutral arbitrator
appointed in accordance with the JAMS Comprehensive Arbitration Rules and
Procedures. Any appeal shall be heard and decided by a panel of three neutral
arbitrators. The neutral arbitrator and the members of any appeal panel shall be
retired judges or justices of any [***] state or federal court, and shall in
their substantive rulings (as opposed to procedural or
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discovery-related rulings that are otherwise governed by the JAMS Comprehensive
Arbitration Rules and Procedures), apply the laws of the State of [***] without
giving effect to any choice or conflict of law provision or rules that would
cause the application of the laws of any jurisdiction other than the State of
[***].
"LAW" and "LAWS" means applicable common law and any statute, ordinance,
code or other law, rule, permit, permit condition, regulation, order, decree,
technical or other standard, requirement or procedure enacted, adopted,
promulgated, applied or followed by any Governmental Authority including, but
not limited to, FCC Rules, as such may be amended at any time and from time to
time.
"LICENSE" and "LICENSES" have the meanings specified in the recitals.
"LICENSEE" has the meaning specified in the preamble.
"LICENSEE'S RESERVED CAPACITY" means the greater of five percent (5%) of
the digital capacity created on the Channels or the amount of capacity required
to meet the obligations of an EBS licensee under FCC Rules, as such capacity is
measured from time to time in accordance with Section 8.
"LICENSEE'S SERVICE" means the use by Licensee or Permitted End Users of
capacity and services provided over the Clearwire Network using Licensee's
Reserved Capacity and/or such other capacity or services as may be made
available to Licensee from time to time pursuant to this Agreement or the
Services Agreement, including the use of any content, service applications,
technical support, one-way or two-way digital communications, telephony, web
hosting, video, data, voice, Internet access or other service which may or may
not exist as of the Effective Date.
"LOWER BAND SEGMENT" has the meaning specified in Section 27.4 of FCC
Rules.
"MAXIMUM TERM" has the meaning specified in Section 2(b).
"MBPS" means megabits per second.
"MHZ/POPS" means the amount of megahertz of spectrum multiplied by the
population within a specified service area.
"MIDDLE BAND SEGMENT" has the meaning specified in Section 27.4 of FCC
Rules.
"MITIGATION PERIOD" has the meaning specified in Section 2(c).
"MONTHLY LEASE PAYMENT" has the meaning specified in Section 3(b).
"NEGOTIATION NOTICE" has the meaning specified in Section 4(b).
"NON-BREACHING PARTY" has the meaning specified in Section 12(d).
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"PARENT GUARANTEE AND COVENANT AGREEMENT" has the meaning specified in
Section 19(d).
"PARTY" and "PARTIES" have the meanings specified in the preamble.
"PERMITTED END USERS" means the Licensee itself and any educational
institution or not-for-profit or religious organization with whom the Licensee,
[***] or their Affiliates is working in furtherance of the educational goals and
mission of Licensee, [***] or their Affiliates, and their respective students,
constituents, employees, consultants, agents and representatives.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, [***], association or Governmental Authority.
"RECEIVING PARTY" has the meaning specified in Section 15(b).
"REFUND" has the meaning specified in Section 3(a).
"RENEWAL TERM" has the meaning specified in Section 2(b).
"REPLACEMENT EBS EQUIPMENT" has the meaning specified in Section 7(b).
"ROFR" has the meaning specified in Section 4(c).
"ROFR PERIOD" has the meaning specified in Section 4(c).
"SERVICES AGREEMENT" has the meaning specified in Section 8.
"SUBSTANTIAL SERVICE REQUIREMENTS" has the meaning specified in Section
7(d).
"SUCCESSOR LICENSEE" has the meaning specified in Section 11(c).
"SUCCESSOR LICENSEE CONDITIONS" has the meaning specified in Section 11(c).
"TERM" has the meaning specified in Section 2(b).
"TERMINATION AMOUNT" means the [***] that would be paid or provided to
Licensee from the [***] discounted to a net present cash value at the
Termination Date using a [***] discount rate applied over the remaining portion
of the [***].
"TERMINATION DATE" is the effective date of termination of this Agreement
if a Termination Notice is sent to Licensee.
"TERMINATION NOTICE" has the meaning specified in Section 2(b).
"THIRD PARTY AGREEMENT" has the meaning specified in Section 2(d).
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"TRANSITION" has the meaning specified in Section 5.
"UPPER BAND SEGMENT" has the meaning specified in Section 27.4 of FCC
Rules.
"WARRANTS" means the warrants to acquire equity in the Clearwire Parent as
described in Section 3(d).
"WARRANT AGREEMENTS" has the meaning specified in Section 3(d).
2. LEASE TERM AND RENEWAL
(A) INITIAL TERM. Subject to Section 2(e), the initial term of this
Agreement begins on the Final Order Date and ends on the date that is ten (10)
years from the Final Order Date (the "INITIAL TERM"), unless this Agreement is
terminated earlier pursuant to Section 12.
(B) RENEWAL. Subject to Section 2(e), on the date that is ten (10)
years from the Final Order Date and then again on the date that is twenty (20)
years from the Final Order Date, this Agreement will automatically renew for all
of the Channels that are subject to this Agreement at the time of the renewal,
in each case for an additional term of ten (10) years (each, a "RENEWAL TERM"
and together with the Initial Term, the "TERM"), for a maximum duration of
thirty (30) years (the "MAXIMUM TERM"). Each Renewal Term will occur
automatically unless Clearwire notifies Licensee at least twelve (12) months
prior to the end of the Initial Term or the end of any Renewal Term that it
declines to renew the Agreement ("TERMINATION NOTICE"). The terms and conditions
of this Agreement shall apply to each Renewal Term.
(C) EFFECT OF TERMINATION NOTICE. Upon Licensee's receipt of a
Termination Notice, Clearwire's exclusivity rights as described in Section 4(a),
ROFR as described in Section 4(c), and participation rights as described in
Section 4(e), will immediately cease to apply and be of no further force or
effect[***].
(D) [***].
(E) RENEWAL OF LICENSES AND EXTENSION OF AGREEMENT. If a License
expires during the Initial Term or any Renewal Term, this Agreement also will
expire at such time with respect to the Channel(s) associated with that License
unless the License is renewed and FCC authorization for this Agreement is
extended for such Channel(s). The Parties will cooperate to timely file License
renewal applications and requests for authorizations to extend this Agreement so
as to assure that the Licenses and this Agreement remain in full effect without
interruption during the Initial Term and any Renewal Term. This Agreement will
continue in effect unless the Agreement expires or is earlier terminated as
provided herein or, with respect to any Channel(s), the FCC denies by Final
Order any application for renewal of the License associated with such Channel(s)
or denies by Final Order any request to extend the term of the Agreement with
respect to such Channel(s). If the Agreement expires or is earlier terminated
with respect to less than all of the Channels pursuant to this Section 2(e), the
Agreement shall remain in effect with respect to the unaffected Channels,
subject to a pro rata reduction in compensation set forth in Section 12(a).
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3. COMPENSATION
(A) INITIAL LEASE PAYMENT. Within five (5) business days following the
Final Order Date, Clearwire will pay Licensee [***] by wire transfer in
immediately available funds (the "INITIAL LEASE PAYMENT"). If (i) this Agreement
is terminated by reason of uncured material default or material breach by
Licensee during the Initial Term, (ii) proper notice of such uncured material
default or material breach was provided to Licensee in accordance with Section
12, and (iii) such uncured material default or material breach precludes
Clearwire from using Clearwire's Capacity as contemplated in this Agreement,
then a portion of the Initial Lease Payment will be refunded to Clearwire
("REFUND"). The amount of the Refund will consist of the Initial Lease Payment
distributed equally over ten (10) years and adjusted on a pro rata basis to
account for the remaining time between the date of termination and the
expiration of ten (10) years following the Final Order Date (e.g., if Clearwire
terminates this Agreement due to Licensee's uncured material default on the date
that is four (4) years after the Final Order Date, then Licensee shall refund
Clearwire [***] of the Initial Lease Payment [***]. There will be no Refund if
the termination occurs for such reason after the expiration of the Initial Term.
(B) MONTHLY LEASE PAYMENT. Commencing with the Effective Date and
continuing for each consecutive calendar month thereafter during the Term,
Clearwire will pay Licensee monthly lease payments in the amounts set forth in
this Section 3(b) (each a "MONTHLY LEASE PAYMENT"). All Monthly Lease Payments
due to Licensee through and including the month during which the Final Order
Date occurs shall accrue and be paid to Licensee in one lump sum within five (5)
business days following the Final Order Date. Thereafter, each Monthly Lease
Payment shall be paid by the fifteenth (15th) day of the then-current month for
which the Monthly Lease Payment is due. The amount of the Monthly Lease Payment
shall be as follows: [***] for years one (1) through five (5); [***] for years
six (6) through ten (10); [***] for years eleven (11) through fifteen (15);
[***] for years sixteen (16) through twenty (20); and [***] for years twenty-one
(21) through thirty (30). For the purpose of the preceding sentence, the "years"
of this Agreement shall be calculated using the Effective Date as the starting
date of year one (1). Unless the Parties otherwise agree during the Term, all
Monthly Lease Payments shall be paid by wire transfer in immediately available
funds pursuant to wiring instructions provided by Licensee. The Monthly Lease
Payment due for any partial calendar month, at the commencement of the Initial
Term or expiration of the Term, shall be prorated accordingly, subject to
adjustment as provided in Section 3(c).
(C) ADJUSTMENTS TO MONTHLY LEASE PAYMENT. The Monthly Lease Payment
will be adjusted as follows:
(I) SECTION 12(A) ADJUSTMENTS. The Monthly Lease Payment will be
reduced in accordance with Section 12(a) if this Agreement is terminated
with respect to less than all of the Licenses and Channels.
(II) RECAPTURE OF LICENSEE'S RESERVED CAPACITY. The Monthly Lease
Payment will be increased on a pro rata basis during the Term if any part
of Licensee's Reserved Capacity becomes available to Clearwire pursuant to
Section 6(b) and in accordance with FCC Rules. The pro-ration of the
Monthly Lease Payment with respect to
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increases in Clearwire's Capacity shall be based on the amount of
Licensee's Reserved Capacity made available to Clearwire as a result of
such increase as compared to the amount of capacity made available to
Clearwire as of the Effective Date. For example, if on the tenth (10th)
anniversary of the Effective Date, Clearwire's Capacity increases by three
percent (3%), the Monthly Lease Payment to be paid for the remainder of the
Term shall be increased by three percent (3%).
(III) USE OF EXPANDED CAPACITY [***]. [***].
(D) WARRANTS. Two (2) business days prior to the Final Order Date,
Clearwire shall deliver to Licensee executed Warrant Agreements in the form of
Exhibits B1 and B2 ("WARRANT AGREEMENTS") entitling Licensee to the warrants to
acquire equity in the Clearwire Parent as set forth in the respective Warrant
Agreements ("WARRANTS"). The Warrants shall be exercisable from the Final Order
Date until the fifth (5th) anniversary of the Final Order Date. Subject to
Section 7(a), transfer of de facto control of Clearwire's Capacity shall be
effective upon receipt by Licensee of the Warrants and the Initial Lease
Payment. If the Final Order Date does not occur within nine (9) months of the
Effective Date then the Warrants, if delivered, shall automatically terminate
and be of no further force and effect so long as one of the Parties provides
notice to terminate this Agreement pursuant to Section 12(e).
(E) W-9. Within ten (10) days of the Effective Date, Licensee shall
deliver a completed IRS Form W-9 to Clearwire.
(F) REFUNDS. With the exception of the Refund specified in Section
3(a), none of the payments, services, service credits, reimbursements, or other
forms of compensation paid to Licensee under this Agreement, the Warrant
Agreement, or the Services Agreement shall be refundable.
4. EXCLUSIVITY, RIGHT OF FIRST REFUSAL, RIGHT TO PARTICIPATE
(A) EXCLUSIVITY. Except as specifically provided in this Section 4 and
Section 11(c), during the Term, Licensee will not negotiate or contract with any
third party to lease, sell, assign, transfer or use any of Clearwire's Capacity
or to have an option for such lease, sale, assignment, transfer or use, whether
such lease, sale, assignment, transfer or use is to take place during the Term
or thereafter.
(B) NEGOTIATION NOTICE. Licensee shall be under no obligation to renew
or extend this Agreement beyond the Term. However, if Licensee receives notice
from Clearwire during the period that is twelve (12) to eighteen (18) months
prior to expiration of the Maximum Term, which notice includes a bona fide
written offer from Clearwire to enter into a new agreement pertaining to sale,
lease or assignment of the Licenses or the Channels ("NEGOTIATION NOTICE"), then
Licensee shall negotiate with Clearwire, exclusively and in good faith for a
period of six (6) months from the date of Licensee's receipt of the Negotiation
Notice for the execution of a new agreement. If Clearwire provides a Negotiation
Notice, but the Parties do not enter into a new agreement pertaining to the
sale, lease or assignment to Clearwire of the Licenses or the Channels then
subject to this Agreement within six (6) months
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of Licensee's receipt of the Negotiation Notice, Licensee shall be free, for the
remainder of the Term and thereafter, to solicit or entertain offers from any
third party pertaining to the Licenses or the Channels (or any portion thereof);
provided, however, that if Licensee receives a Bona Fide Offer during the
remainder of the Term or the ROFR Period that Licensee intends to accept, such
Bona Fide Offer shall be subject to the ROFR. If Clearwire does not provide
Licensee with a Negotiation Notice in accordance with this Section 4(b), then
upon expiration of the period for providing such Negotiation Notice, Licensee's
exclusivity obligations pursuant to Section 4(a) shall terminate, and Licensee
shall be free, for the remainder of the Term and thereafter, to solicit or
entertain offers of any nature from any third party concerning the Channels or
the Licenses, subject to Clearwire's ROFR in Section 4(c).
(C) RIGHT OF FIRST REFUSAL. During the Term and for a period of [***]
following the expiration or termination of this Agreement ("ROFR PERIOD"), if
Licensee receives and desires to accept, a Bona Fide Offer (and if acceptance of
such Bona Fide Offer would be permissible under FCC Rules), Licensee shall,
within thirty (30) days following Licensee's determination to accept such Bona
Fide Offer, deliver to Clearwire notice setting forth the material terms and
conditions of the Bona Fide Offer (but shall not be required to identify the
offeror). Clearwire shall have a right of first refusal ("ROFR") with respect to
any such Bona Fide Offer and shall be required to provide notice to Licensee
within twenty (20) days following Clearwire's receipt of Licensee's notification
stating (i) whether Clearwire is exercising its ROFR, and (ii) the form of
consideration to be paid by Clearwire (as discussed in Section 4(d) below). If
Clearwire declines to exercise its ROFR or fails to provide timely notice of
exercise of its ROFR, Licensee will have one hundred twenty (120) days from the
expiration of Clearwire's twenty (20) day response period to enter into an
agreement with the offeror on the same terms and conditions as were offered to
Clearwire. If, within the aforementioned one hundred twenty (120) day period,
Licensee does not enter into a binding agreement with the offeror on the same
terms and conditions as were offered to Clearwire, then Clearwire's ROFR shall
remain in effect pursuant to the terms stated in this Section 4(c). If, within
the one hundred twenty (120) day period, Licensee enters into a binding
agreement with the offeror on the same terms and conditions as were offered to
Clearwire, then Clearwire's ROFR will terminate and be of no further force or
effect; provided, however, that should Licensee's agreement with the offeror be
terminated within [***] after the expiration or termination of this Agreement,
Clearwire's ROFR will be reinstated for an additional amount of time equal to
the remainder of the [***] plus the amount of days during which Licensee was
subject to such binding agreement. However, if, after Clearwire has declined to
exercise its ROFR (or has failed to provide timely notice of such exercise),
Licensee subsequently proposes to enter into a definitive agreement with the
offeror on different terms and conditions than those offered to Clearwire, then
such different terms and conditions shall be deemed to constitute a new offer
and Clearwire's ROFR will apply pursuant to the terms of this Section 4(c). All
materials exchanged under this ROFR are subject to the non-disclosure provisions
of Section 15. Notwithstanding anything in this Agreement to the contrary, if
Licensee receives a Termination Notice, or if this Agreement is terminated by
Licensee pursuant to Section 12(b) (Payment Default), or if this Agreement is
terminated by Licensee pursuant to Section 12(d) (Other Defaults), then
immediately upon the receipt of the Termination Notice or the effective date of
such termination, the provisions of this Section 4(c) shall no longer be
effective.
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(D) FORM OF CONSIDERATION AND DETERMINATION OF VALUE. Subject to, and
without limiting Clearwire's rights described in Section 4(c), if the whole or
any part of the consideration set forth in a Bona Fide Offer is in a form other
than cash, then Clearwire may meet such non-cash consideration using cash
comparable to the non-cash consideration in its acceptance notice. If Licensee
does not accept Clearwire's offer of a cash-substitute for the non-cash
consideration, then Licensee must notify Clearwire of Licensee's estimate of a
fair cash substitute consideration amount within fifteen (15) days after
Licensee's receipt of Clearwire's acceptance notice. Licensee's failure to
provide such notification to Clearwire within the prescribed fifteen (15) day
period shall be deemed an acceptance of Clearwire's cash-substitute offer. If
Licensee disputes Clearwire's cash-substitute amount, then Clearwire will have
ten (10) days from receipt of Licensee's dispute notice to notify Licensee of
its election to (i) adopt Licensee's stated cash value, or (ii) submit the
valuation issue for determination by JAMS Resolution. In any case where the
right to seek a determination by JAMS Resolution is invoked, Clearwire's ROFR
will remain open until twenty (20) days after Clearwire is notified of the
decision made by JAMS Resolution, during which time Clearwire may revise its
acceptance notice to adopt the findings made by the JAMS Resolution or waive its
ROFR with respect to the third party offer, provided that Licensee and the third
party execute a contract to implement the third party offer within one hundred
twenty (120) days of the end of Clearwire's twenty (20) day time period to
consider the decision made by the JAMS Resolution. Licensee's failure to accept
the third party offer restores the ROFR for the remainder of the ROFR Period, if
any. Licensee's failure to enter into a contract with the third party offeror
within the aforementioned one hundred twenty (120) day time period shall restore
Clearwire's ROFR for the remainder of the ROFR period, if any.
(E) RIGHT TO PARTICIPATE. During the Term and for a period of [***]
following the expiration or termination of this Agreement, if Licensee decides
to consider, issue or solicit bids, proposals or offers for sale (if permitted
by the FCC), assignment (excluding Licensee's rights to assign during the Term
under Section 11(c)), transfer, use or lease of any part or the whole of the
Channels, then Licensee will provide Clearwire with an opportunity no less
favorable in timing or substance than the opportunity provided to any other
Person: (i) to receive and/or submit bids, proposals and offers for the
Channels; (ii) to the extent permissible under applicable non-disclosure
agreements, to receive information with respect to such bids, proposals, offers
and counters thereto; and (iii) to discuss any of the same with Licensee. This
right to participate does not limit in any manner, and is in addition to, the
ROFR set forth in Section 4(c). Notwithstanding anything in this Agreement to
the contrary, if Licensee receives a Termination Notice, or if this Agreement is
terminated by Licensee pursuant to Section 12(b) (Payment Default), or if this
Agreement is terminated by Licensee pursuant to Section 12(d) (Other Defaults),
then immediately upon the receipt of the Termination Notice or the effective
date of such termination, the provisions of this Section 4(e) shall terminate
and cease to be of force and effect.
5. FREQUENCY BAND TRANSITION
(A) COOPERATION AND CONSULTATION. The Parties acknowledge that the
Channels are subject to relocation to different frequencies and/or to different
technical characteristics as a result of the band plan transition rules adopted
by the FCC in WT Docket No. 03-66 as such FCC Rules may be amended from time to
time (the "TRANSITION"). The
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Transition shall have no effect on the compensation to be paid to Licensee
pursuant to Section 3 or any obligations of Clearwire US LLC under the Services
Agreement or Clearwire Parent under the Warrant Agreement. Clearwire and
Licensee will cooperate in the Transition in accordance with FCC Rules to
facilitate Clearwire's and Licensee's use of the Channels as provided in this
Agreement. Except as FCC Rules may otherwise require, Licensee will consult with
Clearwire before adopting, consenting to, or otherwise agreeing to any change of
frequencies or characteristics of the Channels other than those changes
specified by FCC Rules, and will fully involve Clearwire in all of its
interactions with any third parties concerning transitions to channel plans
required or allowed as an outcome of the FCC's Transition proceedings. Within
thirty (30) days of the Effective Date, Licensee will provide Clearwire with
copies of Licensee's responses to Pre-Transition Data Requests made by Sprint
Nextel Corporation concerning the Licenses.
(B) POSSIBLE [***] EXCHANGE. The Parties acknowledge that pursuant to
[***] of FCC Rules, Licensee may be required to exchange [***], or portions
thereof, under call sign [***] for channels [***], or portions thereof,
authorized to the [***] under call sign [***].
(C) COSTS AND EXPENSES. Clearwire shall be solely responsible for
paying [***]. If neither Clearwire nor any third party initiates and/or
completes the Transition of the Channels within the time frames specified by FCC
Rules, Licensee may, at its sole option, avail itself of any "self-transition"
rights made available pursuant to FCC Rules. [***].
6. CAPACITY REQUIREMENTS AND USES
(A) CLEARWIRE'S CAPACITY. Subject to Licensee's rights pursuant to
Section 7(a), and subject to Clearwire's compliance with Section 3(d) and its
other obligations under this Agreement, upon the Final Order Date, Clearwire
will have the exclusive right to use all of Clearwire's Capacity.
(B) EXPANSION OF CLEARWIRE'S CAPACITY. If FCC Rules change such that
less (or no) capacity is required to be set aside for Licensee's use, Licensee
shall have the option, in Licensee's sole discretion, to make any or all of
Licensee's Reserved Capacity available to Clearwire as Clearwire's Capacity in
which case the Monthly Lease Payment will be increased as provided in Section
3(c)(ii). As of the Effective Date, Clearwire intends to use only 5.5 MHz of the
6 MHz assigned to [***]. During the Term, Clearwire may elect, in its sole
discretion, to use more than 5.5 MHz on [***].
(C) USE OF CAPACITY. Subject to Section 6(d), Clearwire may use
Clearwire's Capacity in any manner and for any purpose that is lawful, including
those that may be authorized in the future by the FCC. Subject to Section 14,
Licensee may use Licensee's Reserved Capacity for itself and Permitted End Users
in any manner and for any lawful purpose, including for the purpose of
satisfying Substantial Service Requirements.
(D) CONTENT RESTRICTIONS. The Parties acknowledge that once Clearwire
obtains de facto control of Clearwire's Capacity pursuant to the terms of this
Agreement, Clearwire will assume primary responsibility for ensuring that its
use of the Channels complies
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with applicable Laws. Notwithstanding the foregoing, Clearwire will use
commercially reasonable efforts to ensure that, to the best of its knowledge,
the Channels will not be used to transmit libelous, slanderous, defamatory,
obscene or otherwise illegal material; provided, however, that Clearwire bears
no responsibility for information or content posted on the world wide web or
Internet and bears no responsibility for individual emails, blogs or other
transmission of information over the Internet by third parties. If Clearwire or
Licensee become aware of illegal use of the Channels, the Parties will cooperate
with each other and with law enforcement personnel as appropriate to address any
illegal activity. If Clearwire or its Affiliates use Clearwire's Capacity to
transmit any programming over which they have content control, they will only
select for transmission over the Channels programming or services that do not,
to the best of their knowledge, include libelous, slanderous, defamatory,
obscene or otherwise illegal content. Notwithstanding the foregoing, Licensee
acknowledges and agrees that Clearwire does not make any representation,
warranty or covenant with respect to any content or material not provided by
Clearwire or its Affiliates or served through Clearwire technology that
constitutes libel, obscenity, slander or defamation or in any way violates moral
rights, rights of publicity or privacy or other rights. In the event of a breach
of this Section 6(d), in addition to Licensee's indemnification rights pursuant
to Section 20(b), Licensee's sole and exclusive remedy shall be injunctive
relief.
(E) ANNUAL MEETINGS. On an annual basis during the Term, beginning on
the first anniversary of the Effective Date, Licensee and Clearwire shall meet
to review and discuss the Services Agreement and Licensee's Reserved Capacity
and to coordinate the Parties' then-current and planned operations on, and use
of, the Channels. At such meetings, Clearwire will provide Licensee with
updates, if any, on advances in technology applicable to the Channels, the
Services Agreement, and Licensee's Reserved Capacity and new applications for
use of the Channels to further Licensee's educational goals and [***] goals for
the use of the Channels and the Licenses. Discussions with respect to Licensee's
Reserved Capacity shall not include the adjustments to the number of
Connections, which shall be completed in accordance with the terms of Section 8.
Any such discussions and all information provided to Licensee at such meetings
shall be subject to confidentiality and non-disclosure as set forth in Section
15.
(F) SECTION 27.1214(E) AMENDMENTS. Pursuant to Section 27.1214(e) of
FCC Rules, on the date that is fifteen (15) years after the Effective Date and
every five (5) years thereafter, Licensee shall have a period of sixty (60) days
to request a review of its use of Licensee's Reserved Capacity, at which time
the Parties shall negotiate in good faith an amendment to the Agreement that
accommodates any bona fide changes in educational needs, technology and other
relevant factors affecting Licensee's Reserved Capacity requirements.
Notwithstanding the foregoing, the following shall apply to any such amendment:
(i) to the extent such amendment materially increases Clearwire's monthly costs
either to operate Clearwire's Capacity or to meet Licensee's changed educational
use requirements, the amendment may provide that such costs will be offset by a
reduction in the Monthly Lease Payment or funding or service credits under the
Services Agreement for the remainder of the Term, a refund in an amount to be
agreed upon by both Parties, or both; (ii) Clearwire may accommodate changes in
Licensee's Reserved Capacity through any reasonable means available so as to
avoid disruption to the advanced wireless services provided by Clearwire; and
(iii) Clearwire shall not be required to accommodate changes in Licensee's
Reserved
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Capacity in a manner that has a negative economic impact on Clearwire or
Clearwire's commercial operations under the Agreement.
(G) NON-COMPENSATORY CHANNELS SWAPPING. With the consent of Licensee,
which consent will not be unreasonably withheld, conditioned, or delayed,
Clearwire may require Licensee to enter into agreements to swap the Channels for
other EBS or BRS channels in the GSAs as long as: (i) Clearwire demonstrates it
has a bona fide operational purpose to effectuate the proposed swap and any
direct or indirect compensation to Clearwire or its Affiliates resulting from
the swap is solely to account for any differences in the channel assignments or
geographic areas between the channels to be swapped; (ii) in Licensee's
reasonable determination, there is no material detriment in the operational
capability or commercial or economic value of the swapped channels as compared
to the Channels after taking into account relevant factors including applicable
Interference Consents relating to the Channels or swapped channels, the
operation of licenses in adjacent markets or frequency bands that could affect
the operation of the Channels, the size of the GSAs, and the population within
the GSAs; and (iii) there is no reduction or adverse effect on the services,
funding or service credits provided to Licensee under this Agreement or the
Services Agreement following the swap. Under no circumstances shall Licensee be
required to consent to any channel swap of an Upper Band Segment channel or
Lower Band Segment channel for a Middle Band Segment channel, or to any swap
under which the swapped channels provide less contiguous spectrum than the
Channels provide as configured after giving effect to the Transition. In
evaluating a proposed channel swap, the Parties shall consider [***] as full 6
MHz channels, regardless of whether Clearwire or any other Person is using the
full 6 MHz of each Channel. Clearwire shall bear all Costs and Expenses
associated with any channel swap. If Licensee withholds consent to a channel
swap proposed by Clearwire because Licensee determines that the proposed swap
fails to meet the conditions set forth above, the Parties will negotiate in good
faith in an effort to reach agreement on an alternative swap arrangement or to
adjust the compensation due hereunder; provided, however, that Licensee shall
not be required to consent to a channel swap that does not meet the conditions
set forth above unless the Parties have agreed to an alternative arrangement in
writing.
(H) USE OF MIDDLE BAND SEGMENT CHANNELS. Licensee agrees, at
Clearwire's option, that [***] may be used for low power advanced wireless
services, provided such use is permitted under FCC Rules and does not cause
harmful interference to Licensee's use of Licensee's Reserved Capacity.
7. EXISTING EBS EQUIPMENT AND BUILD-OUT OF CLEARWIRE NETWORK
(A) EXISTING OPERATIONS AND EBS EQUIPMENT. Licensee intends to rely on
[***] to continue to operate and maintain the existing transmission and
reception equipment currently in place for the Channels (the "EXISTING EBS
EQUIPMENT") until such time as Clearwire is prepared to activate the Clearwire
Network so as to enable the provision of Clearwire's Service and Licensee's
Service using Licensee's Reserved Capacity. Clearwire shall provide Licensee
with notice that it is prepared to activate the Clearwire Network in accordance
with the provisions of this Section 7 and, upon receiving such notice, Licensee
shall have sixty (60) days to cease all operations on the Channels (such date of
cessation hereinafter referred to as the "EXISTING SERVICE DISCONTINUANCE
DATE"). Notwithstanding the
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transfer of de facto control to Clearwire pursuant to Section 3(a) and
Clearwire's rights pursuant to Section 6(a), Licensee shall have the right to
use all of the capacity on the Channels to provide non-commercial services until
the Existing Service Discontinuance Date.
(B) RELOCATION OR REPLACEMENT OF EXISTING EBS EQUIPMENT. If Licensee
reasonably determines that it must relocate the Existing EBS Equipment to a new
transmission facility or obtain replacement EBS equipment ("REPLACEMENT EBS
EQUIPMENT") prior to the Existing Service Discontinuance Date, [***].
(C) [***]; provided, however, that Clearwire shall not be obligated to
pay for any such Costs and Expenses incurred by Licensee after the Existing
Service Discontinuance Date, other than any final Costs and Expenses incurred by
Licensee to discontinue its then-current EBS service.
(D) BUILD-OUT; SUBSTANTIAL SERVICE. Within [***] following the
Existing Service Discontinuance Date, Clearwire shall activate the Clearwire
Network and thereafter ensure, for the remainder of the Term, that the Clearwire
Network is maintained and operated so as to permit Licensee to meet whatever
spectrum reserve requirements, minimum educational use requirements, substantial
service requirements, and/or other use and performance benchmarks as are
established by the FCC for use of the Channels, as such requirements and
benchmarks may be modified from time to time (collectively the "SUBSTANTIAL
SERVICE REQUIREMENTS"). In accordance with this Section 7(d), Clearwire will
make available to Licensee the Connections as set forth in Section 8 and the
products, services, service credits, funding, and other compensation specified
in the Services Agreement to allow Licensee to meet the Substantial Service
Requirements. In addition, if required by FCC Rules, Clearwire will use
Clearwire's Capacity in such a way as to assure that Clearwire satisfies any
Substantial Service Requirements which may be applicable to commercial entities
for use of the Channels, as such requirements may change from time to time.
Notwithstanding the foregoing, Clearwire shall not be in breach of this Section
7(d) to the extent that Clearwire is prohibited from, or delayed in, completing
its obligations solely due to circumstances beyond its reasonable control that
could not have been reasonably anticipated, including its inability to obtain,
or the delay in obtaining, necessary governmental permits for completion of
construction of the Clearwire Network, provided that Clearwire has used its
commercially reasonable best efforts to perform under this Section 7(d); and,
provided, further, that Clearwire shall use its commercially reasonable best
efforts, at its expense, to design and implement any alternative and possibly
temporary measures that may be necessary for Licensee (and Clearwire, if
applicable) to meet the Substantial Service Requirements and/or preserve and
protect the Licenses and Channels if Clearwire encounters circumstances beyond
its reasonable control as described in this sentence.
(E) DEDICATED EQUIPMENT PURCHASE OPTION. Upon expiration or
termination of this Agreement, Licensee shall have the option, upon giving
notice to Clearwire within thirty (30) days of such expiration or termination,
to purchase or to lease at Clearwire's option that portion of the transmission
equipment (not including any tower rights) then in operation that is dedicated
solely to transmission of Licensee's Reserved Capacity on the Channels (the
"DEDICATED EQUIPMENT"), or comparable equipment. The price for such equipment
shall be
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equal to the fair market value of the Dedicated Equipment at the time of
Licensee's notice or, if comparable equipment is provided, Clearwire's cost in
obtaining such equipment.
(F) SHARED EQUIPMENT PURCHASE OR LEASE OPTION. Upon expiration or
termination of this Agreement, Licensee shall have the option upon giving notice
to Clearwire within thirty (30) days of such expiration or termination to
purchase or lease at Clearwire's option any equipment owned by Clearwire and
used in connection with the transmission of Licensee's Reserved Capacity on the
Channels that is not Dedicated Equipment, or comparable equipment at a price
equal to such equipment's fair market value for such purchase or lease as
applicable.
(G) REAL ESTATE, TOWER AND SITE LEASE RIGHTS. Nothing contained in
this Agreement shall be interpreted as providing Clearwire with rights to use
any real estate, towers, or other real or personal property owned or controlled
by Licensee or [***]. Licensee and [***] shall each be entitled to enter into
such arrangements as they elect, including arrangements that may be competitive
with Clearwire as long as they do not otherwise conflict with Licensee's
obligations to Clearwire under this Agreement.
8. SERVICES TO BE MADE AVAILABLE TO LICENSEE
(A) COST FREE CONNECTIONS USING LICENSEE'S RESERVED CAPACITY. During
the Term, Licensee shall have full access to and use of Licensee's Reserved
Capacity at no cost so as to enable the provision of Licensee's Service using
Licensee's Reserved Capacity. To facilitate and maximize Licensee's access and
use of Licensee's Reserved Capacity at no cost, the Parties will calculate the
amount of Licensee's Reserved Capacity in terms of total throughput measured in
Mbps based on all EBS and BRS channels used in the Clearwire Network at the time
the calculation is made. Licensee's Reserved Capacity shall be calculated as
follows: [***]. For example, and for purposes of illustration only, if Clearwire
uses [***]. The resulting Mbps will be translated into a maximum number of
commercially available end user devices (e.g., wireless modems, mobile
telephones, etc.) acquired by Licensee pursuant to the Services Agreement that
are technically compatible and may be connected to the Clearwire Network [***]
using Licensee's Reserved Capacity based upon the tiers and types of available
Clearwire's Service selected by Licensee ("CONNECTIONS"). Pursuant to the
foregoing example, [***] could be translated into (i) [***] Clearwire
residential modems with a downlink throughput of up to [***] and an uplink
throughput of up to [***]. It is the intent of the Parties that "Connections" be
interpreted generally to take into account changes and advances in technology,
the evolution of the Clearwire Network and changes in the use of the Channels
over time so as to ensure that Licensee benefits from future changes in
technology and new applications.
(B) CALCULATION AND AVAILABILITY OF CONNECTIONS. The maximum number of
Connections available to Licensee shall be calculated and made available to
Licensee within thirty (30) days following the date that Clearwire's Service
becomes available in either GSA ("CONNECTION CALCULATION DATE"). [***] taking
into consideration changes and advances in technology and changes, enhancements,
and advancements in Clearwire's Service and the Clearwire Network. At the time
of such [***], Clearwire will [***]. Notwithstanding the foregoing, in no event
shall the number of Connections available to Licensee be less than [***]
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Clearwire residential modems with a downlink throughput of up to [***] and an
uplink throughput of up to [***] (or the equivalent number of commercial modems
based on the formula described in Section 8(a)).
(C) TERMS OF USE. Licensee's ordering and Licensee's and its Permitted
End Users use of Connections shall be governed by the acceptable use policy and
terms of service, and such other policies of general applicability which apply
to such services, which are subject to amendment and may be found at
http://www.clearwire.com or such other URL as may be designated; provided,
however, that financial terms contained in the terms of service shall not apply
to Connections. In addition to the foregoing, Clearwire may specify from time to
time, in its sole discretion, reasonable procedures for activation, additions,
deletions or substitutions of Connections to Licensee and its Permitted End
Users.
(D) EQUIPMENT AND SOFTWARE. For all Connections made available to
Licensee and its Permitted End Users, Clearwire shall make available pursuant to
the terms of the Services Agreement any end user equipment, services or software
upgrades that Clearwire makes generally available to Clearwire's retail
customers subscribing to the same tier of service. If any equipment upgrade
involves replacement of equipment, the replaced equipment shall be returned to
Clearwire or its designee and title to the replacement equipment shall transfer
to Licensee or Permitted End Users.
(E) TITLE. All equipment provided by Clearwire to Licensee for the
Connections under this Agreement shall be the property of Licensee or Permitted
End Users free and clear of all liens and encumbrances, when paid in full (if
any payment is required). Licensee shall own, and be solely responsible for the
maintenance and operation of, all end user equipment, facilities and receive
sites installed at Licensee's locations, including the sites of its Permitted
End Users; provided however, that Licensee may use service credits for
maintenance and other services as specified in the Services Agreement.
(F) ADDITIONAL CONNECTIONS AND OTHER SERVICES. Licensee may obtain
additional connections and other products and services offered by Clearwire
Parent, its Affiliates, and their successors and assigns pursuant to the terms
of the Services Agreement attached hereto as Exhibit C ("SERVICES AGREEMENT").
9. INTERFERENCE CONSENTS
Except as disclosed in Exhibit D, Licensee has not, within eleven (11)
years of the Effective Date, executed any Interference Consent. Neither Party
shall execute any Interference Consent or request a waiver of FCC Rules
affecting the Channels or the Licenses without the other Party's advance written
consent, such consent not to be unreasonably withheld, refused or delayed;
provided, however, that Licensee may request a waiver of FCC Rules if it
reasonably determines such waiver is necessary to preserve the Licenses or to
prevent a material adverse effect to the Licenses. Licensee shall execute any
Interference Consent and consent to any waiver of FCC Rules, upon reasonable
request by Clearwire; provided, however, that Licensee shall have no obligation
to execute any Interference Consent or consent to any waiver of FCC Rules, if
Licensee reasonably determines that such consent would (i) result in
interference to the use of Licensee's Reserved Capacity, (ii) result in
interference to a third party in violation of
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FCC Rules; (iii) result in any other violation of FCC Rules; (iv) result in a
material difference in any of the Channels' GSAs upon expiration or termination
of this Agreement; or (v) have a material adverse affect on the value of the
Licenses or the Channels upon the expiration or termination of this Agreement.
10. APPLICATIONS AND EXPENSE REIMBURSEMENT
(A) APPLICATION PREPARATION. To the extent permissible under FCC Rules
and in cooperation with Licensee (including prior Licensee review of all
Applications to be submitted to the FCC or any Governmental Authority),
Clearwire will prepare and submit in its name all applications, amendments,
petitions, requests for waivers, and other documents (collectively,
"APPLICATIONS") necessary for the proper operation of Clearwire's Capacity;
provided, however, that Clearwire will not submit any Application without
Licensee's advance written consent, if such Application would, in Licensee's
reasonable determination, (i) result in interference to the use of Licensee's
Reserved Capacity, (ii) result in interference to a third party in violation of
FCC Rules; (iii) result in any other violation of FCC Rules; (iv) result in a
difference in any of the Channels' GSAs upon expiration or termination of this
Agreement; or (v) have an adverse affect on the value of the Licenses or the
Channels upon the expiration or termination of this Agreement. Licensee will
prepare and submit all Applications necessary for the modification, maintenance
and renewal of the Licenses that, under FCC Rules, may only be filed by
Licensee, including, but not limited to, requests for special temporary
authority or any other such filings reasonably requested by Clearwire that meet
the conditions applicable in this Section 10(a) to Applications that are
otherwise filed by Clearwire.
(B) APPLICATION COSTS AND EXPENSE REIMBURSEMENT. Clearwire shall
reimburse Licensee, not later than thirty (30) days after receipt of any invoice
from Licensee, (including such supporting documentation as Clearwire may
reasonably request), for all reasonable Costs and Expenses incurred in
connection with (i) Licensee's preparation, review, filing, and prosecution of
any Application (including any assignment or transfer applications and the FCC
Long Term Lease Application) or other documents submitted to the FCC relating to
the Licenses including applications to renew and continue in full force the
Licenses; (ii) Licensee's preparation, review, filing, and prosecution of any
Interference Consent or other documents requested by Clearwire; (iii) Licensee's
provision of assistance to Clearwire in licensing and other matters in
connection with the performance of this Agreement as may be reasonably requested
by Clearwire from time to time from the Effective Date; and (iv) any Transition
(or self-transition) of the Channels. During the Initial Term, any Costs and
Expenses for which Licensee intends to seek reimbursement under this Agreement
that is expected to exceed [***] shall be subject to prior approval by
Clearwire. During the first Renewal Term, if any, any Costs and Expenses for
which Licensee intends to seek reimbursement under this Agreement that is
expected to exceed [***] shall be subject to prior approval by Clearwire. During
the second Renewal Term, if any, any Costs and Expenses for which Licensee
intends to seek reimbursement under this Agreement that is expected to exceed
[***] shall be subject to prior approval by Clearwire.
(C) REGULATORY FEES. Clearwire will promptly pay all fees, taxes and
assessments of any kind associated with the Channels and the Licenses (including
any federal
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regulatory fees or fees imposed by the FCC) upon receipt of notice that such
fees, taxes or assessments are due.
(D) FCC LONG TERM LEASE APPLICATION. Within ten (10) days following
the Effective Date and prior to consummating the transfer of de facto control of
the Channels, the Parties agree to cooperate as required to prepare and file
with the FCC all forms and related exhibits, certifications and other documents
necessary to obtain the FCC's consent to this Agreement and satisfy the FCC's
requirements for long term de facto lease approval as set forth in 47 C.F.R.
Section 1.9030(e) ("FCC LONG TERM LEASE APPLICATION"). Each Party will fully
cooperate with the other, and do all things reasonably necessary to timely
submit, prosecute and defend the FCC Long Term Lease Application, including
responding to any petitions for reconsideration or Commission reconsiderations
of the grant of the FCC Long Term Lease Application, and will promptly file or
provide the other Party with all other information which is required to be
provided to the FCC in furtherance of the transactions contemplated hereby. The
Parties will disclose in the FCC Long Term Lease Application the automatic
extension of the Term upon the renewal of the Licenses. The Parties further
covenant and agree to include in any License renewal application, or separately
request, as necessary, a request to extend and renew this Agreement for the
renewal term of the License, if this Agreement contemplates renewal of this
Agreement for or during any part of such License renewal term. Any Costs and
Expenses associated with the filing of the FCC Long Term Lease Application and
renewals thereof shall be paid by Clearwire. Within thirty (30) days following
the Effective Date, the Parties will work in good faith to create a mutually
agreeable redacted form of this Agreement which will be submitted to the FCC if
this Agreement must be filed with the FCC, which redacted form of this Agreement
will be attached hereto as Exhibit E. If changes to Exhibit E are required by
Law, the Parties shall coordinate with each other and mutually agree on
appropriate revisions to Exhibit E.
(E) INFORMATION SHARING. The Parties shall promptly provide each other
with all correspondence, notices, and filings to or from the FCC or other
Governmental Authority that relate to the Licenses or the Channels, including
all Transition correspondence and any Application relating to the Licenses
received, sent or filed after the Effective Date. The Parties shall promptly
inform each other of any material FCC Rules violations with respect to the
Channels or the Licenses about which either Party becomes aware after the
Effective Date.
(F) REGULATORY SUPPORT. Upon either Party's request, the other Party
shall support any reasonable efforts by the requesting party to protect and
preserve the Licenses and Channels, including lobbying the FCC or any other
Governmental Authority to oppose any rulemakings or other proceedings that would
adversely affect the Licenses or Channels and the rights of Licensee and
Clearwire to hold and use the Licenses and Channels as contemplated by this
Agreement.
11. ASSIGNMENTS AND SUBLEASING
(A) ASSIGNMENT AND SUBLEASE BY CLEARWIRE TO THIRD PARTY. Clearwire may
not sell, assign, lease, sublease, cross-lease, license, exchange, delegate or
otherwise transfer (collectively, an "ASSIGNMENT") any of its rights and
obligations under this Agreement without the prior written consent of Licensee,
such consent not to be unreasonably withheld or delayed.
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Notwithstanding the foregoing, Licensee shall consent to an Assignment to a
third party that, in Licensee's reasonable determination, is legally,
technically, and financially qualified to assume Clearwire's duties and
obligations under this Agreement (an "ASSIGNEE"); provided, however, that the
following additional conditions are met: [***]. When determining whether a
proposed assignee is legally, technically and financially qualified for an
Assignment, Licensee shall be entitled to take into account that Licensee would
no longer have the protections offered by the Parent Guarantee and Covenant
Agreement. In addition, notwithstanding the foregoing, an Assignment shall not
take place if, in Licensee's reasonable determination, the Assignment would have
a material adverse effect on Licensee's rights under the Services Agreement or
the ability of the proposed assignee to fulfill the terms of the Services
Agreement. This Agreement may not be Assigned unless there is a contemporaneous
Assignment of the Services Agreement to the same Person to whom this Agreement
is Assigned.
(B) PRO FORMA ASSIGNMENT AND SUBLEASE BY CLEARWIRE. Clearwire may
assign this Agreement (or its rights thereunder) or sublease Clearwire's
Capacity to an Affiliate of Clearwire or Clearwire Parent; provided, however,
that, the following conditions are met: (i) in Licensee's reasonable
determination, the assignee or sublessee must be legally, technically, and
financially qualified to assume, in writing in a form reasonably acceptable to
Licensee, all of Clearwire's duties and obligations under this Agreement; (ii)
the Parent Guarantee and Covenant Agreement will continue to apply in full force
and effect pursuant to its terms following the assignment or sublease; and (iii)
in Licensee's reasonable determination, the assignment or sublease would not
have an adverse effect on Licensee's rights under the Services Agreement or the
ability of Clearwire US LLC or its successor to fulfill the terms of the
Services Agreement. Clearwire shall provide notice to Licensee of any such
assignment or sublease, shall take all steps required by the FCC to effectuate
such assignment or sublease, and shall pay for all Costs and Expenses (including
reimbursing Licensee as necessary) associated with any such assignment or
sublease.
(C) ASSIGNMENT OR SURRENDER OF LICENSES. Licensee may elect to assign
the Licenses to a Person qualified to hold the Channels subject to the following
conditions: (i) to the extent FCC Rules do not preclude Clearwire from
exercising consent rights, Licensee shall obtain Clearwire's consent to the
assignment, such consent not to be unreasonably withheld, delayed or conditioned
(it being agreed by the Parties that it would be reasonable for Clearwire to
withhold its consent if Licensee proposes to assign the Channels to a Person
that is engaged in building, operating, managing, or distributing wireless
broadband services on a commercial basis); (ii) the assignee shall assume in
writing the rights and obligations of Licensee under this Agreement and the
Services Agreement; and (iii) to the extent FCC Rules do not preclude Clearwire
from exercising a ROFR with respect to the assignment of the Licenses, the
assignment of the Licenses shall be subject to Clearwire's ROFR described in
Section 4(c). If Clearwire exercises such ROFR, Licensee shall assign the
Licenses to an FCC-qualified Person designated by Clearwire who will assume the
Licenses and Licensee's obligations under this Agreement and the Services
Agreement (a "SUCCESSOR LICENSEE"); provided however, that such Successor
Licensee must be able to assume the Licenses and all of Licensee's obligations
with respect thereto, within one hundred twenty (120) days of being so
designated by Clearwire ("SUCCESSOR LICENSEE CONDITIONS"). If Licensee elects to
discontinue EBS operations and surrender one or more of its Licenses or Channels
to the FCC, such election shall be subject to the following: (i) Licensee shall
notify Clearwire upon making such
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20
decision; and (ii) if requested by Clearwire within thirty (30) days of
Licensee's notification to Clearwire, Licensee shall assign the License(s) for
the affected Channels to a Successor Licensee that meets the Successor Licensee
Conditions. Licensee, any Successor Licensee, and Clearwire shall cooperate in
filing with the FCC any and all documents necessary to assign the License(s) to
a Successor Licensee and obtain FCC consent to such assignment. [***].
(D) PRO FORMA ASSIGNMENT AND SUBLEASE BY LICENSEE. Licensee may,
without the consent of Clearwire, assign the Licenses for the Channels or
sublease its rights and obligations under this Agreement to [***] or an
Affiliate of Licensee; provided that Licensee notifies Clearwire of such pro
forma assignment or sublease and the assignee agrees in writing to assume all of
Licensee's rights and obligations under this Agreement. Licensee shall take all
steps required by the FCC to effectuate such assignment or sublease, and shall
pay for all Costs and Expenses associated with any such assignment or sublease.
12. TERMINATION OF AGREEMENT
(A) AUTOMATIC TERMINATION. This Agreement will terminate automatically
with respect to the Channel(s) subject to an affected License upon the earlier
of: (i) a Final Order denying any extensions of the term of the FCC Long Term
Lease Application with respect to that License; (ii) a Final Order denying the
renewal of the License; or (iii) a Final Order revoking, terminating or
canceling the License. If this Agreement is partially terminated with respect to
less than all of the Licenses and Channels, this Agreement shall automatically
continue in full force and effect for the remaining License(s) and Channel(s),
and the Monthly Lease Payment and funding and services credits under the
Services Agreement shall be reduced on a pro-rated basis to account for the
reduction in MHz/POPs covered by the License(s) and Channel(s) for which this
Agreement is terminated. No change or modification will be made with respect to
any other compensation previously paid to or earned by Licensee under this
Agreement, including the Initial Lease Payment.
(B) PAYMENT DEFAULT. This Agreement may be terminated by Licensee
immediately upon notice to Clearwire if Clearwire fails to make any payment
required pursuant to Section 3 of this Agreement and such breach continues
uncured for [***] after Clearwire receives notice of such breach from Licensee.
(C) INSOLVENCY. Either Party may terminate this Agreement upon
delivery of at least ten (10) days prior notice to the other Party if the other
Party ceases doing business as a going concern and makes an assignment for the
benefit of creditors, admits in writing an inability to pay its debts as they
become due, files a voluntary petition in bankruptcy, is adjudicated bankrupt or
insolvent, files a petition with a court of competent jurisdiction seeking for
itself any reorganization, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute or regulation, or
consents to or acquiesces in the appointment of a trustee, receiver, or
liquidator of it or of all or any substantial part of its assets or properties,
or within sixty (60) days after the commencement of any proceedings against it
seeking reorganization, readjustment, liquidation, dissolution or similar relief
under any present or future statute or regulation, it fails to have such
proceeding dismissed, or if within sixty (60) days after the appointment,
without the Party's consent or acquiescence, of any trustee, receiver or
liquidator of it or of all or any substantial part of its
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21
assets or properties such appointment shall not vacate. Any act or event
entitling one Party to terminate this Agreement under this Section 12(c) shall,
for all purposes of this Agreement, constitute a default in and failure by the
other Party to perform its obligations under the terms of this Agreement.
(D) OTHER DEFAULTS. In addition to the termination rights set forth
above, this Agreement may be terminated by either Party (in this context, the
"NON-BREACHING PARTY") upon material breach of, or default under, any
representation, warranty, covenant, agreement or obligation under this Agreement
by the other Party (in this context, the "BREACHING PARTY"); provided, however,
that the Breaching Party shall be provided with notice of such material breach
or default by the Non-Breaching Party of the alleged grounds for the breach or
default and allowed a [***] period for cure following such notice; provided,
further, however, that if the Breaching Party proceeds with reasonable diligence
during such [***] period and is unable, because of circumstances beyond its
control or because of the nature of the breach or default, to cure the breach or
default within such applicable time period, the time for cure shall be extended,
but in no event beyond [***] after receipt of notice from the Non-Breaching
Party. Clearwire's failure to satisfy the requirements set forth in Sections
3(d) and 7(d) shall be considered a material breach of this Agreement.
(E) FAILURE OF FINAL ORDER DATE. Either Party may terminate this
Agreement without liability by notice to the other Party if the Final Order Date
has not occurred on or prior to the date that is [***] from the Effective Date;
provided, however, that such failure is not the fault of the terminating party.
(F) SERVICES AGREEMENT DEFAULT. Any uncured material breach or default
of Clearwire US LLC or its successors under the Services Agreement or of
Clearwire Parent under the Parent Guarantee and Covenant Agreement shall be
considered a material default under this Agreement entitling Licensee to
terminate this Agreement effective immediately upon providing notice to
Clearwire without opportunity to cure such breach or default apart from any such
cure periods provided in the Services Agreement or Parent Guarantee and Covenant
Agreement, as applicable.
(G) NOTIFICATION TO FCC. The Parties will notify the FCC of the
termination of this Agreement with respect to a License or Channels within ten
(10) calendar days following the termination.
(H) EFFECT OF EXPIRATION OR TERMINATION. Except as expressly set forth
in this Agreement, upon the expiration or termination of this Agreement with
respect to one or both of the Licenses, each Party will pay its own Costs and
Expenses related to the expiration or termination of this Agreement and the
transactions contemplated herein; provided, however, that each Party shall pay
all unpaid amounts owed to the other Party under this Agreement as of the date
of termination or expiration of this Agreement. Any termination or expiration of
this Agreement, regardless of cause, will not release either Licensee or
Clearwire from any liability arising from any breach or violation by that Party
of the terms and provisions of this Agreement prior to the expiration or
termination. The general and procedural provisions of this Agreement, which may
be relevant to enforcing the obligations or duties of the Parties, as well as
any other provisions that by their terms obligate either party following
expiration or
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22
termination, will survive the expiration or termination of this Agreement until
the obligations or duties are performed or discharged in full. Upon expiration
or termination of this Agreement for any reason other than Licensee's material
breach, Clearwire, for a period of ninety (90) days, will cooperate in good
faith with Licensee and take such actions as are reasonable and necessary to
enable Licensee to transition the affected Licenses and the Channels for use
other than in connection with the Clearwire Network; provided, however,
Clearwire shall not be required to pay any Costs and Expenses associated with
such transition.
13. REVENUES AND EXPENSES
Except that Clearwire will pay Licensee's reasonable attorney's fees in the
negotiation of this initial Agreement, each Party will pay its own Costs and
Expenses incident to any amendments or modifications to the Agreement. Unless
otherwise provided in this Agreement, Clearwire is entitled to one hundred
percent (100%) of the revenue generated from the use of the Clearwire's
Capacity.
14. NON-COMPETITION
Licensee will not, during the Term, use Licensee's Reserved Capacity to
build, operate, manage or distribute, on a for-profit basis, a commercial
wireless broadband network. [***]. Nothing in this Section 14 shall be
interpreted as preventing Licensee from leasing, selling, or otherwise providing
rights to Clearwire, Clearwire's Affiliates, Permitted End Users and third
parties to use any real estate, towers, or other real or personal property owned
or controlled by Licensee or [***].
15. CONFIDENTIALITY AND NON-DISCLOSURE
(A) CONFIDENTIALITY OF THE TERMS OF THIS AGREEMENT. The terms of this
Agreement that are not otherwise required to be disclosed to the FCC will be
kept strictly confidential by the Parties and their Agents, which
confidentiality obligation will survive the termination or expiration of this
Agreement for a period of two (2) years. The Parties may make disclosures as
required by Law or judicial process, and to members of their boards of directors
and advisory boards, employees, shareholders, agents, attorneys and accountants
(collectively, "AGENTS") as required to perform their obligations under the
Agreement; provided, however, that the Parties will cause all Agents to honor
the provisions of this Section 15(a). At the request of one Party, the other
will support an application to a court of competent jurisdiction to enjoin any
disclosure and to maintain such confidentiality. Clearwire may disclose the
terms of this Agreement to its Affiliates, strategic partners, actual or
potential investors, lenders, acquirers, merger partners, and others whom
Clearwire deems in good faith to have a need to know such information for
purposes of pursuing a transaction or business relationship with Clearwire, so
long as Clearwire secures an enforceable obligation from all such third parties
to limit the use and disclosure of this Agreement as provided herein. Licensee
and [***] may disclose the terms of this Agreement to their respective
Affiliates, to possible successors to the interests of Licensee or [***], and
to lenders, solely for purposes of pursuing a transaction or formal relationship
with Licensee or [***] as the case may be, so long as Licensee or [***] secures
an enforceable obligation from such third parties to limit the use and
disclosure of this Agreement as provided herein. Licensee may also disclose the
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23
existence and duration of the exclusivity rights and ROFR in Section 4 of this
Agreement. The Parties will submit a confidentiality request to the FCC if the
FCC seeks from the Parties a copy of this Agreement or any other confidential
information regarding its terms.
(B) NON-DISCLOSURE OF SHARED INFORMATION. As used herein, the term
"INFORMATION" shall mean all non-public information disclosed by a Party
hereunder (in this context, the "DISCLOSING PARTY") to the other Party and its
Agents (collectively, in this context, the "RECEIVING PARTY"), whether written
or oral, that is designated as confidential or that, given the nature of the
information or the circumstances surrounding its disclosure, reasonably should
be considered as confidential. The term Information does not include information
which: (1) has been or becomes published or is now, or in the future, in the
public domain without breach of this Agreement by the Receiving Party or breach
of a similar agreement by a third party; (2) prior to disclosure hereunder, is
property within the legitimate possession of the Receiving Party which can be
verified by independent evidence; (3) subsequent to disclosure hereunder, is
lawfully received by the Receiving Party from a third party having rights
therein without restriction of third party's or the Receiving Party's rights to
disseminate the information and without notice of any restriction against its
further disclosure; or (4) is independently developed by the Receiving Party
through persons who have not had, either directly or indirectly, access to or
knowledge of such Information which can be verified by independent evidence.
During the Term, the Disclosing Party may be supplying and/or disclosing
Information relating to its business or operations. The Information will, during
the Term of this Agreement, and for a period of two (2) years after the
termination or expiration of the Agreement, be kept confidential by the
Receiving Party and not used for any purpose other than implementing the terms
of this Agreement. The Receiving Party will be responsible for any improper use
of the Information by it or any of its Agents. Without the prior written consent
of the Disclosing Party and except as allowed herein, the Receiving Party will
not disclose to any Person the Information, or the fact that the Information has
been made available to it, except (i) for disclosures required by Law (or
pursuant to judicial process), and (ii) for disclosures to the Receiving Party's
Agents. Each person to whom Information is disclosed must be advised of its
confidential nature and must agree to abide by the terms of this Section 15(b).
16. ASSUMPTION OF LIABILITIES
Neither Party is assuming or will be responsible for any of the other's
liabilities or obligations (including customer obligations) except as required
by the FCC or as specifically provided in this Agreement.
17. FCC-MANDATED LEASING OBLIGATIONS
(A) Licensee and Clearwire are familiar with FCC Rules affecting
spectrum leasing and the provision of EBS, the Communications Act of 1934, as
amended ("COMMUNICATIONS ACT"), the Code of Federal Regulations, and all other
applicable FCC Rules, and agree to comply with all applicable Laws.
(B) Clearwire assumes primary responsibility for complying with the
Communications Act, and FCC Rules that apply to the Channels and Licenses; this
Agreement
24
and the Services Agreement may be revoked, cancelled or terminated, in
accordance with Section 12, by Licensee or by the FCC if Clearwire fails to
comply with applicable Laws.
(C) Neither Licensee nor Clearwire will represent itself as the legal
representative of the other before the FCC or any Person, but will cooperate
with each other with respect to FCC matters concerning the Licenses and the
Channels.
(D) If a License is revoked, cancelled, terminated or otherwise ceases
to be in effect, Clearwire has no continuing authority or right to use the
leased spectrum under that License unless otherwise authorized by the FCC.
(E) The Agreement is not an assignment, sale or transfer of the
Licenses themselves.
(F) The Agreement will not be assigned to any Person that is
ineligible or unqualified to enter into a spectrum leasing arrangement under FCC
Rules.
(G) Licensee will not consent to an assignment of a spectrum leasing
arrangement unless such assignment complies with applicable FCC Rules.
(H) Licensee and Clearwire must each retain a copy of the Agreement
and make it available upon request by the FCC in accordance with the
confidentiality provisions contained in Section 15.
18. REPRESENTATIONS AND WARRANTIES
(A) LICENSEE REPRESENTATIONS AND WARRANTIES. Except as disclosed in
Exhibit F, Licensee hereby represents and warrants to Clearwire that:
(I) Except for proceedings or complaints affecting EBS licensees
generally, there are no proceedings or complaints existing, or to Licensee's
knowledge, threatened, before any local, state or federal regulatory body, as of
the Effective Date, that could reasonably be expected to have a material adverse
effect on (A) the Licenses; (B) Licensee's ability to perform its obligations
under this Agreement; or (C) on the solvency or financial condition of Licensee.
(II) (A) It has the full right and authority to enter into,
execute, deliver, and perform its obligations under this Agreement; (B) it has
taken all requisite corporate action to approve the execution, delivery and
performance of this Agreement; (C) this Agreement constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms (except
as may be limited by applicable bankruptcy, insolvency or other laws of general
application affecting creditors' rights generally and except as limited by laws
relating to availability of specific performance, injunctive relief or other
equitable remedies); and (D) its execution of and performance under this
Agreement will not violate any applicable Laws or any of its existing
contractual obligations.
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(III) It knows of no fact or circumstance that would disqualify
it from performing its undertakings hereunder (subject to obtaining FCC consent
to the FCC Long Term Lease Application and any other required consents and
approvals).
(IV) (A) The Licenses are in full force and effect, (B)
Licensee's operations and activities pursuant to the Licenses are being
conducted in material compliance with all FCC Rules, and (C) except as set forth
in this Agreement, no Person other than Licensee has any right, title or
interest in or claims to the Licenses.
(V) There are no proceedings, judgments, investigations, or
litigation existing or, to Licensee's knowledge, threatened against Licensee
that would reasonably be expected to have a material adverse effect on
Licensee's ability to perform its obligations under this Agreement or on
Licensee's solvency or financial condition.
(B) CLEARWIRE REPRESENTATIONS AND WARRANTIES. Clearwire hereby
represents and warrants to Licensee as follows:
(I) (A) It has the full right and authority to enter into,
execute, deliver, and perform its obligations under this Agreement; (B) it has
taken all requisite corporate action to approve the execution, delivery and
performance of this Agreement; (C) this Agreement constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms (except
as may be limited by applicable bankruptcy, insolvency or other laws of general
application affecting creditors' rights generally and except as limited by laws
relating to availability of specific performance, injunctive relief or other
equitable remedies); and (D) its execution of and performance under this
Agreement will not violate any applicable Laws or any of its existing
contractual obligations.
(II) It knows of no fact or circumstance that would disqualify it
from performing its undertakings hereunder, and neither it nor any of its
principals or its Affiliates will take any action, cause any action to be taken,
or fail to take any action that would disqualify them from performing and
undertaking the obligations under and as contemplated by this Agreement.
(III) It is qualified under FCC Rules to lease Clearwire's
Capacity.
(IV) It has the financial capacity to enter into and perform the
obligations of this Agreement.
(V) There are no proceedings, judgments, investigations, or
litigation existing or, to the best of Clearwire's knowledge, threatened against
Clearwire or any of its Affiliates that would reasonably be expected to have a
material adverse effect on Clearwire's ability to perform its obligations under
this Agreement or on the solvency or financial condition of Clearwire.
(C) SURVIVAL. The respective representations and warranties of the
Parties will be true and correct as of the Effective Date and as of the Final
Order Date as if made on each of the dates and will survive for [***] after the
Effective Date except that the representations
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and warranties of Licensee in Section 18(a)(iv) and of Clearwire in Section
18(b) (iii) shall survive during the Term.
19. COVENANTS
(A) COVENANTS AND OBLIGATIONS OF LICENSEE. In addition to the
covenants of Licensee contained elsewhere in this Agreement, Licensee shall use
commercially reasonable efforts to faithfully fulfill the following covenants
and obligations during the Term:
(I) It shall operate and maintain end user equipment associated
with Licensee's Service in accordance with applicable Laws.
(II) It shall avoid causing interference in contravention of FCC
Rules to Clearwire's Service or to the lawful transmissions of any third party,
and operate and maintain end user equipment associated with Licensee's Service
consistent with this obligation. If any interference in contravention of FCC
Rules is caused by end user equipment associated with Licensee's Service, it
shall resolve such interference in accordance with FCC Rules.
(III) Subject to obtaining the timely assistance of Clearwire, it
shall comply with FCC Rules and maintain in full force and effect the Licenses
and any associated authorizations for the Channels, including the timely filing
and diligent prosecution of applications for license renewals required to
maintain the Licenses in full force and effect throughout the Term.
(IV) It shall request from the FCC any modifications to the
Licenses or to any FCC authorization relating to the Licenses that is requested
in writing by Clearwire and is otherwise consistent with this Agreement,
including Section 10(a).
(V) It shall notify Clearwire as soon as reasonably practicable
about the nature and forum of any suit or proceeding brought or pending against
Licensee that is not disclosed in Exhibit F and which could reasonably be
expected to result in a judgment or obligation, after giving effect to available
insurance proceeds, of [***] or more against Licensee or that would otherwise
affect Licensee's ability to perform its obligations hereunder or its ability to
hold the Licenses.
(VI) With respect to any Internet access or other wireless
services it receives through the Clearwire Network, it shall take commercially
reasonable steps to ensure that it and Permitted End Users comply with any
applicable acceptable use policies and terms of service, as the same may be
provided to Licensee or made generally available from time to time.
(VII) It shall not take or fail to take (as applicable), and
shall cause its Affiliates and Agents to refrain from taking or from failing to
take (as applicable), any actions, that would disqualify Licensee from
performing its duties and obligations hereunder.
(VIII) It shall obtain and maintain all FCC licenses, permits and
authorizations necessary to allow Clearwire use of the Channels as provided
herein, and will remain eligible under FCC Rules to provide Clearwire's
Capacity, and, unless required by the FCC or other Governmental Authority, will
not commit any act, engage in any activity, or fail to
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27
take any action that could reasonably be expected to cause the FCC to impair,
revoke, cancel, suspend or refuse to renew the Licenses.
(IX) It shall not take or fail to take any actions that would
disqualify Licensee from performing its duties and obligations hereunder or
adversely impact the Licenses or the Channels.
(B) COVENANTS AND OBLIGATIONS OF CLEARWIRE. In addition to the
covenants of Clearwire contained elsewhere in this Agreement, Clearwire shall,
at its sole cost, use commercially reasonable efforts to faithfully fulfill the
following covenants and obligations during the Term:
(I) It shall obtain and maintain all Governmental Authorizations
necessary to perform its duties and obligations hereunder.
(II) After the Existing Service Discontinuance Date, in
accordance with Section 7(d), it shall construct, operate and maintain the
Clearwire Network so as to enable Licensee (and Clearwire, if applicable) to
satisfy the Substantial Service Requirements as contemplated by this Agreement.
Upon construction of the Clearwire Network, it shall operate, and maintain the
Clearwire Network at all times during the Term so as to avoid the forfeiture,
revocation, cancellation, non-renewal or other impairment of the Licenses or the
Channels.
(III) It shall cooperate at Licensee's reasonable request, to
assist Licensee in fulfilling Licensee's responsibilities as an FCC EBS
licensee.
(IV) It shall avoid causing interference to Licensee's use of
Licensee's Reserved Capacity or to the lawful transmissions of any third party,
and operate and maintain the Clearwire Network consistent with this obligation
at all times during the Term. If any interference in contravention of FCC Rules
is caused by the Clearwire Network, Clearwire's operations or equipment,
Clearwire shall be liable for, and shall be obliged to resolve, such
interference.
(V) It shall, at its own cost, prepare, file and prosecute all
applications necessary to secure and maintain in force all non-FCC Governmental
Authorizations required for it to operate the Clearwire Network and provide
Clearwire's Service, and to use commercially reasonable efforts to defend
against any proceeding that could result in the termination of such Governmental
Authorizations.
(VI) It shall obtain and maintain in force during the Term,
insurance reasonably satisfactory to Licensee that is customary and adequate in
form and amount to protect Licensee against Costs and Expenses, damages,
liabilities, claims, and other losses with respect to those matters specified in
Section 20. Any such policies of insurance shall name Licensee as additional
insured to the extent that its interests may appear. Clearwire shall provide
Licensee with a certificate of such insurance naming Licensee as additional
insured within thirty (30) days of the Effective Date. Clearwire shall ensure
that such insurance coverage does not lapse or terminate.
28
(VII) It shall notify Licensee as soon as reasonably practicable
about the nature and forum of any suit or proceeding brought against Clearwire
or its Affiliates that could result in a judgment or obligation, after giving
effect to available insurance proceeds, of [***] or more against Clearwire that
would affect Clearwire's ability to perform its obligations hereunder.
(VIII) It shall not take or fail to take any actions that would
disqualify Clearwire from performing its duties and obligations hereunder or
adversely impact the Licenses or the Channels.
(IX) It shall cooperate with Clearwire US LLC or its successor to
insure that Clearwire US LLC or its successor is able to fulfill its obligations
to Licensee under the terms of the Services Agreement.
(C) ADDITIONAL COVENANTS OF THE PARTIES.
(I) Subject to obtaining FCC Consent, the Parties expressly
acknowledge that this Agreement is designed to transfer de facto, but not de
jure, control of the Clearwire's Capacity to Clearwire in accordance with
Sections 1.9010 and 1.9030 of FCC Rules. The Parties acknowledge and agree that
this Agreement: (i) does not and will not vest in Clearwire, or constitute,
create or have the effect of constituting or creating, de jure control, direct
or indirect, over Licensee or the Licenses, which ownership or de jure control
remains exclusively and at all times in Licensee; and (ii) does not and will not
constitute the transfer, assignment, or disposition in any manner, voluntary or
involuntary, directly or indirectly, of the Licenses or the transfer of control
of Licensee within the meaning of Section 310(d) of the Communications Act other
than for spectrum leasing purposes. During the Term, Clearwire will not take any
action inconsistent with or contrary to Licensee's de jure control, as that term
is construed by the FCC, over the Licenses. During the Term, Clearwire will not
hold itself out to the public as the holder of the Licenses.
(II) Clearwire is primarily responsible for complying with (i)
the Communications Act and applicable FCC Rules with respect to Clearwire's
Capacity, and (ii) the activation, operation, and maintenance of the Clearwire
Network and provision of Clearwire's Service. Licensee is relieved of primary
and direct responsibility for ensuring that operations on Clearwire's Capacity
and the activation, operation and maintenance of the Clearwire Network and
provision of Clearwire's Service comply with the Communications Act and FCC
Rules. Licensee shall remain responsible for (i) complying with FCC Rules with
regard to Licensee's use of Licensee's Reserved Capacity, (ii) satisfying the
Substantial Service Requirements applicable to Licensee, and (iii) complying
with other FCC Rules that specifically apply to licensees in long term de facto
leasing arrangements. Licensee is responsible for its own FCC Rule violations
and any ongoing violations or other egregious behavior pertaining to use of the
Licenses about which it is aware.
(III) Clearwire shall comply with applicable secondary markets
leasing rules, currently set forth in Section 1.9000 et seq. of FCC Rules.
Clearwire acknowledges that this Agreement may be revoked, cancelled or
terminated by Licensee or by the FCC if Clearwire materially fails to comply
with FCC Rules. If a License is revoked, cancelled, terminated or
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29
otherwise ceases to be in effect, Clearwire understands that it will have no
continuing authority or right to use the Clearwire's Capacity on the License,
unless otherwise authorized by the FCC, or unless the FCC grants Clearwire
special temporary authority to operate.
(D) GUARANTEE AND COVENANT BY CLEARWIRE PARENT. Simultaneously with
the execution of this Agreement, the Clearwire Parent shall deliver the Parent
Guarantee and Covenant Agreement in the form of Exhibit G hereto ("PARENT
GUARANTEE AND COVENANT AGREEMENT"). Notwithstanding anything herein to the
contrary, this Agreement shall not be effective or binding on Licensee until
said Parent Guarantee and Covenant Agreement is delivered to Licensee.
20. INDEMNIFICATION
(A) INDEMNIFICATION BY LICENSEE. Neither Clearwire nor any Clearwire
Affiliate shall be liable to Licensee or to any Licensee Affiliate, for any
Costs and Expenses, damages, injuries, penalties, judgments, fines, liabilities,
claims or other losses of any nature whatsoever (collectively, "DAMAGES")
sustained by Licensee or a Licensee Affiliate on account of the matters
specified below in subsections (i) through (iv); nor shall Clearwire or any
Clearwire Affiliate be liable to Licensee or a Licensee Affiliate, for any claim
or demand made by a third party upon Licensee or a Licensee Affiliate for any
such Damages on account of the matters specified in subsections (i) through
(iv). In furtherance of these provisions, and except as stated herein, Licensee
shall indemnify, hold harmless, and defend Clearwire and Clearwire's Affiliates
from and against any Damages asserted by any third party, [***], with respect
to:
(I) The installation, maintenance, testing, repair, operation, or
removal of the Existing EBS Equipment by Licensee;
(II) Any breach by Licensee of any representation or warranty
made by Licensee in this Agreement;
(III) Any breach by Licensee of any covenant, agreement, or
obligation of Licensee contained in this Agreement; and
(IV) Any proceeding or claim which results from the misconduct or
negligence of Licensee, Licensee's Affiliates or any Permitted End Users under
this Agreement (including with respect to transmission of Licensee's Service
over Licensee's Reserved Capacity).
(B) INDEMNIFICATION BY CLEARWIRE. Neither Licensee nor any Licensee
Affiliate shall be liable to Clearwire, any Affiliate of Clearwire or any third
party for any Damages sustained by Clearwire or such third party on account of
the matters specified below in subsections (i) through (iv); nor shall Licensee
or any Licensee Affiliate be liable to Clearwire or any Clearwire Affiliate for
any Damages asserted by a third party against Clearwire or a Clearwire Affiliate
related to the matters specified in subsections (i) through (iv). In furtherance
of these provisions, and except as stated herein, Clearwire shall indemnify,
hold harmless, and defend Licensee and its Affiliates and Agents from and
against any and all
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30
Damages whether sustained by Licensee (or its Affiliates or Agents) or by any
third party, [***], arising out of, in connection with or with respect to:
(I) The installation, maintenance, testing, repair, operation, or
removal of any of Clearwire's equipment, Clearwire US LLC's equipment, or the
Clearwire Network;
(II) Any breach by Clearwire of any representation or warranty
made by Clearwire in this Agreement, or any breach by Clearwire US LLC of any
representation or warranty made in the Services Agreement;
(III) Any breach by Clearwire of any covenant, agreement, or
obligation of Clearwire contained in this Agreement, or any breach by Clearwire
US LLC of any covenant, agreement, or obligation of Clearwire US LLC contained
in the Services Agreement;
(IV) The provision of Clearwire's Service or of any of the
services provided under the Services Agreement including any claimed liability
arising as a result of an interruption, degradation, or failure in Clearwire's
Service; and
(V) Any proceeding which results from the conduct or activities
of Clearwire or it Affiliates, principals or customers, including any business
activities related to the Clearwire Network, Clearwire's Service, Services
Agreement, or Clearwire's Capacity.
(C) NOTIFICATION OF SUITS AND CLAIMS. Whenever any claim for
indemnification shall arise under Section 20(a) or 20(b), the Party to be
indemnified (the "INDEMNIFIED PARTY") shall promptly notify the Party to provide
indemnification (the "INDEMNIFYING PARTY") of the claim and, when known, the
facts constituting the basis for such claim and the amount or estimate of the
liability arising therefrom. The Indemnifying Party shall have the right to
defend against such claim. An Indemnified Party shall not settle or compromise
any claim by a third party for which the Indemnified Party is entitled to
indemnification hereunder without the prior written consent of the Indemnifying
Party, unless suit in respect of such third party claim shall have been
initiated against the Indemnified Party and the Indemnifying Party shall not
have undertaken the defense thereof. At the time any such defense may become
necessary, the Indemnifying Party shall furnish such bond or undertaking
reasonably adequate to the Indemnified Party to guarantee this obligation.
Except as otherwise provided herein, no action taken by an Indemnified Party
under advice of its legal counsel, in the exercise of its judgment, shall
relieve the Indemnifying Party of its obligations hereunder, including the
obligation to reimburse the Indemnified Party for Costs and Expenses incurred in
defending against any investigation or proceeding.
(D) LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE
IN ANY WAY, REGARDLESS OF THE FORM IN WHICH ANY LEGAL OR EQUITABLE ACTION MAY BE
BROUGHT (WHETHER IN TORT, CONTRACT, STRICT LIABILITY OR OTHERWISE), FOR ANY LOSS
OF USE, INTERRUPTION OF BUSINESS, LOST PROFITS, SALES, DATA OR GOODWILL, COSTS
OF PROCURING SUBSTITUTE GOODS OR SERVICES, OR ANY SPECIAL, INCIDENTAL, INDIRECT,
PUNITIVE OR CONSEQUENTIAL DAMAGES WHATSOEVER, HOWEVER CAUSED, EVEN IF THE
PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE,
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31
AND REGARDLESS OF WHETHER THESE LIMITATIONS CAUSE ANY REMEDY TO FAIL OF ITS
ESSENTIAL PURPOSE. The limitations of liability in this Section 20(d), are
material conditions to the Parties' entering into this Agreement, without which
the Parties would be unwilling to enter into this Agreement, and will survive
any termination or expiration of this Agreement.
21. NOTICES
Any notice required to be given by one Party to the other under this
Agreement will be delivered using a reliable national express overnight delivery
service and will be effective upon receipt. All notices will be delivered to the
Parties at the following addresses:
(A) CLEARWIRE:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
Attn: [***]
Telephone: [***]
Fax: [***]
With a copy to:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
Attn: [***]
Telephone: [***]
Fax: [***]
(B) LICENSEE:
[***]
Telephone: [***]
Facsimile: [***]
With a copy to:
[***]
Telephone: [***]
Facsimile: [***]
Either Party may change its addresses for receipt of notice or payment by giving
notice of such change to the other Party as provided in this Section 21.
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22. MISCELLANEOUS
(A) LAWS, RULES AND REGULATIONS. This Agreement is subject to all
Laws, relative to, among other things, the subject matter addressed in this
Agreement.
(B) FORCE MAJEURE. Neither Party will be liable for any nonperformance
under this Agreement due to causes beyond its reasonable control that could not
have been reasonably anticipated by the non-performing Party and that cannot be
reasonably avoided or overcome; provided that the non-performing party gives the
other Party prompt notice of such cause, and in any event, within fifteen (15)
calendar days of its discovery.
(C) INDEPENDENT PARTIES. None of the provisions of this Agreement will
be deemed to constitute a partnership, joint venture, or any other such
relationship between the Parties, and neither Party will have any authority to
bind the other in any manner. Neither Party will have or hold itself out as
having any right, authority or agency to act on behalf of the other Party in any
capacity or in any manner, except as may be specifically authorized in this
Agreement.
(D) SPECIFIC PERFORMANCE. The Parties recognize that the subject
matter of this Agreement is unique and that this Agreement may not provide an
adequate remedy at law. Accordingly, the Parties agree that each will be
entitled to seek injunctive relief and specific enforcement of this Agreement in
a court of equity without proof of specific monetary damages, but without
waiving any right thereto, in the event of breach of this Agreement by the other
Party, and each Party waives the defense in any action or proceeding brought to
enforce this Agreement that there exists an adequate remedy at law.
(E) APPLICABLE LAW. The validity, construction and performance of this
Agreement will be governed by and construed in accordance with FCC Rules and the
internal laws of the State of [***] without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws
of any jurisdiction other than the State of [***]. Except where JAMS Resolution
is provided for in this Agreement, the Parties hereto, their successors and
assigns consent to the jurisdiction of the courts of [***] with respect to any
legal proceedings that may result from a dispute concerning this Agreement.
(F) ATTORNEYS' FEES. If any action, including JAMS Resolution
proceedings, shall be brought on account of any breach of or to enforce or
interpret any of the terms, covenants or conditions of this Agreement, the
prevailing Party will be entitled to recover from the other its reasonable
attorneys' fees and costs, as determined by the arbitrator(s), court or
governing body hearing the action.
(G) SEVERABILITY. If any provision of this Agreement is found to be
illegal, invalid or unenforceable, such provision will be enforced to the
maximum extent permissible so as to effect the intent of the Parties, and the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired, unless continued enforcement of the provisions
frustrates the intent of the Parties.
(H) NO WAIVER. No delay or failure by either Party in exercising any
right under this Agreement, and no partial or single exercise of that right,
will constitute a waiver of
[*** Confidential Treatment Requested]
33
that or any other right. Failure to enforce any right under this Agreement will
not be deemed a waiver of future enforcement of that or any other right.
(I) SELF HELP. Notwithstanding any other provision of this Agreement,
if at anytime during the Term, Licensee reasonably determines that Clearwire's
actions or omissions (including, by way of example, Clearwire's failure to
construct, maintain or operate the Clearwire Network in accordance with Section
7(d)) are reasonably likely to result in the forfeiture, revocation,
cancellation, non-renewal or other material impairment of the Licenses or the
Channels, then Licensee may, upon ten (10) days advance notice to Clearwire,
assume de facto control of Clearwire's Capacity and take whatever action
Licensee determines, in its reasonable discretion, to be necessary to prevent
the forfeiture, revocation, cancellation, non-renewal or any other impairment of
the Licenses or the Channels; provided however, if Licensee exercises its rights
under this Section 22(i), de facto control of Clearwire's Capacity shall be
transferred back to Clearwire promptly after Licensee has determined, in its
reasonable discretion, that the threat of forfeiture, revocation, cancellation,
non-renewal or other material impairment of the Licenses or the Channels no
longer exists. Clearwire shall promptly reimburse Licensee for all reasonable
Costs and Expenses incurred in connection with Licensee's exercise of its rights
pursuant to this Section 22(i).
(J) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but which collectively
will constitute one and the same instrument. Original signatures transmitted by
facsimile or email will be effective to create such counterparts.
(K) HEADINGS. The headings and captions used in this Agreement are for
convenience only and are not to be considered in construing or interpreting this
Agreement.
(L) CONSTRUCTION. The Parties and their respective counsel have
negotiated this Agreement. This Agreement will be interpreted in accordance with
its terms and without any strict construction in favor of or against either
Party based on draftsmanship of the Agreement or otherwise.
(M) COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter addressed, and
supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, between the Parties or any of their Affiliates
regarding this subject matter. No amendment to or modification of this Agreement
will be binding unless in writing and signed by a duly authorized representative
of each of the Parties and Clearwire Parent.
(N) COOPERATION. The Parties will take such further action and execute
such further assurances, documents and certificates as either Party may
reasonably request to effectuate the purposes of this Agreement.
(O) RECITALS. The recitals set forth at the beginning of this
Agreement are integral to this Agreement, are to be considered substantive
provisions hereof, and are incorporated herein by reference as if fully set
forth.
34
(P) PRESS ANNOUNCEMENTS. No announcement to the press or general
public of this Agreement or the terms or conditions thereof shall be made unless
such announcement or release shall have been approved in advance by both
Parties. Notwithstanding the foregoing, either Party may make any such
disclosures of this Agreement or the terms hereof to the extent necessary to
comply with accounting standards and applicable securities and other laws and
regulations of the Securities and Exchange Commission or with the regulations of
any applicable securities exchange and each of the Parties agree that that the
Parties and/or their Affiliates may be required to disclose the financial terms
of this Agreement in such Party's or its Affiliates' consolidated financial
statements or in the footnotes thereof; provided however, that Clearwire shall
provide notice to Licensee if it makes any such disclosures.
(Q) USE OF LICENSEE'S NAME. With the exception of the FCC Long Term
Lease Application, Clearwire will not use the name of Licensee, [***], or
their Affiliates in any materials that are available to the public without
Licensee's prior written permission, which written permission may be withheld or
granted in Licensee's sole discretion.
23. INCLUDED EXHIBITS
The following exhibits are part of this Agreement:
Exhibit A. FCC Reference Copies of Licenses
Exhibit B1. Warrant Agreement ($10.50)
Exhibit B2. Warrant Agreement ($16.00)
Exhibit C. Services Agreement
Exhibit D. Interference Consents
Exhibit E. Redacted Agreement
Exhibit F. Licensee's Disclosures
Exhibit G. Parent Guarantee and Covenant Agreement
[SIGNATURE PAGE FOLLOWS]
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AGREED TO:
CLEARWIRE SPECTRUM HOLDINGS II LLC
By: /s/ R. Gerard Salemme
---------------------------------
Name: R. Gerard Salemme
Title: Ex V.P.
[***]
By: /s/ [***]
---------------------------------
Name: [***]
Title: President
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EXHIBIT A
FCC REFERENCE COPIES OF LICENSES
[***]
[*** Confidential Treatment Requested]
A-1
EXHIBIT B1
WARRANT AGREEMENT ($10.50)
B-1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. (NO)
Issued: (DATE), 2006
WARRANT TO PURCHASE
SHARES OF CLASS A COMMON STOCK OF
CLEARWIRE CORPORATION
(VOID AFTER __________, 20__ [[FIFTH ANNIVERSARY OF FINAL ORDER DATE]])
This certifies that [***] (the "Holder"), for value received, is entitled
to purchase from Clearwire Corporation, a Delaware corporation (the "Company"),
having a place of business at 5808 Lake Washington Blvd., Suite 300, Kirkland,
WA 98033, Two Million Five Hundred Thousand (2,500,000) fully paid and
nonassessable shares of the Company's Class A Common Stock (the "Common Stock").
The exercise price per share of this Warrant is Ten Dollars and Fifty Cents
($10.50) (the "Stock Purchase Price") payable in lawful money of the United
States or otherwise as hereinafter provided. If payment is by check and the
check is not a check issued by a regulated banking or financial institution the
shares to be so issued shall not be considered issued until such check has
cleared.
Unless this Warrant is terminated earlier as provided in Section 8, this
Warrant may be exercised in whole or in part at any time or from time to time up
to and including 5:00 p.m. (Pacific Time) on [[_______, 20__]][[INSERT DATE 5TH
ANNIVERSARY OF FINAL ORDER DATE]] (the "Expiration Date"), upon surrender to the
Company at its principal office (or at such other location as the Company may
advise the Holder in writing) of this Warrant properly endorsed with the
Subscription Form attached hereto as Warrant Exhibit A duly filled in and signed
(the "Subscription Form") and, if applicable, upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable hereunder are
subject to adjustment as provided in Section 3 of this Warrant.
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Common Stock (but not for a fraction of a
share) which may be purchased hereunder.
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1.2 ISSUANCE OF CERTIFICATES. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be and are deemed to be issued to the
Holder, as directed by Holder from time to time, as the record owner of such
shares as of the close of business on the date on which the Holder surrenders
this Warrant, properly endorsed, and the completed, executed Subscription Form
(a copy of which is attached hereto as Warrant Exhibit A), at the offices of the
Company, upon payment made for such shares as set forth in this Warrant.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time (not to exceed ten (10) business
days) after the rights represented by this Warrant have been so exercised. Each
stock certificate so delivered shall be in such denominations of Common Stock as
may be requested by the Holder hereof and shall be registered in the name of
such Holder or, subject to the provisions of Section 7, such Holder's designee.
In case of a purchase of less than all the shares which may be purchased under
this Warrant, the Company shall cancel this Warrant and execute and deliver a
new Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time (not to exceed ten (10) business days).
1.3 STOCKHOLDERS AGREEMENT. Upon exercising this Warrant, at the request of
the Company, the Holder agrees to become a party to the stockholders agreement
then in effect, if any, among the Company and the holders of shares constituting
a majority of the voting power of the Company's capital stock, prior to or upon
issuance of the Common Stock to the holder.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all shares of Common Stock that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that, during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved or, shall upon request of
the Holder authorize and reserve, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed, including, but not limited to, amending its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock;
provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action that would result in any
adjustment of the Stock Purchase Price (as set forth in Section 3 hereof) if the
total number of shares of Common Stock issuable after such action upon exercise
of all outstanding warrants and options, together with all shares of Common
Stock then outstanding, would exceed the total number of shares of Common Stock
then authorized by the Company's Certificate of Incorporation.
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3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock Purchase
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3. Upon each adjustment of the Stock Purchase
Price, the Holder of this Warrant shall thereafter be entitled to purchase, at
the Stock Purchase Price resulting from such adjustment, the number of shares
obtained by multiplying the Stock Purchase Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Stock Purchase
Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at any
time split or subdivide its outstanding shares of Common Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
split or subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If
at any time or from time to time the holders of Common Stock (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor:
3.2.1 Common Stock or any shares of stock or other securities that are
at any time directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution;
3.2.2 Any cash paid or payable otherwise than as a cash dividend out
of current earnings; or
3.2.3 Common Stock or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement (other than (i) shares of Common Stock
issued as a stock split, adjustments in respect of which shall be covered by the
terms of Section 3.1 above or (ii) an event for which adjustment is otherwise
made pursuant to Section 3.3 below);
then in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses 3.2.2 and 3.2.3 above) which such Holder
would hold on the date of such exercise had he or it been the holder of record
of such Common Stock as of the date on which holders of Common Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION OR RECAPITALIZATION. If any
recapitalization, reclassification or capital reorganization of the capital
stock of the Company shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, or other
3
assets or property (a "Restructuring"), then, as a condition of such
Restructuring, lawful and adequate provisions shall be made whereby the Holder
hereof shall thereafter have the right to purchase and receive (in lieu of or in
addition to the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares of stock, securities or other assets or property
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby and appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.
3.4 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase Price,
any increase or decrease in the number of shares purchasable upon the exercise
of this Warrant or any change in the securities or other property deliverable
upon exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company. The
notice shall be signed by the Company's President and shall state the Stock
Purchase Price resulting from such adjustment, the increase or decrease, if any,
in the number of shares purchasable at such price upon the exercise of this
Warrant or the amount of securities or other property deliverable upon such
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
3.5 OTHER NOTICES. If at any time:
3.5.1 the Company shall declare any cash dividend upon its Common
Stock;
3.5.2 the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
3.5.3 there shall be any Restructuring; or
3.5.4 there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, overnight courier or facsimile, addressed to the Holder
of this Warrant at the address of such Holder as shown on the books of the
Company, (a) at least fifteen (15) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such Restructuring, dissolution, liquidation or winding-up,
and (b) in the case of any such Restructuring, dissolution, liquidation,
winding-up or public offering, at least fifteen (15) days' prior written notice
of the date when the same shall take place; provided, however, that if any
response on the part of the Holder is otherwise required, the Holder shall make
its best efforts to respond to such notice as early as possible after the
receipt thereof. Any notice given in
4
accordance with the foregoing clause (a) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the
holders of Common Stock shall be entitled thereto. Any notice given in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such Restructuring, dissolution,
liquidation, winding-up or public offering, as the case may be.
3.6 CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, the Board of Directors of the Company shall make an adjustment in
the number and class of shares available under the Warrant, the Stock Purchase
Price or the application of such provisions, so as to protect such purchase
rights as aforesaid. The adjustment shall be such as will give the Holder of the
Warrant upon exercise for the same aggregate Stock Purchase Price the total
number, class and kind of shares as it would have owned had the Warrant been
exercised prior to the event and had it continued to hold such shares until
after the event requiring adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Common Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner that interferes with the
timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof the right
to vote or to consent or to receive notice as a stockholder of the Company or
any other matters or any rights whatsoever as a stockholder of the Company. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provision
hereof in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by its creditors.
7. TRANSFER RESTRICTIONS. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole but not in part, without charge to the Holder hereof (except for
transfer taxes), upon surrender of this Warrant properly endorsed and in
compliance with such provisions, to a Qualified Transferee. "Qualified
Transferee" means a proposed transferee that meets all of the following
requirements: (a) the proposed transferee is an "accredited investor" as such
term is defined under Regulation D of the Act; (b) the proposed transferee is
not a competitor of the Company, as reasonably determined
5
by the Company; and (c) the Company has not reasonably and in good faith
concluded that providing such proposed transferee any information to which a
stockholder of the Company is entitled is likely to threaten the proprietary
nature of such information or the Company's business objectives or competitive
positioning. The Company will maintain a register (the "Warrant Register")
containing the names and addresses of the Holder or Holders. Any Holder of this
Warrant or any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register. Until this Warrant is transferred
on the Warrant Register of the Company, the Company may treat the Holder as
shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary. This Warrant may not be
transferred or assigned without compliance with all applicable federal and state
securities laws by the transferor and the transferee. The Holder further agrees
not to make any disposition of all or any portion of this Warrant or any shares
of Common Stock or any security into or for which such Common Stock is exchanged
unless and until the transferee has agreed in writing for the benefit of the
Company to be bound by this Section 7 to the extent such section is then
applicable, and:
A. There is then in effect a registration statement under the 1933 Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
B. (i) the Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition and (ii) if reasonably
requested by the Company, the Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the 1933 Act.
8. CHANGE OF CONTROL.
8.1 The Company shall give the Holder at least fifteen (15) days' prior
written notice of a Change of Control in accordance with the provisions of
Section 3.5. A "Change of Control" means (i) a sale of all or substantially all
of the assets of the Company or (ii) the transfer by the Company's stockholders
by means of a merger, consolidation, reorganization, recapitalization or
otherwise, of more than 50% of the voting power of the Company in a single
transaction or a series of related transactions.
8.2 [***].
9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, referred to in
Section 7, shall survive the exercise of this Warrant.
10. MODIFICATION AND WAIVER. The terms of this Warrant may be amended, or the
observance of any term of this Warrant may be waived (either generally or in a
particular
[*** Confidential Treatment Requested]
6
instance and either retroactively or prospectively), only with the written
consent of the Company and the Holder of this Warrant.
11. NOTICES. Any notice, request or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by first-class mail, postage prepaid, to the Holder at its address
as shown on the Warrant Register or to the Company at the address indicated
therefor in the first paragraph of this Warrant, or such other address as either
may from time to time provide to the other.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.
13. LOST WARRANTS. The Company represents and warrants to the Holder hereof that
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Warrant and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company, at its expense, will make and deliver
a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Fair Market Value of the Common Stock.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its President, thereunto duly authorized as of the date first written above.
CLEARWIRE CORPORATION
a Delaware corporation
By:
------------------------------------
(OFFICER_NAME_TITLE)
7
WARRANT EXHIBIT A
SUBSCRIPTION FORM
Date: _____________, 20__
Clearwire Corporation
____________________________
____________________________
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by Clearwire
Corporation (the "Company") and dated ______________, 200_, Warrant No. ___ (the
"Warrant") to purchase thereunder __________ shares of the Class A Common Stock
of the Company (the "Shares") at a purchase price of $________ per Share, or an
aggregate purchase price of _______________________ ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the Purchase
Price herewith in full in cash or by certified check or wire transfer. The
undersigned also makes the representations set forth on the attached Warrant
Exhibit B.
Very truly yours,
----------------------------------------
By:
------------------------------------
Title:
---------------------------------
WARRANT EXHIBIT B
INVESTMENT REPRESENTATIONS
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO CLEARWIRE CORPORATION
ALONG WITH THE SUBSCRIPTION FORM BEFORE THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THE WARRANT DATED __________________, 200_, WILL BE ISSUED.
________________
Clearwire Corporation
____________________________
____________________________
Ladies and Gentlemen:
The undersigned, _________________________ ("Purchaser"), intends to
acquire up to ______________ shares of the Class A Common Stock (the "Common
Stock") of Clearwire Corporation (the "Company") from the Company pursuant to
the exercise or conversion of certain Warrants to purchase Common Stock held by
Purchaser. The Common Stock will be issued to Purchaser in a transaction not
involving a public offering and pursuant to an exemption from registration under
the Securities Act of 1933, as amended (the "1933 Act") and applicable state
securities laws. Purchaser has been advised that the Common Stock has not been
registered under the 1933 Act or state securities laws on the ground that this
transaction is exempt from registration, and that reliance by the Company on
such exemptions is predicated in part on Purchaser's representations set forth
in this letter. Accordingly, Purchaser represents, warrants and agrees as
follows:
1. Purchaser is acquiring the Common Stock for its own account and
beneficial interest to hold for investment and not for sale or with a view to
distribution of the Common Stock or any part thereof. Purchaser has no present
intention of selling (in connection with a distribution or otherwise), granting
any participation in, or otherwise distributing the same, and does not presently
have reason to anticipate a change in such intention.
2. Purchaser acknowledges that it has received all the information it has
requested from the Company and considers necessary or appropriate for deciding
whether to acquire the Common Stock. Purchaser represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Common Stock and to obtain any
additional information necessary to verify the accuracy of the information given
the Purchaser. Purchaser further represents that it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risk of this investment.
3. Purchaser is an "accredited investor" as such term is defined in Rule
501 under the 1933 Act.
4. Purchaser acknowledges that investment in the Common Stock involves a
high degree of risk, and represents that it is able, without materially
impairing its financial condition, to hold the Common Stock for an indefinite
period of time and to suffer a complete loss of its investment.
5. Purchaser has been informed that under the 1933 Act, the Common Stock
must be held indefinitely unless it is subsequently registered under the 1933
Act or unless an exemption from such registration (such as Rule 144) is
available with respect to any proposed transfer or disposition by Purchaser of
the Common Stock. Purchaser further agrees that the Company may refuse to permit
Purchaser to sell, transfer or dispose of the Common Stock (except as permitted
under Rule 144) unless there is in effect a registration statement under the
1933 Act and any applicable state securities laws covering such transfer, or
unless Purchaser furnishes an opinion of counsel reasonably satisfactory to
counsel for the Company, to the effect that such registration is not required.
Purchaser shall not make any sale, transfer or other disposition of the Common
Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission or in violation
of any applicable state securities law.
6. Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Common Stock, or any substitutions therefor, a legend
stating in substance:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "1933 Act"), or any state
securities laws. These shares have been acquired for investment and may not
be sold or otherwise transferred in the absence of an effective
registration statement for these shares under the 1933 Act and applicable
state securities laws, or, if requested by the Company, an opinion of
counsel satisfactory to the Company that registration is not required and
that an applicable exemption is available."
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Common Stock
with Purchaser's counsel.
Very truly yours,
----------------------------------------
By:
------------------------------------
Title:
---------------------------------
EXHIBIT B2
WARRANT AGREEMENT ($16.00)
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. (NO)
Issued: (DATE), 2006
WARRANT TO PURCHASE
SHARES OF CLASS A COMMON STOCK OF
CLEARWIRE CORPORATION
(VOID AFTER __________, 20__ [[FIFTH ANNIVERSARY OF FINAL ORDER DATE]])
This certifies that [***] (the "Holder"), for value received, is entitled
to purchase from Clearwire Corporation, a Delaware corporation (the "Company"),
having a place of business at 5808 Lake Washington Blvd., Suite 300, Kirkland,
WA 98033, One Million Seven Hundred Thousand (1,700,000) fully paid and
nonassessable shares of the Company's Class A Common Stock (the "Common Stock").
The exercise price per share of this Warrant is Sixteen Dollars ($16.00)
(the "Stock Purchase Price") payable in lawful money of the United States or
otherwise as hereinafter provided. If payment is by check and the check is not a
check issued by a regulated banking or financial institution the shares to be so
issued shall not be considered issued until such check has cleared.
Unless this Warrant is terminated earlier as provided in Section 8, this
Warrant may be exercised in whole or in part at any time or from time to time up
to and including 5:00 p.m. (Pacific Time) on [[_______, 20__]][[INSERT DATE 5TH
ANNIVERSARY OF FINAL ORDER DATE]] (the "Expiration Date"), upon surrender to the
Company at its principal office (or at such other location as the Company may
advise the Holder in writing) of this Warrant properly endorsed with the
Subscription Form attached hereto as Warrant Exhibit A duly filled in and signed
(the "Subscription Form") and, if applicable, upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable hereunder are
subject to adjustment as provided in Section 3 of this Warrant.
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Common Stock (but not for a fraction of a
share) which may be purchased hereunder.
[*** Confidential Treatment Requested]
1.2 ISSUANCE OF CERTIFICATES. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be and are deemed to be issued to the
Holder, as directed by Holder from time to time, as the record owner of such
shares as of the close of business on the date on which the Holder surrenders
this Warrant, properly endorsed, and the completed, executed Subscription Form
(a copy of which is attached hereto as Warrant Exhibit A), at the offices of the
Company, upon payment made for such shares as set forth in this Warrant.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time (not to exceed ten (10) business
days) after the rights represented by this Warrant have been so exercised. Each
stock certificate so delivered shall be in such denominations of Common Stock as
may be requested by the Holder hereof and shall be registered in the name of
such Holder or, subject to the provisions of Section 7, such Holder's designee.
In case of a purchase of less than all the shares which may be purchased under
this Warrant, the Company shall cancel this Warrant and execute and deliver a
new Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time (not to exceed ten (10) business days).
1.3 STOCKHOLDERS AGREEMENT. Upon exercising this Warrant, at the request of
the Company, the Holder agrees to become a party to the stockholders agreement
then in effect, if any, among the Company and the holders of shares constituting
a majority of the voting power of the Company's capital stock, prior to or upon
issuance of the Common Stock to the holder.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all shares of Common Stock that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that, during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved or, shall upon request of
the Holder authorize and reserve, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed, including, but not limited to, amending its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock;
provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action that would result in any
adjustment of the Stock Purchase Price (as set forth in Section 3 hereof) if the
total number of shares of Common Stock issuable after such action upon exercise
of all outstanding warrants and options, together with all shares of Common
Stock then outstanding, would exceed the total number of shares of Common Stock
then authorized by the Company's Certificate of Incorporation.
2
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock Purchase
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3. Upon each adjustment of the Stock Purchase
Price, the Holder of this Warrant shall thereafter be entitled to purchase, at
the Stock Purchase Price resulting from such adjustment, the number of shares
obtained by multiplying the Stock Purchase Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Stock Purchase
Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at any
time split or subdivide its outstanding shares of Common Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
split or subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If
at any time or from time to time the holders of Common Stock (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor:
3.2.1 Common Stock or any shares of stock or other securities that are
at any time directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution;
3.2.2 Any cash paid or payable otherwise than as a cash dividend out
of current earnings; or
3.2.3 Common Stock or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement (other than (i) shares of Common Stock
issued as a stock split, adjustments in respect of which shall be covered by the
terms of Section 3.1 above or (ii) an event for which adjustment is otherwise
made pursuant to Section 3.3 below);
then in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses 3.2.2 and 3.2.3 above) which such Holder
would hold on the date of such exercise had he or it been the holder of record
of such Common Stock as of the date on which holders of Common Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION OR RECAPITALIZATION. If any
recapitalization, reclassification or capital reorganization of the capital
stock of the Company shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, or other
3
assets or property (a "Restructuring"), then, as a condition of such
Restructuring, lawful and adequate provisions shall be made whereby the Holder
hereof shall thereafter have the right to purchase and receive (in lieu of or in
addition to the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares of stock, securities or other assets or property
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby and appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.
3.4 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase Price,
any increase or decrease in the number of shares purchasable upon the exercise
of this Warrant or any change in the securities or other property deliverable
upon exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company. The
notice shall be signed by the Company's President and shall state the Stock
Purchase Price resulting from such adjustment, the increase or decrease, if any,
in the number of shares purchasable at such price upon the exercise of this
Warrant or the amount of securities or other property deliverable upon such
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
3.5 OTHER NOTICES. If at any time:
3.5.1 the Company shall declare any cash dividend upon its Common
Stock;
3.5.2 the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
3.5.3 there shall be any Restructuring; or
3.5.4 there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, overnight courier or facsimile, addressed to the Holder
of this Warrant at the address of such Holder as shown on the books of the
Company, (a) at least fifteen (15) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such Restructuring, dissolution, liquidation or winding-up,
and (b) in the case of any such Restructuring, dissolution, liquidation,
winding-up or public offering, at least fifteen (15) days' prior written notice
of the date when the same shall take place; provided, however, that if any
response on the part of the Holder is otherwise required, the Holder shall make
its best efforts to respond to such notice as early as possible after the
receipt thereof. Any notice given in accordance with the foregoing clause (a)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in
4
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such Restructuring, dissolution,
liquidation, winding-up or public offering, as the case may be.
3.6 CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, the Board of Directors of the Company shall make an adjustment in
the number and class of shares available under the Warrant, the Stock Purchase
Price or the application of such provisions, so as to protect such purchase
rights as aforesaid. The adjustment shall be such as will give the Holder of the
Warrant upon exercise for the same aggregate Stock Purchase Price the total
number, class and kind of shares as it would have owned had the Warrant been
exercised prior to the event and had it continued to hold such shares until
after the event requiring adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Common Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner that interferes with the
timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof the right
to vote or to consent or to receive notice as a stockholder of the Company or
any other matters or any rights whatsoever as a stockholder of the Company. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provision
hereof in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by its creditors.
7. TRANSFER RESTRICTIONS. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole but not in part, without charge to the Holder hereof (except for
transfer taxes), upon surrender of this Warrant properly endorsed and in
compliance with such provisions, to a Qualified Transferee. "Qualified
Transferee" means a proposed transferee that meets all of the following
requirements: (a) the proposed transferee is an "accredited investor" as such
term is defined under Regulation D of the Act; (b) the proposed transferee is
not a competitor of the Company, as reasonably determined
5
by the Company; and (c) the Company has not reasonably and in good faith
concluded that providing such proposed transferee any information to which a
stockholder of the Company is entitled is likely to threaten the proprietary
nature of such information or the Company's business objectives or competitive
positioning. The Company will maintain a register (the "Warrant Register")
containing the names and addresses of the Holder or Holders. Any Holder of this
Warrant or any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register. Until this Warrant is transferred
on the Warrant Register of the Company, the Company may treat the Holder as
shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary. This Warrant may not be
transferred or assigned without compliance with all applicable federal and state
securities laws by the transferor and the transferee. The Holder further agrees
not to make any disposition of all or any portion of this Warrant or any shares
of Common Stock or any security into or for which such Common Stock is exchanged
unless and until the transferee has agreed in writing for the benefit of the
Company to be bound by this Section 7 to the extent such section is then
applicable, and:
A. There is then in effect a registration statement under the 1933 Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
B. (i) the Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition and (ii) if reasonably
requested by the Company, the Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the 1933 Act.
8. CHANGE OF CONTROL.
8.1 The Company shall give the Holder at least fifteen (15) days' prior
written notice of a Change of Control in accordance with the provisions of
Section 3.5. A "Change of Control" means (i) a sale of all or substantially all
of the assets of the Company or (ii) the transfer by the Company's stockholders
by means of a merger, consolidation, reorganization, recapitalization or
otherwise, of more than 50% of the voting power of the Company in a single
transaction or a series of related transactions.
8.2 [***].
9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, referred to in
Section 7, shall survive the exercise of this Warrant.
10. MODIFICATION AND WAIVER. The terms of this Warrant may be amended, or the
observance of any term of this Warrant may be waived (either generally or in a
particular
[*** Confidential Treatment Requested]
6
instance and either retroactively or prospectively), only with the written
consent of the Company and the Holder of this Warrant.
11. NOTICES. Any notice, request or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by first-class mail, postage prepaid, to the Holder at its address
as shown on the Warrant Register or to the Company at the address indicated
therefor in the first paragraph of this Warrant, or such other address as either
may from time to time provide to the other.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.
13. LOST WARRANTS. The Company represents and warrants to the Holder hereof that
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Warrant and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company, at its expense, will make and deliver
a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Fair Market Value of the Common Stock.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its President, thereunto duly authorized as of the date first written above.
CLEARWIRE CORPORATION
a Delaware corporation
By:
------------------------------------
(OFFICER_NAME_TITLE)
7
WARRANT EXHIBIT A
SUBSCRIPTION FORM
Date: _____________, 20__
Clearwire Corporation
_______________________
_______________________
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by Clearwire
Corporation (the "Company") and dated ______________, 200_, Warrant No. ___ (the
"Warrant") to purchase thereunder __________ shares of the Class A Common Stock
of the Company (the "Shares") at a purchase price of $________ per Share, or an
aggregate purchase price of _______________________ ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the Purchase
Price herewith in full in cash or by certified check or wire transfer. The
undersigned also makes the representations set forth on the attached Warrant
Exhibit B.
Very truly yours,
----------------------------------------
By:
------------------------------------
Title:
---------------------------------
WARRANT EXHIBIT B
INVESTMENT REPRESENTATIONS
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO CLEARWIRE CORPORATION
ALONG WITH THE SUBSCRIPTION FORM BEFORE THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THE WARRANT DATED __________________, 200_, WILL BE ISSUED.
_____________________
Clearwire Corporation
_______________________
_______________________
Ladies and Gentlemen:
The undersigned, _________________________ ("Purchaser"), intends to
acquire up to ______________ shares of the Class A Common Stock (the "Common
Stock") of Clearwire Corporation (the "Company") from the Company pursuant to
the exercise or conversion of certain Warrants to purchase Common Stock held by
Purchaser. The Common Stock will be issued to Purchaser in a transaction not
involving a public offering and pursuant to an exemption from registration under
the Securities Act of 1933, as amended (the "1933 Act") and applicable state
securities laws. Purchaser has been advised that the Common Stock has not been
registered under the 1933 Act or state securities laws on the ground that this
transaction is exempt from registration, and that reliance by the Company on
such exemptions is predicated in part on Purchaser's representations set forth
in this letter. Accordingly, Purchaser represents, warrants and agrees as
follows:
1. Purchaser is acquiring the Common Stock for its own account and
beneficial interest to hold for investment and not for sale or with a view to
distribution of the Common Stock or any part thereof. Purchaser has no present
intention of selling (in connection with a distribution or otherwise), granting
any participation in, or otherwise distributing the same, and does not presently
have reason to anticipate a change in such intention.
2. Purchaser acknowledges that it has received all the information it has
requested from the Company and considers necessary or appropriate for deciding
whether to acquire the Common Stock. Purchaser represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Common Stock and to obtain any
additional information necessary to verify the accuracy of the information given
the Purchaser. Purchaser further represents that it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risk of this investment.
3. Purchaser is an "accredited investor" as such term is defined in Rule
501 under the 1933 Act.
4. Purchaser acknowledges that investment in the Common Stock involves a
high degree of risk, and represents that it is able, without materially
impairing its financial condition, to hold the Common Stock for an indefinite
period of time and to suffer a complete loss of its investment.
5. Purchaser has been informed that under the 1933 Act, the Common Stock
must be held indefinitely unless it is subsequently registered under the 1933
Act or unless an exemption from such registration (such as Rule 144) is
available with respect to any proposed transfer or disposition by Purchaser of
the Common Stock. Purchaser further agrees that the Company may refuse to permit
Purchaser to sell, transfer or dispose of the Common Stock (except as permitted
under Rule 144) unless there is in effect a registration statement under the
1933 Act and any applicable state securities laws covering such transfer, or
unless Purchaser furnishes an opinion of counsel reasonably satisfactory to
counsel for the Company, to the effect that such registration is not required.
Purchaser shall not make any sale, transfer or other disposition of the Common
Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission or in violation
of any applicable state securities law.
6. Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Common Stock, or any substitutions therefor, a legend
stating in substance:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "1933 Act"), or any state
securities laws. These shares have been acquired for investment and may not
be sold or otherwise transferred in the absence of an effective
registration statement for these shares under the 1933 Act and applicable
state securities laws, or, if requested by the Company, an opinion of
counsel satisfactory to the Company that registration is not required and
that an applicable exemption is available."
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Common Stock
with Purchaser's counsel.
Very truly yours,
----------------------------------------
By:
------------------------------------
Title:
---------------------------------
EXHIBIT C
SERVICES AGREEMENT
C-1
SERVICES AGREEMENT
THIS Services Agreement ("SERVICES AGREEMENT") is made and entered into
effective December __, 2006 (the "EFFECTIVE DATE"), by and between [***]
("LICENSEE"), and Clearwire US LLC, a Nevada limited liability company with its
principal offices at 5808 Lake Washington Blvd., Suite 300, Kirkland, WA 98033,
and its successors ("CLEARWIRE US"). Clearwire US and Licensee may be referred
to herein individually as a "PARTY" and collectively as "PARTIES."
WHEREAS, Clearwire US, directly and through its Affiliates (as defined in
Section 1), operates wireless broadband systems and facilities capable of
delivering certain wireless broadband data services to customers, including
high-speed Internet access and such other services and technologies as may be
available in the future;
WHEREAS, Licensee and Clearwire Spectrum Holdings II LLC, a Nevada limited
liability company ("CSH II"), have entered into an Educational Broadband Service
Long Term De Facto Transfer Lease Agreement dated December __, 2006 (the
"LEASE"), pursuant to which Licensee has leased to CSH II a portion of the
capacity on certain Educational Broadband Service channels licensed to Licensee;
WHEREAS, Clearwire US and CSH II are both wholly-owned, first tier
subsidiaries of Clearwire Parent (as defined in Section 1);
WHEREAS, Clearwire Parent (as defined in Section 1) has executed a Parent
Guarantee and Covenant Agreement on December __, 2006, pursuant to which upon
the occurrence of certain described events, Clearwire Parent will guarantee the
performance of Clearwire US under this Services Agreement and provide a letter
of credit to Licensee; and
WHEREAS, the Parties are entering into this Services Agreement to provide
Licensee with the ability to access and use products and services offered by
Clearwire US and its Affiliates and funding for certain other services during
the term of the Lease.
NOW, THEREFORE, in consideration of the foregoing and the promises set
forth below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensee and Clearwire US agree as
follows:
1. DEFINITIONS
(A) The following terms, when used in this Services Agreement, shall
have the same meanings ascribed to them in the Lease: Affiliate, [***],
Clearwire Network, Clearwire Parent, Clearwire's Service, Costs and Expenses,
Final Order Date, GSAs, Including, Laws, Parent Guarantee and Covenant
Agreement, Permitted End Users, and Person.
(B) The following terms shall have the meanings set forth below and,
as defined, may be used in the singular or plural form, as appropriate.
"ADDITIONAL CAPITAL PAYMENT" has the meaning specified in Section 5(b).
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"[***] COUNTIES" means [***] counties in [***].
"ASSIGNMENT" has the meaning specified in Section 9(a).
"CAPITAL GOODS" has the meaning specified in Section 5(a).
"CAPITAL PAYMENT" has the meaning specified in Section 5(a).
"CLEARWIRE" has the meaning specified in Section 4(a).
"CLEARWIRE GOODS" has the meaning specified in Section 4(a).
"CLEARWIRE US" has the meaning specified in the preamble.
"CSH II" has the meaning specified in the recitals.
"EFFECTIVE DATE" has the meaning specified in the preamble.
"LEASE" has the meaning specified in the recitals.
"LICENSEE" has the meaning specified in the preamble.
"PARTY" and "PARTIES" have the meanings specified in the preamble.
"PRICE LIST" has the meaning specified in section 4(b).
"RESALE CUSTOMERS" has the meaning specified in section 7.
"ROLL OVER CREDITS" has the meaning specified in Section 3(b).
"SERVICE CREDITS" has the meaning specified in Section 3(a).
"SERVICES" means any telecommunications or information service (including
any product, end user equipment, hardware, software and maintenance necessary to
access and use such services) that may exist now or in the future.
"SERVICES AGREEMENT" has the meaning specified in the preamble.
"TERM" has the meaning specified in Section 8(a).
"THIRD PARTY SERVICES" has the meaning specified in Section 4(c).
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2. SCOPE OF SERVICES AGREEMENT
This Services Agreement is intended to provide Licensee with (a) Services
for a term coinciding with the term of the Lease; and (b) partial compensation
for Licensee's lease of spectrum capacity to CSH II under the Lease. Clearwire
acknowledges that Licensee intends to provide Services to itself, [***] and
Permitted End Users within the [***] Counties pursuant to the terms of this
Services Agreement. The Parties acknowledge that the products and services
offered by Clearwire US and its Affiliates, as well as by third party providers,
will change over time as technology advances and new applications emerge. The
intent of the Parties is that the term "Services" be interpreted broadly and in
a flexible manner (changing over time) so as to ensure that Licensee benefits
from future changes in technology and new applications.
3. SERVICE CREDITS
(A) SERVICE CREDITS. On the Final Order Date, and each anniversary of
the Final Order Date thereafter during the Term, Licensee shall be credited with
an annual amount of service credits ("SERVICE CREDITS") to be used in accordance
with this Services Agreement. The amount of the Service Credits shall be as
follows: [***] per year for years one (1) through five (5); [***] per year for
years six (6) through ten (10); [***] per year for years eleven (11) through
fifteen (15); [***] per year for years sixteen (16) through twenty (20); [***]
per year for years twenty-one (21) through twenty-five (25); and [***] per year
for years twenty-six (26) through thirty (30). For the purpose of the preceding
sentence and Sections 3(b), 4(c) and 4(d), the "years" of this Services
Agreement shall be calculated using the Final Order Date as the starting date of
year one (1).
(B) ROLL OVER OF SERVICE CREDITS. On each anniversary of the Final
Order Date, any amount of the unused Service Credits for the previous year may
be rolled over (i.e., carried forward) to the current year (the "ROLL OVER
CREDITS") subject to the following limitations: (i) Licensee may not use more
than [***] in Service Credits (including Roll Over Credits) in any one (1) year
period, (ii) the total Service Credits (including Roll Over Credits) shall not
exceed [***] at any one time after the third (3rd) year following commercial
launch of Clearwire's Service within either GSA, and (iii) no Roll Over Credits
shall be allowed or provided following the [***] anniversary of the Final Order
Date. After the [***] anniversary of the Final Order Date, Licensee shall have
available to it in each given year, the Service Credits provided under Section
3(a), but no Roll Over Credits.
(C) REPORTING. Within sixty (60) days following each anniversary of
the Final Order Date during the Term, Clearwire US shall provide to Licensee a
report of the Service Credits and Roll Over Credits used by Licensee for the
preceding calendar quarter.
4. USE OF SERVICE CREDITS
(A) CLEARWIRE PRODUCTS AND SERVICES. Beginning on the Final Order
Date, Service Credits can be used by Licensee to buy any product or service,
including maintenance, planning and consulting services, offered by Clearwire US
and/or its Affiliates, successors or assigns and their Affiliates (collectively,
"CLEARWIRE") in the [***] Counties ("CLEARWIRE GOODS"), for use by Licensee,
[***] and Permitted End Users. All Clearwire Goods must be
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offered to Licensee, [***], and Permitted End Users [***] offered by Clearwire
at each location to which Licensee provides Clearwire Goods pursuant to the
terms of this Services Agreement.
(B) LISTS OF PRODUCTS AND SERVICES. The list of available Clearwire
Goods and their prices applicable to Licensee shall be as provided on
Clearwire's website, www.clearwire.com, or such other URL or successor method of
publishing the availability of Clearwire Goods as may be designated by Clearwire
from time to time ("PRICE LIST"). From time to time, Clearwire will notify
Licensee of any Clearwire Goods that are not described in the Price List that
may be made available to Licensee pursuant to this Agreement. Subject to
compliance with Section 4(a), the Clearwire Goods and prices may change from
time to time, as Clearwire changes such Clearwire Goods and prices for all
customers, and such changes will be reflected on the Price List. Each time the
Price List is updated, the updated information updates will supercede the prior
information.
(C) [***].
(D) HUMAN RESOURCES. Service Credits may also be used to fund
internal, third party, or Clearwire human resources (e.g., internal and outside
consulting and staffing to assist Licensee in deploying and managing
telecommunications and information services), provided that Licensee may use
only [***] in Service Credits for non-Clearwire human resources for the first
(1st) year following the Final Order Date, and [***] in Service Credits for
non-Clearwire human resources for each subsequent year thereafter.
(E) [***].
(F) EXCESS SERVICES. If Licensee orders Clearwire Goods or Third Party
Services, including distribution of content pursuant to Section 4(e), in excess
of the Service Credits and any available Roll Over Credits, then Licensee will
pay for such excess in accordance with the pricing described in Section 4(a).
(G) TITLE. Licensee shall receive full and unencumbered title to any
equipment, hardware, software or the like that Licensee purchases using the
Service Credits (including Roll Over Credits) hereunder.
5. CAPITAL PAYMENTS
(A) On each of the Final Order Date and on the tenth (10th)
anniversary of the Final Order Date, Licensee shall be credited with [***] to be
used for capital purchases as described in this Section 5(a) (each a "CAPITAL
PAYMENT"). Licensee may use each Capital Payment to order from Clearwire any
hardware, software or consulting services for Licensee, [***] and Permitted End
Users to design, implement, access and use any Clearwire Goods or Third Party
Services ("CAPITAL GOODS"). For example, and for illustrative purposes only,
Licensee may purchase networking equipment, end user equipment, wiring, routers,
local distribution networks, hardware or software upgrades and consulting time
for current or future technologies and services. Notwithstanding the foregoing,
the Parties agree that up to [***] of each Capital Payment must be used, if at
all, to purchase Capital Goods from Clearwire and
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up to [***] may be used to purchase Capital Goods available from third parties
to the extent Clearwire does not have such Capital Goods available; [***].
(B) In addition, Licensee shall be credited with [***] on the
twentieth (20th) anniversary of the Final Order Date ("ADDITIONAL CAPITAL
PAYMENT"). Licensee may use the Additional Capital Payment to purchase any
Capital Goods from Clearwire or third parties, or, upon Licensee's request,
Clearwire shall send to Licensee the Additional Capital Payment in cash in a
lump sum amount within fifteen (15) days of Licensee's request (provided the
subject payment has become due hereunder).
(C) The Capital Payments and Additional Capital Payment must each be
used or, in the case of the Additional Capital Payment, be taken in cash by
Licensee within ten (10) years of being credited to Licensee pursuant to this
Section 5.
6. OPERATIONAL TERMS
(A) ORDERING. Licensee may purchase Clearwire Goods and Third Party
Services via submission of an order form in a format reasonably acceptable to
Clearwire. Although Licensee may provide Clearwire Goods and Third Party
Services to itself, [***] and Permitted End Users, only Licensee may submit
order forms or otherwise request action by Clearwire US under this Services
Agreement. The ordering and use of Clearwire Goods shall be governed by the
acceptable use policy and terms of service, and such other policies of general
applicability which apply to such services, which are subject to amendment by
Clearwire at any time and may be found at http://www.clearwire.com or such other
URL as may be designated by Clearwire from time to time; provided, however, that
financial terms contained in the terms of service shall not apply to such
Clearwire Goods, which financial terms will be as set forth in this Services
Agreement. In addition to the foregoing policies, Clearwire may specify from
time to time reasonable procedures for the activation, addition, deletion or
substitution of Clearwire Goods and Third Party Services to Licensee.
(B) MAINTENANCE. Licensee, [***] and Permitted End Users will be
solely responsible for the maintenance and operation of all end user equipment,
facilities and receive sites installed at Licensee, [***] or Permitted End User
sites; provided, however, that Licensee may order maintenance services using its
Service Credits as provided in this Services Agreement.
(C) SERVICE OUTAGES, REPAIRS AND UPGRADES. In addressing any service
outages, necessary repairs or upgrades to Clearwire Goods or Capital Goods,
Clearwire shall treat Licensee, [***] and Permitted End Users the same as
similarly situated customers, including assigning Licensee, [***], and Permitted
End Users the same level of priority in resolving service outages or making
necessary repairs or upgrades as it assigns to its other customers subscribing
to similar levels of Clearwire services.
(D) DESIGNATED POINT OF CONTACT. Within thirty (30) days of the Final
Order Date, Clearwire shall provide to Licensee the name and contact information
(i.e., office phone and fax numbers, mobile phone number, address and e-mail) of
a qualified Clearwire engineer or manager who will serve as a dedicated point of
contact to Licensee and whose
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responsibilities will include administering and implementing the terms of this
Services Agreement, providing information to Licensee, answering Licensee's
questions and such other activities as may be necessary or desirable to
implement the intent of this Services Agreement.
7. [***]
[***].
8. TERM AND TERMINATION
(A) TERM. This Services Agreement shall commence on the Effective Date
and shall continue in effect until the earlier of thirty (30) years or the date
of expiration or termination of the Lease for any reason (the "TERM"), unless
earlier terminated as provided herein.
(B) TERMINATION FOR BREACH. Either Party may terminate this Services
Agreement upon notice to the other Party at any time in the event of a material
breach or default by the other Party under this Services Agreement, which
material breach or default remains uncured after thirty (30) days notice of such
breach or default is provided by the other Party; provided, however, that if the
breaching Party proceeds with reasonable diligence during such thirty (30) day
period and is unable, because of circumstances beyond its control or because of
the nature of the breach or default, to cure the breach or default within such
applicable time period, the time for cure shall be extended, but in no event
beyond one hundred eighty (180) days after receipt of notice from the
non-breaching Party.
(C) TERMINATION FOR BANKRUPTCY. Either Party may terminate this
Services Agreement upon notice to the other Party if the other Party (a) ceases
to do business in the normal course, (b) becomes or is declared insolvent or
bankrupt, (c) is the subject of any proceeding related to its liquidation or
insolvency, whether voluntary or involuntary, which is not dismissed within
ninety (90) calendar days or (iv) makes an assignment for the benefit of
creditors.
(D) EFFECT OF TERMINATION. Upon the expiration of this Services
Agreement, any outstanding Service Credits, Roll Over Credits, Capital Payments
or Additional Capital Payment will be terminated and be of no further force or
effect. Upon the termination of this Services Agreement, any outstanding Service
Credits, Roll Over Credits, Capital Payments or Additional Capital Payment will
be terminated and of no further force or effect; provided however, that any
termination of this Services Agreement pursuant to Sections 8(b) or 8(c) will
not release either Licensee or Clearwire from any liability arising from any
breach or violation by that Party of the terms and provisions of this Services
Agreement prior to such termination. Each Party will be responsible for its own
Costs and Expenses related to the expiration or termination of this Services
Agreement, other than a termination pursuant to Section 8(b) and 8(c). The
general and procedural provisions of this Services Agreement, which may be
relevant to enforcing the obligations or duties of the Parties, as well as any
other provisions that by their terms obligate either Party following expiration
or termination, will survive the expiration or termination of this Services
Agreement until the obligations or duties are performed or discharged in full.
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9. ASSIGNMENTS AND SUBLEASING
(A) ASSIGNMENT AND SUBLEASE BY CLEARWIRE US TO THIRD PARTY. Clearwire
US may not sell, assign, lease, sublease, cross-lease, license, exchange,
delegate or otherwise transfer (collectively, an "ASSIGNMENT") any of its rights
or obligations under this Services Agreement without the prior written consent
of Licensee, such consent not to be unreasonably withheld or delayed.
Notwithstanding the foregoing, Licensee's consent shall not be required for an
Assignment to the same Person or Affiliate of the Person to which the Lease is
assigned; provided that the assignment of the Lease is completed in accordance
with the terms and conditions of the Lease, and provided further that both
assignments occur simultaneously.
(B) PRO FORMA ASSIGNMENT AND SUBLEASE BY CLEARWIRE US. Notwithstanding
the foregoing, Clearwire US may assign or sublease this Services Agreement (or
its rights or obligations thereunder) to an Affiliate of Clearwire US or
Clearwire Parent; provided, however, that, the Parent Guarantee and Covenant
Agreement will continue to apply in full force and effect pursuant to its terms
following the assignment or sublease. Clearwire shall provide notice to Licensee
of any such assignment or sublease and shall pay for all Costs and Expenses
(including reimbursing Licensee as necessary) associated with any such
assignment or sublease.
(C) ASSIGNMENT BY LICENSEE. Licensee may assign this Services
Agreement to a Person to which Licensee simultaneously assigns all of the
Channels in accordance with the terms and conditions of the Lease. [***].
10. REPRESENTATIONS AND WARRANTIES
(A) LICENSEE REPRESENTATIONS AND WARRANTIES. Licensee hereby
represents and warrants to Clearwire US that:
(I) (A) It has the full right and authority to enter into,
execute, deliver, and perform its obligations under this Services Agreement; (B)
it has taken all requisite corporate action to approve the execution, delivery
and performance of this Services Agreement; (C) this Services Agreement
constitutes a legal, valid and binding obligation enforceable against it in
accordance with its terms (except as may be limited by applicable bankruptcy,
insolvency or other laws of general application affecting creditors' rights
generally and except as limited by laws relating to availability of specific
performance, injunctive relief or other equitable remedies); (D) its execution
of and performance under this Services Agreement will not violate any applicable
Laws or any of its existing contractual obligations and (E) it knows of no fact
or circumstance that would disqualify it from performing its undertakings
hereunder.
(B) CLEARWIRE US REPRESENTATIONS AND WARRANTIES. Clearwire US hereby
represents and warrants to Licensee as follows:
(I) (A) It has the full right and authority to enter into,
execute, deliver, and perform its obligations under this Services Agreement; (B)
it has taken all requisite corporate action to approve the execution, delivery
and performance of this Services Agreement; (C) this Services Agreement
constitutes a legal, valid and binding obligation enforceable against it in
accordance with its terms (except as may be limited by applicable bankruptcy,
insolvency or
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other laws of general application affecting creditors' rights generally and
except as limited by laws relating to availability of specific performance,
injunctive relief or other equitable remedies); and (D) its execution of and
performance under this Services Agreement will not violate any applicable Laws
or any of its existing contractual obligations.
(II) It knows of no fact or circumstance that would disqualify it
from performing its undertakings hereunder, and neither it nor any of its
principals or its Affiliates will take any action, cause any action to be taken,
or fail to take any action that would disqualify them from performing and
undertaking the obligations under and as contemplated by this Services
Agreement.
(III) It has the financial capacity to enter into and perform the
obligations of this Services Agreement.
(IV) There are no proceedings, judgments, investigations, or
litigation existing or, to the best of Clearwire US's knowledge, threatened
against Clearwire US or any of its Affiliates that would reasonably be expected
to have a material adverse effect on Clearwire US's ability to perform its
obligations under this Services Agreement or on the solvency or financial
condition of Clearwire US.
(C) SURVIVAL. The respective representations and warranties of the
Parties will be true and correct as of the Effective Date and as of the Final
Order Date and will survive for [***] after the Effective Date.
11. MISCELLANEOUS
(A) NOTICES. Any notice required to be given by one Party to the other
under this Services Agreement will be delivered using a reliable national
express overnight delivery service and will be effective upon receipt. All
notices will be delivered to the Parties at the following addresses:
If to Clearwire US:
Clearwire US LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
Attn [***]
Telephone: [***]
Fax: [***]
With a copy to:
Clearwire US LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
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Attn: [***]
Telephone: [***]
Fax: [***]
If to Licensee:
[***]
Telephone: [***]
Facsimile: [***]
With a copy to:
[***]
Telephone: [***]
Facsimile: [***]
Either Party may change its addresses for receipt of notice or payment by giving
notice of such change to the other Party as provided in this Section 11(a).
(B) FORCE MAJEURE. Neither Party will be liable for any nonperformance
under this Services Agreement due to causes beyond its reasonable control that
could not have been reasonably anticipated by the non-performing Party and that
cannot be reasonably avoided or overcome; provided that the non-performing party
gives the other Party prompt notice of such cause, and in any event, within
fifteen (15) calendar days of its discovery.
(C) INDEPENDENT PARTIES. None of the provisions of this Services
Agreement will be deemed to constitute a partnership, joint venture, or any
other such relationship between the Parties, and neither Party will have any
authority to bind the other in any manner. Neither Party will have or hold
itself out as having any right, authority or agency to act on behalf of the
other Party in any capacity or in any manner, except as may be specifically
authorized in this Services Agreement.
(D) APPLICABLE LAW. The validity, construction and performance of this
Services Agreement will be governed by and construed in accordance with the
internal laws of the State of Washington without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws
of any jurisdiction other than the State of Washington. The Parties hereto,
their successors and assigns consent to the jurisdiction of the courts of [***]
with respect to any legal proceedings that may result from a dispute concerning
this Services Agreement.
(E) ATTORNEYS' FEES. If any action shall be brought on account of any
breach of or to enforce or interpret any of the terms, covenants or conditions
of this Services Agreement, the prevailing Party will be entitled to recover
from the other its reasonable attorneys' fees and costs, as determined by the
court or governing body hearing the action.
(F) SEVERABILITY. If any provision of this Services Agreement is found
to be illegal, invalid or unenforceable, such provision will be enforced to the
maximum extent permissible so as to effect the intent of the Parties, and the
validity, legality and enforceability
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of the remaining provisions will not in any way be affected or impaired, unless
continued enforcement of the provisions frustrates the intent of the Parties.
(G) NO WAIVER. No delay or failure by either Party in exercising any
right under this Services Agreement, and no partial or single exercise of that
right, will constitute a waiver of that or any other right. Failure to enforce
any right under this Services Agreement will not be deemed a waiver of future
enforcement of that or any other right.
(H) COUNTERPARTS. This Services Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but which
collectively will constitute one and the same instrument. Original signatures
transmitted by facsimile or email will be effective to create such counterparts.
(I) HEADINGS. The headings and captions used in this Services
Agreement are for convenience only and are not to be considered in construing or
interpreting this Services Agreement.
(J) CONSTRUCTION. The Parties and their respective counsel have
negotiated this Services Agreement. This Services Agreement will be interpreted
in accordance with its terms and without any strict construction in favor of or
against either Party based on draftsmanship of the Services Agreement or
otherwise.
(K) COMPLETE AGREEMENT. This Services Agreement, together with the
Lease and Parent Guarantee and Covenant Agreement, constitutes the entire
agreement between the Parties with respect to the subject matter addressed, and
supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, between the Parties or any of their Affiliates
regarding this subject matter. No amendment to or modification of this Services
Agreement will be binding unless in writing and signed by a duly authorized
representative of each of the Parties and Clearwire Parent.
(L) PRESS ANNOUNCEMENTS. No announcement to the press or general
public of this Services Agreement or the terms or conditions thereof shall be
made unless such announcement or release shall have been approved in advance by
both Parties. Notwithstanding the foregoing, either Party may make any such
disclosures of this Services Agreement or the terms hereof to the extent
necessary to comply with accounting standards and applicable securities and
other laws and regulations of the Securities and Exchange Commission or with the
regulations of any applicable securities exchange and each of the Parties agree
that that the Parties and/or their Affiliates may be required to disclose the
financial terms of this Services Agreement in such Party's or its Affiliates'
consolidated financial statements or in the footnotes thereof; provided,
however, that Clearwire US shall provide notice to Licensee if it makes any such
disclosures.
(M) USE OF LICENSEE'S NAME. Except as provided in Section 11(l) above
Clearwire US will not use the name of Licensee, [***], or their Affiliates in
any materials that are available to the public without Licensee's prior written
permission, which written permission may be withheld or granted in Licensee's
sole discretion.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have executed this Services
Agreement effective as of the Effective Date, pursuant to due authority. Each
Party acknowledges that it has read this Services Agreement, understands it, and
agrees to be bound by its terms.
[***] CLEARWIRE US LLC
By: /s/ [***] By: /s/ R. Gerard Salemme
--------------------------------- ------------------------------------
Name: [***] Name: R. Gerard Salemme
Title: President Title: Ex. V. P.
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EXHIBIT D
INTERFERENCE CONSENTS
Set forth in this Exhibit D are the following documents and information related
to Section 9 of the Agreement:
1. [***].
2. [***].
3. [***].
4. [***].
5. [***].
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[***]
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EXHIBIT E
[TO BE PROVIDED WITHIN 30 DAYS OF EFFECTIVE DATE.]
E-1
EXHIBIT F
LICENSEE'S DISCLOSURES
[***]:
1. [***].
2. [***].
3. [***].
[***].
[***].
[***].
[***].
[***].
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[***]
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EXHIBIT G
PARENT GUARANTEE AND COVENANT AGREEMENT
G-1
PARENT GUARANTEE AND COVENANT AGREEMENT
THIS Parent Guarantee and Covenant Agreement (the "AGREEMENT") is entered
into as of December __, 2006 (the "EFFECTIVE DATE"), by and between [***]
("LICENSEE"), Clearwire Spectrum Holdings II LLC, a Nevada limited liability
company with its principal offices at 5808 Lake Washington Blvd., Suite 300,
Kirkland, WA 98033, and its successors ("CLEARWIRE"), Clearwire US LLC, a Nevada
limited liability company with its principal offices at 5808 Lake Washington
Blvd., Suite 300, Kirkland, WA 98033, and its successors ("CLEARWIRE US") and
Clearwire Corporation, a Delaware corporation with its principal offices at 5808
Lake Washington Blvd., Suite 300, Kirkland, WA 98033, and its successors
("CLEARWIRE PARENT"). Licensee, Clearwire, Clearwire US and Clearwire Parent are
sometimes referred to, individually, as a "PARTY" and, collectively, as the
"PARTIES."
WHEREAS, contemporaneously with the Effective Date hereof, Licensee and
Clearwire have entered into a Long-Term De Facto Transfer Lease Agreement (the
"LEASE") by which Licensee will lease to Clearwire excess capacity on Licensee's
Educational Broadband Service channels [***] under call sign [***] and [***]
under call sign [***] pursuant to the terms and conditions set forth in the
Lease;
WHEREAS, contemporaneously with the Effective Date hereof, Licensee and
Clearwire US have entered into a Services Agreement, under which Clearwire US
will provide Licensee with services and service credits to be applied toward
telecommunications and information services (the "SERVICES AGREEMENT");
WHEREAS, Clearwire Parent is the ultimate corporate parent of Clearwire and
Clearwire US and desires to provide additional assurances to Licensee that
Clearwire and Clearwire US will meet the terms and conditions of the Lease and
the Services Agreement, respectively; and
WHEREAS, the assurances provided by Clearwire Parent in this Agreement are
essential to the Lease and Services Agreement, and Licensee would not enter into
the Lease or Services Agreement without this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants set forth in
this Agreement, and for good and valuable consideration, the sufficiency of
which is acknowledged by the Parties' signatures, the Parties agree as follows:
1. TRIGGERING EVENTS. Within thirty (30) days following the occurrence of a
Triggering Event (defined below), Clearwire Parent shall provide Licensee with
written notice of the Triggering Event and will provide the Guaranty (as defined
in Section 2) and the Letter of Credit (as defined in Section 3). A "TRIGGERING
EVENT" shall occur if any one or more of the following events occurs during the
Initial Term of the Lease:
(A) Clearwire defaults under or breaches the Lease and fails to cure
said default or breach upon notice from Licensee pursuant to the terms of
Sections 12(b) or 12(d) of the Lease;
[*** Confidential Treatment Requested]
1
(B) Clearwire US defaults under or breaches the Services Agreement and
fails to cure said default or breach upon notice from Licensee pursuant to the
terms of Section 8(b) of the Services Agreement;
(C) If the debt of Clearwire Parent has been rated by Standard &
Poor's, Moody's Investors Service and/or Fitch Ratings (each a "RATINGS
AGENCY"), and any Ratings Agency issues a rating for Clearwire Parent that is
below the first rating ever issued by that Rating Agency for Clearwire Parent;
or
(D) If (i) the debt of Clearwire Parent has not been rated by a
Ratings Agency, ceases to be so rated, or if Clearwire no longer has debt to be
rated, and (ii) Clearwire Parent's net cash is less than the net present value,
using a [***] annual discount rate, of the Monthly Lease Payments due to
Licensee under the Lease for the next [***] of the term of the Lease plus the
cash value of the funding and service credits due to Licensee under the Services
Agreement for the next [***] of the term of the Services Agreement (assuming
maximum rollover of those service credits pursuant to the terms of the Services
Agreement). "NET CASH" shall mean the value of Clearwire Parent's cash and
marketable securities less its current liabilities (including the current
portion of long-term debt).
2. GUARANTY. Upon the occurrence of a Triggering Event, Clearwire Parent
agrees to irrevocably and unconditionally guarantee the full performance and
observance of its wholly-owned subsidiaries, Clearwire and Clearwire US, of all
present and future obligations, duties, responsibilities, covenants and the like
under the Lease and Services Agreement, respectively, for so long as the
Triggering Event is continuing (the "GUARANTY"). If, after the Guaranty becomes
effective, Clearwire and/or Clearwire US default or breach their respective
obligations under the terms of the Lease or Services Agreement, Licensee, at its
election, may seek to enforce its rights under the Lease and/or Services
Agreement against Clearwire Parent as guarantor either simultaneously with or
after seeking to enforce such rights against Clearwire and/or Clearwire US.
Clearwire Parent expressly waives any notice or demand from Licensee that is
separate from any notice or demand that Licensee is required to provide
Clearwire and Clearwire US in the event of a breach or default under the terms
of the Lease or Services Agreement, respectively.
3. TERMS OF THE LETTER OF CREDIT.
(A) Following the occurrence of one or more Triggering Events,
Clearwire Parent will, as soon as reasonably practicable, deliver to Licensee a
letter of credit issued by a commercial bank reasonably acceptable to Licensee
and in a form reasonably acceptable to Licensee that may be drawn upon by
Licensee to satisfy any monetary obligations of Clearwire and/or Clearwire US
under the Lease or the Services Agreement that have not been satisfied ("LETTER
OF CREDIT").
(B) If the Triggering Event is based on Section 1(a), the Letter of
Credit shall be, subject to increases as provided in Section 3(e) below, for the
amount of the Monthly Lease Payments (as that term is defined in the Lease) that
would be due through the earlier of (i) expiration of the current term of the
Lease or (ii) [***] ("MONTHLY LEASE PAYMENTS OUTSTANDING").
[*** Confidential Treatment Requested]
D-3
(C) If the Triggering Event is based on Section 1(b), the Letter of
Credit shall be for an amount equal to the cash payments required to be made
under the Services Agreement until the earlier of (i) expiration of the current
term of the Lease Agreement and (ii) [***], (in each case assuming maximum
rollover of those service credits pursuant to the terms of the Services
Agreement) ("SERVICE CREDITS OUTSTANDING").
(D) If the Triggering Event is based on Sections 1(c) or 1(d) or a
combination of any Triggering Events, then the Letter of Credit shall be for an
amount equal to [***].
(E) The Parties acknowledge and agree that Clearwire Parent is
currently subject to limitations on its ability to incur indebtedness under that
certain Loan Agreement, dated as of August 21, 2006 ("LOAN AGREEMENT"). The
Parties further acknowledge and agree that Section 7.1(k) of the Loan Agreement
specifically permits Clearwire Parent to incur indebtedness represented by
letters of credit in an aggregate face amount not to exceed [***] at any one
time outstanding (the "LOC BASKET"). [***].
(F) The term of the Letter of Credit shall be for a period of time
from the delivery of the Letter of Credit through the earlier to occur of the
[***]; provided, however that upon the first anniversary of the Letter of
Credit, and each anniversary thereafter, in each event if the Triggering Event
is still continuing, then Clearwire Parent will either renew or substitute a new
Letter of Credit with the LOC Term determined in accordance with this section.
[***]. If the Triggering Event is not continuing, then Clearwire Parent may
terminate the Letter of Credit upon written notice to Licensee.
4. MISCELLANEOUS.
(A) This Agreement shall be binding upon and inure to the benefit of
the Parties, their assigns, and successors. In the event of an assignment
pursuant to Section 11(a) of the Lease or Section 9(a) of the Services
Agreement, this Agreement shall terminate and be of no further force or effect.
(B) Without limiting any other circumstance in which this Agreement
shall survive, the Parties specifically acknowledge that this Agreement shall
survive (i) any channel swap under Section 6(g) of the Lease and (ii) any
transaction described in Section 11(b) of the Lease or Section 9(b) of the
Services Agreement. In the event of an assignment pursuant to Section 11(b) of
the Lease or Section 9(b) of the Services Agreement, this Agreement shall be
automatically amended so as to substitute the assignee's name wherever
"Clearwire" or "Clearwire US," as the case may be, appears in this Agreement
following the assignment.
(C) The validity, construction and performance of this Agreement will
be governed by and construed in accordance with the internal laws of the State
of [***] without giving effect to any choice or conflict of law provision or
rule that would cause the application of the laws of any jurisdiction other than
the State of [***]. The Parties hereto, their successors and assigns consent to
the jurisdiction of the courts of [***] with respect to any legal proceedings
that may result from a dispute concerning this Agreement.
(D) If any action shall be brought on account of any breach of or to
enforce or interpret any of the terms, covenants or conditions of this
Agreement, the prevailing Party will be
[*** Confidential Treatment Requested]
D-3
entitled to recover from the other Parties, on a joint and several basis, its
reasonable attorneys' fees and costs, as determined by the court or governing
body hearing the action.
(E) If any provision of this Agreement is found to be illegal, invalid
or unenforceable, such provision will be enforced to the maximum extent
permissible so as to effect the intent of the Parties, and the validity,
legality and enforceability of the remaining provisions will not in any way be
affected or impaired, unless continued enforcement of the provisions frustrates
the intent of the Parties.
(F) No delay or failure by a Party in exercising any right under this
Agreement, and no partial or single exercise of that right, will constitute a
waiver of that or any other right. Failure to enforce any right under this
Agreement will not be deemed a waiver of future enforcement of that or any other
right.
(G) This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, but which collectively will constitute one
and the same instrument. Original signatures transmitted by facsimile will be
effective to create such counterparts.
(H) The Parties and their respective counsel have negotiated this
Agreement. This Agreement will be interpreted in accordance with its terms and
without any strict construction in favor of or against a Party based on
draftsmanship of the Agreement or otherwise.
(I) This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter addressed, and, apart from the Lease
and Services Agreement, supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, between the Parties or any of
their affiliates regarding this subject matter. No amendment to or modification
of this Agreement will be binding unless in writing and signed by a duly
authorized representative of each of the Parties.
(J) The Parties will take such further action and execute such further
assurances, documents and certificates as another Party may reasonably request
to effectuate the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
D-3
ACKNOWLEDGED AND AGREED:
CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
---------------------------------
Name: R. Gerard Salemme
Title: Ex. V. P.
ACKNOWLEDGED:
[***]
By: /s/ [***]
---------------------------------
Name: [***]
Title: President
CLEARWIRE SPECTRUM HOLDINGS II LLC
By: /s/ R. Gerard Salemme
---------------------------------
Name: R. Gerard Salemme
Title: Ex. V. P.
CLEARWIRE US LLC
By: /s/ R. Gerard Salemme
---------------------------------
Name: R. Gerard Salemme
Title: Ex. V. P.
[*** Confidential Treatment Requested]
D-3
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 1/8/07 | | | | | | | None on these Dates |
| | 12/22/06 | | 1 | | 3 |
| | 8/21/06 | | 82 |
| List all Filings |
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