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
Exhibit 10.60
MASTER ROYALTY AND USE AGREEMENT
by and among
CLEARWIRE SPECTRUM HOLDINGS II LLC
and
HISPANIC INFORMATION AND TELECOMMUNICATIONS NETWORK, INC.
Dated as of October 4, 2006
TABLE OF CONTENTS
[Download Table]
Page
----
ARTICLE I. RELATIONSHIP SUMMARY.......................................... 6
Section 1.01. Overview............................................... 6
Section 1.02. Overview of Mechanics and Structure of Agreements...... 6
Section 1.03. Scope and Nature of Clearwire Group.................... 8
ARTICLE II. ECONOMIC ROYALTIES........................................... 10
Section 2.01. Aggregate EBS Spectrum Capacity Economic Royalties..... 10
ARTICLE III. ACCESS RIGHT ROYALTIES...................................... 10
Section 3.01. Access Right Royalties................................. 10
Section 3.02. Cost-Free Educational Accounts......................... 10
Section 3.03. Educational Reservation Basic Cost-Free Education
Accounts............................................... 11
Section 3.04. Additional Cost-Free Educational Accounts.............. 11
Section 3.05. Licensee MVNO.......................................... 12
Section 3.06. Access to Educational End User Devices................. 13
Section 3.07. Sharing of Features and Service Sets................... 13
Section 3.08. Preferred Content Provider............................. 13
Section 3.09. [***].................................................. 14
ARTICLE IV. CLOSING MECHANICS; ESCROW.................................... 14
Section 4.01. Deliveries at Execution of this Agreement.............. 14
Section 4.03. EBS Spectrum Capacity IUA Closing(s)................... 15
Section 4.04. Closing Site/Mechanics................................. 16
Section 4.05. Further Assurances..................................... 16
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF LICENSEE.................... 17
Section 5.01. Organization and Good Standing......................... 17
Section 5.02. Authorization of Agreement............................. 17
Section 5.03. No Conflict............................................ 17
Section 5.04. Litigation............................................. 18
Section 5.05. Compliance with Laws; Permits.......................... 18
Section 5.07. Brokers................................................ 18
Section 5.08. Knowledge.............................................. 18
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF CLEARWIRE.................. 19
Section 6.01. Organization and Good Standing......................... 19
Section 6.02. Authorization of Agreement............................. 19
Section 6.05. No Conflict............................................ 19
Section 6.06. Litigation............................................. 20
[*** Confidential Treatment Requested]
A-2
[Download Table]
Section 6.07. Compliance with Laws; Permits.......................... 20
Section 6.08. Brokers................................................ 20
ARTICLE VII. COVENANTS................................................... 20
Section 7.01. Consents and Approvals................................. 20
Section 7.02. Notice of Breach....................................... 21
Section 7.04. Maintenance of FCC Qualifications...................... 21
Section 7.05. Assignment of FCC Licenses............................. 22
Section 7.06. Other FCC Requirements................................. 22
Section 7.08. Fees and Taxes......................................... 22
Section 7.09. Best Efforts for Duration of Relationship.............. 22
ARTICLE IX. INDEMNIFICATION.............................................. 22
Section 9.01. Indemnification........................................ 22
Section 9.02. Determination of Damages............................... 23
Section 9.03. Limitations on Indemnification for Breaches of
Representations and Warranties......................... 24
Section 9.04. Indemnification Procedures............................. 24
ARTICLE X. TERMINATION................................................... 25
Section 10.01. Expiration; Termination................................ 25
Section 10.02. Defaults............................................... 25
ARTICLE XI. GENERAL PROVISIONS........................................... 26
Section 11.01. Payment of Sales, Use or Similar Taxes................. 26
Section 11.02. Survival of Representations and Warranties............. 26
Section 11.04. Entire Agreement; Amendments and Waivers............... 26
Section 11.05. Governing Law.......................................... 27
Section 11.06. Table of Contents and Headings......................... 27
Section 11.07. Notices................................................ 27
Section 11.08. Publicity.............................................. 28
Section 11.09. Severability........................................... 28
Section 11.10. Binding Effect; Assignment............................. 28
Section ll.11. Remedies............................................... 28
Section 11.12. Dispute Resolution Procedure........................... 28
Section 11.13. Counterparts........................................... 31
Section 11.14. Confidentiality........................................ 31
Section 11.15. Non-Disclosure of Shared Information................... 31
-2-
LIST OF EXHIBITS
I. Definitions and Interpretation
II. Form of IUA
III. Form of Stock Pledge Agreement
IV. Form of Clearwire Certificate
V. Form of Licensee Certificate
LIST OF SCHEDULES
A. Schedule of all Licenses, Licensee's data, applicable Geographic Markets
and GSAs, existing use agreements and Initial Spectrum Capacity
B. Licensee Schedule
-3-
MASTER ROYALTY AND USE AGREEMENT
MASTER ROYALTY AND USE AGREEMENT ("Agreement"), dated as of October 4, 2006
(the "Effective Date") by and among Hispanic Information and Telecommunications
Network, Inc. ("Licensee"), and Clearwire Spectrum Holdings II LLC, a Nevada
limited liability company ("Clearwire"). (Each of the foregoing is referred to
as a "Party" and both of the foregoing are referred to collectively as the
"Parties".) Certain defined terms used in this Agreement, and rules of
interpretation applicable to this Agreement, are contained in Exhibit I hereto.
RECITALS:
WHEREAS, the Licensee has been granted certain licenses (as they may be
modified and renewed, the "FCC Licenses") by the Federal Communications
Commission (the "FCC") authorizing it to engineer and operate specified
Educational Broadband Service ("EBS") channels (including any associated J- and
K-Group channels, the "Channels") in the Geographic Markets and covering an area
having the population determined on the basis of 2000 census data, and providing
the number of megahertz of total capacity (measured post-transition, excluding J
and K block spectrum) multiplied by this population number ("MHzPops"), all as
identified on Schedule A;
WHEREAS, subject to the Communications Act of 1934, as amended (the
"Communications Act"), and FCC rules, regulations and policies (the "FCC
Rules"), an EBS station's excess capacity may be used for commercial purposes
(the "Commercial Spectrum Capacity");
WHEREAS, Licensee's ability to provide services to the non-profit community
will be enhanced by expanding the geographic reach of its platform through
making the commercial capacity associated with agreed FCC Licenses available to
Clearwire, and providing services to the non-profit community on Clearwire's
broadband network;
WHEREAS, Clearwire believes that entering into a relationship with Licensee
has several benefits to Clearwire, in securing a source of spectrum capacity for
the future and facilitating the branding of the Clearwire mark through the
services provided by Licensee in the non-profit community;
WHEREAS, Licensee desires to make available to Clearwire, and Clearwire
desires to have access to, the Commercial Spectrum Capacity that is identified
on Schedule A (the "Initial Spectrum Capacity"), and any additional Commercial
Spectrum Capacity of Licensee that is accepted by Clearwire and made subject to
an IUA as provided in this Agreement (the "Future Spectrum Capacity"), all in
accordance with the terms of this Agreement;
-4-
WHEREAS, under this Agreement Licensee receives consideration to facilitate
the transmission of instructional programming to schools and public
organizations and to facilitate instructional broadband spectrum development for
its educational instruction network;
WHEREAS, the bundle of value comprised of the EBS Economic Royalties and
the Access Right Royalties (collectively referred to as the "Total
Consideration") is central to Licensee's efforts to advance the transmission of
its programming and to develop an instructional broadband spectrum network, in
each case utilizing the Clearwire National Platform, including the ability to
use Clearwire as a single source access vendor under the IUAs, and the IUAs and
this Agreement would not have been executed but for all of the elements of the
Total Consideration;
WHEREAS, Clearwire desires to have access to the Commercial Spectrum
Capacity to the extent permitted by FCC Rules and the terms of this Agreement,
for the operation of its business, and the Parties recognize that the success of
Clearwire's business plan depends on its access to the Commercial Spectrum
Capacity (among other factors), and the Licensee desires Clearwire to have full
access rights to the Commercial Spectrum Capacity permitted under FCC Rules and
the terms of this Agreement, to enhance Clearwire's business for the benefit of
Licensee as a shareholder of Clearwire Corporation ("Clearwire Parent"); and
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, and agreements set forth in this
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Parties hereto, intending legally to be bound,
agree as follows:
-5-
ARTICLE I.
RELATIONSHIP TERMS
Section 1.01. Overview.
(a) This Agreement, the Individual Use Agreements entered into
pursuant to this Agreement, and the Collateral Documents entered into by the
Parties in connection herewith, describe the arrangement through which Clearwire
and its Affiliates will obtain access to the Initial Spectrum Capacity
authorized by the FCC Licenses identified on Schedule A hereto and any Future
Spectrum Capacity (collectively, when under IUA hereunder, the "EBS Spectrum
Capacity") to be delivered to Clearwire under the terms of this Agreement.
(b) Clearwire is making an initial payment under this Agreement that
exceeds the value of the Initial Spectrum Capacity, but that includes additional
consideration for the Option and the ROFR granted to Clearwire in this
Agreement, and that also constitutes an advance payment toward Future Spectrum
Capacity.
(c) In addition to the Economic Royalties detailed in ARTICLE II,
central to Licensee's grant of access to the Commercial Spectrum Capacity to
Clearwire under an IUA is Clearwire's agreement and covenant to provide the
Access Right Royalties and other benefits as detailed in ARTICLE III and as
provided for in each IUA, which consists of, among other items (i) access to the
Educational Reservation Basic Cost-Free Educational Accounts; (ii) access to the
Additional Cost-Free Educational Accounts; (iii) the Limited Reciprocity rights;
and (iv) the Preferred Content Provider rights, together with technology,
facilities, equipment and other functionality from Clearwire and its Affiliates
all as more specifically set forth in this Agreement and in the IUAs related
thereto.
Section 1.02. Overview of Mechanics and Structure of Agreements.
(a) IUAs for Initial Spectrum Capacity. In exchange for access to the
Initial Spectrum Capacity made available to Clearwire pursuant to Individual Use
Agreements in the form attached as Exhibit II hereto (individually, an "IUA")
executed and delivered as of the Effective Date in accordance with the
applicable closing procedure set forth in ARTICLE IV. Clearwire will provide at
the times and in the manner set forth in each IUA and hereunder, the Economic
Royalties set forth in ARTICLE II, together with the commitment to provide the
bundle of rights and services set forth in ARTICLE III (identified collectively
as the "Access Right Royalties").
(b) Option for Future Spectrum Capacity. Licensee grants Clearwire an
option (the "Option") to enter into IUAs with Licensee in respect of any and all
spectrum (including, but not limited to, the Commercial Spectrum Capacity, EBS
and BRS) ("Spectrum") on FCC Licenses held by Licensee that is Available or that
becomes Available during the Term, at prices
-6-
to be negotiated in good faith based on the fair market value ("FMV") of such
Spectrum at the time the Option is to be exercised, provided, however, that the
negotiated price shall not exceed [***] per MHz POP. The Option shall be
exercisable in Clearwire's sole discretion each time Spectrum of Licensee or its
Affiliates becomes Available during the Term. When Spectrum is acquired by
Licensee or its Affiliates, or becomes Available for use by Clearwire under an
IUA as Future Spectrum Capacity, Licensee shall immediately provide a written
proposal (an "Option Notice") to Clearwire with the same information with
respect to such proposed Commercial Spectrum Capacity as is set forth on
Schedule A for the Initial Spectrum Capacity. Licensee shall also promptly
provide such additional information with respect to the proposal as may be
reasonably requested by Clearwire. If Clearwire is interested in negotiating the
IUA with respect to such proposed Spectrum, Clearwire shall inform Licensee and
the parties shall commence good faith negotiations within ten (10) days after
Licensee's receipt of such notice and shall continue to negotiate in good faith
for a period of not less than [***] provided that Clearwire may terminate the
negotiations at any time during such [***] period before the execution of the
IUA. The negotiations shall include negotiations regarding the applicable FMV
(which shall not, in any case, exceed [***] per MHz POP). If the Parties do not
reach agreement on the FMV for such proposed Spectrum within such thirty-day
period, Clearwire's Option with respect to the specific Spectrum in question
will terminate, but the provisions in Section 1.04 shall still apply with
respect to such Spectrum in accordance with the terms of Section 1.04. Clearwire
has no obligation to accept any proposed Spectrum other than the Initial
Spectrum Capacity, except as provided in Section 1.02(c) with regard to Other
[***] Transactions. If the Parties reach agreement on the terms of the IUA for
Future Spectrum Capacity, the payment required under such IUA shall reduce the
then remaining unapplied Prepaid Royalties Balance. If any IUA for Future
Spectrum Capacity requires a payment that exceeds the then-current balance of
the Prepaid Royalties Balance, Clearwire shall pay the difference to Licensee in
cash at the applicable Subsequent Closing.
(c) [***] Option. With respect to Commercial Spectrum Capacity of the
Licensee in [***] ("Licensee [***] Spectrum"), if Clearwire exercises the Option
for any of Licensee's spectrum that is Available in [***] Licensee shall have
the right to require that all of Licensee [***] Spectrum that is Available be
included in the IUA as long as the price offered to Clearwire for such spectrum
by Licensee is [***] per MHz POP or less; provided that, during the Term, and
for [***] after the Term, if Clearwire enters into any lease (based on a [***]
lease) or purchase transaction for any other BRS or EBS spectrum in the same or
a "Substantially Similar" (as defined below) GSA in [***] (an "Other [***]
Transaction"), or has already entered into or has any such Other [***]
Transaction, Clearwire shall provide the terms of such transaction to Licensee
within seven (7) days of consummation of the transaction, and Licensee shall
have the option to accept the per MHzPOP price in such Other [***] Transaction
if the Other [***] Transaction is for EBS spectrum, or the per MHzPOP price less
[***] for BRS spectrum, and require that Clearwire execute IUAs for any of
Licensee's Available [***] Spectrum in that GSA at that per MHzPOP price (the
"Higher Price"); and further provided if the Other [***] Transaction
[*** Confidential Treatment Requested]
-7-
occurs after Licensee and Clearwire have executed IUAs for the Licensee [***]
Spectrum, and the price per MHzPOP paid in the Other [***] Transaction is higher
than that paid to Licensee under the [***] Spectrum IUAs, then Clearwire shall
promptly pay Licensee the difference between that paid to Licensee for the
executed IUAs and that paid pursuant to the Other [***] Transaction for the
Licensee [***] Spectrum in that GSA (the "[***] MFN Right"). In no event will
Licensee be obligated to enter into IUAs for any of Licensee's [***] channels at
the price per MHz Pop of less than [***] For purposes of this paragraph, a
Substantially Similar" GSA means a GSA the covers the same metropolitan are in
[***] In the event of an Other [***] Transaction for any [***] GSA, Licensee
shall receive the Higher price for all MHzPOPs included in License's
Substantially Similar GSA and any overlapping GSAs, provided that Licensee shall
not be entitled to receive the Higher Price for a greater number of MHzPOPs
than contained in the [***] GSA that is the subject of the Other [***]
Transaction. (for example, if Clearwire acquires the [***] group that covers
[***] people ("POPs"), Licensee would be entitled to receive the Higher Price
for the same number of POPs times MHz for which Licensee holds FCC licenses on
the "B" channel Group covering the [***] GSA, plus that number of MHz POPs for
any other adjacent "B" channel groups that overlap the [***] group, not to
exceed the total number of MHz POPs covered by the [***] Group.)
(d) The Option shall be exercisable for any Licensee Spectrum in
Clearwire's sole discretion each time such Licensee Spectrum becomes Available
during the Term; provided that Clearwire's Option to acquire IUAs for Licensee
[***] Spectrum shall remain available to Clearwire and subject to the [***] MFN
Right for not less than [***] without regard to the earlier expiration of the
Term. Any outstanding Options shall lapse automatically upon the expiration of
the Term, except to the extent that Clearwire has previously notified Licensee
of its intention to exercise its Option with respect to such Spectrum prior to
the expiration of the Term.
Section 1.03. Service Affiliates. Clearwire covenants and agrees to cause
the entity providing each of the Access Right Royalties to the Licensee (each a
"Service Affiliate"') to assume the obligations of Clearwire hereunder with
respect to the Access Right Royalties and to be jointly and severally liable
therefore for the purpose of providing a direct contractual relationship between
the Licensee and the Service Affiliates, including any other entity that over
time becomes a Service Affiliate. The Service Affiliate and the Licensee shall
execute such additional agreements as may be required to effectuate the
provision of the applicable Access Right Royalty or other service, consistent
with the terms hereof and the applicable IUA (any such agreement, a "Collateral
Document"). Nothing in this Section 1.03 shall be construed to limit the primary
obligation of Clearwire to provide the Access Right Royalties.
Section 1.04. Right of First Refusal on IUAs. The terms of this Section
1.04 shall apply to all Spectrum held by Licensee or any of its
Affiliates during the Term, unless (1) Licensee has complied with the Section
1.02(b) Option Notice with respect to such Spectrum, and (2) the ROFR Offer (as
defined below) does not call for payment of a lower price, or other terms that
[*** Confidential Treatment Requested]
-8-
are more favorable to the third party, than those offered to Clearwire in
connection with the Option referred to in Section 1.02(b). During the Term of
this Agreement (the "ROFR Period"), Clearwire shall have a right of first
refusal to use the Spectrum as set forth in this Section 1.04 and in Section
1.02(b). Upon the receipt by Licensee of any bonafide written offer (a "ROFR
Offer") to purchase, lease, use or otherwise gain any access rights with respect
to any of Licensee's Spectrum that Licensee desires to accept, Licensee shall
transmit a written notice of the ROFR Offer to Clearwire (the "ROFR Offer
Notice"). The ROFR Offer Notice (i) shall contain the name and address of the
Person making the ROFR Offer, the payment structure therefore and a summary of
all material terms of such ROFR Offer, and (ii) shall offer to Clearwire the
option to enter into an IUA upon the terms and subject to the conditions of the
proposed third party use or lease agreement as set forth in the ROFR Offer
Notice. Clearwire shall then have the right for [***] to accept such ROFR Offer.
If Clearwire accepts such ROFR Offer, Clearwire and Licensee shall enter into an
IUA on such terms and conditions. If after such [***] period or upon earlier
written notice Clearwire does not accept such ROFR Offer, its rights hereunder
as to such ROFR Offer shall terminate and Licensee may for a period of [***]
following the expiration of such thirty (30) day period enter into an agreement
with the original offering party on the same terms and conditions as were
offered to Clearwire. If after such [***] period, Licensee does not enter such
an agreement with the original offering party the Clearwire right of first
refusal described in this Section shall again apply for such timing remaining in
the ROFR Period. If the ROFR Offer Notice provides that any consideration is to
be paid by the third person in whole or in part in a form other than cash,
Clearwire accepts the ROFR Offer, and Clearwire is able to provide or procure
comparable non-cash consideration using commercially reasonable efforts,
Clearwire will so provide or procure such non-cash consideration. In the event
Clearwire is unable to provide or procure comparable non-cash consideration,
Clearwire may substitute, in whole or in part, for non-cash consideration an
amount in cash fairly equivalent to the then fair market value of the non-cash
consideration payable by the third person. The ROFR Offer acceptance must
specify the amount of any such substitute cash consideration and the non-cash
consideration for which it is intended to substitute. If Licensee disputes that
the substitute cash consideration specified by Clearwire is in an amount fairly
equivalent to the fair market value of the non-cash consideration payable by the
third person, Licensee must within [***] after the receipt of the ROFR Offer
acceptance provide Clearwire with written notice specifying the amount Licensee
considers to be fairly equivalent to the fair market value of the non-cash
consideration payable by the third person (the "Counter Offer"). The question of
fair market value of the non-cash consideration will be resolved pursuant to
arbitration under this Agreement unless Clearwire gives Licensee written notice
within [***] after its receipt of the Counter-Offer that Clearwire agrees to
enter into an agreement containing the fair market value set forth in the
Counter-Offer.
[*** Confidential Treatment Requested]
-9-
ARTICLE II.
ECONOMIC ROYALTIES
Section 2.01. EBS Spectrum Capacity Economic Royalties. Clearwire shall
cause to be paid to the Licensee the amount of [***] (the "Prepaid Royalties")
upon execution of this Agreement. The Prepaid Royalties shall be applied as
provided in Section 1.02(b), against amounts otherwise due from Clearwire to
Licensee with respect to IUAs for Initial Spectrum Capacity and Future Spectrum
Capacity.
Section 2.02. Refunding of Prepaid Royalties. Within five calendar days
after the expiration or termination of the Term of this Agreement for any cause,
Licensee shall refund Clearwire the full balance of Prepaid Royalties less any
portion of the Prepaid Royalties that has been applied against royalties due
under fully executed IUAs for Initial Spectrum Capacity and Future Spectrum
Capacity (at any time the "Prepaid Royalties Balance"); provided that the Term
shall not be deemed to have expired for this purpose during a period that the
Option periods described in Section 1.02(b) have not terminated. Clearwire has
the right, in its sole discretion, to extend the date on which the Prepaid
Royalties Balance must be refunded. If Clearwire decides to grant such an
extension, the Term of this Agreement shall be extended accordingly and the
terms of this Agreement shall continue in full force and effect.
ARTICLE III.
ACCESS RIGHT ROYALTIES
Section 3.01. Access Right Royalties. Clearwire shall provide the Access
Right Royalties described in this ARTICLE III from and after the Commencement
Date of an IUA hereunder. The Access Right Royalties will be provided in a
manner consistent with the way the Access Right Royalties are provided by
Clearwire to third parties under agreements that provide for Access Right
Royalties similar to the Access Right Royalties provided in this Agreement.
Notwithstanding the preceding sentence, the Parties acknowledge that Licensee
currently provides, and intends to provide, a variety of digital educational
services utilizing the spectrum in [***] a market of special importance to
Licensee, and if the Option is exercised with respect to Licensee [***]
Spectrum, Clearwire agrees to (in good faith) consider and use its commercially
reasonable best efforts to enter into a joint venture with Licensee in the
development and delivery of Licensee's services in [***] to Educational End
Users, which services may be different from services provided in other markets,
if such joint venture involves the purchase of services from Clearwire at
greater than Clearwire's lowest wholesale price in the market for such services.
Section 3.02. Cost-Free Educational Accounts.
[*** Confidential Treatment Requested]
-10-
(a) Included in the Access Right Royalties provided to Licensee,
Licensee shall be entitled to Cost-Free Educational Accounts as provided in this
Section 3.02, Section 3.03, and Section 3.04.
(b) "Cost-Free Educational Account" means a wireless broadband
connection that Clearwire provides to Licensee without charge or expense to
Licensee. Cost-Free Educational Accounts shall have the same capacity and
characteristics as the highest level of premium mass market retail service
provided on Clearwire's network in a given Market Area. Multiple individuals
that are associated with an Educational End User at the time may share the same
Cost-Free Educational Account through Wi-Fi hotspots, local area networks, and
other means. To the extent not inconsistent with the terms of this Agreement and
the applicable IUA, the Cost-Free Educational Accounts shall be subject to the
terms of Clearwire's then generally applicable Acceptable Use Policy. The
Cost-Free Educational Accounts shall be fully portable anywhere within the
Clearwire National Platform to the extent that Clearwire offers such portability
to any customer.
Section 3.03. Educational Reservation Basic Cost-Free Education Accounts.
(a) In respect of Licensee's educational reservation covering the five
percent (5%) educational spectrum capacity currently required by the FCC Rules
pertaining to the FCC Licenses (the "Educational Reservation"), Licensee shall
be permitted to utilize the Educational Reservation in such locations served by
the Clearwire National Platform on a full time basis as Licensee desires for its
operations. Clearwire and Licensee shall at all times comply with applicable FCC
Rules. Clearwire may not use the Educational Reservation. In the event that the
Parties cannot agree on the application of any new rule or interpretation
regarding the Educational Reservation in their circumstances, the Parties shall
jointly approach the FCC for clarification in a timely fashion and, to the
extent the matter remains unresolved thereafter, shall settle the matter
applying the Dispute Resolution Procedure.
(b) Initially, Clearwire shall provide Licensee [***] Cost-Free
Educational Account per Cell Site per Market Area each a "Basic Cost-Free
Education Account"). The number of Cost-Free Educational Accounts shall be
adjusted upward every [***] proportionate to the growth of the overall data
capacity of Clearwire's network in the Market Area where the EBS system is
located. The growth (if any) in the overall data capacity shall be determined as
measured by its average throughput. The average throughput measurement shall be
made in such fashion as shall be agreed by the Parties, or (if the Parties fail
to reach agreement with respect to such measurement) as determined by
arbitration, using metrics that are as consistent as possible with those
utilized at the time of the immediately prior average throughput measurement.
Section 3.04. Additional Cost-Free Educational Accounts. In addition to,
and not in lieu of, the Cost-Free Educational Accounts provided to Licensee by
Clearwire pursuant to the Educational Reservation as set forth in Section 3.03,
Clearwire shall provide Licensee with
[*** Confidential Treatment Requested]
-11-
additional Cost-Free Educational Accounts in the number computed in accordance
with this Section 3.04 (the "Additional Cost-Free Educational Accounts").
(a) Number and Periodic Adjustment. Licensee will have access to
additional spectrum capacity on Clearwire's network in Licensee's Market Area in
the form of Cost-Free Educational Accounts for use on the Clearwire National
Platform equal to the greater of (X) [***] Cost-Free Educational Accounts per
Sector in the Market Area where Licensee holds an FCC License to operate an EBS
system and (Y) the quantity of Cost-Free Educational Accounts determined by
applying the Formula Quantity. The number of Additional Cost Free Educational
Accounts that Clearwire is obligated to provide to Licensee shall be
recalculated and revised [***]
(i) The "Formula Quantity" as of any date, is equal to the
product obtained by multiplying: (a) the Local Channel Ratio by (b) [***] by (c)
the number of subscribers served by Clearwire in the Market Area as of the end
of the previous calendar year. In the event that this product is a fraction, it
shall be rounded up or down to the nearest whole number, where the "Local
Channel Ratio" is the fraction obtained by dividing the number of EBS channels
provided to Clearwire by Licensee under IUA in a given Market Area as of the
date of the calculation by the total number of EBS and BRS channels with
substantially overlapping GSAs then used to provide service in such Market Area
licensed to or under a use agreement with Clearwire (including those of
Licensee) as of that date.
(ii) Educational End Users. Cost-Free Educational Accounts shall
be exclusively for Educational End Users and not for resale, assignment or
transfer by Licensee outside of its Educational End User environment or to
persons who cease to be officially associated with such Educational End User.
(By way of example, a university may resell the service to its students,
faculty, administrators and staff, while such persons are involved with the
university, but shall cease to provide the service if a member of the faculty
terminates employment or a student graduates and ceases to be involved in
university matters.)
(b) Time of Delivery. The Additional Cost-Free Educational Accounts
shall be provided by Clearwire to Licensee pursuant to this Section 3.04(b) upon
the commercial launch of Clearwire's broadband wireless service in any Market
Area where Licensee has an EBS Spectrum Capacity IUA in place with Clearwire, or
the applicable Commencement Date thereof if later.
Section 3.05. Licensee MVNO.
(a) In addition to the right to Cost-Free Educational Accounts,
Licensee shall have the right to resell the Clearwire service in the form of
MVNO Educational Accounts to additional Educational End Users in each Market
Area for use on the Clearwire National Platform. An "MVNO Educational Account"
shall have the identical characteristics as a Cost-Free Educational Account
under Section 3.02(b). except that there shall be a charge to Licensee
[*** Confidential Treatment Requested]
-12-
as determined pursuant to this Section 3.05. Clearwire shall sell to Licensee
such services, at a cost equal to the [***] provided by Clearwire to an
arms-length third party in such Market Area or other comparable market pursuant
to any applicable agreement. However, the number of MVNO Educational Accounts is
limited in each Market Area to [***] the number of Cost-Free Educational
Accounts for that Market Area.
(b) Mechanics. The resale of Clearwire's services pursuant to this
Section 3.05 shall be accomplished pursuant to a standard Clearwire wholesale
agreement form drafted in a manner consistent with the terms of this Agreement
and the applicable IUA, which will be provided to any Licensee requesting the
right to resell an MVNO Educational Account to an Educational End User. Such
arrangement shall be executed not later than thirty (30) days after the
availability of such services.
Section 3.06. Access to Educational End User Devices. Clearwire shall also
make any end-user equipment used in the Clearwire National Platform available
for purchase by Licensee at [***] above Clearwire's cost to acquire such
end-user equipment. Equipment provided to Licensee pursuant to this section
shall be used solely by Educational End Users and not for resale.
Section 3.07. Sharing of Features and Service Sets. Licensee shall have
access to, and full use of, system capabilities, services and feature sets that
are generally provided to Clearwire's retail customers or wholesalers to mass
market customers. Licensee shall have access to reasonably necessary support
made available to Clearwire's commercial customers generally, and that is
reasonably necessary for the Licensee to offer services to its Educational End
Users as contemplated by their agreement. The Licensee shall have access to new
capabilities, features and service sets within six months of the time that
Clearwire makes them available to customers generally, but not earlier than the
Commencement Date with respect to any particular IUA.
Section 3.08. Preferred Content Provider.
(a) Scope. In the event that Clearwire provides third party content to
customers over its network in any Market Area where Licensee is a party to an
EBS Spectrum Capacity IUA, Licensee shall be a "Preferred Content Provider" over
such network in that Market Area. As a Preferred Content Provider, Licensee
shall have the same degree of access to, and use of, any system capability,
service or feature set that is provided to premium third party content
providers.
(b) Service Sets and Features. [***] Licensee agrees that the
programming that Licensee supplies to customers through Clearwire's network
[*** Confidential Treatment Requested]
-13-
will be educational in nature. Licensee agrees not to resell Clearwire's network
access, features and/or service sets to third parties, except in accordance with
Sections 3.04(a)(i) and 3.05.
(c) Capacity Constraints. Clearwire reserves the right to restrict the
use of the capabilities and services made available to the Licensee as a
Preferred Content Provider under this Section 3.08 if such use is no longer
commercially and technically feasible due to limitations in network
capabilities. Clearwire shall comply with the provisions of ARTICLE III to
ensure timely access to information about capacity usage and permit Licensee a
reasonable opportunity to secure alternative access.
SECTION3.09. [***]
ARTICLE IV.
CLOSING MECHANICS; ESCROW
Section 4.01. Deliveries at Execution of this Agreement. On the Effective
Date of this Agreement, Clearwire and the Licensee shall take the following
actions required of it by subsections (a) through (c) hereof.
(a) Licensee. Licensee shall deliver or cause to be delivered to
Clearwire each of the following, duly executed by an authorized representative
of Licensee: (i) one IUA completed in accordance with this Agreement with
respect to each Market comprising the Initial Spectrum Capacity; (ii) the Stock
Pledge Agreement attached to this Agreement as Exhibit III, and all additional
documents required under the Stock Pledge Agreement; and (iii) the
certificate(s) of Licensee described in Section 4.01(c) Licensee shall have
specified on Schedule 4.01 attached hereto its wire account (each a "Wire
Account"), which Wire Account shall be included in the applicable IUA. Absent
notice of different instructions, all cash payments to be made as provided on
Schedule A, and as otherwise reflected in the applicable IUA or this Agreement
to be paid to Licensee, shall be to such Wire Account in immediately available
funds.
[*** Confidential Treatment Requested]
-14-
(b) Clearwire. Clearwire shall deliver or cause to be delivered to the
Licensee each of the following, duly executed by an authorized representative of
Clearwire: (i) one IUA completed in accordance with this Agreement with respect
to each Market comprising the Initial Spectrum Capacity; (ii) its certificate
described in Section 4.01(c); and (iii) the Upfront Royalty provided for in the
applicable EBS Spectrum Capacity IUA as reflected on Schedule A.
(c) Officers Certificates. In connection with the execution of this
Agreement, each Party shall deliver to each other Party, in each case certified
as of the Effective Date of this Agreement by an authorized officer of the
delivering Party, (A) a copy of the resolutions of the board of directors of the
delivering Party authorizing the execution, delivery and performance of this
Agreement and (B) a certificate of incumbency, with signatures of the officers
of such Party authorized to execute and deliver this Agreement.
Section 4.02. EBS Spectrum Capacity IUA Closing(s).
(a) Initial Closing. Subject to the terms and conditions set forth in
this Agreement, the closing of the transactions provided in this Agreement,
including with respect to IUAs for the Initial Spectrum Capacity that are
executed on the date hereof (each an "Initial Closing"), shall take place on the
Effective Date of this Agreement (the "Initial Closing Date").
(b) Subsequent Closings. Subject to the terms and conditions set forth
in this Agreement, the closing of IUAs for Future Spectrum Capacity as provided
in this Agreement shall take place as specified in the applicable IUAs when the
Parties reach agreement on the pricing of such Future Spectrum Capacity IUAs, at
which time an EBS Spectrum Capacity IUA shall be executed (each a "Subsequent
Closing"), which date shall be the Effective Date for that IUA (the "Subsequent
Closing Date").
(c) Closing Conditions.
(i) Conditions to Each Party's Obligations at a Closing. The
respective obligations of each Party to effect execution and closing of an EBS
Spectrum Capacity IUA at the Initial Closing or at any Subsequent Closing shall
be subject to the satisfaction on or prior to the applicable Closing Date of the
following condition with respect to that EBS Spectrum Capacity IUA.
(1) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court or
other Government Agency of competent jurisdiction preventing the consummation of
the transactions contemplated in the applicable IUA or under this Agreement as
it relates to such IUA; provided, however, that prior to invoking this
condition, each Party hereto shall use all commercially reasonable efforts to
have any such injunction or other order vacated.
-15-
(ii) Conditions to the Obligations of Clearwire. The obligations
of Clearwire to effect any Closing of an IUA hereunder shall be subject to the
satisfaction at or prior to the applicable Closing Date of such IUA of each of
the following conditions, any of which may be waived, solely in writing, and
exclusively by Clearwire:
(1) Representations and Warranties. The representations and
warranties of the Licensee contained in the IUA shall be true and correct in all
material respects as of the Effective Date of such IUA.
(2) Officer Certificates. Clearwire shall have received
copies, in each case certified as of the applicable Closing Date by an
authorized officer of Licensee, of (i) the resolutions of the board of directors
of the Licensee, authorizing the execution, delivery and performance of the IUA,
(ii) the signature and incumbency of the officers of the Licensee authorized to
execute and deliver the IUA, and (iii) certifying that the representations and
warranties of the Party to be made under the IUA are true and correct.
(iii) Conditions to Obligations of Licensee. The obligations of
Licensee to effect any Closing of an EBS Spectrum Capacity IUA hereunder shall
be subject to the satisfaction at or prior to the applicable Closing Date of
such IUA of each of the following conditions, any of which may be waived, solely
in writing, and exclusively by Licensee:
(1) Representations and Warranties. The representations and
warranties of Clearwire contained in the IUA shall be true and correct in all
material respects as of the Effective Date of such IUA.
(2) Officer Certificates. Licensee shall have received
copies, in each case certified as of the applicable Closing Date by an
authorized officer of Clearwire, of (i) the resolutions of the board of
directors of Clearwire and each Clearwire Affiliate that is a Party hereto,
authorizing the execution, delivery and performance of the IUA, (ii) the
signature and incumbency of the officers of Clearwire authorized to execute and
deliver the IUA, and (iii) certifying that the representations and warranties of
the Party to be made under the IUA are true and correct.
Section 4.03. Closing Site/Mechanics. Each of the Closings will occur by
electronic delivery procedure agreed by the Parties, provided that the Initial
Closing shall take place at the offices of Davis Wright Tremaine LLP, Seattle,
Washington.
Section 4.04. Further Assurances. Upon the terms and subject to the
conditions of this Agreement, each of the Parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable consistent with
applicable law to consummate and make effective in the most expeditious manner
practicable the Closing of each IUA and compliance with the obligations therein
and herein in respect of each such IUA.
-16-
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF LICENSEE
Licensee hereby represents and warrants to Clearwire and Clearwire Parent
that:
Section 5.01. Organization and Good Standing. It is a nonprofit corporation
duly organized, validly existing and in good standing under the laws of its
state of organization and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. Except as disclosed in Schedule 5.01,
it is duly qualified or authorized to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction in which it owns or
leases real property or FCC Licenses and each other jurisdiction in which the
conduct of its business or the ownership of its properties requires such
qualification or authorization, except where the failure to be so qualified,
authorized or in good standing does not have and would not reasonably be
expected to have a Licensee Material Adverse Effect.
Section 5.02. Authorization of Agreement. It has all requisite corporate
power and authority (i) to enter into, deliver and carry out the transactions
contemplated by this Agreement (the 'Transactions") and each other agreement,
document, or instrument or certificate contemplated by this Agreement to be
delivered on the date thereof, (ii) to enter into and deliver all documents
required or necessary to be executed by it in connection with the consummation
of the Transactions on the date hereof (collectively the "Licensee Documents"),
and (iii) to consummate the Transactions taking place on the date hereof. This
Agreement has been and the Licensee Documents when delivered will be duly and
validly executed and delivered by it and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes and the Licensee Documents will constitute when delivered the legal,
valid and binding obligations of Licensee, enforceable against it in accordance
with their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Section 5.03. No Conflict. Except as set forth on Schedule 5.03:
(a) Neither the execution and delivery by Licensee of this Agreement
or the Licensee Documents, nor compliance by Licensee with any of the provisions
hereof or thereof will (i) conflict with, or result in the breach of, any
provision of the Governing Documents of Licensee, (ii) conflict with, violate,
result in the breach of, constitute (with or without due notice, lapse of time
or both) a default under, result in the acceleration of, create in any Party the
rights to accelerate, terminate, modify or cancel, or require any notice,
consent or waiver under, any note, bond, mortgage, indenture, license, agreement
or other obligation to which Licensee is a party or by which Licensee or any of
its properties or assets is bound or (iii) violate any statute,
-17-
rule, regulation, order or decree of any Government Agency or authority by which
Licensee is bound, except in the cases of clauses (ii) and (iii) for such
violations, breaches or defaults as would not, individually or in the aggregate,
have a Licensee Material Adverse Effect.
(b) No consent, waiver, approval, order, permit or authorization of,
or declaration or filing with, or notification to, any Person or Government
Agency is required on the part of Licensee in connection with the execution and
delivery of this Agreement or the Licensee Documents or the compliance by
Licensee with any of the provisions hereof or thereof, except as contemplated
herein or therein.
Section 5.04. Litigation. Except as set forth on Schedule 5.04 and other
than Proceedings of general applicability and those related to market
transitions ("FCC Proceedings"), there is no Proceeding now in progress or
pending or, to the knowledge of Licensee, threatened against Licensee or the
assets (including the intellectual property rights) or the business of Licensee,
nor to the knowledge of Licensee, does there exist any basis therefore, except
for immaterial claims brought against Licensee in the ordinary course of
business.
Section 5.05. Compliance with Laws; Permits. Excepting the markets listed
on Schedule 5.05 and only to the best knowledge of the Licensee, assuming
compliance in all material respects with the Communications Act and FCC Rules
by other parties to a Third Party Agreement where and during the time access to
the Commercial Spectrum Capacity has been governed by such Third Party
Agreement, in respect of all licenses, including those otherwise subject to
Third Party Agreements, Licensee (a) has complied in all respects with all
federal, state, and local laws, rules, ordinances, codes, consents,
authorizations, registrations, regulations, decrees, directives, judgments and
orders applicable to it and its business other than where noncompliance would
not, individually or in the aggregate, reasonably be expected to have a Licensee
Material Adverse Effect and (b) has all federal, state, and local governmental
Permits necessary in the conduct of its business as currently conducted and to
own and use its assets in the manner in which such assets are currently owned
and used other than where the failure to possess such Permits would not,
individually or in the aggregate, reasonably be expected to have a Licensee
Material Adverse Effect, such Permits are in full force and effect, and no
violations have been recorded in respect of any such Permit, and no proceeding
is pending or, to the best knowledge of Licensee, threatened to revoke or limit
any such Permit.
Section 5.06. Brokers. Neither Licensee nor any of its directors, officers,
employees, or representatives has employed any broker or finder in connection
with the Transactions.
Section 5.07. Knowledge. Any representation, warranty, covenant,
obligation, or part thereof that states that it is made to the best knowledge of
Licensee is made to its best knowledge after commercially reasonable
investigation and includes all facts which it knew or should have known as a
result of such investigation, including the best knowledge of Licensee's
executive officers and legal counsel after commercially reasonable
investigation.
-18-
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF CLEARWIRE
Clearwire hereby represents and warrants to Licensee that:
Section 6.01. Organization and Good Standing. Clearwire Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and Clearwire is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Each has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now conducted. Clearwire
is duly qualified or authorized to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction in which it owns or leases
real property and each other jurisdiction in which the conduct of its business
or the ownership of its properties requires such qualification or authorization,
except where the failure to be so qualified, authorized or in good standing does
not have and would not reasonably be expected to have a Clearwire Material
Adverse Effect.
Section 6.02. Authorization of Agreement. Each of Clearwire Parent and
Clearwire has all requisite corporate power and authority (i) to enter into,
deliver and carry out the Transactions, each IUA and each other agreement,
document, or instrument or certificate contemplated by this Agreement, (ii) to
enter into and deliver all documents required or necessary to be executed by it
in connection with the consummation of the Transactions (collectively the
"Clearwire Documents"), and (iii) to consummate the Transactions. This Agreement
has been and the Clearwire Documents will be when delivered duly and validly
executed and delivered by Clearwire and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes and the Clearwire Documents will constitute when delivered the
legal, valid and binding obligations of Clearwire, enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
Section 6.03. No Conflict.
(a) Neither of the execution and delivery by Clearwire of this
Agreement and of the Clearwire Documents, nor the compliance by Clearwire with
any of the provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the Governing Documents of Clearwire, (ii) conflict
with, violate, result in the breach of, or constitute (with or without due
notice, lapse of time or both) a default under, result in the acceleration of,
create in any Party the rights to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any note, bond, mortgage,
indenture, license, agreement or other obligation to which Clearwire is a party
or by which Clearwire or any of its properties or assets are bound or
-19-
(iii) violate any statute, rule, regulation, order or decree of any Government
Agency by which Clearwire is bound, except, in the case of clauses (ii) and
(iii), for such violations, breaches or defaults as would not, individually or
in the aggregate, have a Clearwire Material Adverse Effect.
(b) No consent, waiver, approval, order, permit or authorization of,
or declaration or filing with, or notification to, any Person or Government
Agency is required on the part of Clearwire in connection with the execution and
delivery of this Agreement or the Clearwire Documents or the compliance by
Clearwire with any of the provisions hereof or thereof, except that in
connection with the execution of the IUAs executed pursuant to this Agreement,
Clearwire will prepare and file spectrum lease applications for approval by the
FCC.
Section 6.04. Litigation. Except as would not reasonably be expected to
have a materially adverse effect on the ability of Clearwire to close hereunder
or as set forth on Schedule 6.04, (a) there is no Proceeding now in progress or
pending or, to the knowledge of Clearwire, threatened against Clearwire or the
assets or the business of Clearwire and (b) Clearwire is not subject to any
order, writ, injunction or decree of any court or other Government Agency.
Section 6.05. Compliance with Laws; Permits. Clearwire (a) has complied in
all respects with all federal, state, and local laws, rules, ordinances, codes,
consents, authorizations, registrations, regulations, decrees, directives,
judgments and orders applicable to it and its business other than where
noncompliance would not, individually or in the aggregate, reasonably be
expected to have a Clearwire Material Adverse Effect and (b) has all federal,
state, and local governmental Permits necessary in the conduct of its business
as currently conducted and to own and use its assets in the manner in which such
assets are currently owned and used other than where the failure to possess such
Permits would not, individually or in the aggregate, reasonably be expected to
have a Clearwire Material Adverse Effect, such Permits are in full force and
effect, and no violations have been recorded in respect of any such Permit, and
no proceeding is pending or, to the best knowledge of Clearwire, threatened to
revoke or limit any such Permit, except that in connection with the execution
of the IUAs executed pursuant to this Agreement, Clearwire will prepare and file
spectrum lease applications for approval by the FCC.
Section 6.06. Brokers. Neither Clearwire nor any of its directors,
officers, employees or representatives has employed any broker or finder in
connection with the Transactions.
ARTICLE VII.
COVENANTS
Section 7.01. Consents and Approvals. Clearwire shall use its commercially
reasonable efforts to obtain, and shall cooperate with Licensee and assist
Licensee in obtaining, all consents, waivers, amendments, modifications,
approvals, authorizations, permits and licenses which are
-20-
required to be obtained by Clearwire and the Licensee to effectuate this
Agreement. Licensee shall use its respective commercially reasonable efforts to
obtain, and shall cooperate with Clearwire and assist Clearwire in obtaining,
all consents, waivers, amendments, modifications, approvals, authorizations,
permits and licenses which are required to be obtained by Clearwire and/or
Licensee to effectuate this Agreement.
Section 7.02. Notice of Breach. Licensee shall promptly give Clearwire
written notice of any matter that becomes known to Licensee which Licensee
determines is reasonably likely to constitute a breach of any representation,
warranty, agreement or covenant of Licensee contained in this Agreement.
Clearwire and Clearwire Parent shall promptly give the Licensee written notice
of any matter that becomes known to them which Clearwire or Clearwire Parent
determines is reasonably likely to constitute a breach of any representation,
warranty, agreement or covenant of Clearwire or Clearwire Parent contained in
this Agreement.
Section 7.03. Maintenance of FCC Qualifications. The provisions of this
Section 7.03 apply only to spectrum that has not been subject to an IUA. Except
as such qualifications may be affected by this Agreement or one or more IUAs
entered into pursuant to this Agreement, Licensee hereby covenants and agrees
that it shall maintain all necessary qualifications to hold and to obtain
renewal in the ordinary course of any FCC License, subject to Clearwire's
obligation to cause Licensee's FCC License to timely meet the substantial
service requirement and to comply with FCC Rules in its use and access to the
licensed spectrum, as such qualifications may be amended or modified from time
to time (individually an "FCC Qualification" and collectively referred to as the
"FCC Qualifications"), and further covenants that it shall not knowingly or
negligently take any action, or fail to take any action, which action or failure
to act creates a material risk that Licensee shall lose any FCC Qualification;
provided, that in the event that the FCC or any other legal authority shall at
any time specify new or different qualifications or conditions for the
maintenance of any FCC Qualification or shall issue a pronouncement offering a
new interpretation of an FCC Qualification, Clearwire shall reimburse on demand
Licensee's reasonable expenses of taking such action as are required for
Licensee to bring itself and its operations into compliance with such new or
different qualifications or conditions; provided, further, that it shall not be
deemed a breach of this sentence if Licensee loses an FCC Qualification as a
result, in whole or in part, of an act or omission of Clearwire or any failure
of Clearwire to perform its obligations under this Agreement or any IUA. If, at
any time, Licensee fails, or it appears to said Licensee more likely than not
that it will fail, to maintain any one or more of its FCC Qualifications with
respect to any of its FCC Licenses or its operations pursuant thereto, Licensee
shall give written notice to Clearwire within five (5) days after Licensee
becomes actually aware that (i) it no longer maintains such FCC Qualifications
or (ii) with the passage of time or upon the occurrence of a future event it
will no longer maintain such FCC Qualifications (referred to as a
"Disqualification Event"). Licensee shall cooperate with reasonable requests of
Clearwire made from time to time for the purpose of verifying, at Clearwire's
expense, that Licensee maintains its FCC Qualifications. Upon the occurrence of
a Disqualification Event, the affected Licensee shall, at Clearwire's expense,
promptly undertake all reasonable actions to obtain, to the extent
-21-
permitted by applicable law, a waiver from the FCC regarding the circumstances
giving rise to such Disqualification Event or to cure the circumstances giving
rise to such Disqualification Event.
Section 7.04. Assignment of FCC Licenses. The provisions of this Section
7.04 apply only to spectrum that has not been subject to an IUA. Licensee may
assign the FCC License to any entity that is eligible under FCC Rules to hold
the FCC License, who is reasonably acceptable to Clearwire and who assumes
Licensee's prospective obligations under this Agreement, whereupon Licensee
shall be forever relieved of such prospective obligations. Clearwire and
Licensee agree that it is reasonable for Clearwire to reject a proposed assignee
where the proposed assignee or its affiliate competes with Clearwire's offering
over EBS or BRS spectrum. In the event that Licensee desires to assign its FCC
License to another entity, Licensee shall inform Clearwire in writing of the
identity of such entity and within twenty (20) days of such notice Clearwire
shall inform Licensee in writing of whether Clearwire consents to such
assignment or refuses to consent to such assignment and, if it refuses, the
reason(s) it is relying upon for such refusal. Notwithstanding the foregoing,
Licensee may, without the prior consent of Clearwire, sell, assign, sublease,
delegate or transfer this Agreement or any of its rights or obligations
hereunder to any of Licensee's affiliates controlled by or under common control
with Licensee.
Section 7.05. Other FCC Requirements. In carrying out this Agreement, the
Parties will comply at all times with applicable laws, as well as rules and
policies of the FCC. The Parties believe that the provisions of this Agreement
comply with all current FCC rules and policies, and agree not to express any
contrary view to regulatory agencies or the general public.
Section 7.06. Fees and Taxes. Until the end of the term of the IUA that is
the last to expire, Clearwire shall pay all fees and taxes (now existing or
hereafter arising) imposed on Licensee as a result of the licensing, regulation
or use of Licensee's EBS Spectrum by Clearwire or Licensee, including, without
limitation, any Federal spectrum, USF and/or regulatory fees that maybe imposed
on EBS Spectrum in the future.
Section 7.07. Best Efforts for Duration of Relationship. The Parties
acknowledge that there will be many changes in the course of the term of the
IUAs in technology, capabilities, and regulatory environment and other relevant
areas, and the Parties covenant and agree to act in a cooperative manner to
preserve the intent of the relationships reflected in this Agreement to their
mutual advantage and to use their commercially reasonable best efforts to
maintain that mutual advantage in accordance with the initial intent of the
Parties.
ARTICLE VIII.
INDEMNIFICATION
Section 8.01. Indemnification
-22-
(a) Licensee shall indemnify Clearwire, its Affiliates, and each of
their respective stockholders (other than Licensee), directors, officers,
employees, agents, successors and assigns (collectively, the "Clearwire
Indemnified Parties") and hold each of the Clearwire Indemnified Parties
harmless from and against any and all Damages based upon, attributable to or
resulting from:
(i) The failure of any representation or warranty of Licensee set
forth in ARTICLE V hereof, or any representation or warranty contained in any
certificate delivered by or on behalf of Licensee pursuant to this Agreement, to
be true and correct as of the dates made; and
(ii) The breach of any covenant or other agreement on the part of
Licensee under this Agreement.
(b) Clearwire shall indemnify the Licensee, its Affiliates, and each
of its agents, successors and assigns (collectively, the "Licensee Indemnified
Parties") and hold the Licensee Indemnified Parties harmless from and against
any and all Damages based upon, attributable to or resulting from:
(i) The failure of any representation or warranty of Clearwire
set forth in ARTICLE VI hereof, or any representation or warranty contained in
any certificate delivered by or on behalf of Clearwire pursuant to this
Agreement, to be true and correct as of the dates made;
(ii) The breach of any covenant or other agreement on the part of
Clearwire under this Agreement; and
(iii) The operation of equipment by, the provision of service by
or otherwise related to the activities of Clearwire, any of its Affiliates or
any of its sublicensees or resellers including, without limitation, damage to
health.
Section 8.02. Determination of Damages. As used herein, "Damages" means any
and all losses, claims, demands, liabilities, obligations, actions, suits,
orders, statutory or regulatory compliance requirements, or proceedings asserted
by any Person, and all damages, costs, expenses, assessments, judgments,
recoveries and deficiencies, including interest, penalties, investigatory
expenses, consultants' fees, and reasonable attorneys' fees and costs, of every
kind and description, contingent or otherwise. For purposes of the above, the
amount of Damages in respect of any breach of a representation or warranty shall
be determined without regard to any limitation or qualification as to
materiality, Licensee(s) Material Adverse Effect, Clearwire Material Adverse
Effect, knowledge or similar language set forth in such representation or
warranty.
-23-
Section 8.03. Limitations on Indemnification for Breaches of
Representations and Warranties. An indemnifying Party shall not have any
liability under Section 8.01(a)(i) or Section 8.01(b)(i) hereof unless the
aggregate amount of Damages to the indemnified Parties finally determined to
arise thereunder based upon, attributable to or resulting from the failure of
any representation or warranty to be true and correct or the breach of any
covenant, exceeds [***] in the aggregate (the "Deductible") and, in such event,
the indemnifying Party shall be required to pay the amount of such Damages
including those used to compute the Deductible.
Section 8.04. Indemnification Procedures
(a) In the event that any claim shall be asserted by any Person in
respect of which payment may be sought under Section 8.01 hereof (regardless of
the Deductible referred to above) (each, a "Claim"), the indemnified Party shall
reasonably and promptly cause written notice (a "Claim Notice") of the assertion
of any Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the indemnifying Party. The indemnifying Party shall have the
right, at its sole option and expense, to be represented by counsel of its
choice, which must be reasonably satisfactory to the indemnified Party, and to
defend against, negotiate, settle or otherwise deal with any Claim which relates
to any Damages indemnified against hereunder. If the indemnifying Party elects
to defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Damages indemnified against hereunder, it shall within five (5)
days of the delivery of the Claim Notice (or sooner, if the nature of the Claim
so requires) notify the indemnified Party of its intent to do so. If the
indemnifying Party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Damages indemnified against hereunder,
fails to notify the indemnified Party of its election as herein provided or
contests its obligation to indemnify the indemnified Party for such Damages
under this Agreement, the indemnified Party may defend against, negotiate,
settle or otherwise deal with such Claim. If the indemnified Party defends any
Claim, then the indemnifying Party shall reimburse the indemnified Party for the
expenses of defending such Claim upon submission of periodic bills. If the
indemnifying Party shall assume the defense of any Claim, the indemnified Party
may participate, at his or its own expense, in the defense of such Claim;
provided, however, that such indemnified Party shall be entitled to participate
in any such defense with separate counsel at the expense of the indemnifying
Party if, so requested by the indemnifying Party to participate or in the
reasonable opinion of counsel to the indemnified Party, a conflict or potential
conflict exists between the indemnified Party and the indemnifying Party that
would make such separate representation advisable; and provided, further, that
the indemnifying Party shall not be required to pay for more than one such
counsel for all indemnified Parties in connection with any Claim. The Parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation, or settlement of any such Claim.
(b) After any final judgment or award shall have been rendered by a
court, arbitration board or administrative agency of competent jurisdiction and
the expiration of the time in which to appeal therefrom, or a settlement shall
have been consummated, or the indemnified Party and the indemnifying Party shall
have arrived at a mutually binding agreement
[*** Confidential Treatment Requested]
-24-
with respect to a Claim hereunder, the indemnified Party shall forward to the
indemnifying Party notice of any sums due and owing by the indemnifying Party
pursuant to this Agreement with respect to such matter.
(c) The failure of the indemnified Party to give reasonably prompt
notice of any Claim shall not release, waive or otherwise affect the
indemnifying Party's obligations with respect thereto except to the extent that
the indemnifying Party can demonstrate actual loss and prejudice as a result of
such failure.
ARTICLE IX.
TERM AND TERMINATION
Section 9.01. Term; Termination. The term of this Agreement (the "Term")
will commence on the Effective Date and will continue until the earlier of (1)
eighteen (18) months after the Effective Date, (2) the date on which Clearwire
has used all of the Prepaid Royalties for accessing Future Spectrum Capacity
pursuant to this agreement, or (3) the date on which Licensee has returned to
Clearwire (in cash) the entire amount of the Prepaid Royalties that has not been
used for accessing Future Spectrum Capacity pursuant to this Agreement.
Clearwire shall have the right, in its sole discretion, to extend the Term at
any time prior to its expiration under clause (1) above; provided, that the Term
shall not extend beyond the first to occur of the events described in clauses
(2) or (3) above except as it pertains to [***]. This Agreement may be
terminated prior to expiration of the Term under any of the following
circumstances: (i) by mutual written agreement of the parties; (ii) by
Clearwire, upon giving written notice to Licensee in the Event of Default;
provided that such Event of Default is not cured (if it is capable of being
cured) within [***] following such notice; (iii) by Licensee, upon giving
written notice to Clearwire in the Event of Default; provided that with respect
to an Event of Default that is a payment default, it is not cured in [***]
following such notice, and with respect to all other Events of Default (that are
of a type capable of being cured) such Event of Default is not cured within
[***] thereof; or (iv) by Clearwire upon written notice to Licensee and to the
extent allowed under law, if Licensee files a petition pursuant to Title 7 or 11
of the United States Bankruptcy Code or is adjudged a debtor after the filing of
an involuntary bankruptcy petition against Licensee, or if Licensee files a
petition for relief pursuant to any state insolvency laws. Upon termination of
this Agreement for any cause, the Prepaid Royalties Balance shall be refunded to
Clearwire, as provided in Section 2.02.
Section 9.02. Defaults. It shall be an "Event of Default" hereunder if
either party fails to perform a material obligation or breaches a material
representation and warranty contained in this Agreement in circumstances where
such failure results in the inability of the other party to exercise its full
rights under this Agreement. In the event of a Loss (as defined in the
applicable IUA), the Parties shall cooperate in seeking special temporary
authority from the FCC to allow Clearwire to continue operating on the Channels
until such time as it can transition its users to other spectrum and minimize
service disruption to its business and other activities.
[*** Confidential Treatment Requested]
-25-
Section 9.03. Survival. The obligations of the parties under this Agreement
that by their nature would continue beyond expiration or termination of this
Agreement shall survive any expiration or termination of this Agreement. Without
limiting the generality of the foregoing, any rights of Clearwire with respect
to any Options or any rights of first refusal shall survive the expiration or
termination of this Agreement if the notice or other event triggering such
Option or right of first refusal occurs (or would have occurred, if Licensee
complied in full with the requirements of this Agreement) prior to expiration or
termination of this Agreement.
ARTICLE X.
GENERAL PROVISIONS
Section 10.01. Payment of Sales, Use or Similar Taxes. Clearwire shall be
liable for and shall pay (and shall indemnify and hold harmless the Licensee(s)
Indemnified Parties against) all sales, use, stamp, documentary, filing,
recording, transfer, real estate transfer, registration, duty or similar fees or
taxes or governmental charges (together with any interest of penalty, addition
to tax or additional amount imposed) as levied by any taxing authority in
connection with the Transactions.
Section 10.02. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement or in any
certificate, document or instrument delivered in connection herewith, shall
survive each of the Closings hereunder for a period of [***] from the Initial
Closing Date or Subsequent Closing Date with respect to the EBS spectrum that
is subject to such Initial Closing or Subsequent Closing, as applicable,
regardless of any investigation made by the Parties hereto. All agreements and
covenants contained herein shall survive indefinitely until, by their respective
terms, they are no longer operative.
Section 10.03. Entire Agreement; Amendments and Waivers. This Agreement
(including the schedules and exhibits hereto), represents the entire
understanding and agreement between the Parties hereto with respect to the
subject matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the Party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any Party, shall be deemed to constitute a waiver by the Party
taking such action of compliance with any representation, warranty, covenant, or
agreement contained herein. The waiver by any Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power, or
remedy by such Party preclude any other or further exercise thereof or the
exercise of any other right, power, or remedy.
[*** Confidential Treatment Requested]
-26-
Section 10.04. Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of New
York applicable to contracts made and to be performed in that state, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
Section 10.05. Table of Contents and Headings. The table of contents and
section headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement.
Section 10.06. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally or by overnight courier, or mailed by certified mail, return receipt
requested, to the Parties (and shall also be transmitted by facsimile to the
Persons receiving copies thereof) at the following addresses (or to such other
address as a Party may have specified by notice given to the other Party
pursuant to this provision):
If to Clearwire, to: Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E., Suite 300
Kirkland, WA 98033
ATTENTION: [***]
FACSIMILE NO [***]
With a copy to: Clearwire Corporation
5808 Lake Washington Blvd. N.E., Suite 300
Kirkland, WA 98033
Attention: [***]
Facsimile No. [***]
And a copy to: Davis Wright Tremaine LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA98101- 1688
Attention: [***]
Facsimile No.: [***]
If to Licensee, to: Hispanic Information and
Telecommunications Network, Inc.
63 Flushing Avenue, Unit 281
Brooklyn, NY 11205
Attention: [***]
FAX: [***]
[*** Confidential Treatment Requested]
-27-
With a copy to: Day, Berry & Howard LLP
875 Third Avenue
New York, NY 10022
Attention: [***]
Fax: [***]
And a copy to: RJGLaw LLC
1010 Wayne Avenue, Suite 950
Silver Spring, MD 20910
ATTENTION: [***]
Fax: [***]
Section 10.07. Publicity. No public release, announcement or other form of
publicity concerning this Agreement or the transactions described in this
Agreement, shall be issued by either Party without the prior consent of the
other Party, except as such release or announcement may be required by law,
regulation or the rules or regulations of any securities exchange, in which case
the Party required to make the release or announcement shall, to the extent
possible, allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance. The Parties shall use reasonable
efforts to consult in good faith with each other with a view to agreeing upon
any press release or public announcement relating to the transactions
contemplated hereby prior to the consummation thereof.
Section 10.08. Severability. If any provision of this Agreement is invalid
or unenforceable, the balance of this Agreement shall remain in effect.
Section 10.09. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns.
Section 10.10. Remedies. The Parties recognize that, in the event that a
Party should refuse to perform any provisions of this Agreement, monetary
damages alone will not be adequate. The non-defaulting Party shall therefore be
entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement.
Notwithstanding any other provision herein, no remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by a
Party shall not constitute a waiver of the right to pursue other available
remedies at any time.
Section 10.11. Dispute Resolution Procedure.
(a) General. The Parties desire to resolve disputes arising out of
this Agreement without litigation. Accordingly, the Parties agree to use the
dispute resolution procedures set forth in this Section 10.11 (the "Dispute
Resolution Procedures") as their sole means of
[*** Confidential Treatment Requested]
-28-
adjudication with respect to any controversy or claim arising out of or relating
to this Agreement or its breach.
(b) Dispute Notice. At the written request of any party (a "Dispute
Notice"), the Parties to the dispute will within seven business days of the
Dispute Notice, appoint knowledgeable, responsible representatives to meet and
negotiate in good faith to resolve any dispute arising under this Agreement. The
Parties intend that these negotiations be conducted by business representatives,
including at least one senior executive of each party to the dispute. The
representatives shall meet and confer, in person or by teleconference, not later
than such seventh business day after the date of the Dispute Notice. The
location, format, frequency, duration and conclusion of these discussions shall
be left to the discretion of the representatives; provided that the duration
shall not exceed 45 days from the date of the Dispute Notice (an "Action Date")
unless extended by mutual written agreement of the Parties setting forth a new
Action Date. The Dispute Notice and any extension shall specify the Action Date.
The Dispute Notice shall set forth the nature of the dispute, in reasonable
detail. Discussion and correspondence among the representatives for purposes of
these negotiations shall be treated as confidential information developed for
purposes of settlement, exempt from discovery and production, and shall not be
admissible in the arbitration described below. Documents identified in or
provided with such communications, which are not prepared for purposes of the
negotiations, are not so exempted and may, if otherwise admissible, be admitted
in evidence in the arbitration. If the Parties are unable to resolve any
disputes arising under or relating to this Agreement (each a "Dispute") using
the process described in this Section 10.11(b) within the time period provided,
including without limitation disputes regarding a breach or default under this
Agreement, the Parties shall arbitrate such dispute pursuant to the arbitration
provisions set forth in Section 10.1l(c).
(c) Arbitration. Any Dispute that has not be resolved within the time
period provided for in Section 10.11(b) shall be resolved by a panel of three
Arbitrators. The Dispute Notice shall automatically serve as a written notice of
a request to submit the Dispute for arbitration if there has not been a
resolution of the Dispute by the Action Date, and the Parties agree to submit
the Dispute to a panel of three Arbitrators who shall be appointed within 30
days of the Action Date (the "Submission Period"). During the Submission Period,
the Parties shall appoint the Arbitrators in accordance with the Commercial
Arbitration Rules (then in effect) of the American Arbitration Authority
("AAA"), as modified below. No punitive damages (or any other amount awarded for
the purpose of imposing a penalty) will be awarded for a breach of this
Agreement.
(i) During the Submission Period, the Parties may submit a
request for discovery to the Arbitrators, who shall determine whether the scope
of the requested discovery is appropriate or useful for the resolution of the
Dispute and order the discovery in their discretion; provided that such
discovery process shall be concluded not later than 30 days following the
submission date (the "Discovery Close Date").
-29-
(ii) The arbitration hearing shall be fixed by the Arbitrators to
be not sooner than 20 days nor later than 45 days after the Discovery Close Date
(the "Hearing Date"). The hearing shall be located in a neutral site as mutually
agreed by the Parties, or if the Parties cannot so agree, then the location of
the arbitration shall be Washington, D.C. The Federal Rules of Evidence shall
apply to the arbitration hearing. The party bringing a particular claim or
asserting an affirmative defense will have the burden of proof with respect
thereto. Each party shall bear the burden of persuasion with respect to its
proposal for resolution of the matter. The arbitration proceedings and all
testimony, filings, documents and information relating to or presented during
the arbitration proceedings shall be deemed to be information subject to the
confidentiality provisions of this Agreement. The Arbitrators will have no power
or authority, pursuant to the rules of the AAA or otherwise, to relieve the
Parties from their agreement hereunder to arbitrate or otherwise to amend or
disregard any provision of this Agreement, including without limitation the
provisions of this Section.
(iii) Each party shall be permitted to submit a pre-hearing brief
not to exceed 25 pages and such technical supporting material as is necessary or
useful, to be submitted to the Arbitrators and the other party not later than 5
days before the Hearing Date, and each party may issue a response thereto not
later than 2 days before the Hearing Date. Following the arbitration hearing,
each party shall be permitted to submit a post-hearing brief not to exceed 25
pages within 5 days following the Hearing Date and a reply brief within 2 days
thereafter (the "Pleading Close Date"). Should an Arbitrator refuse or be unable
to proceed with arbitration proceedings as called for by this Section, the
Arbitrator shall be replaced pursuant to the rules of the AAA. If an Arbitrator
is replaced after the arbitration hearing has commenced, then a rehearing shall
take place in accordance with this Section and the rules of the AAA.
(iv) Within fifteen (15) days after the Pleading Close Date, the
Arbitrators will prepare and distribute to the Parties a writing setting forth
the Arbitration Panel's reasons for the its determination. The findings and
conclusions and the award, if any, shall be deemed to be confidential
information of the Parties. Neither party may disclose such information to any
third party other than their professional advisors or as required by law or
regulations, except in connection with an action to enforce the award.
(v) The Arbitrators are instructed to schedule promptly all
discovery and other procedural steps and otherwise to assume case management
initiative and control to effect an efficient and expeditious resolution of the
Dispute. The Arbitrators are authorized to issue monetary sanctions against
either party if, upon a showing of good cause, such party is unreasonably
delaying the proceeding.
(vi) Any award rendered by the Arbitrators will be final,
conclusive, and binding upon the Parties and any judgment thereon may be entered
and enforced in any court of competent jurisdiction.
-30-
(vii) The non-prevailing party to an arbitration shall pay its
own expenses, the fees of each Arbitrator, the administrative fee of the AAA,
and the expenses, including without limitation, reasonable attorneys' fees and
costs, and expert and witness fees and costs, incurred by the other party to
the arbitration. In the case of a decision which partially favors each party,
expenses shall be paid as determined by the Arbitrators. In connection with any
judicial proceeding to compel arbitration pursuant to this Agreement or to
confirm, vacate or enforce any award rendered by the Arbitrators, the prevailing
party in such a proceeding shall be entitled to recover reasonable attorney's
fees and expenses incurred in connection with such proceedings, in addition to
any other relief to which it may be entitled.
(viii) Notwithstanding anything to the contrary in this
Agreement, neither party shall have any obligation to arbitrate claims for
injunctive relief, specific performance, or other equitable relief or for the
use or unauthorized disclosure of confidential information, as to which either
party shall be entitled to seek and obtain relief exclusively from the state or
federal courts sitting in New York, New York, and each party hereby irrevocably
submits to the jurisdiction of any such court; provided that, any and all claims
for damages shall remain subject to arbitration.
Section 10.12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
Section 10.13. Confidentiality. The terms of this Agreement that are not
otherwise required to be disclosed to the FCC in support of the Defacto
Transfer Application, requests for renewal thereof or notices submitted to the
FCC, or as required to be disclosed in filings with the Securities and Exchange
Commission or state securities agencies, 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 [***]. The Parties
may make disclosures as required by law, and to employees, shareholders, agents,
attorneys and accountants (collectively, "Agents") as required to perform
obligations under the Agreement, provided, however, that the Parties will cause
all Agents to honor the provisions of this section. In addition, either Party
may disclose this Agreement to its Affiliates, strategic partners, actual or
potential investors, lenders, acquirers, merger partners, and others whom it
deems in good faith to have a need to know such information for purposes of
pursuing a transaction or business relationship with it, so long as it secures
an enforceable obligation from such third party to limit the use and disclosure
of this Agreement as provided herein. The Parties will submit a confidentiality
request to the FCC in the event the FCC seeks from the Parties a copy of this
Agreement or any other confidential information regarding its terms.
Section 10.14. Non-Disclosure of Shared Information. As used herein, the
term "Confidential Information" shall mean all non-public information disclosed
hereunder, whether written or oral, that is designated as confidential or that,
given the nature of the information or the circumstances surrounding its
disclosure, is plainly confidential or by the Parties' practices
[*** Confidential Treatment Requested]
-31-
should be understood to be confidential. The term Confidential 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 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; (3) is
lawfully received 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 Confidential
Information. During the Term, the Parties may supply and/or disclose to each
other Confidential Information relating to the business of the other Party. Each
item of Confidential Information will be kept confidential by the Parties during
the Term and for a period of three (3) years thereafter, but may be disclosed in
the enforcement or seeking of damages with respect to a Party's rights under
this Agreement. The receiving Party will be responsible for any improper use of
the Confidential Information by it or any of its Agents. Without the prior
written consent of the disclosing Party, the receiving Party will not disclose
to any entity or person the Confidential Information, or the fact that the
Confidential Information has been made available to it, except for disclosures
required by law, disclosures authorized by the Party owning the Confidential
Information and disclosures made in the context of the enforcement or seeking of
damages with respect to a Party's rights under this Agreement. Each person to
whom Confidential Information is disclosed must be advised of its confidential
nature and must agree to abide by the terms of this section. The provisions of
this Section 10.14 and of the confidentiality provisions of the IUA represent
the entire understanding and agreement of the Parties with respect to the
subject matter hereof and thereof and supercede all prior oral or written
agreements between the Parties with respect to such subject matter, including,
without limitation, all non-disclosure agreements.
[THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK.]
-32-
Each Party has caused this Master Royalty and Use Agreement to be duly
executed by its duly authorized officer or representative on the date first
above written.
CLEARWIRE SPECTRUM HOLDINGS II LLC
By: /s/ R. Gerard Salemme
------------------------------------
Name: R. Gerard Salemme
Title: E. VP
HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
By: /s/ Jose Luis Rodriguez
------------------------------------
Name: Jose Luis Rodriguez
Title: President and CEO
-33-
EXHIBIT I
DEFINITIONS AND INTERPRETATIONS
(a) Index of Definitions. Meanings to the following terms are located
at the following sections with this Agreement:
[Download Table]
AAA................................................ Section 11.12(c)
Access Right Royalties............................. Section 1.02(a)
Action Date........................................ Section 11.12 (b)
Additional Cost Free Educational Accounts.......... Section 3.04
Affiliate.......................................... Definitions
Agents............................................. Section 11.14
Agreement.......................................... Preamble
Available.......................................... Section L02(b)
Basic Cost-Free Education Account.................. Section 3.03(b)
Basic Trading Area................................. Definitions
Calculation of Time Period......................... Definitions
Cell Site.......................................... Definitions
Channels........................................... Recitals
Claim.............................................. Section 9.04(a)
Class A Common Stock............................... Section 6.03(a)
Class B Common Stock............................... Section 6.03(a)
Clearwire.......................................... Preamble
Clearwire Documents................................ Section 6.02
Clearwire Indemnified Parties...................... Section 9.01(a)
Clearwire Material Adverse Effect.................. Definitions
Clearwire National Platform........................ Definitions
Clearwire Parent................................... Recitals
Closing Date(s).................................... Definitions
Collateral Document................................ Section 1.03
Commencement Date.................................. Section 1.02(a)(i)
Commercial Spectrum Capacity....................... Recitals
Communications Act................................. Recitals
Confidential Information........................... Section 11.15
Cost-Free Educational Account...................... Section 3.02(b)
Cost-Free Educational Accounts..................... Section 3.02
Damages............................................ Section 9.02
De facto Transfer Application...................... Definitions
Deductible......................................... Section 9.03
Default Interest Rate.............................. Definitions
-34-
[Download Table]
Discovery Close Date............................... Section 11.12(c)(i)
Dispute............................................ Section 11.12(b)
Dispute Notice..................................... Section 11.12(b)
Dispute Resolution Procedures...................... Section 11.12(a)
Disqualification Event............................. Section 7.04
EBS................................................ Recitals
EBS Spectrum Capacity.............................. Section 1.01 (a)
Educational End User............................... Section 3.02(c)
Educational Reservation............................ Section 3.03(a)
Effective Date..................................... Preamble
Exhibits/Schedules................................. Definitions
Expert............................................. Section 11.12(d) (i)
FCC................................................ Recitals
FCC IUA Approval................................... Definitions
FCC Licenses....................................... Recitals
FCC Proceedings.................................... Section 5.04
FCC Qualifications................................. Section 7.04
FCC Rules.......................................... Recitals
Formula Quantity................................... Section 3.04(a)(i)
Future Spectrum Capacity........................... Recitals
Gender and Number.................................. Definitions
Geographic Market.................................. Section 1.05(b)(ii)
Governing Documents................................ Definitions
Government Agency.................................. Definitions
GSA................................................ Definitions
Hearing Date....................................... Section 11.12(c)(ii)
Herein............................................. Definitions
Including.......................................... Definitions
Initial Closing.................................... Section 4.03(a)
Initial Closing Date............................... Section 4.03(a)
Initial Proposal................................... Section 11.12 (d)(ii)
Initial Spectrum Capacity.......................... Recitals
IUA................................................ Section 1.02(a)
Law................................................ Definitions
LBS/UBS Spectrum................................... Definitions
Licensee........................................... Preamble
Licensee Documents................................. Section 5.02
Licensee [***] Spectrum............................ Section 1.02(c)
Licensee(s) Indemnified Parties.................... Section 9.01 (b)
Licensee(s) Material Adverse Effect................ Definitions
Licensee(s) Schedule............................... Section 5.04
Lien............................................... Definitions
[*** Confidential Treatment Requested]
-2-
[Download Table]
Limited CPI Adjustment............................. Definitions
[***].............................................. Section 3.09(a)
Local Channel Ratio................................ Section 3.04(a)(i)
Market Area........................................ Section 3.02(c)
MHzPops............................................ Recitals
Monthly Royalties.................................. Definitions
MVNO Educational Account........................... Section 3.05(a)
Option............................................. Section 1.02
Option Notice...................................... Section 1.02
Other Definitional and Interpretive Matters........ Definitions
Other [***] Transaction............................ Section 1.02(c)
Party.............................................. Preamble
Payment Default.................................... Definitions
Permit............................................. Definitions
Person............................................. Definitions
Pleading Close Date................................ Section 11.12(c)(Hi)
Preferred Content Provider......................... Section 3.08(a)
Preferred Stock.................................... Section 6.03(a)
Prepaid Royalties.................................. Section 2.02
Prime Rate......................................... Section 10.02 (a)
Proceeding......................................... Definitions
ROFR............................................... Section 1.02(c)
Sector............................................. Section 3.02(c), Section 3.02(c)
Securities Act..................................... Definitions
Service Affiliate.................................. Section 1.03(a)
Spectrum........................................... Section 1.02(b)
Submission Period.................................. Section 11.12(c)
Subsequent Closing................................. Section 4.03(b)
Subsequent Closing Date............................ Section 4.03(b)
Third Party Agreement.............................. Section 1.02(b)
Total Consideration................................ Recitals
Upfront Royalty.................................... Definitions, Definitions
Wire Account....................................... Section 4.01 (a)
[*** Confidential Treatment Requested]
-3-
(b) Definitions. The following terms have the following meanings
throughout this Agreement:
"Affiliate" means, with respect to any entity, any other entity that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with such first entity, but does not include any entity
that directly or indirectly, or through one or more intermediaries, controls
Clearwire Parent, or any entity that directly or indirectly, or through one or
more intermediaries, is under common control with Clearwire Parent but is not a
direct or indirect subsidiary of Clearwire Parent. As used in this definition,
"control" (including, with correlative meanings, "controlled by" and "under
common control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).
"Available" with respect to Commercial Spectrum Capacity means that (A) the
Commercial Spectrum Capacity on the Channels in the Market Area in question is
not encumbered by any Lien, including, but not limited to, any purchase option,
right of first refusal, or other contractual obligation of Licensee (each a
"Third Party Agreement") (excluding interference consents, interference
agreements or similar agreements pertaining to the technical operation of the
Channels granted or entered into prior to the Effective Date of the IUA) and (B)
the Licensee is able to make all of the representations and warranties contained
in the IUA and to perform the applicable covenants in the IUA.
"Basic Trading Area" has the meaning given in the FCC Rules for BRS.
"Cell Site" means a tower, building or other outdoor structure equipped
with one or more antennas to serve the surrounding area.
"Clearwire Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of Clearwire, taken as a whole, other than changes
affecting the broadband wireless business generally.
"Clearwire National Platform" means the sum of all Market Areas and all
other areas within the United States where Clearwire and its Affiliates provide
comparable services.
"Closing Date(s)" means the Initial Closing Date or each Subsequent Closing
Date.
"Commencement Date" means the "Commencement Date" under the applicable IUA
entered into pursuant to this Agreement.
"Defacto Transfer Application" has the meaning set forth in the IUA.
"Economic Royalty" means the total royalty set forth on Schedule A.
"Educational End Users" or "EEU" shall be only non-profit and/or
educational entities and/or Social Welfare Agencies that use the services for
their own purposes, provided that Licensee shall not provide such services
pursuant to an RFP or other substantially similar commercially competitive
opportunities (except in [***], where Licensee shall be permitted to do so), and
Licensee shall not provide such services to any entity if such entity already
has an existing business relationship with Clearwire. For this purpose, "Social
Welfare Agencies" (for all locations other than [***]) includes only those
governmental and quasi-governmental agencies and departments that provide as
their primary service public welfare assistance services (such as low-income
housing, food stamps, or domestic violence services) to the public. For all IUAs
for service in [***], "Social Welfare Agencies" shall include any local and
[***] Territorial governmental sector agency. "Social Welfare Agencies" shall
specifically exclude treasury and revenue services departments, law enforcement
agencies, legislatures, office of the mayor and the military; provided that,
with respect to [***] there shall be permitted to provide services to any local
and [***] Territorial governmental sector agency.
"FCC IUA Approval" means the grant of de facto transfer of an IUA by the
FCC.
"Geographic Market" means the larger of (A) the area covered by the GSA of
an EBS system that is listed on Schedule A as amended from time to time, without
regard to any subsequent swap affecting such EBS system after the Effective
Date, or (B) the area described in clause (A) above combined with the area(s)
covered by the substantially overlapping GSA(s) of EBS and/or BRS systems which
Clearwire or its Affiliates have the right to use in that same market.
"Governing Documents" means articles of incorporation, certificate of
incorporation, bylaws, certificate of formation, limited liability company
agreement, or similar governing documents of an entity.
"Government Agency" means any Federal, state or local government or any
foreign, national, provincial, or local government, or any governmental,
regulatory, legislative, executive, or administrative authority, agency or
commission, or any court, tribunal, or judicial body.
"GSA" shall have the meaning set forth in the IUA.
"Law" means the common law and any federal, provincial, state, local, or
foreign statute, law, ordinance, code, rule, regulation, or other requirement or
rule of law.
"LBS/UBS Spectrum" means lower and/or upper band EBS or BRS spectrum,
post-transition, and channels numbered 1,2 or 3, pre-transition, as defined by
the FCC Rules.
[*** Confidential Treatment Requested]
-2-
"Licensee Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of Licensee(s), taken as a whole, other than changes
affecting EBS licensees or the broadband wireless business generally.
"Lien" means any lien, pledge, mortgage, deed of trust, security interest,
lease, option, right of first refusal, easement, or encumbrance.
"Limited CPI Adjustment" shall have the meaning set forth in the IUA.
"Market Area" means the network coverage footprint of the network of
Clearwire Parent and its Affiliates which includes all or part of the GSA(s) of
the Channels in the Geographic Market, based on its buildout engineered for
services from time to time once it has commenced commercial operation.
"Monthly Royalties" shall have the meaning set forth in the IUA.
"Payment Default" means the failure to pay an amount due under this
Agreement.
"Permit" means all permits, licenses, franchises, consents, variances,
exemptions, Authorizations and the like issued by Governmental Authorities to or
for the benefit of a Party to the Agreement (as the case may be).
"Person," whether or not such term is capitalized, means any individual,
partnership, firm, corporation, limited liability licensee(s), association,
trust, unincorporated organization, or other entity.
"Proceeding" means any action, suit, litigation, arbitration proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, examination or investigation commenced, brought,
conducted or heard by or before, or otherwise involving any court or other
Government Agency or any arbitrator or arbitration panel.
"Securities Act" means the Securities Act of 1933, as amended.
"Sector" means a directional antenna located at a cell site that serves a
portion of a Cell Site area.
"Upfront Royalty" shall have the meaning set forth in the IUA.
(c) Other Definitional and Interpretive Matters. Unless otherwise
expressly provided, for purposes of the Agreement, the following rules of
interpretation shall apply:
(1) Calculation of Time Period. When calculating the period
of time before which, within which or following which any act is to be done or
step taken pursuant
-3-
to this Agreement, the date that is the reference date in calculating such
period shall be excluded. If the last day of such period is a non-Business Day,
the period in question shall end on the next succeeding Business Day.
(2) Exhibits/Schedules. The Exhibits and Schedules to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement. Any capitalized terms used in any Exhibit or Schedule
but not otherwise defined therein shall be defined as set forth in this
Agreement.
(3) Gender and Number. Any reference in this Agreement to
gender shall include all genders, and words imparting the singular number only
shall include the plural and vice versa.
(4) Herein. The words such as "herein," "hereinafter,"
"hereof" and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
(5) Including. The word "including" or any variation thereof
means "including, without limitation" and shall not be construed to limit any
general statement that it follows to the specific or similar items or matters
immediately following it.
(d) The Parties hereto have participated jointly in the negotiation
and drafting of this Agreement and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as jointly
drafted by the Parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any provision
of this Agreement.
-4-
EXHIBIT II
EDUCATIONAL BROADBAND SERVICE
LONG TERM DE FACTO TRANSFER
INDIVIDUAL USE AGREEMENT
THIS Educational Broadband Service Long Term De facto Transfer Individual
Use Agreement (the "AGREEMENT") is entered into as of [____________________],
2006 (the "EFFECTIVE DATE"), by and between Hispanic Information and
Telecommunications Network, Inc., a New York not-for-profit corporation (the
"LICENSEE"), and Clearwire Spectrum Holdings II LLC, a Nevada limited liability
company ("CLEARWIRE") (with each of Licensee and Clearwire sometimes referred to
individually as a "PARTY" and collectively as "PARTIES").
RECITALS:
WHEREAS the Licensee is authorized by the Federal Communications Commission
("FCC") under the rules, regulations and published policies of the FCC (as they
may be amended, "FCC RULES") to engineer and operate Educational Broadband
Service ("EBS") channels ________________ (including any associated J- or
K-Group channels and any channels exchanged for the listed channels, the
"CHANNELS") under call sign ___________________________ (the "FCC LICENSE") in
the _______________________ area (the "BASIC TRADING AREA"); and
WHEREAS the Parties have agreed to enter into this Agreement for Licensee
to provide Clearwire with access to the capacity on the Channels, which pursuant
to the FCC Rules, can be made available for commercial use, in accordance with
the terms and conditions below, and subject to FCC approval.
THEN, 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. TERM
(A) TERM. Subject to Section 1(b), the term of this Agreement begins
on the Effective Date and ends on [__,_______], 2036 (the "TERM"), unless this
Agreement is terminated earlier in accordance with Section 11. Prior to the
Commencement Date (as defined below), the provisions of this Agreement which are
expressly ineffective before the Commencement Date as well as Sections 3, 4, 7
and 8 shall be ineffective until the Commencement Date, at which time all
provisions of this Agreement shall be fully effective. The other provisions in
this Agreement shall be effective from the Effective Date and until the
termination or expiration of this Agreement. The "COMMENCEMENT DATE" is the day
that the FCC's grant of the De facto Transfer Application appears on Public
Notice.
(B) RENEWAL OF FCC LICENSE AND EXTENSION OF AGREEMENT. In the event
that the FCC License expires during the Term, this Agreement will also expire at
such time unless the FCC License is renewed and FCC authorization for this
Agreement is extended. Licensee and Clearwire will cooperate to timely file a
renewal application for the FCC License,
in conjunction with a request for renewal of the De facto Transfer Authorization
for the next FCC License term. Subject to Section 11, this Agreement will
continue to apply unless the FCC denies by Final Order any application for
renewal of the FCC License or the De facto Transfer Authorization, or the FCC
requires the expiration of this Agreement at an earlier time. "Final Order"
means an order issued by the FCC that can no longer be appealed.
2. ROYALTY COMPENSATION
(A) UPFRONT ROYALTY. On the Commencement Date, the Upfront Royalty of
[___________________] shall be deemed to be paid in full and the remaining
amount of the Additional Cash Payment previously made by Clearwire pursuant to
that Master Royalty and Use Agreement dated September 20, 2006 entered into
between Licensee and Clearwire ("MRUA") shall be reduced by the amount of the
Upfront Royalty specified above.
(B) MONTHLY ROYALTIES. No monthly royalties are due under this
Agreement at any time.
(C) PAYMENT RECEIPT ADDRESS. Absent notice of different instructions
from Licensee, all cash payments to be paid to Licensee shall be paid by check
mailed to the following address, which address maybe changed by Licensee by
notice to Clearwire:
Hispanic Information and Telecommunications Network, Inc.
63 Flushing Avenue
Unit 281
Brooklyn, New York 11205
Attention: Jose Luis Rodriguez
(D) W-9. Within ten (10) days following the execution of this
Agreement, Licensee shall deliver a completed IRS Form W-9 to Clearwire.
3. EXCLUSIVE NEGOTIATION PERIOD
From a time period beginning [***] prior to the end of the Term and ending
[***] prior to the end of the Term, Licensee will negotiate in good faith
exclusively with Clearwire about a possible renewal of this Agreement. During
such period, Licensee and its agents and advisors will not discuss or solicit
other opportunities to enable third parties to make use of the Spectrum subject
to such exclusive negotiating period.
4. FREQUENCY BAND TRANSITION
The Channels covered by this Agreement either have been or will be subject
to relocation to different frequencies and/or to different technical
characteristics in accordance with a transition plan adopted in accordance with
the FCC Rules promulgated in WT Docket No. 03-66 (the "TRANSITION"). In the
event that the Transition is not complete on the Commencement Date, the
remaining provisions of this Section 4 shall be effective and, otherwise, shall
be ineffective. Clearwire and Licensee will cooperate in the Transition in
accordance with FCC Rules, to
[*** Confidential Treatment Requested]
2
facilitate Clearwire's and Licensee's use of the Channels, consistent with this
Agreement. To the extent that, after the Commencement Date, the FCC allows
Licensee to participate in selecting the entity initiating and/or overseeing the
Transition of the Channels (the "PROPONENT"), then Licensee will designate and
otherwise reasonably promote Clearwire or its designee as Proponent or
co-Proponent and otherwise support Clearwire's interests in the means and
outcome of the Transition to the extent permitted by FCC Rules and consistent
with Licensee's Transition rights thereunder and interests hereunder and after
expiration or termination of this Agreement; provided, however, if Licensee is
obligated by any other agreement relating to other channels in the market to
promote some other party as Proponent or co-Proponent, Licensee's equally
qualified support for both Clearwire and such other party shall fully satisfy
Licensee's obligations in this sentence. Licensee will consult with Clearwire
before adopting, consenting to, or otherwise agreeing to any change of
frequencies or characteristics of the Channels after the Commencement Date other
than those changes specified by FCC Rules. After the Commencement Date, Licensee
will use its commercially reasonable efforts to make Clearwire aware of and to
seek the permission of meeting participants to allow Clearwire to participate in
its scheduled meetings with the Proponent to the extent they concern Transition
of the Channels to channel plans required or allowed as an outcome of the FCC's
transition proceedings, provided that Licensee is aware sufficiently in advance
of the meeting that it will involve that subject matter. In any event, Licensee
will provide Clearwire with a summary report of any meetings or discussions with
such third persons occurring after the Commencement Date in which Clearwire was
not invited to participate. In the event that neither Clearwire nor any third
party initiates and/or completes the Transition of the Channels within the time
frames specified by the FCC, Licensee may, at its sole option, avail itself of
any "self-transition" rights made available pursuant to FCC Rules. Licensee's
reasonable costs of such self-transition will be paid and/or reimbursed by
Clearwire in their entirety.
5. CAPACITY REQUIREMENTS AND USES; CERTAIN LICENSEE ACCESS RIGHT ROYALTIES
(A) CLEARWIRE CAPACITY. On and after the Commencement Date, subject to
FCC Rules and the restrictions imposed thereby, Clearwire will have the right to
use all of the capacity of the Channels other than Licensee's Reserved Capacity,
the Access Right Royalties and Licensee's other rights and benefits granted by
this Agreement ("CLEARWIRE CAPACITY") and, subject to FCC Rules and the power of
the FCC to control the radio frequency spectrum, Licensee shall not use
Clearwire Capacity or enter into any agreement to allow any third party to use
Clearwire Capacity other than as may be contemplated by this Agreement.
(B) LICENSEE'S RESERVED CAPACITY. As used in this Agreement,
"LICENSEE'S RESERVED CAPACITY" means:
(i) Prior to the Commencement Date, all of the Capacity of the
Channels.
(ii) From the Commencement Date until sixty (60) days after
Licensee receives a notice from Clearwire that Clearwire intends to utilize
the capacity of the Channels, the lesser of one Channel and that number of
Channels Licensee used during the last regular school session immediately
preceding the Effective Date (the "LEGACY
3
RESERVATION"), which Licensee may use to provide services that further the
educational mission of accredited schools ("LICENSEE'S CAPACITY").
Licensee's operations pursuant to Section 5(b)(i) and (ii) are solely in
furtherance of Licensee's educational charter and are not intended for the
benefit of Clearwire or conducted in exchange for any royalties or other
consideration.
(iii) After the later of the Commencement Date and the date that
any one or more of the Channels is engineered to operate in any digital
modulation (the "LEGACY STOP DATE"), in respect of Licensee's educational
reservation covering the [***] educational spectrum capacity currently
required by the FCC Rules pertaining to the FCC Licenses (the "EDUCATIONAL
RESERVATION"), Licensee shall be permitted to utilize the Educational
Reservation in such locations served by the Clearwire National Platform on
a full time basis as Licensee desires for its operations. Clearwire and
Licensee shall at all times comply with applicable FCC Rules. Clearwire may
not use the Educational Reservation. In the event that the Parties cannot
agree on the application of any new rule or interpretation regarding the
Educational Reservation in their circumstances, the Parties shall jointly
approach the FCC for clarification in a timely fashion and, to the extent
the matter remains unresolved thereafter, shall settle the matter by
applying the Dispute Resolution Procedures.
(C) [***]
(D) SECTION 27.1214(E) AMENDMENTS. To the extent required under
Section 27.1214(e) of FCC Rules, on the date that is [***] after the Effective
Date and every [***] thereafter during the Term, Licensee shall have a period of
sixty (60) days to request a review of its minimum educational use requirements,
in which event and at which time the Parties shall negotiate in good faith an
amendment to this Agreement that accommodates any bona fide changes in
educational needs, technology and other relevant factors. Any such amendment
shall provide, among other terms and conditions agreed to by the Parties: (i)
with respect to Licensee and any Educational End Users (defined below) for whom
Clearwire has provided an Educational Account, Clearwire shall make available
any equipment, services or software upgrades that Clearwire makes generally
available to Clearwire's retail customers subscribing to the same tier of
service in the Market Area over Broadband Radio Service or EBS facilities; (ii)
to the extent such amendment materially increases Clearwire's monthly costs
either to operate its leased capacity or to meet Licensee's changed educational
use requirements, whether or not such costs will be offset by a reduction in the
Monthly Royalties for the
[*** Confidential Treatment Requested]
4
remainder of the Term, a refund in an amount to be agreed upon by both Parties,
or both; (iii) 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 (iv) Clearwire shall not be
required to accommodate changes in Licensee's Reserved Capacity in a manner that
has a negative economic impact on Clearwire or Clearwire's commercial operations
under the Agreement. The adjustments set forth in this subsection shall be in
addition to, and not in lieu of, adjustments set forth in other portions of this
Agreement. Neither Party shall have any obligation to enter into any amendment
pursuant to this Section.
(E) CHANNEL SWAPPING; COSTS. 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 some or all of its
Channels for other channels in the Market (the "Swapped Channels"), and in
connection therewith file any necessary FCC applications to accomplish the swap,
so long as there is no material difference in the geographic service area (or
equivalent service area) ("GSA") and FCC authorized uses of the Swapped Channels
as compared to Licensee's previous Channels, taking into account any overlap(s)
of GSAs of such Channels and Swapped Channels with co-channel GSAs in other
markets. Clearwire agrees to bear all costs and expenses associated with the
implementation of channel swapping, channel loading (as discussed in this
Agreement), and channel shifting (as discussed in this Agreement), including the
reasonable out-of-pocket costs of Licensee's engineering consultants and
attorneys.
6. EQUIPMENT; CONTINUATION OF ACCESS RIGHT ROYALTIES; CONTROL OF OPERATIONS
(A) OPERATION AND MAINTENANCE OF EQUIPMENT. Subject to the last
sentence of this Section 6(a), prior to the Legacy Stop Date (as defined in
Section 5(b)(iii)), Licensee may operate the legacy video transmission equipment
currently in place, if any (including replacements thereto), for the Channels
(the "EBS EQUIPMENT") at each transmission site (including substituted and
additional sites), it being understood that Licensee's operations under this
Section 6(a) are solely for Licensee's educational purposes. If Licensee chooses
not to operate the transmission equipment currently in place or replacements
thereto, then Licensee and Clearwire will cooperate in filing all necessary
applications and notices with the FCC to "go dark" and not transmit on the
Channels for an allowed period of time or notify the FCC that Licensee has
ceased operation. If Clearwire or any of its Affiliates has EBS and/or BRS
spectrum operations in the Market Area of the Channels, then Clearwire will
operate legacy video for Licensee at Clearwire's expense until the earlier of
the Legacy Stop Date and the end of the Transition.
(B) MAINTENANCE OF LEGACY EQUIPMENT. Subject to the last sentence of
Section 6(a), while operating a video system for Licensee's educational purposes
under Section 6(a), it is Licensee's responsibility to operate and maintain its
video equipment.
(C) EQUIPMENT PURCHASE OR LEASE OPTION; TAIL SERVICES AND EQUIPMENT.
(i) Subject to subsection (ii) below, in the event this Agreement
expires or is terminated for any reason other than a default by Licensee,
Licensee shall have the option, upon giving notice to Clearwire within
thirty (30) days of such expiration or
5
termination (the "PURCHASE OPTION PERIOD"), to purchase the whole or any
part, as determined by Licensee, of transmission and reception equipment
(not including any tower rights) then in operation that is used to transmit
Licensee's Reserved Capacity on the Channels, whether such equipment is
dedicated entirely to Licensee's Reserved Capacity or shared (the
"LICENSEE'S SPECIFIED EQUIPMENT"), or equivalent equipment. The price for
such equipment shall be equal to the lesser of the [***] Within thirty (30)
day of each request by Licensee delivered to Clearwire, Clearwire
shall inform Licensee in writing (a "PRICE NOTICE") of the price for such
selected equipment [***]
(ii) If Licensee notifies Clearwire of its desire to acquire
Licensee's Specified Equipment and Additional Equipment-Related Features,
in lieu of selling the Licensee's Specified Equipment and Additional
Equipment-Related Features to Licensee as specified in subsection (i)
above, Clearwire shall have the option instead to lease such to Licensee
for an initial term of one year, renewable annually at the option of
Licensee for as many as nine (9) one-year renewal terms. During the period
of such lease, Clearwire shall
[*** Confidential Treatment Requested]
6
have the right to share the use of Licensee's Specified Equipment and
Additional Equipment-Related Features, so long as such sharing does not
diminish the utility to Licensee. The monthly amount payable by Licensee to
Clearwire to lease these items shall be the lesser of: (x) 0.8% of fair
market value of the Licensee's Specified Equipment and Additional
Equipment-Related Features at the commencement of the initial lease term,
and (y) Clearwire's marginal cost of leasing Licensee's Specified Equipment
and Additional Equipment-Related Features to Licensee.
(iii) For the purposes of this Section 6(c), determinations of
fair market value shall be made by an independent engineering firm selected
by Licensee and subject to approval by Clearwire, and the cost of reaching
such determination shall be shared equally by the Parties.
(iv) For a period of [***] after the expiration or termination of
this Agreement, unless termination resulted from Licensee's breach of this
Agreement, Licensee shall have the right to continue to receive the same
in-kind facilities, services and benefits Licensee received during the
Term, including each of the Access Right Royalties under Section 7, on the
most favorable terms and conditions, including price, as Clearwire or any
of its Affiliates offers such Access Right Royalties, or services and
equipment substantially similar thereto. When Clearwire provides Licensee
with the price and other terms for the Access Right Royalties under this
paragraph, Clearwire will also provide an officer's certificate
certifying that such pricing and other terms meet the requirements of this
Section 6(c) and are the [***] The provisions of this Section 6(c) shall
survive the expiration or termination of this Agreement for any cause,
unless termination is caused by Licensee's breach of this Agreement:
(D) OPERATION OF FACILITIES ON THE CHANNELS TO MEET SUBSTANTIAL
SERVICE REQUIREMENTS. In addition to the foregoing. Clearwire, at its expense,
prior to the FCC-mandated deadline, but in no event later than [***] will
construct, operate and maintain facilities for the Channels that provide
operating transmission and coverage capability sufficient to satisfy minimum
build-out, operational, service or performance requirements applicable to the
Channels or which must be satisfied to avoid a reduction in Channels or their
capacity, including substantial service standards, all as required or prescribed
under then- applicable FCC Rules. In the event Clearwire does not satisfy this
requirement by such date, Licensee shall have the right to either terminate this
Agreement pursuant to Section 11, or construct such facilities as qualify for a
"safe harbor," and Clearwire shall reimburse Licensee's costs of such
construction.
(E) CONTROL OVER OPERATIONS. On and after the Commencement Date,
Clearwire shall exercise such day-to-day operational control over operations on
the Channels as permitted by FCC Rules pertaining to de facto transfer
agreements under its secondary markets rules; provided, however, that Licensee
shall retain such powers of oversight and control as are needed to ensure
compliance with standards of conduct for which Licensee remains accountable to
the FCC or as otherwise reserved by this Agreement. In the event (A) Licensee
becomes aware of an on-going violation or repeated violations by Clearwire of
the Communications Act or the FCC Rules governing its use or Licensee's use of
the Channels (collectively, the "Governing Rules"), or any other violation of
the Governing Rules that might adversely affect
[*** Confidential Treatment Requested]
7
Licensee's rights in the License, might impose unreimbursed liability on
Licensee as licensee of the Channels or might cause the FCC to revoke, cancel,
rescind or materially adversely modify the De facto Transfer Authorization and
(B) after Licensee gives notice to Clearwire of such violation(s), Clearwire
does not immediately, in the case of an on-going violation, begin to cure such
violation and fully effect such cure within thirty (30) days or such period that
the FCC may specifically impose, and in the case of repeated violations, take
steps to prevent such violations in the future and fully effect such steps
within thirty (30) days or such period that the FCC may specifically impose,
such that the violation does not re-occur, Licensee shall be entitled to take
action to force Clearwire to immediately cease such violations), immediately
comply with the Governing Rules and take such preventative steps, all at
Clearwire's expense, and including the right to immediately seek injunctive
relief, and in each case without first giving Clearwire any further notice or
awaiting any further cure period.
7. ACCESS RIGHT ROYALTIES
Clearwire shall provide the access right royalties described in this
Section 7 (the "ACCESS RIGHT ROYALTIES") from and after the later of the
Commencement Date and the first commercial launch by Clearwire of its wireless
services on the Channels or other EBS or BRS channels in the Geographic Market
of the Channels. The Access Right Royalties will be provided in a manner
consistent with the way the Access Right Royalties are provided by Clearwire to
third parties under agreements that provide for Access Right Royalties similar
to the Access Right Royalties provided in this Agreement.
(A) COST-FREE EDUCATIONAL ACCOUNTS. Included in the Access Right
Royalties provided to Licensee, Licensee shall be entitled to Cost-Free
Educational Accounts in respect of the Educational Reservation and the
Additional Cost-Free Educational Accounts as provided in this Section 7.
(i) Educational Reservation Basic Cost-Free Educational Accounts.
A. In respect of Licensee's educational reservation covering
the five percent (5%) educational spectrum capacity currently required
by the FCC Rules pertaining to the FCC Licenses (the "EDUCATIONAL
RESERVATION"), Licensee shall be permitted to utilize the Educational
Reservation in such locations served by the Clearwire National
Platform on a full time basis as Licensee desires for its operations.
Clearwire and Licensee shall at all times comply with applicable FCC
Rules. Clearwire may not use the Educational Reservation. In the event
that the Parties cannot agree on the application of any new rule or
interpretation regarding the Educational Reservation in their
circumstances, the Parties shall jointly approach the FCC for
clarification in a timely fashion and, to the extent the matter
remains unresolved thereafter, shall settle the matter by applying the
Dispute Resolution Procedures.
B. Initially, Clearwire shall provide Licensee [***]
Cost-Free Educational Account per Cell Site in the Market Area (each a
"BASIC COST-FREE EDUCATION ACCOUNT"). The number of Cost-Free
Educational Accounts provided pursuant to this Agreement shall be
adjusted upward every five years proportionate to
[*** Confidential Treatment Requested]
8
the growth of the overall data capacity of Clearwire's network in the
Market Area of the Channels. The growth (if any) in the overall data
capacity shall be determined in such fashion as shall be agreed by the
Parties in consultation with Clearwire engineers and other technical
experts prior.
(B) ADDITIONAL COST-FREE EDUCATIONAL ACCOUNTS. In addition to, and not
in lieu of, the Cost-Free Educational Accounts provided to Licensee by Clearwire
pursuant to the Educational Reservation as set forth in Section 7(a), Clearwire
shall provide Licensee with additional Cost-Free Educational Accounts in the
number computed in accordance with this Section 7(b) (the "Additional Cost-Free
Educational Accounts").
(i) Number and Periodic Adjustment. Licensee will have access to
additional spectrum capacity on Clearwire's National Platform in the form
of Cost-Free Educational Accounts equal to the greater of (X) [***]
Cost-Free Educational Accounts per Sector in the Market Area of the
Channels and (Y) the quantity of Cost-Free Educational Accounts determined
by applying the Formula Quantity. The number of Additional Cost Free
Educational Accounts that Clearwire is obligated to provide to Licensee
shall be recalculated and revised annually as of January 31 of each
calendar year.
A. Educational End Users. Cost-Free Educational Accounts
shall be exclusively for Educational End Users and not for resale,
assignment or transfer by Licensee outside of its Educational End User
environment or to persons who cease to be officially associated with
such Educational End User. (By way of example, a university may resell
the service to its students, faculty, administrators and staff, while
such persons are involved with the university, but shall cease to
provide the service if a member of the faculty terminates employment
or a student graduates and ceases to be involved in university
matters.)
B. Time of Delivery. The Additional Cost-Free Educational
Accounts shall be provided by Clearwire to Licensee pursuant to this
Section 7(b) upon the commercial launch of Clearwire's broadband
wireless service in the Market Area of the Channels, or the applicable
Commencement Date thereof if later.
(C) LICENSEE MVNO.
(i) In addition to the right to Cost-Free Educational Accounts,
Licensee shall have the right to resell the Clearwire service in the form
of MVNO Educational Accounts to Educational End Users in the Market Area.
An "MVNO EDUCATIONAL ACCOUNT" shall have the identical characteristics as a
Cost-Free Educational Account, except that there shall be a charge to
Licensee as determined pursuant to this Section 7(c). Clearwire shall sell
to Licensee such services, at a cost equal to the lowest wholesale rate
provided by Clearwire to an arms-length third party in the Market Area of
the Channels or other comparable market pursuant to any applicable
agreement. However, the number of MVNO Educational Accounts is limited in
such Market Area to twice the number of Cost-Free Educational Accounts for
such Market Area.
[*** Confidential Treatment Requested]
9
(ii) Mechanics. The resale of Clearwire's services pursuant to
this Section 7(c) shall be accomplished pursuant to a standard Clearwire
wholesale agreement form revised to be consistent with the terms of this
Agreement, which will be provided to Licensee upon its request to resell an
MVNO Educational Account to an Educational End. User. Such arrangement
shall be executed not later than thirty (30) days after the availability of
such services.
(D) ACCESS TO EDUCATIONAL END USER DEVICES. Clearwire shall also make
any end-user equipment used in the Clearwire National Platform available for
purchase by Licensee at [***] above Clearwire's cost to acquire such end-user
equipment. Equipment provided to Licensee pursuant to this section shall be used
solely by Educational End Users and not for resale.
(E) SHARING OF FEATURES AND SERVICE SETS. Licensee shall have access
to, and full use of, system capabilities, services and feature sets that are
generally provided to Clearwire's retail customers or wholesalers to mass-market
customers. Licensee shall have access to reasonably necessary support made
available to Clearwire's commercial customers generally, and that is reasonably
necessary for Licensee to offer services to its Educational End Users as
contemplated by their agreement. Licensee shall have access to new capabilities,
features and service sets within six months of the time that Clearwire makes
them available to customers generally, but not earlier than the Commencement
Date.
(F) ORDERING COST-FREE EDUCATIONAL ACCOUNTS AND ADDITIONAL COST-FREE
EDUCATIONAL ACCOUNTS; DELIVERY AND INSTALLATION. Licensee may activate Cost-Free
Educational Accounts and Additional Cost-Free Educational Accounts at no cost to
Licensee, via submission of a standard Order Form or online ordering to
Clearwire, to the extent consistent with the terms of this Agreement. Clearwire
will fill each such order within the standard delivery interval by which it
activates new service requests for subscribers generally, and shall ship
associated user units to Licensee's requested destination or complete
installation of user equipment which normally is installed by Clearwire, its
Affiliate or a contractor of either of them within the standard installation
interval by which it makes new installations of user units. Licensee shall
comply with all laws and obtain any necessary governmental permits or approvals,
and third party approvals, which are necessary in order for Clearwire to
undertake an installation.
(G) TERMS OF USE. To the extent not inconsistent with the terms of
this Agreement, Licensee's ordering and use of Cost-Free Educational Accounts,
the Additional Cost-Free Educational Accounts and MVNO Accounts, and the use of
such services by Licensee's users and permitted users, 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 such services. In addition to the foregoing policies, but only to
the extent not inconsistent with the terms of this Agreement, Clearwire may
specify from time to time, in its sole discretion, reasonable and
non-discriminatory procedures for the activation, addition, deletion or
substitution of services to Licensee, its users and permitted users that do not
impose obligations on or detract from the services received by Licensee or its
permitted users.
[*** Confidential Treatment Requested]
10
(H) EQUIPMENT AND SOFTWARE. For Licensee and any permitted users for
whom Clearwire provides services pursuant to this Section 7, Clearwire shall
make available any equipment, services or software, including upgrades, that
Clearwire makes generally available to Clearwire's or its Affiliate's retail
customers subscribing to the same tier of service in the market(s) where it is
used over BRS or EBS facilities. In the event that 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 its designee.
(I) TITLE. All equipment provided by Clearwire to Licensee shall be
the property of Licensee or its designee(s), 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
facilities installed at Licensee's locations and receive sites, including the
sites of its permitted users, subject to manufacturers' warranties.
(J) PREFERRED CONTENT PROVIDER.
(i) Scope. In the event that Clearwire provides third party
content to customers over its network in the Market Area of the Channels,
Licensee may elect to become a "PREFERRED CONTENT PROVIDER" over such
network in such Market Area for such duration as Licensee may select. As a
Preferred Content Provider, Licensee shall have the same degree of access
to, and use of, any system capability, service or feature set that is
provided to premium third party content providers.
(ii) Service Sets and Features. To the extent that Clearwire's or
its Affiliates' most favored program suppliers pay for features and/or
service sets, Licensee shall pay an equal amount for equal features and/or
service sets to the extent that Licensee elects to utilize them. Licensee
agrees that the programming that Licensee supplies to customers through
Clearwire's network will be educational in nature. Licensee agrees not to
resell Clearwire's network access, features and/or service sets to third
parties, except in accordance with Sections 7(b)(i)a. and 7(c).
(iii) Capacity Constraints. Clearwire reserves the right to
restrict the use of the capabilities and services made available to
Licensee as a Preferred Content Provider under this Section 7(j) if such
use is no longer commercially and technically feasible due to limitations
in network capabilities. Clearwire shall comply with the provisions of this
Agreement to ensure timely access to information about capacity usage and
permit Licensee a reasonable opportunity to secure alternative access.
(K) DEFINITIONS.
(i) "ADDITIONAL COST-FREE EDUCATIONAL ACCOUNT" is defined in
Section 7(b).
(ii) "CELL SITE" means a tower, building or other outdoor
structure equipped with one or more antennas to serve the surrounding area.
11
(iii) "CLEARWIRE NATIONAL PLATFORM" means all Market Areas and
all other areas within the United States where Clearwire and its Affiliates
provide comparable services.
(iv) "COST-FREE EDUCATIONAL ACCOUNT" means a wireless broadband
connection that Clearwire or its affiliate provides to Licensee without
charge or expense to Licensee. Cost-Free Educational Accounts shall have
the same capacity and characteristics as the highest level of premium mass
market retail service provided on Clearwire or its affiliate's network in
the market where it is used. Multiple individuals that are associated with
an Educational End-User may share the same Cost-Free Educational Account
through Wi-Fi hotspots, local area networks, and other means. To the extent
not inconsistent with the terms of this Agreement, the Cost-Free
Educational Accounts shall be subject to the terms of Clearwire's then
generally applicable Acceptable Use Policy. The Cost-Free Educational
Accounts shall be fully portable anywhere within the Clearwire National
Platform to the extent that Clearwire offers such portability to any
customer.
(v) "EDUCATIONAL END USERS" OR "EEU" shall be only non-profit
and/or educational entities and/or Social Welfare Agencies that use the
services for their own purposes, provided that Licensees shall not provide
such services pursuant to an RFP or other substantially similar
commercially competitive opportunities (unless the Basic Trading Area of
this IUA is in [***], in which case Licensee shall be permitted to provide
such services pursuant to an RFP or other substantially similar
commercially competitive opportunities), and Licensees shall not provide
such services to any entity if such entity already has an existing business
relationship with Clearwire. For this purpose, "SOCIAL WELFARE AGENCIES"
(for all locations other than [***]) includes only those governmental and
quasi-governmental agencies and departments that provide as their primary
service public welfare assistance services (such as low-income housing,
food stamps, or domestic violence services) to the public. If the Basic
Trading Area of this IUA is in [***], "Social Welfare Agencies" shall
include any local and [***] Territorial governmental sector agency. "Social
Welfare Agencies" shall specifically exclude treasury and revenue services
departments, law enforcement agencies, legislatures, office of the mayor
and the military.
(vi) "FORMULA QUANTITY" as of any date, is the product, rounded
up or down to the nearest whole number, obtained by multiplying: (a) the
Local Channel Ratio by (b) [***] and by (c) the number of subscribers
served by Clearwire or any of its affiliates in the Market Area of the
Channels as of the end of the previous calendar year. In the event that
this product is a fraction, it shall be rounded up or down to the nearest
whole number.
(vii) "GEOGRAPHIC MARKET" means the larger of (A) the area
covered by the GSA(s) of the Channels, as amended from time to time,
without regard to any subsequent swap affecting the Channels after the
Effective Date, and (B) such GSA(s) combined with the area(s) covered by
the substantially overlapping GSA(s) of EBS and/or BRS systems which
Clearwire or any of its Affiliates have the right to use in that same
market.
[*** Confidential Treatment Requested]
12
(viii) "LOCAL CHANNEL RATIO" is the fraction obtained by dividing
the number of Channels as of the date of the calculation by the total
number of EBS and BRS channels in the Market Area of the Channels with
substantially overlapping GSAs then used to provide service in such Market
Area licensed to or under a use agreement with Clearwire or any of its
Affiliates (including those of Licensee) as of that date, in each case
determined without multiplying a channel by the number of times it is
deployed.
(ix) "MARKET AREA" means the network coverage footprint of the
network of Clearwire and its Affiliates which includes all or part of the
GSA(s) of the Channels in the Geographic Market, based on its build-out
engineered for services from time to time once it has commenced commercial
operation.
(x) "MARKET AREA OF THE CHANNELS" is the Market Area of the
Channels as of the Effective Date.
(xi) "MVNO ACCOUNTS" means a broadband connection and related
services that Clearwire or its affiliate provides, including such user
equipment as Clearwire or its affiliate may provide for such connection
services.
(xii) "ORDER FORM" is a form which elicits such information as is
reasonably required by Clearwire to provide the service, and which does not
contain any provision that modifies the service or any provision that is
inconsistent with this Agreement. It is agreed that Clearwire Order Forms
will be in the form of its standard order forms.
(xiii) "SECTOR" means a directional antenna located at a cell
site that serves a portion of a Cell Site area.
8. FCC FILINGS; INTERFERENCE CONSENTS
Upon Clearwire's reasonable request, and within five (5) days of Licensee's
receipt, Licensee shall promptly review, execute and file (if necessary), and,
together with Clearwire, prosecute, all notifications, applications, petitions,
waivers, amendments, and other related documents, including, without limitation
FCC Long Term Lease Applications, necessary to secure FCC approval for
Licensee's and Clearwire's intended uses of the Channels, provided such filings
are consistent with this Agreement and Licensee's legal obligations. Licensee
shall promptly file any requests for extension of construction periods or
performance benchmarks reasonably requested by Clearwire. Licensee shall
promptly, within fifteen (15) business days of its receipt, review and, if
consistent with this Agreement and Licensee's legal obligations, execute and
provide Clearwire any "no objection" letters, interference consent agreements or
retransmission consents that Clearwire may reasonably request, provided that the
action requiring consent does not cause material degradation of Licensee's
signal transmission capabilities. As an illustration, without limiting the
foregoing, interference consent agreements and "no objection letters" that (i)
involve reciprocal limitations on the operations of Licensee's licensed
facilities and other affected facilities, and (ii) waive FCC interference
protection criteria subject to protection from actual harmful interference,
taking into account topography, foliage, ground clutter and other real world
factors limiting signal propagation, shall not be deemed to
13
cause material degradation of Licensee's signal transmission capabilities.
During the Term, Licensee shall not make any filings with any governmental
authority, including the FCC, without prior consultation or coordination with
Clearwire, and Licensee shall not provide any "no objection" letters,
interference consents and/or retransmission consents to any third party without
Clearwire's prior written consent, such consent not to be unreasonably withheld.
9. OTHER APPLICATIONS, APPLICATION COSTS; FEES; DE FACTO TRANSFER
AUTHORIZATION APPLICATION
(A) APPLICATION PREPARATION. Clearwire will prepare and submit in its
name all applications, amendments, petitions, requests for waivers, and other
documents necessary for the proper operation of Clearwire Capacity consistent
with this Agreement and Licensee's responsibilities as a FCC licensee. Licensee
will prepare and submit all applications, amendments, petitions, requests for
waivers, and other documents necessary for the modification, maintenance and
renewal of the FCC License that, under FCC Rules, may only be filed by Licensee,
including any such filings reasonably requested by Clearwire that are consistent
with this Agreement and Licensee's responsibilities as a FCC licensee. The
Parties will cooperate in the preparation and submission of all applications,
amendments, petitions, requests for waivers, and other documents necessary to
secure any FCC approval, consent or other action required to effectuate this
Agreement, including the substantial service showing required by [***]. In no
event shall Licensee be required to make any filing or to take any position
before the FCC or other Government Agency that is inconsistent with Licensee's
interests or which Licensee believes in good faith may be construed by the FCC
or other Government Agency as inconsistent with its responsibilities as a FCC
licensee, not submitted in good faith or submitted for a purpose of delay in a
proceeding.
(B) APPLICATION COSTS. Clearwire will, at its own expense, prepare all
applications, notices, certificates, exhibits, consent agreements, approvals or
authorizations that Clearwire submits to the FCC or seeks to have Licensee
submit to the FCC pursuant to the Agreement. Clearwire will also promptly pay or
reimburse Licensee for its reasonable out-of-pocket expenses in connection with
the activities requested or required of Licensee by Clearwire under this
Agreement, including Licensee's expenses associated with the renewal of any FCC
License and with any other filings with, or information requested by, the FCC,
or required of Licensee to remain eligible under FCC Rules to provide Clearwire
Capacity to Clearwire.
(C) FEES AND TAXES. Clearwire will pay any Federal spectrum, federal
regulatory, universal service, number portability fees, payphone fees, E911 fees
and other fees, charges, assessments, impositions and taxes associated with the
FCC License or imposed on Licensee as a result of the licensing, regulation or
use of the capacity of the Channels by Licensee or Clearwire including, without
limitation, any such fees, charges, assessments, impositions and taxes that may
be imposed on or with respect to EBS spectrum or spectrum licenses in the
future. Clearwire shall pay all such fees, charges, assessments, impositions and
taxes upon receipt of notice from the FCC or taxing authority that such fees are
due, or upon receipt of at least thirty (30) days advance written notice from
Licensee that such fees or charges are due in the event that notice is not sent
to Clearwire by the FCC or such taxing authority. Without limiting the
generality of the foregoing, Clearwire shall be liable for and shall pay (and
shall indemnify and hold harmless the Licensee Indemnified Parties against) all
sales, use, stamp,
14
documentary, filing, recording, transfer, real estate transfer, registration,
duty or similar fees or taxes or governmental charges (together with any
interest or penalty, addition to tax or additional amount imposed) as levied by
any taxing authority in connection with this Agreement.
(D) FCC LONG TERM DE FACTO TRANSFER LEASE AND EXTENSION APPLICATIONS.
Within ten (10) business days following the execution of this Agreement and
prior to consummating the transfer of de facto control of the Channels, the
Parties shall 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 authorization (the "DE FACTO TRANSFER AUTHORIZATION") of the long term de
facto transfer caused by this Agreement as set forth in FCC Rule 1.9030(e) as
amended from time to time (the "FCC LONG TERM LEASE APPLICATION"). Each Party
shall fully cooperate with the other, and do all things reasonably necessary to
timely submit, prosecute and defend 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 efforts to obtain or
retain such grant. The Parties shall disclose in the FCC Long Term Lease
Application the automatic extension of Clearwire's use rights upon the renewal
of the FCC License. The Parties shall include in any FCC License renewal
application, or separately request, as necessary, a request to permit
Clearwire's use rights for the renewal term of the FCC License, if the Term will
continue during any part of such FCC License renewal term. The Parties shall
prosecute each such original or renewal application diligently and in good
faith, including defending it and the grant thereof against all petitions to
deny, informal objections, petitions for reconsideration, applications for
review, appeals, writs, requests for stay filed against any such application or
its grant, and shall file and prosecute petitions for reconsideration,
applications for review, petitions for appeal, notices of appeal, writs of
certiorari and associated pleadings challenging any denial of any such
application or request. Any fees associated with the filing of the FCC Long Term
Lease Application and applications or requests for renewal of the De facto
Transfer Authorization, and all costs incurred in preparing, prosecuting or
defending any and all petitions for reconsideration, applications for review,
appeals, writs, requests for stay and remands of the grant or denial of any such
original or renewal application and related pleadings, and for activity (such as
oral argument and FCC staff visits) in support thereof, shall be paid by
Clearwire. To the extent Licensee is required to file this Agreement with the
FCC, the Licensee shall first notify and consult with Clearwire, and will to the
extent permitted by the FCC redact all information from the Agreement which
Clearwire reasonably designates as confidential including, but not limited to,
all payment information.
10. TRANSFERS OR ASSIGNMENTS
(A) ELIGIBILITY FOR TRANSFER OR ASSIGNMENT. Licensee shall not assign
its interest in this Agreement or the License to any person or entity that is
not eligible or qualified to hold the License or lease the spectrum under
applicable FCC Rules. Clearwire shall not assign its interest in this Agreement
and will not enter into spectrum subleasing arrangements for the spectrum
subject to the License with any person or entity that is not eligible or
qualified to lease the spectrum under applicable FCC Rules.
(B) CLEARWIRE ASSIGNMENT. [***]
[*** Confidential Treatment Requested]
15
[***]
(C) LICENSEE ASSIGNMENT. Subject at all times to Clearwire's right to
purchase the License if the FCC determines to open eligibility for EBS spectrum
(as set forth in Section 21(a) hereof), Licensee may, during the Term, assign
its License or individual Channels to a qualified EBS eligible, or discontinue
EBS operations and surrender its License to the FCC, subject to the following:
Licensee shall notify Clearwire immediately upon making such decision, Licensee
shall not discuss such decision with any third parties without Clearwire's
written consent, and Licensee shall assign any affected Channels or the License
to an FCC-qualified entity designated by Clearwire who will assume the Channels
or License and assume Licensee's obligations under this Agreement (a "Successor
Licensee"). Licensee, Successor Licensee and Clearwire shall cooperate in filing
with the FCC any and all paperwork necessary to assign the license to the
Successor Licensee and receive continued FCC consent, if necessary, to the long
term de facto spectrum leasing arrangement reflected in this Agreement.
(D) CLEARWIRE SUBLEASE. [***]
(E) LICENSEE RELEASE. Upon the valid consummation of the sale,
assignment or transfer of the License to any third party as described in this
Section, the execution by such third party of an assignment and assumption
agreement with respect to this Agreement, and the expiration of any applicable
FCC reconsideration periods for such assignment or transfer: (i) Licensee will
be released and discharged from all obligations to Clearwire arising thereafter;
and (ii) Licensee will not incur any penalties as a result of and will not be
responsible for any of Clearwire's expenses associated with the sale, assignment
or transfer, except that nothing shall release Licensee from any liabilities
incurred prior to the execution of such assignment and assumption agreement.
11. TERMINATION OF AGREEMENT
[*** Confidential Treatment Requested]
16
(A) This Agreement may be terminated prior to expiration of a Term
under any of the following circumstances: (i) by mutual written agreement of the
Parties; (ii) by Clearwire, upon giving written notice to Licensee in the Event
of Default; provided that such Event of Default is not cured (if it is capable
of being cured) within thirty (30) days following such notice; (iii) by
Licensee, upon giving written notice to Clearwire in the Event of Default
provided such Event of Default is not cured (if it is capable of being cured)
within one hundred eighty (180) days thereof; (iv) by Clearwire upon giving
written notice to Licensee within thirty (30) days of a Loss (as hereinafter
defined); (v) by Clearwire upon written notice to Licensee and to the extent
allowed under law, if Licensee files a petition pursuant to Title 7 or 11 of the
United States Bankruptcy Code or is adjudged a debtor after the filing of an
involuntary bankruptcy petition against Licensee, or if Licensee files a
petition for relief pursuant to any state insolvency laws. If the Agreement is
terminated prior to the expected termination date which was disclosed to the
FCC, Licensee shall file a notification with the FCC no later than ten (10) days
after the early termination indicating the date the Agreement was terminated.
(B) It shall be an "Event of Default" hereunder if either party fails
to perform a material obligation or breaches a material representation and
warranty contained in this Agreement in circumstances where such failure results
in the inability of the other party to exercise its full rights under this
Agreement
(C) The term "Loss" means: (1) expiration of the License without
renewal; (2) License termination or revocation by the FCC without reinstatement;
or (3) the unavailability of the Channels for the provision of Clearwire's
Advanced Wireless Services due to regulatory action, including, but not limited
to, FCC denial of the FCC Long Term License Application related to this
Agreement, or reallocation of the Channels for purposes incompatible with
Clearwire's business, or adoption of rules or policies that substantially
frustrate achievement of the purposes of this Agreement. A Loss shall not be
deemed a default by Licensee or Clearwire if the Loss was beyond the reasonable
control of such party, and such party used its best efforts to preserve the
License. In ha the event of a Loss, the Parties shall cooperate in seeking
special temporary authority from the FCC to allow Clearwire to continue
operating on the Channels until such time as it can transition its users to
other spectrum and minimize service disruption to its business and other
activities.
(D) Licensee may terminate this Agreement pursuant to Section 16(b).
(E) If the Commencement date does not occur by the [***] of the
Effective Date, thereafter either Party may terminate this Agreement at any time
before the Commencement Date by giving written notice of termination to the
other Party.
(F) In the event that the Commencement Date occurs, but the FCC's
grant of the De facto Transfer Authorization is subsequently rescinded and such
rescission has become a Final Order, this Agreement shall be deemed terminated
on the date specified as the required termination date by any order in that
proceeding (as that date may have been extended by stay or otherwise) or, in the
absence of such specified date, the effective date of the last decision in that
proceeding.
[*** Confidential Treatment Requested]
17
(G) In the event of an FCC Final Order denying any application to
allow the continuation or renewal of the De facto Transfer Authorization for a
portion of the Term, this Agreement shall be deemed terminated on the date
specified as the required termination date by any order in that proceeding (as
that date may have been extended by stay or otherwise) or, in the absence of
such specified date, the effective date of the last decision in that proceeding.
(H) The Parties will notify the FCC of the termination of this
Agreement with respect to the FCC License or any of the Channels within ten (10)
calendar days following the termination.
(I) Except as expressly set forth in this Agreement, upon the
expiration or termination of this Agreement, each Party will pay its own fees
and expenses related to this Agreement and the transactions contemplated herein,
and the Parties will have no further liability to each other except by reason of
any breach of this Agreement occurring prior to the date of expiration or
termination or after such expiration or termination if the breach is of a
provision that by its terms survives such expiration or termination. 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 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 termination, will survive the expiration or
termination of this Agreement until the obligations or duties are performed or
discharged in full.
(J) The Parties recognize that, in the event that a Party fails or
refuses to perform any provisions of this Agreement, monetary damages alone will
not be adequate. The non-defaulting Party shall therefore be entitled, in
addition to any other remedies which may be available, including money damages,
to obtain specific performance of the terms of this Agreement. Except as
expressly set forth in this Agreement no remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. Except as expressly set forth in this Agreement, the
election of any one or more remedies by a Party shall not constitute a waiver of
the right to pursue other available remedies at any time.
12. EXPENSES AND REVENUES
All subsequent documents appended to this Agreement, and any FCC
activity or activity to preserve, obtain or renew licenses shall be reimbursed
by Clearwire, provided that (and except as specified otherwise in this
Agreement) expenses in excess of $1,000 are approved as to reasonableness by
Clearwire in advance, such approval not to be unreasonably withheld, conditioned
or delayed; and provided further that Licensee shall not be required to take any
action for which Licensee may request expense reimbursement from Clearwire until
the Parties have reached agreement on reimbursement of expenses of Licensee
related to such action in excess of $1,000. Except as otherwise provided in this
Agreement, each Party will pay its own expenses incident to any amendments or
modifications to the Agreement, including, but not limited to, all fees and
expenses of their respective legal counsel and any engineering and
18
accounting expenses. Licensee is entitled to none of the revenue generated from
the use of the Clearwire Capacity, but only the royalties provided for in this
Agreement.
13. COMPETITION
During the Term of this Agreement, Licensee shall not, either itself or
with a third party other than Clearwire, engage in any commercial or for-profit
activities utilizing any of the Channels that directly compete with Clearwire or
its affiliates; provided, however, that any relationship between Licensee and
any Permitted End User relating to the use by such Permitted End User of
Advanced Wireless Services shall not be deemed to be in violation of the
foregoing restriction. During the Term of this Agreement, and except as
contemplated herein, Licensee shall not lease, sublease, pledge, encumber or
otherwise permit or grant any current rights with respect to use of the
Channels, in whole or in part. Without limiting the foregoing, Licensee shall
not resell or otherwise provide services to any end user that is not a Permitted
End User.
14. 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 in support
of the De facto Transfer Application, requests for renewal thereof or notices
submitted to the FCC, or as required to be disclosed in filings with the
Securities and Exchange Commission or state securities agencies, 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,
and to employees, shareholders, agents, attorneys and accountants (collectively,
"AGENTS") as required to perform obligations under the Agreement, provided,
however, that the Parties will cause all Agents to honor the provisions of this
section. In addition, either Party may disclose this Agreement to its
Affiliates, strategic partners, actual or potential investors, lenders,
acquirers, merger partners, and others whom it deems in good faith to have a
need to know such information for purposes of pursuing a transaction or business
relationship with it, so long as it secures an enforceable obligation from such
third party to limit the use and disclosure of this Agreement as provided
herein. The Parties will submit a confidentiality request to the FCC in the
event 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
"Confidential Information" shall mean all non-public information disclosed
hereunder, whether written or oral, that is designated as confidential or that,
given the nature of the information or the circumstances surrounding its
disclosure, is plainly confidential or by the Parties' practices should be
understood to be confidential. The term Confidential 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 or breach of a
similar agreement by a third party; (2) prior to disclosure hereunder, is
property within the legitimate possession of the receiving
19
Party; (3) is lawfully received from a third party having rights therein without
restriction of third party's or the receiving Parry'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 Confidential Information. During the Term, the Parties may supply and/or
disclose to each other Confidential Information relating to the business of the
other Party. Each item of Confidential Information will be kept confidential by
the Parties during the Term and for a period of three (3) years thereafter, but
may be disclosed in the enforcement or seeking of damages with respect to a
Party's rights under this Agreement. The receiving Party will be responsible for
any improper use of the Confidential Information by it or any of its Agents.
Without the prior written consent of the disclosing Party, the receiving Party
will not disclose to any entity or person the Confidential Information, or the
fact that the Confidential Information has been made available to it, except for
disclosures required by law, disclosures authorized by the Party owning the
Confidential Information and disclosures made in the context of the enforcement
or seeking of damages with respect to a Party's rights under this Agreement.
Each person to whom Confidential Information is disclosed must be advised of its
confidential nature and must agree to abide by the terms of this section.
15. ASSUMPTION OF LIABILITIES
Neither Party is assuming or will be responsible for any of the other's
liabilities or obligations (including but not limited to customer obligations)
except as required by the FCC or this Agreement.
16. FCC-MANDATED OBLIGATIONS
(A) Licensee and Clearwire are familiar with the FCC Rules affecting
secondary markets for spectrum 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 such laws and
regulations.
(B) Effective on the Commencement Date, Clearwire assumes primary
responsibility for complying with the Communications Act, and any FCC Rules that
apply to the Channels and FCC License, and this Agreement may be revoked,
cancelled or terminated, in accordance with Section 11, by Licensee or by the
FCC if Clearwire materially fails to comply with applicable laws and
regulations.
(C) Neither Licensee nor Clearwire will represent itself as the legal
representative of the other before the FCC or any party, but will cooperate with
each other consistent with this Agreement with respect to FCC matters concerning
the Licenses and the Channels.
(D) If the FCC License is revoked, cancelled, terminated or otherwise
ceases to be in effect, Clearwire will have no continuing authority or right to
use the Channels unless otherwise authorized by the FCC.
(E) This Agreement is not an assignment, sale or transfer of the FCC
License itself.
20
(F) This Agreement will not be assigned to any entity that is
ineligible or unqualified to enter into a use agreement for the Channels under
the FCC Rules.
(G) Licensee will not consent to an assignment, subassignment or
sublicensing of this secondary market arrangement unless such assignment,
subassignment or sublicensing complies with applicable FCC Rules and this
Agreement.
(H) Licensee and Clearwire must each retain a copy of this Agreement
and make it available upon request by the FCC, in accordance with the
confidentiality provisions in Section 14.
17. LICENSEE'S AUTHORIZATIONS
Licensee shall maintain all necessary qualifications to hold and to obtain
renewal in the ordinary course of the FCC License subject to Clearwire's
obligations under this Agreement, including, without limitation, Clearwire's
obligation to cause Licensee's FCC License to timely meet the substantial
service requirement, as such qualifications may be amended or modified from time
to time (individually an "FCC QUALIFICATION" and collectively referred to as the
"FCC QUALIFICATIONS"), and shall not knowingly or negligently take any action,
or fail to take any action, which action or failure to act creates a material
risk that Licensee shall lose any FCC Qualification; provided, that in the event
that the FCC or any other legal authority shall at any time specify new or
different qualifications or conditions for the maintenance of any FCC
Qualification or shall issue a pronouncement offering a new interpretation of a
FCC Qualification, Clearwire shall reimburse on demand Licensee's reasonable
expenses of taking such action as are required for Licensee to bring itself and
its operations into compliance with such new or different qualifications or
conditions and maintaining such compliance; provided, further, that it shall not
be deemed a breach of this sentence if Licensee loses a FCC Qualification as a
result, in whole or in part, of an act or omission of Clearwire or any failure
of Clearwire to perform its obligations under this Agreement. If, at any time,
Licensee fails, or it appears to Licensee more likely than not that it will
fail, to maintain any one or more of its FCC Qualifications with respect to the
License, Licensee shall give written notice to Clearwire within five (5) days
after Licensee becomes actually aware that (i) it no longer maintains such FCC
Qualifications or (ii) with the passage of time or upon the occurrence of a
future event it will no longer maintain such FCC Qualifications (referred to as
a "DISQUALIFICATION EVENT"). Licensee shall cooperate with reasonable requests
of Clearwire made from time to time for the purpose of verifying, at Clearwire'
expense, that Licensee maintains its FCC Qualifications. Upon the occurrence of
a Disqualification Event, Licensee shall, at Clearwire's expense, promptly
undertake all reasonable actions to obtain, to the extent permitted by
applicable law, a waiver from the FCC regarding the circumstances giving rise to
such Disqualification Event or to cure the circumstances giving rise to such
Disqualification Event.
18. MUTUAL REPRESENTATIONS AND WARRANTIES
(A) BY LICENSEE TO CLEARWIRE. Licensee hereby represents and warrants
to Clearwire that:
21
(i) Organization and Good Standing. It is a nonprofit corporation
duly organized, validly existing and in good standing under the laws of its
state of organization and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as
now conducted and as proposed to be conducted. It is duly qualified or
authorized to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business
or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified, authorized or
in good standing does not have and would not reasonably be expected to have
a material adverse effect on the business, operations, properties, assets,
condition (financial or other) or results of operations of Licensee, taken
as a whole, other than changes affecting the broadband wireless business
generally ("LICENSEE MATERIAL ADVERSE EFFECT").
(ii) Authorization of Agreement. It has all requisite corporate
power and authority to enter into, deliver and carry out the transactions
contemplated by this Agreement This Agreement has been duly and validly
executed and delivered by it and (assuming the due authorization, execution
and delivery by the other Parties hereto) this Agreement constitutes the
legal, valid and binding obligations of Licensee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in
a proceeding at law or in equity).
(iii) No Conflict. Except as set forth on the disclosure schedule
attached hereto by Licensee (the "LICENSEE SCHEDULE"):
A. Neither the execution and delivery by Licensee of this
Agreement, nor compliance by Licensee with any of the provisions hereof
will (i) conflict with, or result in the breach of, any provision of
Licensee's certificate or articles of incorporation or bylaws, (ii)
conflict with, violate, result in the breach of, constitute (with or
without due notice, lapse of time or both) a default under, result in the
acceleration of, create in any party the rights to accelerate, terminate,
modify or cancel, or require any notice, consent or waiver under, any note,
bond, mortgage, indenture, license, agreement or other obligation to which
Licensee is a party or by which Licensee or any of its properties or assets
is bound or (iii) violate any statute, rule, regulation, order or decree of
any Federal, state or local government, or any governmental, regulatory,
legislative, executive, or administrative authority, agency or commission,
or any court, tribunal, or judicial body ("GOVERNMENT AGENCY") by which
Licensee is bound, except in the cases of clauses (ii) and (iii) for such
conflicts, violations, breaches, accelerations or defaults as would not,
individually or in the aggregate, have a Licensee Material Adverse Effect.
B. No consent, waiver, approval, order, permit or
authorization of, or declaration or filing with, or notification to, any
person, entity or Government Agency is required on the part of Licensee in
connection with the execution and
22
delivery of this Agreement or the compliance by Licensee with any of the
provisions hereof, except as contemplated herein.
(iv) FCC Licenses. Except as set forth on the disclosure schedule
attached hereto by Licensee (the "LICENSEE SCHEDULE"):
A. To the best knowledge of Licensee, all information set
forth in Schedule A regarding the License is complete and accurate in all
material respects, although Licensee makes no representation as to the
MHzPops associated with the License. Licensee holds the License free and
clear of all any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction, encumbrance or any other restriction or limitation
whatsoever except for liens for taxes not then due and payable and
generally applicable FCC-imposed restrictions ("Liens").
B. Licensee is authorized, by final order, to hold the FCC
License, subject to any pending renewal application listed on the Licensee
Schedule.
C. To the best knowledge of Licensee, the Licensee Schedule
sets forth a true list of interference consents that have been granted by
Licensee with respect to any FCC Licenses and that are germane under the
two-way rules and would have a material impact on the use of the Channels
(excluding routine consents customary in the industry).
(v) Litigation. Except as set forth in the Licensee Schedule and
other than proceedings of general applicability and those related to market
transitions, there is no action, suit, litigation, arbitration proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving
any court or other Government Agency or any arbitrator or arbitration panel
now in progress or pending or, to the knowledge of Licensee, threatened
against Licensee or the assets (including the intellectual property rights)
or the business of Licensee, nor to the knowledge of Licensee, does there
exist any basis therefore, except for immaterial claims brought against
Licensee in the ordinary course of business. Other than orders issued in
licensing proceedings which contain no continuing requirements or
continuing unusual conditions and Orders which are set forth on the
Licensee Schedule, Licensee is not subject to any order, writ, judgment,
injunction, decree, stipulation, determination, or award entered by or with
any Government Agency.
(vi) Compliance with Laws; Permits. To the best knowledge of the
Licensee where and during the time access to the Channels currently subject
to the FCC License has been governed by a third party agreement (and
assuming that the third party agreement and normal conduct by parties
pursuant to this type of agreement comply in all material respects with the
Communications Act and FCC Rules) and except as provided in the Licensee
Schedule, Licensee (a) has complied in all respects with all federal,
state, local and foreign laws, rules, ordinances, codes, consents,
authorizations, registrations, regulations, decrees, directives, judgments
and orders applicable to it and its business with
23
the Channels other than where noncompliance would not reasonably be
expected to have a Licensee Material Adverse Effect and (b) has all
federal, state, and local governmental permits, authorizations, approvals,
licenses, certificates and consents ("PERMITS") necessary in the conduct of
its business as currently conducted with the Channels and to own and use
its assets used with the Channels in the manner in which such assets are
currently owned and used other than where the failure to possess such
Permits would not, individually or in the aggregate, reasonably be expected
to have a Licensee Material Adverse Effect, such Permits are in full force
and effect, and no violations have been recorded in respect of any such
Permit, and no proceeding is pending or, to the best knowledge of Licensee,
threatened to revoke or limit any such Permit.
(vii) Brokers. Neither Licensee nor any of its directors,
officers, employees, or representatives has employed any broker or finder
in connection with this Agreement.
(viii) Knowledge. Any representation, warranty, covenant,
obligation, or part thereof that states that it is made to the best
knowledge of Licensee is made to its best knowledge after commercially
reasonable investigation and includes all facts which it knew or should
have known as a result of such investigation, including the best knowledge
of Licensee's executive officers and legal counsel after commercially
reasonable investigation.
(B) BY CLEARWIRE TO LICENSEE. Clearwire hereby represents and warrants
to Licensee that:
(i) Organization and Good Standing. Clearwire is a limited
liability company duly organized, validly existing and in good standing
under the laws of the State of Nevada. Each has all requisite corporate or
limited liability company power and authority to own, lease and operate its
properties and to carry on its business as now conducted. Clearwire is duly
qualified or authorized to do business as a foreign organization and is in
good standing under the laws of each jurisdiction in which it owns or
leases real property and each other jurisdiction in which the conduct of
its business or the ownership of its properties requires such qualification
or authorization, except where the failure to be so qualified, authorized
or in good standing does not have and would not reasonably be expected to
have a material adverse effect on the business, operations, properties,
assets, condition (financial or other) or results of operations of
Clearwire, taken as a whole, other than changes affecting the broadband
wireless business generally ("CLEARWIRE MATERIAL ADVERSE EFFECT").
(ii) Authorization of Agreement. Clearwire has all requisite
corporate or limited liability company power and authority (i) to enter
into, deliver and carry out this Agreement, and (ii) to enter into and
deliver all documents required or necessary to be executed by it in
connection with the consummation of this Agreement. This Agreement
(assuming the due authorization, execution and delivery by Licensee)
constitutes the legal, valid and binding obligations of Clearwire,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to
24
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(iii) No Conflict. Neither of the execution and delivery by
Clearwire of this Agreement, nor the compliance by Clearwire with any of
the provisions hereof will (i) conflict with, or result in the breach of,
any provision of the certificate of limited liability company or operating
agreement of Clearwire, (ii) conflict with, violate, result in the breach
of, or constitute (with or without due notice, lapse of time or both) a
default under, result in the acceleration of, create in any party the
rights to accelerate, terminate, modify or cancel, or require any notice,
consent or waiver under, any note, bond, mortgage, indenture, license,
agreement or other obligation to which Clearwire is a party or by which
Clearwire or any of its respective properties or assets are bound or (iii)
violate any statute, rule, regulation, order or decree of any Government
Agency by which Clearwire is bound, except, in the case of clauses (ii) and
(iii), for such conflicts, violations, breaches, accelerations or defaults
as would not, individually or in the aggregate, have a Clearwire Material
Adverse Effect.
(iv) Consents. No consent, waiver, approval, order, permit or
authorization of, or declaration or filing with, or notification to, any
person, entity or Government Agency is required on the part of Clearwire in
connection with the execution and delivery of this Agreement or the
compliance by Clearwire with any of the provisions hereof.
(v) Litigation. Except as would not reasonably be expected to
have a materially adverse effect on the ability of Clearwire to execute,
deliver and perform this Agreement, (a) there is no Proceeding now in
progress or pending or, to the knowledge of Clearwire, threatened against
Clearwire or the assets or the business of Clearwire and (b) neither
Clearwire is not subject to any order, writ, injunction or decree of any
court or other Government Agency other than orders issued in licensing
proceedings.
(vi) Compliance with Laws; Permits. Clearwire (a) has complied in
all respects with all federal, state, and local laws, rules, ordinances,
codes, consents, authorizations, registrations, regulations, decrees,
directives, judgments and orders applicable to it and its business other
than where noncompliance would not, individually or in the aggregate,
reasonably be expected to have a Clearwire Material Adverse Effect and (b)
has all federal, state, and local governmental Permits necessary in the
conduct of its business as currently conducted and to own and use its
assets in the manner in which such assets are currently owned and used
other than where the failure to possess such Permits would not,
individually or in the aggregate, reasonably be expected to have a
Clearwire Material Adverse Effect, such Permits are in full force and
effect, and no violations have been recorded in respect of any such Permit,
and no proceeding is pending or, to the best knowledge of Clearwire,
threatened to revoke or limit any such Permit.
(vii) Brokers. Neither Clearwire nor any of its directors,
officers, employees or representatives has employed any broker or finder in
connection with this Agreement.
25
19. INDEMNIFICATION
(A) Licensee shall indemnify Clearwire, its Affiliates, and each of
their respective stockholders, directors, officers, employees, agents,
successors and assigns (collectively, the "CLEARWIRE INDEMNIFIED PARTIES") and
hold each of the Clearwire Indemnified Parties harmless from and against any and
all Damages based upon, attributable to or resulting from:
(i) the failure of any representation or warranty of Licensee set
forth herein, or any representation or warranty contained in any
certificate delivered by or on behalf of Licensee pursuant to this
Agreement, to be true and correct as of the dates made; or
(ii) the breach of any covenant or other agreement on the part of
the Licensee under this Agreement; or
(iii) any Claim brought or threatened against Clearwire by a
third party claiming one or more rights with respect to Clearwire, or by
virtue of Clearwire entering into this Agreement, an alleged breach of a
contractual right of first refusal ("ROFR") commitment or negotiation
commitment of Licensee.
(B) Clearwire shall indemnify the Licensee, its Affiliates, and each
of their respective, agents, successors and assigns (collectively, the "LICENSEE
INDEMNIFIED PARTIES") and hold each of the Licensee Indemnified Parties harmless
from and against any and all Damages based upon, attributable to or resulting
from:
(i) the failure of any representation or warranty of Clearwire
set forth herein, or any representation or warranty contained in any
certificate delivered by or on behalf of Clearwire pursuant to this
Agreement, to be true and correct as of the dates made;
(ii) the breach of any covenant or other agreement on the part of
Clearwire under this Agreement;
(iii) the operation of equipment by, the provision of service by
or otherwise related to the activities of Clearwire, any of its Affiliates
or any of its sublicensees or resellers including, without limitation,
damage to health; or
(iv) any forfeitures or fines levied by the FCC against Licensee,
or loss or impairment of the FCC License, arising from Clearwire's act or
omission.
(C) DETERMINATION OF DAMAGES. As used herein, "DAMAGES" means any and
all losses, claims, demands, liabilities, obligations, actions, suits, orders,
statutory or regulatory compliance requirements, or proceedings asserted by any
Person, and all damages, costs, expenses, assessments, judgments, recoveries and
deficiencies, including interest, penalties, investigatory expenses,
consultants' fees, and reasonable attorneys' fees and costs, of every kind and
description, contingent or otherwise. For purposes of the above, the amount of
Damages in respect of any breach of a representation or warranty shall be
determined without regard to any limitation or qualification as to materiality
set forth in such representation or warranty. As used
26
in this Agreement, "PERSON," whether or not such term is capitalized, means any
individual, partnership, firm, corporation, limited liability licensee(s),
association, trust, unincorporated organization, or other entity.
27
(D) INDEMNIFICATION PROCEDURES.
(i) In the event that any claim shall be asserted by any Person
in respect of which payment may be sought under this Section 19 (each, a
"CLAIM"), the indemnified party shall reasonably and promptly cause written
notice (a "CLAIM NOTICE") of the assertion of such Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the
indemnifying party. The indemnifying party shall have the right, at its
sole option and expense, to be represented by counsel of its choice, which
must be reasonably satisfactory to the indemnified party, and to defend
against, negotiate, settle or otherwise deal with any Claim which relates
to any Damages indemnified against hereunder. If the indemnifying party
elects to defend against, negotiate, settle or otherwise deal with any
Claim which relates to any Damages indemnified against hereunder, it shall
within five (5) days of delivery of the Claim Notice (or sooner, if the
nature of the Claim so requires) notify the indemnified party of its intent
to do so. If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any
Damages indemnified against hereunder, fails to notify the indemnified
party of its election as herein provided or contests its obligation to
indemnify the indemnified party for such Damages under this Agreement, the
indemnified party may defend against, negotiate, settle or otherwise deal
with such Claim. If the indemnified party defends any Claim, then the
indemnifying party shall reimburse the indemnified party for the expenses
of defending such Claim upon submission of periodic bills. If the
indemnifying party shall assume the defense of any Claim, the indemnified
party may participate, at his or its own expense, in the defense of such
Claim; provided, however, that such indemnified party shall be entitled to
participate in any such defense with separate counsel at the expense of the
indemnifying party if, so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the indemnified
party, a conflict or potential conflict exists between the indemnified
party and the indemnifying party that would make such separate
representation advisable; and provided, further, that the indemnifying
party shall not be required to pay for more than one such counsel for all
indemnified parties in connection with any Claim. The Parties hereto agree
to cooperate fully with each other in connection with the defense,
negotiation, or settlement of any such Claim.
(ii) After any final judgment or award shall have been rendered
by a court, arbitration board or administrative agency of competent
jurisdiction and the expiration of the time in which to appeal therefrom,
or a settlement shall have been consummated, or the indemnified party and
the indemnifying party shall have arrived at a mutually binding agreement
with respect to a Claim hereunder, the indemnified party shall forward to
the indemnifying party notice of any sums due and owing by the indemnifying
party pursuant to this Agreement with respect to such matter.
(iii) The failure of the indemnified party to give reasonably
prompt notice of any Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent
that the indemnifying party can demonstrate actual loss and prejudice as a
result of such failure.
(E) SURVIVAL. Each Party's obligations under this section will
survive the expiration or termination of this Agreement.
20. MISCELLANEOUS
(A) LAWS, RULES AND REGULATIONS. This Agreement is subject to all
laws, rules, regulations and ordinances relative to, among other things, the
subject matter addressed in this Agreement.
(B) FORCE MAJEURE. Other than the failure to pay money when required,
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
written 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 Clearwire nor Licensee 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) DISPUTE RESOLUTION.
(i) General. The Parties desire to resolve disputes arising out
of this Agreement without litigation. Accordingly, the Parties agree to use
the dispute resolution procedures set forth in this Section 20(d) (the
"DISPUTE RESOLUTION PROCEDURES") as their sole means of adjudication with
respect to any controversy or claim arising out of or relating to this
Agreement or its breach.
(ii) Dispute Notice. At the written request of any Party (a
"DISPUTE NOTICE"), the Parties to the dispute will within seven business
days of the Dispute Notice, appoint knowledgeable, responsible
representatives to meet and negotiate in good faith to resolve any dispute
arising under this Agreement. The Parties intend that these negotiations be
conducted by business representatives, including at least one senior
executive of each Party to the dispute. The representatives shall meet and
confer, in person or by teleconference, not later than such seventh
business day after the date of the Dispute Notice. The location, format,
frequency, duration and conclusion of these discussions shall be left to
the discretion of the representatives; provided that, the duration shall
not exceed 45 days from the date of the Dispute Notice (an "ACTION DATE")
unless extended by mutual written agreement of the Parties setting forth a
new Action Date. The Dispute Notice and any extension shall specify the
Action Date. The Dispute Notice shall set forth the nature of the dispute,
in reasonable detail. Discussion and correspondence among the
representatives for purposes of these negotiations shall be treated as
confidential information developed for purposes of settlement, exempt from
discovery and production, and shall not be admissible in the arbitration
described below. Documents identified in or
29
provided with such communications, which are not prepared for purposes of
the negotiations, are not so exempted and may, if otherwise admissible, be
admitted in evidence in the arbitration. If the Parties are unable to
resolve any disputes arising under or relating to this Agreement (each a
"DISPUTE") using the process described in this Section 20(d) within the
time period provided, including without limitation disputes regarding a
breach or default under this Agreement, the Parties shall arbitrate such
dispute pursuant to the arbitration provisions set forth in Section
20(d)(iii).
(iii) Arbitration. Any Dispute that has not be resolved within
the time period provided for in Section 20(d)(ii) shall be resolved by a
panel of three Arbitrators. The Dispute Notice shall automatically serve as
a written notice of a request to submit the Dispute for arbitration if
there has not been a resolution of the Dispute by the Action Date, and the
Parties agree to submit the Dispute to a panel of three arbitrators who
shall be appointed within 30 days of the Action Date (the "SUBMISSION
PERIOD"). During the Submission Period, the Parties shall appoint the
arbitrators in accordance with the Commercial Arbitration Rules (then in
effect) of the American Arbitration Association ("AAA"), as modified below.
No punitive damages (or any other amount awarded for the purpose of
imposing a penalty) will be awarded for a breach of this Agreement.
(iv) During the Submission Period, the Parties may submit a
request for discovery to the arbitrators, who shall determine whether the
scope of the requested discovery is appropriate or useful for the
resolution of the Dispute and order the discovery in their discretion;
provided that such discovery process shall be concluded not later than 30
days following the submission date (the "DISCOVERY CLOSE DATE").
(v) The arbitration hearing shall be fixed by the arbitrators to
be not sooner than 20 days nor later than 45 days after the Discovery Close
Date (the "HEARING DATE"). The hearing shall be located at a neutral site
as mutually agreed by the Parties, or if the Parties cannot so agree, then
the location of the arbitration shall be Washington, D.C. The Federal Rules
of Evidence shall apply to the arbitration hearing. The Party bringing a
particular claim or asserting an affirmative defense will have the burden
of proof with respect thereto. Each Party shall bear the burden of
persuasion with respect to its proposal for resolution of the matter. The
arbitration proceedings and all testimony, filings, documents and
information relating to or presented during the arbitration proceedings
shall be deemed to be information subject to the confidentiality provisions
of this Agreement. The arbitrators will have no power or authority,
pursuant to the rules of the AAA or otherwise, to relieve the Parties from
their agreement hereunder to arbitrate or otherwise to amend or disregard
any provision of this Agreement, including without limitation the
provisions of this Section.
(vi) Each Party shall be permitted to submit a pre-hearing brief
not to exceed 25 pages and such technical supporting material as is
necessary or useful, to be submitted to the arbitrators and the other Party
not later than 5 days before the Hearing Date, and each Party may issue a
response thereto not later than 2 days before the Hearing Date. Following
the arbitration hearing, each Party shall be permitted to submit a
post-hearing brief not to exceed 25 pages within 5 days following the
Hearing Date and a reply brief within 2 days thereafter (the "PLEADING
CLOSE DATE"). Should an arbitrator refuse or
30
be unable to proceed with arbitration proceedings as called for by this
Section, the arbitrator shall be replaced pursuant to the rules of the AAA.
If an arbitrator is replaced after the arbitration hearing has commenced,
then a rehearing shall take place in accordance with this Section and the
rules of the AAA.
(vii) Within fifteen (15) days after the Pleading Close Date, the
arbitrators will prepare and distribute to the Parties a writing setting
forth the arbitration panel's reasons for its determination. The findings
and conclusions and the award, if any, shall be deemed to be confidential
information of the Parties. Neither Party may disclose such information to
any third party other than their professional advisors or as required by
law or regulations, except in connection with an action to enforce the
award.
(viii) The Arbitrators are instructed to schedule promptly all
discovery and other procedural steps and otherwise to assume case
management initiative and control to effect an efficient and expeditious
resolution of the Dispute. The arbitrators are authorized to issue monetary
sanctions against either Party if, upon a showing of good cause, such Party
is unreasonably delaying the proceeding.
(ix) Any award rendered by the arbitrators will be final,
conclusive, and binding upon the Parties and any judgment thereon may be
entered and enforced in any court of competent jurisdiction.
(x) The non-prevailing Party to an arbitration shall pay its own
expenses, the fees of each arbitrator, the administrative fee of the AAA,
and the expenses, including without limitation, reasonable attorneys' fees
and costs, and expert and witness fees and costs, incurred by the other
Party to the arbitration. In the case of a decision that partially favors
each Party, expenses shall be paid as determined by the arbitrators. In
connection with any judicial proceeding to compel arbitration pursuant to
this Agreement or to confirm, vacate or enforce any award rendered by the
arbitrators, the prevailing Party in such a proceeding shall be entitled to
recover reasonable attorney's fees and expenses incurred in connection with
such proceedings, in addition to any other relief to which it may be
entitled.
(xi) Notwithstanding anything to the contrary, neither Party
shall have any obligation to arbitrate claims for injunctive relief,
specific performance, or other equitable relief or for the use or
unauthorized disclosure of confidential information, as to which either
Party shall be entitled to seek and obtain relief from a court of competent
jurisdiction; provided that, any and all claims for damages shall remain
subject to arbitration.
(E) NOTICES.
All notices and other communications under this Agreement shall be in writing
and shall be deemed given when delivered personally or by overnight courier, or
mailed by certified mail, return receipt requested, to the Parties (and shall
also be transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a Party may have specified by
notice given to the other Party pursuant to this provision):
31
(i) CLEARWIRE:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland WA 98033
Attn: [***]
Fax: [***]
With a Copy to:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland WA 98033
Attn: [***]
Fax: [***]
Davis Wright Tremaine, LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attn: [***]
Fax: [***]
LICENSEE
Hispanic Information and Telecommunications Network, Inc.
63 Flushing Avenue
Unit 281
Brooklyn, New York 11205
Telecopy: [***]
Telephone: [***]
Attention: [***]
With a copy to:
Day, Berry & Howard LLP
875 Third Avenue
New York, NY 10022
Attention: [***]
Fax: [***]
And a copy to:
RJGLaw LLC
1010 Wayne Avenue, Suite 950
[*** Confidential Treatment Requested]
32
Silver Spring, MD 20910
Attention: [***]
FAX: [***]
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.
(F) APPLICABLE LAW. The validity, construction and performance of this
Agreement will be governed by and construed in accordance with the laws of the
State of New York.
(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 provision
frustrates the intent of the Parties. To the extent that the Parties or the FCC
determine that the provisions of this Agreement are not adequate to enable
Licensee to comply with the regulatory requirements associated with the FCC
License, the Parties will amend these provisions to ensure that the Licensee is
in compliance with its FCC obligations with respect to the FCC License. The
Parties believe that the provisions of this Agreement comply with all current
FCC Rules, and shall express that belief to regulatory agencies and the general
public.
(H) BEST EFFORTS. The Parties acknowledge that there will be many
changes in the course of the Term, in technology, capabilities, and regulatory
environment among other areas, and agree to act in a cooperative manner to
preserve the intentions of the relationships reflected in the Agreements to
their mutual advantage and to use their commercially reasonable best efforts to
maintain that mutual advantage.
(I) 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 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.
(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. Signatures transmitted by facsimile
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.
[*** Confidential Treatment Requested]
33
(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.
(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) INSURANCE.
(i) Clearwire shall maintain and shall cause each Service Entity
to maintain insurance coverage, and on all certificates for coverage under
general liability, automobile liability, employer's liability, worker's
compensation, and any other coverages required under local law, shall: (i)
name Licensee as an "Additional Insured" on the liability policies,
including without limitation, as an insured with respect to third-party
claims or actions made or brought directly against Licensee or against
Licensee, Clearwire and/or such Service Entity as co-defendants and arising
out of or in connection with this Agreement or operations; (ii) be written
as a primary policy not contributing with any other coverage which Licensee
may carry for the acts and omissions of Clearwire or such Service Entity
and for whom Clearwire or such Service Entity is responsible; and (iii)
stipulate that Licensee shall receive thirty (30) days' prior written
notice of any cancellation in coverage; provided that such cancellation
shall not relieve Clearwire of its continuing obligation to maintain or to
cause each such Service Entity to maintain insurance coverages in
accordance with this Section.
(ii) Clearwire shall maintain and shall cause each Service Entity
to maintain with reputable insurers having a Best Rating of A or better:
A. Commercial general liability insurance with at least
$2,000,000 combined single limit bodily injury and property damage
limits written on an occurrence basis.
B. Full statutory coverage for Workers' Compensation and
Employers Liability with limits as required by law. These policies
will contain waivers of the insurer's subrogation rights against
Licensee where permitted by law.
C. Errors and omissions or professional liability coverage
with a limit of at least $1,000,000 per each claim and $1,000,000
annual aggregate. If Clearwire obtains a claims-made policy, Clearwire
shall maintain continuous coverage in effect at least three (3) years
beyond the expiration or termination of this Agreement through
continuous renewal of the same policy or purchase of extended
discovery period or retroactive insurance dated back to at least the
date of the beginning of this Agreement. This coverage should include
infringement of copyright, trademark, title or slogan, piracy,
plagiarism or unauthorized use of
34
materials. Clearwire may self-insure this provision as long as
Clearwire maintains a minimum net worth of at least $100 million.
D. All risk property insurance policy coverage in amounts
adequate to cover Licensee's property in Clearwire's care, custody and
control.
(iii) Clearwire shall furnish Licensee with certificates of
insurance evidencing all of the insurance referred to herein (including
renewals of insurance). Clearwire's obligations under this Section shall in
no way affect or limit the indemnification, remedy, or warranty provisions
set forth in this Agreement.
(P) PUBLICITY. No public release, announcement or other form of
publicity concerning this Agreement or the transactions described in this
Agreement, shall be issued by either Party without the prior consent of the
other Party, except as such release or announcement may be required by law,
regulation or the rules or regulations of any securities exchange, in which case
the Party required to make the release or announcement shall, to the extent
possible, allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance. The Parties shall use reasonable
efforts to consult in good faith with each other with a view to agreeing upon
any press release or public announcement relating to the transactions
contemplated hereby prior to the consummation thereof.
[remainder of page intentionally left blank]
35
AGREED TO:
CLEARWIRE SPECTRUM HOLDINGS II LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ATTACHMENTS:
Licensee Schedule
36
LICENSE SCHEDULE
37
SCHEDULE A
SCHEDULE B
EXHIBIT III
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made as of the 4th day of
October, 2006, between Hispanic Information and Telecommunications Network, Inc.
(the "Pledgor"), and Clearwire Corporation, a Delaware corporation (the
"Pledgee").
RECITALS
A. The Pledgee is paying the Pledgor [***] pursuant to the terms of the
Master Royalty and Use Agreement among the Pledgor and Clearwire Spectrum
Holdings II LLC ("Operator"), a subsidiary of the Pledgee, dated as of the date
of this Agreement (as amended, restated, modified, renewed, supplemented or
extended from time to time, the "MRUA"). This payment will be available for
application against upfront royalties for Initial Spectrum Capacity and Future
Spectrum Capacity offered by the Pledgor to Operator from time to time
B. The parties are entering into this Agreement for the purpose of the
Pledgor granting security interests to the Pledgee to secure the obligation of
the Pledgor to repay the Prepaid Royalties Balance as defined in the MRUA.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Pledgor
hereby agrees as follows:
AGREEMENT
1. DEFINITIONS; INTERPRETATION.
(A) CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:
"Governmental Authority" means the government of the United States or
any state or any foreign country or any political subdivision of any thereof or
any branch, department, agency, instrumentality, court, tribunal or regulatory
authority which constitutes a part or exercises any sovereign power of any of
the foregoing.
"Lien" means, for any person, any security interest, pledge, mortgage,
charge, assignment, hypothecation, encumbrance, attachment, garnishment,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such person or any real or personal property in which such person has or
hereafter acquires any interest.
"Pledged Collateral" has the meaning specified in Section 2.
"Secured Obligations" means:
(i) the obligation of the Pledgor to repay in full the Prepaid
Royalties Balance as provided in the MRUA and all fees, costs, and expenses
incurred by the Pledgee in connection therewith if not repaid in accordance
with the terms of the MRUA;
[*** Confidential Treatment Requested]
PAGE 1 - PLEDGE AGREEMENT
(ii) all obligations of the Pledgor to pay or reimburse the Pledgee or
any affiliate of the Pledgee for all expenses including, without
limitation, attorneys' fees incurred by the Pledgee or any affiliate of the
Pledgee in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement, including,
without limitation, all such costs and expenses incurred during any
"workout" or restructuring in respect of the MRUA and during any legal
proceeding, including, without limitation, any proceeding under any
applicable bankruptcy, insolvency or other similar debtor relief laws; and
(iii) all interest and fees on any of the foregoing, whether accruing
prior to or after the commencement by or against the Pledgor of any
proceeding under any applicable bankruptcy, insolvency or other similar
debtor relief laws naming the Pledgor as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Washington; provided, however, in the event
that any Pledged Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of Washington, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof as they relate to such Pledged Collateral.
(B) TERMS DEFINED IN UCC. Terms used in this Agreement that are
defined in the UCC have the meanings given to them in the UCC.
(C) TERMS DEFINED IN THE MRUA. Terms used in this Agreement that are
defined in the MRUA have the meanings given to them in the MRUA.
2. PLEDGE AND GRANT OF SECURITY INTEREST. As security for the payment or
performance, as the case may be, in full of the Secured Obligations, the Pledgor
hereby pledges, assigns, transfers, hypothecates and sets over to the Pledgee,
its successors and assigns, and grants to the Pledgee, its successors and
assigns, a security interest in all of the Pledgor's right, title and interest
in, to and under the following, whether now existing or owned or hereafter
acquired or arising (collectively, the "Pledged Collateral"):
(A) PLEDGED SHARES. Not less than 2,833,334 shares of Class A Common
Stock of Clearwire Corporation, as the number of such Shares may be reduced from
time to time as provided in this Agreement (the "Shares"). The number of Shares
pledged at any time shall have a value equal to, or greater than, the amount of
the Prepaid Royalties Balance. As the Prepaid Royalties Balance decreases,
Shares shall be released from the pledge established by this Agreement,
provided, however, that Clearwire shall not be required to release Shares more
than once per month. Shares shall be valued for all purposes under this
Agreement at $6.00 per share; and
(B) ADDITIONAL INTERESTS, ETC. All certificates, instruments or other
writings representing or evidencing the Pledged Collateral.
(C) CASH PROCEEDS. All cash and non-cash proceeds of the Pledged
Collateral, however and whenever acquired and in whatever form (except for
proceeds of a sale of Pledged
PAGE 2 - PLEDGE AGREEMENT
Collateral that has been released by the Pledgee pursuant to Section 2(a)).
Nothing in this Section 2(c) shall be deemed to imply that the Pledgor is
permitted to sell, transfer or otherwise dispose of the Pledged Collateral,
except for Pledged Collateral that has been released by the Pledgee pursuant to
Section 2(a).
3. DELIVERY OF THE PLEDGED SHARES; CONTINUING SECURITY INTEREST. The
Pledgor hereby agrees that:
(A) DELIVERY OF CERTIFICATES. The Pledgor shall deliver to the Pledgee
all certificates, instruments or other writings representing or evidencing
Pledged Shares. All such certificates shall be delivered (i) simultaneously with
or prior to the execution and delivery of this Agreement, and (ii) in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment satisfactory to the Pledgee.
(B) ADDITIONAL PLEDGED COLLATERAL. If the Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral, any (i)
certificate, including any certificate representing a non-cash dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of
membership or equity interests, spin-off or split-off, promissory notes or other
instrument; (ii) warrant, option or other right, whether as an addition to,
substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii)
distributions of securities or other equity interests, then the Pledgor shall
forthwith deliver all of the foregoing to the Pledgee to hold as Pledged
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Pledgee, be segregated from the other property or funds of the
Pledgor, and be forthwith delivered to the Pledgee as Pledged Collateral in the
same form as so received, together with duly executed instruments of transfer or
assignment satisfactory to the Pledgee, as further collateral security for the
Secured Obligations ("Additional Pledged Collateral").
(C) CONTINUING SECURITY INTEREST. The Pledgor acknowledges and agrees
that the security interest of the Pledgee in the Pledged Collateral constitutes
continuing collateral security for all of the Secured Obligations.
4. FINANCING STATEMENTS. The Pledgor hereby irrevocably authorizes the
Pledgee at any time and from time to time to file in any relevant jurisdiction
any initial financing statements and amendments thereto that contain the
information required by Article 9 of the UCC or other applicable law of each
applicable jurisdiction for the filing of any financing statement or amendment
in order to perfect and protect the security interest of the Pledgee in the
Pledged Collateral.
5. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR. The Pledgor represents
and warrants to the Pledgee that:
(A) OWNERSHIP AND AUTHORITY. The Pledgor is the sole legal and
beneficial owner of the Pledged Collateral and has the right, power and
authority to pledge, assign, transfer, hypothecate and set over to the Pledgee
and grant to the Pledgee a security interest in such Pledged Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement.
PAGE 3 - PLEDGE AGREEMENT
(B) AUTHORIZATION OF PLEDGED SHARES. All of the Pledged Shares are
duly authorized and validly issued, are fully paid and nonassessable and are not
subject to the preemptive first-refusal or other similar rights of any person.
All interests hereafter constituting Pledged Collateral will be duly authorized
and validly issued, fully paid and nonassessable and not subject to any
preemptive, first-refusal or other similar rights of any person, except as may
be provided under applicable law.
(C) VALIDITY OF SECURITY INTEREST. This Agreement creates a valid
security interest in favor of the Pledgee, its successors and assigns, in all of
the Pledged Collateral. Upon the taking possession by the Pledgee of the
certificates representing the Pledged Shares and all other certificates and
instruments constituting Pledged Collateral, the Pledgee will have a first
priority perfected security interest in all certificated Pledged Shares and such
certificates and instruments. Except as set forth in this subsection (c), no
action is necessary to perfect or otherwise protect any security interest
granted herein.
(D) ABSENCE OF LIENS AND CLAIMS. Except for the security interest of
the Pledgee created hereby, the Pledged Collateral is free and clear of any
Liens. There exists no "adverse claim" within the meaning of Section 8-102 of
the UCC with respect to any of the Pledged Shares.
(E) NO TRANSFER RESTRICTIONS. Except for restrictions imposed by this
Agreement, and other agreements to which the Pledgee is a party, the Pledged
Collateral is free of contractual restrictions that might prohibit, impair,
delay or otherwise affect the pledge of any Pledged Collateral hereunder or the
sale or disposition thereof pursuant hereto.
(F) NO OTHER PLEDGED COLLATERAL. As of the date of this Agreement, no
other party has possession of any certificates, instruments or other writings
representing or evidencing the Pledged Shares or has any warrants, options or
other rights entitling such party to acquire any interest in the Pledged Shares.
(G) DELIVERY OF CERTIFICATES. The Pledgor has delivered or otherwise
caused the transfer to the Pledgee of all certificates, instruments or other
writings representing, evidencing or constituting Pledged Collateral. The
Pledged Shares are not and shall not be represented or evidenced by any
certificates, instruments or other writings other than those delivered
hereunder.
(H) MARGIN REGULATIONS. The pledge of the Pledged Shares pursuant to
this Agreement does not violate the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. None of the Pledged Shares constitutes "margin stock"
within the meaning of such term under Regulation U.
(I) CONSENTS. No consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority and no consent
of any other person is required (i) for the pledge made by the Pledgor or for
the granting of the security interest by the Pledgor pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the Pledgor
or (ii) for the exercise by the Pledgee of the rights and remedies provided for
in this Agreement.
PAGE 4 - PLEDGE AGREEMENT
(J) POWER. The Pledgor has full power, authority and legal right to
execute, deliver and perform this Agreement.
(K) AUTHORIZATION. The execution, delivery and performance by the
Pledgor of this Agreement have been duly authorized, do not require any approval
or the consent of any third party, do not contravene any law, regulation, rule
or order binding on it and do not contravene the provisions of or constitute a
default under any material indenture, mortgage, contract or other agreement or
instrument to which the Pledgor is a party or by which the Pledgor or any of its
properties may be bound or affected.
(L) GOVERNMENT APPROVALS, ETC. No approval, authorization or consent
of, or filing or registration with the United States or any state thereof or any
other Governmental Authority or any agency, court or regulatory authority which
constitutes a part of any of the foregoing, is required for the making and
performance by the Pledgor of this Agreement or in connection with any of the
transactions contemplated hereby.
(M) BINDING OBLIGATIONS, ETC. This Agreement has been duly executed
and delivered by the Pledgor and constitutes the legal, valid and binding
obligations of the Pledgor enforceable against the Pledgor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, similar laws affecting creditors' rights generally or general
principles of equity.
The foregoing representations and warranties shall survive the execution and
delivery of this Agreement.
6. COVENANTS. So long as any of the Secured Obligations shall remain unpaid
or unsatisfied, the Pledgor shall:
(A) DEFENSE OF PLEDGED COLLATERAL. At the Pledgor's own cost and
expense, take any and all actions necessary to defend title to the Pledged
Collateral against all persons and to defend the Pledgee's security interest in
the Pledged Collateral and the priority thereof against any Lien.
(B) DISPOSITION OF PLEDGED COLLATERAL. Not make or permit to be made
any sale, transfer or other disposition of any of the Pledged Collateral or
grant any option, warrant or other right or interest with respect to, any of the
Pledged Collateral, except with the prior written consent of the Pledgee.
(C) NO LIENS. Not make or permit to be made an assignment, pledge or
hypothecation of any of the Pledged Collateral or create or permit to exist any
Lien upon or with respect to any of the Pledged Collateral other than the
security interest of the Pledgee created hereby.
(D) COMPLIANCE WITH SECURITIES LAWS. File all reports and other
information now or hereafter required to be filed by the Pledgor with the
Securities and Exchange Commission (including any Governmental Authority
succeeding to any of its principal functions, the "SEC") and any other state,
federal or foreign agency in connection with the Pledgor's ownership of the
Pledged Shares.
PAGE 5 - PLEDGE AGREEMENT
7. FURTHER ASSURANCES. The Pledgor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Pledgee may from time to time request
to better assure, preserve, protect and perfect the security interest of the
Pledgee in the Pledged Collateral and the rights and remedies of the Pledgee
hereunder, including, without limitation, the payment of any fees and taxes
required in connection with the execution and delivery of this Agreement, the
granting of such security interest and the filing of any financing statements or
other documents in connection herewith or therewith. Without limiting the
generality of the foregoing, the Pledgor further agrees that it shall,
concurrently with the execution of this Agreement and at any time and from time
to time thereafter (a) procure, execute and deliver to the Pledgee all
endorsements, financing statements, assignments and other instruments of
transfer requested by the Pledgee, (b) deliver to the Pledgee immediately upon
receipt the originals of all Pledged Shares and all certificates, instruments or
other writings representing, evidencing or constituting Pledged Collateral, and
(c) take all steps reasonably required to maintain the Pledgor's continued
performance under the MRUA. The Pledgor agrees that it will use its best efforts
to take such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Pledged
Shares within thirty (30) days after the date it has been notified by the
Pledgee of the specific inaccuracy of a representation or warranty.
8. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The Pledgee shall have the
right (in its sole and absolute discretion) to hold the Pledged Shares in its
own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the
name of the Pledgor, endorsed or assigned in blank or in favor of the Pledgee.
The Pledgor will promptly give to the Pledgee copies of any material notices or
other communications received by it with respect to Pledged Shares registered in
the name of the Pledgor. The Pledgee shall at all times have the right to
exchange the certificates representing Pledged Shares for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
9. VOTING RIGHTS; DIVIDENDS.
(A) PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT. So long as no Event of
Default shall exist or result therefrom (and, in the case of subparagraph (i)
below, so long as written notice has not been given by the Pledgee to the
Pledgor):
(I) VOTING RIGHTS. The Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged Shares or
any part thereof for any purpose not inconsistent with the terms of this
Agreement; provided, however, that the Pledgor shall not exercise or shall
refrain from exercising any such right if, in the judgment of the Pledgee,
such action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof or the interest of the Pledgee
therein; and, provided, further, that the Pledgor shall give the Pledgee at
least five business days' prior written notice of the manner in which it
intends to exercise, or the reasons for refraining from exercising, any
such right.
(II) DISTRIBUTIONS. The Pledgor shall be entitled to receive and
retain any and all dividends or distributions paid in respect of the
Pledged Shares, except the following: (A) distributions paid or payable
other than in cash in respect of, and instruments and
PAGE 6 - PLEDGE AGREEMENT
other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Shares; (B) distributions paid or payable
in cash in respect of any Pledged Shares in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus; and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any Pledged
Shares; all of which shall be forthwith delivered to the Pledgee to hold
as, Pledged Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of the Pledgee, be segregated from the other
property or funds of the Pledgor, and be forthwith paid over or otherwise
delivered to the Pledgee as Pledged Collateral in the same form as so
received, together with duly executed instruments of transfer or assignment
satisfactory to the Pledgee, as further collateral security for the Secured
Obligations.
(III) PROXIES, ETC. The Pledgee shall execute and deliver (or cause to
be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may request for the purpose of enabling the
Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to subparagraph (i) above and to receive the dividends or
distributions which it is authorized to receive and retain pursuant to
subparagraph (ii) above.
(B) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. Upon the occurrence and
during the continuance of an Event of Default:
(I) VOTING RIGHTS. All rights of the Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 9(a)(i) above shall cease upon written notice
thereof from the Pledgee, and all such rights shall thereupon become vested
in the Pledgee, who shall thereupon have the sole right to exercise such
voting and other consensual rights.
(II) DISTRIBUTIONS. All rights of the Pledgor to receive the
distributions which it would otherwise be authorized to receive and retain
pursuant to Section 9(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Pledgee, who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends. All
dividends or distributions which are received by the Pledgor contrary to
the provisions of this subparagraph (ii) shall be received in trust for the
benefit of the Pledgee, shall be segregated from other funds of the Pledgor
and shall be forthwith paid over or otherwise delivered to the Pledgee as
Pledged Collateral in the same form as so received, together with duly
executed instruments of transfer or assignment satisfactory to the Pledgee,
as further collateral security for the Secured Obligations.
(III) PROXIES, ETC. In order to permit the Pledgee to exercise the
voting and other rights which it may be entitled to exercise pursuant to
subparagraph (i) above, and to receive all dividends and distributions
which it may be entitled to receive under subparagraph (ii) above, the
Pledgor shall, if necessary, upon written notice of the Pledgee, from time
to time execute and deliver to the Pledgee appropriate proxies, dividend
payment orders and other instruments as the Pledgee may request.
PAGE 7 - PLEDGE AGREEMENT
10. APPOINTMENT OF PLEDGEE. So long as any Secured Obligation remains
unpaid, the Pledgor does hereby designate and appoint the Pledgee its true and
lawful attorney coupled with an interest and with power irrevocable, after an
Event of Default has occurred and is continuing, for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any
instrument that the Pledgee may deem necessary or advisable to accomplish the
purposes hereof, including, without limitation, all of the following: (i)
receive, endorse and collect all instruments made payable to the Pledgor
representing any principal or interest payment or other distribution in respect
of the Pledged Collateral or any part thereof and to give full discharge for the
same; (ii) perfect or continue perfected, maintain the priority of or provide
notice of the Pledgee's security interest in the Pledged Collateral; (iii)
execute any and all endorsements, assignments or other documents and instruments
necessary to sell, lease, assign, convey or otherwise transfer title in or
dispose of the Pledged Collateral; and (iv) execute any and all such other
documents and instruments, and do any and all acts and things for and on behalf
of the Pledgor, which the Pledgee may deem necessary or advisable to maintain,
protect, realize upon and preserve the Pledged Collateral and the Pledgee's
security interest therein and to accomplish the purposes of this Agreement. The
acceptance of this appointment by the Pledgee shall not obligate it to perform
any duty, covenant or obligation required to be performed by the Pledgor under
or by virtue of the Pledged Collateral or to take any action in connection
therewith. All expenses incurred by the Pledgee in connection with exercising
any of its rights under this Section shall bear interest at a per annum rate
equal to eighteen percent (18%) (the "Default Rate") from the date incurred
until repaid by the Pledgor. All amounts described in this Section shall be
repayable by the Pledgor on demand and the Pledgor's obligation to make such
repayment shall constitute an additional Secured Obligation.
11. NO RESPONSIBILITY FOR CERTAIN ACTIONS. Notwithstanding any provision
contained in this Agreement, the Pledgee shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Pledgee has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve any rights against any third parties with
respect to any Pledged Collateral.
12. EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default":
(a) The Pledgor's failure to repay the Prepaid Royalties Balance as
required under the terms of the MRUA;
(b) any representation or warranty made or deemed made by the Pledgor
under or in connection with this Agreement shall prove to have been incorrect in
any material respect when made or deemed made; or
(c) the Pledgor shall fail to perform or observe any other material
covenant, obligation or term of this Agreement.
13. REMEDIES.
PAGE 8 - PLEDGE AGREEMENT
(A) GENERAL REMEDIES. If an Event of Default shall occur, and upon the
expiration of any applicable notice and cure period under the MRUA, the Pledgee
shall have, in addition to all other rights and remedies granted to it in this
Agreement, or the MRUA, all rights and remedies of a secured party under the UCC
(whether or not the UCC is in effect in the jurisdiction where such rights and
remedies are asserted) or other laws to the extent applicable, provided,
however, that except for specific performance of its rights hereunder, and
except for the Pledged Collateral, Clearwire shall not have recourse against the
Pledgor or its assets in respect of the Prepaid Royalties Balance. Without
limiting the generality of the foregoing, the Pledgor agrees that the Pledgee
may:
(i) require the Pledgor to assemble all or any part of the Pledged
Collateral and make it available to the Pledgee at any place and time
designated by the Pledgee; and
(ii) subject to the requirements of laws affecting the offering and
sale of securities, sell, resell, assign, transfer or otherwise dispose of
any or all of the Pledged Collateral at public or private sale or at any
broker's board or on any securities exchange, by one or more contracts, in
one or more lots or parcels, at the same or different times, for cash or
credit, or for future delivery without assumption of any credit risk, all
as the Pledgee deems advisable; provided, however, that, except as
otherwise required under Section 9A-608 and/or Section 9A-615 of the UCC,
the Pledgor shall be credited with the net proceeds of sale only when such
proceeds are finally collected by the Pledgee.
(B) SALE OF PLEDGED COLLATERAL. Each purchaser at any sale pursuant to
this Agreement shall hold the property sold absolutely, free from any claim or
right on the part of the Pledgor, and the Pledgor hereby waives, to the fullest
extent permitted by applicable laws, all rights of redemption, stay and
appraisal which the Pledgor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Pledgee shall
be authorized at any such sale to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Pledged
Collateral for their own account for investment and not with a view to the
distribution or sale thereof. Neither the Pledgee's compliance with the UCC or
any other applicable law, in the conduct of any sale made pursuant to this
Agreement, nor its disclaimer of any warranties relating to the Pledged
Collateral, shall be considered to adversely affect the commercial
reasonableness of such sale. The Pledgee shall give the Pledgor ten (10) days'
written notice (which the Pledgor agrees is reasonable notice within the meaning
of Section 9A-612 of the UCC) of the Pledgee's intention to make any sale of
Pledged Collateral. The Pledgee shall not be obligated to make any sale of any
Pledged Collateral if it shall determine not to do so, regardless of the fact
that notice of sale of such Pledged Collateral shall have been given. The
Pledgee may, without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. To the fullest extent
permitted by applicable laws, the Pledgee may bid for or purchase the Pledged
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to the Pledgee from the Pledgor
as a credit against the purchase price and the Pledgee, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to the Pledgor therefor. For purposes hereof, a written agreement
to purchase the Pledged Collateral or any portion thereof shall be treated as a
sale thereof; the Pledgee shall be free to carry out such sale pursuant to such
PAGE 9 - PLEDGE AGREEMENT
agreement and the Pledgor shall not be entitled to the return of the Pledged
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Pledgee shall have entered into such an agreement all Events of
Default shall have been remedied and the Secured Obligations paid in full. To
the fullest extent permitted by applicable laws, any sale pursuant to the
provisions of this subsection (b) shall be deemed to conform to the commercially
reasonable standards as provided in Section 9A-610(b) of the UCC.
(C) WAIVER OF RIGHTS TO PURCHASE. The Pledgor, for itself and its
successors and assigns, does hereby irrevocably waive and release all
preemptive, first-refusal and other similar rights of the Pledgor to purchase
any or all of the Pledged Shares upon any sale thereof by the Pledgee under this
Agreement, whether such right to purchase arises under any agreement, by
operation of law or otherwise.
(D) EXEMPT SALES TRANSACTIONS. The Pledgor recognizes that, by reason
of certain provisions contained in the Securities Act of 1933, as from time to
time amended (the "Securities Act") and applicable state securities laws, the
Pledgee may be compelled, with respect to any sale of all or any part of the
Pledged Shares, to limit purchasers to those who will agree, among other things,
to acquire such securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Pledgor acknowledges and agrees
that any such sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions and
notwithstanding such circumstances, agrees that any such sale shall be deemed to
have been made in a commercially reasonable manner. The Pledgee shall be under
no obligation to delay the sale of any of the Pledged Shares for the period of
time necessary to permit the Pledgor to register such securities for public sale
under the Securities Act, or under applicable state or foreign government
securities laws, even if the Pledgor would agree to do so. If the Pledgee
determines to exercise its right to sell any or all of the Pledged Shares, upon
written request, the Pledgor shall and shall cause the Companies to, from time
to time, furnish to the Pledgee all such information as the Pledgee may request
in order to determine the number of shares and other instruments included in the
Pledged Shares which may be sold by the Pledgee as exempt transactions under the
Securities Act and rules of the SEC thereunder, as the same are from time to
time in effect.
(E) RETENTION OF PLEDGED COLLATERAL. The Pledgee may, after providing
the notices required by Section 9A-505(2) of the UCC or otherwise complying with
any requirement of applicable law, accept or retain the Pledged Collateral or
any part thereof in satisfaction of the Secured Obligations. Unless and until
the Pledgee shall have provided such notices, however, the Pledgee shall not be
deemed to have retained any Pledged Collateral in satisfaction of any Secured
Obligations for any reason.
(F) DUTY OF CARE. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Pledgee shall have no duty as to
any Pledged Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Pledged
Collateral. The Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which the Pledgee
accords its own similar property. Neither the Pledgee nor any of its affiliates,
directors, officers, employees, counsel, agents and
PAGE 10 - PLEDGE AGREEMENT
attorneys-in-fact shall be liable for failure to demand, collect or realize upon
all or any part of the Pledged Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Pledged Collateral
upon the request of the Pledgor or otherwise.
(G) APPLICATION OF PROCEEDS. The cash proceeds actually received from
the sale or other disposition or collection of the Pledged Collateral, and any
other amounts received in respect of the Pledged Collateral the application of
which is not otherwise provided for herein, shall be applied: first to payment
of any costs, expenses and fees, including, without limitation, attorneys' fees
(including allocated costs of in-house counsel), incurred by the Pledgee in
connection with sale or other disposition or collection of Pledged Collateral;
second, to payment of any all costs, expenses and fees, including, without
limitation, attorneys' fees (including allocated costs of in-house counsel),
payable to the Pledgee under this Agreement; third, to payment in full of the
Secured Obligations (to the extent not included in clause first or second
above); and fourth, the balance, if any, after all of the Secured Obligations
have been indefeasibly paid in full, to the Pledgor or as otherwise required by
law. The Pledgee shall have absolute discretion as to the time of application of
any such proceeds, moneys or balances in accordance with this Agreement. The
Pledgor shall remain liable to the Pledgee for any deficiency which exists after
any sale or other disposition or collection of the Pledged Collateral.
14. CERTAIN WAIVERS. The Pledgor waives, to the fullest extent permitted by
applicable laws, (a) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (b) any right to require the Pledgee (i) to proceed against
any person, (ii) to exhaust any other collateral or security for any of the
Secured Obligations, (iii) to pursue any remedy in the Pledgee's power, or (iv)
to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Pledged Collateral; and (c) all claims, damages, and
demands against the Pledgee arising out of the repossession, retention, sale or
application of the proceeds of any sale of the Pledged Collateral.
15. AMENDMENTS AND WAIVERS. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed (in
the case of an amendment) by Pledgor and Pledgee or (in the case of a waiver) by
the party against whom the waiver is to be effective. No failure or delay by
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies provided herein are cumulative and not
exclusive of any right or remedy provided by law.
16. NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given or made upon delivery if
delivered personally (by courier service or otherwise), as evidenced by written
receipt or other written proof of delivery (which may be a printout of the
tracking information of a courier service that made such delivery), in each case
to the applicable addresses set forth below (or such other address which either
party may from time to time specify):
PAGE 11 - PLEDGE AGREEMENT
If to Pledgor: Hispanic Information and
Telecommunications Network, Inc.
63 Flushing Avenue, Unit 281
Brooklyn, NY 11205
Attention: [***]
Fax: [***]
With a copy to: Day, Berry & Howard LLP
875 Third Avenue
New York, NY 10022
Attention: [***]
Fax: [***]
RJGLaw LLC
1010 Wayne Avenue, Suite 950
Silver Spring, MD 20910
Attention: [***]
Fax: [***]
If to Pledgee: Clearwire Corporation
5808 Lake Washington Blvd. NE,
Suite 300
Kirkland, WA 98303
Attention: [***]
Facsimile: [***]
With a copy to: Davis Wright Tremaine LLP
1501 Fourth Avenue
2600 Century Square
Seattle, WA 98101
Attention: [***]
Facsimile: [***]
Pledgor hereby agrees that such notice shall be deemed to meet any requirements
of reasonable notice contained in the UCC or other applicable law.
17. COSTS AND EXPENSES. Pledgor and Pledgee shall pay their own costs and
expenses incurred by them, including the fees and out-of-pocket expenses of
their own legal counsel, in connection with the preparation, negotiation and
filing of this Agreement. Pledgor shall pay to Pledgee or its agents on demand
each cost and expense (including, but not limited to, the reasonable fees and
disbursements of counsel to Pledgee or its agents, whether internal or external
and whether retained for advice, for litigation or for any other purpose)
incurred by Pledgee or its agents either directly or indirectly in connection
with endeavoring to (a) collect any amount owing pursuant to this Agreement, or
negotiate or document a workout or restructuring; (b) enforce or realize upon
any guaranty, endorsement or other assurance, any collateral or other security,
or any subordination, directly or indirectly securing or otherwise directly or
indirectly applicable in any such amount; or (c) preserve or exercise any right
or remedy of Pledgee or its agents pursuant to
[*** Confidential Treatment Requested]
PAGE 12 - PLEDGE AGREEMENT
this Agreement. All such amounts shall be repayable by the Pledgor on demand and
shall bear interest at the Default Rate until repaid, and the Pledgor's
obligation to make such repayment shall constitute an additional Secured
Obligation.
18. SURVIVAL OF COVENANTS. All covenants, agreements, representations and
warranties made by Pledgor hereunder shall survive the execution and delivery of
this Agreement and the Pledged Shares hereunder.
19. SEVERABILITY. The unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions
hereof or thereof unenforceable or invalid.
20. ADDITIONAL DOCUMENTS. Pledgor shall at Pledgee's request, from time to
time, at Pledgor's sole cost and expense, execute, re-execute, deliver and
redeliver any and all documents, and do and perform such other and further acts,
as may reasonably be required by Pledgee to enable Pledgee to perfect, preserve,
and protect its security interest in the Pledged Collateral and its rights and
remedies under this Agreement or granted by law and to carry out and effect the
intents and purposes of this Agreement.
21. ASSIGNMENT. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors heirs, executors and
permitted assigns. This Agreement may not be assigned by Pledgor. Pledgee may
transfer or assign the MRUA or this Agreement to any of its affiliates.
22. COUNTERPARTS. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
23. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Washington, without reference
to the choice of law principles thereof. PLEDGOR IRREVOCABLY AGREES THAT,
SUBJECT TO PLEDGEE'S SOLE AND ABSOLUTE DISCRETION, ALL ACTIONS OR PROCEEDINGS IN
ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER DOCUMENTS OR THE
LOAN RELATED HERETO SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE COUNTY
OF KING, STATE OF WASHINGTON. PLEDGOR HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUCH COUNTY AND
STATE. PLEDGOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT AGAINST PLEDGOR BY PLEDGEE IN ACCORDANCE WITH
THIS SECTION.
24. WAIVER OF JURY TRIAL. PLEDGOR AND PLEDGEE HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY PLEDGOR AND
PLEDGEE MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO. PLEDGOR REPRESENTS AND
WARRANTS THAT NO REPRESENTATIVE OR AGENT OF PLEDGEE HAS REPRESENTED, EXPRESSLY
OR
PAGE 13 - PLEDGE AGREEMENT
OTHERWISE, THAT PLEDGEE WELL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THIS JURY TRIAL WAIVER. PLEDGOR ACKNOWLEDGES THAT PLEDGEE HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
SECTION.
25. NO INCONSISTENT REQUIREMENTS. The Pledgor acknowledges that this
Agreement and the other documents may contain covenants and other terms and
provisions variously stated regarding the same or similar matters, and agrees
that all such covenants, terms and provisions are cumulative and all shall be
performed and satisfied in accordance with their respective terms.
26. CONFIDENTIALITY. This Agreement is confidential and is subject to the
terms of the other written agreements between the Pledgor and the Pledgee
relating to confidentiality.
[Remainder of Page Intentionally Left Blank]
PAGE 14 - PLEDGE AGREEMENT
IN WITNESS WHEREOF, the Pledgor and Pledgee have caused this Agreement to
be executed by their respective officers or agents thereunto duly authorized as
of the date first above written.
PLEDGOR: Hispanic Information and
Telecommunications Network, Inc.
By: /s/ Jose Luis Rodriguez
------------------------------------
Name: Jose Luis Rodriguez
Title: President and CEO
PLEDGEE: Clearwire Corporation
By: /s/ R. Gerard Salemme
------------------------------------
Name: R. Gerard Salemme
Title: Executive VP
PAGE 15 - PLEDGE AGREEMENT
EXHIBIT IV
OFFICER'S CERTIFICATE
OF
CLEARWIRE SPECTRUM HOLDINGS II LLC
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to the
Master Royalty and Use Agreement (the "Agreement") dated as of September 20,
2006, by and between Clearwire Spectrum Holdings II LLC, a Nevada limited
liability company ("Clearwire"), and Hispanic Information and Telecommunications
Network, Inc.
The undersigned hereby certifies that he is duly authorized to execute and
deliver this Certificate on behalf of Clearwire, and further certifies as
follows:
Attached as Exhibit A is a true, complete and correct copy of the
Resolutions of the Members of Clearwire authorizing the execution,
delivery, and performance of the Agreement and other agreements referred to
in the Agreement, which Resolutions have not been amended, superseded or
otherwise modified as of the date of this Certificate.
The individual named below (i) is the officer duly authorized to execute
the Agreement on behalf of Clearwire, (ii) has been duly elected to the
office of Clearwire set forth opposite his name, (iii) is duly qualified
and acting as such officer of Clearwire on the date hereof, and (iv) the
signature appearing opposite his name is his genuine signature.
[Download Table]
Name Office Signature
---- ------ ---------
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
CLEARWIRE SPECTRUM HOLDINGS II LLC
Date: By:
------------------------ ------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
EXHIBIT V
OFFICER'S CERTIFICATE
OF
HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to the
Master Royalty and Use Agreement (the "Agreement") dated as of September 20,
2006, by and between Clearwire Spectrum Holdings II LLC, a Nevada limited
liability company and Hispanic Information and Telecommunications Network, Inc.
("HITN").
The undersigned hereby certifies that he is duly authorized to execute and
deliver this Certificate on behalf of HITN, and further certifies as follows:
Attached as Exhibit A is a true, complete and correct copy of the
Resolutions of the Board of Directors of HITN authorizing the execution,
delivery, and performance of the Agreement and other agreements referred to
in the Agreement, which Resolutions have not been amended, superseded or
otherwise modified as of the date of this Certificate.
The individual named below (i) is the officer duly authorized to execute
the Agreement on behalf of HITN, (ii) has been duty elected to me office of
HITN set forth opposite his name, (iii) is duly qualified and acting as
such officer of HITN on the date hereof, and (iv) the signature appearing
opposite his name is his genuine signature.
[Download Table]
Name Office Signature
---- ------ ---------
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
Date: By:
------------------------ ------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 1/8/07 | | | | | | | None on these Dates |
| | 10/4/06 | | 1 | | 5 |
| | 9/20/06 | | 44 | | 102 |
| List all Filings |
↑Top
Filing Submission 0000891020-07-000003 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Sat., Apr. 20, 6:27:48.2am ET 