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 10.59
MASTER ROYALTY AND USE AGREEMENT
by and among
CLEARWIRE SPECTRUM HOLDINGS II LLC
and
CHICAGO INSTRUCTIONAL TECHNOLOGY FOUNDATION, INC.
DENVER AREA EDUCATIONAL TELECOMMUNICATIONS CONSORTIUM, INC.
INSTRUCTIONAL TELECOMMUNICATIONS FOUNDATION, INC.
PORTLAND REGIONAL EDUCATIONAL TELECOMMUNICATIONS CORPORATION
TWIN CITIES SCHOOLS' TELECOMMUNICATIONS GROUP, INC.
NORTH AMERICAN CATHOLIC EDUCATIONAL PROGRAMMING FOUNDATION, INC.
and the
OTHER LICENSEES EXECUTING THIS AGREEMENT
and
CLEARWIRE CORPORATION
Dated as of July 31, 2006
TABLE OF CONTENTS
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Page
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ARTICLE I. RELATIONSHIP SUMMARY ......................................... 2
Section 1.01. Overview .............................................. 2
Section 1.02. Overview of Mechanics and Structure of Agreements ..... 3
Section 1.03. Scope and Nature of Clearwire Group ................... 5
Section 1.04. Scope and Nature of Licenses .......................... 6
Section 1.05. Cross Defaults ........................................ 7
ARTICLE II. ECONOMIC ROYALTIES .......................................... 8
Section 2.01. Aggregate EBS Spectrum Capacity Economic Royalties .... 8
Section 2.02. Strategic Opportunity Spectrum Capacity (SOSC) ........ 9
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
Section 3.10. Strategic Opportunity Spectrum Capacity Right ......... 14
ARTICLE IV. CLOSING MECHANICS; ESCROW ................................... 17
Section 4.01. Deliveries at Execution of this Agreement ............. 17
Section 4.02. Escrow Deposit and Ministerial Condition Failure ...... 17
Section 4.03. EBS Spectrum Capacity IUA Closing(s) .................. 18
Section 4.04. Closing Site/Mechanics ................................ 20
Section 4.05. Subsequent Closings for Strategic Opportunity Spectrum
Capacity .............................................. 20
Section 4.06. Further Assurances .................................... 20
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF LICENSEES .................. 20
Section 5.01. Organization and Good Standing ........................ 21
Section 5.02. Authorization of Agreement ............................ 21
Section 5.03. No Conflict ........................................... 21
Section 5.04. Litigation ............................................ 22
Section 5.05. Compliance with Laws; Permits ......................... 22
Section 5.06. Offering Exemption; Securities Representations ........ 22
Section 5.07. Brokers ............................................... 23
Section 5.08. Knowledge ............................................. 23
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF CLEARWIRE ................. 23
[*** Confidential Treatment Requested]
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Section 6.01. Organization and Good Standing ........................ 24
Section 6.02. Authorization of Agreement ............................ 24
Section 6.03. Capitalization ........................................ 24
Section 6.04. Subsidiaries .......................................... 25
Section 6.05. No Conflict ........................................... 26
Section 6.06. Litigation ............................................ 26
Section 6.07. Compliance with Laws; Permits ......................... 26
Section 6.08. Brokers ............................................... 27
ARTICLE VII. COVENANTS .................................................. 27
Section 7.01. Consents and Approvals ................................ 27
Section 7.02. Notice of Breach ...................................... 27
Section 7.03. Escrow and Parent Shares .............................. 27
Section 7.04. Maintenance of FCC Qualifications ..................... 27
Section 7.05. Assignment of FCC Licenses ............................ 28
Section 7.06. Other FCC Requirements ................................ 28
Section 7.07. Legends ............................................... 28
Section 7.08. Fees and Taxes ........................................ 29
Section 7.09. Best Efforts for Duration of Relationship ............. 29
Section 7.10. Information Covenants and Maintenance of Guarantee .... 29
Section 7.11. Build-Out ............................................. 29
ARTICLE VIII. INFORMATION SHARING OBLIGATIONS AND CONSULTATION
REGARDING ACCESS RIGHT ROYALTIES AND CERTAIN
OTHER COVENANTS ........................................... 30
Section 8.01. Overview of Consultation/Information Exchange
Requirements .......................................... 30
Section 8.02. Capacity Disclosure ................................... 31
Section 8.03. System Information .................................... 32
Section 8.04. Preferred Content Provider Information ................ 32
Section 8.05. Limited Reciprocity Information ....................... 32
Section 8.06 Consultation Processes ................................ 33
Section 8.07. Information Access Rights Related to Clearwire
Parent ................................................ 34
Section 8.08. Information Audit Rights .............................. 35
ARTICLE IX. INDEMNIFICATION ............................................. 35
Section 9.01. Indemnification ....................................... 35
Section 9.02. Determination of Damages .............................. 36
Section 9.03. Limitations on Indemnification for Breaches of
Representations and Warranties ........................ 36
Section 9.04. Indemnification Procedures ............................ 37
ARTICLE X. TERMINATION .................................................. 38
Section 10.01. Expiration; Termination ............................... 38
Section 10.02. Defaults .............................................. 38
ARTICLE XI. GENERAL PROVISIONS .......................................... 38
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Section 11.01. Payment of Sales, Use or Similar Taxes ................ 38
Section 11.02. Survival of Representations and Warranties ............ 39
Section 11.03. Expenses .............................................. 39
Section 11.04. Entire Agreement; Amendments and Waivers .............. 39
Section 11.05. Governing Law ......................................... 39
Section 11.06. Table of Contents and Headings ........................ 40
Section 11.07. Notices ............................................... 40
Section 11.08. Publicity ............................................. 40
Section 11.09. Severability .......................................... 41
Section 11.10. Binding Effect; Assignment ............................ 41
Section ll.1l. Remedies .............................................. 41
Section 11.12. Dispute Resolution Procedure .......................... 41
Section 11.13. Counterparts .......................................... 44
Section 11.14. Confidentiality ....................................... 44
Section 11.15. Non-Disclosure of Shared Information .................. 45
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LIST OF EXHIBITS
I. Definitions and Interpretation
II.-A Form of IUA
II.-B Form of MRUA-2 IUA
II.-C Form of SOSC IUA
III. Form of Escrow Agreement
IV. Joinder to the Amended and Restated Stockholders Agreement dated
March 16, 2004
V. Joinder to the Registration Rights Agreement dated March 16, 2004
VI. Form of Clearwire Certificate
VII. Form of Licensee Certificate
LIST OF SCHEDULES
A. Schedule of all Licenses, Licensees' data, applicable Geographic Markets
and GSAs, existing use agreements and Unencumbered Spectrum Capacity and
Encumbered Spectrum Rights
B. Licensee(s) Schedule
C. Clearwire Schedule
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MASTER ROYALTY AND USE AGREEMENT
MASTER ROYALTY AND USE AGREEMENT ("Agreement"), dated as of July 31, 2006
(the "Effective Date") by and among Chicago Instructional Technology Foundation,
Inc. ("CITF"); Denver Area Educational Telecommunications Consortium, Inc.
("DAETC"); Instructional Telecommunications Foundation, Inc. ("ITF"); Portland
Regional Educational Telecommunications Corporation ("PRETC"); Twin Cities
Schools' Telecommunications Group, Inc. ("TCSTG") (collectively sometimes
referred to as the "ITF Cluster"): North American Catholic Educational
Programming Foundation, Inc. ("NACEPF"), and such additional Licensees as are
identified on Schedule A that execute this Agreement by joinder within 120 days
of the Effective Date (collectively with the ITF Cluster, the "Licensees" and
individually, with each member of the ITF Cluster, a "Licensee"). Clearwire
Spectrum Holdings II LLC, a Nevada limited liability company ("Clearwire"), and
Clearwire Corporation, a Delaware corporation ("Clearwire Parent"). (Each of the
foregoing referred to as a "Party" and all of the foregoing referred to
collectively as the "Parties" and all Licensees with EBS Spectrum on Schedule A
once under an IUA are referred to collectively as the "EBS Spectrum Group.")
Certain defined terms used in this Agreement, and rules of interpretation
applicable to this Agreement, are contained in Exhibit I hereto.
RECITALS:
WHEREAS, the Licensees have been granted certain licenses (as they may be
modified and renewed, the "FCC Licenses") by the Federal Communications
Commission (the "FCC") authorizing them 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) times this population ("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, Licensees desire to make available to Clearwire, and Clearwire
desires to have access to, the Commercial Spectrum Capacity for the Available
Channels identified on Schedule A (the "Unencumbered Spectrum Capacity") and, as
the circumstances permit, when and if the Channels identified on Schedule A that
are not presently Available (the [***]) become Available, all in accordance with
the terms of this Agreement; WHEREAS, NACEPF is also a party to that certain
Master Royalty and Use Agreement of even date herewith (the "MRUA-2 Agreement")
with respect to certain NACEPF Encumbered
[* * * Confidential Treatment Requested]
Spectrum Capacity as identified on Schedule A thereto (the "MRUA-2 Sch A") and
under both agreements NACEPF receives consideration under this Agreement to
facilitate the transmission of instructional, educational and religious
programming to schools, hospitals, public organizations and to facilitate
instructional broadband spectrum development for its educational instruction and
religious network;
WHEREAS, the bundle of value comprised of the EBS Economic Royalties and
the Access Right Royalties (collectively referred to as the "Total
Consideration"), for which the ITF Cluster is not required to perform any
services to Clearwire (other than the grants of rights and support of regulatory
compliance as provided in this Agreement), is central to the ITF Cluster's
efforts to advance the objectives and goals of their individual non-profit
missions to serve educational and non-profit communities and is central for
NACEPF's efforts to advance the transmission of its educational and religious
programming and to develop an instructional and religious 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 Licensees desire 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
those Licensees that are shareholders of Clearwire Parent; and
WHEREAS, the Parties desire and intend to have a long-term mutually
beneficial relationship during the Term, the broad parameters and guiding
principles of which are as set out in Article I of this Agreement and which are
an integral part of the consideration hereunder.
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:
ARTICLE I.
RELATIONSHIP SUMMARY
Section 1.01. Overview.
(a) This Agreement, the Individual Use Agreements entered into
thereunder, 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 Commercial Spectrum Capacity authorized by
the FCC Licenses identified on Schedule A hereto
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(collectively, when under IUA hereunder, together with the Commercial Spectrum
Capacity from MRUA-2 Sch A, that becomes under IUA under the MRUA-2 Agreement,
the "EBS Spectrum Capacity") and certain Strategic Opportunity Spectrum Capacity
to be delivered to Clearwire under the terms of this Agreement.
(b) In addition to the Economic Royalties detailed in ARTICLE II,
central to each 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 Customer Accounts (Section 3.03); (ii)
access to the Additional Cost-Free Customer Accounts (Section 3.04); and (iii)
the Limited Reciprocity rights (Section 3.09), the Preferred Content Provider
rights (Section 3.08), and the Strategic Opportunity Spectrum Capacity rights
(Section 3.10), together with technology, facilities, equipment and other
functionality from Clearwire and its Affiliates all as more specifically set
forth in Section 3.06 and Section 3.07 and elsewhere in this Agreement and in
the IUAs related thereto. This Agreement and the IUAs would not have been
executed but for the Total Consideration.
(c) The Parties acknowledge that there will be many changes in the
course of the Term of this Agreement and during the terms of the IUAs, in
technology, capabilities, and regulatory environment among other areas, and the
Parties have agreed to act in a cooperative manner to preserve the intentions of
the relationships reflected in this Agreement and the IUAs to their mutual
advantage and to use their commercially reasonable best efforts to maintain that
mutual advantage.
Section 1.02. Overview of Mechanics and Structure of Agreements
(a) Individual Use Agreements for Commercial Spectrum Capacity. In
exchange for access to the Unencumbered Spectrum Capacity made available to
Clearwire pursuant to Individual Use Agreements executed and delivered in the
form attached as Exhibit II hereto (individually, an "IUA") 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, consisting of a Upfront Royalty Deposit, and,
following the Commencement Date, the balance of the Upfront Royalty, an Equity
Royalty and the Monthly Royalties, together with the commitment to provide the
bundle of rights and services set forth in ARTICLE III (identified collectively
as the "Access Right Royalties") and to undertake the governance obligations of
ARTICLE VIII.
(i) Commencement Date. The "Commencement Date" means the
"Commencement Date" under the applicable IUA entered into pursuant to this
Agreement or the MRUA-2 Agreement.
(b) Encumbered Spectrum Capacity. Each Licensee will comply with all
material provisions of its agreements with third parties applicable to the [***]
subject to such Licensee's rights incident to a default of the other party
thereto or incident to a
[* * * Confidential Treatment Requested]
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force majeure event. When and if such [***] becomes Available, Licensee and
Clearwire shall enter into an IUA hereunder with respect to such EBS Spectrum
Capacity in accordance with the applicable procedures for a Subsequent Closing
under ARTICLE IV. The term "Available" with respect to previously [***] means
that (A) the Commercial Spectrum Capacity on the Channels in the Market Area
subject to the IUA 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.
(i) PRETC [***]. With respect to PRETC, the Parties acknowledge
that PRETC has agreed to negotiate in good faith for the renewal of its current
excess capacity agreement for the C channel group in Portland, Oregon with the
Person identified on Schedule A, which agreement expires on August 2, 2006
("Portland Agreement"). If PRETC fails to renew the Portland Agreement prior to
September 1, 2006, PRETC will on September 1, 2006, notify Clearwire in writing
of such fact. In the event of non-renewal, after such date either PRETC or
Clearwire shall have the right, upon written notice to the other Party, to
require the other Party to enter into an IUA in the form attached as Exhibit
II-B hereto as provided in this Section 1.02(b) following such notice. If
neither Party informs the other of its desire to enter into an IUA within 180
days after such notice, either Party may terminate the provisions of this
Section 1.02(b)(i) if the other Party again fails to provide notice of its
desire to enter into an IUA within ten (10) days after an additional notice from
the Party desiring to terminate this Section 1.02(b)(i).
(ii) DAETC [***] With respect to DAETC, the Parties acknowledge
that DAETC has agreed to negotiate in good faith for the renewal of its current
excess capacity agreement for two of the four D group channels at [***] with the
person identified on Schedule A (the "[***]"), which agreement expires on August
1, 2007. DAETC and Clearwire will enter into an IUA for the remaining two D
group channels in the form attached as Exhibit II-B hereto. If DAETC fails to
renew the [***] Agreement prior to September 1, 2007, DAETC will on September 1,
2007, notify Clearwire in writing of such fact. In the event of non-renewal,
after such date either DAETC or Clearwire shall have the right, upon written
notice to the other Party, to cause the DAETC IUA to be amended in accordance
with its terms to include the remaining two D-group channels licensed to DAETC
in [***], and to adjust the compensation paid to DAETC upward in proportion to
the increased MHzPops represented by the two added channels as shown on Schedule
A. If neither Party informs the other of its desire to include those channels
within the DAETC IUA within 180 days after such notice, either Party may
terminate the provisions of this Section 1.02(b)(ii) if the other Party again
fails to provide notice of its desire to enter into an IUA within ten days after
an additional notice from the Party desiring to terminate this Section
1.02(b)(ii).
(c) [***]. In the event that a Claim is brought
or threatened against the ITF Cluster or NACEPF by [***] claiming
[*** Confidential Treatment Requested]
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one or more rights to the Commercial Spectrum Capacity specified on Schedule A
by virtue of the Licensee entering into this Agreement or an IUA hereunder in
alleged breach of a contractual right of first refusal ("ROFR") commitment or
negotiation commitment of such Licensee, Clearwire shall indemnify and defend
Licensee for, and hold the Licensee harmless from, any such Claim in accordance
with ARTICLE IX of this Agreement.
Section 1.03. Scope and Nature of Clearwire Group.
(a) Service Affiliates. As of the Effective Date, Clearwire and the
companies identified on Schedule 6.04 are all of the Affiliates under the
control of Clearwire Parent. Clearwire covenants and agrees to cause the entity
providing each of the Access Right Royalties and the other services provided for
in ARTICLE III to the Licensees (each a "Service Affiliate") to assume the
obligations of Clearwire hereunder and to be jointly and severally liable
therefore for the purpose of providing a direct contractual relationship between
the Licensees and the Service Affiliates so identified on Schedule 6.04 and
between the Licensees and each 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(a) shall be construed to limit the primary obligation of Clearwire
to provide the Access Right Royalties.
(b) Spectrum Holding Company Commitment. Except as provided below in
this Section 1.03(b), during the term of this Agreement, each of Clearwire
Parent and Clearwire covenant and agree not to segregate the EBS Spectrum
Capacity IUAs in an entity except in an entity that holds at least 50% of the
spectrum of Clearwire Parent and its Affiliates, exclusive of the EBS Spectrum
Capacity IUAs represented by Schedule A. The restriction in this Section 1.03(b)
shall not apply, however, while the Parent Guarantee or a LOC Substitution is in
effect.
(c) Clearwire Parent Guarantees.
(i) Payment Guarantee. Except during the time an LOC Substitution
shall be in place and effective under Section 1.03(c)(i)(1), Clearwire Parent
hereby absolutely and unconditionally guarantees all of the payment obligations
of any Clearwire Affiliate, including Clearwire, under this Agreement, each IUA
entered into pursuant to this Agreement, each Required IUA, and any Collateral
Documents for the period from the Effective Date through December 31, 2016 (the
"Parent Guarantee"). This is a guarantee of payment and not of collection only.
The Parent Guarantee is irrevocable and unconditional, and shall be binding upon
the assignees of Clearwire Parent, and shall inure to the benefit of the
applicable Licensee and its successors and assigns. No failure or delay by a
Licensee in exercising any of its rights or powers hereunder shall operate as a
waiver thereof. The rights, remedies and benefits under this Section 1.03(c)(i)
are cumulative and not exclusive of any other rights, remedies or benefits a
Licensee may have against Clearwire Parent, Clearwire or Clearwire Affiliate
under this Agreement or any EBS Spectrum IUA or Required IUA. Clearwire Parent
hereby waives presentment, protest, demand or notice of any kind, other than
notices required under this Agreement, and all other suretyship defenses, and
agrees that no extension or other indulgence
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granted to Clearwire, and no discharge or release of Clearwire or any other
party liable with respect to the guaranteed obligations, shall discharge or
affect the liability of Clearwire Parent. Notwithstanding the foregoing, prior
to making any demand for payment under the Parent Guarantee, the applicable
Licensee must make demand for payment by Clearwire and allow for the expiration
of all applicable cure periods. The Parent Guarantee shall not apply to any
payment obligations due with respect to a SOSC IUA or the Strategic Opportunity
Spectrum Capacity. The Parent Guarantee shall automatically extend to the
payment obligations pertaining to each EBS Spectrum IUA and each Required IUA. A
"Required IUA" is an IUA (other than a SOSC IUA) that is properly tendered by a
Licensee and is required to be entered into by Clearwire but that has not been
so executed in breach of this Agreement, however no breach shall be deemed to
have occurred during the pendency of a bona fide dispute for which the Dispute
Resolution Procedure is in process and where Clearwire has sought not to be
required to execute the IUA as its remedy. A Required IUA shall be treated as if
it had been entered into and a commencement date had occurred with respect
thereto on the last date such execution was required.
(1) Terms Applicable to the Guarantee. Payments pursuant to
the Parent Guarantee shall be made within thirty (30) days of the date of demand
for payment on the Parent Guarantee and shall bear interest at the Default
Interest Rate from the original due date to the date of payment and shall extend
to all amounts due from the Affiliate, including without limitation, the 2%
charge for late payment under the IUAs. Accrued but unpaid interest shall be
payable monthly.
(2) Terms Applicable to the Letter of Credit. At Clearwire
Parent's option it may at any time substitute a Qualifying Letter of Credit for
its obligation to provide the Parent Guarantee; provided that, the Chief
Financial Officer of Clearwire Parent shall have certified to Licensees that the
substitution for the Parent Guarantee is required in connection with a
modification of Clearwire Parent's loan covenants or a change in lenders or will
otherwise reduce Clearwire Parent's cost of, or increase its access to, funds
(the "LOC Substitution").
(3) Qualifying Letter of Credit. A "Qualifying Letter of
Credit" shall be in form and substance reasonably satisfactory to the Licensees
and: (A) shall be an unconditional stand-by letter of credit issued by a bank
organized under the laws of the United States or a State thereof, having
capital, surplus and undivided profits of not less than $25,000,000,000, that is
a member of the Federal Deposit Insurance Corporation and that has an issuer
rating from Moody's Investors Service of A2 or better (a "Qualifying Bank"), (B)
shall be in an amount equal to the net present value of the remaining EBS
Economic Royalties for the balance of the period to December 31, 2016,
discounted at 10% annually and recalculated on an annual basis on January 1st of
each year in such period, and (C) shall be in form and substance reasonably
acceptable to Licensee.
Section 1.04. Scope and Nature of Licenses. Each of the Licensees is an
independent non-profit organization, each possessing its own separate governing
board, assets and liabilities. The obligations of each of the Licensees
hereunder shall be several and not joint for all purposes and no Licensee shall
be responsible for any act or omission of any other Licensee.
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Section 1.05. Cross Defaults.
(a) Upon and at any time after the occurrence of a Cross Default, any
Licensee shall have the right to withdraw from this Agreement and the MRUA-2
Agreement and/or any of the IUAs executed by such Licensee hereunder, upon
submission of a notice of withdrawal to Clearwire identifying which agreements
are to be terminated; provided that, if the Licensee is in receipt of a written
notice of Cross Default from Clearwire, the Licensee's notice of withdrawal with
respect to the Cross Default identified in such notice must be submitted to
Clearwire by the Licensee within ninety (90) days after the receipt of such
notice of Cross Default. Licensee's actual knowledge of the Cross Default shall
not limit the time permitted for its issuance of a notice of withdrawal. Upon
submission of a notice of withdrawal by a Licensee, the Term of the agreements
identified therein shall cease with respect to such Licensee and all of the
provisions of this Agreement applicable to a termination at the end of the Term
shall apply with respect to each IUA identified in the notice and, if
applicable, this Agreement as well. Clearwire will not be liable in damages to
any Licensee under this Agreement or an IUA as a result of a Cross Default,
except to the extent of such Licensee's actual damage under the IUA that is
subject to the Cross Default as a result of Clearwire's direct breach of such
IUA. A Cross Default shall not, in and of itself, be deemed to be a breach of an
IUA.
(b) Definitions and Interpretive Rules Related to Cross Defaults.
(i) A "Cross Default" occurs if a Payment Default or a Material
Failure has occurred and is not cured within [***] after written notice to
Clearwire (A) with respect to EBS Spectrum Capacity IUAs of Licensees in any
three Geographic Markets at the same time or (B) with respect to EBS Spectrum
Capacity IUAs of Licensees in any two Geographic Markets at the same time, as
long as those Geographic Markets represent at least [***] percent of total EBS
Spectrum Capacity MHzPops determined in accordance with clause (v) below.
(ii) "Geographic Market" means the larger of (A) the area covered
by the GSA of an EBS system that is listed on Schedule A or covered by an SOSC
IUA 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
Section 1.05(b)(ii)(A) 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.
(iii) "Material Failure" means an act or failure to act that
materially threatens cancellation or material impairment of a FCC License.
(iv) Clearwire's failure to meet the Build-out Condition
specified in Section 7.11 is not considered a Default or a Material Failure.
(v) For purposes of determining the existence of a Cross Default,
all of the EBS Spectrum Capacity IUAs entered into pursuant to this Agreement
and the MRUA-2 Agreement shall be aggregated and considered together.
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(vi) A Payment Default or Material Failure (A) under an IUA that
has been terminated by its terms prior to the [***] cure period specified in (i)
above, or (B) under any SOSC IUA, shall not be taken into consideration for
purposes of determining if a Cross Default has occurred.
ARTICLE II.
ECONOMIC ROYALTIES
Section 2.01. Aggregate EBS Spectrum Capacity Economic Royalties.
(a) EBS Spectrum Capacity IUAs. Clearwire shall cause to be paid to
the Licensees the Economic Royalties specified on Schedule A commencing upon
execution of the corresponding EBS Spectrum Capacity IUAs at the times specified
therein. In the case of NACEPF and the ITF Cluster the Economic Royalties are
comprised of an Upfront Royalty, an Equity Royalty and Monthly Royalties and, in
the case of the remaining Licensees, the Economic Royalties are comprised of an
Upfront Royalty and Monthly Royalties (collectively, the "EBS Economic
Royalties"). For the EBS Spectrum Group, the EBS Economic Royalties are in
addition to the Access Right Royalties specified in ARTICLE III. The EBS
Economic Royalties payable to the Licensees as reflected on Schedule A are
generally in proportion to their respective MHzPops, except as otherwise
provided on Schedule A.
(b) Equity Royalty - Escrow and Adjustments.
(i) Parent Shares/Price Per Share. The Equity Royalty payable in
respect of an EBS Spectrum Capacity IUA shall be the number of Parent Shares set
forth on Schedule A, based on a price per share of [***], and subject to
adjustment as provided in Section 2.01(b)(iii) below.
(ii) Escrow of Parent Shares. Within five (5) business days after
the Effective Date, Certificates representing the Parent Shares specified on
Schedule A for each EBS Spectrum Capacity IUA that could be executed hereunder
shall be dated the Effective Date, properly signed and issued, and such shares
shall be registered on the Effective Date in Clearwire Parent's stock ledger, in
the name of the corresponding Licensee (or its permitted designee approved by
Clearwire Parent), and such certificates together with stock powers executed in
blank by the Licensee, shall be deposited with the Escrow Agent as provided in
ARTICLE IV and the Escrow Agreement attached as Exhibit III hereto (the "Escrow
Agreement"), to be released to the Licensee on the Commencement Date of the
corresponding EBS Spectrum Capacity IUA (the "Escrow") or returned to Clearwire
Parent as provided in this Agreement or the applicable IUA.
(iii) Capital Changes. Distributions and Rights. The Parent
Shares issuable in respect of the Equity Royalty shall be adjusted for any
Capital Changes and for any
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cash dividends and distributions made in respect of the Parent Shares from the
date hereof, and while they are held in Escrow from the Effective Date through
the date of payment to the Licensee and paid with the Parent Shares as the
Equity Royalty on the Commencement Date under the applicable EBS Spectrum
Capacity IUA. While the Parent Shares are in Escrow, the Escrow Agent shall
afford the applicable Licensees the opportunity to take all actions with respect
to such Parent Shares as if the Licensee owned the shares, including (except as
provided below) the exercise of preemptive rights, if any (subject to, and as
provided in, the Amended and Restated Stockholders Agreement dated as of March
16, 2004); provided that, the Escrow Agent shall not be required to advance
funds for the Licensee and the Licensee shall not be entitled to vote such
Parent Shares. Licensees shall not have any preemptive rights with respect to
any investment by Intel Corporation or Motorola, Inc. or their respective
Affiliates made pursuant to a binding agreement entered into prior to the
Effective Date (an "Excluded Investment"), or any investment by third parties
resulting from the exercise of the preemptive rights of third parties arising
from an Excluded Investment. "Capital Changes" include any recapitalization,
reclassification, split-up or consolidation of Parent Shares or stock dividend,
merger or consolidation of Clearwire Parent or sale by Clearwire Parent of all
or a portion of its assets, coupled with a distribution to shareholders.
(iv) Release of Escrowed Parent Shares. The Parent Shares
allocable to an EBS Spectrum Capacity IUA that is terminated under Section 11(f)
of the IUA or that is otherwise terminated prior to a Commencement Date under
the provisions of the EBS Spectrum Capacity IUA shall be released from Escrow
and returned to Clearwire Parent with the blank stock powers upon the effective
date of such termination.
Section 2.02. Strategic Opportunity Spectrum Capacity (SOSC).
(a) SOSC Economic Royalties. Upon execution of each Strategic
Opportunity Spectrum Capacity IUA (a "SOSC IUA") pursuant to a Tender as
provided in Section 3.10, Clearwire shall cause to be paid the SOSC Economic
Royalties required under Section 3.10(e) and the applicable SOSC IUA. The
allocation of SOSC Economic Royalties shall be as provided in Section 3.10(e).
(b) SOSC Equity Royalties. No part of the SOSC Economic Royalties
shall be paid in Parent Shares unless the parties to the particular SOSC IUA so
agree. If any amount is to be paid in Parent Shares, that portion of the SOSC
Economic Royalty so allocated shall be divided by the Price Per Share. For this
purpose, "Price Per Share" means the greater of (i) the value per share of
Parent Stock as determined by the board of directors of Clearwire Parent from
time to time, as in effect on the relevant closing date; or (ii) the price per
share of Parent Shares in the then most recently completed funding round of
Clearwire in excess of Fifty Million Dollars ($50,000,000), or, if such funding
round did not include common stock but did include preferred stock or other
convertible securities, the price per share of common stock, based on converting
such preferred stock or other convertible securities to common stock pursuant to
the applicable conversion rights, provided, however that (x) if the Parent
Shares are publicly traded on a national securities exchange or listed in a
national automated interdealer quotation system, the Price Per Share will be the
average reported closing trading price of the Parent Shares for the
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twenty trading days immediately prior to the Commencement Date of the related
IUA, and (y) any valuation pursuant to clause (b)(ii) above shall be based only
upon a transaction that has occurred within 180 days prior to the date of such
valuation, and if there has been no such transaction such valuation shall be
made in accordance with clause (b)(i) above of clause (x) of this proviso.
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 related provisions of ARTICLE VIII shall govern
the information rights of the Licensees with respect hereto.
Section 3.02. Cost-Free Educational Accounts.
(a) Included in the Access Right Royalties provided to Licensees,
Licensees 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 a Licensee without charge or expense to
such 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.
(c) Definitions Related to Cost-Free Educational Accounts. As used in
this ARTICLE III and elsewhere in this Agreement, the following terms have the
indicated meanings:
"Cell Site" means a tower, building or other outdoor structure equipped
with one or more antennas to serve the surrounding area.
"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.
"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
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Market, based on its build-out engineered for services from time to time once it
has commenced commercial operation.
"Educational End Users" or "EEU" shall be only non-profit entities,
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 a request-for-proposals (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"
includes only (1) 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 or (2) correctional institutions that use the service in
connection with a written agreement with the Licensee for specific programming
content produced or procured by Licensee or with whom Licensee has had a prior
written relationship; provided that such programming content is delivered to
such correctional institutions without charge or other fees. Social Welfare
Agencies shall specifically exclude treasury and revenue services departments,
law enforcement agencies, legislatures, the office of the mayor and the
military.
"Sector" means a directional antenna located at a cell site that serves a
portion of a Cell Site area.
Section 3.03. Educational Reservation Basic Cost-Free Education Accounts.
(a) In respect of Licensees' educational reservation covering the five
percent (5%) educational spectrum capacity currently required by the FCC Rules
pertaining to the FCC Licenses (the "Educational Reservation"), Licensees shall
be permitted to utilize the Educational Reservation in such locations served by
the Clearwire National Platform on a full time basis as Licensees desire for
their 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 Licensees [***] 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
set forth in Section 8.02(c) hereof.
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 Licensees with
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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. Each 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 a 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 a 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,
Licensees 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 as
determined pursuant to this Section 3.05. Clearwire shall sell to Licensees such
services, at a cost equal to [***] provided by Clearwire to an arms-length third
party in
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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 Licensees at [***] above Clearwire's cost to acquire such
end-user equipment. Equipment provided to Licensees 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. Licensees 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. Licensees shall have access to reasonably necessary support
made available to Clearwire's commercial customers generally, and that is
reasonably necessary for the Licensees to offer services to their Educational
End Users as contemplated by their agreement. The Licensees 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 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 3.04(a)(ii) 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
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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 VIII to ensure timely access to information about capacity
usage and permit Licensee a reasonable opportunity to secure alternative access.
Section 3.09. [***]
Section 3.10. Strategic Opportunity Spectrum Capacity Right.
(a) Scope. Licensees shall be permitted to Tender Strategic
Opportunity Spectrum Capacity ("Strategic Opportunity Spectrum Capacity" or
"SOSC") for Quality Spectrum to Clearwire under Section 3.10(b) and (c).
"Quality Spectrum" is defined for purposes of this Section 3.10 as Commercial
Spectrum Capacity that is: [***] [***] The maximum number of MHzPops deliverable
under both this Agreement and the MRUA-2 Agreement shall be equal to the greater
of [***] MHzPops (based on 2000 census data) or [***] times the total number of
MHzPops delivered on EBS Spectrum Capacity IUAs executed under Schedule A and
MRUA-2 Sch A.
(b) General Strategic Opportunity Spectrum Capacity Right
(i) Clearwire Spectrum Designation List. Clearwire Spectrum Staff
will produce a list from time to time of spectrum acquisition target parameters
(the "A-List"), updated not less frequently than every 180 days. Clearwire shall
provide the A-List to Licensee Representatives within ten business days of the
execution of this Agreement, and thereafter not later than five business days
following the effective date of a change or revision to the A-List information,
including any implicit revision as a result of an action taken to approve a
spectrum
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transaction that is outside the terms of a then-current A-List. For a period of
up to 120 days after any modification of the A-List, Clearwire shall be required
to enter into Strategic Opportunity Spectrum IUAs in the form attached as
Exhibit II- C ("SOSC IUAs") for Quality Spectrum Tendered within the A-List
parameters, subject to a Clearwire Parent board approval process, if required.
(ii) Uniform Application of A-List Parameters. The A-List
parameters shall apply to all Clearwire spectrum purchase and use agreements
within the applicable period from all sources. If the A-List parameters are
altered for any reason, including without limitation as evidenced by a Clearwire
spectrum acquisition from a third party, the A-List parameters will be deemed
changed automatically and Clearwire shall be required to redefine and promptly
issue a new set of A-List parameters reflecting the characteristics of such
spectrum. Clearwire may exclude from the A-List parameters the effect of
acquisitions of spectrum capacity in smaller markets not within the A-List
parameters in connection with a larger transaction where the smaller market
acquisition is deemed necessary or advisable by Clearwire for a strategic
purpose in connection with the larger transaction.
(iii) Clearwire Board Approval Process. If Clearwire Parent board
approval is required for a Tendered SOSC IUA, the following procedure shall
apply: (a) Clearwire management will (based on this Agreement) recommend
approval to the Clearwire Parent board, (b) Clearwire Parent board action will
be taken at the next meeting of the Clearwire Parent board, but not later than
thirty days from the date of the Tender, (c) Clearwire management will promptly
advise Licensees of the result and (d) if the Clearwire Parent board does not
approve the transaction, it shall provide a written explanation of the reason
why such rejection was commercially reasonable under the circumstances.
Clearwire Parent and Clearwire covenant and agree that they will not permit
Licensee Tenders to be treated less favorably or in a manner different from any
other spectrum acquisitions as evidenced by the results of Clearwire's spectrum
acquisitions over the term of the SOSC right. Upon Licensee's request following
any Clearwire board action declining a Tender, Clearwire shall provide
information supporting the reason for the declined Tender, including relevant
information from all spectrum transactions in the period commencing 60 days
before such action and for 90 days thereafter, with such detail as reasonably
requested by the Licensees on the terms thereof.
(c) Mandatory Strategic Opportunity Spectrum Capacity Right.
Notwithstanding the General Strategic Opportunity Spectrum Capacity Right
provisions of Section 3.10(b). Licensees may Tender, and Clearwire shall enter
into, a SOSC IUA for Quality Spectrum identified by a Licensee that qualifies as
a Mandatory SOSC IUA. A "Mandatory SOSC IUA" is one Tendered where the following
financial thresholds have not been exceeded (a) up front payments collectively
for all Mandatory SOSC IUAs including the Tendered SOSC IUA shall not exceed
[***] and (b) the total net present value expense collectively for all Mandatory
SOSC IUAs, including the Tendered SOSC IUA, shall not exceed [***] (assuming a
30-year term and 10% discount rate) (the "Mandatory Thresholds"). There is no
limit on the quantity of Mandatory SOSC IUAs, as long as they collectively do
not exceed either of the Mandatory Thresholds. Clearwire must execute a
Mandatory SOSC IUA within ten days of the
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Licensees' Tender of the Mandatory SOSC IUA, unless the Parties agree to a later
date in writing.
(d) Tender Process. Clearwire will designate a senior member of its
spectrum acquisition management (a "Senior Spectrum Manager") to meet in person
or telephonically with the Licensee Representatives or their designee at a
mutually agreeable time in the first week of each month after the Effective Date
of this Agreement to consult on matters related to the SOSC provisions of
Section 3.10 (the "SOSC Committee"). As frequently as necessary, but in all
events not less frequently than once per month, the Senior Spectrum Manager and
the Licensee Representatives (or their designated representatives) shall confer
concerning objectives in progress with respect to SOSC opportunities. The
Licensee Representatives will present a list of EBS systems then subject to
contract with a Licensee or targeted by the Licensee for acquisition that meets
the Quality Spectrum definition (each such proposal, a "Tender").
Unless subject to Clearwire Parent board approval, Clearwire shall
enter in a SOSC IUA in respect of Tendered spectrum capacity (A) within 60 days
of the date of the Tender or (B) if the Tendered spectrum capacity represents
channels that are the subject of a binding agreement executed within 90 days
from the date of the Tender, upon the Closing thereof.
(e) Strategic Opportunity Spectrum Capacity IUA Terms. SOSC IUA Terms
would be on the same terms as the then current IUA under this Agreement,
modified as follows:
(i) The total Economic Royalty will be [***] per MHzPop using
2000 census data, determined on a net present value basis using a ten percent
discount rate and a 30 year term.
(ii) For spectrum that is made available pursuant to Section
3.10(b), up front payments will be [***] of the total Economic Royalty unless
the parties negotiate a different allocation at the time.
(iii) Parent Shares may be substituted for a portion of royalties
by agreement of the parties to the SOSC IUA.
(iv) The SOSC IUA will be in the form attached as Exhibit II-C
hereto, which reflects the EBS Spectrum Capacity IUA, except with less
restrictive IUA terms with respect to assignment and sublicensing, and the
absence of an accelerated build-out obligation, the absence of a Parent
Guarantee, and the absence of cross-default provisions.
(f) Clearwire EBS and BRS Transactions. Subject to Sections
3.10(b)(iii) and (d), Clearwire shall inform Licensee Representatives within ten
(10) business days of its entering into binding agreements for the acquisition
of rights to spectrum in the EBS and BRS bands. Information disclosed pursuant
to this Section will be limited to the public information available through the
FCC public notice process. Clearwire's obligations set forth in this Section are
in addition to, and not in lieu of, the requirements of Section 3.10(b)(iii).
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ARTICLE IV.
CLOSING MECHANICS; ESCROW
Section 4.01. Deliveries at Execution of this Agreement. On the Effective
Date of this Agreement, Clearwire and each of the Licensees shall take the
following actions required of it by subsections (a) through (c) hereof.
(a) Licensees. Each Licensee shall deliver or cause to be delivered to
Clearwire each of the following, duly executed by an authorized representative
of such Licensee: (i) the Escrow Agreement dated on or before the Effective Date
in the case of Licensees in the ITF Cluster and NACEPF; (ii) one EBS Spectrum
Capacity IUA completed in accordance with this Agreement and the instructions in
the form of IUA with respect to the Unencumbered Spectrum authorized under each
FCC License held by such Licensee and identified on Schedule A; (iii) the
certificate(s) of such Licensee described in Section 4.01(c); and (iv) evidence
of the delivery to the Escrow Agent of the stock powers executed in blank by
such Licensee as required under this Agreement and the joinders attached to this
Agreement as Exhibits IV and V. Each Licensee shall have specified on Schedule
4.01 attached hereto its respective wire accounts (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 a
Licensee, shall be to such Wire Account in immediately available funds.
(b) Clearwire. Clearwire shall deliver or cause to be delivered to
each of the Licensees each of the following, duly executed by an authorized
representative of Clearwire: (i) the Escrow Agreement dated on or before the
Effective Date in the case of Licensees in the ITF Cluster and NACEPF; (ii) one
EBS Spectrum Capacity IUA completed in accordance with this Agreement and the
instructions in the form of IUA with respect to the Unencumbered Spectrum
authorized under each FCC License identified on Schedule A to the applicable
Licensee; (iii) its certificate described in of Section 4.01 (c); (iv) the
Upfront Royalty Deposit provided for in the applicable EBS Spectrum Capacity IUA
as reflected on Schedule A; (v) the payment of any balance of the Applicable Fee
Payments (per Section 11.03) not previously paid; and (vi) evidence of delivery
of the Parent Shares specified on Schedule A to the Escrow Agent.
(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. Escrow Deposit and Ministerial Condition Failure.
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(a) Each of Clearwire Parent and Clearwire and each of the ITF Cluster
Licensees and NACEPF shall deliver to the Escrow Agent within five (5) days of
the Effective Date of this Agreement, (i) the Escrow Agreement dated as of the
Effective Date and duly executed by an authorized representative of such Party,
(ii) in the case of Clearwire Parent and Clearwire properly executed
certificates dated the Effective Date and representing the full amount of the
Parent Shares reflected in the Equity Royalties on Schedule A, which shall be
issued and outstanding, registered in the names of the applicable Licensees and
deposited into the Escrow, all as provided in Section 2.01, and (iii) in the
case of each Licensee, stock powers executed by it in blank. Each of Clearwire,
NACEPF and the ITF Cluster shall cause the Escrow Agent to execute the Escrow
Agreement and to take the actions provided for therein to be taken by the Escrow
Agent, and to deliver to each of the Parties a receipt evidencing the foregoing.
(b) Termination for Ministerial Condition Failure. As permitted by
this Section 4.02(a) and Section 2.0l(b)(ii), the Parent Shares may be deposited
with the Escrow Agent up to five days following the Effective Date. In the event
that the deposit of such Parent Shares is not made within such time period, for
any reason whatsoever, this Agreement shall terminate as shall each of the IUAs
executed hereunder, and the Parties shall have no further obligations of any
kind or nature whatsoever hereunder or thereunder.
Section 4.03. 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 those EBS Spectrum Capacity IUAs 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 the transactions provided in this Agreement
shall take place when the Commercial Spectrum Capacity becomes Available 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 conditions 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
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prior to invoking this condition, each Party hereto shall use all commercially
reasonable efforts to have any such injunction or other order vacated.
(2) No Cross Default Condition. The Licensee shall not have
exercised its right to terminate this Agreement and the IUA as a result of a
Cross Default and the issuance of a withdrawal notice under Section 1.05(a) with
respect to that IUA.
(3) Availability. The Commercial Spectrum Capacity of the
applicable IUA is Available as defined in Section 1.02(b).
(ii) Conditions to the Obligations of Clearwire. The obligations
of Clearwire 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 Clearwire:
(1) Representations and Warranties. The representations and
warranties of the Licensee contained in of 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 each 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.
(3) Joinders; Substantial Compliance with Master Agreement.
The Licensee shall have delivered to Clearwire Parent executed joinders in the
form attached to this Agreement as Exhibits IV and V. The Licensee shall be in
compliance with all of the material terms of this Agreement as it relates to
such Licensee.
(iii) Conditions to Obligations of Licensee. The obligations of a
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 such 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)
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certifying that the representations and warranties of the Party to be made under
the IUA are true and correct.
(3) Substantial Compliance with Master Agreement. Clearwire,
Clearwire Parent and the other Affiliates that are or become Parties hereto,
shall be in compliance with all of the material terms of this Agreement as it
relates to such Licensee.
(4) Escrow. The Escrow shall contain all of the Parent
Shares applicable to the EBS Spectrum Capacity IUA being entered into and such
Parent Shares shall have been issued and be outstanding and registered in the
name of Licensee and the Escrow shall contain any and all additional amounts as
may be required to reflect any distributions and adjustments due to Capital
Changes as provided therein.
(5) No Clearwire Material Adverse Effect. During the period
from the Effective Date of this Agreement to the Effective Date of the
applicable EBS Spectrum Capacity IUA, there shall not have occurred any event
that has had or is reasonably likely to have a Clearwire Material Adverse
Effect.
Section 4.04. Closing Site/Mechanics. Each of the Closings will occur by
electronic delivery procedure agreed by the Parties, provided that the first
Initial Closing shall take place at the offices of Day, Berry & Howard LLP, 875
Third Avenue, New York, New York 10022.
Section 4.05. Subsequent Closings for Strategic Opportunity Spectrum
Capacity.
(a) SOSC IUA. At any time when Strategic Opportunity Spectrum is
tendered as provided in Section 3.10, Licensee shall deliver to Clearwire a SOSC
IUA at the time provided for therein for execution.
At each Subsequent Closing, the applicable licensee and Clearwire shall
deliver an SOSC IUA with respect to such SOSC, duly executed by an authorized
representative of each.
Section 4.06. 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.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF LICENSEES
Except as set forth on a referenced "Schedule" to this ARTICLE V, each of
the Licensees for itself, severally and not jointly or in addition to any other
Licensee, hereby represents and warrants to Clearwire and Clearwire Parent that:
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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 "Contemplated 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 Contemplated Transactions on the date hereof (collectively
the "Licensee Documents"), and (iii) to consummate the Contemplated 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. This representation is made to the best
knowledge of each Licensee with respect to agreements pursuant to which, by
their explicit terms, the time periods for ROFR rights and which agreements
themselves have expired. 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, 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(s) Material Adverse Effect.
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(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 of the
disclosure schedule attached hereto by one or more of the Licensees (the
"Licensee(s) Schedule") 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 of the Licensee(s) Schedule, 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, and assuming that the Third
Party Agreement complies in all material respects with the Communications Act
and FCC Rules. 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(s) 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(s) 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. Offering Exemption; Securities Representations. NACEPF and
each of the ITF Cluster Licensees hereby represent and warrant the following:
(a) Schedule 5.06 sets forth the Licensees that are and those that are
not "accredited investors" as this term is defined in Rule 501(a) of Regulation
D as promulgated by the U.S. Securities and Exchange Commission under the
Securities Act.
(b) Excepting that portion of the Equity Royalty to be delivered to a
designee of Licensee approved in writing by Clearwire Parent, each Licensee is
acquiring the Equity Royalty for its own account, for investment purposes only
and not with a view to the distribution (as such term is used in Section 2(11)
of the Securities Act) thereof. Each Licensee understands that the Equity
Royalty has not been registered under the Securities Act and cannot be sold
unless
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subsequently registered under the Securities Act or an exemption from such
registration is available.
(c) Each Licensee is knowledgeable and experienced in the
telecommunications industry and is capable of evaluating the risks and merits of
the Contemplated Transactions, including the acquisition of the Parent Shares,
and making an informed decision with respect thereto. Each Licensee acknowledges
receipt of Clearwire Parent's Private Placement Memorandum and Supplement
thereto (the "Private Placement Memorandum"). Licensee, its officers, and
directors have had sufficient opportunity to ask questions of and receive
answers from Clearwire Parent concerning the business of Clearwire Parent, its
operations, assets and liabilities. Licensee and its representatives have had an
opportunity to review all documents and records concerning Clearwire Parent and
its business that such Licensee has requested. Each Licensee has conducted its
own independent assessment, analysis and investigation with respect to Clearwire
Parent and its business at the time of entering into this Agreement and has
agreed to enter into this Agreement based solely on this assessment, analysis
and investigation, and the representations and warranties of Clearwire set forth
in ARTICLE VI hereof.
(d) Each Licensee is aware that Clearwire Parent is a speculative
enterprise, that certain of the information disclosed to Licensee contains
forward looking statements which involve risks and uncertainties, and that
Clearwire Parent's actual results may differ significantly from the results
discussed in these forward looking statements. Each Licensee further
acknowledges that the value of Clearwire Parent's assets is inherently uncertain
and is dependent upon market, technological, and regulatory developments
concerning feasible and allowable uses. Each Licensee represents and warrants to
Clearwire Parent that it has assessed these factors independently and has agreed
to enter into this Agreement without reliance upon or expectation of any
representations, warranties, or disclosures of any kind from Clearwire, except
as specifically set forth in ARTICLE VI hereof.
Section 5.07. Brokers. Neither Licensee nor any of its directors, officers,
employees, or representatives has employed any broker or finder in connection
with the Contemplated Transactions. NACEPF and ITF Cluster Licensees are solely
responsible for all fees payable to D.F. Hadley & Co., Inc.
Section 5.08. 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.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF CLEARWIRE
Except as set forth on a referenced "Schedule" to this ARTICLE VI,
Clearwire hereby represents and warrants to Licensees that:
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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 Contemplated 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 Contemplated
Transactions (collectively the "Clearwire Documents"), and (iii) to consummate
the Contemplated 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. Capitalization.
(a) As of the date of this Agreement, and without giving effect to the
Contemplated Transactions, (i) the authorized capital stock of Clearwire
consists of 500,000,000 shares of Class A Common Stock, $0.0001 par value per
share (the "Class A Common Stock"). 100,000,000 shares of Class B Common Stock,
$0.0001 par value per share ("Class B Common Stock"), and 5,000 shares of
Preferred Stock, par value $0.0001 per share ("Preferred Stock"), (ii) there are
173,842,111 shares of Class A Common Stock, 56,072,860 shares of Class B Common
Stock and no shares of Preferred Stock issued and outstanding and (iii) no
shares of Class A Common Stock, Class B Common Stock or Preferred Stock are held
by Clearwire as treasury stock. All of the issued and outstanding shares of
Class B Common Stock were duly authorized for issuance and are validly issued,
fully paid and non-assessable.
(b) As of the date of this Agreement, and without giving effect to the
Contemplated Transactions, other than (i) the conversion rights of the Class B
Common Stock, (ii) warrants to purchase 56,351,034 shares of Class A Common
Stock (the "Warrants"), and (iii) except as set forth on Schedule 6.03(b) of the
disclosure schedule attached hereto by Clearwire ("Clearwire Schedule"), there
are no existing options, warrants, calls, rights, commitments or
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other agreements of any character to which Clearwire Parent is a party and,
except as contemplated in the preceding sentence and in the Clearwire Schedule,
there are no securities of Clearwire Parent outstanding which upon conversion or
exchange would require, the issuance, sale or transfer of any additional shares
of Class A Common Stock or other equity securities of Clearwire Parent or other
securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of Class A Common Stock or other equity
securities of Clearwire Parent. Except as disclosed in the Clearwire Schedule,
and except for the Stockholders Agreement and as disclosed in the Private
Placement Memorandum and the Registration Rights Agreement, as of the Initial
Closing Date Clearwire is not a party to any voting trust or other voting
agreement with respect to any of the shares of Class A Common Stock.
(c) The authorization, offer, issuance, sale and delivery of the
Equity Royalty pursuant to this Agreement and the applicable IUAs has been duly
authorized by all requisite corporate action on the part of Clearwire, and the
Equity Royalties, when issued, sold and delivered in accordance with this
Agreement, will be validly issued and outstanding, and when released to
Licensees from escrow, will be fully paid and nonassessable, free of any Liens
and not subject to preemptive or similar rights of the other shareholders of
Clearwire or others (other than as set forth in the Clearwire Schedule, the
Private Placement Memorandum, the Stockholders Agreement, the Debt Warrants or
Clearwire' Certificate of Incorporation, as amended). The terms, designations,
powers, preferences and relative participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the Class A
Common Stock are as stated in Clearwire Parent's Certificate of Incorporation,
as amended.
Section 6.04. Subsidiaries. Schedule 6.04 hereto sets forth the name of
each Subsidiary of Clearwire as of the Initial Closing Date, immediately prior
to the occurrence of the Initial Closing, and without giving effect to the
Contemplated Transactions ("Subsidiaries") and, with respect to each Subsidiary,
the jurisdiction in which it is incorporated or organized, the jurisdictions, if
any, in which it is qualified to do business, the number of shares of its
authorized capital stock, the number and class of shares thereof duly issued and
outstanding, the names of all stockholders or other equity owners and the number
of shares of stock owned by each stockholder or the amount of equity owned by
each equity owner. The outstanding shares of capital stock or equity interests
of each such Subsidiary are validly issued, folly paid and nonassessable, and
all such shares or other equity interests represented as being owned by
Clearwire Parent are owned by it free and clear of any and all Liens, except as
set forth in Schedule 6.04. Except as set forth in Schedule 6.04, there is no
existing option, warrant, call, commitment or agreement to which any such
Subsidiary is a party requiring, and there are no convertible securities of any
Subsidiary outstanding which upon conversion would require, the issuance of any
additional shares of capital stock or other equity interests of any Subsidiary
or other securities convertible into shares of capital stock or other equity
interests of any Subsidiary or other equity security of any Subsidiary. Each
such Subsidiary is a duly organized and validly existing corporation or other
entity in good standing under the laws of the jurisdiction of its organization
and is duly qualified to do business and is in good standing under the laws of
(i) each jurisdiction in which it owns or leases real property and (ii) each
other jurisdiction in which the conduct of its business or the ownership of its
assets requires such qualification and where a
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failure to be so qualified would have a Clearwire Material Adverse Effect. Each
such Subsidiary has all requisite corporate or limited liability company power
and authority to own its properties and carry on its business as presently
conducted.
Section 6.05. No Conflict.
(a) Except as set forth on Schedule 6.05(a) of the Clearwire Schedule
hereto, 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 (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) Except as set forth in Schedule 6.05(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.
Section 6.06. 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 6.06 of the Clearwire Schedule, (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 6.07. Compliance with Laws; Permits. Except as provided on Schedule
6.07 of the Clearwire Schedule, 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.
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Section 6.08. Brokers. Neither Clearwire nor any of its directors,
officers, employees or representatives has employed any broker or finder in
connection with the Contemplated Transactions.
ARTICLE VII.
COVENANTS
Section 7.01. Consents and Approvals. Clearwire will use its commercially
reasonable efforts to obtain, and shall cooperate with each Licensee and assist
each Licensee in obtaining, all consents, waivers, amendments, modifications,
approvals, authorizations, permits and licenses which are required to be
obtained by Clearwire and/or one or more of the Licensees to effectuate this
Agreement. Each Licensee will 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 such
Licensee to effectuate this Agreement.
Section 7.02. Notice of Breach. Each Licensee shall promptly give Clearwire
written notice of any matter that becomes known to such Licensee which such
Licensee determines is reasonably likely to constitute a breach of any
representation, warranty, agreement or covenant of such Licensees contained in
this Agreement. Clearwire and Clearwire Parent shall promptly give the Licensees
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. Escrow and Parent Shares. Clearwire covenants that the full
number of Parent Shares for the Equity Royalty on Schedule A and adjusted as
provided in Section 2.01(b)(iii) from time to time, shall be deposited pursuant
to the Escrow Agreement for delivery to the appropriate Licensee or its
designees (subject to approval by Clearwire Parent) on the applicable
Commencement Date, at which time Clearwire covenants that the Parent Shares
shall be fully paid and non-assessable, without restrictions, except as set
forth in the legend provided for in Section 7.07.
Section 7.04. Maintenance of FCC Qualifications. The provisions of this
Section 7.04 apply only to spectrum identified on Schedule A 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, each
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
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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 a 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, a 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, such
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"). Each 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 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 7.05. Assignment of FCC Licenses. The provisions of this Section
7.05 apply only to spectrum identified on Schedule A 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 Licensees 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 7.06. 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 7.07. Legends. Each Licensee hereby consents to the placement of
the legends set out in Clearwire Parent's Amended and Restated Stockholders
Agreement, dated as of March
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16, 2004, on all certificates representing capital stock of Clearwire Parent
received by Licensee pursuant to this Agreement.
Section 7.08. 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 Licensees as a result of the licensing, regulation
or use of Licensees' EBS Spectrum by Clearwire or Licensees, including, without
limitation, any Federal spectrum, USF and/or regulatory fees that may be imposed
on EBS Spectrum in the future.
Section 7.09. 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.
Section 7.10. Financial Information Covenants and Maintenance of Guarantee.
Clearwire Parent and Clearwire covenant and agree to provide the financial and
other information required by ARTICLE VIII in a timely fashion.
Section 7.11. Build-Out.
(a) For those Geographic Markets where (i) Clearwire and its
Affiliates have the use of eight or more channels of EBS and/or BRS spectrum
with substantially overlapping GSAs, and (ii) Clearwire has entered into an IUA
with an EBS Spectrum Group Licensee for EBS spectrum in such Geographic Market
(the "Build-out Markets"): (A) Clearwire or its Affiliate shall commence
construction of wireless broadband networks with respect to [***] of the EBS
spectrum (measured on the basis of MHzPops) of the Build-out Markets within
[***] of the earliest Commencement Date of an IUA executed between Clearwire and
a Licensee ("First Commencement Date"), (B) Clearwire or its Affiliates shall
commence construction of wireless broadband networks with respect to [***] of
the EBS spectrum (measured on the basis of MHzPops) of the Build-out Markets
within [***] of the First Commencement Date, and (C) Clearwire or its Affiliates
shall commence construction of wireless broadband networks with respect to [***]
of the EBS Spectrum (measured on the basis of MHzPops) of the Build-out Markets
within [***] of the First Commencement Date (such clauses (A), (B) and (C)
referred to as the "Build-out Condition").
(b) In each Build-out Market where Clearwire has commenced
construction of a wireless broadband network pursuant to Section 7.11(a) above,
Clearwire shall deliver wireless broadband service to [***] of the then-current
GSA population of each EBS Spectrum Group EBS system within [***] of the
completion of the bandplan transition in the local Basic Trading Area and
notification of completion per Section 27.1235 of the FCC Rules. For the purpose
of this Agreement, population shall be considered to be served by applying the
then-current standard set forth in the FCC Rules or policies for substantial
service in the EBS service,
[*** Confidential Treatment Requested]
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or, if the FCC Rules and policies contain no such standard, with reference to
coverage maps then employed by Clearwire in the Geographic Market for marketing
to prospective customers.
(c) The "Build-out Failure Financial Royalty" shall apply when and
during the time that: (i) Clearwire is not in compliance with the
then-applicable Build-out Condition, or (ii) Clearwire is not in compliance with
Section 7.11(b).
(d) The Build-out Failure Financial Royalty shall be an amount equal
[***] of the applicable Monthly Royalties (adjusted for the Limited CPI
Adjustment) due to be paid with respect to the quantity of EBS Spectrum measured
in MhzPops for which Clearwire has failed to meet the requirements of Section
7.11(a) and (b) above.
(e) The monthly amount of the Build-out Failure Financial Royalty
shall be distributed pro-rata to each Licensee which operates an EBS system in a
Geographic Market where: (i) the Build-out Condition has not been met, or the
Build-out Condition has been met, but the requirement of Section 7.11(b) above
has not been met. The amount of Build-out Failure Financial Royalty each such
Licensee receives shall be determined pro-rata according to the MHzPops of its
EBS Stations meeting the criteria set forth in (i) and/or (ii) above. At the
option of the affected Licensee, in lieu of accepting its pro rata share of
Build-out Failure Financial Royalty such Licensee may instead accept equivalent
Access Royalties and other services in one or more other Geographic Markets
served by Clearwire.
ARTICLE VIII.
INFORMATION SHARING OBLIGATIONS AND CONSULTATION REGARDING ACCESS RIGHT
ROYALTIES AND CERTAIN OTHER COVENANTS
Section 8.01. Overview of Consultation/Information Exchange Requirements.
(a) Guiding Principles. The consultation, governance and information
rights and obligations and the related processes for audit contained in this
ARTICLE VIII (collectively, the "Ongoing Obligations"), are intended to preserve
the benefits to Licensees set forth in Article III and Section 7.11 hereof in
light of changes in the wireless broadband environment over a Term of
approximately 30 years. By way of example and not limitation, the Parties
recognize that changes to the technology or architecture of Cell Sites or
Sectors, or to the composition, number or characteristics of Subscribers, could,
without accompanying changes to the provisions of Article III result in an
adverse impact on the number of Cost-Free Customer Accounts to which a Licensee
is entitled or otherwise impair their value in comparison to the anticipated
circumstances at the time of execution of this Agreement. As well, it is the
intent of the Parties to supply those Licensees which are Clearwire Parent
shareholders (or have the right to become Clearwire Parent shareholders) with
information as described in Section 8.07. The Ongoing Obligations are intended
to facilitate good faith negotiation and resolution of issues arising from
changes in circumstances during the Term, but any failure to comply with the
Ongoing Obligations is to be addressed through the Dispute Resolution Procedure
and shall not give rise to a right to terminate an IUA or this Agreement.
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(b) Party Representatives. To facilitate the Ongoing Obligations, the
Parties shall designate Party Representatives as provided in this Section
8.01(b) to act as representatives of the Licensees that appoint them hereunder,
on the one hand, and Clearwire, on the other hand, with respect to the all
matters under this Agreement and in particular with respect to matters governed
by Section 8.06. Licensees shall have not less than two representatives, one of
whom shall be designated by NACEPF (the "NACEPF Representative") and the other
of whom shall be designated by the ITF Cluster (the "ITF Group Representative"
and with NACEPF Representative, and any third representative (the "Licensee
Representatives"). If so requested, the Licensees other than NACEPF and the ITF
Cluster may request, as a group, one additional Licensee Representative to
represent their interests. Clearwire shall designate two representatives, at
least one of whom shall be an officer of Clearwire Parent and one of whom shall
be a Clearwire senior spectrum management executive (who may be the same person)
(the "Clearwire Representatives" and with the Licensee Representatives, the
"Party Representatives"). The initial Party Representatives shall be the
individuals identified on Schedule 8.01 hereto.
(c) Relationship Management. To facilitate the management of the
relationship between Licensees and Clearwire, the affected Licensees shall be
provided with the information disclosure provided for in Section 8.02 through
Section 8.05 at the times specified therein. The completeness and accuracy of
such information may be evaluated through the audit process set forth in Section
8.06. Clearwire Parent information will be made available in accordance with
Section 8.07 to any Licensee which is a shareholder or has the right to become a
shareholder of Clearwire Parent.
Section 8.02. Capacity Disclosure.
(a) Initial Capacity Disclosure. Within thirty (30) days of the later
of (i) the commercial launch of a Clearwire Affiliate's broadband wireless
system in any Market Area, and (ii) the Commencement Date of an IUA for EBS
Spectrum in the Market Area (such later date, the "EBS Relevance Date"),
Clearwire shall disclose in writing to the affected Licensees: (1) the total
number of EBS and BRS channels Clearwire currently is utilizing for Permitted
Uses (as defined in the IUAs) in the Market Area, (2) the number of Cell Sites
in the Market Area, and (3) the number of Sectors in the Market Area. The
information pursuant to (1) and (2) shall be updated at each Information Sharing
Meeting, and the information pursuant to (3) shall be updated as provided in
Section 8.02(b) below.
(b) Annual Update. By January 31 of each year following the EBS
Relevance Date for a Market Area, Clearwire shall disclose in writing to the
affected Licensee(s): (1) the number of Sectors in the Market Area, and (2) the
number of subscribers in the Market Area served by Clearwire or any of its
Affiliates. All information shall be as of December 31 of the previous year.
(c) Data Capacity Measurement. On the first and fifth anniversaries of
the EBS Relevance Date for a Market Area, and every five years thereafter,
Clearwire shall disclose in writing to the affected Licensees the overall data
capacity of the network in such Market Area as measured by its average
throughput. The average throughput measurement shall be made in
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such fashion as shall be agreed by the Party Representatives in consultation
with Clearwire engineers and other technical experts prior to such anniversary,
using metrics that are as consistent as possible with those utilized at the time
of the immediately prior average throughput measurement (with respect to each
Market Area on each such anniversary, the "Updated Capacity Disclosure").
Section 8.03. System Information.
Within thirty (30) days of the EBS Relevance Date for a Market Area,
Clearwire shall disclose in writing to the affected Licensee(s) the system
capabilities, services, and feature sets that are generally provided to
Clearwire's or its Affiliate's retail customers and wholesalers to mass market
customers ("System Service Capabilities"), which information can be provided by
reference to Clearwire's website to the extent that it is available to the
public there. At such time as System Service Capabilities are changed for any
Market Area, Clearwire shall so notify the affected Licensee(s) in writing
within 30 days of such change. Clearwire will also provide appropriate
supporting information of the change as may be reasonably requested by Licensee.
Section 8.04. Preferred Content Provider Information.
(a) Within thirty (30) days of the later of the EBS Relevance Date for
a Market Area and the date when third-party content is delivered in the Market
Area, Clearwire shall disclose to the affected Licensee(s) in writing the system
capabilities, and/or service or feature sets that are then being provided to
third-party content providers in the Market Area, and a schedule of the charges,
if any, for any of the foregoing, together with the basis on which such charges
are imposed to demonstrate that the pricing requirements of Section 3.08(b) are
being satisfied. Clearwire shall advise the affected Licensee(s) of anticipated
changes in the price structure and the effective date of any such change not
less than 30 days before such change shall become effective.
(b) Clearwire shall disclose in a timely fashion to permit Licensee to
make alternative arrangements if Clearwire anticipates that there may be
limitations in the network capabilities in a Market Area that could cause
Clearwire to restrict the use of capabilities and services pertaining to a
Licensee's providing content over the broadband wireless network in that Market
Area. Prior to restricting access of Licensee as a result of such limitations,
as permitted under Section 3.08, Clearwire shall have disclosed in sufficient
detail the scope of such constraints. Clearwire shall promptly advise Licensee
if as a result of a change in technology, business practices, customer dynamics,
or otherwise, the capacity constraint is dissipated at any time, which would
reinstate the obligations of Clearwire under Section 3.08.
Section 8.05. Limited Reciprocity Information.
Should Clearwire enter into advanced stage negotiations to form a strategic
relationship with any entity covered by [***]. it shall promptly notify
the Licensee Representatives in writing. Clearwire will use its commercially
reasonable best efforts to arrange one or more meetings between NACEPF and the
ITF Cluster and any such actual or potential strategic partner
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so as to permit discussion of carriage of the networks contemplated under
Section 3.09. Clearwire shall use it commercially reasonable best efforts to
facilitate negotiations to a successful conclusion.
Section 8.06. Consultation Processes.
(a) Consultation Process Pertaining to Access Right Royalty
Information. As often as necessary, but in no event less than once per calendar
quarter, the Licensee Representatives or their designees shall be given access
to members of Clearwire's management and/or technical staff to review the
process and content of information sharing pursuant to Article VIII, and to
address any questions or concerns about the manner, timeliness and completeness
of the information received, in addition to questions about its content.
(b) Process for Altering Definitions/Formulae to Maintain Integrity of
Relationship. At the call of any Party Representative, the Party Representatives
shall meet, together with such other employees or advisors as may facilitate
such meeting, to discuss concerns over the operation of the formulas and the
scope of defined terms as a result of one or more changes in Clearwire's
technology and/or business practices that individually or collectively produce a
material adverse change to the Access Royalties or other material benefits that
some or all of the Licensees receive pursuant to this Agreement, and to
determine if a reformation of this Agreement or any or all EBS Spectrum IUAs
should be implemented to prevent or reverse such material adverse change(s).
(i) The Parties agree to share such information and to provide
such technical assistance in collecting and evaluating such information as may
be useful or necessary to facilitate the process required by Section 8.06(a) and
(b). In connection with such consultation, any Party Representative may propose
altering the scope of a term or formula under this Agreement or an IUA
("Reformation Proposal") to achieve the goals set forth in Section 8.01 and to
preserve the Licensee benefits set forth Article III or elsewhere in this
Agreement. If the Parties agree on the change, they shall take such action as is
necessary to amend this Agreement and the applicable IUAs. If the Parties cannot
agree on a proposed modification in a timely manner, any Party Representative
may invoke the Special Dispute Resolution Procedure identified for this purpose
in Section 11.12(d). Any Party Representative may invoke for the first time
Special Dispute Resolution Procedure set forth above at any time following the
Commencement Date of an IUA between such Parties.
(ii) No Party Representative may invoke the Special Dispute
Resolution Procedure in support of a Reformation Proposal on the same principal
grounds more frequently than every five (5) years during the Term of this
Agreement. By way of example but not limitation: no Party Representative's
Reformation Proposal justified primarily on Clearwire network technical changes
can be pursued through the Special Dispute Resolution Procedure within five (5)
years of the immediately preceding Special Dispute Resolution Procedure
justified primarily on Clearwire network technical changes. By way of further
example and not limitation: no Party's Representative's Reformation Proposal
justified primarily on Clearwire's changed business practices can be pursued
through the Special Dispute Resolution Procedure
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within five (5) years of the immediately preceding Special Dispute Resolution
Procedure justified primarily on Clearwire's changed business practices.
Section 8.07. Information Access Rights Related to Clearwire Parent.
[***]
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[***]
Section 8.08. Information Audit Rights.
(a) Licensees may audit the information provided by Clearwire pursuant
to Sections 8.02, 8.03, and 8.04. Licensees' audit will be limited to
Clearwire's records and engineering documents that are relevant and sufficient
to verify the information provided by Clearwire. No more than once per calendar
year for each Market Area, each Licensee may audit one or more metrics reported
by Clearwire for that Market Area where an IUA has been executed between
Clearwire and Licensee. In the case of metrics that are not specific to Market
Areas, but that are company-wide or regional, any member of the EBS Spectrum
Group may audit one or more of such metrics reported by Clearwire no more than
once per calendar year. Clearwire must provide the underlying source documents
within 20 days of a request for audit by a Licensee.
(b) The costs incurred by a Licensee in performing an audit under this
Section 8.08 shall be borne by the Licensee; provided that, if there is a
discrepancy of [***] or more with respect to a particular metric in a Market
Area, costs of audit of that metric shall be borne by Clearwire and promptly
paid upon submission of an invoice.
ARTICLE IX.
INDEMNIFICATION
Section 9.01. Indemnification
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(a) Each Licensee severally shall indemnify Clearwire, its Affiliates,
and each of their respective stockholders (other than Licensee(s)), 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 that
Licensee set forth in ARTICLE V hereof, or any representation or warranty
contained in any certificate delivered by or on behalf of that 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
that Licensee under this Agreement.
(b) Clearwire shall indemnify the Licensees, their Affiliates, and
each of their respective, agents, successors and assigns (collectively, the
"Licensee(s) Indemnified Parties") and hold each of the Licensee(s) 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 9.02. 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.
Section 9.03. Limitations on Indemnification for Breaches of
Representations and Warranties. An indemnifying Party shall not have any
liability under Section 9.01(a)(i) or Section 9.0l(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
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any representation or warranty to be true and correct or the breach of any
covenant, exceeds $10,000 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 9.04. 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 9.01 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 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
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respect thereto except to the extent that the indemnifying Party can demonstrate
actual loss and prejudice as a result of such failure.
ARTICLE X.
TERMINATION
Section 10.01. Expiration; Termination. The term of this Agreement begins
on the Effective Date and ends on July 31, 2036, unless sooner terminated (the
"Term"). Termination of this Agreement pursuant to this Section 10.01 shall
terminate all rights and obligations of the Parties hereunder and this Agreement
shall become void and have no force or effect. Notwithstanding the foregoing,
this Section 10.01 and ARTICLES IX and XI shall survive termination of this
Agreement, and no Party shall be relieved from any liability for any breach of
any of its covenants or agreements in this Agreement prior to such termination.
Section 10.02. Defaults.
(a) Any default under, breach of or misrepresentation under the
covenants, obligations or representations set out in this Agreement (other than
a Payment Default) must be cured within [***] of receipt of written notice
thereof from Clearwire, if the defaulting Party is a Licensee, or from a
Licensee if the defaulting Party is Clearwire, as long as the defaulting Party
commences to cure such default within [***] of receipt of written notice and
proceeds with reasonable diligence thereafter, provided, however, that Payment
Defaults must be cured within [***] of receipt of notice thereof. In the event
that a payment obligation remains unpaid [***] after its original due date, the
defaulting Party shall pay interest on the unpaid amount from the original due
date until the time of payment equal to the greater of (i) [***] or (ii) a
fluctuating rate equal to the Prime Rate as of the original due date plus [***],
but in no event exceeding the highest lawful rate of interest that may be
charged or collected. Interest shall be due and payable monthly. In addition, if
any payment remains unpaid 30 days after its original due date, a penalty equal
to [***] of the unpaid amount shall become immediately due and payable. The
"Prime Rate" shall be the rate last published in the Wall Street Journal or any
similar successor publication as the Prime Rate as of the applicable date.
Clearwire's failure to meet the Build-out Condition shall not be deemed a
default or Material Failure hereunder.
(b) A Licensee shall have the right to withdraw from this Agreement
and terminate any IUA to which it is a party upon the occurrence of a Cross
Default as provided in Section 1.05.
ARTICLE XI.
GENERAL PROVISIONS
Section 11.01. 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
[* * * Confidential Treatment Requested]
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sales, use, stamp, 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 the Contemplated
Transactions.
Section 11.02. Survival of Representations and Warranties. The Parties
hereto hereby agree that 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 11.03. Expenses. Clearwire shall reimburse Licensees for all of
Licensees' reasonable out-of-pocket expenses incurred in preparation and
negotiation of this Agreement and the term sheet and the IUAs (whether or not
the Parties execute this Agreement) and shall reimburse up to [***] for each IUA
closed on the Effective Date or within three (3) months of the date of this
Agreement and [***] for each IUA closed thereafter. The expenses incurred by
Licensees for the negotiation and preparation of all subsequent documents
appended to this Agreement and to each IUA, and in connection with any FCC
activity or activity to preserve, obtain or renew licenses for EBS Spectrum
shall be reimbursed by Clearwire, as long as expenses over $1,000 are approved
as to reasonableness by Clearwire in advance. (The amounts due and remaining
payable by Clearwire under this Section 11.03 as of any date are sometimes
referred to herein as the "Applicable Fee Payments"). Licensees and Clearwire
shall otherwise each bear their own expenses except as stated otherwise in any
IUA.
Section 11.04. 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.
Section 11.05. 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
[*** Confidential Treatment Requested]
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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 11.06. 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 11.07. 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 Corporation
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, WA 98101-1688
Attention: [***]
Facsimile No.: [***]
If to Licensee(s), to: Contact information on Schedule A
In either case, with a copy to:
Day, Berry & Howard LLP
875 Third Avenue
New York, New York 10022
Attention: [***]
Facsimile No.: [***]
Section 11.08. Publicity. No public release, announcement or other form of
publicity concerning this Agreement or the transactions described in this
Agreement, shall be issued by
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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 11.09. Severability. If any provision of this Agreement is invalid
or unenforceable, the balance of this Agreement shall remain in effect.
Section 11.10. 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 11.11. 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 11.12. 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 11.12 (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.
(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
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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
11.12(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
11.01(c) and as modified by the Special Arbitration provisions Section 11.01(d)
in the case of disputes arising under Section 8.06(b).
(c) Arbitration. Any Dispute that has not be resolved within the time
period provided for in Section 11.12(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").
(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 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 Boston, Massachusetts, if NACEPF is a party, or Denver,
Colorado if NACEPF is not a party. 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.
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(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.
(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, 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
Boston, Massachusetts, where NACEPF is a party, and otherwise in Denver,
Colorado, 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.
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(d) Special Arbitration. With respect to any Dispute arising under
Section 8.06(b), the Arbitration procedures set forth in Section 11.12(c) shall
govern as modified by this Section 11.12(d).
(i) During the first 15 days of the Submission Period each of the
Parties shall designate an arbitrator and unless the third arbitrator has been
selected as provided in the following sentence, the two arbitrators together
shall, within 10 days of their appointment, select the third arbitrator who
shall be an expert in one of the principal areas that is the subject to the
arbitration. If the Parties can agree within the first 15 days of the Submission
Period, the third arbitrator shall be a mutually selected individual with
substantial experience in the general subject matter of the Dispute (the
"Expert"). No arbitrator shall have been employed by either party during the 24
months preceding the hearing date, unless the other party consents. The Expert
shall serve as the chair of the panel.
(ii) During the Submission Period, each Party shall submit to the
each other and the Arbitrators, a description of the Dispute and a proposed
resolution, based on the facts known to the party at the time (an "Initial
Proposal").
(iii) Following discovery and as a part of the party's brief,
each party shall make such adjustments, if any, as the party determines
appropriate to the Initial Proposal.
(iv) Notwithstanding Section 11.12(c)(vii), in the case of a
Special Arbitration, each party shall bear its own expenses and the Parties
shall each bear half of the expenses of the arbitration; provided that, the
costs and expenses of the prevailing party in any court action to compel
arbitration shall be borne by the non-prevailing party as provided in the last
clause of Section 11.12(c)(vii).
Section 11.13. 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 11.14. Confidentiality. 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 [***]. 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
[*** Confidential Treatment Requested]
-44-
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 11.15. 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 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 11.15 and of Section 14 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.]
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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: EVP
CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
------------------------------------
Name: R. Gerard Salemme
Title: EVP
LICENSEES
CHICAGO INSTRUCTIONAL
TECHNOLOGY FOUNDATION, INC.
By: /s/ John B. Schwartz
------------------------------------
Name: John B. Schwartz
Title: Pres.
DENVER AREA EDUCATIONAL
TELECOMMUNICATIONS CONSORTIUM, INC.
By: /s/ John B. Schwartz
------------------------------------
Name: John B. Schwartz
Title: Pres.
INSTRUCTIONAL
TELECOMMUNICATIONS FOUNDATION, INC.
By: /s/ John B. Schwartz
------------------------------------
Name: John B. Schwartz
Title: Pres.
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NORTH AMERICAN CATHOLIC EDUCATIONAL
PROGRAMMING FOUNDATION, INC.
By: /s/ John Primeau
------------------------------------
Name: John Primeau
Title: Pres.
PORTLAND REGIONAL EDUCATIONAL
TELECOMMUNICATIONS
CORPORATION
By: /s/ John B. Schwartz
------------------------------------
Name: John B. Schwartz
Title: Pres.
TWIN CITIES SCHOOLS' TELECOMMUNICATIONS
GROUP, INC.
By: /s/ John B. Schwartz
------------------------------------
Name: John B. Schwartz
Title: Pres.
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EXHIBIT I
DEFINITIONS AND INTERPRETATION
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
A-List ................................................. Section 3.10(b)(i)
Applicable Fee Payments ................................ Section 11.03
Available .............................................. Section 1.02(b)
Basic Cost-Free Education Account ...................... Section 3.03(b)
Basic Trading Area ..................................... Definitions
Build-out Condition .................................... Section 7.11(a)
Build-out Failure Financial Royalty .................... Section 7.11(d)
Build-out Markets ...................................... Section 7.11(a)
Calculation of Time Period ............................. Definitions
Capital Changes ........................................ Section 2.01(b)(iii)
Cash Upfront Royalty Deposit ........................... Definitions
Cell Site .............................................. Section 3.02(c)
Channels ............................................... Recitals
CITF ................................................... Preamble
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 Gone Private Period .......................... Section 8.07(c)
Clearwire Indemnified Parties .......................... Section 9.01(a)
Clearwire Material Adverse Effect ...................... Definitions
Clearwire National Platform ............................ Section 3.02(c)
Clearwire Parent ....................................... Preamble
Clearwire Private Company Financials ................... Section 8.07(b)
Clearwire Representative ............................... Section 8.01(b)
[Download Table]
Clearwire Schedule ..................................... Section 6.03(b)
Closing Date(s) ........................................ Definitions
Collateral Document .................................... Section 1.03(a)
Commencement Date ...................................... Section 1.02(a)(i)
Commercial Spectrum Capacity ........................... Recitals
Communications Act ..................................... Recitals
Company Package ........................................ Section 8.07(a)
Confidential Information ............................... Section 11.15
Contemplated Transaction ............................... Section 5.02
Cost-Free Educational Account .......................... Section 3.02(b)
Cross Default .......................................... Section 1.05(b)(i)
DAETC .................................................. Preamble
Damages ................................................ Section 9.02
Deductible ............................................. Section 9.03
Default Interest Rate .................................. Definitions
[***] Agreement ........................................ Section 1.02(b)(ii)
Discovery Closing 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 Economic Royalties ................................. Section 2.01(a)
EBS Relevance Date ..................................... Section 8.02(a)
EBS Spectrum Capacity .................................. Section 1.01(a)
EBS Spectrum Group ..................................... Preamble
Economic Royalty ....................................... Definitions
Educational End User ................................... Section 3.02(c)
Educational Reservation ................................ Section 3.03(a)
Effective Date ......................................... Preamble
Equity Royalties ....................................... Definitions
Escrow ................................................. Section 2.01(b)
Escrow Agent ........................................... Definitions
Escrow Agreement ....................................... Section 2.01(b)
Exchange Act ........................................... Section 8.07(a)
Exhibits/Schedules ..................................... Definitions
FCC .................................................... Recitals
FCC IUA Approval ....................................... Definitions
FCC License ............................................ Recitals
FCC Proceedings ........................................ Section 5.04
FCC Qualifications ..................................... Section 7.04
FCC Rules .............................................. Recitals
[*** Confidential Treatment Requested]
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[Download Table]
First Commencement Date ................................ Section 7.11(a)
Formula Quantity ....................................... Section 3.04(a)(i)
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)
ITF .................................................... Preamble
ITF Cluster ............................................ Preamble
ITF Group Representative ............................... Section 8.01(b)
IUA .................................................... Section 1.02(a)
Law .................................................... Definitions
LBS/UBS Spectrum ....................................... Definitions
Licensee ............................................... Preamble
Licensee Documents ..................................... Section 5.02
Licensee Representatives ............................... Section 8.01(b)
Licensee(s) Indemnified Parties ........................ Section 9.01(b)
Licensee(s) Material Adverse Effect .................... Definitions
Lien ................................................... Definitions
[***] .................................................. Section 3.09(a)
LOC Substitution ....................................... Section 1.03(c)(i)(2)
Local Channel Ratio .................................... Section 3.04(a)(i)
Mandatory SOSC IUAs .................................... Section 3.10(b)
Mandatory Strategic Opportunity Spectrum
Capacity Right ...................................... Section 3.10(c)
Mandatory Thresholds ................................... Section 3.10(c)
Market Area ............................................ Section 3.02(c)
Material Failure ....................................... Section 1.05(b)(iii)
MHzPops ................................................ Recitals
Monthly Royalties ...................................... Definitions
MRUA-2 Agreement ....................................... Recitals
MRUA-2 Sch A ........................................... Recitals
MVNO Educational Account ............................... Section 3.05
NACEPF ................................................. Preamble
NACEPF Representative .................................. Section 8.01(b)
Ongoing Obligations .................................... Section 8.01(a)
Other Definitional and Interpretive Matters ............ Definitions
Parent Guarantee ....................................... Section 1.03(c)(i)
[*** Confidential Treatment Requested]
-3-
[Download Table]
Parent Shares .......................................... Definitions
Party .................................................. Preamble
Party Representative ................................... Section 8.01(b)
Payment Default ........................................ Definitions
Permit ................................................. Definitions
Person ................................................. Definitions
Pleading Close Date .................................... Section 11.12(c)(iii)
Portland Agreement ..................................... Section 1.02(b)(i)
Preferred Content Provider ............................. Section 3.08(a)
Preferred Stock ........................................ Section 6.03(a)
PRETC .................................................. Preamble
Price Per Share ........................................ Section 2.02(b)
Prime Rate ............................................. Section 10.02(a)
Proceeding ............................................. Definitions
Qualifying Bank ........................................ Section 1.03(c)(i)(3)
Quality Spectrum ....................................... Section 3.10(a)
Required IUA ........................................... Section 1.03(c)(i)
ROFR ................................................... Section 1.02(c)
Sector ................................................. Section 3.02(c)
Securities Act ......................................... Definitions
Senior Spectrum Manager ................................ Section 3.10(d)
Service Affiliate ...................................... Section 1.03(a)
Social Welfare Agencies ................................ Section 3.02(c)
SOSC ................................................... Section 3.10(a)
SOSC Committee ......................................... Section 3.10(d)
SOSC Economic Royalties ................................ Section 2.02(a)
SOSC Equity Royalties .................................. Section 2.02(b)
SOSC IUAs .............................................. Section 3.10(b)(i)
Strategic Opportunity Spectrum Capacity ................ Section 3.10(a)
Submission Period ...................................... Section 11.12(c)
Subsequent Closing ..................................... Section 4.03(b)(i)
Subsequent Closing Date ................................ Section 4.03(b)(i)
Subsidiaries ........................................... Section 6.04
System Service Capabilities ............................ Section 8.03
TCSTG .................................................. Preamble
Tender ................................................. Section 3.10(d)
Term ................................................... Section 10.01
Third Party Agreement .................................. Section 1.02(b)
Total Consideration .................................... Recitals
Unencumbered Spectrum Capacity ......................... Recitals
Updated Capacity Disclosure ............................ Section 8.02(c)
Upfront Royalty ........................................ Definitions
Wire Account ........................................... Section 4.01(a)
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(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).
"Basic Trading Area" has the meaning given in the FCC Rules for BRS.
"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.
"Closing Date(s)" means the Initial Closing Date or each Subsequent Closing
Date.
"De facto Transfer Application" has the meaning set forth in the IUA.
"Default Interest Rate" means an interest rate equal to the greater of (i)
[***] or (ii) a fluctuating rate equal to the "Prime Rate" as announced from
time to time by The Wall Street Journal plus [***], but in no event exceeding
the highest lawful rate of interest that may be charged or collected.
"Escrow Agent" shall be Wells Fargo Bank N.A. or its Affiliate, including
any successor thereto appointed in accordance with the terms of the Escrow
Agreement.
"Economic Royalty" means the total royalty set forth on Schedule A.
"Equity Royalties" means the Initial Closing Equity Royalties and/or the
Subsequent Closing Equity Royalties. "FCC IUA Approval" means the grant of de
facto transfer of an IUA by the FCC.
"Governing Documents" means articles of incorporation, certificate of
incorporation, bylaws, certificate of formation, limited liability company
agreement, or similar governing documents of an entity.
[*** Confidential Treatment Requested]
"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.
"Licensee(s) 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.
"Monthly Royalties" shall have the meaning set forth in the IUA.
"Parent Shares" means shares of Class A Common Stock, par value $0.0001, of
Clearwire Corporation.
"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.
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"Upfront Royalty" shall have the meaning set forth in the IUA.
"Upfront Royalty Deposit" 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 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.
-3-
EXHIBIT II-A
FORM OF IUA
EXHIBIT I-A
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 _________, 20_____(1) (the
"EFFECTIVE DATE"), by and between __________ ,(2) a __________ (3) (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 "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 4(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 __________ BASIC TRADING AREA")(6);
WHEREAS Licensee, Clearwire Corporation, a Delaware corporation ("CLEARWIRE
PARENT"), Clearwire and certain other EBS licensees are parties to that certain
Master Royalty and Use Agreement, dated ___________ , 2006 (the "MASTER
AGREEMENT"), which sets forth certain rights and obligations between the Parties
with respect to access to EBS spectrum licensed to Licensee and certain other
licensees, including capacity on the Channels;
WHEREAS this Agreement is an integral part of the Master Agreement; 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) Insert Initial Closing Date or Subsequent Closing Date, as applicable.
(2) Insert name of licensee.
(3) Insert organizational information on licensee.
(4) Insert EBS channel designations.
(6) Insert the one or more Basic Trading Areas that host the GSA(s) of the
Channels.
1. TERM(7)
(A) TERM. Subject to Section 1(b), the term of this Agreement begins
on the Effective Date and ends on July 31, 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 grants the De facto Transfer Application.
(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) EQUITY ROYALTY. Pursuant to the Master Agreement,_____ 8 shares of
Clearwire Parent Class A Common Stock (as the number of such shares may be
adjusted in accordance with the requirements of the Master Agreement, the
"EQUITY ROYALTY") have been deposited in escrow (the "ESCROW") for delivery to
Licensee pursuant to the terms of an escrow agreement (as it may be or may have
been amended or replaced, the "Escrow Agreement") by and among __________ (9)
and __________ (10) (as it may be replaced, the "ESCROW AGENT"). Clearwire shall
cause the Escrow Agent to deliver the Equity Royalty to Licensee within ten (10)
days of the Commencement Date. The Equity Royalty is partial consideration for
the execution and delivery of this Agreement by Licensee. In the event that this
Agreement is terminated pursuant to Section 11(f) or is otherwise terminated
prior to the Commencement Date, the Parent Stock shares shall be released from
Escrow and returned to Clearwire Parent with the blank stock powers upon the
effective date of such termination. In the event that this Agreement is
terminated pursuant to Section 11(g), Licensee shall transfer to Clearwire that
number of Equity Royalty shares that have been issued to Licensee pursuant to
this Agreement that is equal to the product of the number of Equity Royalty
shares issued pursuant to this Agreement (as adjusted
----------
(7) For DAETC IUA, change this heading to "TERM; ADDITION OF CHANNELS" and
insert Rider C.
(8) Insert number of shares as shown on Schedule A of the Master Agreement, as
such number may have been adjusted in accordance with the terms of the
Master Agreement for "Capital Changes" as defined and calculated
thereunder.
(9) Insert names of parties other than escrow agent.
(10) Insert name of Escrow Agent.
2
for stock splits, stock combinations and reclassifications between the date of
issuance and the return date) and the fraction having as its numerator the
number of days between the date of such termination and July 31, 2036 and having
as its denominator the number of days between the Effective Date and July 31,
2036. In the event that such product is a fraction, it shall be rounded to the
nearest whole share. Promptly after such return, Clearwire shall cause Clearwire
Parent to issue a new share certificate for the Equity Royalty shares as are
retained by Licensee. Except to the extent expressly required by this Section
2(a), in no event shall Licensee be required to return or refund any portion or
the whole of the Equity Royalty notwithstanding any termination of this
Agreement and this Section 2(a) shall survive the termination of this
Agreement.(11)
(B) UPFRONT ROYALTY.(12)
(C) MONTHLY ROYALTIES. Within five (5) business days following the
Commencement Date and by the first day of each month thereafter throughout the
Term, Clearwire will pay Licensee a monthly royalty (as it may be adjusted
pursuant to Section 2(c)(i) and (ii), the "MONTHLY ROYALTIES") as shown in the
following table. The Monthly Royalty due for any partial calendar month, at the
commencement of the Commencement Date or expiration of the Term, shall be
prorated. If the FCC grant of the De facto Transfer Authorization is stayed by
the FCC or by any Federal court on appeal of the FCC's grant, and such stay
precludes the provision of the capacity of the Channels during its effective
period, no Monthly Royalties shall be paid during the period of that legal
incapacity, and for any period of such incapacity that lasts for less than a
full calendar month, the Monthly Royalty for that month shall be pro rated.
[Download Table]
YEAR IN WHICH ROYALTY IS PAID MONTHLY ROYALTIES (13)
----------------------------- ----------------------
2006-2010 $__________
2011-2015 $__________
2016-2020 $__________
2021-2025 $__________
2026-2030 $__________
2031-2036 $__________
----------
(11) This Section 2(a) does not apply to School District IUAs, and should be
replaced with the word "RESERVED" in those IUAs.
(12) For Instruction Telecommunications Foundation, Inc. and North American
Catholic Educational Programming Foundation, Inc. IUAs, insert Rider A for
those of its IUAs executed prior to the date that any of its IUAs are
granted by the FCC and Rider B for those IUAs executed after the date that
any of its IUAs are granted by the FCC. For all other Licensees, insert
Rider B.
(13) Insert Monthly Royalty as expressed in Schedule A of the Master Agreement.
3
(i) LIMITED CPI ADJUSTMENT. On August 31, 2012 and on each
anniversary thereof (August 31, 2012 and each anniversary, an "ADJUSTMENT
DATE"), the Monthly Royalties shall be increased by multiplying each Monthly
Royalty, as it may have been previously adjusted pursuant to this clause (i), by
the sum of (A) one plus (B) the Adjustment Factor, as defined below in this
section. [***] "CPI" means The Consumer Price Index for All Urban Consumers
(CPI-U) for the U.S. City Average for All Items, 1984-1986=100 as published by
the Bureau of Labor Statistics of the United States Department of Labor;
provided, however, in the event that the CPI (or a successor or substitute
index) is not available, a similar reliable U.S. governmental or other
nonpartisan publication selected by Licensee will be used.
(ii) ADJUSTMENT RELATED TO BUILD-OUT. The Monthly Royalties will
be adjusted, if required, pursuant to Section 7.11 of the Master Agreement.
(D) PREPARATION REIMBURSEMENT. Within ten (10) days after the
Effective Date, Clearwire shall reimburse Licensee for the preparation of this
Agreement in the amount of __________.(14) This obligation shall apply without
regard to whether or not this Agreement is subsequently terminated.
(E) 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 may be changed by Licensee by
notice to Clearwire:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Attn: ___________________________(15)
(F) W-9. Within ten (10) days following the execution of this
Agreement, Licensee shall deliver a completed IRS Form W-9 to Clearwire.
(G) No Set-Off. All payments of Upfront Royalties, Equity Royalties
(16) and Monthly Royalties shall be made without set-off except for a sum that
Licensee is finally determined to owe Clearwire by arbitration conducted
pursuant to this Agreement.
----------
(14) Insert $1,500 if the Effective Date is on or before September 28, 2006 or
$2,500 if the Effective Date is after September 28, 2006.
(15) Insert Licensee-provided mailing address.
[*** Confidential Treatment Requested]
4
(H) CLEARWIRE PARENT GUARANTEE OR LETTER OF CREDIT. Clearwire shall
cause Clearwire Parent to comply with its guarantee and letter of credit
obligations set forth in the Master Agreement with respect to this Agreement,
and shall not permit Clearwire Parent to repudiate any such guarantee unless it
is replaced by a letter of credit issued in compliance with the application
provisions of the Master Agreement. Any violation of this Section 2(h)
constitutes a material default of this Agreement.
(I) INTEREST ON OVERDUE AMOUNTS. Clearwire shall pay interest to
Licensee on all payments owed under this Agreement more than thirty (30) days in
arrears, accruing from the original payment due date and continuing until
payment of the amount due, in an amount equal to the greater of (i) ten (10)
percent or (ii) a fluctuating rate equal to the "Prime Rate" as announced from
time to time by The Wall Street Journal plus [***] percent, but in no event
exceeding the highest lawful rate of interest that may be charged or collected
(the "DEFAULT INTEREST RATE"). Accrued interest shall be due and payable
monthly. In addition, for payments owed under this Agreement thirty (30) days or
more in arrears, a penalty equal to [***] percent of the payment owed shall be
immediately due and payable.
3. EXCLUSIVE NEGOTIATION PERIOD
For a time period beginning [***] 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 Channels.
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, 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
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
----------
(16) Delete ", Equity Royalty" from School District IUAs.
[* * * Confidential Treatment Requested]
5
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 or the Master 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 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 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
6
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 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 or the Master
Agreement. Neither Party shall have any obligation to enter into any amendment
pursuant to this Section.
(E) CHANNEL SWAPPING; COSTS.
[Clearwire may not require Licensee to swap Channels, by assignment of FCC
License, sublicensing or otherwise, without the prior written consent of
Licensee, which Licensee may withhold at its discretion.](17)
----------
(17) Use the bracketed language in all IUAs other than those executed by
Instruction Telecommunications Foundation, Inc. or North American Catholic
Educational Programming Foundation, Inc.
[*** Confidential Treatment Requested]
7
[After the Commencement Date, provided that Clearwire is not in breach of this
Agreement, Clearwire shall be permitted to require Licensee to swap all but not
less than all of the spectrum authorized by the FCC License for Suitable
Replacement Spectrum licensed to one entity (the "SWAP PARTNER") in either the
Geographic Market or one different U.S. market without Licensee's consent,
provided that Licensee receives the same benefits it would otherwise receive
from Clearwire under this Agreement, such swap is reversed at the expiration or
termination of this Agreement and Licensee receives assurances reasonably
acceptable to Licensee that it will receive back from the Swap Partner within
six (6) months after such expiration or termination the same or superior
channels and channel rights Licensee provided to the Swap Partner (as reasonably
determined by Licensee), without any lien or encumbrance and free of the rights
of third parties. Clearwire agrees to bear all costs and expenses associated
with the implementation of channel swapping and reversal of the swap, including
without limitation the reasonable out-of-pocket costs of Licensee's engineering
consultants and attorneys. The foregoing requirements with respect to the
reversal of a swap shall survive the expiration or termination of this
Agreement, unless termination is caused by Licensee's breach of this Agreement.
"SUITABLE REPLACEMENT SPECTRUM" means regular FCC Authorization (and not
special, special temporary, experimental or developmental authorization) in
Licensee's name and entitling Licensee to use one FCC-defined channel (plus
related guardbands, if any) for each FCC-defined channel (and associated
guardband segment, if any) provided to the Swap Partner (an "ASSIGNED CHANNEL"),
and each such replacement channel (and associated guardband segment, if any) (a
"RECEIVED CHANNEL") shall have the following additional characteristics: (1) it
is swapped along with the other Channels to a single licensee having the same
number of channels; (2) it may not be Broadband Radio Service ("BRS") Channel 1,
2 or 2A; (3) it shall be of an entire EBS channel (e.g., EBS Channel Gl) as
defined in FCC Rule 27.5(i) or any successor rule, and not a channel created
from parts of FCC-defined channels; (4) Licensee's upper or lower band segment
Channels (or, if pre-Transition, Licensee's Channels bearing FCC-assigned
numbers 1, 2 or 3) must be replaced with three upper or lower band segment
channels (or, if pre-Transition, channels bearing FCC-assigned numbers 1, 2 or
3) that will be contiguous through the post-Transition period; (5) it shall have
a FCC-defined geographic service area ("GSA") at least as large as that of the
Assigned Channel of like number (e.g., Gl and Dl); (6) its GSA shall include a
total estimated population at least as large as the total estimated population
within the GSA of the Assigned Channel of like number; (7) if the Received
Channel is subject to any Interference Consent(s), those Interference Consent(s)
must meet the requirements for classification as Conforming Interference
Consents and provide Licensee, after the swap, with the same rights the Licensee
would have pursuant to a Conforming Interference Consent as reasonably
determined by Licensee; (8) the Received Channel's authorization shall not be
subject to any facts or circumstances which Licensee reasonably determines could
cause its FCC authorization to be cancelled, forfeited, revoked, subject to
cancellation, forfeiture or revocation, or not to be able to transition to its
default channel specified in FCC Rule 27.5(i)(2) or any successor rule; (9) the
Received Channel shall be free and clear of all liens, encumbrances, and rights
of persons (with the exception of third party leases that will not apply after
the swap and except agreements permitted under clause (7)); and (10) the
Received Channel shall be free of any unusual license conditions not also
applicable to the Assigned Channel. Clearwire's right to require Licensee to
swap is subject to FCC consent and the consent of the Swap Partner.
Notwithstanding the
8
foregoing in this Section 5(e), Licensee shall reasonably consider channel swaps
for spectrum that is not Suitable Replacement Spectrum.](18)
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 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 (x) [***]
----------
(18) Use bracketed language only in Instruction Telecommunications Foundation,
Inc. and North American Catholic Educational Programming Foundation, Inc.
IUAs.
[*** Confidential Treatment Requested]
9
[***]
(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 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) [***] 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 [***] 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 parties.
[* * * Confidential Treatment Requested]
10
(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 MFN Price. 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,
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. Without limiting the generality of the
foregoing, Clearwire shall have constructed and maintained in service such
facilities operating on the Channels as are needed to qualify for a "safe
harbor" under the FCC Rule 27.14(e)(l)(ii) and/or 27.14(e)(2), as they may be
amended from time to time, or any other applicable "safe harbor" as may be
reasonably acceptable to Licensee, so that Licensee would qualify for at least
one of such "safe harbors" on [***] substantial service showing deadline of FCC
Rule 27.14(e) had been advanced to [***] and Clearwire shall continue to
maintain such facilities in service between [***] and the later of [***] and
such date to which the FCC may extend the substantial service showing deadline
so as to ensure that the FCC finds that Licensee has met the substantial service
requirement under FCC Rule 27.14(e). In the event that the FCC by Final Order
effective prior to [***] extends the substantial service showing date beyond
[***], then the [***] deadline shall be extended to the date that is sixteen
(16) months before such extended date. In the event that Clearwire determines
that it may not satisfy the [***], and if, by [***], Clearwire demonstrates to
Licensee's reasonable satisfaction that Clearwire will meet the [***] deadline
if this deadline is extended to [***], then this deadline shall be extended to
[***] by written notice from Licensee to Clearwire. In the event that (i)
Clearwire elects to make such demonstration by [***], and Licensee informs
Clearwire that Licensee is not reasonably satisfied that Clearwire will meet the
[***] if the deadline for it is extended to [***], or (ii) Clearwire does not
make such a demonstration by [***], Clearwire shall be in material breach of
this Agreement and Clearwire shall have a cure period to meet the [***] that
ends on [***], notwithstanding any longer cure period or requirement for breach
notice for non-payment breaches provided by Section 11(c). If Clearwire fails to
meet the [***] by the end of that thirty (30) day cure period, Licensee shall
have the right to terminate this Agreement or to build such facilities as
qualify for a "safe harbor" under Section 27.14(e) of FCC Rules, and Clearwire
shall reimburse Licensee's reasonable costs of doing so. In the event Clearwire
makes such
[*** Confidential Treatment Requested]
11
demonstration to Licensee's reasonable satisfaction, but fails to satisfy the
[***], such failure shall constitute a material breach by Clearwire, for which
there shall be no requirement of breach notice or opportunity to cure
notwithstanding Section 11(c), and Licensee shall have the right to terminate
this Agreement or to build such facilities as qualify for a "safe harbor" under
Section 27.14(e) of FCC Rules, and Clearwire shall reimburse Licensee's
reasonable costs of doing so.
(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 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 violations), 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 violation(s), 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 EBBS or BRS channels in the Geographic Market
of the Channels.
(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 [***] 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
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12
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 [***] proportionate to 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 as set forth in Section 20(b)(iii).
(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.
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(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.
(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.
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(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.
(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
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limitations in network capabilities. Clearwire shall comply with the
provisions of this Agreement and the Master 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.
(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
entities, 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 a request-for-proposals (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" includes only (1) 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 or (2)
correctional institutions that use the service in connection with a written
agreement with the Licensee for specific programming content produced or
procured by Licensee or with whom Licensee has had a prior written
relationship; provided that such programming content is delivered to such
correctional institutions without charge or other fees. Social Welfare
Agencies shall specifically exclude treasury and revenue services
departments, law enforcement agencies, legislatures, the 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
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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.
(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. INTERFERENCE CONSENTS
Upon advance written notice to Licensee given after the Commencement Date,
Clearwire shall have the right to enter into agreements ("INTERFERENCE
CONSENTS") allowing third party licensees and operators to operate transmitters
that cause greater levels of signal strength within the Licensee's GSA than
otherwise is permitted under Part 27 of FCC Rules in order to coordinate
Clearwire's operations in Licensee's GSA with those of third parties. This right
shall apply only to such Interference Consents ("CONFORMING INTERFERENCE
CONSENTS") as (1) by their
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terms expire upon the earlier of the expiration or termination of this
Agreement; (2) do not result in or allow operations as may result in a
degradation in the value of the Channels or any impairment of the FCC License
for the Channels that is material or will continue beyond the expiration or
termination of this Agreement; (3) are limited to terms and conditions providing
for fair and reciprocal rights and limitations for and on the operation of
Licensee's facilities and the facilities of the other party in connection with
system coordination inside Licensee's GSA and at Licensee's GSA boundaries and
provisions ancillary thereto, but not channel swapping; (4) do not cede, grant
or provide any part of the Licensee's GSA or channel capacity to a third party;
(5) do not allow the placement of third party transmitters operating on the
frequencies of any of the Channels within the Licensee's GSA, except for
transmitters operated pursuant to Special Temporary Authority for not more than
a total of 180 days plus a renewal period of not more than 180 days, and in any
event ending prior to the expiration or termination of this Agreement; and (6)
do not prevent the construction of facilities sufficient to qualify the Licensee
for a substantial service safe harbor pursuant to the terms of this Agreement.
Third-party rights to use Licensee's GSA or channel capacity other than those
matters related above are to be handled in accordance with the assignment or
sublicensing provisions of this Agreement.
All Interference Consents entered into by Clearwire pursuant to this
Section shall provide that the Licensee has the right to require the third party
to cease operations that required the Interference Consent to exist upon the
expiration or termination of this Agreement, including the right of specific
performance of such requirement and the payment by the third party of attorneys'
fees in enforcing that right, and that such rights shall not be affected or
diminished by any default by Clearwire. Except in connection with a permitted
assignment of this Agreement itself, Clearwire shall have no right or power to
assign any such Interference Consent, it being understood that Clearwire's
rights to enter such Interference Consents is based upon a special relationship
with Licensee. Unless termination results from Licensee's material breach of
this Agreement, Clearwire shall be responsible for any unreimbursed cost or
damages to Licensee as a result of a third party's failure to cease operations
upon expiration or termination of the Agreement, and shall pay Licensee's legal
fees in connection with enforcement of the Interference Consent. The rights in
this paragraph shall survive the expiration or termination of this Agreement for
any cause.
Clearwire shall not enter into any Interference Consent, or any amendment
or supplement thereto, without first giving Licensee and its counsel thirty (30)
days advanced written notice or such lesser time as may be required by the
exigencies of the situation but no less than ten (10) days (the "NOTICE PERIOD")
of Clearwire's intention to enter into the consent, amendment or supplement,
along with a complete and unredacted form of the consent, amendment or
supplement (and any documents to which it refers) and a statement of the Notice
Period applicable thereto. In the event that Clearwire intends to execute an
Interference Consent, or any amendment or supplement thereto, that materially or
substantively differs from the form previously supplied to Licensee, Clearwire
shall once again follow the procedure and requirements of the immediately
preceding sentence as though no notice of the document in the prior form had
been given. During the Notice Period applicable to any proposed Interference
Consent, or any amendment or supplement thereto, Clearwire shall answer
questions and entertain comments and suggestions of the Licensee. The failure of
Licensee to object to any proposed Interference Consent, or any amendment or
supplement thereto, shall not constitute a
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waiver of this Section 8 or be construed as Licensee's implied endorsement of
such proposed consent, amendment or supplement.
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, 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.
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19
(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) ASSIGNMENT AND TRANSFER BY CLEARWIRE. Subject to Section 10(c) and
(d), [***] and any required FCC consent or authorization, which [***], Clearwire
may assign this Agreement to a third party or experience a Transfer of Control;
provided, however, that Clearwire shall remain responsible for the performance
of the payment obligations of the assignee pursuant to the Agreement, except
that Clearwire shall not be responsible for the performance of the payment
obligations of those assignees whose creditworthiness is equal to or better than
Clearwire's, as measured by each party's respective bond ratings or other
comparable measure, and who sign an agreement with, and reasonably acceptable
to, Licensee to assume the obligations of Clearwire hereunder. Licensee's
consent may be withheld, if, among other things, Clearwire does not covenant in
writing in form and substance reasonably acceptable to Licensee to provide or
does not demonstrate to Licensee the capability to provide at the time of
assignment or Transfer of Control and thereafter the same level of services,
features and access to Licensee, including without limitation all of the Access
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20
Right Royalties in the Market Area of the Channels, that Clearwire would have
provided or been obligated to provide had the Agreement not been assigned, and
any such assignment or Transfer of Control without Licensee's consent shall be
void and of no force and effect. "TRANSFER OF CONTROL" means a transfer, sale or
assignment of equity in Clearwire, or any direct or indirect parent of
Clearwire, that would require FCC consent under present provisions of Section
310 of the Communications Act of 1934, as amended, other than (i) a transfer,
sale or assignment of equity in Clearwire Parent, a merger of Clearwire Parent
or a merger with any of Clearwire Parent's Affiliates even if such transfer
otherwise constitutes a transfer of Clearwire or (ii) a transaction in which an
entity acquires all or substantially all of the assets of the Clearwire
subsidiaries that hold the U.S. assets and operating companies.
(B) SUBLICENSING BY CLEARWIRE. Subject to Section 10(d), [***] and any
required FCC consent or authorization, [***] Clearwire may sublicense the use of
Clearwire Capacity; provided, however, that Clearwire shall remain responsible
for the performance of the payment obligations pursuant to this Agreement,
except that Clearwire shall not be responsible for the performance of the
payment obligations if and to the extent the sublicensee agrees with Licensee by
agreement in form and substance reasonably acceptable to Licensee to perform
such payment obligations and if the sublicensee's creditworthiness is equal to
or better than Clearwire's, as measured by each party's respective bond ratings
or other comparable measure. Licensee's consent may be withheld if, among other
things, Clearwire does not covenant in writing in form and substance reasonably
acceptable to Licensee to provide the same level of services, features and
access to Licensee including without limitation all of the Access Right
Royalties in the Market Area of the Channels under this Agreement, that it would
have provided or been obligated to provide had such Clearwire Capacity not been
sublicensed. In the event Clearwire's rights under this Agreement are
sublicensed, Licensee may require the sublicensee, at its expense, to provide
Licensee with an unconditional stand-by letter of credit issued by a FDIC-member
bank organized under the laws of the United States or a State hereof, having
capital, surplus and undivided profits of not less than $25,000,000,000, and
that has an issuer rating from Moody's Investors Service of A2 or better in the
amount of the net present value of the remaining Monthly Royalty payments for
the period ending on the tenth (10th) anniversary of the Effective Date
discounted at ten percent (10%) annually and recalculated on an annual basis on
January 1, which Licensee may draw down one or more times to cure any payment
default of such sublicensee hereunder. Such letter of credit shall be in form
and substance reasonably acceptable to Licensee. Clearwire may not allow a
sublicensee to sublicense the use of Clearwire Capacity to another third party.
(C) PERMITTED ASSIGNMENTS BY CLEARWIRE; DISTINCT SERVICE ENTITY.
Notwithstanding the foregoing but subject to Section 10(d), Clearwire, with
prior notice to Licensee but without the prior consent of Licensee, may: (1)
subject to the Guarantee provided under the Master Agreement, assign any of its
rights under this Agreement as collateral, provided that Clearwire shall remain
responsible for performance of all its obligations under this Agreement and
related obligations under the Master Agreement and further provided that the
assignment shall be subject to the provisions of Section 9-408(d) of the Uniform
Commercial Code (Official Text); and (2) sell, assign, sublease, delegate or
transfer this Agreement or any of its rights or obligations hereunder to any of
Clearwire's Affiliates or any entity that acquires all or substantially all of
the assets of the Clearwire subsidiaries that hold the U.S. assets and
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21
operating companies. In the event that an entity (a "SERVICE ENTITY") other than
Clearwire is not the direct provider of any one or more of the Access Right
Royalties, within ten (10) days of Licensee's request, Clearwire shall cause
such Service Entity to execute and to deliver a written undertaking, in form and
substance reasonably acceptable to Licensee, to provide such Access Right
Royalties as it may provide in accordance with the provisions of this Agreement
applicable thereto, including an assumption of the obligations of Clearwire
under Section 7 and to be jointly and severally liable with Clearwire therefore
(a "SERVICE ENTITY AGREEMENT"). No Service Entity Agreement shall be deemed to
relieve Clearwire of any of its Access Right Royalty obligations hereunder.
(D) PRE-COMMENCEMENT DATE RESTRICTIONS. In no event shall Clearwire
undertake or experience any assignment, Transfer of Control or sublicensing
prior to the Commencement Date.
(E) ASSIGNMENT BY LICENSEE. 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. If FCC consent to the assignment of the De
facto Transfer Authorization is required for the rights of Licensee hereunder to
be assigned to such proposed assignee, the Parties shall promptly join with the
proposed assignee in seeking such consent and shall cooperate in prosecuting
such consent application. 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: (1) assign any of its rights under this Agreement as collateral
and (2) 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.
(F) [***]
[*** Confidential Treatment Requested]
22
11. TERMINATION OF AGREEMENT
(A) This Agreement will automatically terminate with respect to the
FCC License or affected Channel(s) upon the earlier of: (1) the loss or
expiration without renewal of the FCC License; or (2) an FCC Final Order
revoking, terminating or canceling the FCC License, and in either such event
this Agreement shall terminate on the date specified as the expiration,
revocation, termination or cancellation 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.
(B) This Agreement may be terminated by either Party if the other
Party fails to cure a payment default under this Agreement within sixty (60)
days of receipt of written notice from the non-defaulting Party specifying the
payment default. If the non-defaulting party terminates the Agreement within one
hundred eighty (180) days of a payment default, the payment default will not be
included in the definition of a Cross Default under the Master Agreement.
(C) This Agreement may be terminated by either Party after the
material breach of a non-payment obligation by the other Party or a material
misrepresentation by the
[*** Confidential Treatment Requested]
23
other Party and, except as provided in Section 6(d), the failure or refusal of
the breaching Party (i) to diligently commence efforts to cure such default with
reasonable promptness after receipt of written notice from the non-defaulting
Party specifying the default but in no event any later than thirty (30) days
after receipt of such notice, or (ii) to diligently continue efforts to cure
such default after commencing such efforts, or (iii) to cure such default within
one-hundred twenty (120) days of receipt of written notice from the
non-defaulting Party specifying the default. In the event of an uncured material
breach of a non-payment obligation, Licensee shall have the option, but not the
obligation, to cure such breach at Clearwire's expense. A breach by a Service
Entity of a Service Entity Agreement (subject to the expiration of applicable
cure periods in the Service Entity Agreement, which shall be consistent with
those stated in this Agreement) shall be deemed a breach by Clearwire of this
Agreement. In the event of a material breach of this Agreement by Licensee prior
to the Commencement Date, Clearwire's sole recourse shall be to seek the
specific performance of this Agreement by Licensee.
(D) This Agreement shall terminate automatically in the event that
Licensee elects to withdraw from the Master Agreement incident to a Cross
Default, as defined in the Master Agreement.
(E) Licensee may terminate this Agreement pursuant to Section 16(b).
(F) If the Commencement Date does not occur by the first (1st)
anniversary 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.
(G) 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.
(H) 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.
(I) 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.
(J) 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
24
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.
(K) 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 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
Licensee agrees that it will not, during the Term of this Agreement,
engage in building, operating, managing or distributing, on a for-profit basis,
a wireless broadband network in the Market Area, except as allowed by this
Agreement and except for the use of the Educational Reservation and the Access
Royalties in compliance with the provisions hereof applicable to such royalties.
25
14. CONFIDENTIALITY AND NON-DISCLOSURE(19)
(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 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
----------
(19) If the Licensee is a governmental body subject to an open records, sunshine
or similar law or regulation that requires Licensee to make information
available to the public in an manner or to an extent that would be
inconsistent with this Section 14, revise this Section 14 to be consistent
with such law or regulation.
26
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.
(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.
27
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. Subject to any specific exceptions
identified on any schedule to the Master Agreement,(20) Licensee hereby
represents and warrants to Clearwire that:
(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
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(20) Delete this clause from School District IUAs.
28
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 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,
29
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 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
30
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) Offering Exemption: Securities Representations.(21)
A. The Licensee Schedule states whether Licensee is or is
not an "accredited investors" as this term is defined in Rule 501(a)
of Regulation D as promulgated by the U.S. Securities and Exchange
Commission under the Securities Act.
B. Licensee is acquiring the Equity Royalty for its own
account, for investment purposes only and not with a view to the
distribution (as such term is used in Section 2(11) of the Securities
Act) thereof. Licensee understands that the Equity Royalty has not
been registered under the Securities Act and cannot be sold unless
subsequently registered under the Securities Act or an exemption from
such registration is available.
C. Licensee is knowledgeable and experienced in the
telecommunications industry and is capable of evaluating the risks and
merits of the Equity Royalty, and making an informed decision with
respect thereto. Licensee, its officers, and directors have had
sufficient opportunity to ask questions of and receive answers from
Clearwire concerning the business of Clearwire, its operations, assets
and liabilities. Licensee and its representatives have had an
opportunity to review all documents and records concerning Clearwire
and its business that Licensee has requested. Licensee has conducted
its own independent assessment, analysis and investigation with
respect to Clearwire and its business at the time of entering into
this Agreement and has agreed to enter into this Agreement based
solely on this assessment, analysis and investigation, and the
representations and warranties of Clearwire set forth in this
Agreement and the Master Agreement.
D. Licensee is aware that Clearwire Parent is a speculative
enterprise, that certain of the information disclosed to Licensee
contains forward looking statements which involve risks and
uncertainties, and that Clearwire Parent's actual results may differ
significantly from the results discussed in these forward looking
statements. Licensee further acknowledges that the value of Clearwire
Parent's assets is inherently uncertain and is dependent upon market,
technological, and regulatory developments concerning feasible and
allowable uses. Licensee represents and warrants to Clearwire that it
has assessed these factors independently and has agreed to enter into
this Agreement without reliance upon or expectation of any
representations, warranties, or disclosures of any kind from
Clearwire, except as set forth or delivered pursuant to this Agreement
or the Master Agreement.
(viii) Brokers. Neither Licensee nor any of its directors,
officers, employees, or representatives has employed any broker or finder
in connection with this
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(21) Delete this subsection (viii) from School District IUAs.
31
Agreement other than D.F. Hadley & Co., Inc. Licensee is solely responsible
for all fees payable to D.F. Hadley & Co., Inc.(22)
(ix) 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. Subject to any specific exceptions
identified in the Master Agreement, Clearwire hereby represents and warrants to
Licensee that:
(i) 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. 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. Each of Clearwire and Clearwire
Parent 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 or Clearwire Parent, taken as a whole, other
than changes affecting the broadband wireless business generally
("CLEARWIRE MATERIAL ADVERSE EFFECT").
(ii) Authorization of Agreement. Each of Clearwire Parent and
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 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).
Clearwire Parent's obligation to issue the Equity Royalty in the Master
Agreement (assuming the due authorization, execution and delivery by the
other parties thereto) constitutes the legal, valid and binding obligations
of Clearwire Parent, 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
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(22) Delete this Subsection (ix) from School District IUAs.
32
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) Equity Royalty.(23) The authorization, offer, issuance,
sale and delivery of the Equity Royalty has been duly authorized by all
requisite corporate action on the part of Clearwire Parent, and the Equity
Royalty, when issued, sold and delivered in accordance with the Master
Agreement and this Agreement, will be validly issued and outstanding, fully
paid and nonassessable, free of any Liens and not subject to preemptive or
similar rights of the other shareholders of Clearwire Parent or others
(other than as set forth in the Stockholders Agreement, as defined in the
Master Agreement, or Clearwire Parent's Certificate of Incorporation, as
amended). The terms, designations, powers, preferences and relative
participating, optional and other special rights, and the qualifications,
limitations and restrictions, of the Class A Common Stock are as stated in
the Clearwire Parent's Certificate of Incorporation, as amended.
(iv) No Conflict. Neither of the execution and delivery by
Clearwire or Clearwire Parent of this Agreement or the Master Agreement,
nor the compliance by Clearwire or Clearwire Parent with any of the
provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the certificate of incorporation, certificate
of limited liability company, bylaws or operating agreement of Clearwire or
Clearwire Parent, (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 or Clearwire Parent is a party or by
which Clearwire or Clearwire Parent 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 or Clearwire Parent 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.
(v) 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 or
Clearwire Parent in connection with the execution and delivery of this
Agreement or the Master Agreement or the compliance by Clearwire or
Clearwire Parent with any of the provisions hereof or thereof.
(vi) 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, or the ability of Clearwire Parent to
issue to Equity Royalty, (a) there is no Proceeding now in progress or
pending or, to the knowledge of Clearwire, threatened against Clearwire or
Clearwire Parent or the assets or the business of Clearwire or Clearwire
Parent and (b) neither Clearwire nor Clearwire Parent is subject to any
order,
----------
(23) Do not insert this representation in School District IUAs. For these IUAs
insert "RESERVED."
33
writ, injunction or decree of any court or other Government Agency other
than orders issued in licensing proceedings.
(vii) Compliance with Laws; Permits. Each of Clearwire and
Clearwire Parent (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.
(viii) Brokers. Neither Clearwire nor any of its directors,
officers, employees or representatives has employed any broker or finder in
connection with this Agreement.
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.
(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;
34
(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 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.
(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
35
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. INFORMATION SHARING OBLIGATIONS AND CONSULTATION REGARDING ACCESS RIGHT
ROYALTIES AND CERTAIN OTHER COVENANTS
(A) OVERVIEW OF CONSULTATION/INFORMATION EXCHANGE REQUIREMENTS.
(i) Guiding Principles. The consultation, governance and
information rights and obligations and the related processes for audit
contained in this Section 20 (collectively, the "ONGOING OBLIGATIONS"), are
intended to preserve the benefits to Licensees set forth in this
Agreement's Sections 6(c), 7 and Section 2(c)(ii) and Section 7.11 of the
Master Agreement hereof in light of changes in the wireless broadband
environment over a Term of approximately 30 years. By way of example and
not limitation, the Parties recognize that changes to the technology or
architecture of Cell Sites or Sectors, or to the composition, number or
characteristics of Subscribers, could, without accompanying changes to the
provisions of Section 7 result in an adverse impact on the number of
Cost-Free Customer Accounts to which Licensee is entitled or otherwise
impair their value in comparison to the anticipated circumstances at the
time of execution of this Agreement. As well, it is the intent of the
Parties to supply Licensee with information as described in Section 20(f)
if Licensee owns shares of Clearwire Parent stock pursuant to Section 2 of
this Agreement and the related provisions of the Master Agreement. The
Ongoing Obligations are intended to facilitate good faith negotiation and
resolution of issues arising from changes in circumstances during the Term,
but any failure to comply
36
with the Ongoing Obligations is to be addressed through the Dispute
Resolution Procedures and shall not give rise to a right to terminate this
Agreement.
(ii) Party Representatives. To facilitate the Ongoing
Obligations, each Party shall designate a party representative as provided
in this Section 20(a)(ii) to act as its representative with respect to the
all matters under this Agreement and in particular with respect to matters
governed by Section 20(e) (the "PARTY REPRESENTATIVES"). Notwithstanding
the foregoing in this Section 20(a)(ii), if the rights of Clearwire
hereunder at the outset of a negotiation hereunder are held by Clearwire or
a Clearwire Affiliate and the rights of Licensee hereunder remain held by
the entity that executed this Agreement as the "Licensee" or an Affiliate
of that entity, then the appointment of Party Representatives, including
the number for each, shall be governed by Section 8.01(b) of the Master
Agreement, and if during any negotiations the rights of Clearwire hereunder
are not held by Clearwire or a Clearwire Affiliate or the rights of
Licensee hereunder are no longer held by the entity that executed this
Agreement as the "Licensee" or an Affiliate of that entity, then the
appointment of Party Representatives, including the number for each, shall
be governed by this Section 20(a)(ii) and the Parties shall promptly make
new appointments.
(iii) Relationship Management. To facilitate the management of
the relationship between Licensee and Clearwire, the Licensee shall be
provided with the information disclosure provided for in Section 20(b)
through Section 20(e) at the times specified therein. The completeness and
accuracy of such information may be evaluated through the audit process set
forth in Section 20(g). Clearwire Parent information will be made available
in accordance with Section 20(f) if Licensee owns shares of Clearwire
Parent stock pursuant to Section 2 of this Agreement and the related
provisions of the Master Agreement.
(B) CAPACITY DISCLOSURE.
(i) Initial Capacity Disclosure. Within thirty (30) days of the
later of (i) the commercial launch of a Clearwire Affiliate's broadband
wireless system in the Market Area, and (ii) the Commencement Date (such
later date, the "EBS RELEVANCE DATE"), Clearwire shall disclose in writing
to Licensee: (1) the total number of EBS and BRS channels Clearwire
currently is utilizing in the Market Area of the Channels, (2) the number
of Cell Sites in such Market Area, and (3) the number of Sectors in such
Market Area. The information pursuant to (1) and (2) shall be updated at
each Information Sharing Meeting, and the information pursuant to (3) shall
be updated as provided in Section 20(b)(ii).
(ii) Annual Update. By January 31 of each year following the EBS
Relevance Date, Clearwire shall disclose in writing to Licensee: (1) the
number of Sectors in such Market Area, and (2) the number of subscribers in
such Market Area served by Clearwire or any of its Affiliates. All
information shall be as of December 31 of the previous year.
(iii) Data Capacity Measurement. On the [***] and [***]
anniversaries of the EBS Relevance Date, and every [***] thereafter,
Clearwire shall disclose in writing
[*** Confidential Treatment Requested]
37
to Licensee the overall data capacity of the network in such Market Area as
measured by its average throughput. The average throughput measurement
shall be made in such fashion as shall be agreed by the Party
Representatives in consultation with Clearwire engineers and other
technical experts prior to such anniversary, using metrics that are as
consistent as possible with those utilized at the time of the immediately
prior average throughput measurement (on each such anniversary, the
"UPDATED CAPACITY DISCLOSURE").
(C) SYSTEM INFORMATION.
Within thirty (30) days of the EBS Relevance Date, Clearwire shall disclose
in writing to Licensee the system capabilities, services, and feature sets
that are generally provided to Clearwire's or its Affiliate's retail
customers and wholesalers to mass market customers ("SYSTEM SERVICE
CAPABILITIES"), which information can be provided by reference to
Clearwire's website to the extent that it is available to the public there.
At such time as System Service Capabilities are changed for any Market
Area, Clearwire shall so notify Licensee in writing within 30 days of such
change. Clearwire will also provide appropriate supporting information of
the change as may be reasonably requested by Licensee.
(D) PREFERRED CONTENT PROVIDER INFORMATION.
(i) Within thirty (30) days of the later of the EBS Relevance
Date and the date when third-party content is delivered in the Market Area,
Clearwire shall disclose to Licensee in writing the system capabilities,
and/or service or feature sets that are then being provided to third-party
content providers in the Market Area, and a schedule of the charges, if
any, for any of the foregoing, together with the basis on which such
charges are imposed to demonstrate that the pricing requirements of Section
7(j) are being satisfied. Clearwire shall advise Licensee of anticipated
changes in the price structure and the effective date of any such change
not less than 30 days before such change shall become effective.
(ii) Clearwire shall disclose in a timely fashion to permit
Licensee to make alternative arrangements if Clearwire anticipates that
there may be limitations in the network capabilities in the Market Area of
the Channels that could cause Clearwire to restrict the use of capabilities
and services pertaining to a Licensee's providing content over the
broadband wireless network in that Market Area. Prior to restricting access
of Licensee as a result of such limitations, as permitted under Section
7(j), Clearwire shall have disclosed in sufficient detail the scope of such
constraints. Clearwire shall promptly advise Licensee if as a result of a
change in technology, business practices, customer dynamics, or otherwise,
the capacity constraint is dissipated at any time, which would reinstate
the obligations of Clearwire under Section 7(j).
(E) CONSULTATION PROCESSES.
(i) Consultation Process Pertaining to Access Right Royalty
Information. As often as necessary, but in no event less than once per
calendar quarter, the Licensee Representatives or their designees shall be
given access to members of Clearwire's management and/or technical staff to
review the process and content of
38
information sharing pursuant to this Section 20, and to address any
questions or concerns about the manner, timeliness and completeness of the
information received, in addition to questions about its content.
(ii) Process for Altering Definitions/Formulae to Maintain
Integrity of Relationship. At the call of any Party Representative, the
Party Representatives shall meet, together with such other employees or
advisors as may facilitate such meeting, to discuss concerns over the
operation of the formulas and the scope of defined terms as a result of one
or more changes in Clearwire's technology and/or business practices that
individually or collectively produce a material adverse change to the
Access Right Royalties or other material benefits that Licensee receives
pursuant to this Agreement, and to determine if a reformation of this
Agreement should be implemented to prevent or reverse such material adverse
change(s).
A. The Parties agree to share such information and to
provide such technical assistance in collecting and evaluating such
information as may be useful or necessary to facilitate the process
required by Section 20(e)(i) and (ii). In connection with such
consultation, any Party Representative may propose altering the scope
of a term or formula under this Agreement (a "REFORMATION PROPOSAL")
to achieve the goals set forth in Section 20(a) and to preserve the
Licensee benefits set forth Section 7 or elsewhere in this Agreement.
If the Parties agree on the change, they shall take such action as is
necessary to amend this Agreement. If the Parties cannot agree on a
proposed modification in a timely manner, any Party Representative may
invoke the Special Dispute Resolution Procedure identified for this
purpose in Section 21(d)(xii). Any Party Representative may invoke for
the first time Special Dispute Resolution Procedure set forth above at
any time following the Commencement Date.
B. No Party Representative may invoke the Special Dispute
Resolution Procedure in support of a Reformation Proposal on the same
principal grounds more frequently than every five (5) years during the
Term of this Agreement. By way of example but not limitation: no Party
Representative's Reformation Proposal justified primarily on Clearwire
network technical changes can be pursued through the Special Dispute
Resolution Procedure within five (5) years of the immediately
preceding Special Dispute Resolution Procedure justified primarily on
Clearwire network technical changes. By way of further example and not
limitation: no Party's Representative's Reformation Proposal justified
primarily on Clearwire's changed business practices can be pursued
through the Special Dispute Resolution Procedure within five (5) years
of the immediately preceding Special Dispute Resolution Procedure
justified primarily on Clearwire's changed business practices.
(F) INFORMATION ACCESS RIGHTS RELATED TO CLEARWIRE PARENT.
(i) Access to Information. [***]
[*** Confidential Treatment Requested]
39
[***]
[*** Confidential Treatment Requested]
40
[***]
(G) INFORMATION AUDIT RIGHTS.
(i) Licensee may audit the information provided by Clearwire
pursuant to Section 20(b), 20(c), and 20(d). Licensee's audit will be
limited to Clearwire's records and engineering documents that are relevant
and sufficient to verify the information provided by Clearwire. No more
than once per calendar year, Licensee may audit one or more metrics
reported by Clearwire for the Market Area. Clearwire must provide the
underlying source documents within 20 days of a request for audit by a
Licensee.
(ii) The costs incurred by Licensee in performing an audit under
this Section 20(g) shall be borne by the Licensee; provided that, if there
is a discrepancy of 5% or more with respect to a particular metric in the
Market Area, costs of audit of that metric shall be borne by Clearwire and
promptly paid upon submission of an invoice.
21. 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.
[*** Confidential Treatment Requested]
41
(D) DISPUTE RESOLUTION.(24)
(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 21(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 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 21(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 21(d)(iii) and
as modified by the Special Arbitration provisions Section 21(d)(xii) in the
case of disputes arising under Section 20(e)(ii).
(iii) Arbitration. Any Dispute that has not be resolved within
the time period provided for in Section 21(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.
----------
(24) If the Licensee is a governmental agency that is required to conduct
dispute resolution by other means, substitute the other means for this
Section 21(d).
42
(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 the largest city within the GSA of
the Channels(25). 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 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
----------
(25) For North American Catholic Educational Programming Foundation, Inc. IUAs,
substitute "Providence, RI" for "the largest city within the GSA of the
Channels" and for the ITF Cluster insert "Boulder, CO."
43
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 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.
(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.
(xii) Special Arbitration. With respect to any Dispute arising
under Section 20(e)(ii), the Arbitration procedures set forth in Section
21(d) above shall govern as modified by this Section 21(d)(xii).
44
A. During the first 15 days of the Submission Period each of
the Parties shall designate an arbitrator and unless the third
arbitrator has been selected as provided in the following sentence,
the two arbitrators together shall, within 10 days of their
appointment, select the third arbitrator who shall be an expert in one
of the principal areas that is the subject to the arbitration. If the
Parties can agree within the first 15 days of the Submission Period,
the third arbitrator shall be a mutually selected individual with
substantial experience in the general subject matter of the Dispute
(the "EXPERT"). No arbitrator shall have been employed by either Party
during the 24 months preceding the hearing date, unless the other
Party consents. The Expert shall serve as the chair of the panel.
B. During the Submission Period, each Party shall submit to
the each other and the arbitrators, a description of the Dispute and a
proposed resolution, based on the facts known to the Party at the time
(an "INITIAL PROPOSAL").
C. Following discovery and as a part of the Party's brief,
each Party shall make such adjustments, if any, as the Party
determines appropriate to the Initial Proposal.
D. Notwithstanding Section 21(d)(x), in the case of a
Special Arbitration, each Party shall bear its own expenses and the
Parties shall each bear half of the expenses of the arbitration;
provided that, the costs and expenses of the prevailing Party in any
court action to compel arbitration shall be borne by the non-
prevailing Party as provided in the last clause of Section 21(d)(x).
(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):
(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
[* * * Confidential Treatment Requested]
45
Kirkland, WA 98033
Attn: [***]
Fax: [***]
Davis Wright Tremaine, LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attn: [***]
Fax: [***]
(ii) LICENSEE
With a Copy to:(26)
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.(27)
(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.
----------
(26) Insert notice address(es) information provided by Licensee.
(27) If the Licensee is a governmental entity whose agreements must be subject
to another State's laws, insert reference to that State's laws in lieu of
New York.
[*** Confidential Treatment Requested]
46
(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.
(I) CONSTRUCTION. The Parties and their respective counsel have
negotiated this Agreement. This Agreement will be interpreted in accordance with
its terms and without any strict construction in favor of or against either
Party based on draftsmanship of the Agreement or otherwise.
(M) COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter addressed, and
supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, between the Parties or any of their affiliates
regarding this subject matter other than the Master Agreement. 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 and Clearwire shall cause
Clearwire Parent to 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
47
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 materials. Clearwire may self-insure
this provision as long as Clearwire maintains a minimum net worth of
at least $100 million.
D. All risk property insurance policy coverage in amounts
adequate to cover Licensee's property in Clearwire's care, custody and
control.
(iii) Clearwire shall furnish Licensee with certificates of
insurance evidencing all of the insurance referred to herein (including
renewals of insurance). Clearwire's obligations under this Section shall in
no way affect or limit the indemnification, remedy, or warranty provisions
set forth in this Agreement.
(P) PUBLICITY. No public release, announcement or other form of
publicity concerning this Agreement or the transactions described in this
Agreement, shall be issued by either Party without the prior consent of the
other Party, except as such release or announcement may be required by law,
regulation or the rules or regulations of any securities exchange, in which case
the Party required to make the release or announcement shall, to the extent
possible, allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance. The Parties shall use reasonable
efforts to consult in good faith with each other with a view to agreeing upon
any press release or public announcement relating to the transactions
contemplated hereby prior to the consummation thereof.
48
AGREED TO:
CLEARWIRE SPECTRUM HOLDINGS II LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[--LICENSEE--]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ATTACHMENTS:
Licensee Schedule
49
RIDER A
(i) On the Effective Date, Clearwire shall pay Licensee
____________________________Dollars ($________________)(28) (the "UPFRONT
ROYALTY DEPOSIT") as a down-payment of [***] of the upfront royalty
(the "UPFRONT ROYALTY"). Within ten (10) Business Days after the Commencement
Date, Clearwire shall pay the Licensee _________________________________ Dollars
($___________)(29) which is the remaining balance (the "BALANCE") of the Upfront
Royalty, plus any amount (the "APPLIED AMOUNT") of the Upfront Royalty Deposit
as may have been applied in payment of "Upfront Royalties" or "Monthly
Royalties" under any one or more of Licensee's Other IUAs; provided, however,
that, if any part or the whole of the Balance or the Applied Amount is received
more than five (5) days after the Commencement Date, that part or whole shall
bear interest at the Default Rate of Interest (as defined in Section 2(i))
accruing from the Commencement Date and continuing until paid.
(ii) Clearwire and Licensee have entered into, or may enter into,
one or more other Educational Broadband Service Long Term De facto Transfer
Individual Use Agreements ("LICENSEE'S OTHER IUAS" which are referred to
together with this Agreement as the "LICENSEE'S IUAS") pursuant to which
Licensee has or will have received payments also referred to in Licensee's Other
IUAs as "Upfront Royalty Deposits."
a. In the event that the FCC approval of the de facto
transfer of any of Licensee's Other IUAs occurs before the Commencement Date
hereunder, the Upfront Royalty Deposit hereunder shall become nonrefundable,
even if this Agreement is terminated. In this event, the Upfront Royalty Deposit
shall be shifted pro rata by MHzPop among those of Licensee's Other IUAs
("LICENSEE'S FIRST GRANT IUAS") as have the earliest date of FCC approval of de
facto transfer, and applied first in payment of "Upfront Royalties" and (if any
shifted amount remains after that application) and then in payment of "Monthly
Royalties" due under such Licensee's First Grant IUAs dollar-for-dollar as they
become due. In the event that the FCC subsequently approves the de facto
transfer of this Agreement, the application of the Upfront Royalty Deposit
hereunder to those Licensee's First Grant IUAs shall be reversed to the extent
that it has not been applied in payment of "Upfront Royalties" or "Monthly
Royalties" due such Licensee's First Grant IUAs and shall be a permanently
vested and non-refundable portion of the Upfront Royalty. In the event that this
Agreement is terminated prior to the Commencement Date, the Upfront Royalty
Deposit hereunder shall be applied to the payment obligations of Clearwire under
Licensee's First Grant IUAs (if any), dollar-for-dollar, in order of maturity.
For purposes of this Section 2(b), "MHZPOPS" are those shown on Schedule A of
the Master Agreement.
b. If this Agreement is a Licensee's First Grant IUA, and
there are Licensee's Other IUAs that are not Licensee's First Grant IUAs on the
Commencement Date of this Agreement ("UNGRANTED IUAs"), then the "Upfront
Royalty Deposits" under the Ungranted IUAs shall be shifted pro rata by MHzPop
among Licensee's First Grant IUAs, including this Agreement, and applied first
in payment of "Upfront Royalties" and (if any shifted
----------
(28) Insert amount that is [***] of the Upfront Royalty as determined from
Schedule A of Master Agreement.
(29) Insert amount that is the remaining [***] of the Cash Upfront Royalty as
determined from Schedule A of Master Agreement.
[*** Confidential Treatment Requested]
50
amount remains after that application) and then in payment of "Monthly
Royalties" due under such Licensee's First Grant IUAs (including this Agreement)
dollar-for-dollar as they become due. In the event that the FCC subsequently
approves the de facto transfer of any one or more Ungranted IUAs, the
application of the "Upfront Royalty Deposits" of such one or more Ungranted IUAs
to this Agreement shall be reversed to the extent that these deposits have not
been applied in payment of Upfront Royalties and Monthly Royalties under this
Agreement and shall be permanently vested and non-refundable portion of the
"Upfront Royalty" of such one or more Ungranted IUAs. In the event that any such
one or more Ungranted IUAs is terminated prior to its "Commencement Date," the
portion of the "Upfront Royalty Deposit" of such one or more Ungranted IUAs as
has been shifted to this Agreement but not yet applied in the payment of Upfront
Royalties and Monthly Royalties hereunder shall be applied to such royalties,
dollar-for-dollar, as they become due.
c. If the FCC has not granted its approval of the de facto
transfer of this Agreement by the first anniversary of the Effective Date and,
as of that anniversary date, has not granted its approval of the de facto
transfer of any of Licensee's Other IUAs that have been executed, then the
Upfront Royalty Deposit shall be vested and non-refundable as follows:
(1) On such anniversary date, [***] of the Upfront
Royalty Deposit shall become vested and non-refundable; and
(2) for each thirty (30) days after that anniversary
date preceding a termination of this Agreement pursuant to Section 1l(f), an
additional [***] of the Upfront Royalty Deposit shall become vested and
non-refundable, with the amount that becomes vested and nonrefundable for any
period less than thirty (30) days being pro rated.
d. If this Agreement is terminated pursuant to Section
11(g), Licensee shall refund to Clearwire that portion of the Upfront Royalty
that has been paid to Licensee (excluding any portion of "Upfront Royalty
Deposits" shifted to this Agreement from Ungranted IUAs that has been applied to
Monthly Royalties or reversed) for application with respect to this Agreement
that is equal to the product of the Upfront Royalty (excluding such portion) and
the fraction having as its numerator the number of days between the date of such
termination and July 31, 2036 and having as its denominator the total of number
of days between the Effective Date and July 31, 2036.
(iii) Refund on Termination.
a. The Upfront Royalty is compensation for Licensee's
agreement to enter into this Agreement and is not compensation to Licensee for
any other commitment of Licensee. In the event that a refund of the whole or any
portion of the Upfront Royalty is required, it shall be repaid to Clearwire
without interest. Except to the extent expressly required by this Section 2(b),
in no event shall Licensee be required to return or refund any portion or the
whole of the Upfront Royalty notwithstanding any termination of this Agreement
and this Section 2(b) shall survive the termination of this Agreement.
[*** Confidential Treatment Requested]
51
RIDER B:
(i) DOWNPAYMENT ON EFFECTIVE DATE; PAYMENT OF BALANCE. On the
Effective Date, Clearwire shall pay Licensee ___________________________ Dollars
($__________________)(30) (the "UPFRONT ROYALTY DEPOSIT") as a down-payment of
[***] of the upfront royalty (the "UPFRONT ROYALTY"). Within ten (10) Business
Days after the Commencement Date, Clearwire shall pay the Licensee
_______________ Dollars ($__________________)(31) which is the remaining balance
of the Upfront Royalty; provided, however, that, if any part or the whole of the
balance is received more than five (5) days after the Commencement Date, that
part or the whole shall bear interest at the Default Rate of Interest (as
defined in Section 2(i)) accruing from the Commencement Date and continuing
until paid.
(ii) REFUND ON TERMINATION.
(a) The Upfront Royalty is compensation for Licensee's
agreement to enter into this Agreement and is not compensation to Licensee for
any other commitment of Licensee. In the event that a refund to Clearwire of the
whole or any portion of the Upfront Royalty is required, it shall be repaid to
Clearwire without interest. Except to the extent expressly required by this
Section 2(b), in no event shall Licensee be required to return or refund any
portion or the whole of the Upfront Royalty notwithstanding any termination of
this Agreement and this Section 2(b) shall survive the termination of this
Agreement.
(b) If this Agreement is terminated pursuant to Section
11(f), Licensee shall promptly thereafter return to Clearwire the lesser of
(i) ______________________________________________________(32) and (ii) the
difference between _________________________(33) and the product of (X) the
number of months and partial months (expressed as a decimal) between the first
anniversary of the Effective Date and the date such termination notice is
delivered, (Y) [***] and (Z) the full amount of the Upfront Royalty Deposit.
(c) If this Agreement is terminated pursuant to Section
11(g), Licensee shall refund to Clearwire that portion of the Upfront Royalty
that has been paid to Licensee for application with respect to this Agreement
that is equal to the product of the Upfront Royalty and the fraction having as
its numerator the number of days between the date of such termination and July
31, 2036 and having as its denominator the total of number of days between the
Effective Date and July 31, 2036.
----------
(30) Insert amount that is [***] of the Cash Upfront Royalty as determined from
Schedule A of Master Agreement.
(31) Insert amount that is the remaining [***] of the Cash Upfront Royalty as
determined from Schedule A of Master Agreement.
(32) Insert the number that is [***] of the Cash Upfront Royalty Deposit.
(33) Ditto.
[*** Confidential Treatment Requested]
52
RIDER C:
(c) ADDITION OF CHANNELS.
(I) The Parties acknowledge that Licensee, pursuant to the
[***] Agreement (as defined in the Master Agreement) has agreed to negotiate in
good faith with a third party for the renewal of its current excess capacity
agreement for channels D1 and D2 in [***], which agreement expires on [***]. In
the event the [***] Agreement is not renewed by [***], Licensee shall on [***]
provide written notice to Clearwire that such D1 and D2 channels (the
"ADDITIONAL CHANNELS") are Available (as defined in the Master Agreement) and
thereafter Licensee and Clearwire shall each have the right, upon written notice
to the other Party, to require the other Party to execute an amendment to this
Agreement in accordance with the terms of this Section 2(c) (the "ADDITIONAL
CHANNELS NOTICE").
(II) If neither Licensee nor Clearwire delivers the
Additional Channels Notice by [***], either Party may terminate the provisions
of this Agreement with respect to such Additional Channels.
(III) Upon delivery of the Additional Channels Notice (the
"DELIVERY DATE") the Additional Channels shall immediately and automatically
become Channels hereunder and shall be subject to the terms and conditions of
this Agreement and the Master Agreement, and the following provisions shall take
effect:
A. The term "Channels" shall be amended to include the
Additional Channels and any associated J-Group channels, but the application of
the provisions of this Agreement (other than the provision of this section) to
the Additional Channels shall be governed by Section _ (d) below.
B. The amount of Monthly Royalties payable hereunder
shall increase in proportion to the increase in MHzPops represented by the
Additional Channels, and Clearwire shall, within ten (10) days after the
Delivery Date pay Licensee the pro rated amount of the increased Monthly Royalty
for the period between such notice date and the end of the month.
C. Within ten (10) days after the Delivery Date,
Clearwire shall have caused the Clearwire Parent Class A Common Stock held in
Escrow for the Additional Channels, as that number of shares may have been
adjusted in accordance with the requirements of the Master Agreement, to be
delivered by the Escrow Agent to Licensee, whereupon such additional shares
shall be deemed a part of the Equity Royalty hereunder.
D. Within ten (10) days of the Delivery Date, Clearwire
shall pay to Licensee an additional amount of __________________________________
Dollars ($____________________)(34) representing the additional Upfront Royalty
Deposit which would have been payable had the term "Channels" included all four
of Channels D1 through D4 on the Effective Date been on the Commencement Date;
provided, however, that, if the additional Upfront Royalty payable for the
----------
(34) Insert amount determined by reference to Schedule A of Master Agreement.
[* * * Confidential Treatment Requested]
53
Additional Channels is not received within such time period, so much of such
remaining balance as has not been received by Licensee by such tenth (10th)
Business Day shall bear interest at the Default Rate of Interest (as defined in
Section 11(b)) from [***] until paid in full.
E. Within ten (10) days of the Additional Channels
Commencement Date, as defined below, Clearwire shall pay Licensee the remaining
unpaid balance of the Upfront Royalty as would have been paid had the term
"Channels" included all four of Channels D1 through D4 on the Commencement Date;
provided, however, that, if such balance payable for the Additional Channels is
not received within such time period, so much of such balance as has not been
received by Licensee by such tenth (10th) Business Day shall bear interest at
the Default Rate of Interest (as defined in Section 11(b)) from [***] until paid
in full.
(iv) Prior to the Additional Channels 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 as applied to the Additional Channels and associated J-Group
channels until the Additional Channels Commencement Date, at which time all
provisions of this Agreement shall be fully applicable to the Additional
Channels and associated J-Group channels. The other provisions in this Agreement
shall be fully applicable to the Additional Channels and associated J-Group
channels from the Delivery Date and until the termination or expiration of this
Agreement. The "Additional Channels Commencement Date" is the day that the FCC
grants the Additional Channels De facto Transfer Application.
(v) Within ten (10) business days following the Delivery
Date and prior to consummating the transfer of de facto control of the
Additional 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 "ADDITIONAL CHANNELS 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
"ADDITIONAL CHANNELS 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 Additional Channels 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
Additional Channels 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 Additional
Channels 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 Additional Channels FCC Long Term
Lease Application and applications or requests for renewal of the Additional
Channels De
[*** Confidential Treatment Requested]
54
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. Upon grant of the Additional Channels Long Term De facto Transfer
Authorization, the provisions of this Agreement applicable to the Long Term De
facto Transfer Authorization shall apply to the Additional Channels Long Term De
facto Transfer Authorization as though it were the Long Term De facto Transfer
Authorization.
55
EXHIBIT II-B
FORM OF MRUA-2 IUA
[SEE EXHIBIT II-A]
EXHIBIT II-C
FORM OF SOSC IUA
EXHIBIT II-C
EDUCATIONAL BROADBAND SERVICE
LONG TERM DE FACTO TRANSFER
SOSC INDIVIDUAL USE AGREEMENT
THIS Educational Broadband Service Long Term De facto Transfer SOSC
Individual Use Agreement (the "AGREEMENT") is entered into as of ______________,
20__(1) (the "EFFECTIVE DATE"), by and between ___________________________,(2)
a __________________(3) (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 "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 ___________ ________ (4)(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 ____________________________ BASIC TRADING AREA")(5);
WHEREAS this Agreement is an integral part of the Master Agreement; 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 July 31, 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
----------
(1) Insert Subsequent Closing Date.
(2) Insert name of licensee.
(3) Insert organizational information on licensee.
(4) Insert EBS channel designations.
(5) Insert the one or more Basic Trading Areas that host the GSA(s) of the
Channels.
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
grants the De facto Transfer Application.
(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.
(i) DOWNPAYMENT ON EFFECTIVE DATE; PAYMENT OF BALANCE. On the
Effective Date, Clearwire shall pay Licensee __________ Dollars
($_______)(6) (the "UPFRONT ROYALTY DEPOSIT") as a down-payment of [***]
of the upfront royalty (the "UPFRONT ROYALTY"). Within ten (10) Business
Days after the Commencement Date, Clearwire shall pay the Licensee _______
Dollars ($_________)(7) which is the remaining balance of the Upfront
Royalty; provided, however, if any part or the whole of the balance is
received more than five (5) days after the Commencement Date, that part or
whole shall bear interest at the Default Rate of Interest (as defined in
Section 2(g)) accruing from the Commencement Date and continuing until
paid.
(ii) REFUND ON TERMINATION.
A. The Upfront Royalty is compensation for Licensee's
agreement to enter into this Agreement and is not compensation to
Licensee for any other commitment of Licensee. In the event that a
refund to Clearwire of the whole or any portion of the Upfront Royalty
is required, it shall be repaid to Clearwire without interest. Except
to the extent expressly required by this Section 2(a), in no event
shall Licensee be required to return or refund any portion or the
whole of the Upfront Royalty notwithstanding any termination of this
Agreement and this Section 2(a) shall survive the termination of this
Agreement.
B. If this Agreement is terminated pursuant to Section
1l(f), Licensee shall promptly thereafter return to Clearwire the
lesser of (i) _____________________________(8) and (ii)
----------
(6) Insert amount that is [***] of the Cash Upfront Royalty as determined from
Section 3.10 of Master Agreement.
(7) Insert amount that is the remaining [***] of the Cash Upfront Royalty as
determined from Section 3.10 of Master Agreement.
(8) Insert the number that is [***] of the Cash Upfront Royalty Deposit.
[*** Confidential Treatment Requested]
2
the difference between ___________________(9) and the product of (X)
the number of months and partial months (expressed as a decimal)
between the first anniversary of the Effective Date and the date such
termination notice is delivered, (Y) [***] and (Z) the full amount
of the Upfront Royalty Deposit.
C. If this Agreement is terminated pursuant to Section
11(e), Licensee shall refund to Clearwire that portion of the Upfront
Royalty that has been paid to Licensee for application with respect to
this Agreement that is equal to the product of the Upfront Royalty and
the fraction having as its numerator the number of days between the
date of such termination and July 31, 2036 and having as its
denominator the total of number of days between the Effective Date and
July 31, 2036.
(B) MONTHLY ROYALTIES. Within five (5) business days following the
Commencement Date and by the first day of each month thereafter throughout the
Term, Clearwire will pay Licensee a monthly royalty (as it may be adjusted
pursuant to Section 2(c)(i), the "MONTHLY ROYALTIES") as shown in the following
table. The Monthly Royalty due for any partial calendar month, at the
commencement of the Commencement Date or expiration of the Term, shall be
prorated. If the FCC grant of the De facto Transfer Authorization is stayed by
the FCC or by any Federal court on appeal of the FCC's grant, and such stay
precludes the provision of the capacity of the Channels during its effective
period, no Monthly Royalties shall be paid during the period of that legal
incapacity, and for any period of such incapacity that lasts for less than a
full calendar month, the Monthly Royalty for that month shall be pro rated.
[Download Table]
MONTHLY
YEAR IN WHICH ROYALTIES
ROYALTY IS PAID (10)
--------------- ---------
2006-2010 $_____
2011-2015 $_____
2016-2020 $_____
2021-2025 $_____
2026-2030 $_____
2031-2036 $_____
----------
(9) Ditto.
(10) Insert Monthly Royalty as determined pursuant to Section 3.10 of the Master
Agreement.
[*** Confidential Treatment Requested]
3
(i) LIMITED CPI ADJUSTMENT. On the later of (A) August 31 next
following the Effective Date and (B) August 31, 2012, and on each
anniversary of such later date (an "ADJUSTMENT DATE"), the Monthly
Royalties shall be increased by multiplying each Monthly Royalty, as it may
have been previously adjusted pursuant to this clause (i), by the sum of
(X) one plus (Y) the Adjustment Factor, as defined below in this section.
[***] "CPI" means The Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items, 1984-1986 = 100
as published by the Bureau of Labor Statistics of the United States
Department of Labor; provided, however, in the event that the CPI (or a
successor or substitute index) is not available, a similar reliable U.S.
governmental or other nonpartisan publication selected by Licensee will be
used.
(C) PREPARATION REIMBURSEMENT. Within ten (10) days after the
Effective Date, Clearwire shall reimburse Licensee for the preparation of this
Agreement in the amount of __________.(11) This obligation shall apply without
regard to whether or not this Agreement is subsequently terminated.
(D) 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 may be changed by Licensee by
notice to Clearwire:
_______________________________
_______________________________
_______________________________
_______________________________
Attn: _________________________(12)
(E) W-9. Within ten (10) days following the execution of this
Agreement, Licensee shall deliver a completed IRS Form W-9 to Clearwire.
(F) NO SET-OFF. All payments of Upfront Royalties and Monthly
Royalties shall be made without set-off except for a sum that Licensee is
finally determined to owe Clearwire by arbitration conducted pursuant to this
Agreement.
(G) INTEREST ON OVERDUE AMOUNTS. Clearwire shall pay interest to
Licensee on all payments owed under this Agreement more than thirty (30) days in
arrears, accruing from the original payment due date and continuing until
payment of the amount due, in an amount equal to the greater of (i) [***]
or (ii) a fluctuating rate equal to the "Prime Rate" as announced from
time to time by The Wall Street Journal plus [***], but in no event
----------
(11) Insert $1,500 if the Effective Date is on or before September 28, 2006 or
$2,500 if the Effective Date is after September 28, 2006.
(12) Insert Licensee-provided mailing address.
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4
exceeding the highest lawful rate of interest that may be charged or collected
(the "DEFAULT INTEREST RATE"). Accrued interest shall be due and payable
monthly. In addition, for payments owed under this Agreement thirty (30) days or
more in arrears, a penalty equal to [***] of the payment owed shall be
immediately due and payable.
3. EXCLUSIVE NEGOTIATION PERIOD
For a time period beginning [***], 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 Channels.
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, 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
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.
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5
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 or the Master 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 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 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.
(C) [***]
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(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 ("BRS") 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 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 or the Master
Agreement. Neither Party shall have any obligation to enter into any amendment
pursuant to this Section.
(E) CHANNEL SWAPPING; COSTS.
After the Commencement Date, provided that Clearwire is not in breach of this
Agreement, Clearwire shall be permitted to require Licensee to swap all but not
less than all of the spectrum authorized by the FCC License for Suitable
Replacement Spectrum licensed to one entity (the "SWAP PARTNER") in either the
Geographic Market or one different U.S. market without Licensee's consent,
provided that Licensee receives the same benefits it would otherwise receive
from Clearwire under this Agreement, such swap is reversed at the expiration or
termination of this Agreement and Licensee receives assurances reasonably
acceptable to Licensee that it will receive back from the Swap Partner within
six (6) months after such expiration or termination the same or superior
channels and channel rights Licensee provided to the Swap Partner (as reasonably
determined by Licensee), without any lien or encumbrance and free of the rights
of third parties. Clearwire agrees to bear all costs and expenses associated
with the implementation of channel swapping and reversal of the swap, including
without limitation the reasonable out-of-pocket costs of Licensee's engineering
consultants and attorneys. The foregoing requirements with respect to the
reversal of a swap shall survive the expiration or termination of this
Agreement, unless termination is caused by Licensee's breach of this Agreement.
"SUITABLE REPLACEMENT SPECTRUM" means regular FCC Authorization (and not
special, special temporary, experimental or developmental authorization) in
Licensee's name and entitling Licensee to use one FCC-defined channel (plus
related guardbands, if any) for each FCC-defined channel (and associated
guardband segment, if any) provided to the Swap Partner (an "ASSIGNED CHANNEL"),
and each such replacement channel (and associated guardband segment, if any) (a
"RECEIVED CHANNEL") shall have the following additional characteristics: (1) it
is swapped along with the
[* * * Confidential Treatment Requested]
7
other Channels to a single licensee having the same number of channels; (2) it
may not be BRS Channel 1, 2 or 2A; (3) it shall be of an entire EBS channel
(e.g., EBS Channel Gl) as defined in FCC Rule 27.5(i) or any successor rule, and
not a channel created from parts of FCC-defined channels; (4) Licensee's upper
or lower band segment Channels (or, if pre-Transition, Licensee's Channels
bearing FCC-assigned numbers 1, 2 or 3) must be replaced with three upper or
lower band segment channels (or, if pre-Transition, channels bearing
FCC-assigned numbers 1, 2 or 3) that will be contiguous through the
post-Transition period; (5) it shall have a FCC-defined geographic service area
("GSA") at least as large as that of the Assigned Channel of like number (e.g.,
Gl and Dl); (6) its GSA shall include a total estimated population at least as
large as the total estimated population within the GSA of the Assigned Channel
of like number; (7) if the Received Channel is subject to any Interference
Consent(s), those Interference Consent(s) must meet the requirements for
classification as Conforming Interference Consents and provide Licensee, after
the swap, with the same rights the Licensee would have pursuant to a Conforming
Interference Consent as reasonably determined by Licensee; (8) the Received
Channel's authorization shall not be subject to any facts or circumstances which
Licensee reasonably determines could cause its FCC authorization to be
cancelled, forfeited, revoked, subject to cancellation, forfeiture or
revocation, or not to be able to transition to its default channel specified in
FCC Rule 27.5(i)(2) or any successor rule; (9) the Received Channel shall be
free and clear of all liens, encumbrances, and rights of persons (with the
exception of third party leases that will not apply after the swap and except
agreements permitted under clause (7)); and (10) the Received Channel shall be
free of any unusual license conditions not also applicable to the Assigned
Channel. Clearwire's right to require Licensee to swap is subject to FCC consent
and the consent of the Swap Partner. Notwithstanding the foregoing in this
Section 5(e), Licensee shall reasonably consider channel swaps for spectrum that
is not Suitable Replacement Spectrum.
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) POST-TRANSITION OR MIGRATION OPERATION AND MAINTENANCE OF
EQUIPMENT ON THE EXCLUDED CHANNELS. Subject to the last sentence of Section
6(a), while
8
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 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 [***]
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9
[***]
(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 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) [***] 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 [***] 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 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 MFN Price. 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,
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. Without limiting the generality of the
foregoing, Clearwire shall have constructed and maintained in service such
facilities operating on the Channels as are needed to qualify for a "safe
harbor" under the FCC Rule 27.14(e)(l)(ii) and/or 27.14(e)(2), as they may be
amended from time to time, or any other applicable "safe harbor" as may be
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10
reasonably acceptable to Licensee, so that Licensee would qualify for at least
one of such "safe harbors" on [***] as if the [***] substantial service showing
deadline of FCC Rule 27.14(e) had been advanced to [***] (the "[***]") and
Clearwire shall continue to maintain such facilities in service between [***]
and the later of [***] and such date to which the FCC may extend the substantial
service showing deadline so as to ensure that the FCC finds that Licensee has
met the substantial service requirement under FCC Rule 27.14(e). In the event
that the FCC by Final Order effective prior to [***] extends the substantial
service showing date beyond [***], then the [***] deadline shall be extended to
the date that is [***] before such extended date. In the event that Clearwire
determines that it may not satisfy the [***], and if, by [***], Clearwire
demonstrates to Licensee's reasonable satisfaction that Clearwire will meet the
[***]'s deadline if this deadline is extended to [***], then this deadline shall
be extended to [***] by written notice from Licensee to Clearwire. In the event
that (i) Clearwire elects to make such demonstration by [***], and Licensee
informs Clearwire that Licensee is not reasonably satisfied that Clearwire will
meet the [***] if the deadline for it is extended to [***] or (ii) Clearwire
does not make such a demonstration by [***], Clearwire shall be in material
breach of this Agreement and Clearwire shall have a cure period to meet the
[***] that ends on [***], notwithstanding any longer cure period or requirement
for breach notice for non-payment breaches provided by Section 11(c). If
Clearwire fails to meet the [***] by the end of that thirty (30) day cure
period, Licensee shall have the right to terminate this Agreement or to build
such facilities as qualify for a "safe harbor" under Section 27.14(e) of FCC
Rules, and Clearwire shall reimburse Licensee's reasonable costs of doing so. In
the event Clearwire makes such demonstration to Licensee's reasonable
satisfaction, but fails to satisfy the [***] by [***] such failure shall
constitute a material breach by Clearwire, for which there shall be no
requirement of breach notice or opportunity to cure notwithstanding Section
11(c), and Licensee shall have the right to terminate this Agreement or to build
such facilities as qualify for a "safe harbor" under Section 27.14(e) of FCC
Rules, and Clearwire shall reimburse Licensee's reasonable costs of doing so.
(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 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
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11
specifically impose, such that the violation does not re-occur, Licensee shall
be entitled to take action to force Clearwire to immediately cease such
violation(s), 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.
(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
[***] 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 [***]
proportionate to 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 as set forth in Section
20(b)(iii).
(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").
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(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 7fc). 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.
(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.
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(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.
(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
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14
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 be 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 and the Master 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.
(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
15
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
entities, 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 a request-for-proposals (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" includes only (1) 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 or (2)
correctional institutions that use the service in connection with a written
agreement with the Licensee for specific programming content produced or
procured by Licensee or with whom Licensee has had a prior written
relationship; provided that such programming content is delivered to such
correctional institutions without charge or other fees. Social Welfare
Agencies shall specifically exclude treasury and revenue services
departments, law enforcement agencies, legislatures, the 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.
(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
[*** Confidential Treatment Requested]
16
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. INTERFERENCE CONSENTS
Upon advance written notice to Licensee given after the Commencement Date,
Clearwire shall have the right to enter into agreements ("INTERFERENCE
CONSENTS") allowing third party licensees and operators to operate transmitters
that cause greater levels of signal strength within the Licensee's GSA than
otherwise is permitted under Part 27 of FCC Rules in order to coordinate
Clearwire's operations in Licensee's GSA with those of third parties. This right
shall apply only to such Interference Consents ("CONFORMING INTERFERENCE
CONSENTS") as (1) by their terms expire upon the earlier of the expiration or
termination of this Agreement; (2) do not result in or allow operations as may
result in a degradation in the value of the Channels or any impairment of the
FCC License for the Channels that is material or will continue beyond the
expiration or termination of this Agreement; (3) are limited to terms and
conditions providing for fair and reciprocal rights and limitations for and on
the operation of Licensee's facilities and the facilities of the other party in
connection with system coordination inside Licensee's GSA and at Licensee's GSA
boundaries and provisions ancillary thereto, but not channel swapping; (4) do
not cede, grant or provide any part of the Licensee's GSA or channel capacity to
a third party; (5) do not allow the placement of third party transmitters
operating on the frequencies of any of the Channels within the Licensee's GSA,
except for transmitters operated pursuant to Special Temporary Authority for not
more than a total of 180 days plus a renewal period of not more than 180 days,
and in any event ending prior to the expiration or termination of this
Agreement; and (6) do not prevent the construction of facilities sufficient to
qualify the Licensee for a substantial service safe harbor pursuant to the terms
of this Agreement. Third-party rights to use
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Licensee's GSA or channel capacity other than those matters related above are to
be handled in accordance with the assignment or sublicensing provisions of this
Agreement.
All Interference Consents entered into by Clearwire pursuant to this
Section shall provide that the Licensee has the right to require the third party
to cease operations that required the Interference Consent to exist upon the
expiration or termination of this Agreement, including the right of specific
performance of such requirement and the payment by the third party of attorneys'
fees in enforcing that right, and that such rights shall not be affected or
diminished by any default by Clearwire. Except in connection with a permitted
assignment of this Agreement itself, Clearwire shall have no right or power to
assign any such Interference Consent, it being understood that Clearwire's
rights to enter such Interference Consents is based upon a special relationship
with Licensee. Unless termination results from Licensee's material breach of
this Agreement, Clearwire shall be responsible for any unreimbursed cost or
damages to Licensee as a result of a third party's failure to cease operations
upon expiration or termination of the Agreement, and shall pay Licensee's legal
fees in connection with enforcement of the Interference Consent. The rights in
this paragraph shall survive the expiration or termination of this Agreement for
any cause.
Clearwire shall not enter into any Interference Consent, or any amendment
or supplement thereto, without first giving Licensee and its counsel thirty (30)
days advanced written notice or such lesser time as may be required by the
exigencies of the situation but no less than ten (10) days (the "NOTICE PERIOD")
of Clearwire's intention to enter into the consent, amendment or supplement,
along with a complete and unredacted form of the consent, amendment or
supplement (and any documents to which it refers) and a statement of the Notice
Period applicable thereto. In the event that Clearwire intends to execute an
Interference Consent, or any amendment or supplement thereto, that materially or
substantively differs from the form previously supplied to Licensee, Clearwire
shall once again follow the procedure and requirements of the immediately
preceding sentence as though no notice of the document in the prior form had
been given. During the Notice Period applicable to any proposed Interference
Consent, or any amendment or supplement thereto, Clearwire shall answer
questions and entertain comments and suggestions of the Licensee. The failure of
Licensee to object to any proposed Interference Consent, or any amendment or
supplement thereto, shall not constitute a waiver of this Section 8 or be
construed as Licensee's implied endorsement of such proposed consent, amendment
or supplement.
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
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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, 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
[*** Confidential Treatment Requested]
19
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) Assignment and Transfer by Clearwire. Subject to any required FCC
consent or authorization, Clearwire may assign this Agreement to a third party;
provided, however, that Clearwire shall remain responsible for the performance
of the payment obligations of the assignee pursuant to the Agreement, except
that Clearwire shall not be responsible for the performance of the payment
obligations of those assignees whose creditworthiness is equal to or better than
Clearwire's, as measured by each party's respective bond ratings or other
comparable measure, and who sign an agreement with, and reasonably acceptable
to, Licensee to assume the obligations of Clearwire hereunder.
(B) Sublicensing by Clearwire. With any required FCC consent or
authorization, Clearwire may sublicense the use of Clearwire Capacity; provided,
however, that Clearwire shall remain responsible for the performance of the
payment obligations pursuant to this Agreement, except that Clearwire shall not
be responsible for the performance of the payment obligations if and to the
extent the sublicensee agrees with Licensee by agreement in form and substance
reasonably acceptable to Licensee to perform such payment obligations and if the
sublicensee's creditworthiness is equal to or better than Clearwire's, as
measured by each party's respective bond ratings or other comparable measure.
(C) Permitted Assignments by Clearwire: Distinct Service Entity.
Notwithstanding the foregoing but subject to Section 10(d), Clearwire, with
prior notice to Licensee but without the prior consent of Licensee, may: (1)
assign any of its rights under this Agreement as collateral, provided that
Clearwire shall remain responsible for performance of all its obligations under
this Agreement and related obligations under the Master Agreement and further
provided that the assignment shall be subject to the provisions of Section
9-408(d) of the
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Uniform Commercial Code (Official Text); and (2) sell, assign, sublease,
delegate or transfer this Agreement or any of its rights or obligations
hereunder to any of Clearwire's Affiliates or any entity that acquires all or
substantially all of the assets of the Clearwire subsidiaries that hold the U.S.
assets and operating companies. In the event that an entity (a "SERVICE ENTITY")
other than Clearwire is not the direct provider of any one or more of the Access
Right Royalties, within ten (10) days of Licensee's request, Clearwire shall
cause such Service Entity to execute and to deliver a written undertaking, in
form and substance reasonably acceptable to Licensee, to provide such Access
Right Royalties as it may provide in accordance with the provisions of this
Agreement applicable thereto, including an assumption of the obligations of
Clearwire under Section 7 and to be jointly and severally liable with Clearwire
therefore (a "SERVICE ENTITY AGREEMENT"). No Service Entity Agreement shall be
deemed to relieve Clearwire of any of its Access Right Royalty obligations
hereunder.
(D) PRE-COMMENCEMENT DATE RESTRICTIONS. In no event shall Clearwire
undertake any assignment or sublicensing prior to the Commencement Date.
(E) ASSIGNMENT BY LICENSEE. 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. If FCC consent to the assignment of the De
facto Transfer Authorization is required for the rights of Licensee hereunder to
be assigned to such proposed assignee, the Parties shall promptly join with the
proposed assignee in seeking such consent and shall cooperate in prosecuting
such consent application. 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: (1) assign any of its rights under this Agreement as collateral
and (2) 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.
11. TERMINATION OF AGREEMENT
(A) This Agreement will automatically terminate with respect to the
FCC License or affected Channel(s) upon the earlier of: (1) the loss or
expiration without renewal of the FCC License; or (2) an FCC Final Order
revoking, terminating or canceling the FCC License, and in either such event
this Agreement shall terminate on the date specified as the expiration,
revocation, termination or cancellation 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.
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(B) This Agreement may be terminated by either Party if the other
Party fails to cure a payment default under this Agreement within sixty (60)
days of receipt of written notice from the non-defaulting Party specifying the
payment default.
(C) This Agreement may be terminated by either Party after the
material breach of a non-payment obligation by the other Party or a material
misrepresentation by the other Party and, except as provided in Section 6(d),
the failure or refusal of the breaching Party (i) to diligently commence efforts
to cure such default with reasonable promptness after receipt of written notice
from the non-defaulting Party specifying the default but in no event any later
than thirty (30) days after receipt of such notice, or (ii) to diligently
continue efforts to cure such default after commencing such efforts, or (iii) to
cure such default within one-hundred twenty (120) days of receipt of written
notice from the non-defaulting Party specifying the default. In the event of an
uncured material breach of a non-payment obligation, Licensee shall have the
option, but not the obligation, to cure such breach at Clearwire's expense. A
breach by a Service Entity of a Service Entity Agreement (subject to the
expiration of applicable cure periods in the Service Entity Agreement, which
shall be consistent with those stated in this Agreement) shall be deemed a
breach by Clearwire of this Agreement. In the event of a material breach of this
Agreement by Licensee prior to the Commencement Date, Clearwire's sole recourse
shall be to seek the specific performance of this Agreement by Licensee.
(D) Licensee may terminate this Agreement pursuant to Section 16(b).
(E) If the Commencement Date does not occur by the first (1st)
anniversary 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.
(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
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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 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
Licensee agrees that it will not, during the Term of this Agreement, engage
in building, operating, managing or distributing, on a for-profit basis, a
wireless broadband network in the Market Area, except as allowed by this
Agreement and except for the use of the Educational Reservation and the Access
Royalties in compliance with the provisions hereof applicable to such royalties.
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14. CONFIDENTIALITY AND NON-DISCLOSURE(13)
(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 renewals 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 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
----------
(13) If the Licensee is a governmental body subject to an open records, sunshine
or similar law or regulation that requires Licensee to make information
available to the public in an manner or to an extent that would be
inconsistent with this Section 14, revise this Section 14 to be consistent
with such law or regulation.
24
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.
(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.
25
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:
(i) Organization and Good Standing. It is a ____________(14) 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
----------
(14) Insert entity type.
26
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 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 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. Licensee holds the License free and clear of all any
lien, pledge, mortgage, deed of trust, security interest, claim,
lease, charge, option, right of
27
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 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
28
Permit, and no proceeding is pending or, to the best knowledge of Licensee,
threatened to revoke or limit any such Permit.
(vii) 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. Subject to any specific exceptions
identified in the Master Agreement, Clearwire hereby represents and warrants to
Licensee that:
(i) 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. 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. Each of Clearwire and Clearwire
Parent 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 or Clearwire Parent, taken as a whole, other
than changes affecting the broadband wireless business generally
("CLEARWIRE MATERIAL ADVERSE EFFECT").
(ii) Authorization of Agreement. Each of Clearwire Parent and
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 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 or Clearwire Parent of this Agreement or the Master Agreement,
nor the compliance by Clearwire or Clearwire Parent with any of the
provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the certificate of incorporation,
29
certificate of limited liability company, bylaws or operating agreement of
Clearwire or Clearwire Parent, (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 or Clearwire
Parent is a party or by which Clearwire or Clearwire Parent 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 or Clearwire Parent 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 or
Clearwire Parent in connection with the execution and delivery of this
Agreement or the Master Agreement or the compliance by Clearwire or
Clearwire Parent with any of the provisions hereof or thereof.
(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 Clearwire Parent or the assets or the business of Clearwire or
Clearwire Parent and (b) neither Clearwire nor Clearwire Parent is 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. Each of Clearwire and
Clearwire Parent (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.
30
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.
(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 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.
31
(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.
32
(E) SURVIVAL. Each Party's obligations under this section will survive
the expiration or termination of this Agreement.
20. INFORMATION SHARING OBLIGATIONS AND CONSULTATION REGARDING ACCESS RIGHT
ROYALTIES AND CERTAIN OTHER COVENANTS
(A) OVERVIEW OF CONSULTATION/INFORMATION EXCHANGE REQUIREMENTS.
(i) Guiding Principles. The consultation, governance and
information rights and obligations and the related processes for audit
contained in this Section 20 (collectively, the "ONGOING OBLIGATIONS"), are
intended to preserve the benefits to Licensees set forth in this
Agreement's Sections 6(c) and 7 hereof in light of changes in the wireless
broadband environment over a Term of approximately _______(15) years. By
way of example and not limitation, the Parties recognize that changes to
the technology or architecture of Cell Sites or Sectors, or to the
composition, number or characteristics of Subscribers, could, without
accompanying changes to the provisions of Section 7 result in an adverse
impact on the number of Cost-Free Customer Accounts to which Licensee is
entitled or otherwise impair their value in comparison to the anticipated
circumstances at the time of execution of this Agreement. The Ongoing
Obligations are intended to facilitate good faith negotiation and
resolution of issues arising from changes in circumstances during the Term,
but any failure to comply with the Ongoing Obligations is to be addressed
through the Dispute Resolution Procedures and shall not give rise to a
right to terminate this Agreement.
(ii) Party Representatives. To facilitate the Ongoing
Obligations, each Party shall designate a party representative as provided
in this Section 20(a)(ii) to act as its representative with respect to the
all matters under this Agreement and in particular with respect to matters
governed by Section 20(e) (the "PARTY REPRESENTATIVES"). Notwithstanding
the foregoing in this Section 20(a)(ii), if the rights of Clearwire
hereunder at the outset of a negotiation hereunder are held by Clearwire or
a Clearwire Affiliate and the rights of Licensee hereunder remain held by
the entity that executed this Agreement as the "Licensee" or an Affiliate
of that entity, then the appointment of Party Representatives, including
the number for each, shall be governed by Section 8.01(b) of the Master
Agreement, and if during any negotiations the rights of Clearwire hereunder
are not held by Clearwire or a Clearwire Affiliate or the rights of
Licensee hereunder are no longer held by the entity that executed this
Agreement as the "Licensee" or an Affiliate of that entity, then the
appointment of Party Representatives, including the number for each, shall
be governed by this Section 20(a)(ii) and the Parties shall promptly make
new appointments.
(iii) Relationship Management. To facilitate the management of
the relationship between Licensee and Clearwire, the Licensee shall be
provided with the
----------
(15) Insert number of years remaining.
33
information disclosure provided for in Section 20(b) through Section 20(e)
at the times specified therein. The completeness and accuracy of such
information may be evaluated through the audit process set forth in Section
20(f).
(B) CAPACITY DISCLOSURE.
(i) Initial Capacity Disclosure. Within thirty (30) days of the
later of (i) the commercial launch of a Clearwire Affiliate's broadband
wireless system in the Market Area, and (ii) the Commencement Date (such
later date, the "EBS Relevance Date"), Clearwire shall disclose in writing
to Licensee: (1) the total number of EBS and BRS channels Clearwire
currently is utilizing in the Market Area of the Channels, (2) the number
of Cell Sites in such Market Area, and (3) the number of Sectors in such
Market Area. The information pursuant to (1) and (2) shall be updated at
each Information Sharing Meeting, and the information pursuant to (3) shall
be updated as provided in Section 20(b)(ii).
(ii) Annual Update. By January 31 of each year following the EBS
Relevance Date, Clearwire shall disclose in writing to Licensee: (1) the
number of Sectors in such Market Area, and (2) the number of subscribers in
such Market Area served by Clearwire or any of its Affiliates. All
information shall be as of December 31 of the previous year.
(iii) Data Capacity Measurement. On the [***] and [***]
anniversaries of the EBS Relevance Date, and every [***] years thereafter,
Clearwire shall disclose in writing to Licensee the overall data capacity
of the network in such Market Area as measured by its average throughput.
The average throughput measurement shall be made in such fashion as shall
be agreed by the Party Representatives in consultation with Clearwire
engineers and other technical experts prior to such anniversary, using
metrics that are as consistent as possible with those utilized at the time
of the immediately prior average throughput measurement (on each such
anniversary, the "UPDATED CAPACITY DISCLOSURE").
(C) SYSTEM INFORMATION.
Within thirty (30) days of the EBS Relevance Date, Clearwire shall disclose in
writing to Licensee the system capabilities, services, and feature sets that are
generally provided to Clearwire's or its Affiliate's retail customers and
wholesalers to mass market customers ("SYSTEM SERVICE CAPABILITIES"), which
information can be provided by reference to Clearwire's website to the extent
that it is available to the public there. At such time as System Service
Capabilities are changed for any Market Area, Clearwire shall so notify Licensee
in writing within 30 days of such change. Clearwire will also provide
appropriate supporting information of the change as may be reasonably requested
by Licensee.
(D) PREFERRED CONTENT PROVIDER INFORMATION.
(i) Within thirty (30) days of the later of the EBS Relevance
Date and the date when third-party content is delivered in the Market Area,
Clearwire shall disclose to Licensee in writing the system capabilities,
and/or service or feature sets
[*** Confidential Treatment Requested]
34
that are then being provided to third-party content providers in the Market
Area, and a schedule of the charges, if any, for any of the foregoing,
together with the basis on which such charges are imposed to demonstrate
that the pricing requirements of Section 7(j) are being satisfied.
Clearwire shall advise Licensee of anticipated changes in the price
structure and the effective date of any such change not less than 30 days
before such change shall become effective.
(ii) Clearwire shall disclose in a timely fashion to permit
Licensee to make alternative arrangements if Clearwire anticipates that
there may be limitations in the network capabilities in the Market Area of
the Channels that could cause Clearwire to restrict the use of capabilities
and services pertaining to a Licensee's providing content over the
broadband wireless network in that Market Area. Prior to restricting access
of Licensee as a result of such limitations, as permitted under Section
7(j), Clearwire shall have disclosed in sufficient detail the scope of such
constraints. Clearwire shall promptly advise Licensee if as a result of a
change in technology, business practices, customer dynamics, or otherwise,
the capacity constraint is dissipated at any time, which would reinstate
the obligations of Clearwire under Section 7(j).
(E) CONSULTATION PROCESSES.
(i) Consultation Process Pertaining to Access Right Royalty
Information. As often as necessary, but in no event less than once per
calendar quarter, the Licensee Representatives or their designees shall be
given access to members of Clearwire's management and/or technical staff to
review the process and content of information sharing pursuant to this
Section 20, and to address any questions or concerns about the manner,
timeliness and completeness of the information received, in addition to
questions about its content.
(ii) Process for Altering Definitions/Formulae to Maintain
Integrity of Relationship. At the call of any Party Representative, the
Party Representatives shall meet, together with such other employees or
advisors as may facilitate such meeting, to discuss concerns over the
operation of the formulas and the scope of defined terms as a result of one
or more changes in Clearwire's technology and/or business practices that
individually or collectively produce a material adverse change to the
Access Right Royalties or other material benefits that Licensee receives
pursuant to this Agreement, and to determine if a reformation of this
Agreement should be implemented to prevent or reverse such material adverse
change(s).
A. The Parties agree to share such information and to
provide such technical assistance in collecting and evaluating such
information as may be useful or necessary to facilitate the process
required by Section 20(e)(i) and (ii). In connection with such
consultation, any Party Representative may propose altering the scope
of a term or formula under this Agreement (a "Reformation Proposal")
to achieve the goals set forth in Section 20(a) and to preserve the
Licensee benefits set forth Section 7 or elsewhere in this Agreement.
If the Parties agree on the change, they shall take such action as is
necessary to amend this Agreement. If the Parties
35
cannot agree on a proposed modification in a timely manner, any Party
Representative may invoke the Special Dispute Resolution Procedure
identified for this purpose in Section 21(d)(xii). Any Party
Representative may invoke for the first time Special Dispute
Resolution Procedure set forth above at any time following the
Commencement Date.
B. No Party Representative may invoke the Special Dispute
Resolution Procedure in support of a Reformation Proposal on the same
principal grounds more frequently than every five (5) years during the
Term of this Agreement. By way of example but not limitation: no Party
Representative's Reformation Proposal justified primarily on Clearwire
network technical changes can be pursued through the Special Dispute
Resolution Procedure within five (5) years of the immediately
preceding Special Dispute Resolution Procedure justified primarily on
Clearwire network technical changes. By way of further example and not
limitation: no Party's Representative's Reformation Proposal justified
primarily on Clearwire's changed business practices can be pursued
through the Special Dispute Resolution Procedure within five (5) years
of the immediately preceding Special Dispute Resolution Procedure
justified primarily on Clearwire's changed business practices.
(F) INFORMATION AUDIT RIGHTS.
(i) Licensee may audit the information provided by Clearwire
pursuant to Section 20(b), 20(c), and 20(d). Licensee's audit will be
limited to Clearwire's records and engineering documents that are relevant
and sufficient to verify the information provided by Clearwire. No more
than once per calendar year, Licensee may audit one or more metrics
reported by Clearwire for the Market Area. Clearwire must provide the
underlying source documents within 20 days of a request for audit by a
Licensee.
(ii) The costs incurred by Licensee in performing an audit under
this Section 20(f) shall be borne by the Licensee; provided that, if there
is a discrepancy of 5% or more with respect to a particular metric in the
Market Area, costs of audit of that metric shall be borne by Clearwire and
promptly paid upon submission of an invoice.
21. 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.
36
(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.(16)
(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 2l(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 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 21(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 21(d)(iii) and
as modified by the Special Arbitration provisions Section 21(d)(xii) in the
case of disputes arising under Section 20(e)(ii).
(iii) Arbitration. Any Dispute that has not be resolved within
the time period provided for in Section 21(d)(ii) shall be resolved by a
panel of three Arbitrators. The Dispute Notice shall automatically serve as
a written notice of a
----------
(16) If the Licensee is a governmental agency that is required to conduct
dispute resolution by other means, substitute the other means for this
Section 21(d).
37
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 the largest city within the GSA of
the Channels. 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 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 the determination. The findings
and conclusions and the award, if any, shall be deemed to be confidential
information of the Parties. Neither Party may
38
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 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.
(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.
(xii) Special Arbitration. With respect to any Dispute arising
under Section 20(e)(ii), the Arbitration procedures set forth in Section
21(d) above shall govern as modified by this Section 21(d)(xii).
39
A. During the first 15 days of the Submission Period each of the
Parties shall designate an arbitrator and unless the third arbitrator has
been selected as provided in the following sentence, the two arbitrators
together shall, within 10 days of their appointment, select the third
arbitrator who shall be an expert in one of the principal areas that is the
subject to the arbitration. If the Parties can agree within the first 15
days of the Submission Period, the third arbitrator shall be a mutually
selected individual with substantial experience in the general subject
matter of the Dispute (the "EXPERT"). No arbitrator shall have been
employed by either Party during the 24 months preceding the hearing date,
unless the other Party consents. The Expert shall serve as the chair of the
panel.
B. During the Submission Period, each Party shall submit to the
each other and the arbitrators, a description of the Dispute and a proposed
resolution, based on the facts known to the Party at the time (an "INITIAL
PROPOSAL").
C. Following discovery and as a part of the Party's brief, each
Party shall make such adjustments, if any, as the Party determines
appropriate to the Initial Proposal.
D. Notwithstanding Section 21(d)(x), in the case of a Special
Arbitration, each Party shall bear its own expenses and the Parties shall
each bear half of the expenses of the arbitration; provided that, the costs
and expenses of the prevailing Party in any court action to compel
arbitration shall be borne by the non-prevailing Party as provided in the
last clause of Section 21(d)(x).
(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):
(i) CLEAR-WIRE:
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
[*** Confidential Treatment Requested]
40
Kirkland, WA 98033
Attn: [***]
Fax: [***]
Davis Wright Tremaine, LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attn: [***]
Fax: [***]
(ii) LICENSEE
With a Copy to:(17)
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.(18)
(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.
----------
(17) Insert notice address(es) information provided by Licensee.
(18) If the Licensee is a governmental entity whose agreements must be subject
to another State's laws, insert reference to that State's laws in lieu of
New York.
[*** Confidential Treatment Requested]
41
(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.
(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 other than the Master Agreement. 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 and Clearwire shall cause
Clearwire Parent to 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 and 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
42
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 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.
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.
43
AGREED TO:
CLEARWIRE SPECTRUM HOLDINGS II LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[--LICENSEE--]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ATTACHMENTS:
Licensee Schedule
44
EXHIBIT III
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT
This Escrow Agreement ("Agreement"), dated July 31, 2006, is by and among
the undersigned Licensees Representatives, as agents and representatives of
NACEPF and the Licensees that comprise the ITF Cluster (as such terms are
defined under two Master Royalty And Use Agreements (together, the "Master
Agreement"), dated as of July 31, 2006 by and among Clearwire Corporation, a
Delaware corporation ("Clearwire Parent") and certain affiliates of Clearwire
Parent (collectively, "Clearwire"). and the Licensees identified therein),
Clearwire Parent and Wells Fargo Bank Northwest, N.A., as escrow agent (the
"Escrow Agent"). All terms used but not defined herein shall have the meanings
assigned to such terms in the Master Agreements.
RECITALS
WHEREAS, in connection with the transactions contemplated in the Master
Agreements, Clearwire has agreed to deliver to the Licensees certain shares of
common stock of Clearwire Parent (referred to as "Parent Shares") up to the
number of Parent Shares specified on Schedule A to each of the Master Agreements
are attached hereto and made a part hereof (both such Schedule A referred to
together herein as "Schedule A"), and allocated among the Licensees as reflected
thereon in respect of EBS Spectrum Capacity IUAs to be entered into by Clearwire
with each Licensee and for which authorization of de facto transfer is to be
submitted to the Federal Communications Commission (upon grant thereof, "FCC IUA
Approval");
WHEREAS, the parties desire to have the Parent Shares issued and
outstanding and registered in the names of the applicable Licensees in the
amounts specified on Schedule A as of the Effective Date of the Master
Agreement, but subject to return to Clearwire in certain events if FCC IUA
Approval is not granted by the Final Escrow Release Date (defined herein) and in
certain other circumstances;
WHEREAS, Licensees and Clearwire have agreed that the Parent Shares shall
be placed in escrow to be released to each Licensee as the related EBS Spectrum
Capacity IUA receives FCC IUA Approval (with respect to each such IUA, its
"Commencement Date").
NOW, THEREFORE, in consideration of the Master Agreement and the agreements
contained therein and herein, the parties hereto hereby agree as follows:
ARTICLE I
APPOINTMENT OF ESCROW AGENT
Appointment of Escrow Agent. Licensees Representatives and Clearwire designate
Wells Fargo Bank Northwest, N.A. to act as Escrow Agent hereunder, and Wells
Fargo Bank Northwest, N.A. hereby accepts such appointment and agrees to act as
Escrow Agent, upon the terms and subject to the conditions set forth herein.
ARTICLE II
ESCROW
2.1 Escrow. Clearwire shall cause to be deposited certificates for the
Parent Shares in escrow with the Escrow Agent in the number and in the name of
the respective Licensees as set forth on Schedule A. to be held and distributed
by the Escrow Agent in accordance with the terms and conditions set forth
herein, together with such other securities or amounts as may be distributed in
respect of the Parent Shares or into which the Parent Shares may be converted as
a result of a Capital Change during the Escrow Period (as defined below, the
Additional Escrow). Said certificates shall be issued in the names of the
Licensees, and for that number of shares for each Licensee (as to each Licensee,
an "Allocation"), set forth on Schedule A. Licensees shall deposit with the
Escrow Agent stock powers executed in blank for use in the event there is no
timely Commencement Date in respect of the portion of the Parent Shares
allocable to the related IUA.
2.2 Escrow Period. The escrow period (the "Escrow Period") for the Parent
Shares shall begin on the date hereof and shall terminate on the earlier of (i)
the Final Escrow Release Date, as defined in Section 2.3. or (ii) the date of
release under the terms hereof of the last of the Parent Shares.
2.3 Escrow Release Date. The "Final Escrow Release Date" shall be July 31,
2011. The Final Escrow Release Date may be extended or shortened by a notice
signed by Licensees Representatives and Clearwire and delivered to Escrow Agent
in accordance with Section 4.1 hereof.
2.4 Release of Parent Shares. The Escrow Agent shall distribute each
Allocation of the Parent Shares upon receipt by the Escrow Agent of instructions
to release the shares signed by either of the Licensees Representatives and
Clearwire and delivered to the Escrow Agent in accordance with Section 4.1
hereof (a "Release Notice"), as follows:
a. Upon receiving a Release Notice, the Escrow Agent (i) shall
distribute promptly to the Licensees Representative specified in the Release
Notice the released Allocation and any Additional Escrow (as defined below)
accumulated pro rata with respect to the Allocation, or (ii) shall otherwise
deliver such Allocation and Additional Escrow as instructed in the Release
Notice.
b. Upon the Final Escrow Release Date, the Escrow Agent shall promptly
distribute the remaining Parent Shares and any Additional Escrow to Clearwire.
c. Additional Escrow. All earnings and additional shares accrued on or
attributable to the Parent Shares, arising, without limitation, as a result of
stock splits, stock or cash dividends, recapitalizations and the like (the
"Additional Escrow") shall be promptly deposited with Escrow Agent by Clearwire
and, until disbursement, shall be held with the Parent Shares upon the terms and
conditions set forth herein. The Additional Escrow shall be distributed in
accordance with Section 2.4. Clearwire and the Licensees Representatives shall
provide the Escrow Agent with such taxpayer identification numbers and related
documentation as may be necessary for reporting of distributions of Additional
Escrow.
-2-
2.5 Rights in Respect of Parent Shares. Pursuant to the Master Agreement,
Licensees are to be afford the opportunity to take all actions with respect to
the Parent Shares held in their name as if the Licensee owned the shares,
including (except as provided in the Master Agreement) the exercise of
preemptive rights. Escrow Agent shall timely forward any notices received in
respect to the Parent Shares to the Licensees Representatives, who may exercise
the rights pursuant to the Master Agreement; provided that, the Licensee shall
not be entitled to vote the Parent Shares.
a. Preemptive Rights Procedures.
(i) In the event that Clearwire is required to or otherwise does
offer preemptive rights or substantially similar rights to shareholders, it
shall promptly send a copy of any such notice to the Licensee Representatives in
respect of Parent Shares held in this Escrow and shall recognize the
instructions of Licensee Representatives with respect thereto. Any securities or
other property delivered pursuant to the exercise of the preemptive right during
the time that the Parent Shares with respect to which they were exercised are
held in Escrow (the "Special Property"), such Special Property shall be
registered in the name of the applicable Licensee and delivered to the Escrow
Agent to be delivered to the Licensee with the Parent Shares under the terms
hereof. Any payment made by Licensee to Clearwire for or in respect of such
Special Property (a "Cash Payment") shall be deposited by Clearwire with the
Escrow Agent, who shall invest such Cash Payment in one or more Permitted
Investments. (The Cash Payment together with any earnings thereon from Permitted
Investments thereof is referred to as the "Cash Proceeds.")
(ii) Upon distribution of the Parent Shares to a Licensee
hereunder, the Escrow Agent also shall deliver any Special Property associated
therewith to the Licensee and shall at the same time deliver the related Cash
Proceeds to Clearwire. If for any reason the Parent Shares are to be returned to
Clearwire under the terms hereof, the Escrow Agent shall deliver the Special
Property acquired in respect of such Parent Shares to Clearwire as well, and
shall at the same time deliver the Cash Proceeds to the Licensee.
(iii) The Escrow Agent shall invest the Cash Payment, and any
earnings thereon, in (i) U.S. Government Securities, (ii) time deposits and
certificates of deposit of any institution that is a member of the Federal
Reserve System having capital of not less than $500 million, and (iii) money
market, mutual, or similar funds that invest in such securities referred to in
(i) and (ii) above, as jointly directed in writing by the Licensee and
Clearwire. In the absence of specific joint written instructions from the
Licensee and Clearwire, the Escrow Agent shall invest the Cash Payment in the
Wells Fargo Advantage 100% Treasury Money Market Fund. Any investment made
pursuant to this Section 2.5(a)(iii), shall be referred to as a "Permitted
Investment."
2.6 No Encumbrance on Escrow. Neither Licensees Representatives nor
Clearwire shall transfer, assign, pledge, hypothecate or otherwise encumber the
Parent Shares or the Additional Escrow while they are held by the Escrow Agent.
-3-
ARTICLE III
LIABILITY AND INDEMNIFICATION; FEES AND EXPENSES
3.1 Liability. The Escrow Agent shall not be liable to anyone whatsoever by
reason of any act or failure to act made or omitted by it in good faith, or any
action taken or omitted in reliance upon any instrument, including any written
statement provided for in this Agreement that Escrow Agent shall in good faith
believe to be genuine, or for forgeries, fraud, impersonations or determining
the authority of any representative of the Clearwire or of the Licensees
Representatives, or for any mistake of fact or law with respect to anything
which it may do or refrain from doing in connection herewith, unless caused by
or arising out of its own gross negligence or willful misconduct.
3.2 Indemnity. The Licensees and Clearwire shall indemnify and hold the
Escrow Agent harmless from any and all losses, claims, damages, liability and
expenses (including, without limitation, attorneys' fees) that may arise out of
any action taken or omitted by it as Escrow Agent in accordance with this
Agreement, including, but not limited to, any litigation arising from this
Agreement, except such liability and expense as may result from the gross
negligence or willful misconduct of the Escrow Agent. As between them, Licensees
collectively and Clearwire shall each be responsible for one-half of any
indemnity due to Escrow Agent.
3.3 Reliance. The Escrow Agent shall be entitled to treat as genuine any
letter, paper, facsimile, e-mail or other document or writing furnished or
caused to be furnished to it by any party to this Agreement and believed by it
to be genuine and to have been delivered, mailed, faxed, or e-mailed or signed
and presented by any party to this Agreement. The Escrow Agent is not
responsible for determining and verifying the authority of any party acting or
purporting to act on behalf of any party to this Agreement. The Escrow Agent may
consult with counsel with respect to the Escrow Agent's duties hereunder, and
shall be fully protected in respect to any action taken or suffered by the
Escrow Agent in good faith in accordance with the advice of such counsel.
3.4 Fees and Expenses.
(a) Licensees collectively and Clearwire shall each be responsible for
one-half of the Escrow Agent's compensation for its normal services hereunder in
accordance with the Escrow Agent's fee schedule in effect from time to time,
which may be subject to change in accordance with the reasonable and customary
practice of the Escrow Agent for all its similarly situated clients on an annual
basis. The Escrow Agent's fee for the first year shall be $5.000. payable in
advance.
(b) Licensees collectively and Clearwire each agree to reimburse the Escrow
Agent on demand for all reasonable and customary costs and expenses incurred in
connection with the administration of this Agreement or the escrow created
hereby or the performance or observance of its duties hereunder which are in
excess of its compensation for normal services hereunder, including without
limitation, payment of any reasonable legal fees and expenses incurred by the
Escrow Agent for one outside counsel in connection with resolution of any claim
by any party
-4-
hereunder, with each of the Licensees collectively and Clearwire, responsible
for one-half thereof.
ARTICLE IV
GENERAL PROVISIONS
4.1 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally 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 Parent, to: Clearwire U.S. Corporation
2300 Carillon Point
Kirkland, WA 98033-7353
Attention: [***]
Facsimile No.: [***]
With a copy to: Davis Wright Tremaine LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attention: [***]
Facsimile No.: [***]
If to Licensees
Representatives, to: [***]
[***]
[***]
[***]
Phone: [***]
Fax: [***]
and
[***]
[***]
[***]
[***]
[***]
Phone: [***]
Fax: [***]
Email: [***]
[Address]
[*** Confidential Treatment Requested]
-5-
With a copy to: [***]
Attention: [***]
Facsimile No.: [***]
If to Escrow Agent to:
[***]
Attention: [***]
Facsimile: [***]
With a copy to:
4.2 Termination. This Agreement shall terminate upon the earlier of (a) the
written express agreement of the Clearwire Parent and the Licensees
Representatives, (b) the distribution of all items held in escrow hereunder, or
(c) the Final Escrow Release Date.
4.3 Amendment. This Agreement may not be amended except by an instrument in
writing executed by all the parties hereto.
4.4 Controversies. The Escrow Agent will not be required to determine any
controversy that may arise concerning the subject matter of this Agreement. The
parties agree that any such controversy shall be resolved pursuant to the
dispute resolution provisions in the Master Agreement. The Escrow Agent may hold
all documents and funds and may wait for settlement of any such controversy,
despite what may be set forth elsewhere in this Agreement. In such event, the
Escrow Agent will not be liable for interest or damage. The Escrow Agent shall
be entitled to rely upon the resolution of any arbitration or other legal
proceeding in order to determine how the escrows hereunder are to be
distributed.
4.5 Resignation of Escrow Agent, The Escrow Agent may resign at any time
upon giving at least 30 days' written notice to the parties hereto; provided
however, that no such resignation shall become effective until the appointment
of a successor escrow agent which shall be accomplished as follows:
a. The parties hereto shall use their best efforts to mutually agree
on a successor escrow agent within 30 days after receiving such notice.
b. If the parties fail to agree upon a successor escrow agent within
such time, the Escrow Agent shall have the right to appoint a successor escrow
agent.
[*** Confidential Treatment Requested]
-6-
4.6 Interpretation. The validity, construction, interpretation and
enforcement of this Agreement shall be determined and governed by the laws of
the State of New York without regard to conflict of laws principles. The
invalidity or unenforceability of any provision of this Agreement or the
invalidity or unenforceability of any provision as applied to a particular
occurrence or circumstances shall not affect the validity or enforceability of
any of the other provisions of this Agreement or the applicability of such
provision, as the case may be. All provisions of the Master Agreement applicable
hereto shall be incorporated herein by reference as if set forth in their
entirety herein.
4.7 Remedies. The rights and remedies of the parties under this Agreement
and the Master Agreement and all other letters, certificates or documents
executed in connection herewith and therewith are cumulative and not exclusive
of any rights, remedies, powers and privileges that may otherwise be available
to the parties hereto.
4.8 Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.
-7-
IN WITNESS WHEREOF, the parties have signed this Agreement on the day and
year first above written.
LICENSEES REPRESENTATIVES:
----------------------------------------
John Schwartz
----------------------------------------
John Primeau
CLEARWIRE CORPORATION, for itself and on
behalf of the Clearwire Affiliates:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ESCROW AGENT:
Wells Fargo Bank Northwest, N.A
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ESCROW AGREEMENT
SCHEDULE A
ALLOCATIONS
-9-
EXHIBIT IV
JOINDER TO THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
DATED MARCH 16, 2004
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this ______ day of ___, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: North American Catholic
Educational Programming Foundation, Inc.
By: /s/ R. Gerard Salemme By: /s/ John Primeau
--------------------------------- ---------------------------------
Name: R. Gerard Salemme Name: John Primeau
Title: E.V.P. Title: President
Date: 8/2/06 Date: July 31, 2006
1
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this 31st day of July, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: Instructional
Telecommunications Foundation, Inc.
By: /s/ R. Gerard Salemme By: /s/ John Schwartz
--------------------------------- ---------------------------------
Name: R. Gerard Salemme Name: John Schwartz
Title: E.V.P. Title: President
Date: 8/2/06 Date: 7/31/06
1
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this 31st day of July, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: Portland Regional
Educational Telecommunications Corporation
By: /s/ R. Gerard Salemme By: /s/ John Schwartz
------------------------------- --------------------------------------
Name: R. Gerard Salemme Name: John Schwartz
Title: E.V.P. Title: President
Date: 8/2/06 Date: 7/31/06
1
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this 31st day of July, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: Twin Cities Schools'
Telecommunications Group, Inc.
By: /s/ R. Gerard Salemme By: /s/ John Schwartz
--------------------------------- ---------------------------------
Name: R. Gerard Salemme Name: John Schwartz
Title: E. V. P. Title: President
Date: 8/2/06 Date: 7/31/06
1
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this 31st day of July, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: Chicago Instructional
Technology Foundation, Inc.
By: /s/ R. Gerard Salemme By: /s/ John Schwartz
--------------------------------- ---------------------------------
Name: R. Gerard Salemme Name: John Schwartz
Title: E.V.P. Title: President
Date: 8/2/06 Date: 7/31/06
1
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this 31st day of July, 2006, by and between Clearwire Corporation, a Delaware
corporation (the "Company"), and the party whose signature appears below (the
"Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of the
Company under the Stockholders Agreement, including the restrictions on transfer
of the shares acquired from the Company and the requirement that the Joining
Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY: Denver Area Educational
Telecommunications Consortium, Inc.
By: /s/ R. Gerard Salemme By: /s/ John Schwartz
--------------------------------- ---------------------------------
Name: R. Gerard Salemme Name: John Schwartz
Title: E.V.P. Title: President
Date: 8/2/06 Date: 7/31/06
1
EXHIBIT V
JOINDER TO THE REGISTRATION RIGHTS AGREEMENT
DATED MARCH 16, 2004
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: July 31, 2006
Name of Stockholder: North American Catholic Educational
Programming Foundation, Inc.
Sign Name: /s/ John Primeau
---------------------------------------
Print Name/Title: John Primeau, President
Address: [***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: 8/2/06
Name of Stockholder: Chicago Instructional Technology
Foundation, Inc.
Sign Name: /s/ John Schwartz
---------------------------------------
Print Name/Title: John Schwartz, President
Address: [***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: 7/31/06
Name of Stockholder: Denver Area Educational
Telecommunications Consortium, Inc.
Sign Name: /s/ John Schwartz
---------------------------------------
Print Name/Title: John Schwartz, President
Address: [***]
[***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: 7/31/06
Name of Stockholder: Instructional Telecommunications
Foundation. Inc.
Sign Name: /s/ John Schwartz
---------------------------------------
Print Name/Title: John Schwartz, President
Address: [***]
[***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: 7/31/06
Name of Stockholder: Portland Regional Educational
Telecommunications Corporation
Sign Name: /s/ John Schwartz
---------------------------------------
Print Name/Title: John Schwartz, President
Address: [***]
[***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt of
a copy of which is hereby acknowledged, as fully as if the undersigned were one
of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: 7/31/06
Name of Stockholder: Twin Cities Schools' Telecommunications
Group, Inc.
Sign Name: /s/ John Schwartz
---------------------------------------
Print Name/Title: John Schwartz, President
Address: [***]
[***]
SSN/EIN: [***]
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By: /s/ R. Gerard Salemme
-----------------------------------
Name: R. Gerard Salemme
Title: EVP
Dated: 8/2/06
[*** Confidential Treatment Requested]
1
EXHIBIT VI
FORM OF CLEARWIRE CERTIFICATE
OFFICER'S CERTIFICATE
OF
CLEARWIRE SPECTRUM HOLDINGS II LLC
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to
Section 4.01(c) of that certain Master Royalty and Use Agreement (the
"Agreement") dated as of July ____, 2006, by and between Clearwire Spectrum
Holdings II LLC, a Nevada limited liability company ("Clearwire"), Clearwire
Corporation, a Delaware corporation, and Chicago Instructional Technology
Foundation, Inc.; Denver Area Educational Telecommunications Consortium, Inc.;
Instructional Telecommunications Foundation, Inc.; Portland Regional Educational
Telecommunications Corporation; Twin Cities Schools Telecommunications Group,
Inc.; North American Catholic Educational Programming Foundation, Inc.; and such
additional Licensees as are identified on Schedule A to the Agreement.
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
---- ------------------------ ---------
R. Gerard Salemme Executive Vice President
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
CLEARWIRE SPECTRUM HOLDINGS II LLC
Date: July ___, 2006 By:
------------------------------------
Name: Broady R. Hodder
Title: Vice President, General Counsel
and Secretary
EXHIBIT A
OFFICER'S CERTIFICATE
OF
CLEARWIRE CORPORATION
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to
Section 4.0l(c) of that certain Master Royalty and Use Agreement (the
"Agreement") dated as of July ____, 2006, by and between Clearwire Corporation,
a Delaware corporation ("Clearwire Corporation"), Clearwire Spectrum Holdings
LLC, a Nevada limited liability company, and Chicago Instructional Technology
Foundation, Inc.; Denver Area Educational Telecommunications Consortium, Inc.;
Instructional Telecommunications Foundation, Inc.; Portland Regional Educational
Telecommunications Corporation; Twin Cities Schools Telecommunications Group,
Inc.; North American Catholic Educational Programming Foundation, Inc.; and such
additional Licensees as are identified on Schedule A to the Agreement.
The undersigned hereby certifies that he is duly authorized to execute and
deliver this Certificate on behalf of Clearwire Corporation, 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 Clearwire Corporation 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 Corporation, (ii) has been duly
elected to the office of Clearwire Corporation set forth opposite his name,
(iii) is duly qualified and acting as such officer of Clearwire Corporation
on the date hereof, and (iv) the signature appearing opposite his name is
his genuine signature.
[Download Table]
Name Office Signature
---- ------------------------ ---------
R. Gerard Salemme Executive Vice President
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
CLEARWIRE CORPORATION
Date: July ___, 2006 By:
------------------------------------
Name: Broady R. Hodder
Title: Vice President, General Counsel
and Secretary
EXHIBIT A
EXHIBIT VII
FORM OF LICENSEE CERTIFICATE
OFFICER'S CERTIFICATE
OF
NORTH AMERICAN CATHOLIC EDUCATIONAL PROGRAMMING FOUNDATION, INC.
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to
Section 4.01(c) of that certain Master Royalty and Use Agreement (the
"Agreement") dated as of July__, 2006, by and between Clearwire Spectrum
Holdings II LLC, a Nevada limited liability company, Clearwire Corporation, a
Delaware corporation, and Chicago Instructional Technology Foundation, Inc.;
Denver Area Educational Telecommunications Consortium, Inc.; Instructional
Telecommunications Foundation, Inc.; Portland Regional Educational
Telecommunications Corporation; Twin Cities Schools' Telecommunications Group,
Inc.; North American Catholic Educational Programming Foundation, Inc.
("NACEPF"); and such additional Licensees as are identified on Schedule A to the
Agreement.
The undersigned hereby certifies that he is duly authorized to execute and
deliver this Certificate on behalf of NACEPF, 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 NACEPF 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 NACEPF, (ii) has been duly elected to the office
of NACEPF set forth opposite his name, (iii) is duly qualified and acting
as such officer of NACEPF on the date hereof, and (iv) the signature
appearing opposite his name is his genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
NORTH AMERICAN CATHOLIC EDUCATIONAL
PROGRAMMING FOUNDATION, INC.
Date: July __, 2006 By:
------------------------------------
Name: John Primeau
Title: President
EXHIBIT A
OFFICER'S CERTIFICATE
OF
NORTH AMERICAN CATHOLIC EDUCATIONAL PROGRAMMING FOUNDATION, INC.
This OFFICER'S CERTIFICATE (the "Certificate") is provided pursuant to
Section 4.03(c) of that certain Master Royalty and Use Agreement (the
"Agreement") dated as of July 31, 2006, by and between Clearwire Spectrum
Holdings II LLC, a Nevada limited liability company, Clearwire Corporation, a
Delaware corporation, and Chicago Instructional Technology Foundation, Inc.;
Denver Area Educational Telecommunications Consortium, Inc.; Instructional
Telecommunications Foundation, Inc.; Portland Regional Educational
Telecommunications Corporation; Twin Cities Schools' Telecommunications Group,
Inc.; North American Catholic Educational Programming Foundation, Inc.
("NACEPF"); and such additional Licensees as are identified on Schedule A to the
Agreement, and regards one or more Individual Use Agreements ("IUAs") executed
on the date hereof.
The undersigned hereby certifies that he is duly authorized to execute and
deliver this Certificate on behalf of NACEPF, and further certifies as follows:
The representations and warranties of NACEPF contained in the IUAs are true
and correct in all material respects at and as of the date hereof (except
that the accuracy of representations and warranties that by their terms
speak as of the date of the Agreement or some other date are true and
correct in all material respects only as of such date).
Attached as Exhibit A is a true, complete and correct copy of the
Resolutions of the board of directors of NACEPF authorizing the execution,
delivery, and performance of the IUAs and other agreements referred to in
the IUAs, 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 IUAs on behalf of NACEPF, (ii) has been duly elected to the office of
NACEPF set forth opposite his name, (iii) is duly qualified and acting as
such officer of NACEPF on the date hereof, and (iv) the signature appearing
opposite his name is his genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date set forth below.
NORTH AMERICAN CATHOLIC EDUCATIONAL
PROGRAMMING FOUNDATION, INC.
Date: July ___, 2006 By:
------------------------------------
Name: John Primeau
Title: President
EXHIBIT A
Dates Referenced Herein and Documents Incorporated by Reference
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