Exhibit 10.16
SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
DATED AS OF MAY 24, 2005
AMONG
CLEARWIRE CORPORATION
HISPANIC INFORMATION AND TELECOMMUNICATIONS NETWORK, INC. AND
HITN SPECTRUM, LLC
SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT This Spectrum Access and Loan
Facility Agreement (this "Agreement"), dated as of May 24, 2005, is among
Clearwire Corporation, a Delaware corporation, whose address is 0000 Xxxx
Xxxxxxxxxx Xxxx. XX, Xxxxx 000, Xxxxxxxx, XX 00000 ("Clearwire"), Hispanic
Information and Telecommunications Network, Inc., a New York non-profit
corporation, whose address is 000 Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("HITN"), and HITN Spectrum, LLC, a Delaware limited liability company,
having an address at 000 Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Holdco").
RECITALS:
A. HITN and Holdco, as HITN's wholly owned affiliate, are eligible to
hold licenses for EBS spectrum in the United States issued by the FCC.
HITN currently holds a number of such licenses. HITN has partnered
with Clearwire to further its mission of providing a network of
non-commercial telecommunications facilities in order to advance the
interests of non-profit communities, including educational, social,
cultural and governmental organizations (collectively, the "Non-Profit
Community"). In particular, HITN, directly and through its affiliates,
is focused on the educational, social, cultural, and economic
aspirations of Hispanics throughout the United States, including
Puerto Rico. HITN has made certain commercial capacity associated with
its EBS licenses available to Clearwire, and Clearwire has committed
to make capacity on its wireless broadband network available to HITN.
B. HITN believes that its ability to provide the desired services to the
Non-Profit Community will be significantly enhanced by expanding the
geographic reach of its platform through the acquisition by Holdco, or
wholly owned limited liability company subsidiaries of Holdco (each a
"Newco") of additional EBS licenses, making the commercial capacity
associated with those licenses available to Clearwire, subject to
existing obligations to other commercial operators, and providing
services to the Non-Profit Community on the reserved spectrum
capacity.
C. Clearwire wishes to obtain a source of spectrum capacity for the
future and to facilitate the branding of the Clearwire xxxx through
the services to be provided by HITN to the Non-Profit Community.
Therefore, Clearwire has agreed, at its continuing option and in its
sole discretion, to provide financing to Holdco to facilitate Holdco's
acquisition of EBS licenses.
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The parties therefore agree as follows:
1. DEFINITIONS. As used in this Agreement the following terms shall have
the following meanings:
1.1 "Acquired Channel" shall mean an EBS Opportunity Channel which has
been acquired in an Acquisition.
1.2 "Acquisition" shall mean an acquisition of EBS Opportunity Channel
by Holdco or Newco, which acquisition is funded by a Purchase Advance.
1.3 "Acquisition Balance" shall mean the sum of all Advances made by
Clearwire to the date of execution of a Use Agreement by Clearwire with respect
to the EBS Opportunity Channels that are the subject of such Use Agreement,
together with accrued and unpaid interest in respect thereof to the date
thereof.
1.4 "Acquisition Budget" shall mean a budget submitted by Holdco to
Clearwire for each Acquisition showing the purchase price of the EBS Opportunity
Channel and all Expenses related to the Acquisition.
1.5 "Advance" shall mean a Purchase Advance or an Expense Advance in
respect of a particular EBS Opportunity Channel or group of EBS Opportunity
Channels in the same Market, and reflected in a Promissory Note in respect of
such Market.
1.6 "Advance Royalty Payment" has the meaning given that term in the
applicable Use Agreement.
1.7 "Agreement Expenses" shall mean all out-of-pocket expenses
actually incurred and either paid by HITN or approved in advance by Clearwire in
the preparation and negotiation of this Agreement and the other Loan Documents,
including reasonable attorneys' fees.
1.8 "Clearwire" has the meaning given that term in the heading, and
shall include any Clearwire affiliate to which are assigned any rights or
obligations of Clearwire as permitted hereunder.
1.9 "Clearwire License Transfer" has the meaning given that term in
Section 2.5.4.
1.10 "CW Subsidiary" shall mean a wholly owned subsidiary of
Clearwire.
1.11 "Default Rate" shall mean five percent (5%) above the prime rate
as published in The Wall Street Journal at the time an Event of Default occurs.
1.12 "Disallowed Claim" has the meaning given that term in Section
9.4.
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1.13 "EBS" shall mean Educational Broadband Service (formerly known as
"Instructional Television Fixed Service"), as such term is defined in the
current rules and regulations of the FCC.
1.14 "EBS Opportunity Channels" shall mean EBS spectrum identified by
any of Clearwire, Holdco and HITN as an acquisition opportunity.
1.15 "Encumbered Channel" shall mean an Acquired Channel which is
subject to a Third-Party Lease that survives the closing of the Acquisition.
1.16 "Expense Advance" shall mean an advance of funds under a
Promissory Note to pay Expenses, as reflected on a grid attached to such
Promissory Note.
1.17 "Expense Budget" shall have the meaning assigned to that term in
Section 2.4.
1.18 "Expenses" shall mean all out-of-pocket expenses actually
incurred and either paid by HITN, Holdco or any Newco or approved in advance by
Clearwire including without limitation all FCC filing fees, application fees,
reasonable legal and engineering fees arising from the Acquisition of an EBS
Opportunity Channel or with respect to the ownership, maintenance and lease of
such EBS Opportunity Channel.
1.19 "FCC" shall mean Federal Communications Commission.
1.20 "Global Events of Default" shall have the meaning assigned to
that term in Section 8.1 hereof.
1.21 "Guarantor" shall have the meaning given that term in Exhibit
1.40.
1.22 "Guaranty" shall mean, as the context requires, a Guaranty
Agreement in the form attached hereto as Exhibit 1.22 to be executed by HITN in
favor of Clearwire, guaranteeing the obligations of Holdco and each subsequent
Guaranty Agreement to be executed by HITN and Holdco in favor of Clearwire,
guaranteeing the obligations of each Newco.
1.23 "HITN" has the meaning given that term in the heading.
1.24 "HITN Indemnitee" has the meaning given that term in Section 9.4.
1.25 "Holdco" has the meaning given that term in the heading.
1.26 "Interest Rate" shall mean a fixed rate of interest for each
Promissory Note which shall be fixed at the time of the first Advance thereunder
at a rate equal to the then prime rate of interest as published in The Wall
Street Journal, calculated on the basis of a 365-day year and actual days
elapsed.
1.27 "Loan Documents" shall mean, collectively, this Agreement, each
Promissory Note, each Security Agreement, each Pledge Agreement, each Guaranty
and any other security documents, guarantees, pledges and agreements executed by
HITN, Holdco and/or
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any Newco in connection with this Agreement and any Use Agreement.
1.28 "Loan Facility" shall mean the credit facilities provided by
Clearwire to Holdco and Newco pursuant to this Agreement.
1.29 "Market" shall mean the EBS Opportunity Channels in the same
Geographic Service Area (as defined by the FCC) that are the subject of one or
more Acquisitions hereunder.
1.30 "Market Events of Default" shall have the meaning assigned to
that term in Section 8.2 hereof.
1.31 "Newco" has the meaning given to that term in Recital B.
1.32 "Newly Unencumbered Channel" shall mean an EBS Opportunity
Channel that at the time of Acquisition was an Encumbered Channel and is no
longer subject to a Third-Party Lease or Subsequent Lease Rights.
1.33 "Non-Profit Community" has the meaning given to that term in
Recital A.
1.34 "Opportunity Notice" has the meaning given that term in Section
2.1.
1.35 "Other Claim" has the meaning given that term in Section 9.4.
1.36 "Pledge Agreement" shall mean, as the context requires, a Pledge
Agreement in the form attached hereto as Exhibit 1.36 to be executed by HITN in
favor of Clearwire evidencing the pledge of HITN's membership interests in
Holdco as described in Section 3.6.2 and each subsequent Pledge Agreement to be
executed by Holdco in favor of Clearwire evidencing the pledge of Holdco's
membership interests in a Newco as described in Section 3.6.2.
1.37 "Promissory Note" shall mean a promissory note in the form
attached hereto as Exhibit 1.37 from Holdco or Newco in favor of Clearwire
evidencing the applicable Advances and any promissory note or notes made and
delivered in substitution or replacement therefor.
1.38 "Proposed Expense Budget" shall have the meaning assigned to that
term in Section 2.4.
1.39 "Purchase Advance" shall mean an advance of funds under a
Promissory Note to fund an Acquisition, as reflected on a grid attached to such
Promissory Note.
1.40 "Security Agreement" shall mean a Security Agreement in the form
attached hereto as Exhibit 1.40 and, as the context requires, each Security
Agreement executed pursuant to this Agreement.
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1.41 "Single Purpose Entity" shall mean an entity that (i) exists
solely for the purpose of owning and operating its EBS Opportunity Channels, and
(ii) conforms with all of the requirements set forth in Exhibit 1.41.
1.42 "SPE Operating Agreement" has the meaning given that term in
Exhibit 1.41.
1.43 "Subsequent Lease Rights" shall mean any and all rights of first
refusal, rights of negotiation, rights of first offer, options to lease or
purchase or other similar rights that may be in existence or come into existence
upon the expiration of a Third-Party Lease or otherwise with respect to an
Acquired Channel, but excluding any rights that may be deemed created by this
Agreement or that are otherwise for the benefit of Clearwire or any Clearwire
affiliate.
1.44 "Third-Party Lease" shall mean a lease, royalty or other
applicable use agreement in respect of an EBS Opportunity Channel by a party
other than Clearwire or HITN as the lessee or party with rights to use all or
some portion of the EBS Opportunity Channel.
1.45 "UCC" shall mean the Uniform Commercial Code as currently in
force in or as subsequently amended in the State of Washington.
1.46 "Unencumbered Channel" shall mean an EBS Opportunity Channel that
is not subject to a Third-Party Lease or subject to Subsequent Lease Rights on
the date of the closing of its Acquisition.
1.47 "Use Agreement" shall mean the form of EBS Excess Capacity Use
and Royalty Agreement attached hereto as Exhibit 1.47, and each Use Agreement
entered into pursuant to this Agreement.
2. LEASE OPTION.
2.1 Identification of EBS Opportunity Channel. Any of Clearwire,
Holdco and HITN may identify opportunities for Holdco, or to the extent provided
for in Section 2.3, a Newco, to acquire EBS Opportunity Channels. Such
identification shall be in writing addressed to the other parties at the
addresses provided below for notice and specifically identifying the channels
and the call sign for the channels (each an "Opportunity Notice"). If Clearwire
so identifies EBS Opportunity Channels, HITN and Holdco agree that neither of
them will solicit, negotiate for, purchase, accept assignment or otherwise
acquire such EBS Opportunity Channels other than pursuant to the terms set forth
in this Agreement.
2.2 Election to Proceed. If HITN and Holdco elect to pursue an
Acquisition through Holdco or a Newco, Holdco will advise Clearwire in writing
of its desire to proceed within five (5) business days following the receipt of
the Opportunity Notice from Clearwire. If Holdco does not respond affirmatively,
Clearwire may pursue the EBS Opportunity Channels with another organization
qualified to hold EBS Channels. If EBS Opportunity Channels are identified by
HITN or Holdco, then Clearwire will inform HITN in writing within fifteen (15)
days following receipt of the Opportunity Notice whether or not it is willing to
provide financing to facilitate the Acquisition. If Clearwire elects to provide
financing, then Clearwire will inform
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HITN within 15 days after the receipt by Clearwire of all due diligence
materials related to the Acquisition if Clearwire requires that such Acquisition
be made by a Newco, as provided in Section 2.3. If the parties mutually agree to
pursue an Acquisition pursuant to these procedures and Holdco or a Newco
thereafter signs a binding purchase agreement for such Acquisition on terms
approved by Clearwire, then subject to satisfaction of the conditions precedent
of Section 3.7, Clearwire shall have an obligation to make a Purchase Advance to
fund such Acquisition and to make the other Advances with respect thereto as
herein provided. In the event of an Acquisition, the commercial capacity on the
EBS Opportunity Channels so acquired shall be made available to Clearwire on the
terms set forth in Section 2.5.
2.3 Acquisition by a Newco. At Clearwire's sole discretion, it may
require Holdco to form a Newco for the purpose of acquiring any of the EBS
Opportunity Channels. Each Newco shall be a Single Purpose Entity and shall also
own no assets other than the EBS Opportunity Channel to be acquired (and any EBS
Opportunity Channels subsequently acquired in the same Market) and the assets
related to the operation of such EBS Opportunity Channel or Channels.
2.4 Expense Advances.
2.4.1 Expense Budget Procedures. Within thirty (30) days
following the closing of each Acquisition and each year thereafter, Holdco or
Newco, as the case may be, will propose a budget ("Proposed Expense Budget") of
Expenses necessary to maintain the acquired EBS Opportunity Channel in full
force and effect and to carry out its obligations under any Third-Party Lease
affecting such acquired EBS Opportunity Channel; provided, however, if more than
one Acquisition occurs in a single Market, then the Proposed Expense Budget
shall amend the then existing Expense Budget for the acquired EBS Opportunity
Channels in such Market and shall reflect Expenses for all EBS Opportunity
Channels acquired in such Market. Clearwire will approve or modify the Proposed
Expense Budget within thirty (30) days of its receipt and such Proposed Expense
Budget, as modified, shall be the "Expense Budget" for the EBS Opportunity
Channels in such Market for the following twelve months unless modified by the
addition of more EBS Opportunity Channels in such Market. Clearwire shall be
obligated to make the Expense Advances for the Expenses set forth in the Expense
Budget and such other Expenses that Clearwire approves in writing prior to such
Expenses being incurred.
2.4.2 Uncompensated Actions. Notwithstanding anything in this
Agreement or any other Loan Document to the contrary, neither Holdco nor any
Newco shall be required to take any action for which Clearwire has not approved
an Expense under this procedure; provided that, any such failure to take an
action shall not prejudice in any manner Clearwire's right to take such action
in place of and in the name of Holdco or a Newco, if in the reasonable judgment
of Clearwire it was necessary to preserve a present or future right of Clearwire
hereunder.
2.4.3 Application of Third Party Royalties. During the time that
an Acquired Channel is subject to a Third-Party Lease, any royalty payments
which are paid under such Third-Party Lease to Holdco or Newco (including
payments made on account of such Third-Party Lease after its expiration) shall
be held in trust for Clearwire and immediately paid over to Clearwire to be
applied by Clearwire as provided in the Promissory Note related to such
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Acquired Channel. Clearwire shall make Expense Advances on a timely basis
regardless of whether there is any delay or shortfall in such royalty payments.
Clearwire shall account for the receipt and application of royalty payments from
Third-Party Leases on the grid attached to the applicable Promissory Note.
2.4.4 Acquired Markets Subject to Use Agreements. The procedures
outlined for Expense Advances shall cease to the extent Expenses are provided
for under an applicable Use Agreement while such Use Agreement is in force, but
shall continue to be applicable to the Acquired Channels to the extent any
Expenses are not covered by such Use Agreement or if the operation of the Use
Agreement is suspended, terminated or is unenforceable for any reason, as long
as an affiliate of HITN is the holder of the license in respect thereof.
2.5 Clearwire Option to Enter Use Agreements.
2.5.1 Use Agreement for Unencumbered Channels. Within five (5)
days following the closing of the Acquisition of any Unencumbered Channels,
Holdco (or the applicable Newco) and Clearwire (or an entity designated by
Clearwire) will enter into a Use Agreement (with the blanks appropriately
completed by Clearwire), and the Advance Royalty Payment shall be equal to the
Acquisition Balance in respect of the Unencumbered Channels, as reflected in the
applicable Promissory Note at the time.
2.5.2 Subsequent Use Agreement Rights. If any Acquired Channel
is, at the time of the closing of the applicable Acquisition, subject to a
Third-Party Lease and thereafter, such Third-Party Lease expires or is otherwise
terminated pursuant to its terms and there are no Subsequent Lease Rights under
such Third-Party Lease which survive the expiration or termination thereof, then
Holdco or Newco, as the case may be, will then offer to Clearwire, in writing,
the right to enter into a Use Agreement with respect to such Acquired Channel
and if Clearwire accepts such offer within ninety (90) days of the receipt of
such offer by Clearwire, Holdco or Newco shall promptly execute and deliver to
Clearwire a Use Agreement, with the blanks appropriately completed by Clearwire,
and the Advance Royalty Payment shall be equal to the Acquisition Balance.
2.5.3 Subsequent Use Agreement Option. If any Acquired Channel
is, at the time of the closing of the applicable Acquisition, subject to a
Third-Party Lease which includes Subsequent Lease Rights that survive the
closing of the Acquisition, then HITN, Holdco and Newco agree that during the
term of any such Third-Party Lease and/or during the period during which any
such Subsequent Lease Rights are in effect, that neither HITN, Holdco nor Newco
will take any action that would trigger the Subsequent Lease Rights or
application thereof to such Acquired Channel without the written consent of
Clearwire. Upon the expiration of the Third-Party Lease and the Subsequent Lease
Rights, Holdco or Newco, as the case may be, will then offer to Clearwire, in
writing, the right to enter into a Use Agreement with respect to such Acquired
Channel and if Clearwire accepts such offer within ninety (90) days of the
receipt of such offer by Clearwire, Holdco or Newco shall execute and deliver to
Clearwire a Use Agreement, with the blanks appropriately completed by Clearwire,
and the Advance Royalty Payment shall be equal to the Acquisition Balance.
Notwithstanding the foregoing, if Clearwire determines in good faith that a
breach will not result from, and the Subsequent Lease Rights will not be
triggered by, entering into a Use Agreement for such Acquired Channel with
Clearwire,
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Clearwire, by written notice to Holdco (or the applicable Newco) may elect to
enter into a Use Agreement upon the termination or expiration of such
Third-Party Lease. In that event, Holdco (or the applicable Newco) shall,
promptly following expiration or termination of such Third-Party Lease, execute
and deliver to Clearwire a Use Agreement, with the blanks appropriately
completed by Clearwire, and the Advance Royalty Payment shall be equal to the
Acquisition Balance; provided that, Clearwire indemnify, and hold harmless, HITN
and Holdco and any applicable Newco, and their respective Indemnified Parties,
for any and all claims relating to its entering into the Use Agreement, pursuant
to the indemnification procedures set forth in Section 9.4
2.5.4 Clearwire License Options. If at any time the FCC rules
permit the license of an Acquired Channel to be held by any commercial entity
directly, then pursuant to the applicable Use Agreement if one is then in
effect, Holdco (or the applicable Newco) shall transfer the license to Clearwire
(or its designated CW Subsidiary) at no cost to Clearwire (a "Clearwire License
Transfer"). Where a Use Agreement is not in place with respect to an Acquired
Channel that upon expiration of a Third-Party Lease would be a Newly
Unencumbered Channel, upon Clearwire's request Holdco (or the applicable Newco)
shall transfer the license to Clearwire, at no cost to Clearwire, at which time
any Acquisition Balance in respect of the Acquired Channel shall be deemed
satisfied. Clearwire shall have no right to a Clearwire License Transfer with
respect to any Acquired Channel which is subject to a Third-Party Lease which
includes Subsequent Lease Rights unless Clearwire determines in good faith that
a breach will not result from, and the Subsequent Rights will not be triggered
by, the Clearwire License Transfer. Upon such determination, Clearwire, by
written notice to Holdco (or the applicable Newco) may require Holdco (or the
applicable Newco) to make a Clearwire License Transfer; provided that, Clearwire
indemnify, and hold harmless, HITN and Holdco and any applicable Newco, and
their respective Indemnified Parties, for any and all claims relating to such
Clearwire License Transfer, pursuant to the indemnification procedures set forth
in Section 9.4.
2.6 Resale of Services. In the event that (i) Clearwire or a CW
Subsidiary becomes the holder of a license for an Acquired Channel pursuant to
the provisions of Section 2.5.4, (ii) Holdco or Newco, as applicable, is then
serving six or more customers through such Acquired Channel, (iii) any
Third-Party Lease or Subsequent Lease Rights related to such Acquired Channel
have expired, and (iv) Clearwire or such CW Subsidiary has launched or
subsequently launches its wireless communications services in the Market over
the Acquired Channel, then Clearwire shall offer to Holdco or Newco, as
applicable, the ability to resell Clearwire's commercial services to nonprofit
accredited and unaccredited educational institutions and other similar nonprofit
institutions in the relevant Market ("Permitted Customers"). If the conditions
in clauses (i), (ii) and (iii) above are satisfied, then within sixty (60) days
following the commencement of commercial services, as described in clause (iv)
above, Clearwire, or the CW Subsidiary, will provide written notice of such
commercial service to Holdco which notice will include a proposed agreement upon
which Holdco or Newco, as applicable, could resell Clearwire's package of
wireless communication services on up to five percent (5%) of the network
capacity on such Acquired Channel to Permitted Customers in the applicable
Market. The prices offered to Holdco or Newco will be the standard wholesale
rates offered to similarly situated, unaffiliated third parties in such Market
purchasing a similar quantity and type of wireless communications services. The
resale agreement will incorporate the standard terms and conditions used by
Clearwire with respect to other similarly situated
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resellers of Clearwire's wireless communications services. Clearwire, or the CW
Subsidiary, may terminate any resale agreement entered into pursuant to this
Section 2.6 at any time Holdco or Newco, as applicable, is not serving at least
six customers through the Acquired Channel which is the subject of such resale
agreement.
3. LOAN AND PROMISSORY NOTE
3.1 Loan Amount. Subject to the terms and conditions of this Agreement
and each Promissory Note, Clearwire shall make the Loan Facility available to
Holdco. Each Advance shall be evidenced by entry on a grid attached to a
Promissory Note, as described below, the terms of which are by this reference
incorporated in this Agreement.
3.2 Use of Funds. Holdco, directly or through one or more Newcos,
shall utilize the Loan Facility for the exclusive purpose of the Acquisition of
identified EBS Opportunity Channels or paying the Expenses set forth in an
Expense Budget related thereto or as otherwise approved by Clearwire. The Loan
Facility and Advances thereunder shall not be used for any other purposes,
including for the personal, family, household or other expenses of any
individual.
3.3 Interest. The outstanding principal balance of each Promissory
Note shall bear interest at the Interest Rate per annum and shall be paid as
provided therein.
3.4 Default Interest. If any amount due under this Agreement is not
paid when due, such amount shall continue to bear interest from the due date
until and including the date such payment is received by Clearwire at the
Interest Rate per annum.
3.5 Payments. Principal and accrued interest shall be payable as
described in each Promissory Note. Payment of all principal and interest on each
Promissory Note, and all other amounts due under the Loan Documents, shall be
made at the office of Clearwire set forth above or as otherwise directed in
writing by Clearwire to Holdco or Newco, as applicable. Except as otherwise
specifically provided in this Agreement, Holdco's, Newco's and Clearwire's
obligations to pay all sums due under the Loan Documents shall be absolute and
unconditional under any and all circumstances of any character.
3.6 Security.
3.6.1 Security Agreement. All obligations under each Promissory
Note and each Use Agreement related thereto shall be secured by a Security
Agreement granting Clearwire a first and exclusive lien on all of Holdco's
assets in the relevant Market if such Promissory Note is executed by Holdco or
by a Security Agreement granting Clearwire a first and exclusive lien on all of
assets of each Newco, if such Promissory Note is executed by a Newco, in each
case to the extent permitted by law.
3.6.2 Pledge Agreement. All obligations under every Promissory
Note executed by Holdco and each Use Agreement related thereto shall be further
secured by a Pledge Agreement granting Clearwire a first priority, exclusive
pledge by HITN of 100% of the securities of Holdco. All obligations under each
Promissory Note executed by a Newco and each
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Use Agreement related thereto shall be further secured by a Pledge Agreement
granting Clearwire a first priority, exclusive pledge by Holdco of 100% of the
securities of such Newco.
3.6.3 Guaranty. All obligations under this Agreement, each Use
Agreement and each Promissory Note shall be guaranteed by HITN pursuant to the
Guaranty to the extent permitted by law.
3.7 Conditions Precedent. The following conditions must be satisfied
or waived by Clearwire before the initial Purchase Advance or Clearwire shall
have no obligation to make such Purchase Advance:
(a) All of the Loan Documents to which they are parties and
which are due to be executed at the time as provided herein must be
executed by HITN, Holdco or Newco, as the case may be, and delivered to
Clearwire, and Clearwire must execute all documents to which it is a party;
(b) Any other documents, instruments or agreements related
to the Loan Facility and reasonably requested by Clearwire must be executed
by HITN, Holdco and/or Newco;
(c) HITN must own 100% of the voting and beneficial
interests of Holdco at all times;
(d) Clearwire shall have filed a financing statement in the
State of Delaware to perfect its security interest in the membership
interests in Holdco;
(e) Clearwire's board of directors must have approved this
Agreement and the transactions contemplated hereby on or before the date of
this Agreement;
(f) Clearwire must complete, to its satisfaction, its due
diligence for the initial Purchase Advance and the Acquisition to be funded
with the proceeds of such Purchase Advance;
(g) The representations and warranties of HITN and Holdco
contained herein and in the other Loan Documents shall be true and correct
in all material respects as of the date the initial Purchase Advance is
made as if made on and as of such date (except that representations and
warranties that are made as of a specific date need be so true and correct
only as of such date), and that the corporate and limited liability company
documents described in Sections 3.7(i)((i)and (ii)) have not been amended,
and Clearwire shall have received certificates to such effect dated as of
such date and executed by duly authorized officers of HITN and Holdco;
(h) Holdco's operating agreement must incorporate the single
purpose entity provisions attached hereto as Exhibit 1.41;
(i) Clearwire shall have received:
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(i) certified copies of the resolutions of the board of
directors of HITN and the sole member's consent of Holdco, dated as of
the date of this Agreement, and approving, as appropriate, the Loan
Facility, the form of Use Agreement, this Agreement and the other Loan
Documents, and all other applicable documents, if any, to which HITN
or Holdco is a party and evidencing corporate or limited liability
company authorization with respect to such documents;
(ii) a certificate of the Secretary or Assistant
Secretary of HITN and Holdco, dated as of the date of this Agreement,
and certifying (w) the name, title and true signature of each officer
of such entity authorized to execute the Loan Documents and the Use
Agreements to which it is a party, (x) that attached thereto is a true
and complete copy of the organizing documents and bylaws of HITN or
the operating agreement of Holdco, as amended to date, and a recent
certificate of status, certificate of compliance, good standing
certificate or analogous certificate, (y) that HITN owns 100% of the
issued and outstanding membership interests of Holdco and that no
options or other rights exist in any other person, and (z) that Holdco
has no other securities outstanding;
(iii) insurance certificates evidencing the coverages
required by Section 6.9 and naming Clearwire as an "additional
insured" or "loss payee," as applicable;
(iv) a copy of the most recent tax information return
on Form 990 filed by HITN with the Internal Revenue Service or other
applicable information return filed by HITN and a pro forma financial
statement of Holdco showing the effect of the initial Purchase Advance
and the first Acquisition; and
(v) opinion letters of counsel for HITN and Holdco,
dated the date of this Agreement, in form and substance satisfactory
to Clearwire in its sole discretion;
(j) Clearwire must approve the Acquisition Budget; and
(k) Clearwire must approve the amount of Agreement Expenses
after HITN has presented Clearwire with a detailed accounting of the same.
3.8 Future Purchase Advance Conditions Precedent. The following
conditions must be satisfied or waived by Clearwire before each subsequent
Purchase Advance or Clearwire shall have no obligation to make such Purchase
Advance:
(a) Holdco or Newco, as the case may be, shall execute a
Promissory Note with an attached grid showing the amount of the Purchase
Advance. However, if the Purchase Advance is to fund an Acquisition in a
Market in which Holdco or an existing Newco already has an Acquired
Channel, then the Purchase Advance shall be reflected on the grid attached
to the applicable existing Promissory Note and shall be acknowledged by
Holdco or Newco, as the case may be, and an additional Promissory Note
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need not be executed. In other words, all Purchase Advances made to the
same entity to fund Acquisitions in the same Market will be evidenced by
one Promissory Note;
(b) Unless Clearwire has already made a Purchase Advance to
fund an Acquisition in the same Market, then Holdco will execute a Security
Agreement granting Clearwire a security interest in all of the assets of
Holdco in the subject Market;
(c) Any other documents, instruments or agreements related
to the Loan Facility and reasonably requested by Clearwire must be executed
by HITN and/or Holdco or Newco;
(d) Clearwire must complete, to its satisfaction, its due
diligence for each subsequent Acquisition to be funded with the proceeds of
a Purchase Advance;
(e) The representations and warranties of HITN and Holdco
contained herein and in the other Loan Documents and in the Use Agreements
shall be true and correct in all material respects as of the date each
subsequent Purchase Advance is made as if made on and as of such date
(except that representations and warranties that are made as of a specific
date need be so true and correct only as of such date), and that the
corporate documents described in Sections 3.7(i) (i and ii) have not been
amended, and Clearwire shall have received certificates to such effect
dated as of such date and executed by duly authorized officers of HITN and
Holdco; and
(f) Clearwire must approve the Acquisition Budget.
3.9 Expense Advance Conditions Precedent. The following conditions
must be satisfied or waived by Clearwire before each Expense Advance or
Clearwire shall have no obligation to make such Expense Advance:
(a) Clearwire must have approved the initial Expense Budget
or the applicable annual Expense Budget;
(b) Holdco or Newco must deliver a written request for the
Expense Advance at least 15 days prior to the proposed date of the Expense
Advance stating the amount of the Expense Advance, the items to be paid for
with the Expense Advance, a copy of the invoice(s) to be paid, and other
information reasonably requested by Clearwire from time to time. Submission
of such a request shall be deemed a representation by the submitting party
that (i) no Global Event of Default exists, (ii) no Market Event of Default
exists in the Market of the Acquired Channel for which the Expense Advance
is requested, (iii) all of the representations and warranties of HITN,
Holdco and Newco contained in this Agreement are true and correct as of the
date of the request and (iv) all Expenses which are described in the
request for the Expense Advance have been paid or approved in advance by
Clearwire;
(c) The items to be paid with the Expense Advance must have
been included in the applicable Expense Budget or, if not included, then
Clearwire must have approved such Expense in writing; and
PAGE 12 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
(d) Holdco or Newco, as the case may be, shall acknowledge
the grid attached to the applicable Promissory Note evidencing the Expense
Advance.
3.10 Conditions Precedent for Newco. The following additional
conditions must be satisfied or waived by Clearwire before the first Purchase
Advance or Expense Advance to each Newco or Clearwire shall have no obligation
to make such Advance:
(a) HITN and Holdco must each execute and deliver to
Clearwire a Guaranty, guaranteeing the obligations of the Newco which will
receive the Advance;
(b) Holdco must execute and deliver to Clearwire a Pledge
Agreement, granting Clearwire a first priority and exclusive pledge by
Holdco of 100% of the securities of Newco;
(c) Newco must execute and deliver to Clearwire a Security
Agreement, granting Clearwire a first and exclusive lien on all of assets
of Newco, to the extent permitted by law;
(d) Clearwire shall have filed a financing statement in the
State of Delaware to perfect its security interest in the membership
interests in Newco;
(e) Holdco must take any other actions necessary to provide
Clearwire with a perfected first security interest in all of the issued and
outstanding securities of Newco;
(f) Newco must be a Single Purpose Entity and, after the
Acquisition, must own no assets other than the EBS Opportunity Channel to
be acquired and the assets related to operating it;
(g) Clearwire shall have received:
(i) a certified copy of the sole member's consent of
Newco, dated as of the date of the Acquisition, and approving, as
appropriate, the Use Agreement and the other Loan Documents, and all
other applicable documents, if any, to which Newco is a party and
evidencing authorization with respect to such documents;
(ii) a certificate of the Secretary or Assistant
Secretary of Newco, dated as of the date of the Acquisition, and
certifying (w) the name, title and true signature of each officer of
such entity authorized to execute the Loan Documents and Use
Agreements to which it is a party, (x) that attached thereto is a true
and complete copy of the organizing documents and operating agreement
of Newco, as amended to date, and a recent certificate of status,
certificate of compliance, good standing certificate or analogous
certificate, (y) that Holdco owns 100% of the issued and outstanding
membership interests of Newco and that no options or other rights
exist in any other person, and (z) that Newco has no other securities
outstanding;
PAGE 13 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
(iii) insurance certificates evidencing the coverages
required by Section 6.9 and naming Clearwire as an "additional
insured" or "loss payee," as applicable;
(iv) a pro forma financial statement of Newco showing
the effect of the subject Purchase Advance and the subject
Acquisition; and
(v) an opinion letter of counsel for Newco in the same
form and substance as was delivered with respect to Holdco pursuant to
Section 3.7(i)(v); and
(h) Newco must execute an agreement in form attached hereto
as Exhibit 3.10(h) to the effect that all representations, warranties and
covenants under this Agreement that apply to Holdco also apply to Newco in
the same fashion and that Newco is bound by the terms and conditions of
this Agreement in the same fashion as Holdco as if it had been a party to
this Agreement at the outset.
4. REPRESENTATIONS AND WARRANTIES OF HITN AND HOLDCO. HITN and Holdco
hereby represent and warrant to Clearwire as follows:
4.1 Nature of HITN and Newco. HITN is a non-profit corporation duly
organized, validly existing, and in good standing under the laws of New York.
Holdco is a non-profit single member limited liability company duly organized,
validly existing, and in good standing under the laws of Delaware. Both HITN and
Holdco have powers adequate for (a) making and performing each of the Loan
Documents and Use Agreements to which it is a party and (b) carrying on its
business and owning its property.
4.2 Single Purpose Entity. Holdco at all times shall remain a Single
Purpose Entity until after every Advance has been repaid in full, all
obligations of HITN and Holdco under every Loan Document and Use Agreement have
been fully satisfied, and this Agreement has been terminated by Clearwire
pursuant to Section 9.13.
4.3 Authorization. The execution, delivery and performance of each of
the Loan Documents and Use Agreements have been duly authorized by all necessary
corporate action required by HITN's and Holdco's organizing documents, HITN's
bylaws, Holdco's operating agreement and all applicable laws.
4.4 Power. The execution and performance of, and the compliance with
the provisions of, each of the Loan Documents and Use Agreements will not
violate any provision of any applicable law or any provision of HITN's or
Holdco's organizing documents and bylaws or operating agreement, respectively,
and will not conflict with or result in any breach of or result in the creation
or imposition of any encumbrance upon any of the properties or assets of HITN or
Holdco pursuant to the terms of, or constitute a default under, any other
agreement or instrument to which HITN or Holdco is a party or is bound.
4.5 Binding Effect. This Agreement constitutes, and the Use
Agreements, the Promissory Note and each of the other Loan Documents when
executed and delivered by HITN and Holdco, as applicable, will constitute, valid
obligations of HITN and Holdco, as applicable, which are binding and enforceable
against it in accordance with their respective terms, subject to
PAGE 14 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
4.6 Familiarity with Terms. HITN and Holdco are fully familiar with
all of the terms, covenants and conditions of the Loan Documents and Use
Agreements.
4.7 Legal Proceedings. There is no proceeding pending or, to the best
knowledge of HITN and Holdco, threatened before or by any federal, state,
municipal or other governmental department, commission (including the FCC) or
instrumentality, domestic or foreign, which might result in any materially
adverse change in HITN's or Holdco's financial condition or operations.
4.8 No Governmental Approvals. No registration with or approval of any
governmental agency or commission, including the FCC, is necessary for the due
execution and delivery of this Agreement, the Promissory Note, any of the other
Loan Documents or the Use Agreements or for the validity or enforceability
thereof with respect to any of HITN's or Holdco's obligations hereunder or
thereunder; provided, however, that in the event of default, certain FCC
notifications or approvals may be required before any action that would result
in a transfer of control of Holdco may be permissible.
4.9 Compliance with Laws. HITN and Holdco have complied with, and
shall continue to comply with, all laws, regulations and orders which affect in
any material respect Holdco's right to carry on its operations, perform its
obligations under the Loan Documents and Use Agreements or meet its obligations
in the ordinary course of business.
4.10 Financial Condition. The financial statement of Holdco as of the
closing of the Loan Facility, heretofore delivered to Clearwire correctly sets
forth the financial condition of Holdco as of the date thereof, and there has
been no material adverse change in the condition or operations of Holdco since
such date. Holdco has not made any cash distribution or otherwise distributed
profits, property or assets or agreed to do any of the foregoing other than as
stated in such financial statement. Upon funding of any Advance under the Loan
Facility, (i) Holdco will have no debt except that listed on its financial
statement, (ii) Holdco will have no liabilities or obligations except to
Clearwire under the Use Agreements, upon the execution thereof, and to lessees
under the Third-Party Leases, and (iii) there will be no liens against the
assets of Holdco.
4.11 No Encumbrance. Other than pursuant to the Pledge Agreement,
there is no encumbrance on the membership interests in Holdco, and HITN will not
further pledge such interests. Holdco has not pledged any of its assets and will
not do so except pursuant to a Security Agreement.
4.12 Agreements. Neither HITN nor Holdco is a party to or subject to
any material agreement or instrument or charter or other internal restriction
materially adversely affecting the business, properties, assets, operations or
condition (financial or otherwise) of Holdco.
4.13 Performance. Neither HITN nor Holdco is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any contractual obligation of HITN or Holdco and no
condition exists which, with the giving of
PAGE 15 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
notice or the lapse of time or both, would constitute such a default, except in
either case where the consequences, direct or indirect, of such default or
defaults, if any, would not have a material adverse effect on the business,
properties, assets, operations or condition (financial or otherwise) of HITN or
Holdco.
4.14 Brokers. Neither Holdco nor HITN has engaged a broker in
connection with the Loan Facility.
5. REPRESENTATIONS AND WARRANTIES OF CLEARWIRE. Clearwire hereby represents
and warrants to HITN as follows:
5.1 Nature of Clearwire. Clearwire is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware. Clearwire has
powers adequate for (a) making and performing each of the Loan Documents and Use
Agreements to which it is a party and (b) carrying on its business and owning
its property.
5.2 Authorization. The execution, delivery and performance of each of
the Loan Documents and Use Agreements to which it is a party have been duly
authorized by all necessary corporate action required by Clearwire's articles of
incorporation and bylaws and all applicable laws.
5.3 Power. The execution and performance of, and the compliance with
the provisions of, each of the Loan Documents and Use Agreements to which it is
a party will not violate any provision of any applicable law or any provision of
Clearwire's articles of incorporation and bylaws, and will not conflict with or
result in any breach of or result in the creation or imposition of any
encumbrance upon any of the properties or assets of Clearwire pursuant to the
terms of, or constitute a default under, any other agreement or instrument to
which Clearwire is a party or is bound.
5.4 Binding Effect. This Agreement constitutes, and each of the other
Loan Documents and Use Agreements to which it is a party when executed and
delivered by Clearwire, will constitute, valid obligations of Clearwire, which
are binding and enforceable against it in accordance with their respective
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
5.5 Familiarity with Terms. Clearwire is fully familiar with all of
the terms, covenants and conditions of the Loan Documents and Use Agreements.
5.6 No Governmental Approvals. No registration with or approval of any
governmental agency or commission, including the FCC, is necessary for the due
execution and delivery of this Agreement, or any of the other Loan Documents or
Use Agreements to which it is a party or for the validity or enforceability
thereof with respect to any of Clearwire's obligations hereunder or thereunder;
provided, however, that in the event of default, certain FCC notifications or
approvals may be required before any action that would result in a transfer of
control of Holdco may be permissible.
PAGE 16 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
5.7 Compliance with Laws. Clearwire has complied with, and shall
continue to comply with, all laws, regulations and orders which affect in any
material respect Clearwire's right to carry on its operations, perform its
obligations under the Loan Documents and Use Agreements to which it is a party
or meet its obligations in the ordinary course of business.
5.8 Brokers. Clearwire has not engaged a broker in connection with the
Loan Facility.
5.9 Licenses. Clearwire will not take any actions contrary to the
rules and regulations of the FCC which would result in the loss or forfeiture of
licenses for the EBS Opportunity Channels acquired with a Purchase Advance.
5.10 Expenses. Clearwire will pay all Expenses required to be paid by
it under this Agreement or under any Use Agreement.
6. AFFIRMATIVE COVENANTS. Until all amounts owed under this Agreement, the
Promissory Note and the other Loan Documents have been paid in full and so long
as no Event of Default has occurred, Clearwire shall cause to be paid to HITN or
Holdco, as the case may be, the amounts required for Holdco and HITN to timely,
at its own expense, comply with the terms of this Section 6.
6.1 Financial Information. Holdco shall furnish or cause to be
furnished to Clearwire, as soon as the same are available, and in any event (a)
within thirty (30) days after the end of each fiscal quarter, a statement of
profit and loss and of surplus of the quarter then ended and a balance sheet as
of the end of such quarter, all in reasonable detail and certified by Holdco's
chief financial officer, and (b) within ninety (90) days after the end of each
fiscal year, copies of Holdco's current annual financial statements. Such annual
financial statements shall be prepared in accordance with generally accepted
accounting principles applied on a basis consistently maintained throughout the
period involved and with prior periods and certified to by a recognized firm of
independent certified public accountants satisfactory to Clearwire.
6.2 Notice of Default. Immediately upon obtaining knowledge of the
occurrence of any event which constitutes an Event of Default, or which with
notice or lapse of time, or both, would constitute an Event of Default, Holdco
shall give written notice thereof to Clearwire, together with a detailed
statement of the steps being taken by HITN or Holdco to cure such Event of
Default.
6.3 Maintenance of Existence. Holdco shall cause to be done all things
necessary to maintain and preserve its existence, rights, licenses, leases and
franchises, and shall comply with all related laws applicable to Holdco in such
manner as their counsel shall advise.
6.4 Payment of Taxes. Holdco shall pay all taxes, assessments and
charges lawfully levied or imposed by the United States or any state, local or
foreign government or taxing authority on or with respect to Holdco's business,
properties and assets.
6.5 Maintenance of Property and Leases. Holdco shall keep its
properties in good repair and condition, reasonable wear and tear excepted, and
from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto.
PAGE 17 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
Holdco shall at all times comply with the provisions of all Third-Party Leases
and all other licenses and leases, including the rules and regulations of the
FCC incorporated thereon to which they are a party so as to prevent any loss or
forfeiture thereof or thereunder.
6.6 Notice of Litigation. HITN and Holdco shall promptly notify
Clearwire in writing of the initiation of any litigation against HITN or Holdco
or any of them which in HITN's good-faith judgment might materially and
adversely affect the operations, financial condition, property or business of
Holdco or HITN's ability to perform under the Pledge and Guaranty.
6.7 Accounts and Reports. Holdco shall keep true and accurate records
and books of account in which full, true and correct entries shall be made of
all dealings or transactions in relation to its business and affairs in
accordance with generally accepted accounting principles applied on a consistent
basis.
6.8 Inspection. Holdco shall permit Clearwire or its designated
representative, at all reasonable hours upon reasonable advance notice, to visit
and inspect its properties, offices and facilities, and to examine Holdco's
books of account.
6.9 Insurance. Holdco shall maintain personal property insurance,
comprehensive public liability insurance (including but not limited to products
liability) and such other insurance as is reasonably required by Clearwire,
subject to deductibles reasonably required by Clearwire, issued by insurers
satisfactory to Clearwire and under policies (or binders) of a form and type
acceptable to Clearwire. Copies of such policies or certificates, and all
amendments or changes thereto, evidencing coverage shall be provided to
Clearwire. Clearwire shall be listed as a "loss payee" under personal property
insurance and an "additional insured" under liability policies. All insurance
policies shall contain an endorsement in form and substance acceptable to
Clearwire to the effect that they may not be cancelled or materially changed
without thirty (30) days prior written notice to Clearwire.
6.10 License Renewal. HITN or Holdco, as appropriate, shall apply for
the renewal of the EBS licenses acquired in any Acquisition in a timely manner,
and Clearwire shall advance any and all costs associated therewith, and with all
compliance required to maintain and build out the station as required thereby,
to HITN.
7. NEGATIVE COVENANTS. Until all amounts owed under this Agreement, the
Promissory Note and the other Loan Documents have been paid in full, Holdco
shall not, and HITN shall not allow Holdco nor any Newco, without the prior
written consent of Clearwire, to:
7.1 Distributions. Make any cash distributions or otherwise distribute
property in kind;
7.2 Internal Loans. Make any loans or advances to any of its officers,
directors or shareholders, or assume, guarantee, endorse or otherwise become
directly or contingently liable in connection with any obligation of any of its
officers, directors or shareholders or any third party except for the guaranty;
PAGE 18 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
7.3 Changes. Change its name, liquidate, dissolve, enter into any
merger or consolidation, create or acquire any subsidiaries, except for the
creation of Newcos by Holdco, or, except for the Use Agreements and Third-Party
Leases or in the ordinary course of business, sell, lease, transfer or
distribute any of its assets;
7.4 Debt. Except for the Loan Facility, borrow money or incur any
indebtedness or enter into any agreement with respect to the same, other than
unsecured trade debt incurred in the ordinary course of business in connection
with maintaining or using the EBS Opportunity Channels;
7.5 Capital Expenditures. Incur any new capital expenditures (by
purchase or lease) other than what is required to maintain Holdco's (or any
Newco's) existing assets or pursuant to an Acquisition and in the use of
spectrum under a Use Agreement or pursuant to Section 2.6;
7.6 Other Loans. Make any loan or advance to, or investment in, any
person except for investments in short-term, direct obligations of the United
States government, certificates of deposit issued by Bank, investments in
commercial paper maturing 270 days or less and rated at least A-1 by Standard &
Poor's Corporation or P-1 by Xxxxx'x Investors Services, Inc.;
7.7 Subsequent Lease Rights. Take any action that triggers Subsequent
Lease Rights for any other party to lease, use or purchase any of the spectrum
on the EBS Opportunity Channels or Acquired Channels, pursuant to a Third-Party
Lease or otherwise;
7.8 Negotiations. Enter into any negotiations or agreements with a
third party other than Clearwire relating in any way to the future lease, use,
sale transfer or assignment of the EBS Opportunity Channels, the Acquired
Channels or the associated commercial capacity except as required by any
existing Third-Party Lease; or
7.9 Third-Party Leases. Modify, amend or waive any provisions of
existing Third-Party Leases without Clearwire's consent, which shall be given or
withheld in Clearwire's sole and absolute discretion.
8. EVENTS OF DEFAULT
8.1 Global Events of Default. The occurrence of one or more of the
following events (herein called "Global Events of Default") shall constitute a
default under this Agreement: (a) a material default by HITN, Holdco or Newco
under any of the other Loan Documents, subject to notice and/or cure periods
provided therein, if any, which default could, if not cured, result in (i) a
lien being imposed on the membership interests in Holdco or Newco or the assets
of Holdco or Newco, or (ii) the loss of an FCC license or (iii) the extension of
a Third-Party Lease; (b) the occurrence of any proceeding by or against HITN or
Holdco under any provision of bankruptcy law, or the occurrence of any other
bankruptcy, insolvency or similar act or proceeding by or against HITN or
Holdco; (c) any representation or warranty contained in any of the Loan
Documents proves untrue in any material respect; (d) the failure by Holdco or
any Newco at any time to be a Single Purpose Entity; or (e) the failure by HITN,
Holdco or any Newco to strictly comply with the provisions of Section 6.3
(Maintenance of Existence),
PAGE 19 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
Section 6.5 (Maintenance of Property and Leases), Section 6.9 (Insurance),
Section 6.10 (License Renewal), Section 7.3 (Changes), Section 7.7 (Subsequent
Lease Rights), Section 7.8 (Negotiations) or Section 7.9 (Third-Party Leases).
8.2 Market Events of Default. The occurrence of one or more of the
following events (herein called "Market Events of Default") shall constitute a
default under this Agreement: (a) Holdco's or Newco's failure to pay any
installment of principal and interest due under any Promissory Note or any other
amount under any of the Loan Documents when and as the same shall become due and
payable as therein or herein expressed; provided, however, this shall not be a
Market Event of Default if such failure is due to the failure of the lessee
under a Third-Party Lease to make its payment and Holdco or Newco, as the case
may be, has taken all available steps to remedy such failure; (b) HITN's,
Holdco's or Newco's failure to duly perform or observe any other material
covenant or condition to be performed or observed by it hereunder, not expressly
described in Section 8.1, following five (5) business days notice from
Clearwire; (c) Holdco or Newco shall be in default in the payment or performance
of any material obligation to any third party under any promissory note,
contract or other instrument to which it is a party or is bound; (d) final
judgment for the payment of money not covered by insurance aggregating in excess
of Fifty Thousand United States Dollars ($50,000.00) shall be rendered against
Holdco or Newco and the same shall remain outstanding and undischarged for a
period of thirty (30) days thereafter; (e) Holdco's or Newco's default under any
contractual obligation between Holdco or Newco and Clearwire, including the Use
Agreements; or (f) a default by HITN, Holdco or Newco under any of the other
Loan Documents which is not expressly described in Section 8.1, subject to
notice and/or cure periods provided therein.
8.3 Clearwire Default. No Global Event of Default or Market Event of
Default shall be deemed to have occurred and be continuing if Clearwire is in
default of its obligations under this Agreement to pay Expenses.
8.4 Global Default Remedies. Upon the occurrence of a Global Event of
Default and while any Global Event of Default is continuing, and subject to any
relevant FCC notice or approval requirements, Clearwire may at its option elect
to pursue any or all of the following remedies, which are cumulative and in
addition to any other right or remedy provided by applicable law: (a) without
further demand, protest or notice of any kind to HITN, Holdco or Newco, declare
any or all Advances made to or for the benefit of Holdco and any Newco under any
and all Promissory Notes to be due and immediately payable, and upon such
declaration the same shall become and be immediately due and payable; (b) in the
event HITN, Holdco or Newco fails to perform any act which it is required to
perform under the Loan Documents, including enforcement of rights or exercise of
remedies under Third-Party Leases, Clearwire may perform such act, and any
reasonable expense thereby incurred by Clearwire shall be a demand obligation
owing by HITN, Holdco and Newco unless Clearwire is obligated hereunder to pay
such expense; (c) assert such other rights and remedies of a secured party under
any and all Pledge Agreements and Security Agreements and under the laws of the
United States or the State of Washington (regardless of whether such law or one
similar thereto has been enacted in the jurisdiction where the rights or
remedies are asserted), including, without limitation, all rights and remedies
of a secured party under the UCC, whether or not this Agreement and the
transactions contemplated hereby are determined to be governed by the UCC; (d)
take any and all steps necessary to prevent the loss of an FCC license; and (e)
assert all other rights and
PAGE 20 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
remedies available under any of the Loan Documents, provided, however, Clearwire
will not seek monetary damages against HITN under this clause (e) until it has
made reasonable efforts to satisfy its claim through the remedies described in
clauses (a), (b) and (c).
8.5 Market Default Remedies. Upon the occurrence of a Market Event of
Default and while any Market Event of Default is continuing, and subject to any
relevant FCC notice or approval requirements, Clearwire may at its option elect
to pursue any or all of the following remedies, which are cumulative and in
addition to any other right or remedy provided by applicable law: (a) without
further demand, protest or notice of any kind to HITN, Holdco or Newco, declare
any or all Advances made to or for the benefit of the defaulting party under the
applicable Promissory Note to be due and immediately payable, and upon such
declaration the same shall become and be immediately due and payable; (b) in the
event HITN, Holdco or any Newco fails to perform any act which it is required to
perform under the Loan Documents or Use Agreements, including enforcement of
rights or exercise of remedies under Third-Party Leases, Clearwire may perform
such act, and any reasonable expense thereby incurred by Clearwire shall be a
demand obligation owing by HITN, Holdco or Newco, respectively, unless Clearwire
is obligated hereunder to pay such expense; (c) assert such other rights and
remedies of a secured party under the applicable Pledge Agreement and Security
Agreement and under the laws of the United States or the State of Washington
(regardless of whether such law or one similar thereto has been enacted in the
jurisdiction where the rights or remedies are asserted), including, without
limitation, all rights and remedies of a secured party under the UCC, whether or
not this Agreement and the transactions contemplated hereby are determined to be
governed by the UCC; and (d) take any and all steps necessary to prevent the
loss of an FCC license.
8.6 FCC Approval. To the extent Clearwire asserts any rights or
remedies under this Agreement that may result in a de jure or de facto transfer
of control of Holdco or Newco under the provisions of the Communications Act of
1934 and/or the Rules and decisions of the FCC, Clearwire agrees that it will
prepare and file the necessary applications with the FCC for such a transfer.
Clearwire agrees that no transfer of control will take place until any necessary
approvals for such a transfer are obtained from the FCC. For purposes of
accomplishing such transfer, Clearwire may assign its rights hereunder to a
third party.
8.7 Costs and Expenses. Holdco shall pay to Clearwire on demand all
reasonable attorneys' fees (including allocated costs for in-house legal
services) and other costs and expenses reasonably incurred by Clearwire
exercising its rights, powers or remedies under Section 8.4 hereof, together
with interest on such sums at a fixed rate per annum equal to the Default Rate
from the date when the costs and expenses are incurred until fully paid,
provided in no event shall the rate of interest exceed that permitted by
applicable law; provided, however, if Clearwire incurs fees, costs or expenses
due to the default of the lessee under a Third-Party Lease or as a result of a
failure of Clearwire to pay Expenses, then Holdco shall have no payment
obligation under this Section 8.7.
9. MISCELLANEOUS PROVISIONS.
9.1 No Operational Control. Nothing in this Agreement shall be
interpreted to give operational control over Holdco or any Newco to Clearwire.
Clearwire agrees that control over Holdco and each Newco, and, subject to the
Third-Party Leases and the Use Agreements,
PAGE 21 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
any FCC licenses held by Holdco or any Newco will remain with HITN, Holdco and
Newco, as applicable, and their existing (or, in the case of each Newco,
initial) owners, officers and directors, unless and until Clearwire seeks and
obtains any FCC approval, as and if applicable, for a transfer of control.
9.2 Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed (in the case of an amendment) by HITN, Holdco and Clearwire or (in the
case of a waiver) by the party against whom the waiver is to be effective. No
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
9.3 Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given or made (i) upon delivery if
delivered personally (by courier service or otherwise), as evidenced by written
receipt or other written proof of delivery (which may be a printout of the
tracking information of a courier service that made such delivery), or (ii) upon
confirmation of dispatch if sent by facsimile transmission (which confirmation
shall be sufficient if shown by evidence produced by the facsimile machine used
for such transmission), in each case to the applicable addresses set forth below
(or such other address which either Party may from time to time specify):
If to HITN, Holdco or Newco: Hispanic Information and
Telecommunications Network, Inc.
000 Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Day, Xxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to: RJGLaw LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
PAGE 22 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
If to Clearwire: Clearwire Corporation
00000 X.X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Facsimile: 000-000-0000
With a copy to: Xxxxx Xxxxxx Xxxxxxxx LLP
0000 Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
HITN and Holdco hereby agree that such notice shall be deemed to meet any
requirements of reasonable notice contained in the UCC.
9.4 Indemnification. Clearwire shall defend, indemnify and hold
harmless HITN, Holdco and each Newco (each a "HITN Indemnitee") from and against
any and all actions by any person arising (a) in whole or in part as a result of
the execution of this Agreement or any Loan Document, or (b) otherwise by virtue
of the status of Holdco or Newco as the holder of the license in respect of any
Acquired Channel, provided that (x) such action was not the result of the
negligence, gross negligence, or intentional or willful misconduct on the part
of a HITN Indemnitee or (y) such action would not have a basis if all the
representations in Section 4 (including as applicable to each Newco) were true,
and (z) in either case, there would have been no liability but for the existence
of the circumstance in (x) or (y) (each a "Disallowed Claim"). Upon the request
of a HITN Indemnitee to defend an action under this Section, Clearwire shall
either: (1) engage counsel of its choosing to defend the HITN Indemnitee; (2)
notify the HITN Indemnitee to select counsel, which must be reasonably
acceptable to Clearwire, in which case Clearwire shall promptly advance the
amount of reasonable attorneys fees to defend any such action as such fees are
incurred; or (3) advise the HITN Indemnitee that the action is a Disallowed
Claim. HITN shall defend, indemnify and hold harmless Clearwire and each CW
Subsidiary from and against any and all actions by any person arising from a
Disallowed Claim and any action brought solely against Clearwire or a CW
Subsidiary which would be a Disallowed Claim had such action also been brought
against a HITN Indemnitee ("Other Claim"). HITN shall promptly advance the
amount of reasonable attorneys fees to defend any such Disallowed Claim or Other
Claim as such fees are incurred. Any person with rights to indemnification
hereunder may decline a defense upon written notice and the related
indemnification obligation shall then lapse.
9.5 Costs and Expenses. Clearwire shall pay its costs and expenses
incurred by it, including the fees and out-of-pocket expenses of its own legal
counsel, in connection with the preparation, negotiation and filing of the Loan
Documents. In addition, Clearwire shall pay such costs and expenses reasonably
and necessarily incurred by HITN and Holdco not to exceed $22,500.00.
9.6 Survival of Covenants. All covenants, agreements, representations
and warranties made by HITN and Holdco hereunder shall survive the execution and
delivery of this
PAGE 23 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
Agreement, the Loan Facility hereunder and the termination hereof. Clearwire's
agreement in Section 2.6 and its covenants in Sections 5.9 and 5.10 shall
survive the execution and delivery of this Agreement, the Loan hereunder and the
termination hereof.
9.7 Severability. The unenforceability or invalidity of any provision
or provisions of this Agreement, the Promissory Note or any other Loan Document
shall not render any other provision or provisions hereof or thereof
unenforceable or invalid.
9.8 Additional Loan Documents. HITN shall at Clearwire's request, from
time to time, at Clearwire's sole cost and expense, execute, re-execute, deliver
and redeliver any and all documents, and do and perform such other and further
acts, as may reasonably be required by Clearwire to enable Clearwire to perfect,
preserve, and protect its security interest in the collateral subject to the
Pledge Agreement and the Security Agreement and its rights and remedies under
this Agreement or granted by law and to carry out and effect the intents and
purposes of this Agreement.
9.9 Assignment. This Agreement and the Loan Documents shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement and the Loan Documents may not
be assigned by HITN or Holdco. Clearwire may transfer or assign the Loan
Facility, this Agreement and any other Loan Document to any of its affiliates.
9.10 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
9.11 Governing Law. This Agreement, the Promissory Note and the Loan
Documents shall be governed by, and construed in accordance with, the internal
laws of the State of Washington, without reference to the choice of law
principles thereof. HITN AND HOLDCO IRREVOCABLY AGREE THAT, SUBJECT TO
CLEARWIRE'S SOLE AND ABSOLUTE DISCRETION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER DOCUMENTS OR THE LOAN
FACILITY SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE COUNTY OF KING,
STATE OF WASHINGTON. HITN AND HOLDCO HEREBY CONSENT AND SUBMIT TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUCH COUNTY AND
STATE. HITN AND HOLDCO HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR
CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST HITN OR HOLDCO BY CLEARWIRE
IN ACCORDANCE WITH THIS SECTION.
9.12 Waiver of Jury Trial. HITN, HOLDCO AND CLEARWIRE HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY HITN,
HOLDCO AND CLEARWIRE MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY,
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO. HITN AND
HOLDCO REPRESENT AND WARRANT THAT NO REPRESENTATIVE OR AGENT OF CLEARWIRE HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT CLEARWIRE WILL NOT, IN THE
PAGE 24 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER, HITN AND HOLDCO
ACKNOWLEDGE THAT CLEARWIRE HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
9.13 Termination. Clearwire may terminate this Agreement at any time
by written notice to HITN and Holdco, and thereafter upon payment in full of all
Advances and satisfaction by HITN and Holdco of all obligations under this
Agreement and the other Loan Documents, this Agreement shall have no further
force and effect except for the provisions of Section 9.4 which shall survive.
9.14 Oral Agreements Not Enforceable. ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN FACILITY MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CLEARWIRE: HITN:
Clearwire Corporation, a Delaware Hispanic Information & Telecommunications
corporation Network, Inc., a New York not-for-profit
corporation
By: /s/ Xxxxxxxx X. Xxxxx By:
-------------------------------- -------------------------------------
Xxxxxxxx X. Xxxxx Print Name:
Executive Vice President -----------------------------
Title:
----------------------------------
HOLDCO:
HITN Spectrum, LLC, a Delaware
limited liability company
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
PAGE 1 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. HITN AND HOLDCO
ACKNOWLEDGE THAT CLEAR WIRE HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
9.13 Termination. Clearwire may terminate this Agreement at any time
by written notice to HITN and Holdco, and thereafter upon payment in full of all
Advances and satisfaction by HITN and Holdco of all obligations under this
Agreement and the other Loan Documents, this Agreement shall have no further
force and effect except for the provisions of Section 9.4 which shall survive.
9.14 Oral Agreements Not Enforceable. ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN FACILITY MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CLEAKWIRE: HITN:
Clearwire Corporation, a Delaware Hispanic Information & Telecommunications
corporation Network, Inc., a New York not-for-profit
corporation
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------- -------------------------------------
Xxxxxxxx X. Xxxxx Print Name: Xxxx X. Xxxxxxxxx
Executive Vice President Title: President
HOLDCO:
HITN Spectrum, LLC, a Delaware
limited liability company
By: /s/ Illegible
--------------------------------
Print Name: Illegible
Title:
-----------------------------
PAGE 2 - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
TABLE OF CONTENTS
1. DEFINITIONS .......................................................... 2
1.1 "Acquired Channel" ................................................... 2
1.2 "Acquisition" ........................................................ 2
1.3 "Acquisition Balance" ................................................ 2
1.4 "Acquisition Budget" ................................................. 2
1.5 "Advance" ............................................................ 2
1.6 "Advance Royalty Payment" ............................................ 2
1.7 "Agreement Expenses" ................................................. 2
1.8 "Clearwire" .......................................................... 2
1.9 "Clearwire License Transfer" ......................................... 2
1.10 "CW Subsidiary" ...................................................... 2
1.11 "Default Rate" ....................................................... 2
1.12 "Disallowed Claim" ................................................... 2
1.13 "EBS" ................................................................ 3
1.14 "EBS Opportunity Channels" ........................................... 3
1.15 "Encumbered Channel" ................................................. 3
1.16 "Expense Advance" .................................................... 3
1.17 "Expense Budget" ..................................................... 3
1.18 "Expenses" ........................................................... 3
1.19 "FCC" ................................................................ 3
1.20 "Global Events of Default" ........................................... 3
1.21 "Guarantor" .......................................................... 3
1.22 "Guaranty" ........................................................... 3
1.23 "HITN" ............................................................... 3
1.24 "HITN Indemnitee" .................................................... 3
1.25 "Holdco" ............................................................. 3
1.26 "Interest Rate" ...................................................... 3
1.27 "Loan Documents" ..................................................... 3
1.28 "Loan Facility" ...................................................... 4
1.29 "Market" ............................................................. 4
1.30 "Market Events of Default" ........................................... 4
1.31 "Newco" .............................................................. 4
1.32 "Newly Unencumbered Channel" ......................................... 4
1.33 "Non-Profit Community" ............................................... 4
1.34 "Opportunity Notice" ................................................. 4
1.35 "Other Claim" ........................................................ 4
1.36 "Pledge Agreement" ................................................... 4
1.37 "Promissory Note" .................................................... 4
1.38 "Proposed Expense Budget" ............................................ 4
1.39 "Purchase Advance" ................................................... 4
PAGE i - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
1.40 "Security Agreement" ................................................. 4
1.41 "Single Purpose Entity" .............................................. 5
1.42 "SPE Operating Agreement" ............................................ 5
1.43 "Subsequent Lease Rights" ............................................ 5
1.44 "Third-Party Lease" .................................................. 5
1.45 "UCC" ................................................................ 5
1.46 "Unencumbered Channel" ............................................... 5
1.47 "Use Agreement" ...................................................... 5
2. LEASE OPTION ......................................................... 5
2.1 Identification of EBS Opportunity Channel ............................ 5
2.2 Election to Proceed .................................................. 5
2.3 Acquisition by a Newco ............................................... 6
2.4 Expense Advances ..................................................... 6
2.4.1 Expense Budget Procedures ...................................... 6
2.4.2 Uncompensated Actions .......................................... 6
2.4.3 Application of Third Party Royalties ........................... 6
2.4.4 Acquired Markets Subject to Use Agreements ..................... 7
2.5 Clearwire Option to Enter Use Agreements ............................. 7
2.5.1 Use Agreement for Unencumbered Channels ........................ 7
2.5.2 Subsequent Use Agreement Rights ................................ 7
2.5.3 Subsequent Use Agreement Option ................................ 7
2.5.4 Clearwire License Options ...................................... 8
2.6 Resale of Services ................................................... 8
3. LOAN AND PROMISSORY NOTE ............................................. 9
3.1 Loan Amount .......................................................... 9
3.2 Use of Funds ......................................................... 9
3.3 Interest ............................................................. 9
3.4 Default Interest ..................................................... 9
3.5 Payments ............................................................. 9
3.6 Security ............................................................. 9
3.6.1 Security Agreement ............................................. 9
3.6.2 Pledge Agreement ............................................... 9
3.6.3 Guaranty ....................................................... 10
3.7 Conditions Precedent ................................................. 10
PAGE ii - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
3.8 Future Purchase Advance Conditions Precedent ......................... 11
3.9 Expense Advance Conditions Precedent ................................. 12
3.10 Conditions Precedent for Newco ....................................... 13
4. REPRESENTATIONS AND WARRANTIES OF HITN AND HOLDCO .................... 14
4.1 Nature of HITN and Newco ............................................. 14
4.2 Single Purpose Entity ................................................ 14
4.3 Authorization ........................................................ 14
4.4 Power ................................................................ 14
4.5 Binding Effect ....................................................... 14
4.6 Familiarity with Terms ............................................... 15
4.7 Legal Proceedings .................................................... 15
4.8 No Governmental Approvals ............................................ 15
4.9 Compliance with Laws ................................................. 15
4.10 Financial Condition .................................................. 15
4.11 No Encumbrance ....................................................... 15
4.12 Agreements ........................................................... 15
4.13 Performance .......................................................... 15
4.14 Brokers .............................................................. 16
5. REPRESENTATIONS AND WARRANTIES OF CLEARWIRE .......................... 16
5.1 Nature of Clearwire .................................................. 16
5.2 Authorization ........................................................ 16
5.3 Power ................................................................ 16
5.4 Binding Effect ....................................................... 16
5.5 Familiarity with Terms ............................................... 16
5.6 No Governmental Approvals ............................................ 16
5.7 Compliance with Laws ................................................. 17
5.8 Brokers .............................................................. 17
5.9 Licenses ............................................................. 17
5.10 Expenses ............................................................. 17
6. AFFIRMATIVE COVENANTS ................................................ 17
6.1 Financial Information ................................................ 17
6.2 Notice of Default .................................................... 17
6.3 Maintenance of Existence ............................................. 17
6.4 Payment of Taxes ..................................................... 17
6.5 Maintenance of Property and Leases ................................... 17
6.6 Notice of Litigation ................................................. 18
6.7 Accounts and Reports ................................................. 18
6.8 Inspection ........................................................... 18
PAGE iii - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
6.9 Insurance ............................................................ 18
6.10 License Renewal ...................................................... 18
7. NEGATIVE COVENANTS ................................................... 18
7.1 Distributions ........................................................ 18
7.2 Internal Loans ....................................................... 18
7.3 Changes .............................................................. 19
7.4 Debt ................................................................. 19
7.5 Capital Expenditures ................................................. 19
7.6 Other Loans .......................................................... 19
7.7 Subsequent Lease Rights .............................................. 19
7.8 Negotiations ......................................................... 19
7.9 Third-Party Leases ................................................... 19
8. EVENTS OF DEFAULT .................................................... 19
8.1 Global Events of Default ............................................. 19
8.2 Market Events of Default ............................................. 20
8.3 Clearwire Default .................................................... 20
8.4 Global Default Remedies .............................................. 20
8.5 Market Default Remedies .............................................. 21
8.6 FCC Approval ......................................................... 21
8.7 Costs and Expenses ................................................... 21
9. MISCELLANEOUS PROVISIONS ............................................. 21
9.1 No Operational Control ............................................... 21
9.2 Amendments and Waivers ............................................... 22
9.3 Notices .............................................................. 22
9.4 Indemnification ...................................................... 23
9.5 Costs and Expenses ................................................... 23
9.6 Survival of Covenants ................................................ 23
9.7 Severability ......................................................... 24
9.8 Additional Loan Documents ............................................ 24
9.9 Assignment ........................................................... 24
9.10 Counterparts ......................................................... 24
9.11 Governing Law ........................................................ 24
9.12 Waiver of Jury Trial ................................................. 24
PAGE iv - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
EXHIBITS
Guaranty ............................................. Page - Ex. 1.22
Pledge Agreement ..................................... Page - Ex. 1.36
Promissory Note ...................................... Page - Ex. 1.37
Security Agreement ................................... Page - Ex. 1.40
SPE and Bankruptcy Remote Requirements ............... Page - Ex. 1.41
Use Agreement ........................................ Page - Ex. 1.47
Joinder Agreement .................................... Page - Ex. 3.10(h)
PAGE i - SPECTRUM ACCESS AND LOAN FACILITY AGREEMENT
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty") is made as of the ____ day of
_____ _________________, 20__, between [OPTION 1: HISPANIC INFORMATION &
TELECOMMUNICATIONS NETWORK, INC., a New York not-for-profit corporation] [OPTION
2: HITN SPECTRUM, LLC, a Delaware limited liability company] ("Guarantor"), and
CLEARWIRE CORPORATION, a Delaware corporation ("Clearwire").
RECITALS
A. [OPTION 1 (TO BE USED IF GUARANTOR IS HITN): Guarantor, Clearwire
and HITN Spectrum, LLC, a Delaware limited liability company ("Holdco") have
entered into that certain Spectrum Access and Loan Facility Agreement dated as
of April _____, 2005 (as amended, restated, modified, renewed, supplemented or
extended from time to time, the "Loan Facility Agreement"), pursuant to which
Clearwire has agreed, at its continuing option and in its sole discretion, to
provide financing to Holdco or wholly owned limited liability company
subsidiaries of Holdco to facilitate Holdco's acquisition of EBS licenses (the
"Loan Facility"). This Guaranty is a condition precedent to Clearwire's
obligations to make available the Loan Facility. Guarantor has agreed to execute
and deliver this Guaranty as an inducement to Clearwire to make available the
Loan Facility. Capitalized terms used herein and not otherwise defined shall
have the meanings given to them in the Loan Facility Agreement.
B. Guarantor is the sole member of Holdco [, WHICH IS THE SOLE MEMBER
OF _________ ___________, A DELAWARE LIMITED LIABILITY COMPANY ("NEWCO")]. The
proceeds of each Advance under the Loan Facility to be made by Clearwire to
[HOLDCO/NEWCO] are being used by [HOLDCO/NEWCO] for the exclusive purpose of the
Acquisition of EBS Opportunity Channels or paying the Expenses set forth in an
Expense Budget related thereto or as otherwise approved by Clearwire. The
proceeds of each Advance under the Loan Facility will therefore result in a
direct or indirect material economic benefit to Guarantor.]
A. [OPTION 2 (TO BE USED IF GUARANTOR IS HOLDCO): Guarantor, Clearwire
and Hispanic Information & Telecommunications Network, Inc., a New York
non-profit corporation ("HITN") have entered into that certain Spectrum Access
and Loan Facility Agreement dated as of April ___, 2005 (as amended, restated,
modified, renewed, supplemented or extended from time to time, the "Loan
Facility Agreement"), pursuant to which Clearwire has agreed, at its continuing
option and in its sole discretion, to provide financing to Guarantor or wholly
owned limited liability company subsidiaries of Guarantor to facilitate
Guarantor's acquisition of EBS licenses (the "Loan Facility"). This Guaranty is
a condition precedent to Clearwire's obligations to make available the Loan
Facility to [_____________________], a Delaware limited liability company
("Newco"). Guarantor has agreed to execute and deliver this Guaranty as an
inducement to Clearwire to make available the Loan Facility to Newco.
Capitalized terms used herein and not otherwise defined shall have the meanings
given to them in the Loan Facility Agreement.
B. Guarantor is the sole member Newco. The proceeds of each Advance
under the Loan Facility to be made by Clearwire to Newco are being used by Newco
for the exclusive
PAGE 1 - EXHIBIT 1.22 - GUARANTY AGREEMENT
purpose of the Acquisition of EBS Opportunity Channels or paying the Expenses
set forth in an Expense Budget related thereto or as otherwise approved by
Clearwire. The proceeds of each Advance under the Loan Facility will therefore
result in a direct or indirect material economic benefit to Guarantor.]
NOW THEREFORE, in consideration of Clearwire making available the Loan
Facility, and for other good and valuable consideration receipt of which
Guarantor hereby acknowledges, Guarantor agrees as follows:
AGREEMENT
1. GUARANTEED OBLIGATIONS. Guarantor absolutely and unconditionally
guarantees payment to Clearwire when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) of all indebtedness,
liabilities and obligations whatsoever of [HOLDCO/NEWCO] owing to Clearwire
under the Loan Facility Agreement and under any other Loan Documents and Use
Agreements (as defined in the Loan Facility Agreement) whether presently
existing or hereafter arising (collectively, the "Obligations"), without
set-off, counterclaim, recoupment or deduction of any amounts owing or alleged
to be owing by Clearwire to [HOLDCO/NEWCO]. Without limiting the foregoing,
Guarantor specifically guarantees payment of any judgment entered against
[HOLDCO/NEWCO] under the Loan Facility Agreement or any Loan Documents and the
payment of any damages that may be awarded in any action brought against
[HOLDCO/NEWCO] by Clearwire under the Loan Facility Agreement or any Loan
Documents. This Guaranty is a guaranty of payment and not merely of collection.
2. GUARANTOR'S CONSENT. Guarantor hereby consents to all terms and
conditions of agreements heretofore or hereafter made between Clearwire and
[HOLDCO/NEWCO] and further consents that Clearwire may without further consent
or disclosure and without affecting or releasing the obligations of Guarantor
hereunder: (a) surrender, exchange, release, assign, or sell any collateral or
waive, release, assign, sell, or subordinate any security interest, in whole or
in part; (b) waive or delay the exercise of any rights or remedies of Clearwire
against [HOLDCO/NEWCO]; (c) waive or delay the exercise of any rights or
remedies of Clearwire against any surety or guarantor (including, without
limitation, rights or remedies of Clearwire against Guarantor under this
Guaranty); (d) waive or delay the exercise of any rights or remedies of
Clearwire in respect of any collateral or security interest now or hereafter
held; (e) release any surety or guarantor; (f) renew, extend, waive or modify
the terms of any Obligation or the obligations of any surety or guarantor, or
any instrument or agreement evidencing the same; (g) renew, extend, waive or
modify the terms of any deed of trust, mortgage, pledge, assignment, security
agreement or other security document; (h) apply payments received from
[HOLDCO/NEWCO] or any surety or guarantor (including Guarantor) or from any
collateral, to any Obligation hereunder; and (i) realize on any security
interest, judicially or nonjudicially, with or without preservation of a
deficiency judgment. In the event any deed of trust securing the Obligations is
foreclosed judicially or nonjudicially, Guarantor's liability under this
Guaranty shall be that portion of the Obligations representing a deficiency
resulting from a judicial or nonjudicial sale, i.e., the difference between the
amount due and owing on the Obligations on the day of the foreclosure sale
(including without limitation principal, accrued interest, attorneys' fees, late
payments, if any, and costs of foreclosure) and the amount of the successful bid
at any
PAGE 2 - GUARANTY AGREEMENT
such judicial or nonjudicial foreclosure sale. Guarantor hereby waives the right
to object to the amount which may be bid by Clearwire or any other person at
such foreclosure sale.
3. GUARANTOR'S WAIVER. Guarantor waives any action on delinquency in
respect of the Obligations or any part thereof [FOLLOWING TO BE USED IF
GUARANTOR IS HITN), SUBJECT TO THE LIMITATIONS IN SECTION 8.4 OF THE LOAN
FACILITY AGREEMENT] [REMAINDER OF THE SENTENCE TO BE USED IF GUARANTOR IS
HOLDCO], including any right to require Clearwire to xxx Newco or any guarantor
or surety obligated with respect to the Obligations or any part thereof, or
otherwise to enforce payment thereof against any collateral securing the
Obligations or the obligations of any guarantor of surety or any part thereof.
Guarantor further waives notice of (a) Clearwire's acceptance of this Guaranty
or its intention to act or its actions in reliance hereon; (b) the present
existence or future incurring of any Obligations or any terms or amounts thereof
or any change therein; (c) any default by [HOLDCO/NEWCO] or any surety or
guarantor; (d) the obtaining of any guaranty or surety agreement (in addition to
this Guaranty); (e) the obtaining of any pledge, assignment or other security
for any Obligations; (f) the release of any surety or guarantor; (g) the release
of any collateral; (h) any change in [HOLDCO/NEWCO]'s business or financial
condition; (i) any renewal, extension or modification of the terms of any
Obligation or of the obligations or liabilities of any surety or guarantor or
any instruments or agreements evidencing the same; (j) any acts or omissions of
Clearwire consented to in Section 2 hereof; and (k) any other demands or notices
whatsoever with respect to the Obligations or this Guaranty. Guarantor further
waives notice of presentment, demand, protest, notice of nonpayment and notice
of protest in relation to any instrument or agreement evidencing any Obligation.
4. GUARANTOR'S KNOWLEDGE OF [HOLDCO/NEWCO]'S ECONOMIC CONDITIONS.
Guarantor represents and warrants to Clearwire that he, she or it has reviewed
such documents and other information as he, she or it has deemed appropriate in
order to permit he, she or it to be fully apprised of [HOLDCO/NEWCO]'s financial
condition and operations and has, in entering into this Guaranty made its own
credit analysis independently and without reliance upon any information
communicated to it by Clearwire. Guarantor covenants for the benefit of
Clearwire to remain apprised of all material economic or other developments
relating to or affecting [HOLDCO/NEWCO], [HOLDCO/NEWCO]'s property or
[HOLDCO/NEWCO]'s business. Without limiting the foregoing Guarantor agrees to
enter into such agreements and arrangements with [HOLDCO/NEWCO] as may be
necessary to ensure Guarantor's receipt of notice of such material changes and
of periodic financial statements. Guarantor expressly waives any requirement
that Clearwire advise, disclose, discuss or deliver notice to Guarantor
regarding [HOLDCO/NEWCO]'s financial condition or operations or with respect to
any default by [HOLDCO/NEWCO] in its performance of the Obligations whether or
not knowledge of such condition, operations or default is or reasonably could be
in the possession of Guarantor and whether or not such knowledge is in the
possession of Clearwire before or after the extension of any credit giving rise
to Obligations by [HOLDCO/NEWCO].
5. UNCONDITIONAL GUARANTY. The obligations of Guarantor under this
Guaranty are absolute and unconditional without regard to the obligations of any
other party or person. The obligations of Guarantor hereunder shall not be in
any way limited or effected by any circumstance whatsoever including, without
limitation, (a) any act or omission of Clearwire consented to in Section 2
hereof; (b) the failure to receive any notice, demand, presentment or protest
waived in Sections 3 and 4 hereof; (c) any failure by [HOLDCO/NEWCO] or any
other
PAGE 3 - GUARANTY AGREEMENT
guarantor or surety to perform or comply with the Obligations or the terms of
any instrument or agreement relating thereto; (d) any change in the name,
purpose, capital stock or constitution of [HOLDCO/NEWCO] or any other guarantor
or surety; (e) any irregularity, defect or unauthorized action by
[HOLDCO/NEWCO], or any other guarantor or surety or any of their respective
officers, directors or other agents in executing and delivering any instrument
or agreements relating to the Obligations or in carrying out or attempting to
carry out the terms of any such agreements; (f) any insolvency, bankruptcy,
reorganization or similar proceeding by or against [HOLDCO/NEWCO], Clearwire,
Guarantor or any other surety or guarantor; (g) any setoff, counterclaim,
recoupment, deduction, defense or other right which Guarantor may have against
Clearwire, [HOLDCO/NEWCO] or any other person for any reason whatsoever whether
related to the Obligations or otherwise; or (g) any other circumstance which
might constitute a legal or equitable discharge or defense, in whole or in part,
of a surety or guarantor. Guarantor hereby waives all defenses of a surety to
which it may be entitled by statute or otherwise.
6. CONTINUING GUARANTY. This Guaranty shall be continuing and shall be
binding upon Guarantor regardless of how long before or after the date hereof
any Obligation was or is incurred. Credit may be granted or continued from time
to time by Clearwire to [HOLDCO/NEWCO] without notice to or authorization from
Guarantor regardless of [HOLDCO/NEWCO]'s then-existing financial or other
condition. Notwithstanding the foregoing, however, Guarantor may limit its
obligations hereunder by delivery of written notice to such effect to Clearwire.
Such notice will limit Guarantor's obligations hereunder to (a) Obligations
incurred by [HOLDCO/NEWCO], or arising out of acts or omissions of
[HOLDCO/NEWCO] occurring, on or prior to a date five (5) business days after
such notice is received by Clearwire; (b) any extensions, renewals, or
modifications of such Obligations; and (c) any additional fees and expenses
incurred by Clearwire (including attorneys' fees and costs) in seeking to
enforce or collect such Obligations. Guarantor agrees that this Guaranty shall
continue to be effective or shall be reinstated as the case may be if at any
time any payment to Clearwire of any of the Obligations is rescinded or must be
restored or returned by Clearwire upon the insolvency, bankruptcy or
reorganization of [HOLDCO/NEWCO] all as though such payment had not been made.
In the event this Guaranty is preceded or followed by any other agreement of
suretyship or guaranty by Guarantor or others, all shall be deemed to be
cumulative, and the obligations of Guarantor hereunder shall be in addition to
those stated in any other suretyship or guaranty agreement.
7. WAIVER OF SUBROGATION. Guarantor hereby irrevocably waives all
claims it has or may acquire against [HOLDCO/NEWCO] in respect of the
Obligations, including rights of exoneration, reimbursement and subrogation.
Guarantor agrees to indemnify Clearwire, and hold it harmless from and against
all loss and expense, including reasonable attorneys' fees and disbursements,
suffered or incurred by Clearwire as a result of claims to avoid any payment
received by Clearwire from [HOLDCO/NEWCO], or for their account or from
collateral, with respect to the Obligations of [HOLDCO/NEWCO] guarantied herein.
8. [OPTION 2 (TO BE USED IF GUARANTOR IS HOLDCO): GUARANTOR'S
ADDITIONAL COVENANTS. Guarantor at all times shall remain a Single Purpose
Entity and shall issue no additional shares until after the Obligations have
been repaid in full or otherwise fully satisfied and the Loan Facility Agreement
has terminated.]
PAGE 4 - GUARANTY AGREEMENT
9. FEES AND EXPENSES; DEFAULT INTEREST. Guarantor agrees to pay
Clearwire upon demand all reasonable fees and expenses, including, without
limitation, reasonable attorneys' fees and disbursements incurred by Clearwire
(a) in all efforts made to enforce payment of any of the Obligations or of
Guarantor's obligations under this Guaranty, or (b) in connection with the
entering into, modification, amendment, administration and enforcement of the
Obligations or of Guarantor's obligations under this Guaranty, or (c) in any
dispute relating to the interpretation, enforcement or performance of the
Obligations or this Guaranty, in any event whether through judicial proceedings,
including bankruptcy, or otherwise. All such fees and expenses shall bear
interest from the date incurred until paid at the Default Rate (as such term is
defined in the Loan Facility Agreement).
10. NO RELIANCE. Guarantor represents and warrants to Clearwire that in
making this Guaranty, it is not relying upon Clearwire's obtaining any guaranty
agreements (other than this Guaranty) or any collateral pledged or assigned to
secure repayment of the Obligations. Guarantor specifically acknowledges that
Clearwire's obtaining any such guaranty agreements or collateral is not a
condition to the enforcement of this Guaranty. If Clearwire should
simultaneously or hereafter elect to attempt to take additional guaranty
agreements or collateral to secure repayment of the Obligations and if
Clearwire's efforts to do so should fail in any respect including, without
limitation, a determination that the agreement purporting to provide such
additional guaranty or security interest is invalid or unenforceable for any
reason, this Guaranty shall, nonetheless, remain in full force and effect.
11. CLEARWIRE'S REMEDIES. No delay in making demand on Guarantor for
satisfaction of the obligations of Guarantor hereunder shall prejudice
Clearwire's right to enforce such satisfaction. All of Clearwire's rights and
remedies shall be cumulative, and any failure of Clearwire to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right at any time and from time to time hereafter. In the event
Clearwire, in its sole discretion, elects to give notice of any action with
respect to the sale of collateral, if any, securing the Obligations or any part
thereof, Guarantor agrees that a period of seven (7) days from the time the
notice is sent shall be deemed a reasonable period of notification of any
matters contained in such notice.
12. FINANCIAL INFORMATION. Guarantor agrees to provide Clearwire with
such financial information of Guarantor as Clearwire shall request from time to
time (including without limitation year-end tax returns [OPTION (TO BE USED IF
GUARANTOR IS HOLDCO) AND UPDATED FINANCIAL STATEMENTS] and authorizes Clearwire
to obtain credit information about Guarantor through any credit reporting
company or any other means.
13. SURVIVAL OF COVENANTS. All covenants, agreements, representations
and warranties made by Guarantor hereunder shall survive the execution and
delivery of this Guaranty, the Loan Facility hereunder and the termination
hereof.
14. SEVERABILITY. The unenforceability or invalidity of any provision
or provisions of this Guaranty shall not render any other provision or
provisions hereof or thereof unenforceable or invalid.
PAGE 5 - GUARANTY AGREEMENT
15. ASSIGNMENT. This Guaranty shall be binding upon and shall inure to
the benefit of the parties and their respective successors and permitted
assigns. This Guaranty may not be assigned by Guarantor. Clearwire may transfer
or assign this Guaranty to any of its affiliates.
16. GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the internal laws of the State of Washington, without reference
to the choice of law principles thereof. GUARANTOR IRREVOCABLY AGREES THAT,
SUBJECT TO CLEARWIRE'S SOLE AND ABSOLUTE DISCRETION, ALL ACTIONS OR PROCEEDINGS
IN ANY WAY ARISING OUT OF OR RELATED TO THIS GUARANTY SHALL BE LITIGATED IN
COURTS HAVING SITUS WITHIN THE COUNTY OF KING, STATE OF WASHINGTON. GUARANTOR
HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL
COURT LOCATED WITHIN SUCH COUNTY AND STATE. GUARANTOR HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST
GUARANTOR BY CLEARWIRE IN ACCORDANCE WITH THIS SECTION.
17. WAIVER OF JURY TRIAL. GUARANTOR AND CLEARWIRE HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND
CLEARWIRE MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF CLEARWIRE HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT CLEARWIRE WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT
CLEARWIRE HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS,
THE PROVISIONS OF THIS SECTION.
18. ACKNOWLEDGMENT OF NOTICE. Guarantor acknowledges receiving the
following notice:
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF Guarantor has executed and delivered this Guaranty
as of the date first above written.
GUARANTOR: [OPTION 1: HISPANIC INFORMATION &
TELECOMMUNICATIONS NETWORK, INC., a
New York not-for-profit corporation]
[OPTION 2: HITN SPECTRUM, LLC, a
Delaware limited liability company]
By
-----------------------------------
Its
-------------------------------
PAGE 6 - GUARANTY AGREEMENT
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement" is made as of
the_________________________________day of __________________, 20__, between
[OPTION 1: HISPANIC INFORMATION AND TELECOMMUNICATIONS NETWORK, INC., a New York
not-for-profit corporation/ [OPTION 2: HITN SPECTRUM, LLC, a Delaware limited
liability company] (the "Pledgor"), and CLEARWIRE CORPORATION, a Delaware
corporation (the "Pledgee").
RECITALS
A. The Pledgor and the Pledgee are parties to that certain Spectrum
Access and Loan Facility Agreement dated May________________, 2005, herewith (as
amended, restated, modified, renewed, supplemented or extended from time to
time, the "Loan Facility Agreement").
B. [OPTION 1 (TO BE USED IF PLEDGOR IS HITN): It is a material
condition precedent to the Pledgee's obligation to make an Advance under the
Loan Facility Agreement to HITN Spectrum, LLC ("Holdco"), a Delaware limited
liability company, that the Pledgor enter into this Agreement and grant to the
Pledgee the security interests hereinafter provided to secure the obligations of
the Pledgor described below.
C. Pledgor is the sole member of Holdco and the proceeds of each
Advance to be made by the Pledgee to Holdco under the Loan Facility Agreement
will result in a direct or indirect material economic benefit to Pledgor.]
B. [OPTION 2 (TO BE USED IF PLEDGOR IS HOLDCO): It is a material
condition precedent to the Pledgee's obligation to make an Advance under the
Loan Facility Agreement to [_____________________________ __________________], a
Delaware limited liability company ("Newco") that the Pledgor enter into this
Agreement and grant to the Pledgee the security interests hereinafter provided
to secure the obligations of the Pledgor described below.
C. Pledgor is the sole member of Newco and the proceeds of each Advance
to be made by the Pledgee to Newco under the Loan Facility Agreement will result
in a direct or indirect material economic benefit to Pledgor.]
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration receipt of which is hereby acknowledged, the Pledgor
hereby agrees as follows:
AGREEMENT
1. DEFINITIONS; INTERPRETATION.
(a) TERMS DEFINED IN LOAN FACILITY AGREEMENT. Capitalized
terms not otherwise defined herein shall have the meanings given in the Loan
Facility Agreement.
(b) CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms have the following meanings:
PAGE 1 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
"Change in Control" means a direct or indirect, de jure or de facto
change in the control (as these terms and concepts are defined and interpreted
under the Communications Act of 1934, as amended, and/or the rules and decisions
of the FCC) of any entity holding licenses issued by the FCC.
"FCC" means Federal Communications Commission.
"Governmental Authority" means the government of the United States or
any state or any foreign country or any political subdivision of any thereof or
any branch, department, agency, instrumentality, court, tribunal or regulatory
authority which constitutes a part or exercises any sovereign power of any of
the foregoing.
"Lien" means, for any person, any security interest, pledge, mortgage,
charge, assignment, hypothecation, encumbrance, attachment, garnishment,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such person or any real or personal property in which such person has or
hereafter acquires any interest.
"Operating Agreement" means the Operating Agreement of [HOLDCO/NEWCO]
as amended from time to time.
"Pledged Membership Interests" means all of the Pledgor's membership
interests in [HOLDCO/NEWCO].
"Pledged Collateral" has the meaning specified in Section 2.
"Secured Obligations" means, collectively:
(i) all debts, liabilities, obligations, covenants and duties
of the Pledgor and [HOLDCO/NEWCO] owing to the Pledgee now or hereafter
existing, whether joint or several, direct or indirect, absolute or
contingent or due or to become due, arising under or in connection with
the Loan Facility Agreement or any Guaranty or any other Loan Document
to which it is a party or any of the transactions contemplated thereby
and including, without limitation, any interest thereon;
(ii) all debts, liabilities, obligations, covenants and duties
of the Pledgor to pay or reimburse the Pledgee or any affiliate of the
Pledgee for all reasonable expenses including, without limitation,
reasonable attorneys' fees (including allocated charges of internal
legal counsel), incurred by the Pledgee or any affiliate of the Pledgee
in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under any of the documents,
instruments and agreements referred to in clause (i) above, including,
without limitation, all such costs and expenses incurred during any
"workout" or restructuring in respect of the credit extended under the
Loan Facility Agreement and during any legal proceeding, including,
without limitation, any proceeding under any applicable bankruptcy,
insolvency or other similar debtor relief laws;
(iii) all debts, liabilities, obligations, covenants and
duties of [HOLDCO/NEWCO] owing to the Pledgee now or hereafter
existing, whether joint or several, direct or indirect,
PAGE 2 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
absolute or contingent or due or to become due, arising under or in
connection with the Use Agreements, including, without limitation, any
interest thereon;
(iv) all debts, liabilities, obligations, covenants and duties
of [HOLDCO/NEWCO] to pay or reimburse the Pledgee or any affiliate of
the Pledgee for all expenses including, without limitation, attorneys'
fees (including allocated charges of internal legal counsel), incurred
by the Pledgee or any affiliate of the Pledgee in connection with the
enforcement, attempted enforcement, or preservation of any rights or
remedies under any of the documents, instruments and agreements
referred to in clause (iii) above, including, without limitation, all
such costs and expenses incurred during any "workout" or restructuring
in respect of any lease under the Use Agreements and during any legal
proceeding, including, without limitation, any proceeding under any
applicable bankruptcy, insolvency or other similar debtor relief laws;
and
(v) all interest and fees on any of the foregoing, whether
accruing prior to or after the commencement by or against the Pledgor
of any proceeding under any applicable bankruptcy, insolvency or other
similar debtor relief laws naming the Pledgor as the debtor in such
proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Washington; provided, however, in the
event that any Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of Washington, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof as they relate to such Pledged Collateral.
(c) TERMS DEFINED IN UCC. Terms used in this Agreement that
are defined in the UCC have the meanings given to them in the UCC.
2. PLEDGE. As security for the payment or performance, as the case may
be, in full of the Secured Obligations, the Pledgor hereby pledges, assigns,
transfers, hypothecates and sets over to the Pledgee, its successors and
assigns, and grants to the Pledgee, its successors and assigns, a security
interest in all of the Pledgor's right, title and interest in, to and under the
following, whether now existing or owned or hereafter acquired or arising
(collectively, the "Pledged Collateral"):
(a) PLEDGED MEMBERSHIP INTERESTS. All of the Pledged
Membership Interests;
(b) ADDITIONAL INTERESTS, ETC. (i) All certificates,
instruments or other writings representing or evidencing the Pledged Membership
Interests; (ii) all warrants, options and other rights entitling the Pledgor to
acquire any interest in any Pledged Membership Interests, and (iii) all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of the Pledged Membership Interests; and
(c) PROCEEDS. All cash and non-cash proceeds of the foregoing,
however and whenever acquired and in whatever form.
PAGE 3 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
3. DELIVERY OF THE PLEDGED COLLATERAL; CONTINUING SECURITY INTEREST.
The Pledgor hereby agrees that:
(a) DELIVERY OF CERTIFICATES. The Pledgor shall deliver to the
Pledgee simultaneously with or prior to the execution and delivery of this
Agreement, all certificates, instruments or other writings representing or
evidencing Pledged Membership Interests. All such certificates shall be
delivered in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment satisfactory to the Pledgee.
(b) ADDITIONAL PLEDGED COLLATERAL. If the Pledgor shall
receive by virtue of its being or having been the owner of any Pledged
Collateral, any (i) certificate, including any certificate representing a
dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of
shares or membership or equity interests, stock splits, spin-off or split-off,
promissory notes or other instrument; (ii) warrant, option or other right,
whether as an addition to, substitution for, or an exchange for, any Pledged
Collateral or otherwise; (iii) dividends payable in securities; or (iv)
distributions of securities or other equity interests in connection with a
partial or total liquidation, dissolution or reduction of capital, capital
surplus or paid-in surplus, then the Pledgor shall forthwith deliver all of the
foregoing to the Pledgee to hold as Pledged Collateral and shall, if received by
the Pledgor, be received in trust for the benefit of the Pledgee, be segregated
from the other property or funds of the Pledgor, and be forthwith delivered to
the Pledgee as Pledged Collateral in the same form as so received, together with
duly executed instruments of transfer or assignment satisfactory to the Pledgee,
as further collateral security for the Secured Obligations.
(c) CONTINUING SECURITY INTEREST. The Pledgor acknowledges and
agrees that the security interest of the Pledgee in the Pledged Collateral
constitutes continuing collateral security for all of the Secured Obligations.
4. FINANCING STATEMENTS. The Pledgor hereby irrevocably authorizes the
Pledgee at any time and from time to time to file in any relevant jurisdiction
any initial financing statements and amendments thereto that contain the
information required by Article 9 of the UCC of each applicable jurisdiction for
the filing of any financing statement or amendment in order to perfect and
protect the security interest of the Pledgee in the Pledged Collateral.
5. PLEDGOR'S CONSENT. The Pledgor hereby consents to all terms and
condition of agreements heretofore or hereafter made between the Pledgee and
[HOLDCO/NEWCO] (including without limitation the Loan Facility Agreement and the
other Loan Documents) and further consents that the Pledgee may without further
consent or disclosure and without affecting or releasing the obligations of the
Pledgor hereunder: (a) surrender, exchange, release, assign, or sell any
collateral or waive, release, assign, sell, or subordinate any security
interest, in whole or in part; (b) waive or delay the exercise of any rights or
remedies of the Pledgee against [HOLDCO/NEWCO]; (c) waive or delay the exercise
of any rights or remedies of the Pledgee against any surety or guarantor
(including, without limitation, rights or remedies of the Pledgee against the
Pledgor under this Agreement); (d) waive or delay the exercise of any rights or
remedies of the Pledgee in respect of any collateral or security interest now or
hereafter held; (e) release any surety or guarantor; (f) renew, extend, waive or
modify the terms of any Secured Obligation or the obligations of any surety or
guarantor, or any instrument or agreement evidencing the same;
PAGE 4 - EXHIBIT 1.36- PLEDGE AGREEMENT
EXHIBIT 1.36
(g) renew, extend, waive or modify the terms of any Loan Document or any other
security agreement, pledge, assignment, deed of trust, mortgage or other
security document; (h) apply payments received from [HOLDCO/NEWCO] or any surety
or guarantor or from any collateral, to any indebtedness, liability, or
obligations of [HOLDCO/NEWCO] or such sureties or guarantors whether or not a
Secured Obligation hereunder; and (i) realize on any security interest,
judicially or nonjudicially, with or without preservation of a deficiency
judgment.
6. PLEDGOR'S WAIVER. The Pledgor waives any action on delinquency in
respect of the Secured Obligations or any part thereof [(FOLLOWING TO BE USED IF
PLEDGOR IS HITN), SUBJECT TO THE LIMITATIONS IN SECTION 8.4 OF THE LOAN FACILITY
AGREEMENT] [REMAINDER OF THE SENTENCE TO BE USED IF PLEDGOR IS HOLDCO],
including any requirement, substantive or procedural, that (a) the Pledgee
pursue any foreclosure action, realize or attempt to realize on any security or
preserve or enforce any deficiency claim against Newco, the Pledgor, surety or
any other person or party after any realization; (b) a judgment first be sought
or rendered against Newco, the Pledgor, surety, or any other person or party;
(c) Newco, the Pledgor, any surety or any other person or party be joined in any
action; or (d) a separate action be brought against Newco under the Loan
Facility Agreement or any other Loan Document. The Pledgor waives and releases
all right to require marshaling of assets and liabilities or sale in inverse
order of alienation of any security for the Secured Obligations. The Pledgor
further waives notice of (a) the Pledgee's acceptance of this Agreement or its
intention to act or its actions in reliance hereon; (b) the present existence or
future incurring of any Secured Obligations or any terms or amounts thereof or
any change therein; (c) any default by [HOLDCO/NEWCO] or any surety or
guarantor; (d) the obtaining of any guaranty or surety agreement; (e) the
obtaining of any pledge, assignment or other security for any Secured
Obligations (including this Agreement); (f) the release of any surety or
guarantor; (g) the release of any collateral; (h) any change in [HOLDCO/NEWCO]'s
business or financial condition; (i) any renewal, extension or modification of
the terms of any Secured Obligation or of the obligations or liabilities of any
surety or guarantor or any instruments or agreements evidencing the same; (j)
any acts or omissions of the Pledgee consented to in Section 5 hereof; and (k)
any other demands or notices whatsoever with respect to the Secured Obligations
or this Agreement. The Pledgor further waives notice of presentment, demand,
protest, notice of nonpayment and notice of protest in relation to any
instrument or agreement evidencing any Secured Obligation.
7. PLEDGOR'S KNOWLEDGE OF [HOLDCO/NEWCO]'S ECONOMIC CONDITIONS. The
Pledgor represents and warrants to the Pledgee that it has reviewed such
documents and other information as it has deemed appropriate in order to permit
it to be fully apprised of [HOLDCO/NEWCO]'s financial condition and operations
and has, in entering into this Agreement made its own credit analysis
independently and without reliance upon any information communicated to it by
the Pledgee. The Pledgor covenants for the benefit of the Pledgee to remain
apprised of all material economic or other developments relating to or affecting
[HOLDCO/NEWCO], its property or its business. Without limiting the foregoing,
the Pledgor agrees to enter into such agreements and arrangements with
[HOLDCO/NEWCO] as may be necessary to ensure its receipt of notice of such
material changes and of periodic financial statements. The Pledgor expressly
waives any requirement that the Pledgee advise, disclose, discuss or deliver
notice to the Pledgor regarding [HOLDCO/NEWCO]'s financial condition or
operations or with respect to any default by [HOLDCO/NEWCO] in its performance
of the Secured Obligations whether or not knowledge of such condition,
operations or default is or reasonably could be in the possession of the Pledgor
and
PAGE 5 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
whether or not such knowledge is in the possession of the Pledgee before or
after the extension of any credit giving rise to Secured Obligations by
[HOLDCO/NEWCO].
8. NO RELIANCE. The Pledgor acknowledges that the Pledgee intends to
obtain other guaranties and collateral to secure the repayment of the Secured
Obligations. The Pledgor represents and warrants to the Pledgee, however, that
in making this Agreement it is not relying upon the Pledgee obtaining any
guaranty agreements or any collateral pledged or assigned to secure repayment of
the Secured Obligations. The Pledgor specifically acknowledges that the
Pledgee's obtaining any such guaranty agreements or collateral is not a
condition to the enforcement of this Agreement. If the Pledgee should
simultaneously or hereafter elect to attempt to take additional guaranty
agreements or collateral to secure repayment of the Secured Obligations and if
its efforts to do so should fail in any respect including, without limitation, a
determination that the agreement purporting to provide such additional guaranty
or security interest is invalid or unenforceable for any reason, this Agreement
shall, nonetheless, remain in full force and effect.
9. WAIVER OF SUBROGATION. The Pledgor hereby irrevocably waives all
claims it has or may acquire against [HOLDCO/NEWCO] in respect of the Secured
Obligations, including rights of exoneration, reimbursement and subrogation. The
Pledgor agrees to indemnify the Pledgee, and hold it harmless from and against
all loss and expense, including legal fees, suffered or incurred by the Pledgee
as a result of claims to avoid any interest of the Pledgee in any Collateral.
10. REPRESENTATIONS AND WARRANTIES. In addition to the representations
and warranties of the Pledgor set forth in the Loan Facility Agreement, which
are incorporated herein by this reference, the Pledgor represents and warrants
to the Pledgee that:
(a) LEGAL NAME; JURISDICTION OF INCORPORATION. The Pledgor's
chief executive office and chief place of business is located
at________________________________________________________ __________________,
and the Pledgor keeps its books and records at such location. [OPTION 1 (TO BE
USED IF PLEDGOR IS HITN) The Pledgor's exact corporate name is Hispanic
Information and Telecommunications Network, Inc., the jurisdiction of its
incorporation is the State of New York.] [OPTION 2 (TO BE USED IF PLEDGOR IS
HOLDCO) The Pledgor's exact legal name is HITN Spectrum, LLC, the jurisdiction
of its organization is the State of Delaware and the identification number given
by its jurisdiction of organization is 3886431.]
(b) OWNERSHIP AND AUTHORITY. The Pledgor is the sole legal and
beneficial owner of the Pledged Collateral and has the right, power and
authority to pledge, assign, transfer, hypothecate and set over to the Pledgee
and grant to the Pledgee a security interest in such Pledged Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement.
(c) AUTHORIZATION OF PLEDGED MEMBERSHIP INTERESTS. All of the
Pledged Membership Interests are duly authorized and validly issued, are fully
paid and nonassessable and are not subject to the preemptive first-refusal or
other similar rights of any person. All membership interests hereafter
constituting Pledged Collateral will be duly authorized and validly issued,
fully paid and nonassessable and not subject to any preemptive, first-refusal or
other similar rights of any person, except as may be provided under applicable
law.
PAGE 6 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
(d) VALIDITY OF SECURITY INTEREST. This Agreement creates a
valid security interest in favor of the Pledgee, its successors and assigns, in
all of the Pledged Collateral. Upon the filing of an appropriate financing
statement on form UCC-1, the Pledgee will have a first priority perfected
security interest in all certificated Pledged Membership Interests and such
certificates and instruments. Except as set forth in this subsection (d), no
action is necessary to perfect or otherwise protect such security interest.
(e) ABSENCE of LIENS AND CLAIMS. Except for the security
interest of the Pledgee created hereby, the Pledged Collateral is free and clear
of any Liens; There exists no "adverse claim" within the meaning of Section
8-102 of the UCC with respect to any of the Pledged Membership Interests.
(f) NO TRANSFER RESTRICTIONS. Except for restrictions imposed
by this Agreement, the Pledged Collateral is free of contractual restrictions
that might prohibit, impair, delay or otherwise affect in a materially adverse
manner the pledge of any Pledged Collateral hereunder or the sale or disposition
thereof pursuant hereto, provided, however, that Pledgee will not take any
actions that would constitute a Change in Control of [HOLDCO/NEWCO] or any other
entity holding licenses issued by the FCC without first securing any necessary
approvals from the FCC.
(g) NO OTHER PLEDGED COLLATERAL. As of the date of this
Agreement, (i) the Pledged Membership Interests represent all of the membership
interests of [HOLDCO/NEWCO] issued and outstanding as of such date, and (ii) no
other party has possession of any of the certificates, instruments or other
writings representing or evidencing the Pledged Membership Interests or has any
warrants, options or other rights entitling such party to acquire any interest
in the membership interests of [HOLDCO/NEWCO].
(h) PLEDGED MEMBERSHIP INTERESTS NOT SECURITIES. None of the
Pledged Membership Interests (i) is dealt in or traded on a securities exchange
or in a securities market, (ii) by its terms expressly provides that it is a
security governed by Article 8 of the UCC, (iii) is an investment company
security, (iv) is held in a securities account or (v) constitutes a Security or
Financial Asset.
(i) DELIVERY OF MEMBERSHIP INTERESTS. The Pledgor has
delivered or otherwise caused the transfer to the Pledgee of all certificates,
instruments or other writings representing, evidencing or constituting Pledged
Collateral. The Pledged Membership Interests are not and shall not be
represented or evidenced by any certificates, instruments or other writings
other than those delivered hereunder.
(j) CONSENTS. No consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or Governmental Authority and no
consent of any other person (including, without limitation, any stockholder,
member or creditor of the Pledgor), is required (i) for the pledge made by the
Pledgor or for the granting of the security interest by the Pledgor pursuant to
this Agreement or for the execution, delivery or performance of this Agreement
by the Pledgor or (ii) for the exercise by the Pledgee of the rights and
remedies provided for in this Agreement, except (a) any necessary approvals by
the FCC for a Change in Control of an entity holding FCC licenses, which
approvals must be secured by Pledgee before the Pledgee may take any action
PAGE 7 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
constituting a Change in Control, and (b) such approvals as may be required by
laws affecting the offering and sale of securities.
(k) BINDING OBLIGATIONS, ETC. This Agreement has been duly
executed and delivered by the Pledgor and constitutes the legal, valid and
binding obligations of the Pledgor enforceable against the Pledgor in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, similar laws affecting creditors' rights generally
or general principles of equity.
The foregoing representations and warranties shall survive the execution and
delivery of this Agreement.
11. COVENANTS. In addition to the covenants of the Pledgor set forth in
the Loan Facility Agreement, which are incorporated herein by this reference, so
long as any of the Secured Obligations shall remain unpaid or unsatisfied, the
Pledgor shall:
(a) DEFENSE OF PLEDGED COLLATERAL. At its own cost and
expense, take any and all actions necessary to defend title to the Pledged
Collateral against all persons and to defend the Pledgee's security interest in
the Pledged Collateral and the priority thereof against any Lien.
(b) DISPOSITION OF PLEDGED COLLATERAL. Not make or permit to
be made any sale, transfer or other disposition of any of the Pledged Collateral
or grant any option, warrant or other right or interest with respect to, any of
the Pledged Collateral, except with the prior written consent of the Pledgee.
(c) CHANGE OF NAME, IDENTITY OR STRUCTURE. The Pledgor will
not move the location of its chief executive offices, change its jurisdiction of
organization or entity structure nor move its records concerning the Pledged
Collateral unless the Pledgor shall have given the Pledgee prior written notice
of such move or change.
(d) NO LIENS. Not make or permit to be made an assignment,
pledge or hypothecation of any of the Pledged Collateral or create or permit to
exist any Lien upon or with respect to any of the Pledged Collateral other than
the security interest of the Pledgee created hereby without the prior written
consent of the Pledgee.
(e) MEMBER AGREEMENTS. Not enter into any member agreement,
voting agreement, voting trust, irrevocable proxies or any other similar
agreement or instrument with respect to any Pledged Collateral.
(f) NO SECURITIES. Not take any action or permit any action to
be taken that would cause any Pledged Membership Interests to become a Security,
unless such Pledged Membership Interest has been certificated and pledged to the
Pledgee pursuant to this Agreement.
12. FURTHER ASSURANCES. The Pledgor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such reasonable actions as the Pledgee
may from time to time request to better assure, preserve, protect and perfect
the security interest of the Pledgee in the Pledged Collateral and the rights
and remedies of the Pledgee hereunder, including, without limitation, the
payment of any
PAGE 8 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
fees and taxes required in connection with the execution and delivery of this
Agreement, the granting of such security interest and the filing of any
financing statements or other documents in connection herewith or therewith.
Without limiting the generality of the foregoing, the Pledgor further agrees
that it shall, concurrently with the execution of this Agreement and at any time
and from time to time thereafter (a) procure, execute and deliver to the Pledgee
all stock powers, endorsements, financing statements, assignments and other
instruments of transfer requested by the Pledgee and (b) deliver to the Pledgee
immediately upon receipt the originals of all Pledged Membership Interests and
all certificates, instruments or other writings representing, evidencing or
constituting Pledged Collateral. The Pledgor agrees that it will use its best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Pledged Membership Interests within thirty (30) days after the date it
has been notified by the Pledgee of the specific identification of such Pledged
Membership Interests.
13. INTENTIONALLY OMITTED.
14. VOTING RIGHTS; DIVIDENDS.
(a) PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT. So long as no Event
of Default shall exist or result therefrom (and, in the case of subparagraph (i)
below, so long as written notice has not been given by the Pledgee to the
Pledgor):
(i) VOTING RIGHTS. The Pledgor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the
Pledged Membership Interests or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Loan Facility
Agreement; provided, however, that the Pledgor shall not exercise or
shall refrain from exercising any such right if, in the judgment of the
Pledgee, such action would have a material adverse effect on the value
of the Pledged Collateral or any part thereof or the interest of the
Pledgee therein, and, provided, further, that the Pledgor shall give
the Pledgee at least five business days' prior written notice of the
manner in which it intends to exercise, or the reasons for refraining
from exercising, any such right.
(ii) DIVIDENDS. The Pledgor shall be entitled to receive and
retain any and all dividends or distributions paid in respect of the
Pledged Membership Interests, but only if such dividends or
distributions are allowed by the terms of the Loan Facility Agreement,
except the following: (A) dividends paid or payable other than in cash
in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Pledged
Membership Interests; (B) dividends and other distributions paid or
payable in cash in respect of any Pledged Membership Interests in
connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus; and (C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Membership Interests;
all of which shall be forthwith delivered to the Pledgee to hold as,
Pledged Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of the Pledgee, be segregated from the other
property or funds of the Pledgor, and be forthwith paid over or
otherwise delivered to the Pledgee as Pledged Collateral in the same
form as so received, together with duly executed instruments of
transfer or
PAGE 9 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
assignment satisfactory to the Pledgee, as further collateral security
for the Secured Obligations.
(iii) PROXIES, ETC. The Pledgee shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as the Pledgor may request for the purpose of
enabling the Pledgor to exercise the voting and other rights which it
is entitled to exercise pursuant to subparagraph (i) above and to
receive the dividends or distributions which it is authorized to
receive and retain pursuant to subparagraph (ii) above.
(b) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. Upon the occurrence and
during the continuance of an Event of Default:
(i) VOTING RIGHTS. All rights of the Pledgor to exercise the
voting and other consensual rights which it would otherwise be entitled
to exercise pursuant to Section 14(a)(i) above shall cease upon written
notice thereof from the Pledgee, and all such rights shall thereupon
become vested in the Pledgee, who shall thereupon have the sole right
to exercise such voting and other consensual rights, provided, however,
that no rights shall vest in Pledgee that would constitute a Change in
Control of any holder of FCC licenses unless and until Pledgee first
secures any requisite approval from the FCC.
(ii) DIVIDENDS. All rights of the Pledgor to receive the
dividends or distributions which it would otherwise be authorized to
receive and retain pursuant to Section 14(a)(ii) above shall cease, and
all such rights shall thereupon become vested in the Pledgee, who shall
thereupon have the sole right to receive and hold as Pledged Collateral
such dividends, provided, however, that no rights shall vest in Pledgee
that would constitute a Change in Control of any holder of FCC licenses
unless and until Pledgee first secures any requisite approval from the
FCC. All dividends or distributions which are received by the Pledgor
contrary to the provisions of this subparagraph (ii) shall be received
in trust for the benefit of the Pledgee, shall be segregated from other
funds of the Pledgor and shall be forthwith paid over or otherwise
delivered to the Pledgee as Pledged Collateral in the same form as so
received, together with duly executed instruments of transfer or
assignment satisfactory to the Pledgee, as further collateral security
for the Secured Obligations.
(iii) PROXIES, ETC. In order to permit the Pledgee to exercise
the voting and other rights which it may be entitled to exercise
pursuant to subparagraph (i) above, and to receive all dividends and
distributions which it may be entitled to receive under subparagraph
(ii) above, the Pledgor shall, if necessary, upon written notice of the
Pledgee, from time to time execute and deliver to the Pledgee
appropriate proxies, dividend payment orders and other instruments as
the Pledgee may request.
15. APPOINTMENT OF PLEDGEE. So long as any Secured Obligation remains
unpaid, the Pledgor does hereby designate and appoint the Pledgee its true and
lawful attorney coupled with an interest and with power irrevocable, after an
Event of Default has occurred and is continuing, for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any
instrument that the Pledgee may reasonably deem necessary or advisable to
accomplish the
PAGE 10 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
purposes hereof, including, without limitation, all of the following: (i)
receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same; (ii) perfect or continue perfected, maintain the priority of or provide
notice of the Pledgee's security interest in the Pledged Collateral; (iii)
execute any and all endorsements, assignments or other documents and instruments
necessary to sell, lease, assign, convey or otherwise transfer title in or
dispose of the Pledged Collateral; and (iv) execute any and all such other
documents and instruments, and do any and all acts and things for and on behalf
of the Pledgor, which the Pledgee may reasonably deem necessary or advisable to
maintain, protect, realize upon and preserve the Pledged Collateral and the
Pledgee's security interest therein and to accomplish the purposes of this
Agreement, provided, however, that no rights shall vest in Pledgee that would
constitute a Change in Control of any holder of FCC licenses unless and until
Pledgee first secures any requisite approval from the FCC. The acceptance of
this appointment by the Pledgee shall not obligate it to perform any duty,
covenant or obligation required to be performed by the Pledgor under or by
virtue of the Pledged Collateral or to take any action in connection therewith.
All expenses incurred by the Pledgee in connection with exercising any of its
rights under this Section shall bear interest at a per annum rate equal to five
percent (5%) above the prime rate as published in The Wall Street Journal at the
time an Event of Default occurs (the "Default Rate") from the date incurred
until repaid by the Pledgor. All amounts described in this Section shall be
repayable by the Pledgor on demand and the Pledgor's obligation to make such
repayment shall constitute an additional Secured Obligation.
16. NO RESPONSIBILITY FOR CERTAIN ACTIONS. Notwithstanding any
provision contained in this Agreement, the Pledgee shall have no responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Pledgee has or is deemed to have knowledge of
such matters, or (b) taking any necessary steps to preserve any rights against
any third parties with respect to any Pledged Collateral.
17. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default":
(a) a Global Event of Default or a Market Event of Default as
defined in the Loan Facility Agreement shall have occurred and be continuing;
(b) any representation or warranty made or deemed made by the
Pledgor under or in connection with this Agreement shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) the Pledgor shall fail to perform or observe any other
covenant, obligation or term of this Agreement.
18. FCC COMPLIANCE. Notwithstanding anything to the contrary contained
herein, the Pledgee will not take any action pursuant to this Agreement which
would constitute or result in an assignment of any FCC license, construction
permit or other authorization or a Change in Control of any holder of an FCC
license if such assignment of FCC license, construction permit or other
authorization or Change in Control would require under then existing law
(including the written
PAGE 11 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
rules and regulations promulgated by the FCC) the prior approval of the FCC
without first obtaining such approval of the FCC. The Pledgee specifically
agrees that (a) voting rights in the Pledged Membership Interests will remain
with the Pledgor upon and following the occurrence of an Event of Default unless
any required prior approvals of the FCC to the transfer of such voting rights
shall have been obtained; and (b) prior to the exercise of voting rights by a
purchaser of the Pledged Membership Interests at a private or public sale, the
prior consent of the FCC pursuant to 47 U.S.C. Section 310(d) or any successor
provision or applicable law will, if required, be obtained. The Pledgor agrees
after the occurrence of any Event of Default to take any action which the
Pledgee may reasonably request in order to obtain and enjoy the full rights and
benefits granted to the Pledgee by this Agreement and each other agreement,
instrument and document delivered to the Pledgee in connection herewith or by
any of the other Loan Documents, including specifically, at the Pledgor's own
cost and expense, the use of Pledgor's best efforts to assist in obtaining
approval of the FCC for any action or transaction contemplated by this Agreement
which is then required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
and licensee's portions of any application or applications for consent to
assignment of license, construction permit or other authorization or transfer of
control necessary or appropriate under the FCC's rules and regulations. Pledgor
further consents to the assignment or transfer of control of any FCC license,
construction permit, or other authorization to a receiver, trustee, or similar
official or to any purchaser of the pledged securities pursuant to any public or
private sale, judicial sale, foreclosure, or exercise of other remedies
available to Pledgee as permitted by applicable law.
19. REMEDIES.
(a) GENERAL REMEDIES. Pledgee's rights and remedies under this
Section 19 are subject to Sections 8.4, 8.5, and 8.7 of the Loan Facility
Agreement. If an Event of Default shall occur, the Pledgee shall have, in
addition to all other rights and remedies granted to it in this Agreement, the
Loan Facility Agreement or any other Loan Document, all rights and remedies of a
secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Pledgor agrees that the Pledgee may:
(i) require the Pledgor to assemble all or any part of the
Pledged Collateral and make it available to the Pledgee at any place
and time designated by the Pledgee; and
(ii) in the event that any of the Pledged Membership Interests
become securities, subject to the requirements of laws affecting the
offering and sale of securities, sell, resell, assign, transfer or
otherwise dispose of any or all of the Pledged Collateral at public or
private sale or at any broker's board or on any securities exchange, by
one or more contracts, in one or more lots or parcels, at the same or
different times, for cash or credit, or for future delivery without
assumption of any credit risk, all as the Pledgee deems advisable;
provided, however, that, except as otherwise required under Section
9A-608 and/or Section 9A-615 of the UCC, the Pledgor shall be credited
with the net proceeds of sale only when such proceeds are finally
collected by the Pledgee.
(b) SALE OF PLEDGED COLLATERAL. Each purchaser at any sale
pursuant to this Agreement shall hold the property sold absolutely, free from
any claim or right on the part of the Pledgor, and the Pledgor hereby waives, to
the fullest extent permitted by applicable laws, all
PAGE 12 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
rights of redemption, stay and appraisal which the Pledgor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. If required by FCC regulations at the time of sale, each
prospective purchaser at any sale pursuant to this Agreement shall be notified
in writing that any such sale may be subject to FCC approval (which Pledgor
agrees is commercially reasonable). The Pledgee shall be authorized at any such
sale to restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Pledged Collateral for their
own account for investment and not with a view to the distribution or sale
thereof (which Pledgor agrees is commercially reasonable). Neither the Pledgee's
compliance with the UCC or any other applicable law, in the conduct of any sale
made pursuant to this Agreement, nor its disclaimer of any warranties relating
to the Pledged Collateral, shall be considered to adversely affect the
commercial reasonableness of such sale. The Pledgee shall give the Pledgor ten
(10) days' written notice (which the Pledgor agrees is reasonable notice within
the meaning of Section 9A-612 of the UCC) of the Pledgee's intention to make any
sale of Pledged Collateral. The Pledgee shall not be obligated to make any sale
of any Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Pledged Collateral shall have been given (which
Pledgor agrees is commercially reasonable). The Pledgee may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned (which Pledgor agrees is commercially
reasonable). To the fullest extent permitted by applicable laws, the Pledgee may
bid for or purchase the Pledged Collateral or any part thereof offered for sale
and may make payment on account thereof by using any claim then due and payable
to the Pledgee from the Pledgor as a credit against the purchase price and the
Pledgee, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to the Pledgor therefor. For
purposes hereof, a written agreement to purchase the Pledged Collateral or any
portion thereof shall be treated as a sale thereof; the Pledgee shall be free to
carry out such sale pursuant to such agreement and the Pledgor shall not be
entitled to the return of the Pledged Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Pledgee shall have entered into
such an agreement, all Events of Default shall have been remedied and the
Secured Obligations paid in full.
(c) WAIVER OF RIGHTS TO PURCHASE. The Pledgor, for itself and
its successors and assigns, does hereby irrevocably waive and release all
preemptive, first-refusal and other similar rights of the Pledgor to purchase
any or all of the Pledged Membership Interests upon any sale thereof by the
Pledgee under this Agreement, whether such right to purchase arises under any of
the organizational documents of [HOLDCO/NEWCO], by agreement, by operation of
law or otherwise.
(d) EXEMPT SALES TRANSACTIONS. The Pledgor recognizes that, in
the event that any of the Pledged Membership Interests become securities, by
reason of certain provisions contained in the Securities Act of 1933, as from
time to time amended (the "Securities Act") and applicable state securities
laws, the Pledgee may be compelled, with respect to any sale of all or any part
of the Pledged Membership Interests, to limit purchasers to those who will
agree, among other things, to acquire such securities for their own account, for
investment, and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale
without such restrictions and notwithstanding such circumstances, agrees that
any such sale shall
PAGE 13 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
be deemed to have been made in a commercially reasonable manner. The Pledgee
shall be under no obligation to delay the sale of any of the Pledged Membership
Interests for the period of time necessary to permit the Pledgor to register
such securities for public sale under the Securities Act, or under applicable
state or foreign government securities laws, even if the Pledgor would agree to
do so. If the Pledgee determines to exercise its right to sell any or all of the
Pledged Membership Interests, upon written request, the Pledgor shall and shall
cause [HOLDCO/NEWCO] to, from time to time, furnish to the Pledgee all such
information as the Pledgee may request in order to determine the number of
shares and other instruments included in the Pledged Membership Interests which
may be sold by the Pledgee as exempt transactions under the Securities Act and
rules of the SEC thereunder, as the same are from time to time in effect.
(e) RETENTION OF PLEDGED COLLATERAL. The Pledgee may, after providing
the notices required by Section 9A-505(2) of the UCC or otherwise complying with
any requirement of applicable law, accept or retain the Pledged Collateral or
any part thereof in satisfaction of the Secured Obligations. Unless and until
the Pledgee shall have provided such notices, however, the Pledgee shall not be
deemed to have retained any Pledged Collateral in satisfaction of any Secured
Obligations for any reason.
(f) DUTY OF CARE. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Pledgee shall have no duty as to
any Pledged Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Pledged
Collateral. The Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which the Pledgee
accords its own similar property. Neither the Pledgee nor any of its affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact shall be
liable for failure to demand, collect or realize upon all or any part of the
Pledged Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Pledged Collateral upon the request of the
Pledgor or otherwise.
(g) APPLICATION OF PROCEEDS. The cash proceeds actually received from
the sale or other disposition or collection of the Pledged Collateral, and any
other amounts received in respect of the Pledged Collateral the application of
which is not otherwise provided for herein, shall be applied: first, to payment
of any reasonable costs, expenses and fees, including, without limitation,
reasonable attorneys' fees (including allocated costs of in-house counsel),
incurred by the Pledgee in connection with sale or other disposition or
collection of Pledged Collateral; second, to payment of any all reasonable
costs, expenses and fees, including, without limitation, reasonable attorneys'
fees (including allocated costs of in-house counsel), payable to the Pledgee
under this Agreement; third, to payment in full of the Secured Obligations (to
the extent not included in clause first or second above); and fourth, the
balance, if any, after all of the Secured Obligations have been indefeasibly
paid in full, to the Pledgor or as otherwise required by law. The Pledgee shall
have absolute discretion as to the time of application of any such proceeds,
moneys or balances in accordance with this Agreement. The Pledgor shall remain
liable to the Pledgee for any deficiency which exists after any sale or other
disposition or collection of the Pledged Collateral.
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EXHIBIT 1.36
20. CERTAIN WAIVERS. The Pledgor waives, to the fullest extent
permitted by applicable laws, (a) any right of redemption with respect to the
Pledged Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling of the Pledged Collateral or other collateral or security
for the Secured Obligations; (b) any right to require the Pledgee (i) to proceed
against any person, (ii) to exhaust any other collateral or security for any of
the Secured Obligations, (iii) to pursue any remedy in the Pledgee's power, or
(iv) to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Pledged Collateral; and (c) all claims, damages, and
demands against the Pledgee arising out of the repossession, retention, sale or
application of the proceeds of any sale of the Pledged Collateral.
21. EXPENSES INCURRED. The Pledgee is not required to, but may, at its
option, pay any tax, assessment, insurance premium, filing or recording fees, or
other charges payable by the Pledgor hereunder and any such amount shall bear
interest at the Default Rate from the date of payment until repaid. The Pledgor
agrees to pay or reimburse the Pledgee on demand for all reasonable expenses
including, without limitation, reasonable attorneys' fees (including allocated
charges of internal legal counsel), incurred by the Pledgee in connection with
(i) the custody or preservation of, or the sale of, collection from or other
realization upon any of the Pledged Collateral (including, without limitation,
all reasonable expenses of sales and collections of the Pledged Collateral),
(ii) the exercise, enforcement or protection of any of the rights of the Pledgee
under this Agreement (including, without limitation, all such reasonable costs
and expenses incurred during any "workout" or restructuring in respect of the
credit extended under the Loan Facility Agreement and during any legal
proceeding, including, without limitation, any proceeding under any applicable
bankruptcy, insolvency or other similar debtor relief laws) or (iii) the failure
of the Pledgor to perform or observe any its obligations under this Agreement,
and any such amount shall bear interest at the Default Rate from the date such
expenditures are made by the Pledgee until repaid. All amounts described in this
Section shall be repayable by the Pledgor on demand and the Pledgor's obligation
to make such repayment shall constitute an additional Secured Obligation.
22. AMENDMENTS AND WAIVERS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed (in the case of an amendment) by Pledgor and Pledgee or (in the case of a
waiver) by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided herein are
cumulative and not exclusive of any right or remedy provided by law.
23. NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given or made (i) upon delivery if
delivered personally (by courier service or otherwise), as evidenced by written
receipt or other written proof of delivery (which may be a printout of the
tracking information of a courier service that made such delivery), or (ii) upon
confirmation of dispatch if sent by facsimile transmission (which confirmation
shall be sufficient if shown by evidence produced by the facsimile machine used
for such transmission), in each case to the applicable addresses set forth below
(or such other address which either party may from time to time specify):
PAGE 15 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
If to Pledgor: Hispanic Information and
Telecommunications Network, Inc.
000 Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Day, Xxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to: RJGLaw LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
If to Pledgee: Clearwire Corporation
00000 X.X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
With a copy to: Xxxxx Xxxxxx Xxxxxxxx LLP
0000 Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
Pledgor hereby agrees that such notice shall be deemed to meet any requirements
of reasonable notice contained in the UCC or other applicable law.
24. COSTS AND EXPENSES. Pledgor and Pledgee shall pay their own costs
and expenses incurred by them, including the fees and out-of-pocket expenses of
their own legal counsel, in connection with the preparation, negotiation and
filing of this Agreement. Pledgor shall pay to Pledgee or its agents on demand
each cost and expense (including, but not limited to, the reasonable fees and
disbursements of counsel to Pledgee or its agents, whether internal or external
and whether retained for advice, for litigation or for any other purpose)
incurred by Pledgee or its agents either directly or indirectly in connection
with endeavoring to (1) collect any amount owing pursuant to this Agreement, or
negotiate or document a workout or restructuring; (2) enforce or realize upon
any guaranty, endorsement or other assurance, any collateral or other security,
or any subordination, directly or indirectly securing or otherwise directly or
indirectly applicable in any such amount; or (3) preserve or exercise any right
or remedy of Pledgee or its agents pursuant to this Agreement. All such amounts
shall be repayable by the Pledgor on demand and shall bear
PAGE 16 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
interest at the Default Rate until repaid, and the Pledgor's obligation to make
such repayment shall constitute an additional Secured Obligation.
25. SURVIVAL OF COVENANTS. All covenants, agreements, representations
and warranties made by Pledgor hereunder shall survive the execution and
delivery of this Agreement and the Pledged Membership Interests hereunder.
26. SEVERABILITY. The unenforceability or invalidity of any provision
or provisions of this Agreement shall not render any other provision or
provisions hereof or thereof unenforceable or invalid.
27. ADDITIONAL DOCUMENTS. Pledgor shall at Pledgee's request, from time
to time, at Pledgor's sole cost and expense, execute, re-execute, deliver and
redeliver any and all documents, and do and perform such other and further acts,
as may reasonably be required by Pledgee to enable Pledgee to perfect, preserve,
and protect its security interest in the Collateral and its rights and remedies
under this Agreement or granted by law and to carry out and effect the intents
and purposes of this Agreement.
28. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective successors and permitted
assigns. This Agreement may not be assigned by Pledgor. Pledgee may transfer or
assign the Loan Facility and this Agreement to any of its affiliates.
29. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
30. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Washington, without
reference to the choice of law principles thereof. PLEDGOR IRREVOCABLY AGREES
THAT, SUBJECT TO PLEDGEE'S SOLE AND ABSOLUTE DISCRETION, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL BE
LITIGATED IN COURTS HAVING SITUS WITHIN THE COUNTY OF KING, STATE OF WASHINGTON.
PLEDGOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT LOCATED WITHIN SUCH COUNTY AND STATE. PLEDGOR HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT
AGAINST PLEDGOR BY PLEDGEE IN ACCORDANCE WITH THIS SECTION.
31. WAIVER OF JURY TRIAL. PLEDGOR AND PLEDGEE HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY PLEDGOR AND
PLEDGEE MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO. PLEDGOR REPRESENTS AND
WARRANTS THAT NO REPRESENTATIVE OR AGENT OF PLEDGEE HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT PLEDGEE WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THIS JURY TRIAL WAIVER. PLEDGOR ACKNOWLEDGES THAT PLEDGEE
PAGE 17 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
PROVISIONS OF THIS SECTION.
32. NO INCONSISTENT REQUIREMENTS. The Pledgor acknowledges that this
Agreement and the other Loan Documents may contain covenants and other terms and
provisions variously stated regarding the same or similar matters, and agrees
that all such covenants, terms and provisions are cumulative and all shall be
performed and satisfied in accordance with their respective terms.
33. FCC. Notwithstanding anything else contained in this Agreement to
the contrary, all actions taken by the parties pursuant to this Agreement shall
be consistent with the provisions and requirements of the Communications Act of
1934, as amended by Telecommunications Act of 1996, and the rules, regulations
and policies promulgated thereunder.
IN WITNESS WHEREOF, the Pledgor and Pledgee have caused this Agreement
to be executed by their respective officers or agents thereunto duly authorized
as of the date first above written.
PLEDGOR: /HISPANIC INFORMATION &
TELECOMMUNICATIONS NETWORK,
INC., a New York not-for-profit corporation/
[OPTION 2: HITN SPECTRUM, LLC, a
Delaware limited liability company/
By
-----------------------------------------
Its
-----------------------------------------
PLEDGEE: CLEARWIRE CORPORATION, a
Delaware corporation
By:
-----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice-President
PAGE 18 - EXHIBIT 1.36 - PLEDGE AGREEMENT
EXHIBIT 1.36
[HOLDCO/NEWCO]'S CONSENT AND AGREEMENT
[HOLDCO/NEWCO] hereby consents to the terms of the foregoing Agreement.
Without limiting the generality of the foregoing, [HOLDCO/NEWCO] agrees that
upon the occurrence of an Event of Default, Pledgee may foreclose its security
interest in the Pledged Collateral in accordance with the UCC and the terms of
the foregoing Agreement. Upon execution and delivery of documents in a form
reasonably acceptable to [HOLDCO/NEWCO] purporting to assume the obligations of
Pledgor under the Operating Agreement, Pledgee, its nominee or a third party
purchaser of the Pledged Collateral, as the case may be, shall have all rights
of Pledgor under the Operating Agreement and without limiting the foregoing
shall, if it elects to do so, have the right to become a "Member" under the
Operating Agreement. [HOLDCO/NEWCO] further agrees that upon receipt of written
notice from Pledgee to the effect that an Event of Default has occurred, and
without requiring an assumption of Pledgor's obligations by Pledgee or any other
party, [HOLDCO/NEWCO] shall make all payments otherwise payable to Pledgor under
the Operating Agreement directly to Pledgee. Notwithstanding anything to the
contrary in this Consent and Agreement, the provisions of Section 33 of the
foregoing Agreement apply.
[HITN SPECTRUM, LLC/NEWCO],
a___________________limited liability
company/corporation
By [_________________________________]
Its Member
PAGE 19 - EXHIBIT 1.36 - PLEDGE AGREEMENT
PROMISSORY NOTE
Dated as of _____________, 20__
1. BORROWING AND REPAYMENT.
1.1 Promise To Pay. For value received, [HITN SPECTRUM,
LLC]/[NEWCO], a Delaware limited liability company ("Borrower"), promises to pay
to the order or assigns of Clearwire Corporation, a Delaware corporation
("Lender"), in lawful money of the United States, the amount that Lender
actually loans to Borrower under this Promissory Note (this "Note") pursuant to
that certain Spectrum Access and Loan Facility Agreement dated as of May _____,
2005 (the "Loan Facility Agreement"), under which Lender, at its continuing
option and in its sole discretion, may advance funds to Borrower from time to
time, together with interest thereon as provided in this Note (the "Interest
Rate").
1.2 Definitions. This Note is one of the Promissory Notes
described in the Loan Facility Agreement and the terms of the Loan Facility
Agreement are incorporated herein by reference. Lender or anyone who takes this
Note by transfer and who is entitled to receive payments under this Note will be
called the "Note Holder." Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Loan Facility Agreement.
1.3 Borrowing. Borrower may request loans from Lender from
time to time under this Note and Lender shall make loans to Borrower (each, an
"Advance") as long as: (a) the amount to be advanced shall be authorized by
Lender and shall not exceed the amount required pursuant to the applicable
spectrum transfer agreement (each, an "STA") under which Borrower acquires an
EBS Opportunity Channel plus additional expenses incurred in connection with
each STA to form an acquisition entity (if required), to complete due diligence
and to close the transaction; (b) the initial Advance is being used only for the
purpose of financing Borrower's acquisition of the spectrum licenses and channel
under each STA; (c) all conditions precedent set forth in the Loan Facility
Agreement to making an Advance (or a "Subsequent Advance," if applicable) are
satisfied; (d) there is no event of default by Borrower under this Note; (e)
there is no Market Event of Default in the Market of the Acquired Channel
acquired with an Advance by Hispanic Information and Telecommunications Network,
Inc. [OPTION 1: (USE IF BORROWER IS HOLDCO): or Borrower] [OPTION 2: (USE IF
BORROWER IS A NEWCO): HITN Spectrum, LLC, or Borrower] or any affiliate of
Borrower under the Loan Facility Agreement; (f) no Global Event of Default
exists under the Loan Facility Agreement; (g) there is no event of default by
Borrower [OPTIONAL (USE IF BORROWER IS A NEWCO): or HITN Spectrum, LLC] under
any of the Use Agreements or the Third-Party Leases; and (h) no event exists
which with notice, or the passage of time or both would become an event of
default, Market Event of Default or Global Event of Default as described in
clauses (d) through (g) above. If Lender makes an Advance, then, so long as the
conditions in clauses (c) and (d) above are still satisfied, Lender agrees to
subsequently advance such additional sums (each, a "Subsequent Advance") as may
be necessary to pay other reasonable and necessary out-of-pocket expenses
incurred by Borrower in connection with maintaining the Acquired Channel
acquired with the Advance, including legal and engineering expenses. Subsequent
Advances shall be advanced only against invoices evidencing incurred obligations
and will not be advanced prior to the time that the expense is incurred.
PAGE 1 - EXHIBIT 1.37 - PROMISSORY NOTE
EXHIBIT 1.37
Without limiting the generality of the foregoing, no money
will be advanced under this Note for any personal, family, or household
purposes.
1.3 Further Documentation. Upon the making of any Advance,
Lender shall complete a grid in the form of Exhibit 1 attached hereto ("Grid")
and attach it to this Note. Each Grid shall become a part of this Note and shall
be incorporated herein without further action being required by Borrower. Upon
making any Subsequent Advance or the receipt of any payment under this Note,
Lender shall make notations on the applicable Grid. Borrower agrees that such
notations shall constitute evidence of all Advances and Subsequent Advances made
under and payments made on this Note and shall be the sole criteria for
computing principal and interest balances owed by Borrower to Lender.
1.4 Interest Rate. Interest shall accrue on the outstanding
principal balance of each Advance from time to time from the date of
disbursement until the Maturity Date at a fixed Interest Rate equal to the prime
rate of interest as published in The Wall Street Journal as of the date of the
initial Advance hereunder. Interest hereunder shall be calculated on the basis
of a 365-day year and actual days elapsed.
1.5 Full Repayment. Borrower promises to repay the entire
principal plus all accrued and unpaid interest under each Advance at the time a
Use Agreement is entered into with respect to the Acquired Channel acquired by
Borrower with the Advance but in no event later than [OPTION 1: (USE IF
APPLICABLE THIRD-PARTY LEASE IS UNDER OLD FCC RULES AND HAS MORE THAN 10 YEARS
REMAINING) fifteen (15) years] [OPTION 2: (USE IF NEW FCC RULES ARE APPLICABLE)
ten (10) years] from the initial date of the Advance ("Maturity Date").
1.6 Installment Payments. Borrower shall immediately forward
all payments received under Third-Party Leases to Lender. Lender shall apply
such payments as provided in Section 4.
1.7 Place of Payment. All payments shall be made at 00000 X.X.
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, or at such other place as Note
Holder notifies Borrower.
2. PREPAYMENT. Borrower shall have the right to prepay the whole or any
part of the unpaid principal balance of this Note on any date, together with all
accrued and unpaid interest owing under this Note on the amount so prepaid.
3. BORROWER'S FAILURE TO PAY AS REQUIRED.
3.1 Default. If Borrower is in default under this Note, a
Global Event of Default exists under the Loan Facility Agreement or a Market
Event of Default under the Loan Facility Agreement exists in the Market of the
Acquired Channel acquired with an Advance, then, the Note Holder shall have the
right to declare the whole sum of principal and interest remaining unpaid, and
all other sums due hereunder, immediately due and payable and, upon such
declaration and acceleration of the maturity date hereof, to increase the
Interest Rate hereunder to a fixed rate per annum equal to five percent (5%)
above the Interest Rate (the "Default Rate"). Such Default Rate shall continue
to apply until all defaults are cured to the satisfaction of Note Holder.
Failure to exercise this option upon any one or more defaults shall not
constitute a waiver of the right to exercise it in the future.
PAGE 2 - EXHIBIT 1.37 - PROMISSORY NOTE
EXHIBIT 1.37
3.2 Reasonableness of Default Charges. Borrower acknowledges
that nonpayment of any payment when due (whether or not resulting from
acceleration due to an event of default under any applicable Loan Document) will
result in damages to the Note Holder by reason of the additional expenses
incurred in servicing the indebtedness evidenced by this Note and by reason of
the loss to the Note Holder of the use of the money due and frustration to the
Note Holder in meeting its other commitments. Borrower also acknowledges and
agrees that the occurrence of any other event of default under any applicable
Loan Document will result in damages to the Note Holder by reason of the
detriment caused thereby. Borrower further acknowledges that it is and will be
extremely difficult and impracticable to ascertain the extent of such damages
caused by nonpayment of any sums when due or resulting from any other event of
default under any of the applicable Loan Documents. Borrower by its execution
and delivery hereof and the Note Holder by the acceptance of this Note agree
that the Default Rate is a reasonable estimate of such damages, based in part
upon the duration of the default, and that the Default Rate prescribed above
with respect to the amount due and payable after maturity or acceleration will
not unreasonably compensate the Note Holder for such damages.
4. APPLICATION OF PAYMENTS. As long as there is no default
under this Note, or any other applicable Loan Document, Note Holder shall apply
each payment first to interest due on the unpaid principal balance, and then to
the reduction of unpaid principal; provided, however, that, if any sums have
been advanced by Note Holder to or on behalf of Borrower, Note Holder shall have
the right, but not the obligation, to apply any cash payment first to the
repayment of such sums advanced. In the event of any default under this Note, or
any other applicable Loan Document, Note Holder, at its option, may apply cash
payments and all other sums received by Note Holder in such manner and in such
order as Note Holder elects in its sole discretion.
5. RESPONSIBILITY OF PERSONS UNDER THIS NOTE. Borrower and
each guarantor of this Note, and each person who may at any time assume or
otherwise become liable on this Note (i) waives demand, presentment for payment,
valuation, appraisement, notice of intention to accelerate the maturity of this
Note and to declare the entire balance of the indebtedness evidenced by this
Note due and payable, notice that the entire balance of the indebtedness
evidenced by this Note has been declared due and payable, notice of nonpayment,
protest, notice of protest and all other notices, filing of suit and diligence
in collecting this Note or enforcing the Pledge Agreement or Security Agreement
for the payment of this Note, (ii) agrees to any substitution, exchange or
release of any security or the release of any party primarily or secondarily
liable on this Note, (iii) agrees that, to enforce payment of this Note, the
Note Holder will not be obligated to commence an action or exhaust the remedies
of the Note Holder against Borrower or others liable or to become liable on this
Note, or enforce the rights of Note Holder against any security for the payment
of this Note, and (iv) consents to any extensions or postponements of time of
payment of this Note and to any other indulgence in connection with this Note
without notice of the extensions, postponements or indulgences to any of them.
6. FEES AND EXPENSES. If Borrower defaults under this Note,
Borrower shall be liable for and shall pay to Note Holder, in addition to all
other indebtedness of Borrower to Note Holder under the applicable Loan
Documents to which it is a party (including through the Joinder Agreement), all
costs and expenses incurred by Note Holder in collection of this Note or any
such indebtedness or in the enforcement of this Note or any other applicable
Loan Documents, including but not limited to reasonable attorneys' fees
(including allocated costs of
PAGE 3 - EXHIBIT 1.37 - PROMISSORY NOTE
EXHIBIT 1.37
in-house legal services). Without limiting the foregoing, if the Note Holder
refers this Note to an attorney for collection or seeks legal advice following
default, or if any other judicial or non-judicial action is instituted, or any
attorney is employed to reclaim, sequester, protect, preserve or enforce the
Note Holder's interest in any real property or other security for this Note,
including but not limited to proceedings under bankruptcy or eminent domain
laws, or any attorney is employed to interpret, amend, modify, restate or extend
this Note, or any attorney is employed resulting from a dispute between Borrower
and Note Holder regarding this Note, Borrower shall pay all of the Note Holder's
reasonable attorneys' fees (including allocated costs of in-house legal
services) and costs, including, without limitation, attorneys' fees at trial and
on subsequent appeal or review, to the extent permitted by applicable law.
7. GOVERNING LAW. The provisions of this Note shall be governed by, and
construed in accordance with, the internal laws of the State of Washington,
without reference to the choice of law principles thereof.
8. NO ORAL WAIVER, MODIFICATION OR CANCELLATION; INVALIDITY. No
provision of this Note may be waived, modified, discharged or canceled orally,
but only in writing and signed by the party against whom enforcement of any
waiver, modification, discharge or cancellation is sought. In case any one or
more of the provisions contained in this Note shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions hereof, and this Note
shall be construed as if such invalid, illegal or unenforceable provision(s) had
never been included.
9. HEADINGS. The headings of this Note are inserted for convenience of
reference only and shall not be applied in construing the provisions of this
Note.
10. TIME OF ESSENCE. Time is of the essence under this Note.
11. LAWFUL RATE OF INTEREST. In no event shall the amount of interest
paid hereunder, together with all the amounts reserved, charged, or taken by the
Note Holder as compensation for fees, services, or expenses incidental to the
making, negotiation, or collection of the loan evidenced hereby exceed the
maximum rate of interest on the unpaid principal balance hereof allowable by
applicable law. Nothing contained in this Note, nor in any instrument related
hereto, or securing this Note, shall be construed or so operate as to require
Borrower to pay interest in an amount or at a rate greater than the maximum
allowed by applicable law. Should any interest or other payments paid by
Borrower or property received by the Note Holder result in the computation or
earning of interest in excess of the maximum rate of interest which is permitted
under applicable law, then any and all such excess shall be and the same is
hereby waived by the Note Holder, and all such excess shall be automatically
credited against and in reduction of the principal balance of this Note, and any
portion of said excess which exceeds the principal balance of this Note shall be
paid by the Note Holder to Borrower, it being the intent of the parties hereto
that under no circumstances shall Borrower be required to pay interest in excess
of the maximum rate or amount allowed by applicable law.
12. SECURITY. This Note is secured by, among other things, a pledge
agreement (the "Pledge Agreement") and a security agreement (the "Security
Agreement") of even date herewith. This Note shall evidence, and the Pledge
Agreement and the Security Agreement, and
PAGE 4 - EXHIBIT 1.37- PROMISSORY NOTE
EXHIBIT 1.37
any of the other Loan Documents to which it is a party which provide that they
secure this Note, shall secure, the indebtedness described herein, any further
loans or advances that may be made to or on behalf of Borrower by Note Holder at
any time or times hereafter under the Pledge Agreement or the Security
Agreement, and any other amounts required to be paid by Borrower under any such
Loan Documents which provide that they secure this Note, and any such loans,
advances or amounts shall be added to the indebtedness evidenced by this Note,
and shall bear interest at the Interest Rate unless a greater rate is expressly
provided for in this Note, the Pledge Agreement, the Security Agreement or such
other Loan Documents.
13. ASSIGNMENT AND PARTICIPATION. Borrower hereby acknowledges and
agrees that Note Holder may, at any time and from time to time, in Note Holder's
sole discretion, and without notice to or consent of Borrower, sell, assign or
participate interests in the loan or credit facility evidenced by this Note to
any of its affiliates and in connection therewith may disclose to any
prospective assignee or participant any and all financial and other information
about Borrower, any guarantor of the loan evidenced by this Note, or any other
person or entity which may be or become liable on this Note, and about any
aspect of Borrower's, any guarantor's, or any such other person's or entity's
performance or non-performance of any obligations under the applicable Loan
Documents.
14. NOTICES. Any notice to be given hereunder by Borrower to Note
Holder or by Note Holder to Borrower shall be given in the manner and to the
respective addresses of the parties provided in the Loan Facility Agreement.
15. NO OPERATIONAL CONTROL. Nothing in this Note shall be interpreted
to give operational control over Borrower or Newco to Note Holder. Note Holder
agrees that control over Borrower and Newco and any FCC licenses held by
Borrower or Newco will remain with the Borrower and/or Newco and their existing
owners, officers and directors, unless and until Note Holder seeks and obtains
any FCC approvals, as and if applicable, for a transfer of control.
[HITN SPECTRUM, LLC]/[NEWCO]
By:
-----------------------------
Print Name:
---------------------
Title:
--------------------------
NOT TO BE EXECUTED UNDER A POWER OF ATTORNEY
PAGE 5 - EXHIBIT 1.37 - PROMISSORY NOTE
EXHIBIT 1.37
ADVANCE NO.________
This Grid is attached to that certain Promissory Note dated _____________, from
[HITN SPECTRUM, LLC]/[NEWCO] to the order or assigns of Clearwire Corporation on
the date of the [ADVANCE/SUBSEQUENT ADVANCE].
Date of [ADVANCE/SUBSEQUENT ADVANCE]:___________________________________________
EBS Opportunity Channel Acquired with Advance: _________________________________
Purchase Price of EBS Opportunity Channel: $_________________
Due Diligence Expenses: $_________________
Closing Costs: $_________________
Acquisition Entity Expense (if applicable): $_________________
TOTAL ADVANCE: $_____________
[OR]
Expenses $_________________
TOTAL SUBSEQUENT ADVANCES $_____________
--------------------------------------------------------------------------------
Date Initial Advance Subsequent Advance Interest Payment Interest Paid Through Principal Payment Principal Balance
---- --------------- ------------------ ---------------- --------------------- ----------------- -----------------
PAGE 6 - EXHIBIT 1.37 - PROMISSORY NOTE
EXHIBIT 1.40
SECURITY AGREEMENT
Dated as of _____________, 20__
1. [OPTION 1 (TO BE USED IF HOLDCO IS GRANTING SECURITY INTEREST):
BACKGROUND. HITN Spectrum, LLC, a Delaware limited liability company,
("Debtor"), Hispanic Information and Telecommunications Network, Inc., a New
York not-for-profit corporation ("HITN"), and Clearwire Corporation, a Delaware
corporation ("Secured Party") entered into that certain Spectrum Access and Loan
Facility Agreement dated as of April __, 2005 (the "Loan Facility Agreement").
Capitalized terms not otherwise defined herein shall have the meaning given in
the Loan Facility Agreement. Pursuant to the Loan Facility Agreement and the
other Loan Documents, Secured Party has agreed, at its continuing option and in
its sole discretion, to provide financing to Debtor or wholly owned limited
liability company subsidiaries of Debtor to facilitate Debtor's acquisition of
EBS licenses (the "Loan Facility"). Simultaneously herewith, Debtor is entering
into a Promissory Note relating to [IDENTIFY RELEVANT GEOGRAPHIC SERVICE AREA AS
DEFINED BY THE FCC] (the "Market"). It is a material condition precedent to
Secured Party's obligation to make Advances evidenced by a Promissory Note that
Debtor enter into this Security Agreement and grant to Secured Party the
security interests hereinafter provided to secure the obligations of Debtor
described below.]
1. [OPTION 2 (TO BE USED IF NEWCO IS GRANTING SECURITY INTEREST):
BACKGROUND. HITN Spectrum, LLC, a Delaware limited liability company,
("Holdco"), Hispanic Information and Telecommunications Network, Inc., a New
York not-for-profit corporation ("HITN"), and Clearwire Corporation, a Delaware
corporation ("Secured Party") entered into that certain Spectrum Access and Loan
Facility Agreement dated as of April __, 2005 (the "Loan Facility Agreement").
Capitalized terms not otherwise defined herein shall have the meaning given in
the Loan Facility Agreement. Pursuant to the Loan Facility Agreement and the
other Loan Documents (as such term is defined in the Loan Facility Agreement),
Secured Party has agreed, at its continuing option and in its sole discretion,
to provide financing to Holdco or wholly owned limited liability company
subsidiaries of Holdco to facilitate Holdco's acquisition of EBS licenses (the
"Loan Facility"). It is a material condition precedent to Secured Party's
obligation to make available the Loan Facility to [__________________], a
Delaware limited liability company ("Debtor"), that Debtor enter into this
Security Agreement and grant to Secured Party the security interests hereinafter
provided to secure the obligations of Debtor described below.]
2. THE SECURITY. Debtor hereby assigns and grants to Secured Party, a
security interest in all personal and fixture property of every kind and nature
of Debtor [FOLLOWING TO BE USED IF HOLDCO IS GRANTING SECURITY INTEREST: located
in or used in connection with the Market], including but not limited to the
following described property now owned or hereafter acquired by Debtor
[FOLLOWING TO BE USED IF HOLDCO IS GRANTING SECURITY INTEREST): that is located
in or used in connection with the Market] (collectively, the "Collateral"):
(a) All accounts, contract rights, chattel paper, instruments,
deposit accounts, and general intangibles, including proceeds of the sale of the
Debtor Licenses (defined below)
Page 1 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
and all amounts due to Debtor from a factor; and all returned or repossessed
goods which, on sale or lease, resulted in an account or chattel paper.
(b) All equipment and fixtures of every type.
(c) All instruments, notes, chattel paper, documents, and
certificates of deposit of every type. The Collateral shall include all liens,
security agreements, leases and other contracts securing or otherwise relating
to the foregoing.
(d) All licenses and leases of Debtor, whether now owned or
hereafter acquired, including licenses granted by the FCC authorizing Debtor to
construct and operate Multi-channel Multipoint Distribution Service channels and
lease agreements pursuant to which Debtor holds the rights under certain
licenses granted by the FCC authorizing the construction and operation of
Instructional Television Fixed Service channels (collectively, "Debtor
Licenses"), to the extent that a security interest in such licenses and leases
can now or in the future be legally granted.
(e) All general intangibles, including, but not limited to,
(i) all patents, and all unpatented or unpatentable inventions; (ii) all
trademarks, service marks, and trade names; (iii) all copyrights and literary
rights; (iv) all computer software programs; (v) all mask works of semiconductor
chip products; (vi) all trade secrets, proprietary information, customer lists,
manufacturing, engineering and production plans, drawings, specifications,
processes and systems; and (vii) all payment intangibles, including proceeds of
the sale of the Debtor Licenses. The Collateral shall include all good will
connected with or symbolized by any of such general intangibles; all contract
rights, documents, applications, licenses, materials and other matters related
to such general intangibles; all tangible property embodying or incorporating
any such general intangibles; and all chattel paper and instruments relating to
such general intangibles.
(f) All negotiable and nonnegotiable documents of title
covering any Collateral.
(g) All accessions, attachments and other additions to the
Collateral, and all tools, parts and equipment used in connection with the
Collateral.
(h) All substitutes or replacements for any Collateral, all
cash or non-cash proceeds, products, rents and profits of any Collateral, all
income, benefits and property receivable on account of the Collateral, all
rights under warranties and insurance contracts covering the Collateral, and any
causes of action relating to the Collateral and all cash or non-cash proceeds of
the Debtor Licenses hereto even if such licenses are not Collateral themselves.
(i) All books and records pertaining to any Collateral,
including but not limited to any computer-readable memory and any computer
hardware or software necessary to process such memory ("Books and Records").
Page 2 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
3. THE INDEBTEDNESS. The Collateral secures and will secure all
Indebtedness of Debtor to Secured Party. For the purposes of this Security
Agreement, "Indebtedness" means (i) the Loan Facility, including, without
limitation, the payment when due of any and all amounts due or to become due to
Secured Party from Debtor under the Loan Documents, the indebtedness evidenced
by any Promissory Note delivered by Debtor to Secured Party pursuant to the Loan
Documents; (ii) [SUBSECTION II TO BE USED IF HOLDCO IS DEBTOR] the liability of
Debtor arising pursuant to any Guaranty, including, without limitation, the
payment when due of any and all amounts due or to become due to Secured Party
from Debtor under any Guaranty and the payment of any other present or future
indebtedness or obligation of Debtor to Secured Party pursuant to any Guaranty
or any other documents executed by Debtor in connection with any Guaranty; (iii)
all obligations of Debtor under any of the Use Agreements; and (iv) all
obligations of Debtor under this Security Agreement.
4. DEBTOR'S COVENANTS. Debtor covenants and warrants that unless
compliance is waived by Secured Party in writing:
(a) Debtor will properly preserve the Collateral; defend the
Collateral against any adverse claims and demands; and keep accurate Books and
Records; and execute all financing statements necessary or advisable to be filed
to perfect Secured Party's security interest in the Collateral.
(b) Debtor has notified Secured Party in writing of, and will
notify Secured Party in writing prior to any change in, the location of (i)
Debtor's place of business or Debtor's chief executive office if Debtor has more
than one place of business, and (ii) any Collateral, including the Books and
Records.
(c) Debtor will notify Secured Party in writing prior to any
change in Debtor's name, identity, business structure or state of organization.
(d) Debtor has not granted and will not grant any security
interest in any of the Collateral except to Secured Party, and will keep the
Collateral free of all liens, claims, security interests and encumbrances of any
kind or nature except the security interest of Secured Party and leases approved
in writing by Secured Party.
(e) Debtor will promptly notify Secured Party in writing of
any event which materially diminishes the value of the Collateral, the ability
of Debtor or Secured Party to dispose of the Collateral, or the rights and
remedies of Secured Party in relation thereto, including, but not limited to,
the levy of any legal process against any Collateral and the adoption of any
arrangement or procedure affecting the Collateral, whether governmental or
otherwise.
(f) Debtor shall pay all reasonable costs necessary to
preserve, defend, enforce and collect the Collateral, including but not limited
to taxes, assessments, insurance premiums, repairs, rent, storage costs and
expenses of sales, and any costs to perfect Secured Party's security interest.
Without waiving Debtor's default for failure to make any such
Page 3 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
payment, Secured Party, at its option, may pay any such costs and expenses to
discharge encumbrances on the Collateral.
(g) Until Secured Party exercises its rights to make
collection, Debtor will diligently collect all Collateral.
(h) If any Collateral is or becomes the subject of any
registration certificate, certificate of deposit or negotiable document of
title, including any warehouse receipt or xxxx of lading, Debtor shall
immediately deliver such document to Secured Party, together with any necessary
endorsements.
(i) Debtor will not sell, lease, agree to sell or lease, or
otherwise dispose of any Collateral of any material value except with the prior
written consent of Secured Party, and except for Third-Party Leases.
(j) Debtor will engage in no business other than its current
business and will not issue any securities or incur any indebtedness for
borrowed money.
(k) With respect to the Collateral, Debtor shall maintain
insurance in amounts and covering risks as is required by the Loan Facility
Agreement.
5. ADDITIONAL REQUIREMENTS. Debtor agrees that Secured Party may at its
option at any time, whether or not Debtor is in default:
(a) Require Debtor to deliver to Secured Party (i) copies of
or extracts from the Books and Records, and (ii) information on any contracts or
other matters affecting the Collateral.
(b) Examine the Collateral, including the Books and Records,
and make copies of or extracts from the Books and Records, and for such purposes
enter at any reasonable time upon the property where any Collateral or any Books
and Records are located.
(c) Require Debtor to deliver to Secured Party any instruments
or chattel paper which are part of the Collateral.
(d) Following a default hereunder, notify any account debtors,
any buyers of the Collateral, or any other persons of Secured Party's interest
in the Collateral.
6. DEFAULTS. Any one or more of the following shall be a default
hereunder:
(a) The Indebtedness is not paid when due, or any default
occurs under any of the Loan Documents other than this Security Agreement or any
other agreement relating to the Indebtedness.
Page 4 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
(b) Debtor breaches its covenant in Section 4(b) and such
breach has a materially adverse impact on Secured Party.
(c) Debtor breaches any other term, provision, warranty or
representation under this Security Agreement (except for Section 4(b)), and such
breach continues following five (5) days' written notice from Secured Party, or
under any other obligation of Debtor to Secured Party subject to notice and/or
cure periods provided therein, if any.
(d) Any custodian, receiver or trustee is appointed to take
possession, custody or control of all or a substantial portion of the property
of Debtor or of any guarantor or other party obligated under any Indebtedness.
(e) Debtor or any guarantor or other party obligated under the
Indebtedness becomes insolvent, or is generally not paying or admits in writing
its inability to pay its debts as they become due, fails in business, makes a
general assignment for the benefit of creditors, dies, or commences any case,
proceeding or other action under any bankruptcy or other law for the relief of,
or relating to, debtors.
(f) Any case, proceeding or other action is commenced against
Debtor or any guarantor or other party obligated under any Indebtedness under
any bankruptcy or other law for the relief of, or relating to, debtors which is
not dismissed within sixty (60) days.
(g) Any involuntary lien of any kind or character in excess of
$50,000.00 attaches to any Collateral.
(h) Any financial statements, certificates, schedules or other
information now or hereafter furnished by Debtor to Secured Party proves false
or incorrect in any material respect.
7. SECURED PARTY'S REMEDIES AFTER DEFAULT. In the event of any default,
Secured Party may do any one or more of the following:
(a) Declare any Indebtedness immediately due and payable,
without notice or demand.
(b) Enforce the security interest given hereunder pursuant to
the Uniform Commercial Code of Washington and any other applicable law.
(c) Require Debtor to segregate all collections and proceeds
of the Collateral so that they are capable of identification and deliver daily
such collections and proceeds to Secured Party in kind.
(d) Require Debtor to direct all account debtors to forward
all payments and proceeds of the Collateral to Secured Party.
Page 5 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
(e) Require Debtor to assemble the Collateral, including the
Books and Records, and make them available to Secured Party at a place
designated by Secured Party.
(f) Upon reasonable notice during normal business hours, enter
upon the property where any Collateral, including any Books and Records, are
located and take possession of such Collateral and such Books and Records, and
use such property (including any buildings and facilities) and any of Debtor's
equipment, if Secured Party deems such use necessary or advisable in order to
take possession of, hold, preserve, process, assemble, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral.
(g) Demand and collect any payments on and proceeds of the
Collateral. In connection therewith Debtor irrevocably authorizes Secured Party
to endorse or sign Debtor's name on all checks, drafts, collections, receipts
and other documents, and to take possession of and open the mail addressed to
Debtor and remove therefrom any payments and proceeds of the Collateral.
(h) Grant extensions and compromise or settle claims with
respect to the Collateral for less than face value, all without prior notice to
Debtor.
(i) Use or transfer any of Debtor's rights and interests in
any Intellectual Property now owned or hereafter acquired by Debtor, if Secured
Party reasonably deems such use or transfer necessary or advisable in order to
take possession of, hold, preserve, process, assemble, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral. Debtor agrees that any such use or transfer shall be without any
additional consideration to Debtor. As used in this paragraph, "Intellectual
Property" includes, but is not limited to, all trade secrets, computer software,
service marks, trademarks, trade names, trade styles, copyrights, patents,
applications for any of the foregoing, customer lists, working drawings,
instructional manuals, and rights in processes for technical manufacturing,
packaging and labeling, in which Debtor has any right or interest, whether by
ownership, license, contract or otherwise.
(j) Have a receiver appointed by any court of competent
jurisdiction to take possession of the Collateral. Debtor hereby consents to the
appointment of such a receiver and agrees not to oppose any such appointment.
(k) Take such measures as Secured Party may reasonably deem
necessary or advisable to take possession of, hold, preserve, process, assemble,
insure, prepare for sale or lease, market for sale or lease, sell or lease, or
otherwise dispose of, any Collateral, and Debtor hereby irrevocably constitutes
and appoints Secured Party as Debtor's attorney-in-fact to perform all acts and
execute all documents in connection therewith.
Page 6 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
8. MISCELLANEOUS.
(a) Any waiver, express or implied, of any provision hereunder
and any delay or failure by Secured Party to enforce any provision shall not
preclude Secured Party from enforcing any such provision thereafter.
(b) Debtor hereby irrevocably authorizes Secured Party at any
time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all assets of Debtor or words of
similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Uniform Commercial Code of
Washington, or such jurisdiction, or (ii) as being of an equal or lesser scope
or with greater detail, and (b) provide any other information required by part 5
of Article 9 of the Uniform Commercial Code of Washington, or such other
jurisdiction, for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether Debtor is an organization, the
type of organization and any organizational identification number issued to
Debtor and, (ii) in the case of a financing statement filed as a fixture filing
or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. Debtor
agrees to furnish any such information to Secured Party promptly upon Secured
Party's request.
(c) This Security Agreement shall be governed by and construed
according to the laws of the State of Washington, to the jurisdiction of which
the parties hereto submit.
(d) All rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies otherwise provided by law. Any single or
partial exercise of any right or remedy shall not preclude the further exercise
thereof or the exercise of any other right or remedy.
(e) All terms not defined herein are used as set forth in the
Uniform Commercial Code of Washington.
(f) In the event of any action by Secured Party to enforce
this Security Agreement or to protect the security interest of Secured Party in
the Collateral, or to take possession of, hold, preserve, process, assemble,
insure, prepare for sale or lease, market for sale or lease, sell or lease, or
otherwise dispose of, any Collateral, Debtor agrees to pay immediately the costs
and expenses thereof, together with reasonable attorney's fees and allocated
costs for in-house legal services.
(g) Secured Party's rights hereunder shall inure to the
benefit of its successors and permitted assigns. Secured Party may assign this
Security Agreement. All representations, warranties and agreements of Debtor
shall be binding upon the successors and assigns of Debtor.
(h) Notwithstanding anything else contained in this Security
Agreement to the contrary, all actions taken by the parties pursuant to this
Security Agreement shall be consistent with the provisions and requirements of
the Communications Act of 1934, as amended by
Page 7 - EXHIBIT 1.40 - SECURITY AGREEMENT
EXHIBIT 1.40
Telecommunications Act of 1996, and the rules, regulations and policies
promulgated thereunder.
(i) Debtor and Secured Party submit to the jurisdiction of the
state and federal courts located in King County, Washington. Debtor and Secured
Party HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS SECURITY AGREEMENT.
[HITN SPECTRUM, LLC/NEWCO] Clearwire Corporation
By: By:
------------------------------------ ------------------------------
Xxxxxxxx X. Xxxxx
Title: Executive Vice President
---------------------------------
Debtor's chief executive office:
--------------------------------
--------------------------------
Page 8 - EXHIBIT 1.40 - SECURITY AGREEMENT
SPE AND BANKRUPTCY REMOTE REQUIREMENTS.
Holdco is a Delaware limited liability company formed for the purpose
of entering this Agreement and the Loan Documents and performing its obligations
thereunder. Each Newco will be a Delaware limited liability company formed for
the purpose of entering any Loan Documents necessary to complete an Acquisition
and performing its obligations thereunder Holdco is, and each Newco when formed
will be, and will continue to be in good standing under the laws of the State of
Delaware. Holdco and each Newco will become qualified to do business in each
state where an EBS Opportunity Channel is located on or before any Acquisition.
Holdco is a wholly owned subsidiary of HITN; each Newco will be a wholly owned
subsidiary of Holdco.
Holdco has observed, and each Newco when formed will have observed, and
will continue to observe all material procedures and formalities relating to its
separateness required by its organization documents (as approved by Clearwire)
and by its operating agreement (as approved by Clearwire) ("SPE Operating
Agreement") and by the laws of the states where the EBS Opportunity Channels are
located.
The business and purposes of Holdco are, and of each Newco when formed
will be, and will continue to be limited to the following:
(i) to acquire, own, hold, lease, operate, manage, maintain,
develop and improve the EBS Opportunity Channels which have been acquired by it
pursuant to an Acquisition;
(ii) to enter into and perform its obligations under the Loan
Documents;
(iii) to sell, transfer, service, convey, dispose of, pledge,
assign, borrow money against, finance or otherwise deal with the EBS Opportunity
Channels which have been acquired by it pursuant to an Acquisition to the extent
permitted under the Loan Documents;
(iv) to lease the EBS Opportunity Channels which have been
acquired by it pursuant to an Acquisition to Clearwire pursuant to Use
Agreements; and
(v) to engage in any lawful act or activity and to exercise
any powers permitted to limited liability companies organized under the laws of
the state of Delaware that are related or incidental to and necessary,
convenient or advisable for the accomplishment of the above-mentioned purposes.
Holdco and each Newco shall do (or cause to be done) all things
necessary in order to preserve its existence. Holdco and each Newco shall do (or
cause to be done), or not do, as appropriate, all of the following:
PAGE 1 - EXHIBIT 1.41 - SPE AND BANKRUPTCY REMOTE REQUIREMENTS
EXHIBIT 1.41
(i) not own any asset or property other than (x) direct
ownership interests of the EBS Opportunity Channels which have been acquired by
it pursuant to an Acquisition, (y) incidental personal property necessary for
the ownership or operation of its EBS Opportunity Channels which have been
acquired by it pursuant to an Acquisition, and, in the case of Holdco, 100% of
the ownership interests of each Newco;
(ii) not enter into any contract or agreement with any
affiliate of HITN, any constituent party of HITN, Holdco or any Newco, any
guarantor or indemnitor under any of the Loan Documents (a "Guarantor") or any
affiliate of any such constituent party or Guarantor, except upon terms and
conditions that are intrinsically fair and substantially similar to those that
would be available on an arm's-length basis with third parties other than any
such party and only as required in connection with (i)(x) and (i)(y) above;
(iii) maintain its intention to remain solvent and pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets, to the extent of its assets, as the same shall become
due;
(iv) do or cause to be done all things necessary to observe
its organizational formalities and preserve its existence, and not terminate or
fail to comply to the extent material to the opinions rendered herein with any
of the single purpose entity provisions to be included in its SPE Operating
Agreement;
(v) maintain all of its books, records, financial statements
and bank accounts separate from those of its affiliates and any other person or
entity; provided, however, that Holdco's and each Newco's financial position,
assets, results of operations and cash flows may be included in a consolidated
financial statement of an affiliate in accordance with GAAP, so long as any such
consolidated financial statement contains a note indicating that Holdco and its
affiliate and Newco and its affiliate are separate legal entities;
(vi) hold itself out to the public as a legal entity separate
and distinct from any other entity (including any affiliate of Holdco, Newco,
any Guarantor or any constituent party of Holdco or Newco), correct any known
misunderstanding regarding its status as a separate entity, conduct business in
its own name, and not identify itself or any of its affiliates as a division or
part of the other;
(vii) to the extent of cash flow available from operations,
intend to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;
(viii) not commingle the funds and other assets with those of
any affiliate or constituent party, any Guarantor or any other person;
(ix) maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any affiliate or constituent party, any Guarantor or any other
person or entity;
PAGE 2 - EXHIBIT 1.41 - SPE AND BANKRUPTCY REMOTE REQUIREMENTS
EXHIBIT 1.41
(x) not permit any affiliate or constituent party independent
access to its bank accounts, except in connection with EBS Opportunity Channels
which have been acquired by it pursuant to an Acquisition or cash management
activities consented to by Clearwire;
(xi) pay the salaries of its own employees;
(xii) compensate each of its consultants and agents;
(xiii) maintain an arm's-length relationship with its
affiliates;
(xiv) allocate fairly and reasonably shared expenses,
including shared office space;
(xv) not pledge any of its assets for the benefit of any other
person or entity;
(xvi) have no obligation to indemnify its officers, directors,
members, springing members or preferred members, as the case may be, except to
the extent that such obligation is fully subordinated to the Loan Facility and
the Use Agreements and will not constitute a claim against it if cash flow (as
distinct from funds from other sources, such as insurance) in excess of the
amount required to pay the Loan Facility is insufficient to pay such obligation;
(xvii) maintain records, books of account and bank accounts
separate and apart from any other person or entity; and file its own tax
returns, if any, as may be required under applicable law, and maintain its
books, records, resolutions and agreements as official records; and
(xviii) not make any loans or advances to any third party
(including any affiliate or constituent party, any Guarantor or any affiliate of
any such constituent party or Guarantor), and not acquire obligations or
securities of its affiliates.
So long as any obligation under any Loan Document or Use Agreement is
outstanding, Holdco and each Newco shall not do (or cause to be done) any of the
following without the consent of Clearwire which may be granted or withheld in
Clearwire's sole and absolute discretion:
(i) except as may be contemplated by the Loan Documents,
assume, guarantee, become obligated for, or hold itself out to be responsible
for the debts or obligations of any other person or entity or the decisions or
actions respecting the daily business or affairs of any other person;
(ii) engage, directly or indirectly, in any business other
than the actions required or permitted to be performed under Holdco's and each
Newco's respective organization documents, Holdco's and each Newco's respective
operating agreement (in their forms at the time of approval by Clearwire) and
the Loan Documents;
PAGE 3 - EXHIBIT 1.41 - SPE AND BANKRUPTCY REMOTE REQUIREMENTS
EXHIBIT 1.41
(iii) incur, create or assume any indebtedness other than the
Loan Facility (in the case of Holdco) or as expressly permitted under the terms
of the Loan Documents, which may include obligations under the License and
existing Leases;
(iv) make or permit to remain outstanding any loan or advance
to, or own or acquire any stock or securities of, any person or entity, except
that Holdco and each Newco may invest in those investments permitted under the
Loan Documents and may make any advance required or expressly permitted to be
made pursuant to any provisions of the Loan Documents and permit the same to
remain outstanding in accordance with such provisions;
(v) form, acquire or hold any subsidiary (whether corporate,
partnership, limited liability company or other) except that Holdco may form
each Newco as a subsidiary; or
(vi) to the fullest extent permitted by law, engage in any
dissolution, liquidation, consolidation, merger or (except in accordance with
the Loan Documents) sale of all or substantially all of its assets.
PAGE 4 - EXHIBIT 1.41 - SPE AND BANKRUPTCY REMOTE REQUIREMENTS
EBS EXCESS CAPACITY USE
AND ROYALTY AGREEMENT
THIS EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
("Agreement"), is entered into this _____day of __________________, 20___, by
and between ____________, a New York not-for-profit corporation with its
principal offices at 000 Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxx, XX 00000 ("Licensee"),
and Fixed Wireless Holdings, LLC, a Delaware limited liability company with its
principal offices at 00000 X.X. Xxxxxx Xx., Xxxxx 000, Xxxxxxxx, XX 00000,
together with its affiliates ("Operator"). Licensee and Operator shall be
referred to collectively herein as the "parties," and individually as a "party."
This Agreement shall be binding upon the parties as of the date of execution,
and those rights, duties and responsibilities that can be performed by the
parties prior to FCC consent to the FCC Long Term Lease Application (as
hereinafter defined) and prior to the effectiveness of the new Part 27 rules for
EBS and BRS shall be performed.
RECITALS
WHEREAS, Licensee has entered into a purchase agreement of even date
herewith (the "Purchase Agreement") to purchase the license ("License") issued
by the Federal Communications Commission ("FCC") to operate Educational
Broadcast Service ("EBS") Station [_______________] (the "Station") on Channels
[___________] in the [__________(city, state)] market area (the "Market") and
may be granted associated or transitioned spectrum and guardband (each a
"Channel" and, collectively, the "Channels");
WHEREAS, upon the acquisition of such License, Licensee wishes to lease
all excess capacity to Operator pursuant to the terms of this Agreement;
WHEREAS, Operator is in the business of operating, aggregating and/or
managing EBS spectrum and Broadband Radio Service spectrum ("BRS"), both as
defined by Part 27 of the FCC Rules (as hereinafter defined), together with
other spectrum which Operator uses for the distribution of Advanced Wireless
Services in the Market. For purposes of this Agreement, "Advanced Wireless
Services" shall be defined as digital, two-way, fixed, temporary-fixed, mobile
or portable Internet access, data, video, voice, or telephone services that are
deployed using cellular architectures, web architectures, or any other uses,
technologies or architectures Operator may choose or the FCC may now or
hereafter permit for EBS and BRS spectrum. All Advanced Wireless Services
provided by Operator over the Channels shall comply with the rules, regulations,
and policies of the FCC (as such rules may be modified from time to time, the
"FCC Rules"); and
WHEREAS, Licensee is willing to permit Operator to use its Excess
Capacity (as hereinafter defined) on the Channels pursuant to the terms and
conditions of this Agreement, and Operator desires to use such capacity,
together with any other spectrum Operator may lease or license in the Market,
to provide Advanced Wireless Services (the "Wireless System").
In consideration of the mutual promises set forth below, the parties
agree as follows:
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
TERMS AND CONDITIONS
1. TERM.
(a) INITIAL TERM. The initial term shall begin on the date the
Commission approves the FCC Long Term Lease Application (as hereinafter defined)
filed by the parties with respect to this Agreement pursuant to Section 8(a)
hereof, and shall continue until expiration of the License term (the "Initial
Term"); provided, however, that in the event of a reconsideration of the grant
of the FCC Long Term Lease Application, as discussed in Section 8(a) hereof, the
commencement of the Initial Term may be delayed at Operator's option.
(b) RENEWAL TERMS. Subject to the termination rights contained
in Section 12 upon the expiration of the Initial Term and each Renewal Term,
this Agreement shall extend to the end of the next License term (each such
extension a "Renewal Term") conditioned only upon: (1) the parties' appropriate
and timely application to the FCC for approval of the renewal of this Agreement,
which application shall be filed with the FCC at least twenty-one (21) days
prior to the expiration of the Initial Term (or the then-current Renewal Term),
and the FCC's grant thereof; and (2) the FCC's renewal of the License. It is
expressly understood that the Initial Term and any Renewal Term shall
automatically extend during the pendency of the FCC's consideration of any
application for consent to renew the License or this Agreement. The Initial Term
along with any and all Renewal Terms shall be collectively referred to herein as
the "Term." The terms and conditions of the Agreement for each Renewal Term
shall be identical to the terms and conditions of the Initial Term, except as
otherwise set forth herein or as otherwise agreed upon by the parties in
writing. Licensee shall be under no obligation to renew or extend this Agreement
beyond the Term; provided, however, that if Operator gives notice to Licensee
between six (6) and twelve (12) months prior to expiration of the Term that it
desires to renew or extend this Agreement, then Licensee shall negotiate with
Operator, exclusively and in good faith, for renewal or extension of this
Agreement until expiration of the Term.
(c) EXCLUSIVITY; RIGHT OF FIRST REFUSAL.
(1) Licensee agrees that it shall not, during the
Term, or any extensions thereof, negotiate or discuss with any third
party the use, lease, sale, transfer or assignment of the Channels, or
any part thereof, or any option therefore, whether such use, lease,
sale, transfer, option or assignment is to take place during the Term
or thereafter, subject to Licensee's right to assign the Channels or
part thereof to a qualified EBS eligible under the circumstances
described in Section 20(c) hereof. Licensee shall notify Operator of
any communications it receives, whether written or verbal, from third
parties during the Term regarding any proposed use, lease, sale,
transfer, option or assignment of the Channels, or any part thereof,
either during the Term or thereafter.
(2) For a period of five (5) years following
expiration of the Term or early termination of the Agreement pursuant
to Section 12 (the "ROFR Period"), Operator shall have a right of first
refusal, assignable at Operator's option, with respect to any and all
offers, of any kind, received by Licensee to acquire the License (if
the FCC's Rules regarding eligibility allow it), lease or otherwise use
any of the capacity on the Channels (or any part thereof) in any other
manner, or to acquire an option to acquire,
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
lease or otherwise use any of the capacity on the Channels (or any part
thereof) as follows: Upon the receipt by Licensee of any bona fide
offer (an "Offer") which Licensee desires to accept and Licensee is
legally and contractually able to accept, Licensee shall transmit a
notice of the Offer to Operator (the "Offer Notice"). The Offer Notice
shall: (i) contain the name and address of the offering party, the
payment structure therefor and a summary of all material terms of such
Offer; and, (ii) offer to Operator the option of entering into an
agreement with Licensee upon the same terms and conditions as those set
forth in the Offer Notice. Operator shall have thirty (30) days
following receipt of the Offer Notice to accept the terms thereof in
writing. If Operator accepts, Operator and Licensee shall enter into an
agreement which generally comports with the terms and conditions set
forth in the Offer Notice. If, Operator does not timely accept the
terms of the Offer Notice, its rights thereto shall terminate and
Licensee may, for a period of sixty (60) days after expiration of
Operator's thirty (30) day consideration period, enter into an
agreement with the original offering party on the same terms and
conditions as were offered to Operator. If, after such sixty (60) day
period, Licensee does not enter into such an agreement with the
original offering party, if any of the material terms of the offer or
agreement change, or with respect to a purchase or option agreement, if
such agreement expires or is otherwise terminated without closing prior
to the end of the ROFR Period, Operator's right of first refusal shall
be reinstated for the remainder of ROFR Period. If the Offer Notice
provides that any consideration is to be in a form other than cash,
Operator shall provide comparable non-cash consideration if Operator is
able to provide or procure comparable non-cash consideration using
commercially reasonable efforts, otherwise, Operator may substitute a
cash equivalent to the fair market value of the offered non-cash
consideration. If Licensee disputes that the substitute cash
consideration specified by Operator is in an amount fairly equivalent
to the fair market value of the non-cash consideration offered by the
original offering party, Licensee must, within fifteen (15) days after
receipt of Operator's acceptance, provide Operator with written notice
specifying the amount it considers to be fairly equivalent to the fair
market value of the non-cash consideration payable by the original
offering party (the "Counter-Offer"). The question of the fair market
value of the non-cash consideration will be referred to the arbitration
pursuant to Section 28 hereof unless Operator gives Licensee written
notice within fifteen (15) days after its receipt of the Counter-Offer
that it agrees to enter into an agreement containing the fair market
value set forth in the Counter-Offer. Nothing in this Section l(c)
shall prohibit Operator from exercising its option to purchase the
License at any time in accordance with Section 21(a).
2. WIRELESS SERVICES; ADVANCED WIRELESS SERVICES; TRANSITION.
(a) WIRELESS SERVICES; ADVANCED WIRELESS SERVICES.
(1) The parties acknowledge and agree that, as of the
date of this Agreement, Operator intends to offer Advanced Wireless
Services over the Wireless System in the Market, both before and/or
after a Transition (as hereinafter defined), and not Wireless Services.
For purposes of this Agreement, "Wireless Services" shall be defined as
analog or digital video service, or one-way digital Internet access
service. Operator has no intention of continuing operation of any
Wireless Services that may be
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active in the Market as of execution of this Agreement, and the parties
agree that Operator may (but shall not be required to) discontinue such
Wireless Services, subject only to compliance with FCC Rules. Unless
the parties otherwise agree, Licensee's educational Wireless Services
on the Channels shall also be discontinued after commencement of the
Initial Term in favor of implementation of Advanced Wireless Services
(whether before or after a Transition, at Operator's choosing), subject
only to compliance with FCC Rules. The parties agree that
discontinuance of Wireless Services shall not be considered a default
by Operator hereunder, provided such discontinuance is in conformance
with FCC Rules and does not result in a Loss (as hereinafter defined).
(2) It shall be the duty of the Operator to bear all
costs associated with dismantling the Wireless Services Transmission
Facilities (as hereinafter defined) for the Channels. For purposes of
this Agreement, "Wireless Services Transmission Facilities" shall be
defined to include, but shall not be limited to, the Tower,
transmitter(s), combiner, transmission line, EBS antenna, STL antenna,
receiver and related equipment and hardware (if any), as well as the
STL antenna and transmitter located at Licensee's control center (if
any), and any modifications, additions, or replacements to the
foregoing. Operator shall be solely responsible for dismantling and
disposing of all equipment associated with Wireless Services that are
located at any of Licensee's authorized receive sites.
(3) Operator will use commercially reasonable efforts
to construct facilities for Advanced Wireless Services (such
facilities, and any modifications and additions thereto, referred to as
"Advanced Wireless Services Transmission Facilities") in accordance
with applicable FCC Rules at Operator's sole cost and expense before
renewal of the License in order to achieve whatever "substantial
service" or performance or build-out benchmarks the FCC may adopt as a
condition of renewing EBS licenses. While the legal responsibility for
meeting any performance or build-out requirements applicable under the
License remains the responsibility of Licensee and is not delegable to
Operator, Licensee may attribute to itself the build-out or performance
activities of Operator for purposes of complying with any substantial
service, build-out or performance requirements applicable to the
License.
(b) TRANSITION. The FCC expects that most EBS and BRS
licensees will transition their spectrum to a new spectrum plan pursuant to
Sections 27.1230 through 27.1235 of the FCC's Rules within three (3) years of
the effective date of such FCC Rules (the "Transition"). Licensee and Operator
agree that, for any Transition involving the Channels, Operator will be the
Proponent or Co-Proponent of the Transition or will determine, based on the
specific circumstances of each market that it will not be the Proponent and that
it will cooperate with a third party which has decided to be the Proponent, and
that Licensee shall not seek, under any circumstance, to be a Proponent or
Co-Proponent of such Transition. Notwithstanding the foregoing, Licensee agrees
that it will cooperate with all activities undertaken by Operator as part of a
Transition to the new spectrum plan. The parties specifically agree that the
Transition plan for the License shall specify use of Time Division Duplexing
("TDD") technology for spectrum in the Lower Band Segment and the Upper Band
Segment (and, if possible, the Middle Band Segment), or whatever other
technology Operator may choose. Licensee agrees, at Operator's option and
Operator's expense, to cooperate fully with Operator to take such actions
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as are reasonably necessary and appropriate in order to Transition the spectrum
and implement Advanced Wireless Services over some or all of the Channels, as
Operator may designate, including filing any FCC notifications or applications
which may be necessary.
3. USE OF EXCESS CAPACITY AIRTIME. The term "Airtime" as used in this
Agreement means all the capacity on the Channels, including all of Licensee's
capacity in the Lower Band Segment, Middle Band Segment, and Upper Band Segment,
all subcarriers, subchannels, blanking intervals, second audio carriers,
guardband and any other spectrum, capacity, rights or transmission medium
associated with the Channels, as the same exists today and as may be granted to
Licensee by the FCC during the Term. To the extent allowed by FCC Rules, and any
amendments thereof, Licensee hereby leases to Operator the exclusive use of all
Excess Capacity on the Channels. The term "Excess Capacity" means all Airtime on
the Channels apart from Licensee's Primary & Ready Recapture Airtime (defined
below). Operator shall be entitled to use the Excess Capacity for any purpose
allowed by the FCC. Licensee covenants and agrees that at all times during the
Term Operator may peaceably and quietly enjoy the Excess Capacity, subject only
to the terms and conditions of this Agreement. In furtherance of the foregoing,
Licensee shall not take or fail to take any action which may have a material
adverse effect on Operator's right to possession and peaceable enjoyment of the
Excess Capacity. If, pursuant to changes in FCC Rules, the parties have
additional flexibility in implementing Operator's use of Excess Capacity, then
Licensee and Operator agree to implement such flexibility and, if necessary, to
negotiate revisions to this Agreement which will be mutually beneficial to both
Parties and which will maximize the availability of Airtime on the Channels for
Operator's use.
4. LICENSEE'S PRIMARY & READY RECAPTURE AIRTIME.
(a) DEFINED. The term "Licensee's Primary & Ready Recapture
Airtime" shall describe the Airtime that is required to be set aside for
Licensee's use pursuant to FCC rules, as the same may change from time to time.
Consistent with FCC Rules, and as designated by Operator from time to time,
Licensee's Primary & Ready Recapture Airtime may be shifted or loaded on any
Channel, or portion thereof, that is part of Operator's Wireless System. For
purposes of this Agreement, the terms "Licensee's Primary and Ready Recapture
Airtime" and "Advanced Wireless Services Reserved Capacity" shall be used
interchangeably.
(b) ADVANCED WIRELESS SERVICES RESERVED CAPACITY. So long as
the FCC requires EBS licensees to observe a minimum educational programming
requirement, Licensee's Primary & Ready Recapture Airtime shall be the minimum
Airtime required to meet the obligations of an EBS licensee under the FCC's
rules and regulations, but shall not be less than 5% of the digital capacity on
the Channels. If the requirement is a percentage of the digital capacity on the
Channels, such percentage shall be measured by determining the product of (x)
the ratio of the total amount of spectrum (in MHz) assigned to Licensee's
Channel(s) utilized by Operator to provide Advanced Wireless Services divided by
the total amount of spectrum (in MHz) assigned to all BRS and EBS channels
utilized by Operator to provide Advanced Wireless Services in the Market and (y)
the aggregate throughput capacity of Operator's Wireless System radio
transmission and reception equipment operating on all BRS and EBS Channels
utilized in the Wireless System in the Market (including those that are
utilized at more than one location due to frequency re-use) at the time of
determination. For example, and for purposes of illustration only, if Operator
utilizes eight (8) EBS and/or BRS channels on its Wireless System
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in the Market, four (4) of which are Licensee Channels, the FCC requirements
provide for five percent (5%) of the digital capacity to be reserved for
Licensee, and the aggregate system capacity of Operator's Wireless System is 500
mbps, Advanced Wireless Services Reserved Capacity would be 12.5 mbps (4/8 x 500
mbps x 5% = 12.5 mbps). Licensee recognizes that Operator has an interest in
limiting the Advanced Wireless Services Reserved Capacity to the minimum
required by the FCC in order to preserve capacity for Operator's services.
Accordingly, Operator, at its expense, may use available technical and other
means to restrict any usage in excess of five percent (5%) of the digital
capacity on the Channels. In the event the FCC eliminates the minimum
educational usage requirements at any time during the Term of this Lease, then
Operator will continue to make available up to five percent (5%) of the digital
capacity on the Channels; provided, however, that Operator may, in its
discretion, charge Licensee Operator's standard wholesale rates offered to
similarly situated, unaffiliated third parties in such Market purchasing a
similar quantity and type of wireless communications services with respect to
such Airtime and the delivery of any services related thereto; provided further,
that such Airtime be used by Licensee and its Permitted End Users for purposes
related to their non-profit mission as provided in Section 4(c). Notwithstanding
the foregoing, if, at any time after (i) Operator has deployed Advanced Wireless
Services on the Channels and (ii) the FCC eliminates the educational usage
requirements, then if there are not at least (6) Permitted End Users using the
Advanced Wireless Services on the system continuously during any six (6) month
period, then Licensee shall relinquish Licensee's Primary & Ready Recapture Time
and make such capacity available to Operator for the remainder of the Term as
Excess Capacity.
(c) USE. Licensee and its Permitted End Users shall use
Licensee's Primary & Ready Recapture Airtime for purposes related to their
non-commercial, non-profit missions only. Licensee agrees that by its own
action, or through a third party, it will not utilize any part of the Channels
to create or operate any service that is in competition with the current,
planned or future commercial services provided by Operator's System. It is the
mutual understanding of the parties that the purpose of Licensee's use of
Licensee's Primary and Ready Recapture Airtime is and shall be non-profit.
Licensee shall not, directly or indirectly, acting alone, through an affiliate,
or as a member of a partnership or other business entity offer, using all or any
part of the channels on a system separate from Operator's system, provide or
deliver a competing service to Operator's System, or lease or license any part
of the Channels to a third party that offers, provides or delivers a competing
service to Operator's System.
(d) USE OF MIDDLE BAND SEGMENT CHANNEL. Consistent with FCC
Rules regarding channel loading, the parties agree that after the Channels are
subject to a Transition, and the FCC grants Licensee a Channel in the Middle
Band Segment (the "Middle Band Segment Channel"), Operator may choose, at its
option, to load all of Licensee's Primary and Ready Recapture Airtime onto the
Middle Band Segment Channel, with any remaining Excess Capacity Airtime on such
Channel to be leased to Operator. Licensee agrees, at Operator's option, that
the Middle Band Segment Channel may be used for low power Advanced Wireless
Services, provided such use is permitted under FCC rules and provided such use
does not result in interference to Licensee's Middle Band Segment Channel, or
interference to other channels in the Middle Band Segment. If Licensee uses
substantially all of the Airtime on the Middle Band Segment Channel for
Licensee's Primary and Ready Recapture Airtime, or if Licensee's use of the
Middle Band Segment Channel is incompatible with the technology deployed by
Operator in the remainder of the Wireless System, Operator may, at its sole
option and discretion, provide
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EXHIBIT 1.47
notice to Licensee that it will not use the Excess Capacity on such Channel.
Upon the giving of such notice, and until further notice by Operator, the entire
Middle Band Segment Channel shall be reserved for Licensee's educational use
("Contingent Reserved Capacity") subject to all terms and conditions of this
Agreement. Upon Licensee's receipt of such notice, (i) Operator shall have no
further rights and obligations with respect to the Contingent Reserved Capacity,
and (ii) Licensee shall be solely responsible for all costs and expenses
associated therewith, including but not limited to tower site lease fees;
provided that, if any facilities associated with the Contingent Reserved
Capacity are shared with Operator's Wireless System, such costs and expenses
shall be shared equally between the parties.
(e) SPECTRUM CHANGES. Prior to taking any voluntary action
pursuant to which Licensee may convert, swap, exchange, relinquish or in any way
transfer, its License or the Channels for the same, similar or different
spectrum, licenses, channels and/or other consideration, in the same or
different market areas (the "FCC Rights"), Licensee will obtain Operator's
written consent to such action, which may be withheld in Operator's discretion.
Subject to reservation of certain channel capacity by Licensee in accordance
with FCC Rules, all such FCC Rights will inure solely to the benefit, and be
exclusively available for use by, Operator during the Term. This Agreement will
be automatically amended to cover the FCC Rights. Unless otherwise prohibited by
the FCC, Licensee will not take any action with regard to the License or the
Channels other than in accordance with this Agreement or as is otherwise
consented to by Operator in writing.
(f) CHANNEL SWAPPING; COSTS. With the consent of Licensee,
which consent will not be unreasonably withheld, conditioned, or delayed,
Operator may require Licensee to enter into agreements to swap some or all of
its Channels for other channels in the Market (the "Swapped Channels"), and in
connection therewith file any necessary FCC applications to accomplish the swap,
so long as there is no material difference in the geographic service area (or
equivalent service area) ("GSA") of the Swapped Channels as compared to
Licensee's previous Channels, taking into account any overlap(s) of GSAs of such
Channels and Swapped Channels with co-channel GSAs in other markets. Operator
agrees to bear all costs and expenses associated with the implementation of
channel swapping, channel loading (as discussed in Sections 4(a) and 4(d)
hereof), and channel shifting (as discussed in Section 4(a) hereof), including
the reasonable out-of-pocket costs of Licensee's engineering consultants and
attorneys.
5. ADVANCED WIRELESS TRANSMISSION FACILITIES, PURCHASE OPTIONS,
INSTALLATION OF ADVANCED WIRELESS SERVICES.
(a) OWNERSHIP AND LEASE. The parties acknowledge and agree
that the Advanced Wireless Transmission Facilities utilizing the Channels, and
any modifications, additions thereto or replacements thereof supplied by
Operator, shall be owned by Operator.
(b) TOWER. Operator shall, in its own name, and at its sole
cost and expense, arrange for the right to use any tower facilities required in
connection with the operation of Advanced Services Transmission Facilities;
Licensee shall have no independent rights to use the tower facilities, except
through Operator and pursuant to this Agreement.
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(c) DEDICATED EQUIPMENT PURCHASE OPTION. 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 Operator within
thirty (30) days of such expiration or termination, to purchase or to lease at
Operator's option that portion of the Advanced Wireless Transmission Facilities
(not including any tower rights) then in operation that is dedicated solely to
transmission of Licensee's Primary and Ready Recapture Airtime on the Channels
(the "Dedicated Equipment"), or comparable equipment. The price for such
equipment shall be equal to the fair market value of the Dedicated Equipment at
the time of Licensee's notice or, if comparable equipment is provided,
Operator's cost in obtaining such equipment. If the parties do not agree on the
fair market value of the Dedicated Equipment or comparable equipment within
thirty (30) days of Licensee's exercise of its option, the fair market value
shall be determined by arbitration pursuant to Section 28 hereof.
(d) SHARED EQUIPMENT PURCHASE OR LEASE OPTION. 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 Operator within
thirty (30) days of such expiration or termination to purchase or lease at
Operator's option any equipment owned by Operator and used in connection with
the transmission of Licensee's Primary and Ready Recapture Airtime on the
Channels that is not Dedicated Equipment, or comparable equipment (not including
any tower rights) (the "Shared Equipment"), at a price equal to the Shared
Equipment's fair market value for such purchase or lease as applicable. If the
parties do not agree on the fair market value of the Shared Equipment within
thirty (30) days of Licensee's exercise of its option, the fair market value
shall be determined by arbitration pursuant to Section 28 hereof.
(e) OPERATION, MAINTENANCE AND REPAIR OF ADVANCED WIRELESS
TRANSMISSION FACILITIES. Except with respect to facilities operated pursuant to
Contingent Reserved Capacity, Operator shall at its own expense manage, operate,
maintain and repair the Advanced Wireless Transmission Facilities, in accordance
with all applicable requirements of the FCC and good engineering standards and
practices
(f) ADVANCED WIRELESS SERVICES FOR PERMITTED END USERS. After
activation of Advanced Wireless Services on the Channels in the Market, Licensee
may request at no cost to Licensee, via submission of an Order Form, Standard
Advanced Services Installation of Advanced Wireless Services for up to
twenty-five (25) Permitted End Users that are located within Operator's
then-serviceable area of the GSA for the Channels. In addition, Licensee may
request in writing to Operator a request to purchase Standard Advanced Services
Installation for) Permitted End Users in excess of the original twenty-five (25)
during the Term of this Agreement, which request shall not be made more than one
time during any calendar year. Upon receipt of such request Operator shall
determine, based on Operator's then current calculation (which may either be
based on a national average of all of Clearwire's then operating markets or with
respect to the Market, as Clearwire determines in its sole discretion) the
number of Standard Advanced Services Installation of Advance Wireless Services
which would utilize Licensee's Advanced Wireless Services Reserved Capacity at
the tier(s) of service then utilized by Licensee (the "Base Number"). If the
Base Number is more than the greater of (i) 25 or (ii) the number of Standard
Advanced Services Installations previously requested by Licensee, including
without limitation the original 25, Operator shall sell to Licensee additional
Standard Advanced Services
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Installations of Advanced Wireless Services up to the Base Number. Operator
shall approve Licensee's Order Form in its reasonable discretion, taking into
consideration relevant technical, operational and legal factors. The cost of the
Standard Advanced Services Installation of Advanced Wireless Services, in excess
of the original 25, shall be equal to Operator (or its affiliate's) standard
wholesale rates offered for such equipment to similarly situated, unaffiliated
third parties in such Market purchasing a similar quantity and type of equal or,
if no such wholesale rates are then available in the Market, then Operator's
out-of-pocket fully loaded, costs of supplying the necessary equipment and
installation. Licensee may request Advanced Wireless Services for Permitted End
Users for any tiers of service (with respect to throughput) that Operator makes
available to commercial customers utilizing EBS or BRS capacity in the Market;
provided, however, that the number of Permitted End Users shall at all times be
limited by the Advanced Wireless Services Reserved Capacity set forth in Section
4(b) hereof, which may not be exceeded when the ordered throughput or capacity
for all Permitted End Users in the Market are aggregated. Licensee shall comply
with all laws and obtain any necessary governmental permits or approvals, and
third party approvals, which are necessary in order for Operator to undertake a
Standard Advanced Services Installation.
(1) Definitions. "Order Form" has the meaning set
forth in the terms of service referenced in Section 5(f)(2) below.
"Standard Advanced Services Installation" means the customer premises
equipment package made generally available to Operator's retail
customers in the Market, at the time Operator receives Licensee's Order
Form, who subscribe to the same tier of service over BRS or EBS
capacity. "Permitted End Users" means Licensee itself and any
educational institution or not-for-profit organization or site in the
Market with whom Licensee is working in furtherance of its educational
goals, which will include at least one (1) local accredited educational
institution as defined by the FCC.
(2) Terms of Use. Licensee's ordering and use of
Advanced Wireless Services, and the use of such services by Licensee's
users and Permitted End Users, shall be governed by the acceptable use
policy and terms of service, and such other policies of general
applicability which apply to the Advanced Wireless Services, which are
subject to amendment and may be found at xxxx://xxx.xxxxxxxxx.xxx or
such other URL as may be designated; provided, however, that financial
terms contained in the terms of service shall not apply to Advanced
Wireless Services to Licensee or Permitted End Users that are provided
free of charge pursuant to this Section 5. In addition to the foregoing
policies, Operator may specify from time to time, in its sole
discretion, reasonable procedures for the activation, addition,
deletion or substitution of services to Licensee, its users and
Permitted End Users. With respect to the use of Advanced Wireless
Services by Licensee, its users and its Permitted End Users, Clearwire
Corporation is an intended third party beneficiary of this Agreement.
(3) Equipment and Software. For Licensee and any
Permitted End Users for whom Operator has provided a Standard Advanced
Services Installation, Operator shall make available any equipment,
services or software upgrades that Operator makes generally available
to Operator's retail customers subscribing to the same tier of service
in the Market over BRS or EBS facilities. In the event that any
equipment upgrade involves replacement of equipment, the replaced
equipment shall be
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
returned to Operator or its designee and title to the replacement
equipment shall transfer to Licensee or its designee.
(4) Title. All equipment provided by Operator to
Licensee as part of Standard Advanced Services Installations for
Permitted End Users 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 End Users.
(g) ADDITIONAL EXPENSES. Licensee and its Permitted End Users
shall be responsible for the payment of any telecommunications or similar
charges incurred by Operator as a result of any special requirements associated
with Licensee's usage of Advanced Wireless Services Reserved Capacity and
Contingent Reserved Capacity. The types of operating costs for which Licensee
may be responsible include, but are not limited to, Internet Service Provider
("ISP") fees (if ISP services are only provided for a separate fee to other
Operator customers using the service offerings ordered by Permitted End Users),
Internet access or backhaul charges (if such services are only provided for a
separate fee to other Operator customers using the service offerings ordered by
Permitted End Users), fees for establishing a network point of presence,
long-distance telephone usage and access charges and similar telecommunications
charges, as well as the cost of any additional equipment that Operator is not
otherwise required to provide under this Agreement. Notwithstanding the
foregoing, Operator acknowledges and agrees that Licensee and its Permitted End
Users for whom Operator provides a Standard Advanced Services Installation will
not be charged for services or facilities that are provided to Operator's other
retail customers subscribing to the same tier of service without separate
charge.
6. CONTROL; SPECTRUM LEASING REQUIREMENTS.
(a) Notwithstanding anything in this Agreement to the
contrary, and subject to prior FCC consent to the FCC Long Term Lease
Application with respect to this Agreement, the parties expressly acknowledge
that this Agreement is designed to transfer de facto, but not de jure, control
of the leased spectrum to Operator in accordance with Sections 1.9010 and 1.9030
of the FCC Rules. This Agreement: (i) does not and will not vest in Operator, or
constitute, create or have the effect of constituting or creating, de jure
control, direct or indirect, over Licensee or the License, which ownership or
control remains exclusively and at all times in the Licensee; and, (ii) does not
and will not constitute the transfer, assignment, or disposition in any manner,
voluntary or involuntary, directly or indirectly, of the License or the transfer
of control of the Licensee within the meaning of Section 310(d) of the
Communications Act (as hereinafter defined) other than for spectrum leasing
purposes. During the Term, Operator will not take any action inconsistent with
or contrary to the Licensee's de jure control, as that term is construed by the
FCC, over the License. During the Term, Operator will not hold itself out to the
public as the holder of the License.
(b) Operator hereby assumes primary responsibility for
complying with the Communications Act and applicable FCC Rules with respect to
the Excess Capacity spectrum leased, and Licensee is relieved of primary and
direct responsibility for ensuring that operations on the Excess Capacity
spectrum comply with the Communications Act and FCC Rules.
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EXHIBIT 1.47
However, Licensee shall remain responsible for complying with FCC Rules with
regard to the spectrum it retains use of for purposes of Licensee's Primary and
Ready Recapture Airtime, Licensee is responsible to satisfy its minimum
educational use requirements, Licensee is responsible to comply with other FCC
Rules that specifically apply to licensees in long term de facto leasing
arrangements, and Licensee is responsible for its own FCC Rule violations and
any ongoing violations or other egregious behavior pertaining to use of the
License about which it is aware.
(c) Operator shall comply with applicable secondary markets
leasing rules as set forth in Section 1.9000 et seq. of the FCC Rules. Operator
acknowledges that this Agreement may be revoked, cancelled or terminated by
Licensee or by the FCC if Operator materially fails to comply with such rules,
and such failure is reasonably expected to result in a Loss; provided, however,
that before Licensee may exercise such termination right, it shall first provide
Operator with notice of an Event of Default pursuant to Section 12(b) hereof,
and provide Operator with an opportunity to cure such default or failure as
specified therein. If the License is revoked, cancelled, terminated or otherwise
ceases to be in effect, Operator understands that it will have no continuing
authority or right to use the leased spectrum, unless otherwise authorized by
the FCC, or unless the FCC grants Operator special temporary authority to
operate as contemplated in Section 12(c) hereof.
7. ROYALTY PAYMENTS TO LICENSEE. Upon the execution of this Agreement,
Operator shall advance to Licensee, $____________________as the advance payment
of the annual Royalty Payment due to Licensee during the Term ("Advance Royalty
Payment"). The annual "Royalty Payment" shall be equal to
$_________________which, if not paid in advance, would become due on each
anniversary of the execution of this Agreement. The Advance Royalty Payment and
any other amounts owed by Operator to Licensee hereunder shall be subject to
offset from any amounts owed by Licensee or its parent, Hispanic Information and
Telecommunications Network, Inc. If, for any reason, this Agreement terminates
(including without limitation by reason of Operator purchasing the license
pursuant to Section 21 hereof, the Loss of the License or otherwise) or expires
prior to the end of the Term, including all available Renewal Terms, the
remaining advanced Royalty Payment which would have otherwise become due during
the Term had this Agreement not been terminated, shall be refunded to Operator
in immediately available funds within two (2) days of such termination.
8. REGULATORY FILINGS; LEGAL AND ENGINEERING FEES.
(a) APPLICATION FOR LEASE APPROVAL. Within ten (10) business
days following grant of the assignment application by the FCC and the closing of
the purchase of the License, or upon the effective date of the new Part 27 rules
for EBS and BRS, whichever occurs later, and prior to consummating the transfer
of de facto control of the Excess Capacity spectrum leased to Operator
hereunder, the parties agree to cooperate as required to prepare and file with
the FCC all forms and related exhibits, certifications and other documents
necessary to obtain the FCC's consent to this Agreement and satisfy the FCC's
requirements for long term de facto lease approval as set forth in 47 C.F.R.
Section 1.9030(e) ("FCC Long Term Lease Application"). Each party covenants and
agrees that it will fully cooperate with the other, and do all things reasonably
necessary to timely submit, prosecute and defend the FCC Long Term Lease
Application, including responding to any petitions for reconsideration or
Commission reconsiderations of the
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grant of the FCC Long Term Lease Application, and will promptly file or provide
the other Party with all other information which is required to be provided to
the FCC in furtherance of the transactions contemplated hereby. The parties will
disclose in the FCC Long Term Lease Application the automatic extension of the
Term upon the renewal of the License. The parties further covenant and agree to
include in any License renewal application a request to extend and renew this
Agreement for the renewal term of the License. Any fees associated with the
filing of the FCC Long Term Lease Application shall be paid by Operator. To the
extent Licensee is required to file this Agreement with the FCC, the Licensee
shall first notify and consult with Operator, and will redact all information
from the Agreement which Operator reasonably designates as confidential
including, but not limited to, all payment information. In the event a petition
for reconsideration is filed against the grant of an FCC Long Term Lease
Application, or if the Commission determines to reconsider such grant on its own
motion, Operator shall determine at its option whether to delay commencement of
the Initial Term until resolution of such reconsideration and, in the event of
such delay, it will notify Licensee in writing.
(b) OTHER FCC FILINGS. Upon Operator's reasonable request, and
within five (5) days of Licensee's receipt, Licensee shall promptly review,
execute and file (if necessary), and, together with Operator, prosecute, all
notifications, applications, petitions, waivers, amendments, and other related
documents, including, without limitation FCC Long Term Lease Applications,
necessary to secure FCC approval for Licensee's and Operator's intended uses of
the Channels, provided such filings are consistent with this Agreement and
Licensee's legal obligations. Licensee shall promptly file any requests for
extension of construction periods or performance benchmarks reasonably requested
by Operator. Licensee shall promptly, within fifteen (15) business days of its
receipt, review and, if consistent with this Agreement and Licensee's legal
obligations, execute and provide Operator any "no objection" letters,
interference consent agreements or retransmission consents that Operator may
reasonably request, provided that the action requiring consent does not cause
material degradation of Licensee's signal transmission capabilities. As an
illustration, without limiting the foregoing, interference consent agreements
and "no objection letters" that (i) involve reciprocal limitations on the
operations of Licensee's licensed facilities and other affected facilities, and
(ii) waive FCC interference protection criteria subject to protection from
actual harmful interference, taking into account topography, foliage, ground
clutter and other real world factors limiting signal propagation, shall not be
deemed to cause material degradation of Licensee's signal transmission
capabilities. During the Term, Licensee shall not make any filings with any
governmental authority, including the FCC, without prior consultation or
coordination with Operator, and Licensee shall not provide any "no objection"
letters, interference consents and/or retransmission consents to any third party
without Operator's prior written consent, such consent not to be unreasonably
withheld.
(c) TRANSITION FILINGS. Licensee shall fully cooperate with
Operator to assist in a Transition of the spectrum in the Market and spectrum in
other markets which are included within the Major Economic Area for the Market
as defined by FCC Rules. Licensee shall execute any notices, reports,
applications, correspondence or other documents reasonably necessary and
appropriate to effectuate a Transition as requested by Operator. Operator shall
bear all reasonable and appropriate FCC-related costs and expenses, including
legal, engineering and filing fees, incurred to prepare, file and prosecute any
initiation plans, Transition plans, applications and notices in connection with
a Transition.
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EXHIBIT 1.47
(d) MAINTENANCE OF CHANNELS. Licensee shall use its best
efforts to maintain in full force and effect throughout the Term its License and
any associated authorizations for the Channels, it shall maintain its
qualifications to hold such License(s) and authorizations, and it will comply in
all respects with its regulatory requirements as an FCC licensee. Licensee
agrees that it will timely file its License renewal applications and its FCC
Long Term Lease Applications as provided herein and in FCC Rules. Each party
shall, with respect to its activities and operations related to the Channels,
comply with all FCC Rules and all other applicable laws, rules and regulations
of every kind. Licensee shall provide to Operator a copy of any notice received
from the FCC concerning the License within five (5) business days of receipt.
(e) COOPERATION IN FURTHER EFFORTS. The parties shall utilize
reasonable efforts and take such further action and execute such further
applications, documents, assurances and certificates as either party may
reasonably request of the other, consistent with the parties' rights and
obligations under this Agreement, in order to effectuate the purposes of this
Agreement. In addition, Operator shall assist Licensee from time to time in
verifying and correcting data in the FCC Universal Licensing System records for
the Licensee.
(f) REIMBURSEMENT OF EXPENSES. Except for Licensee's payment
obligations and other responsibilities as set forth in this Agreement,
including, but not limited to, those obligations set forth in Sections 2(a)(2),
4(d), 5(c), 5(d), 5(f)(5) and 5(g) hereof, Operator shall reimburse Licensee,
not later than thirty (30) days after receipt of any invoice from Licensee, for
Licensee's reasonable, documented out-of-pocket legal and engineering expenses
incurred at Operator's request after commencement of the Initial Term in
connection with obtaining, renewing, and continuing in full force and effect the
License, otherwise complying with FCC regulatory obligations relating to the
License, and providing assistance to Operator in licensing and other matters as
Operator may request from time to time during the Term. Any expense for which
Licensee seeks reimbursement that is in excess of five hundred dollars ($500)
shall be subject to prior approval by Operator.
9. TAXES AND OTHER ASSESSMENTS AND FEES.
Operator shall pay all taxes and other charges assessed against the
Wireless Services Transmission Facilities, without cost to or reimbursement by
Licensee. Operator shall also pay all other taxes, assessments and fees due from
Operator or Licensee as a result of the use of Excess Capacity on the Channels
by Operator and provision of services by Operator or any of Operator's
sublessees over the Channels, including but not limited to any regulatory fees
and required contributions of Licensee to the Universal Service Fund under the
Communications Act and the FCC Rules, except for taxes, assessments or fees, if
any, with respect to services provided by Licensee to Permitted End Users.
10. REPRESENTATIONS AND WARRANTIES OF OPERATOR.
Operator represents and warrants as follows:
(a) Operator is duly organized, validly existing and in good
standing under the laws of the State of Delaware. Operator has all requisite
power and authority to own its
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EXHIBIT 1.47
properties and to carry on its business. Operator has all requisite power to
execute, deliver and, subject to the regulatory authority of the FCC, perform
this Agreement.
(b) All necessary actions on the part of Operator to authorize
the execution and delivery of this Agreement, and the performance of the
obligations of Operator herein, have been taken. This Agreement is valid and
legally binding upon Operator and enforceable in accordance with its terms
except to the extent that enforceability thereof may be limited by bankruptcy,
insolvency or other laws relating to the enforcement of creditor's rights or by
the application of equitable principles.
(c) The execution, delivery and performance of this Agreement
and all actions and transactions contemplated hereby: (i) will not violate any
provision of law or of the certificate of organization or operating agreement of
Operator, any order of any court or other agency of government to which Operator
is a party or by which it or any of its properties is bound, and (ii) will not
violate, be in conflict with, result in a breach of or constitute (with notice
or lapse of time or both) a default under any applicable law, order or
regulation, indenture, agreement or other instrument to which Operator is a
party or by which it or any of its properties is bound and that has not been
waived or consented to, or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of its property or
assets. The factual statements and representations contained herein are true and
correct to the best of Operator's knowledge and belief.
11. REPRESENTATIONS AND WARRANTIES OF LICENSEE.
Licensee represents and warrants as follows:
(a) Licensee is lawfully existing and in good standing under
the laws of the State of New York, has all requisite power and authority to
enter into this Agreement, and to perform the obligations to be performed by it
under this Agreement. This Agreement constitutes a valid, binding and
enforceable obligation of Licensee. The entry into and performance under this
Agreement does not and will not conflict with any other obligations or any other
agreements by which Licensee is or will be bound, or give rise to a cause of
action for any violation thereof. The factual statements and representations
contained herein are true and correct to the best of Licensee's knowledge and
belief. To HITN's knowledge, there are no outstanding contractual rights,
including rights of first refusal, on behalf of any third party which grants any
rights with respect to leasing capacity on or otherwise using or purchasing, the
License.
(b) Licensee holds, and is fully qualified in all respects to
hold, the License (Engineering File No. ___________________________, as renewed
through ___________________________ by File No. _______________________)
currently in force for the Channels.
(c) During Licensee's possession of the Licenses, Licensee has
neither permitted (or agreed to permit) any mortgage, lien, pledge, charge,
security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever to be placed on the Licenses nor
transferred (or agreed to transfer) the Licenses.
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EXHIBIT 1.47
(d) Licensee has not agreed to accept interference from other
FCC licensees with respect to the Channels, nor has Licensee allowed any such
interference.
(e) Licensee is in compliance with all applicable Laws except
for any non-compliance that, individually or in the aggregate, will not have a
material adverse effect on the License. Since the filing of its application for
the assignment of License, Licensee has complied in all material respects with
FCC Laws applicable to the License. Since the approval of the assignment of the
License, Licensee has complied in all material respects with all of the terms
and conditions of the License. The License is unimpaired by any acts or
omissions of Licensee. All material documents required to be filed at any time
by Licensee with the FCC with respect to the License have been timely filed or
the time period for such filing has not lapsed. All such documents filed since
the date that the License was issued to Licensee are correct in all material
respects. All amounts owed to the FCC by Licensee in connection with the License
have been timely paid.
(f) There is no Proceeding now in progress or pending or, to
the best knowledge of Licensee, threatened against Licensee or the assets
(including the intellectual property rights) or the business of Licensee, nor to
the best knowledge of Licensee, does there exist any basis therefore, except for
immaterial claims brought against Licensee in the ordinary course of business.
Licensee is not subject to any order, writ, injunction or decree of any court of
any federal, state, municipal or other domestic or foreign governmental
department, commission, board, bureau, agency or instrumentality.
(g) Licensee represents, warrants and covenants that with
respect to the use of the Advanced Wireless Services, Licensee shall ensure that
it, its users, and its Permitted End Users, strictly comply at all times with
the acceptable use policy and terms of service, and such other policies of
general applicability which may apply to the Advanced Wireless Services which
are subject to amendment and may be found at xxxx://xxx.xxxxxxxxx.xxx or
such other URL as may be designated.
12. TERMINATION; DEFAULT; LOSS; SURVIVAL.
(a) TERMINATION. This Agreement may be terminated prior to
expiration of a Term under any of the following circumstances: (i) by mutual
written agreement of the parties; (ii) by Operator, upon giving written notice
to Licensee in the Event of Default; provided that such Event of Default is not
cured (if it is capable of being cured) within thirty (30) days following such
notice; (iii) by Licensee, upon giving written notice to Operator in the Event
of Default; provided that if the Event of Default is a payment default that is
cured in thirty (30) days following such notice and with respect to all other
Events of default (that are of a type capable of being cured) such Event of
Default is not cured within one hundred eighty (180) days thereof; (iv) by
Operator upon giving written notice to Licensee within thirty (30) days of a
Loss (as hereinafter defined); (v) by Operator upon written notice to Licensee
and to the extent allowed under law, if Licensee files a petition pursuant to
Title 7 or 11 of the United States Bankruptcy Code or is adjudged a debtor after
the filing of an involuntary bankruptcy petition against Licensee, or if
Licensee files a petition for relief pursuant to any state insolvency laws, or
(vi) upon the closing of the purchase of the Licenses by Operator pursuant to
Section 21(a). If the Agreement is terminated prior to the expected termination
date which was disclosed to the
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EXHIBIT 1.47
FCC, Licensee shall file a notification with the FCC no later than ten (10) days
after the early termination indicating the date the Agreement was terminated.
(b) DEFAULT. It shall be an "Event of Default" hereunder if
either party fails to perform a material obligation or breaches a material
representation and warranty contained in this Agreement in circumstances where
such failure results in the inability of the other party to exercise its full
rights under this Agreement.
(c) LOSS. The term "Loss" means: (1) expiration of the License
without renewal; (2) License termination or revocation by the FCC without
reinstatement; or (3) the unavailability of the Channels for the provision of
Operator's Advanced Wireless Services due to regulatory action, including, but
not limited to, FCC denial of the FCC Long Term License Application related to
this Agreement, or reallocation of the Channels for purposes incompatible with
Operator's business, or adoption of rules or policies that substantially
frustrate achievement of the purposes of this Agreement. A Loss shall not be
deemed a default by Licensee or Operator if the Loss was beyond the reasonable
control of such party, and such party used its best efforts to preserve the
License. In the event of a Loss, the parties shall cooperate in seeking special
temporary authority from the FCC to allow Operator to continue operating on the
Channels until such time as it can transition its users to other spectrum and
minimize service disruption to its business and other activities.
(d) SURVIVAL OF EXPIRATION OR TERMINATION. The obligations of
the parties under this Agreement that by their nature would continue beyond
expiration or termination of this Agreement (including, without limitation,
Sections l(c) (Right of First Refusal), 12(a) (Termination), 12(d) (Survival),
13 (Indemnification, Insurance, Limitation of Liability), 18 (Confidential
Information), 19 (Notices), 21 (Options), 22 (Waiver), 24 (Construction), 27
(Severability), 28 (Arbitration), 29 (Governing Law), 30 (Specific Performance)
shall survive any expiration or termination of this Agreement.
13. INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY.
(a) SCOPE OF INDEMNIFICATION BY OPERATOR. Operator shall
defend, indemnify and hold Licensee harmless from any and all costs and
expenses, including reasonable attorney's fees, arising from any inaccuracy or
misrepresentation of any representation or warranty made by Operator herein or
any failure by Operator to perform or comply with any covenant in this Agreement
to be performed of complied with by Operator.
(b) SCOPE OF INDEMNIFICATION BY LICENSEE. In addition to
Licensee's indemnification of Operator for use of Advanced Wireless Services,
which indemnification is set forth in the terms of service and the acceptable
use policy referenced in Section 5(f)(2) hereof, Licensee shall defend,
indemnify and hold Operator harmless from any and all costs and expenses,
including reasonable attorney's fees, arising out of or resulting from any
inaccuracy or misrepresentation of any representation or warranty made by
Licensee herein or any failure by Licensee to perform or comply with any
covenant in this Agreement to be performed of complied with by Licensee. The
parties agree and acknowledge that for purposes of Licensee's indemnification
for use of the Advanced Wireless Services by Licensee, its users and its
Permitted End Users, Clearwire Corporation is an intended third party
beneficiary.
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EXHIBIT 1.47
(c) INDEMNIFICATION PROCEDURES. In claiming indemnification
pursuant to this Agreement the party seeking indemnification shall, with respect
to any claim for which indemnification is available, notify the indemnifying
party in writing of the nature of the claim as soon as practicable. (The failure
by the party seeking indemnification to give notice as provided, above, shall
not relieve the indemnifying party of its obligations under this Section, except
to the extent that the failure results in the failure of actual notice and the
indemnifying party is damaged as a result of the failure to give notice.) Upon
receipt of notice of the assertion of a claim, the indemnifying party shall
assume the defense of the claim. The party seeking indemnification shall have
the right to employ separate counsel and to participate in (but not control) any
such action, but the fees and expenses of such counsel shall be at the expense
of the party seeking indemnification unless (a) the employment of counsel by the
party seeking indemnification has been authorized by the indemnifying party, (b)
the party seeking indemnification has been advised by its counsel in writing
that there is a conflict of interest between the indemnifying party and the
party seeking indemnification in the conduct of the defense of the action (in
which case the indemnifying party shall not have the right to direct the defense
of the action on behalf of the party seeking indemnification), or (c) the
indemnifying party has not in fact employed counsel to assume the defense of the
action within a reasonable time following receipt of the notice given pursuant
to this Section, in each of which cases the fees and expenses of such counsel
shall be at the expense of the indemnifying party. The indemnifying party shall
not be liable for any settlement of an action effected without its written
consent (which consent shall not be unreasonably withheld), nor shall the
indemnifying party settle any such action without the written consent of the
party seeking indemnification (which consent shall not be unreasonably
withheld). The indemnifying party shall not consent to the entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the party seeking
indemnification a release from all liability with respect to the claim. Each
party shall cooperate in the defense of any claim for which indemnification is
available and shall furnish such records, information, testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may
reasonably be requested by the other party.
(d) INSURANCE. At its expense, Operator will secure and
maintain with financially reputable insurers not less than the following
insurance: (a) "All Risk" property insurance covering the Advanced Wireless
Services Transmission Facilities for their full replacement value, (b)
Commercial General Liability insurance covering liability resulting from
Operator's operation of the Advanced Wireless Services Transmission Facilities
with limits of not less than $1,000,000 combined single limit per occurrence for
bodily injury and property damage liability and $2,000,000 annual aggregate, (c)
in the event that Operator transmits any Operator-selected content, errors and
omissions insurance; and (d) Workers' Compensation, Business Auto liability and
other insurance as required by law. Licensee must be named as an additional
insured or loss payee, as appropriate, on the above referenced insurance (except
Workers' Compensation). Such insurance must be primary to any coverage that
Licensee carries. A certificate of insurance must be delivered to Licensee
evidencing that the above coverage is in effect and will not be canceled or
materially altered without first giving Licensee thirty (30) days' prior written
notice. Renewal certificates must be delivered prior to the expiration of the
term thereof. Notwithstanding any other provision of this Agreement, Operator
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
shall not be required to provide any insurance coverage for the facilities
associated with the Contingent Reserved Capacity.
(e) WAIVER OF SUBROGATION. Anything in this Agreement to the
contrary notwithstanding, neither Licensee nor Operator will be liable to the
other or to any insurance company insuring the other party (by way of
subrogation or otherwise) for any loss or damage to any structure, building,
equipment or other tangible property, or any resulting loss of income, even
though such damage or loss might have been occasioned by the negligence of
Licensee or Operator or any of their agents or employees, if any such loss or
damage is covered by insurance benefiting the party suffering such loss or
damage, or was required of such party to be covered by insurance pursuant to
this Agreement, but only to the extent such loss is or should have been covered
by such insurance.
(f) LIMITATION OF LIABILITY. Operator, its affiliates,
directors, officers, employees or agents shall not be responsible or liable to
Licensee for any indirect, incidental, consequential, special, exemplary,
punitive or other damages, or for any loss of profits, loss of revenue, loss
resulting from interruption of business or loss of use or data, even if
Operator, its affiliates, directors, officers, employees or agents have been
advised of the possibility of such damages, and notwithstanding any failure of
essential purpose of any limited remedy of any kind, under any contract,
negligence, strict liability or other theory, arising out of or relating in any
way to this Agreement or its implementation. In no event shall the total
collective liability of Operator, its affiliates, directors, officers, employees
and agents arising out of or relating in any way to this Agreement or its
implementation exceed the royalty payments that are remaining to be paid to
Licensee under Section 7(a) hereof, for the remainder of the then-current
Initial Term or Renewal Term.
14. NO JOINT VENTURE.
Notwithstanding any other provisions of this Agreement, the parties
intend by this document to enter a use agreement and not to create a joint
venture and will carry out this Agreement to preserve that intent. Neither party
is, nor shall either party hold itself out to be, vested with any power or right
to contractually bind, act on behalf of the other as its contracting broker,
agent or otherwise for committing, selling, conveying or transferring any of the
other party's assets or property, contracting for or in the name of the other
party, or making any contractually binding representations as to the other party
that shall be deemed representations contractually binding upon such party.
15. PROVISION OF EBS CONTENT.
Licensee shall be solely responsible for providing and monitoring any
educational content that is transmitted over the Channels. The content shall be
transmitted in the form in which it is provided by Licensee, and Operator shall
have neither the right nor the obligation to edit, enhance, correct or otherwise
change or monitor the content. Upon receipt of the notice specified in Section
4(d), Operator shall not be responsible for any transmissions pursuant to the
Contingent Reserved Capacity.
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EXHIBIT 1.47
16. FORCE MAJEURE.
Neither Licensee nor Operator shall be deemed in default or otherwise
liable hereunder due to either party's inability to perform (except with respect
to any obligation to make payment of money, which shall not be affected) by
reason of any fire, earthquake, flood, substantial snowstorm, epidemic,
accident, explosion, casualty, strike, lockout, labor controversy, riot, civil
disturbance, act of public enemy, embargo, war, Act of God, or any municipal,
county, state or national ordinance or law, or any executive, administrative or
judicial order (which order is not the result of any act or omission that would
constitute a default hereunder), or the failure of any municipal, county, state
or national agency or department, including without limitation the FCC, to act
in a timely manner on any application or request before such agency which would
permit the performance of the party hereto, or the inability of Licensee or
Operator to obtain the necessary consents, after use of commercially reasonable
efforts, of third parties to the performance of the party hereto, or any failure
or delay of any transportation, power or other essential thing required, or
similar causes beyond either party's control.
17. FCC POLICY.
This Agreement shall at all times be subject to and construed in
accordance with the FCC Rules and the Communications Act of 1934, as amended
(the "Communications Act").
18. CONFIDENTIAL INFORMATION.
Pursuant to this Agreement and the performance thereof, Licensee may
receive non-public proprietary information relating to the plans and/or
operations of Operator and its affiliates, parents and subsidiaries
("Confidential Information"). Confidential Information includes, but is not
limited to, information regarding vendors, customers and lender arrangements,
line-of-sight and other customer calculations, leasing terms and arrangements,
product/service specifications, prototypes, computer programs, models, drawings,
acquisition plans, financing plans and arrangements, marketing plans, business
plans, financial data, personnel statistics and any similar non-public or
otherwise confidential or sensitive information. Licensee shall not use for
itself, except in performance of the Agreement, or disclose to any third person,
firm, corporation or other entity this Agreement or any Confidential
Information, except (a) information that was gained independent of Licensee's
relationship with Operator and become publicly available through no breach of
any obligation of confidentiality by Licensee; (b) information that is
communicated to a third party with the prior written consent of Operator; or (c)
information that is required to be disclosed pursuant to the lawful order of a
government agency or disclosure that is required by operation of law, but in
such event, only to the extent such disclosure is required and, to the extent
reasonably practicable, prior written notice must be given to allow Operator to
seek a protective order or other appropriate remedy. In the event of a beach or
threatened breach of the terms of this Section, Operator shall be entitled to
seek an injunction prohibiting any such breach. Any such injunctive relief shall
be in addition to, and not in lieu of, any appropriate relief in the way of
money damages or any other remedies available at law or in equity. Operator may
disclose this Agreement to its affiliates, strategic partners, actual or
potential investors, lenders, acquirers, merger partners, and others whom
Operator deems in good faith to have a need to know such information for
purposes of pursuing a transaction or
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
business relationship with Operator, so long as Operator secures an enforceable
obligation from such third party to limit the use and disclosure of Confidential
Information as provided herein.
19. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be effective upon receipt, in each case addressed:
If to Licensee, to: ______________________________
c/o Hispanic Information and
Telecommunications Network, Inc.
000 Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx Xxxxxxxxx
Fax: (000) 000-0000
With a copy to: Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
and
RJGLaw LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
If to Operator, to: Fixed Wireless Holdings, LLC
00000 XX Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to: Xxxxx Xxxxxx Xxxxxxxx, LLP
0000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
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20. ASSIGNMENT/TRANSFER OF CONTROL.
(a) ELIGIBILITY FOR TRANSFER OR ASSIGNMENT. Licensee shall not
assign its interest in this Agreement or the License to any person or entity
that is not eligible or qualified to hold the License or lease the spectrum
under applicable FCC Rules. Operator shall not assign its interest in this
Agreement and will not enter into spectrum subleasing arrangements for the
spectrum subject to the License with any person or entity that is not eligible
or qualified to lease the spectrum under applicable FCC Rules.
(b) OPERATOR ASSIGNMENT. Pursuant to Section 1.9030(g) of the
FCC Rules, Operator may assign this Agreement to another entity, provided that
(in the case of assignments that are not pro-forma) Licensee has consented to
such assignment (such consent not to be unreasonably withheld, delayed or
conditioned), there is privity between Licensee and the assignee (i.e., the
assignee agrees in writing to assume Operator's obligations under this
Agreement), and the assignment of the Agreement is approved by the FCC after the
parties file an FCC Long Term Lease Application. Pursuant to Section 1.9030(h)
of the FCC Rules, Operator may undergo a transfer of control (other than a pro
forma transfer of control) during the Term of this Agreement, provided it first
obtains FCC consent by filing an FCC Long Term Lease Application. Upon
assignment or transfer of this Agreement by Operator pursuant to the foregoing,
the assignee or transferee will be solely responsible for the obligations of
Operator hereunder and Operator shall be relieved and discharged of all
responsibilities, liabilities and obligations. Each party shall be entitled,
without the consent of the other party, to undertake a pro forma assignment or
transfer of this Agreement, or its rights hereunder, and shall provide notice to
the other party and notice to the FCC as required by Sections 1.9030(g) and (h).
(c) LICENSEE ASSIGNMENT. Subject at all times to Operator's
right to purchase the License if the FCC determines to open eligibility for EBS
spectrum (as set forth in Section 21(a) hereof), Licensee may, during the Term,
assign its License or individual Channels to a qualified EBS eligible, or
discontinue EBS operations and surrender its License to the FCC, subject to the
following: Licensee shall notify Operator immediately upon making such decision,
Licensee shall not discuss such decision with any third parties without
Operator's written consent, and Licensee shall assign any affected Channels or
the License to an FCC-qualified entity designated by Operator who will assume
the Channels or License and assume Licensee's obligations under this Agreement
(a "Successor Licensee"). Licensee, Successor Licensee and Operator shall
cooperate in filing with the FCC any and all paperwork necessary to assign the
license to the Successor Licensee and receive continued FCC consent, if
necessary, to the long term de facto spectrum leasing arrangement reflected in
this Agreement.
(d) OPERATOR SUBLEASE. Operator shall have the right to
sublease capacity on the Wireless System (but not sublease any of the Channels
apart from its operation on the Wireless System) in accordance with FCC Rules
after receiving FCC consent by filing an FCC Long Term Lease Application.
Licensee shall provide its written consent to such subleasing which Operator may
submit to the FCC, and Licensee will reasonably cooperate with Operator to
effect any such sublease; provided however, that Operator shall bear all
reasonable costs and expenses associated with any such sublease, and no such
sublease shall relieve Operator of any responsibility for compliance with all of
Operator's obligations under this Agreement.
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EXHIBIT 1.47
(e) NONCOMPETITION. During the Term of this Agreement,
Licensee shall not, either itself or with a third party other than Operator,
engage in any commercial or for-profit activities utilizing any of the Channels
that directly compete with Operator or its affiliates; provided, however, that
any relationship between Licensee and any Permitted End User relating to the use
by such Permitted End User of Advanced Wireless Services shall not be deemed to
be in violation of the foregoing restriction. During the Term of this Agreement,
and except as contemplated herein, Licensee shall not lease, sublease, pledge,
encumber or otherwise permit or grant any current rights with respect to use of
the Channels, in whole or in part. Without limiting the foregoing, Licensee
shall not resell or otherwise provide services to any end user that is not a
Permitted End User.
(f) LICENSEE RELEASE. Upon the valid consummation of the sale,
assignment or transfer of the License to any third party as described in this
Section, the execution by such third party of an assignment and assumption
agreement with respect to this Agreement, and the expiration of any applicable
FCC reconsideration periods for such assignment or transfer: (i) Licensee will
be released and discharged from all obligations to Operator arising thereafter;
and (ii) Licensee will not incur any penalties as a result of and will not be
responsible for any of Operator's expenses associated with the sale, assignment
or transfer, except that nothing shall release Licensee from any liabilities
incurred prior to the execution of such assignment and assumption agreement.
21. OPTIONS TO PURCHASE AND SELL THE LICENSE.
(a) OPERATOR'S OPTION TO PURCHASE. Licensee grants to Operator
an option (the "Option") to acquire, or to designate an FCC qualified entity to
acquire, from Licensee all of Licensee's right, title and interest in and to the
License, free and clear of all Liens. The Option may be exercised at any time
during the Term and ten (10) years thereafter (the "Expiration Time"). If, prior
to the Expiration Time, Operator intends to exercise the Option, Operator shall
provide written notice of its intent to Licensee, and if the License is to be
purchased pursuant to the option by an FCC qualified entity designated by
Operator, then such notice shall identify such entity. Upon delivery of such
notice, each party shall use its reasonable best efforts to cause the sale of
the License to occur as soon as possible. Should Operator (or an FCC qualified
entity designated by Operator) exercise the Option, then the purchase will close
upon the grant of the FCC's approval of the assignment of the License to
Operator (or an FCC qualified entity designated by Operator). At such time,
Operator shall pay to Licensee [ Dollars ($_______________)] in immediately
available funds wired to an account designated by the Licensee and Licensee
shall deliver to Operator (or to the FCC qualified entity designated by
Operator) an instrument of assignment of the License in a form reasonably
satisfactory to Operator. Notwithstanding the other provisions of this Section
21(a), Operator agrees that it will not exercise the Option and designate an
alternative non-profit entity qualified to hold EBS licenses to acquire the
License from Licensee, unless or until (i) Licensee defaults under this
Agreement and fails to cure such default within the time period given hereunder,
if any; (ii) a change of control of Licensee has occurred; or (iii) such time as
to refrain from exercising such Option and designating a non-profit entity
qualified entity to hold such EBS license would be harmful to Clearwire's
commercial or competitive interests. For the purposes of this Section 21(a), a
change of control of Licensee shall occur if (A) more than fifty percent (50%)
of the members of the board of directors of Licensee as of the date of this
Agreement have either resigned or been
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
replaced or (B) Xxxx Xxxx Xxxxxxxxx is no longer the President and Chief
Executive Officer of Licensee.
(b) SALE OF LICENSE AT AUCTION. Subject at all times to
observing the FCC's anti-collusion rules, in the event the FCC determines to
hold an auction pursuant to which EBS licenses are auctioned, Licensee and
Operator shall cooperate and agree upon whether the License will be submitted as
part of the auction. Licensee shall not submit the License for potential sale at
the auction without the prior written consent of Operator. In the event the
parties agree that the License may be auctioned and sold to a third party, the
parties agree that in consideration of Operator's sole and substantial financial
investment in developing, constructing and operating the Channels and the
Wireless System, Licensee will retain Five Thousand Dollars ($5,000) of the sale
price for the License sold, and immediately pay the remainder to Operator. In
the event that any Channel or the License is sold at auction, Licensee shall
cause: (i) the transferee of such Channel or License to unconditionally agree in
writing to assume Licensee's obligations under this Agreement with respect to
any such Channel or the License; and (ii) the written instrument described in
the foregoing subsection shall provide that Operator will be a third-party
beneficiary of such instrument.
22. WAIVERS.
Any waiver by any party of any breach of or failure to comply with any
provision of this Agreement by the other party shall not be construed as or
constitute a continuing waiver of such provision, or a waiver of any other
breach of, or failure to comply with, any other provision of this Agreement.
23. COMPLETE AGREEMENT.
Except for the terms of service and acceptable use policy referenced in
Section 5(f)(2) hereof, which govern the use of the Advanced Wireless Services,
this Agreement sets forth the entire understanding of the parties hereto and
supersedes all prior agreements, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any party (or any
officer, employee or representative of any party).
24. CONSTRUCTION.
The parties intend that the Wireless System of which the Channels will
form a part will, subject to required FCC authorizations and FCC Rules, provide
an array of services selected by Operator in accordance with its business plan,
as such business plan may evolve from time to time, and the parties anticipate
that the architecture of the Wireless System and its service set will evolve in
accordance with technological developments and Operator's plans to employ
technological developments in its business. Accordingly, it is the intention and
the agreement of the parties that this Agreement shall be understood and
interpreted in an expansive fashion to adapt to and permit the utilization of
such changes in technology, consistent with applicable legal requirements and
the parties' rights hereunder. The headings of the Sections of this Agreement
are inserted for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this Agreement
to Sections refer to the Sections of this Agreement.
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EXHIBIT 1.47
25. AMENDMENT.
This Agreement may not be amended or modified orally but only by an
instrument in writing duly executed by the parties.
26. COUNTERPARTS.
More than one counterpart of this Agreement may be executed by the
parties hereto, and each fully executed counterpart shall be deemed an original.
27. SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. In the event that any provision of this Agreement is determined to be
invalid, unenforceable or otherwise illegal, such provision will be deemed
restated, in accordance with applicable law, to reflect as nearly as possible
the original intentions of the parties, and the remainder of the Agreement will
be in full force and effect.
28. ARBITRATION.
(a) If the parties are unable to resolve any dispute, including without
limitation disputes regarding a breach or default under this Agreement (each a
"Dispute"), the parties shall arbitrate such Dispute pursuant to the rules set
forth in this Section 28.
(b) Any such matter shall be resolved by a single arbitrator (the
"Arbitrator"). In the event of a Dispute, either party may request that the
Dispute be resolved by initiating arbitration proceedings in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
modified by this Section 28 or as agreed by the parties. The parties agree that
discovery in any arbitration proceeding shall be of the type provided by the
Washington State Rules of Civil Procedure, pursuant to any schedule established
by the Arbitrator. Pre-hearing disclosures, briefs and other filings shall be at
the discretion of the Arbitrator. The parties agree that the Arbitrator shall
have no jurisdiction to consider evidence with respect to or render an award or
judgment for punitive damages (or any other amount awarded for the purpose of
imposing a penalty).
(c) The arbitration hearing shall take place in Seattle, Washington.
The Washington 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
Arbitrator will have no power to amend or disregard any provision of this
Agreement, including without limitation the provisions of this Section 28.
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
(d) Within thirty (30) days after the closing of the
arbitration hearing, the Arbitrator will prepare and provide to the parties an
award (the "Award") which shall be a writing setting forth the Arbitrator's
finding of facts and any conclusions of law relating to the Dispute, including
the reasons for the decisions contained in the Award. The Award shall be deemed
to be information subject to the confidentiality provisions of this Agreement.
(e) The Award will be final, but all or any part of the Award
may be appealed by either party to a court of competent jurisdiction located in
King County, Washington for a trial de novo of the Dispute, including but not
limited to all factual findings and legal conclusions addressed by the
Arbitrator. Any such appeal must be made by the initiation of an action with a
court of competent jurisdiction located in King County, Washington within thirty
(30) days following the parties receipt of the Award. Any appeal taken under
this section shall include all rights of appeal from the trial court to
appropriate courts of appeal.
(f) This Agreement and all terms and conditions contained
herein shall remain in full force and effect during any arbitration pursuant to
this Section 28 and all appeals thereof until a final, non-appealable
determination of all issues is made or the parties otherwise finally settle all
issues of the Dispute by a binding settlement agreement. Any termination under
Section 12 for an Event of Default or otherwise shall be stayed during the
arbitration and all appeals thereof.
(g) Each party will bear an equal one-half of all fees, costs
and expenses of the Arbitrator, and notwithstanding any law to the contrary,
each party will bear all the fees, costs and expenses of its own attorneys,
experts and witnesses, in arbitration, trial de novo or any appeal therefrom.
(h) Notwithstanding anything to the contrary in this Section
28, either party may seek injunctive relief from a court of competent
jurisdiction located in King County, Washington (in accordance with Section 30)
at any time without complying with the foregoing provisions.
29. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington applicable to contracts made and wholly
performed within Washington by persons domiciled in Washington.
30. SPECIFIC PERFORMANCE.
The parties acknowledge and agree that the rights reserved to each of
them hereunder are of a special, unique, unusual and extraordinary character,
and that irreparable harm would occur in the event that any of the agreements
and provisions of this Agreement were not performed fully by the parties hereto
in accordance with their specific terms or conditions or were otherwise
breached, and that money damages are an inadequate remedy for breach of the
Agreement because of the difficulty of ascertaining and quantifying the amount
of damage that will be suffered by the parties hereto in the event that this
Agreement is not performed in accordance with its terms or conditions or is
otherwise breached. It is accordingly hereby agreed that each
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 1.47
party hereto shall be entitled to an injunction or injunctions to restrain,
enjoin and prevent breaches of this Agreement by the other party and to enforce
specifically such terms and provisions of this Agreement in any state or federal
court of the United States, such remedy being in addition to and not in lieu of,
any other rights and remedies to which the other parties are entitled to at law
or in equity. The non-prevailing party shall pay its own expenses, court costs
and the expenses, including without limitation, attorneys' fees and costs, and
expert witness fees incurred by the other party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
FIXED WIRELESS HOLDINGS, LLC
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT 1.47 - EBS EXCESS CAPACITY USE AND ROYALTY AGREEMENT
EXHIBIT 3.10(h)
JOINDER AGREEMENT
This Joinder Agreement ("Joinder") is made and entered into this
___ day of ___________________, 20_____, by and between Clearwire Corporation, a
Delaware corporation (the "Company"), and the party whose signature appears
below ("Newco").
Reference is made to that certain Spectrum Access and Loan Facility
Agreement dated May_______, 2005, (the "Loan Facility Agreement") by and among
the Company, Hispanic Information and Telecommunications Network, Inc., and HITN
Spectrum, LLC ("Holdco"). The Loan Facility Agreement requires Newco to deliver
this Joinder.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Newco hereby consents and agrees to become a party to and be bound
by the Loan Facility Agreement as fully as if Newco were one of its original
parties. Newco hereby acknowledges receipt of a copy of the Loan Facility
Agreement.
2. Newco hereby agrees that all representations, warranties and
covenants under the Loan Facility Agreement that apply to Holdco shall also
apply to Newco in the same fashion. Without limiting the foregoing, Newco hereby
makes all of the representations and warranties in Section 4 of the Loan
Facility Agreement as Holdco has made therein and Newco hereby agrees to be
bound by all of the covenants in Sections 6 and 7 of the Loan Facility Agreement
as Holdco has agreed to be bound by therein.
3. All terms and conditions of the Loan Facility Agreement remain in
full force and effect.
4. 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 Washington, without
reference to any rules governing conflicts of laws.
5. 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 and
the same agreement.
Each party has caused this Joinder Agreement to be duly executed
personally or by its duly authorized officer or representative on the date first
above written.
COMPANY: JOINING PARTY:
CLEARWIRE CORPORATION, [NEWCO, LLC],a Delaware limited
a Delaware corporation liability company
By: By:
---------------------------- ----------------------------
Xxxxxxxx X. Xxxxx Name:
Executive Vice President --------------------------
Title:
-------------------------
EXHIBIT 3.10(h) - JOINDER AGREEMENT
