EXHIBIT 10.15
ITFS CAPACITY USE AND ROYALTY AGREEMENT
THIS ITFS CAPACITY USE AND ROYALTY AGREEMENT (this "Agreement") is made
this 13th day of November, 2003 by and between (i) HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC., a New York not-for-profit corporation
("Licensee") and (ii) FIXED WIRELESS HOLDINGS, LLC, a Delaware limited liability
company ("Operator"). Licensee and Operator are referred to individually without
distinction as a "Party" and collectively as the "Parties."
RECITALS:
WHEREAS, the Federal Communications Commission (including any successor to
its functions and powers, "FCC") allows Instructional Television Fixed Service
(including any name then used by the FCC for such radio service after the date
of the Spectrum Agreement, "ITFS") stations to be used for commercial purposes;
WHEREAS, Licensee holds an FCC authorization with the call sign listed on
Exhibit A (the "License", including any associated authorizations other than
I-channel authorizations, the "Licenses") to operate the six (6) MHz ITFS
channels listed on Exhibit A (each such channel, is referred to individually as
an "ITFS Channel," and collectively as the "ITFS Channels") in the metropolitan
area where the ITFS Channels are authorized to operate as listed on Exhibit A
(the "Market Area");
WHEREAS, Operator desires to provide digital wireless services to
customers and to use the transmission capacity of the ITFS Channels for these
purposes;
WHEREAS, Operator may enter into capacity use agreements with other ITFS
and/or Multipoint Distribution Service (including any name then used by the FCC
for such radio service after the date of the Spectrum Agreement, "MDS")
licensees and applicants in the Market Area, may be the licensee of MDS and ITFS
channels in the Market Area and may use other radio frequencies, including
unlicensed spectrum in the Market Area (the radio transmission and receive
facilities in the Market Area using ITFS, MDS and other channels leased or
licensed to Operator or any of its Affiliates or otherwise made available to
Operator or any of its Affiliates for operation within the Market Area,
including signal input facilities, are referred to collectively as the
"System");
WHEREAS, Licensee and Operator are parties to that certain Master Spectrum
Acquisition Agreement dated November __, 2003 between Licensee and Flux U.S.
Corporation (the "Spectrum Agreement"), providing for additional rights and
obligations between Licensee and Operator;
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WHEREAS, the excess transmission capacity of the ITFS Channels is
available for commercial and/or secondary purposes, consistent with the
Communications Act of 1934, as amended, and the rules, regulations and policies
of the FCC (collectively "FCC Rules"); and
WHEREAS, Licensee is licensed under the Federal Communications Commission
to disseminate its programming in the Instructional Television Fixed Service and
Operator wishes to utilize Licensee's capacity pursuant to FCC Rules.
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and undertakings set forth herein, Licensee and Operator agree as follows:
1. TERM OF AGREEMENT.
Subject to PARAGRAPHS 8 AND 9 of this Agreement, the term of this
Agreement shall begin on the date hereof (the "Effective Date") and shall expire
on the fifteenth (15th) anniversary of that date ("Initial Term"). If the FCC
Rules should, at any time and from time to time, permit lease or use terms in
excess of fifteen (15) years, then upon the expiration of the Initial Term, if
Operator is not then in default under this Agreement, this Agreement will
automatically renew for such number of additional terms of one (1) year each, as
is permitted by the FCC (during the Initial Term or any Renewal Term), not to
exceed a maximum term of thirty (30) years (each a "Renewal Term"); provided
that this Agreement may be terminated by Operator at the expiration of the
Initial Term or upon each Renewal Term, if Operator provides written notice to
Licensee not less than ninety (90) days prior to the last day of the preceding
term. The Initial Term together with all Renewal Terms shall be referred to as
the "Term". The terms and conditions of this Agreement for each Renewal Term
shall be identical to the terms and conditions for the Initial Term.
2. ALLOCATION AND USE OF TRANSMISSION CAPACITY.
a) DISTRIBUTION OF CAPACITY PRIOR TO TWO WAY OPERATIONS.
(i) Transition from Legacy Operations to Two-way Operations. The
provisions of this SUBPARAGRAPH 2(a) shall be effective from
the Effective Date until the date transitional operations
provided for under this SUBPARAGRAPH 2(a) are discontinued,
and the provisions of SUBPARAGRAPHS 2(c) THROUGH (p) shall be
effective from the Start Date until the termination of this
Agreement.
(1) Provision and Operation of Equipment. Promptly after the
Effective Date, Operator, at its expense, shall procure
and construct such equipment and facilities as are
required to
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operate the ITFS Channels in accordance with the
Licenses, and for Licensee to continue such services as
it last provided prior to the Effective Date, whether
pursuant to any prior provision of the transmission
capacity of the ITFS Channels (a "Prior Use Agreement")
to a third party (a "Prior User") or otherwise,
including program input and video equipment. Once
constructed, Operator shall operate and maintain such
equipment and all subscriber stations in service as of
the Effective Date used in conjunction with Licensee's
services, at Operator's expense, in accordance with
PARAGRAPH 3 and in accordance with SUBPARAGRAPH 6(c) as
though such subscriber response stations were Primary
Response Stations. Operator also shall procure and shall
bear all expenses under all site leases.
(2) Right to Buy and Use Legacy Equipment under Prior Use
Agreement or Otherwise.
(A) To the extent that Licensee owns, or has the right
to use or possess, as of the Effective Date and
apart from any Prior Use Agreement, the whole or
any portion of the transmission, hub site
reception, response station, program input
equipment or other equipment used to operate the
ITFS Channels in the Market Area prior to the
Effective Date (any such equipment referred to as
"Licensee Legacy Equipment"), Licensee agrees to
make such Licensee Legacy Equipment available to
Operator, at no additional cost to Operator, for
use in the provision of ITFS services contemplated
under this SUBPARAGRAPH 2(a) to the extent
Licensee is able to do so without violating the
terms of any agreement creating such right to use
or possess.
(B) If the Prior Use Agreement provides Licensee with
a right existing on the Effective Date to purchase
the whole or any portion of the transmission
and/or hub site reception equipment used by the
Prior User or equipment in replacement thereof
(the "Prior User Legacy Equipment," together with
the Licensee Legacy Equipment, the "Legacy
Equipment"), Licensee shall either exercise such
right (any such purchase, a "Licensee Purchase")
or Licensee shall promptly give Operator notice
that Licensee does not intend to exercise such
right. Unless Operator intends to cause the Start
Date to occur so early
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that Operator does not have a need to use such
Prior Use Legacy Equipment, if Licensee gives such
notice, Operator shall tender to Licensee notice
that Operator desires Licensee to exercise such
right and Operator shall tender to Licensee such
immediately available funds as are required to
exercise and consummate such right by the date
that is five (5) days (or if five days is not
available, such reasonable time) before the time
stated in the Prior Use Agreement by which
Licensee must take any action to exercise such
right of purchase (the "Equipment Notice Date"),
and Licensee shall use commercially reasonable
efforts, all at Operator's expense, to purchase
such Prior User Legacy Equipment on behalf of
Operator (an "Operator Purchase") in accordance
with the terms of such purchase right; provided,
however, Licensee shall not be required to, absent
its consent (which consent will not be
unreasonably withheld or delayed), and Licensee
shall not without Operator's prior written
consent, invoke judicial processes, invoke
arbitral processes or take any other extraordinary
action to require the Prior User's observance of
such right. In the event that Licensee purchases
the Prior User Legacy Equipment in accordance with
this SUBPARAGRAPH 2(a)(i)(2)(B), the Prior User
Legacy Equipment shall be used by Operator to
commence operation or continue operation, as
applicable, of the ITFS Channels in accordance
with SUBPARAGRAPH 2(a)(i)(1). In the event of a
Licensee Purchase, Licensee shall hold title in
the Prior User Legacy Equipment, but Operator may
use such equipment pursuant to the provisions of
this SUBPARAGRAPH 2(a) and FCC Rules. In the event
of an Operator Purchase) title shall be held by
Operator and, if used to operate the ITFS
Channels, such equipment shall be deemed leased to
Licensee for One Dollar ($1.00) per year subject
to the provisions of this SUBPARAGRAPH 2(a). If
Operator does not provide notice that Operator
desires Licensee to exercise such purchase right
or fails to tender to Licensee such funds by the
Equipment Notice Date, Licensee may purchase the
whole or any part of the Prior Use Legacy
Equipment free of any and all rights of Operator
thereto, and Licensee may use such equipment for
any purpose, provided, in the event of such
purchase, Licensee shall promptly remove acquired
Prior User Legacy Equipment from any Transmission
site
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then being utilized by Operator to provide
transition services.
(C) If (x) the Prior Use Agreement provides Licensee
with a right existing on the Effective Date to
continue to use any of the Prior User Legacy
Equipment, in lieu of or in addition to any right
to purchase the same, or to otherwise occupy any
one or more transmitter and/or hub reception sites
for the ITFS Channels for any period after the
expiration or termination of the Prior Use
Agreement (a "Hold-over Right"), and (y) Operator
shall tender to Licensee notice that Operator
desires Licensee to exercise such right and
Operator shall tender to Licensee such immediately
available funds as are required to exercise and
consummate such right by the date that is five (5)
days before the time stated in the Prior Use
Agreement by which Licensee must take any action
to exercise the Hold-over Right (the "Hold-over
Right Notice Date"), then Licensee shall use good
faith efforts, all at Operator's expense, to
exercise the Hold-over Right in accordance with
the terms of such right; provided, however,
Licensee shall not be required to, absent its
consent, and Licensee shall not without Operator's
prior written consent, invoke judicial processes,
invoke arbitral processes or take any other
extraordinary action to require the Prior User's
observance of such right; provided, further,
Licensee shall not be required to exercise such
Hold-over Right if such Hold-over Right is not
available or will be precluded because of the
existence of this Agreement. In the event that
periodic payments are required under the Prior Use
Agreement in exchange for the Hold-over Right,
Operator shall tender such payments to Licensee
reasonably in advance of their due dates to allow
Licensee to make such payments to the Prior User
via U.S. mail, and if such payments are so
tendered, Licensee shall timely make such
payments. If the exercise of the Hold-over Right
is an alternative, in whole or in part, to the
exercise of any option to purchase the Prior User
Legacy Equipment, then Operator may require
Licensee to exercise the rights in this
SUBPARAGRAPH 2(a)(i)(2)(C) to the extent that the
exercise of such rights would not conflict with
the exercise of the rights in SUBPARAGRAPH
2(a)(i)(2)(B).
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(D) In the event that Licensee exercises the Hold-over
Right, Licensee may restrict Operator's access to
the equipment at the Hold-over Right sites to the
extent required by the permission under which
Licensee continues to have access to such sites,
but Licensee shall cooperate with Operator, at
Operator's expense, to cause repair, maintenance
and installation personnel to have access as is
permissible to the site(s).
(E) Upon request by Operator, Licensee agrees to
cooperate, at Operator's expense, with Operator in
negotiations with a Prior User to obtain access to
equipment or transmission sites on a transitional
basis in order to minimize the costs of transition
services provided by Operator pursuant to this
SUBPARAGRAPH 2(a), consistent with any rights of
Licensee described in this SUBPARAGRAPH 2(a).
(F) Subject to SUBPARAGRAPH 2(a)(i)(2)(D), Operator
shall maintain, repair and replace any equipment
operated pursuant to this SUBPARAGRAPH 2(a) as
required for it to operate in accordance with
manufacturers' specifications and FCC Rules.
(ii) Within thirty (30) days of any request by Licensee, Operator
shall cease using and shall return to Licensee such Licensee
Legacy Equipment and Prior Use Legacy Equipment as requested
by Licensee in such notice (the "Identified Legacy
Equipment"). If the Identified Legacy Equipment is Prior User
Legacy Equipment constituting an Operator Purchase, Licensee
shall reimburse Operator the amount Operator actually paid the
Prior User for such equipment, minus any depreciation
accumulated during the period held by Operator for such
equipment within sixty (60) days of Licensee's receipt of such
equipment. The Identified Legacy Equipment shall be shipped by
Operator to such domestic location as named in Licensee's
notice and shall be delivered to Licensee in good operating
condition subject to normal wear and tear. If the removal of
such equipment would render any station operating on the ITFS
Channels inoperable, in whole or part, Operator shall, at
Operator's expense, replace such equipment on the day it is
dismantled with comparable equipment that meets the
requirements of FCC Rules and the applicable License.
(iii) Distribution of Capacity Prior to Start Date. The full
capacity of the ITFS Channels, including all associated
response channels (if any), shall
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be allocated to Licensee from the Effective Date until the
Start Date, provided Licensee shall, upon request by Operator,
permit Operator to enter into subleases of video excess
capacity to third parties in conformity with FCC Rules in
order to defray the costs of the analog transition services
provided by Operator pursuant to this SUBPARAGRAPH 2(a). All
proceeds from any such sublease shall be paid to and retained
by Operator. To comply with FCC Rules in the event of such
sublease, and in addition to such other requirements as may be
imposed by the FCC for such subleasing, all of which
requirements shall be satisfied by Operator at its sole
expense, either (x) a full ITFS Channel shall be reserved to
Licensee at the Primary Transmission Site during any such
sublease if requested by Licensee (the "Full Channel Option")
or (y) Licensee shall have reserved to Licensee such number of
hours in a week on one ITFS Channel as equals the product of
the number of ITFS Channels and twenty (20) (with such hours
falling during those times when schools ordinarily are in
session) (the "Partial Channel Option"). Operator, at its
expense, shall transmit educational programming provided by
Licensee for transmission over such ITFS Channel full-time, if
the Full Channel Option is selected, or for the specified
number of hours per week, if the Partial Channel Option is
selected. Further, during any such sublease, if the Partial
Channel Option is selected, Licensee shall have the
unabridgeable right to recapture, subject to six (6) months'
advance written notification by Licensee to Operator, an
average of an additional twenty (20) hours per ITFS Channel
per week. In the event that the sublease involves any Licensed
Booster Station or Unlicensed Booster Station in addition to a
Primary Transmission Site, Operator may sublease the entire
capacity of such booster station but Licensee shall maintain
the unabridgeable right to ready recapture at least forty (40)
hours per ITFS Channel per week for Licensee's services.
(iv) Digital Transition. Licensee shall cooperate with Operator's
efforts to plan for, construct and test the System at
Operator's expense prior to the Start Date, such cooperation
including the limitation of legacy operations as reasonably
requested by Operator for the purpose of System tests.
Licensee and Operator shall cooperate so as to minimize the
adverse impact on Licensee and its services of any such change
in the facilities or operating on the ITFS Channels. Licensee
shall be responsible for assisting its existing end users in
connection with the transition to digital transmission,
subject to Operator's obligations to provide equipment or
services expressly provided in this Agreement.
b) OPERATOR'S DIGITAL NETWORK.
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(i) Subject to SUBPARAGRAPHS 3(b)(i) AND (ii), Operator will use
reasonable efforts to prepare FCC applications for two-way
facilities in the Market Area as soon as possible, subject to
Operator's overall business development plans approved by the
Board of Directors of Operator, or to the extent applicable,
by the Board of Directors of Operator's ultimate parent, and
consistent, to the extent reasonably achievable, with the
educational objectives of Licensee which involve the System.
Operator will use reasonable efforts to notify Licensee in
writing at least ninety (90) days prior to its plans to begin
developing two-way facilities in the Market Area, and to
submit written updates to Licensee of any material changes to
such plans, until such time that Operator has launched
services to the public in the Market Area. Subject to
SUBPARAGRAPH 3(b)(ii), the timing of such construction will be
at Operator's discretion, provided the construction shall be
consistent with the Licenses and FCC Rules.
(ii) The Parties intend that the System of which the ITFS Channels
will form a part will, subject to required FCC authorizations
and FCC Rules, provide an array of services and
functionalities 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
System and its service set will evolve in accordance with
technological developments and Operator's plan 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 such changes in technology, so as to give
effect to the original intent of the Parties as closely as
possible in order that the provisions hereof are given effect
as originally contemplated to the greatest extent possible.
(iii) Subject to SUBPARAGRAPH 3(b)(ii), at such time as Operator
determines to construct a two-way system in the Market Area,
Operator shall notify Licensee and consult with Licensee on
the schedule. The date on which Operator commences digital
commercial operations on any ITFS Channel authorized by
special temporary or regular authority to Licensee in the
Market Area shall be deemed to be the "Start Date."
c) OPERATOR'S CAPACITY. Subject to FCC Rules, commencing on the Start
Date, Licensee hereby provides to Operator all transmission capacity
associated with the ITFS Channels ("Operator's Capacity"), other
than such
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capacity on the ITFS Channels as is allocated to Licensee's
Educational Reservation under SUBPARAGRAPH 2(d).
d) LICENSEE'S EDUCATIONAL RESERVATION.
(i) General. From the Start Date until the termination of this
Agreement (the "Operational Period"), Operator shall reserve
for Licensee's use in the System, at no expense to Licensee,
five percent (5%) of the Total ITFS Throughput Rate at the
time of determination, but in no event any less than the
reservation required by FCC Rules ("Licensee's Educational
Reservation"). Operator may cause the reservation of
Licensee's Educational Reservation through any reasonable
measures that effectively reserves Licensee's Education
Reservation for Licensee and its users; provided, however, no
such system shall impair Licensee's ability to effectively use
the full amount of Licensee's Educational Reservation to
provide services on the System equivalent to the generally
prevailing quality, functions, speed and performance of
services Operator provides to its other customers in the
Market Area. Operator shall cooperate with Licensee in
developing reasonable technical means and procedures to
determine, at Operator's expense, when the usage of Licensee
and Licensee's Permitted End Users taking service under
Licensee's Education Reservation (each, a "Five Percent User"
and, collectively, "Five Percent Users") exceeds Licensee's
Educational Reservation, provided that any such procedures
shall afford Licensee the opportunity to purchase additional
capacity in accordance with the terms of this Agreement in
lieu of accepting restrictions on usage. Licensee shall have
the right to distribute activations associated with Licensee's
Educational Reservation throughout the System in a
geographically even or uneven fashion in Licensee's
discretion, provided that in the event that activations of
additional Five Percent Users in the area served by particular
Transmission Equipment are not feasible due to the fact that
the System has no further capacity in that geographical area,
Operator shall not be obligated to permit such additional
activations unless and until it is commercially reasonable to
add capacity, as determined by Operator in its reasonable
business judgment, based upon demand requirements, including
those of Licensee. "Throughput" shall mean all data delivered
to or received from the end user, measured in total bytes, net
of overhead (such as forward error correction and framing).
"Throughput Rate" shall mean the data rate delivered to or
received from the end user, measured in bytes per second, net
of overhead (such as forward error correction
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and framing). "ITFS Engineered Throughput Rate" shall mean the
maximum uplink and downlink Throughput Rate achievable on any
specific Transmission Equipment, measured in bytes per second,
as installed in the Market Area. "Total ITFS Throughput Rate"
shall mean the total of the ITFS Engineered Throughput Rates
of all Transmission Equipment as installed in the Market Area.
An example of the calculation of Total ITFS Throughput Rate
and of Licensee's Educational Reservation is set forth on
Exhibit C, page 1.
(ii) The Parties understand and agree that the following method of
effectuating Licensee's Educational Reservation set forth in
this SUBPARAGRAPH 2(d)(ii) and SUBPARAGRAPHS 2(d)(iii), (iv)
AND (v) is an acceptable interpretation of SUBPARAGRAPH
2(d)(i), for so long as Operator employs technology in the
System to which the following method can be applied. In
connection with Licensee's Educational Reservation, Licensee
shall be entitled to activate Five Percent Users at any End
User Throughput Rate then offered by Operator. "End User
Throughput Rate" shall mean the sum of the ordered uplink and
downlink Throughput Rates provided to an End User. For
example, an Operator offering an ordered Throughput Rate of
128 kbps upload and 128 kbps download equals an End User
Throughput Rate of 256 kbps. Licensee shall be permitted to
activate Five Percent Users with combined End User Throughput
Rates no greater than Licensee's Educational Reservation times
the Oversubscription Level ("Licensee's Throughput Rate
Entitlement"). "Oversubscription Level" means the number
utilized by Operator in its network activation and planning
activities in a Market Area that represents the number of
customer activations at an End User Throughput Rate offered by
Operator which Operator will permit for each increment of
Engineered Throughput Rate. "Engineered Throughput Rate" shall
mean the maximum uplink and downlink Throughput Rate
achievable on any specific transmission or reception equipment
in the System (other than backhaul equipment or CPE), measured
in bytes per second, as installed in the Market Area. The
Operator may change the Oversubscription Level from time to
time in Operator's sole discretion based upon the data traffic
generated by its customers. A sample calculation of Licensee's
Throughput Rate Entitlement is shown in page 1 of Exhibit C.
Licensee understands and acknowledges that the actual
Throughput speed of a Permitted End User may be restricted
from exceeding the ordered End User Throughput Rate by
Operator's network technology and Customer Premises Equipment.
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(iii) Licensee and Operator acknowledge that Operator's permitted
Oversubscription Level is based upon Operator's estimation of
the actual total Throughput of its customers, and that actual
total Throughput delivered to or received from Licensee's Five
Percent Users in any calendar month ("Licensee's Throughput")
may be less than or greater than such estimate, thereby
allowing action with respect to Five Percent Users as set
forth in clauses (iv) and (v). If Licensee desires to
determine if such difference exists in any calendar month,
Licensee shall request prior to the end of such calendar month
(the "Target Month"), and Operator shall provide Licensee by
the tenth (10th) day of the next calendar month, reports,
consistent with System capabilities, listing Operator's
permitted Oversubscription Level for the Target Month,
Operator's calculation of the use of Licensee's Educational
Reservation during the Target Month and each Five Percent
User's actual usage in total bytes for the Target Month,
separately stated for Peak Hours and Non-peak Hours (a
"Utilization Report"). If Operator desires to determine if
such difference exists in any calendar month, Operator shall
prepare a Utilization Report for the Target Month and shall
provide it to Licensee by the tenth (10th) day of the next
calendar month. To determine if a Utilization Report for a
calendar month indicates the right of Operator to require an
adjustment under SUBPARAGRAPH 2(d)(iv) or the right of
Licensee to require an adjustment under SUBPARAGRAPH 2(d)(v),
Operator shall make the following calculations:
(1) The Operator shall calculate the amount of the
adjustment that would be required for Peak Hours by:
(A) First, Operator shall determine, by measurement,
Licensee's Throughput for the Target Month.
(B) Second, Operator shall multiply Licensee's
Educational Reservation times the number of
seconds during Peak Hours during the Target Month
("Peak Benchmark").
(C) Third, Operator shall divide Licensee's Throughput
by the Peak Benchmark, and the resulting quotient
shall be known as the Adjustment Ratio.
(D) Fourth, Operator shall divide the Licensee's
Throughput Rate Entitlement by the Adjustment
Ratio,
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and the quotient shall be known as the Adjusted
Licensee's Throughput Rate Entitlement.
(E) Fifth, Operator shall determine the reduction or
increase to the Licensee's Throughput Rate
Entitlement by subtracting the Licensee's
Throughput Rate Entitlement from the Adjusted
Licensee's Throughput Rate Entitlement ("Peak
Adjustment Number"). If the result is a negative
number, there is an Excess Usage Situation and if
the result is a positive number, there may be an
Underutilization Situation.
(2) For Non-peak Hours, Operator shall repeat the above five
steps (A) through (E), with the following exceptions:
(1) the term Non-peak shall replace Peak; (2) in step
(B) multiply the number produced by the calculation in
(B) by three (3) so as to triple the Benchmark
applicable to Non-peak Hours.
(3) "Peak Hours" shall mean periods generally specified by
Operator for the System in its reasonable discretion
based upon System users' traffic patterns (whether
contiguous or in different periods of the day, that may
vary by day) of greatest usage of the System, as
specified by Operator in advance from time to time,
provided that only one specification of Peak Hours may
apply in any one (1) calendar month. "Non-peak Hours"
shall mean, with respect to any calendar month, all
hours which are not Peak Hours.
(iv) If either the Non-peak Adjustment Number or the Peak
Adjustment Number is negative for the Target Month (an "Excess
Usage Situation"), Licensee at Operator's request shall adjust
Licensee's Total Ordered Data Speeds downward by the lesser of
such adjustment number so as to result in Licensee's Total
Ordered Data Speeds for the second (2nd) calendar month
following such Target Month being equal to or less than the
Adjusted Licensee's Throughput Rate Entitlement. "Licensee's
Total Ordered Data Speeds" shall mean the sum of the End User
Throughput Rates for all Five Percent Users. This downward
adjustment may be accomplished, at Licensee's option, by any
combination of (x) converting Licensee-selected Five Percent
Users to paying customers in accordance with the terms of the
Licensee Service Contract, (y) reducing the ordered End User
Throughput Rate of Licensee-selected Five Percent Users to a
lower End User Throughput Rate then offered by Operator, or
(z) terminating the
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subscriptions of Licensee-selected Five Percent Users. License
shall provide notice of its election no later than fifteen
(15) days after receipt of the Utilization Report, which
notice shall specify the identity of the customers to be
affected by its election, and the disposition of their
activations. An example of an Excess Usage Situation and a
sample reduction are set forth on Exhibit C, Page 3.
(v) If both the Non-peak Adjustment Number and the Peak Adjustment
Number are positive for the Target Month (an "Underutilization
Situation"), Licensee may, in Licensee's discretion, instruct
Operator to adjust Licensee's Total Ordered Data Speeds upward
by the lower of such adjustment numbers to produce Licensee's
Total Ordered Data Speeds for the second (2nd) calendar month
following such Target Month. This permitted upward adjustment
may be accomplished, at Licensee's option, by any combination
of (x) adding Five Percent User activations or (y) increasing
the ordered End User Throughput Rates of Licensee-selected
Five Percent Users.
e) Licensee's Wholesale Agreement, Reference Contract and Licensee
Service Contract
(i) Wholesale Agreement. Between ninety (90) and sixty (60) days
prior to the initiation of service to the public in the Market
Area with the ITFS Channels, Operator shall provide Licensee
with a complete and, except for non-price and non-service
information as would identify the customer or any proprietary
technology of the customer, unredacted copy of each presently
effective, non-duplicative Wholesale Agreement whereby
Operator or any of its Affiliates offers any radio-based
transmission service or service including radio-based
transmission, either with or without other services and
equipment, to third parties in the Market Area. As used
herein, "Wholesale Agreement" means an agreement for the sale
to third parties who are not Affiliates of Operator, on an
arms length basis, of a package of wireless communications
services to a third party reseller who packages such services
and offers them on a retail basis without creating the
services. In the event that there are no such Wholesale
Agreements for the Market Area, Operator shall provide
Licensee with Wholesale Agreements for a reasonable number of
comparable market areas, if any, and such contracts shall be
considered the Wholesale Agreement for the Market Area,
provided Operator shall not be obligated to provide or offer
contracts which Operator reasonably determines are not
commercially reasonable or technically feasible in the Market
Area. In the event that Licensee
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notifies Operator that Licensee may desire terms or conditions
other than those which appear in such Wholesale Agreements,
Licensee shall inform Operator and specify the general nature
of the terms and conditions desired, and Operator shall
provide Licensee with copies of Wholesale Agreements for areas
other than the Market Area that provide Licensee with
Licensee's desired terms and conditions, if any, provided
Operator shall not be obligated to provide or offer contracts
that Operator in its good faith judgment determines are not
commercially reasonable or technically feasible in the Market
Area. In the event that there are no Wholesale Agreements, the
Parties shall in good faith negotiate the terms of a Wholesale
Agreement for services that contain the discounts for
Licensee's Intermediate Capacity and Excess Capacity as
defined below, and including terms and conditions that take
into consideration all other provisions contained herein that
govern Licensee's provision of services in the Market Area.
"Affiliate" means an entity that controls, is controlled by or
is under common control with the subject entity or entities.
(ii) Reference Contract. Licensee shall be entitled to select any
Wholesale Agreement to serve as the basis for its contract
with Operator for any activation of Licensee's Educational
Reservation, Licensee's Intermediate Capacity and Excess
Capacity (a "Reference Contract"), and Operator and Licensee
shall be obligated to accept all terms, conditions, rights and
obligations associated with such contract, including, without
limitation, terms related to price, term, volume commitment,
and service levels, except (w) that the terms for the
provision of Customer Premises Equipment shall be in
accordance with PARAGRAPH 6 hereof; (x) that the price paid by
Licensee for services associated with Licensee's Educational
Reservation shall be zero, the price paid for Licensee's
Intermediate Capacity shall be governed by SUBPARAGRAPH
2(f)(i), and the price paid for Excess Capacity shall be
governed by SUBPARAGRAPH 2(f)(ii); (y) the provisions of
Subparagraph 2(h) shall govern Enhanced Features, Network
Management Services, Internet Transit for Five Percent Users
and Collocation, and (z) to the extent that any provision of
this Agreement contradicts any provision or requirement of
such Reference Contract, the applicable provision of this
Agreement shall control and shall be incorporated into such
Reference Contract to the extent required to eliminate such
contradiction.
(iii) Licensee Service Contract. Upon selection of a Reference
Contract pursuant to SUBPARAGRAPH 2(e)(ii), Licensee shall
notify Operator
14
and immediately thereafter, Licensee and Operator shall
cooperate in good faith to diligently and expeditiously
execute and deliver an agreement on the terms and conditions
of the Reference Contract as modified by SUBPARAGRAPH 2(e)(ii)
(each, a "Licensee Service Contract"). Pending the execution
and delivery of a Licensee Service Contract, Operator shall
provide service to Licensee under the terms of the Reference
Contract subject to the provisions of SUBPARAGRAPH (2)(e)(ii).
Upon the expiration of one year following the date of
execution of the first Licensee Service Contract, or upon the
expiration or termination of any subsequent Licensee Service
Contract in accordance with its terms, Licensee shall be
entitled to select a replacement contract in accordance with
the provisions of SUBPARAGRAPH 2(e)(i) AND (ii). Accordingly,
in the event that Licensee notifies Operator of Licensee's
desire to execute a new agreement to replace the first
Licensee Service Contract, Operator shall repeat the Customer
Contract delivery, review, and Reference Contract selection
process described in Subparagraphs 2(e)(i) and (ii) provided
(x) Operator shall not be obligated to provide contracts from
other Market Areas if Operator is able to deliver at least six
(6) sample contracts to Licensee from the Market Area subject
to this Agreement, (y) the delivered sample contracts shall be
those in effect at the time of Licensee's notice and (z) the
time for completion of the Initial Delivery shall be thirty
(30) days after Licensee's notice. In this event, the existing
agreement between Operator and Licensee shall remain in effect
until superceded by a new agreement.
f) LICENSEE'S ADDITIONAL CAPACITY RIGHTS.
(i) Licensee's Right to Purchase Intermediate Capacity. In
addition to Licensee's Educational Reservation, Licensee may
during the Operational Period purchase additional transmission
capacity on the System from Operator in an amount up to double
the amount of Licensee's Educational Reservation ("Licensee's
Intermediate Capacity"). The terms of the Licensee Service
Contract then in effect shall govern the provision and use of
Licensee's Intermediate Capacity except that the price paid by
Licensee for each activation of Licensee's Intermediate
Capacity shall be set at (1)(A) if Operator sells transmission
capacity to wholesale customers in the Market Area,
eighty-five percent (85%) of the "Wholesale Price" which shall
be the lowest wholesale price generally made available by
Operator to its wholesale customers (who are not Affiliates of
Operator) for the Market Area, or (B) if Operator does not
sell
15
transmission capacity on a wholesale basis in the Market Area,
seventy percent (70%) of the "Retail Price" which shall be the
lowest retail price generally made available by Operator to
its retail customers in the Market Area, excluding promotional
pricing that is offered for a period of less than four (4)
months, plus (2) only those taxes Operator is required by law
to collect from Licensee, such as sales taxes. The Wholesale
Price shall include the value of all cash and non-cash
consideration received by Operator and its Affiliates,
including all tangible and intangible benefits accruing to
Operator and its Affiliates as a result of the business
relationship between Operator and the wholesale customer, as
reasonably determined by Operator in good faith. For example,
non-cash consideration that would be considered in determining
the Wholesale Price would include, but not be limited to, the
value of equity issued to or received from the wholesale
customer, the value of a customer base made available to
Operator and the value of spectrum made available to Operator.
(ii) Licensee's Right to Purchase Excess Capacity. During the
Operational Period, Licensee may purchase additional
transmission capacity on the System in an amount equal to the
Intermediate Capacity ("Excess Capacity"). The terms of the
Licensee Service Contract then in effect shall govern the
provision and use of such Excess Capacity; provided, however,
that (x) the price paid by Licensee for each activation of the
Excess Capacity shall be set at (1)(A) if Operator sells
transmission capacity to wholesale customers in the Market
Area, the Wholesale Price, or (B) if Operator does not sell
transmission capacity on a wholesale basis in the Market Area,
eighty percent (80%) of the Retail Price, plus (2) only those
taxes Operator is required by law to collect from Licensee,
such as sales taxes); and (y) Operator may defer its provision
of Excess Capacity to Licensee by providing notice to Licensee
to the extent that Operator's then-existing use of Operator's
Capacity (determined by the Oversubscription Level) would be
curtailed by meeting Licensee's request for Excess Capacity.
Such notice (a "Deferral Notice"), to be effective, shall
state with specificity reasons for the deferral, shall state
its maximum duration (which may not be in excess of three
hundred and sixty-five (365) days), shall state the projected
delivery date of portions of the Excess Capacity, if any,
during the deferral period (including the size of the
portions), and shall be delivered to Licensee within fifteen
(15) days after Licensee's delivery of its request for Excess
Capacity to Operator. If Licensee, following receipt of the
Deferral
16
Notice, still wishes to purchase the Excess Capacity after
reviewing such schedule, Licensee shall agree to accept and
pay for such Excess Capacity upon delivery, except that
Licensee may specify the dates for the provision of service,
which dates shall be no later than thirty (30) days after the
delivery date(s) set forth in such Deferral Notice. Delivery
dates specified in accordance with this SUBPARAGRAPH shall
form a part of the Licensee Service Contract then in effect
between Licensee and Operator for such Excess Capacity order.
(iii) Operator shall inform Licensee promptly after Operator becomes
aware that Licensee has used all of Licensee's Intermediate
Capacity or Excess Capacity.
g) PROVISION OF BASIC SERVICES.
(i) Operator agrees to provide free of charge to each Five Percent
User, for each category of service used by such Five Percent
User, all services, capabilities and functionalities, and any
access to facilities that Operator and/or its Affiliates
("Operator's Group") provides at no separately stated
additional charge to customers who subscribe to Operator's
basic package of services for such category generally
available at the time to customers in the Market Area, as such
basic package(s) of services shall be modified by Operator
from time to time (each, a "Basic Feature"). "Affiliate" means
an entity that controls, is controlled by or is under common
control with the subject entity or entities.
(ii) Licensee shall have the right to make reasonable requests for
information from Operator in order to verify the contents and
basis of Operator's selection of any basic package of services
offered to Licensee pursuant to SUBPARAGRAPH 2(g)(i) and
Operator shall provide such information promptly. In the event
that Licensee believes that any such package offered by
Operator to Licensee pursuant to SUBPARAGRAPH 2(g)(i) is not a
bona fide basic services offering, Licensee shall provide
written notice to Operator. The Parties shall thereafter
consult in good faith for no more than thirty (30) days in
order to address Licensee's claim, during which time Operator
shall give Licensee access to information in the possession of
Operator or any of its Affiliates in the Market Area that is
relevant to the issue. If the Parties are unable to reach
agreement following such consultation, Licensee and a
representative of Operator's management shall present their
respective positions in writing to the other Party within
thirty (30) additional days. Following the
17
submission of written positions, the parties shall consult in
good faith for a period of fifteen (15) additional days to
resolve these issues.
(iii) If Licensee and Operator have not reached a mutually
acceptable agreement with respect to an appropriate basic
service package following completion of the dispute resolution
procedures set forth in SUBPARAGRAPH 2(g)(ii), the issue shall
be submitted for resolution pursuant to the Baseball
Arbitration procedures provided for in PARAGRAPH 14 hereof, as
modified by this SUBPARAGRAPH 2(g)(iii). Each Party shall
submit a service package then offered by Operator for
consideration by the Arbitrator. The Arbitrator in any such
proceeding shall select the basic service package in the
Market Area the Arbitrator determines to be the bona fide
Basic Feature offering of Operator for the applicable category
of service, in light of the following criteria (the "Basic
Service Criteria"): (1) whether the offering is commonly
available and utilized by subscribers to carriers of
comparable size in comparable markets; (y) whether it is
consistent with the basic service offerings of competitive
carriers of comparable size in terms of price and included
services, capabilities, functionalities, and access to
facilities. Licensee shall not be entitled to once again
invoke the dispute resolution procedures set forth in this
SUBPARAGRAPH 2(g) until one (1) year after the conclusion of
any arbitration proceeding under this SUBPARAGRAPH 2(g).
h) ADDITIONAL OPERATOR-PROVIDED SERVICES AND FACILITIES.
(i) In addition to Basic Features, Operator agrees to provide to
Five Percent Users all services, capabilities and
functionalities, and any access to facilities that any member
of Operator's Group makes generally available at the time to
customers in the Market Area for which Operator imposes a
separate charge (each such service, capability and
functionality and access to facilities, other than Network
Management Services, Internet Transit and Collocation, is
referred to as an "Enhanced Feature"), and only for so long as
Operator makes such Enhanced Feature generally available, at a
price equal to (x) for the period of one year after an
Enhanced Feature is made generally available to customers in
the Market Area, ninety percent (90%) of the average price
(plus only taxes Operator is required by law to collect from
Permitted End Users, such as sales taxes) then charged to
customers taking such Enhanced Feature in the Market Area for
comparable orders of capacity, excluding introductory offers
of temporary duration; and (y) at any time after
18
the expiration of the period of one year after an Enhanced
Feature is made generally available to customers in the Market
Area, eighty-five percent (85%) of the average price (plus
only taxes Operator is required by law to collect from
Permitted End Users, such as sales taxes) then charged to
customers taking such Enhanced Feature in the Market Area for
comparable orders of capacity, excluding introductory offers
of temporary duration. If Operator intends to cease offering
an Enhanced Feature, Operator shall give Licensee at least
such notice of discontinuance of such Enhanced Feature as it
provides generally to its customers who receive the particular
Enhanced Service. In the event that a dispute is pending under
SUBPARAGRAPH 2(g)(ii) OR (iii) as to whether any service,
capability, functionality or access to facilities is a Basic
Feature, Licensee may nonetheless take such disputed feature
during the pendency of such dispute in accordance with the
ordering and payment provisions of this SUBPARAGRAPH 2(h)(i)
and, if the dispute is ultimately resolved in Licensee's
favor, Operator shall refund the payments made for such
feature.
(ii) Operator shall periodically advise Licensee of new features
and functionalities of the System so as to allow Licensee to
better and more efficiently employ Licensee's Educational
Reservation in its educational mission and in service of the
needs and desires of Licensee's students and other Permitted
End Users.
(iii) Operator shall make available to Licensee free of charge all
generally available comparable wireless carrier back-office
functionality, including trouble-reporting, fault isolation,
network management and other similar services, functions and
reporting performed by Operator's network operations center
("Network Management Services") that Operator provides at no
separately stated charge to any wholesale customers of
Operator in the Market Area or, if there is a charge for such
services to such wholesale customers, Operator shall provide
each such service for which there is a charge at Operator's
generally applicable charge. In the event that Operator has no
wholesale customers in the Market Area, Operator shall make
available to Licensee free of charge the Network Management
Services that Operator customarily provides at no separately
stated charge to wholesale customers of Operator in other
comparable Market Areas where Operator has wholesale
customers. If Operator has no wholesale customers in any of
its Market Areas, then Operator shall provide Licensee with
such Network Management Services as are commonly and
customarily
19
provided by comparable wireless carriers to their wholesale
customers at no additional charge.
(iv) Operator shall provide to Licensee, at Operator's expense,
Internet Transit ("Internet Transit") for all Internet-bound
traffic generated by Five Percent Users at data speeds for
each such customer that are not less than those provided to
Operator's other customers who receive a service comparable in
data speed to that of the Five Percent User.
(v) Operator shall offer Collocation to Licensee in accordance
with all applicable terms and conditions directly related to
Operator's offering, if any, of Collocation to any other
customer of Operator in the Market Area, as selected by
Licensee (the "Collocation Reference Contract"), at such
Collocation points, if any, that Operator makes available to
any such customer, provided Operator shall not be obligated to
provide Collocation in any circumstance where such Collocation
is not practical for technical reasons or because of space
limitations. "Collocation" means an arrangement whereby
Licensee's facilities are terminated in Operator equipment (x)
necessary to interconnect with Operator's network or
facilities and (y) that is installed and maintained at the
premises of Operator, and shall include rack space to the
extent provided by Operator. Collocation shall consist of
physical collocation only, in which Licensee is responsible
for installing and maintaining its own equipment in Operator's
premises. If more than one Collocation arrangement is made
available to Operator's customers in a Market Area, Licensee
may select one such offering, subject to all applicable terms
and conditions directly related to such offering. Licensee
shall be responsible for all government approvals associated
with any collocation offering, including, but not limited to,
local zoning and/or building permits required for such
Collocation, and Operator shall use reasonable efforts to
assist Licensee in Licensee's efforts to obtain such
governmental approvals. At Licensee's request, Operator shall
also use reasonable efforts to obtain roof access rights for
Licensee to install and maintain a satellite dish at a
Collocation site, provided the acquisition of such roof rights
shall not interfere with the roof access needs of Operator.
Licensee and Operator shall execute an agreement governing the
Collocation arrangement on the material terms of the portions
of the Collocation Reference Contract that relate to
Collocation. In the event that Operator does not provide
Collocation, Operator shall, upon written request by Licensee,
20
provide to Licensee a service proposal setting forth the
price, term, location, service levels and other terms and
conditions under which Operator will provide Collocation,
which such price, term, location, service levels, time to make
Collocation available, access of Licensee to Operator's
premises, and other terms and conditions shall be reasonable
in all respects. Operator shall be entitled to quote a price
in any such service proposal which provides operating profit
margins and recovery of related capital expenditures
comparable to those received by Operator on its other services
in the Market Area. If utilization of Collocation by Licensee
requires interconnection of Licensee equipment or facilities
with equipment or facilities of Operator, any such collocation
arrangement shall also be subject to the requirements of
SUBPARAGRAPH 2(k)(ii). Operator shall provide such a service
proposal within thirty (30) days of receipt of Licensee's
request and shall negotiate in good faith with Licensee to the
end of reaching agreement for such Collocation on mutually
agreeable terms in a reasonably expeditious time frame.
i) SYSTEM-WIDE SCOPE OF LICENSEE'S EDUCATIONAL RESERVATION AND
LICENSEE'S INTERMEDIATE CAPACITY. Subject to the overall limitations
provided for herein, Licensee's Educational Reservation, Licensee's
Intermediate Capacity and Excess Capacity shall be available, as
provided herein, throughout the ITFS Channels, including any
Transmission Equipment or unlicensed spectrum, MDS channel and ITFS
channel transmitters and receivers (other than those used
exclusively as Customer Premises Equipment at the premises of
Operator's other customers), and shall include adequate backhaul and
access to radio-carried response (return path) capacity, to the
extent that radio-carried response (return path) capability is then
made available by Operator, as desired by Licensee to use Licensee's
Educational Reservation, Licensee's Intermediate Capacity and Excess
Capacity.
j) SPECTRUM USE. Subject to the receipt of any necessary authorization
of the FCC and FCC Rules, Operator's Capacity may be transmitted in
such transmission formats or protocols as Operator may select from
time to time. To the extent it is technically feasible, and Licensee
elects not to use the transmission formats or protocols then used by
Operator for Operator's Capacity, transmissions by Licensee and its
Permitted End Users in the System shall be in a format or protocol
and shall be limited to signals having formats, waveform
transmission characteristics and emissions as will not interfere
with systems then used or future systems when used by Operator in
the System elements or sub-elements carrying such traffic.
21
k) INTERCONNECTION AND INTERNET ACCESS.
(i) Operator acknowledges that Licensee may require access, not
otherwise provided pursuant to this Agreement, to Internet
points of presence (including, for example, Internet Network
Access Points) for the transmission of Internet traffic.
Operator shall, upon written request by Licensee specifying
the nature of the connection desired, the location of the
desired connection and Licensee's proposed monetary
commitment, provide to Licensee a service proposal setting
forth the price, term, location, service levels and other
terms and conditions under which Operator will provide such
connection, which such price, term, location, service levels,
time to make such connection available, access of Licensee to
Operator's premises, peering arrangements, if available, and
other terms and conditions shall be reasonable in all respects
and, with respect to pricing, may be priced to provide
operating profit margins and recovery of related capital
expenditures comparable to those earned by Operator on its
services in the Market Area generally.
(ii) With respect to any Internet connections provided to Licensee
pursuant to SUBPARAGRAPH 2(k)(i), or in the event that
Licensee requires the connection of any equipment or
facilities supplied by Licensee to the facilities or equipment
of Operator in order to provide the services contemplated by
this Agreement to its Permitted End Users, and no other
provision of this Agreement or the applicable Licensee Service
Contract provides for the same, Operator and Licensee shall
cooperate in good faith to provide for such interconnection
through then available industry standard interfaces at such
points of interconnection as Operator determines in its good
faith judgment to be commercially reasonable. Operator's
obligation to provide any such interconnection is expressly
conditioned upon (i) the Parties' reaching prior written
agreement on routing, appropriate sizing and forecasting,
equipment, ordering, provisioning, maintenance, repair,
testing, augmentation, peering arrangements, if available,
reasonable compensation procedures and arrangements for
establishing and maintaining any interconnection arrangements,
reasonable distance limitations, and on any other arrangements
necessary to implement such interconnection and (ii) such
other appropriate protections as reasonably deemed necessary
by either Party. Any such arrangement shall be priced to
provide gross margins comparable to Operator's gross margins
on its services in the Market Area generally. In the event the
Parties agree to any such interconnection
22
arrangement, Licensee agrees to bear all expenses associated
with the purchase of facilities, equipment, materials,
circuits or services necessary to facilitate and maintain any
such interconnection arrangement on Licensee's side of the
interconnection point.
l) USE OF LICENSEE'S EDUCATIONAL RESERVATION AND LICENSEE'S ADDITIONAL
CAPACITY. The Parties recognize that Licensee may sell or otherwise
provide directly to nonprofit accredited and unaccredited
educational institutions and other similar nonprofit institutions
and their members (including Licensee and its Affiliates, "Permitted
End Users") services utilizing the System. Licensee agrees that it
shall utilize any capacity provided for under this Agreement for the
provision or sale of service directly to Permitted End Users (such
uses constituting "Permitted Uses"). Licensee acknowledges and
agrees that sale to resellers of communications services is not a
Permitted Use, and that Licensee shall provide Permitted End Users
only under contract that prohibits Permitted End Users from
reselling service or otherwise providing capacity to any third
party; provided, however, nothing contained herein shall prohibit
the sale of communication services by a Permitted End User directly
to any individual to whom such Permitted End User provides
educational services utilizing such communications services on a not
for profit basis in the ordinary course of its business, to its
employees or to students enrolled in the educational offerings of
such Permitted End User.
m) IMPLEMENTATION OF CHANGES TO OPERATOR'S DIGITAL SYSTEM. Operator
shall provide notice equal to the notice provided to its other
customers in the Market Area of any changes in the System (each, a
"System Change") that could impair the performance or functionality
of Licensee or Permitted End Users' equipment using the System. All
Operator replacements and upgrades shall be scheduled and completed
so as to cause no more disruption to Licensee or its Permitted End
Users than the System Change causes to Operator and its other
customers. Further, Operator shall consult with Licensee reasonably
in advance of the implementation of any System Change so that
Licensee may assess the potential effects of proposed System Change
on Licensee and its Permitted End Users, and Operator shall
cooperate with Licensee to minimize the disruption caused by System
Changes to Licensee and Licensee's Permitted End Users. Operator, at
its expense, shall take such steps and make such equipment, software
and services and infrastructure changes to Standard Customer
Packages at the Primary Response Station Sites and Additional
Standard Customer Packages as necessary or appropriate in the event
of a System Change in equipment or software affecting such a
station, including replacing the equipment and/or software of such
station; and as necessary, reorienting or
23
modifying the transceiver antennas at such response station (return
path) sites if any such site experiences or would experience a
material degradation in signal reception quality or transmission
capability as a result of any relocation of or other changes to any
associated Transmission Equipment, or change in the backhaul or
communications systems used for interconnecting the System to
facilities not a part of the System.
n) AVAILABILITY OF SERVICE. Provision of service by Operator to
Licensee and Permitted End Users at any location is subject to
System capabilities and the ability to establish an adequate radio
link given topography, terrain, location and other factors to the
Permitted End User. Operator shall provide Licensee free of charge
with access to Operator's pre-qualification system, if any, applied
generally by Operator in the Market Area to confirm service
availability. Operator shall confirm service availability to a
Permitted End User with such system prior to installation.
o) OPERATOR CONFIRMATION OF COMPLIANCE. Upon written request by
Licensee no more than twice annually, Operator shall confirm in
writing that any service, facility or feature required to be
provided to Licensee in accordance with prices, terms or conditions
provided to other customers of Operator are being provided in
accordance with such prices, terms or conditions.
p) ACTIVATIONS AND DEACTIVATIONS OF LICENSEE'S SERVICES. Operator shall
activate and deactivate, as requested by Licensee, Licensee's
services on the System to Licensee and Permitted End Users
consistent with the time frames Operator activates and deactivates
similar services to its customers.
q) DETERMINATIONS WHEN CAPACITY SUBLEASED. Operator and Licensee
acknowledge that portions of this Agreement describe Licensee's
access to capacity, services and equipment by reference to access to
the same Operator provides to its other customers, but that Operator
may have subleased Operator's Capacity and therefor may not serve
end-users directly. In those instances in which Operator does not
serve end-users (not considering service by a reseller to itself),
Operator's customers shall be deemed to be the end-users of the ITFS
Channels' capacity and Operator shall obtain such information from
the reseller or sublessee having the direct relationship with the
end-user as is required to determine Licensee's access to such
capacity, services and equipment.
r) PREEMPTION BY GOVERNMENTAL AUTHORITY. In the event that the FCC, or
any other governmental entity having authority or apparent authority
to so order, orders the cessation or curtailment of operations of
any one or more of the ITFS Channels because of the existence of
exigent or unusual
24
circumstances, or as a part of the FCC's or any other governmental
agency's efforts to control, isolate, detect or eliminate
interference or real or potential harm from any of the Transmission
Equipment or related equipment or operations, Operator shall comply
with such order within the time frame specified in such order.
3. TRANSMISSION SITES AND FACILITIES.
a) SYSTEM PARAMETERS. During the Operational Period, Operator shall
purchase and maintain, at Operator's expense, all equipment
necessary to operate the System in accordance with the terms of this
Agreement and the Licenses.
(i) The current primary transmission site(s) of Licensee's ITFS
Channels are identified in Exhibit A (as such sites may be
changed from time to time, the "Primary Transmission Sites").
During the Operational Period, Operator shall purchase at
Operator's expense and lease to Licensee all equipment located
at Primary Transmission Sites which regularly operates on the
ITFS Channels (the "Primary Transmission Equipment"). Subject
to PARAGRAPH 26, Operator shall maintain and operate the
Primary Transmission Equipment during the Term of this
Agreement solely at its expense.
(ii) During the Operational Period, if any of the ITFS Channels
regularly is transmitted at Operator's request by an
FCC-licensed booster station (a "Licensed Booster Station"),
Operator shall purchase and maintain, at Operator's expense,
and lease to Licensee the equipment associated with such
Licensed Booster Station to transmit each ITFS Channel in the
System then-authorized to Licensee (the "High Power Booster
Station Equipment"). When, during the Operational Period, any
of the ITFS Channels is regularly transmitted at Operator's
request by a Licensed Booster Station that does not require an
FCC license ("Unlicensed Booster Station"), Operator shall
lease to Licensee the equipment associated with such
Unlicensed Booster Station to transmit the ITFS Channel ("Low
Power Booster Station Equipment").
(iii) During the Operational Period, Operator shall supply Licensee
with the right, at Operator's expense, to use the signal
processing equipment and associated software, if any, that
processes the signal(s) transmitted over transmission capacity
then allocated or provided to Licensee under PARAGRAPH 2.
25
(iv) During the Operational Period, Operator shall supply Licensee
with a right to use, at no expense to Licensee, all reception
equipment at each Unlicensed Booster Station regularly
transmitting and/or receiving an ITFS Channel.
(v) During the Operational Period, Operator shall purchase and
maintain, at Operator's expense, and lease to Licensee, all
hub receive site receiving equipment ("Hub Receive Equipment")
tuned or regularly used to receive any ITFS Channel at any hub
receive site ("Hub Receive Site").
(vi) During the Operational Period, Operator shall purchase,
maintain and replace for Licensee, at Operator's expense, and
shall supply Licensee with the right to use, the shared radio
frequency equipment at each Primary Transmission Site (the
"Common Equipment"), at each Licensed Booster Station site and
at each Hub Receive Site, including antenna and wave guide, if
any. During the Operational Period, Operator shall supply
Licensee with a right to use, at no expense to Licensee, the
equivalent equipment at each Unlicensed Booster Station site
transmitting and Hub Receive Site regularly receiving an ITFS
Channel to the extent necessary to transmit or receive such
ITFS Channel during the Operational Period.
(vii) Any and all leases provided for in this SUBPARAGRAPH 2(a)
shall be subordinate to any lien, security interest or other
rights of any secured lender or other secured party providing
financing to Operator or to any Affiliate of Operator.
(viii) All equipment and software leased or otherwise provided to
Licensee pursuant to SUBPARAGRAPHS 2(a)(i)-(vii) shall be
leased or otherwise provided for the sum of One Dollar ($1.00)
per year. To the extent that any such equipment also operates
on frequencies licensed to another FCC licensee, the lease
provided herein shall be subject to the grant of a similar
lease or use right to any such licensee.
(ix) All equipment provided for in this SUBPARAGRAPH 2(a) shall be
installed, maintained and operated by Operator in compliance
with FCC Rules.
(x) For purposes of this Agreement, any and all Primary
Transmission Equipment, High Power Booster Station Equipment,
if any, Low Power Booster Station Equipment, if any, Hub
Receive Equipment, if any, Common Equipment, any related
software, and any other
26
transmission and/or reception equipment operating on the ITFS
Channels in the Market Area, as such equipment may be
modified, replaced, or upgraded by Operator from time to time,
but not including response stations (return path) or other
transmission and/or reception equipment located and operated
at the premises of Licensee, a Permitted End User, or a
customer of Operator (each, an "End User") for the
transmission or reception of communications by any such End
User and not for relay purposes, shall be referred to as
"Transmission Equipment." Response stations (return path) or
other transmission and/or reception equipment located and
operated at the premises of an End User, for the transmission
or reception of communications by any such End User and not
for relay purposes shall be referred to as "Customer Premises
Equipment". Consistent with SUBPARAGRAPH 2(b)(ii), the parties
understand and agree that references in this Agreement to
System elements and components (for example, Hub Receive
Sites) shall not be construed to create an obligation on the
part of Operator to utilize a particular network architecture,
or to utilize any particular network equipment or components
other than those selected by Operator in its business judgment
from time to time, consistent with this Agreement (including
SUBPARAGRAPH 2(b) AND 3(c)) and FCC Rules.
b) STATION MODIFICATIONS.
(i) From time to time, but subject to Licensee's consent (which
consent will not be unreasonably delayed or withheld),
Operator may determine that it desires Licensee to seek FCC
approvals required to modify the use of the ITFS Channel(s) or
that additional FCC authorizations are necessary or convenient
for the use of the ITFS Channel(s). Examples of such
modifications and/or authorizations include, but are not
limited to, changing the authorized digital emission(s) of the
ITFS Channel(s), changing their transmission power, or
reconfiguring, adding or relocating Transmission Equipment. In
such event, Operator shall inform and consult with Licensee
regarding any such proposed modification or authorization, and
provide Licensee with such engineering studies and technical
information as Licensee may reasonably request to determine
whether Licensee shall consent to the modification. Licensee
shall not unreasonably withhold its consent to any such
modification or new authorization. Licensee agrees to utilize
reasonable best efforts to review and process information and
materials provided by Operator in connection with any
application and to respond to Operator in a commercially
reasonable and timely manner. If such
27
consent shall be given in writing and following Licensee's
receipt from Operator of such FCC applications for
authorization of such modification or grant of such additional
authorization in form and substance reasonably acceptable to
Licensee, Licensee shall complete such applications and shall
file such applications at the FCC no later than the later of
ten (10) days after Licensee's receipt of such applications
and the first date that the FCC accepts that type of
application. Following such filing, Licensee shall use its
reasonable best efforts to cause the grant of any such
application by the FCC, and shall file such supplements,
amendments, documents or reports as may reasonably be
requested for grant of such application or authorization.
Operator shall, pursuant to PARAGRAPH 5, reimburse Licensee's
Expenses for the preparation, analysis, review, filing and
prosecution of each application or filing made by Licensee,
including appeals of partially or fully adverse actions,
undertaken to seek authorizations and licenses to implement
such Operator proposals.
(ii) Operator, at its expense, shall construct the facilities used
to operate or receive the ITFS Channels before the end of the
construction period stated in the modification or additional
authorization (as such may thereafter be extended). Operator
and Licensee shall cooperate so as to complete construction in
accordance with Operator's reasonable schedule and plans. In
the event that unforeseen business circumstances make it
unduly burdensome or impractical for Operator to complete
construction of two-way facilities following initial
authorization within the FCC-specified construction period,
Licensee agrees to cooperate in the filing and prosecution of
such extension requests as Operator may reasonably request to
extend the construction period for a reasonable period beyond
the circumstances, provided Licensee shall not be obliged to
seek any such extension to the extent that Licensee reasonably
believes that the FCC will not grant the proposed extension.
(iii) The Parties agree that it is in their mutual best interest,
and that of each of their customers, to prevent and limit
interference to operations the operators on the ITFS Channels.
The Parties further recognize that the grant and receipt of
interference consents may be necessary to construct and
operate the System efficiently and to comply with FCC Rules
requiring cooperative resolution of interference issues.
Subject to such Licensee control as is required by the FCC,
Licensee and Operator agree to cooperate in good faith to
consider the terms under which Licensee may provide
interference
28
consents in any particular situation in order to maximize
Operator's ability to efficiently engineer its Transmission
Equipment during the Operational Period while protecting
Licensee's independent interests in preserving the viability
of operations on the ITFS Channels and the protection of the
reception of the ITFS Channels from interference. To promote
this process, Licensee and Operator shall use reasonable best
efforts to promptly make available to each other all
information in their possession reasonably necessary or
appropriate to inform the Parties' consideration of proposed
interference consents. Operator shall perform necessary work
on behalf of Licensee, at Operator's expense, required to
implement such agreements or consents. Licensee shall not use
a demand for monetary compensation, other than the
reimbursement of Licensee's expenses of negotiation and
compliance, as a reason not to enter into any interference
consent agreement. Without limiting the foregoing, Licensee
and Operator shall use their respective reasonable best
efforts to maximize protection of the ITFS Channels from
interference and the foreclosure of service to the Market
Area, including, without limitation, by making FCC filings in
opposition to third party applications, consistent with FCC
Rules and the Parties' contractual and legal obligations.
c) EFFORTS TO SECURE SPECIAL TEMPORARY AUTHORIZATIONS. Promptly after
Operator's request, Licensee shall apply to the FCC for special
temporary authorization or developmental authorization ("STA") to
operate the ITFS Channels in such configuration or configurations as
Licensee may reasonably accept for such temporary period. Such STA
application shall be in form and substance reasonably acceptable to
Licensee and Operator. Operator is authorized to operate the ITFS
Channels in accordance with the STA and this Agreement. Licensee
shall use commercially reasonable efforts to keep such STA in full
force and effect to the extent the FCC shall allow by taking such
actions as are required to do so, including applying to the FCC to
renew and extend such STA, until such time as the FCC shall have
granted Licensee regular authorization to operate the ITFS Channels.
Operator shall, pursuant to PARAGRAPH 5, reimburse Licensee's
Expenses for the preparation, filing and prosecution of each such
application or filing.
d) SITE LEASES. Operator shall negotiate all site leases for locations
where Transmission Equipment is operated and Operator shall be the
lessee thereunder. Operator shall pay the full cost of such leases
(including all rental, reimbursements and pass-throughs). Operator
agrees to cooperate with Licensee and to use reasonable best efforts
to assist Licensee, when requested by Licensee, upon the expiration
of any master site lease or other
29
site leases covering such sites, in obtaining the rights to utilize
or lease any site utilized by Operator, following the expiration or
termination of this Agreement, provided Licensee shall pay any
increase in rent resulting from the grant of any such rights.
Operator shall not be required to accept adverse conditions in order
to obtain any such rights for Licensee and, except to the extent
Licensee's occupation of a site is pursuant to PARAGRAPH 9, Licensee
shall bear the site rent for the period of its occupancy of a site
after the expiration or termination of this Agreement. To the extent
that Operator has the right to grant any such rights to Licensee
under an existing lease, Operator shall do so.
e) STATION IDENTIFICATION. During the Term, Operator shall cause the
Transmission Equipment to transmit any identification information to
the extent required by the FCC, and in such form or forms as the FCC
may then require. If the FCC shall require any response station
(return path) provided by Operator to transmit any identification
information, Operator at its expense shall take such steps as
required to comply with such FCC requirement.
f) INSTALLATION OF RESPONSE STATIONS AND TRANSMISSION EQUIPMENT.
Operator shall construct and install all Transmission Equipment and
response station (return path) equipment in accordance with FCC
Rules, including such procedures then-required by the FCC (such as
professional installation and advanced notice to licensees of ITFS
receivers near the proposed response station site), and the orders
of the Occupational Safety and Health Administration (including any
previous or future successor to its powers and functions, "OSHA")
and OSHA regulations.
4. FEES.
a) ROYALTY FEES GENERALLY. Commencing on December 1, 2003, Operator
shall pay to Licensee monthly royalty fees equal to $0.09 per CPOP,
calculated on a net present value basis, as a thirty (30) year
annuity discounted at ten percent (10%) and growing at a three
percent (3%) annual growth rate split into twelve (12) payments per
year as reflected on Schedule 4(a).
b) FAIR MARKET VALUE ROYALTY FEES.
(i) Within sixty (60) days following a Decoupling Event (as
defined below), Licensee may cause the monthly royalty fees
(the "Royalty Fee") payable by Operator to Licensee to be
reset from those stated on Schedule 5(a) to an amount equal to
the Fair Market Value Royalty Fee. A "Decoupling Event" shall
occur upon the sale of all
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or substantially all of the assets of Operator due to a
voluntary or involuntary insolvency proceeding being commenced
against Operator which is not dismissed within sixty (60) days
or the winding up of Operator's business operations, or upon
an assignment or transfer of this Agreement that is not
permitted under either this Agreement or the Spectrum
Agreement. For clarification, a "Decoupling Event" shall not
have occurred upon the sale of all or substantially all of the
assets of Operator's business as a going concern. The "Fair
Market Value Royalty Fee" shall be the highest reasonable
periodic royalty rate that a willing, third party capacity
operator could be expected to pay for the use of Operator's
Capacity in an arms-length transaction, assuming a remaining
use period of not less than ten (10) years. To establish the
Fair Market Value Royalty Fee, Licensee must notify Operator
that Licensee wishes to establish the Fair Market Value
Royalty Fee. The date of such notice is referred to as
"Licensee's Notice Date". Within ten (10) days of Licensee's
Notice Date, Operator and Licensee shall meet to discuss and
attempt to agree upon the Fair Market Value Royalty Fee. Such
discussions shall continue for not more than ten (10) days.
If, at the end of that time, the Parties have not agreed upon
the Fair Market Value Royalty Fee, the matter shall be
promptly submitted to arbitration under the Baseball
Arbitration procedures set forth in PARAGRAPH 13. Within the
Submission Period, each of the Operator and Licensee shall
submit to the arbitrator its own proposal for the Fair Market
Value Royalty Fee. If the arbitrator determines that the
proposals reasonably can be expected to result in monthly
royalties that do not differ by more than five percent (5%) of
the proposal the arbitrator believes will generate the higher
royalties, then the arbitrator shall fashion a royalty
provision which reasonably is expected to result in monthly
royalties that are between the monthly royalties that would be
expected under the competing proposals. Otherwise, the
arbitrator shall determine which proposal he or she believes
to be closer to the Fair Market Value Royalty Fee and shall
select that proposal as the Fair Market Value Royalty Fee.
Upon such selection, the monthly royalty set forth on Schedule
5(a) shall automatically be changed to the selected Fair
Market Value Royalty Fee, and that change shall relate back to
Licensee's Notice Date. Operator shall have thirty (30) days
to pay Licensee the difference between the Fair Market Value
Royalty Fee and the amount of royalties paid for the period
starting with Licensee's Notice Date and ending on such
selection date, and no interest or penalties shall accrue as a
result of such deficiency being unpaid during such period.
Licensee shall bear thirty percent (30%) and
31
Operator shall bear seventy percent (70%) of the expenses and
fees of such arbitrator and the AAA, and each party shall bear
its own attorneys' fees, experts' fees and out-of-pocket costs
of such arbitration.
(ii) Operator shall, for a period of at least two (2) years after
their creation, keep, maintain and preserve complete and
accurate records by which Fair Market Value Royalty Fees due
hereunder may be audited. Such records shall be made available
for inspection and audit no more than twice in any calendar
year by Licensee or its designee at Operator's address listed
in SUBPARAGRAPH 16(i), during normal business hours, upon at
least seven (7) days' advance written notice.
c) PAYMENTS AND LATE CHARGES. Operator shall transmit to Licensee each
monthly Royalty Fee payment accompanied by a statement showing how
the Royalty was calculated by the twenty-fifth (25th) day of the
next calendar month. All payments from Operator to Licensee shall be
paid by bank check made payable to the order of Licensee, mailed to
Hispanic Information and Telecommunications Network, Inc., 000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attn: Accounting
Department, or mailed to such other address as Licensee shall
designate in writing to Operator. If Operator shall fail to make the
whole or any part of a payment to Licensee required by the terms of
this Agreement within ten (10) days of the due date therefore, then
interest shall accrue on such delinquent amount (both before and
after judgment) at the lesser of the highest lawful rate and the
rate of one and one-half percent (1.5%) per month (based upon a
thirty (30) day month) and shall be payable upon Licensee's demand.
d) NET TAXES, ETC. All payments required to be made by Operator to
Licensee under this Agreement are net to Licensee. If federal, state
or local taxes or assessments (other than taxes assessed on the
income or assets of the Licensee) are applicable, or become
applicable, to the whole or any part thereof, then Operator shall
pay such taxes and assessments and Operator shall indemnify and hold
harmless Licensee for any liability for such taxes and assessments,
including reasonable attorneys' fees and costs associated with
defending against liability for such taxes and assessments;
provided, however, that Licensee shall bear any interest, penalties
or fines which are not attributable to any act or omission of
Operator. In the event Operator is prohibited by law from paying any
such taxes or assessments, then the payment required by this
PARAGRAPH 4 shall be increased by such amount as is required to
ensure that Licensee's compensation hereunder, after
32
paying such taxes and assessments, is not below such compensation as
Licensee would receive absent payment of such taxes and assessments.
5. LICENSEE'S EXPENSES.
a) Subject to this PARAGRAPH 5, not later than thirty (30) days after
receipt of detailed invoices from Licensee, Operator shall reimburse
Licensee or its designated counsel directly, for all reasonable,
out-of-pocket expenses actually incurred by Licensee (net of any
credits, refunds or retainers previously paid by operator to
Licensee or its counsel for such expenses), and that are not after
the Effective Date in connection with this Agreement at the request
of Operator, including legal and engineering consulting expenses
incurred in Licensee's efforts to obtain, renew, maintain and modify
its authorization(s) for the ITFS Channels; Licensee's counsels'
efforts to evaluate, prepare and advise with respect to applications
to the FCC filed by Licensee or to renew any License; Licensee's
counsels' efforts to prepare and prosecute any petition to deny,
objection or appeal request by Operator or submitted to protect any
License; Licensee counsels' efforts to analyze and report on any
proposal submitted by Operator; to negotiate any site lease with
respect to this Agreement; and Licensee's counsels' efforts to
defend this Agreement, its provisions before the FCC, courts,
arbitrators and appellate forums; and Licensee counsels' efforts to
provide assistance to Licensee as requested by Operator from time to
time (collectively referred to as "Licensee's Expenses"); provided,
however, any such expense for which Licensee seeks reimbursement
which is in excess of One Thousand Dollars ($1,000) shall have been
approved by Operator prior to the time such expense was incurred,
which approval shall not be unreasonably withheld; provided,
further, however, if after such approval, any event occurs which
leads Licensee to believe that the approved cap of Licensee's
Expenses for any action will not fully cover Licensee's Expenses,
Licensee shall have the right to request that Operator raise the cap
to the new amount that is Licensee's reasonable estimate of
Licensee's Expenses and, absent such approval, Licensee may relieve
itself of the obligation for which Licensee's Expenses are to be
paid hereunder.
b) Notwithstanding anything to the contrary in this Agreement, in the
event that Licensee files, at Operator's request, an application to
modify any License, and such application is or becomes subject to
disposition by the FCC through a competitive bidding procedure,
Licensee shall participate in such competitive bidding procedure as
a bidder and shall submit bids in such auction to the extent that
Operator agrees (i) to defray the upfront payment required to bid in
such auction for such authorization and (ii) to defray bids by
Licensee for the grant of such License modification(s);
33
provided, however, Licensee's bids and Licensee's total financial
obligation to the federal government may exceed the amount Operator
has agreed to defray, but such excess shall be the sole
responsibility of Licensee. Licensee shall not submit any bids in
such auction procedure without first consulting with Operator.
Operator shall have the right to modify the maximum bid amount
Operator has agreed to defray, by notice to Licensee, but no such
modification shall reduce that amount below the portion of the last
bid preceding such notice that would be Operator's responsibility to
pay. In the event that Operator declines to authorize bidding or
declines to authorize further bidding once bidding has commenced,
Licensee may thereafter bid, but shall not be required to bid, at
its own expense.
c) Operator shall pay all taxes and other governmental charges assessed
against its equipment, without cost to or reimbursement by Licensee.
In addition, if the FCC or any governmental body collects any
regulatory, spectrum or similar fees (including any excise tax) with
respect to the ITFS Channels or Operator's Capacity, Operator shall
pay such fees.
6. ADDITIONAL OPERATOR-SUPPLIED EQUIPMENT AND SERVICES.
a) PRIMARY SUBSCRIBER RESPONSE STATIONS. At any time during the
Operational Period Operator shall provide and install for the use of
Licensee or a Permitted End User, at Operator's expense, one
standard Customer Premises Equipment package (a "Standard Customer
Package"), at up to twenty five locations selected by Licensee (the
"Primary Response Station Sites"). A Standard Customer Package shall
consist of the lowest cost Customer Premises Equipment package made
generally available at the time to Operator's retail customers in
the Market Area permitting full utilization of the lowest cost tier
of service generally available at the time to retail customers in
the Market Area. The number of Primary Response Station Sites shall
provided to Licensee at Operator's expense shall equal twenty-five
(25). Upon provision, each such Standard Customer Package at a
Primary Response Station shall be deemed the exclusive property of
Licensee or its designee.
b) LICENSEE ACCESS TO ADDITIONAL RESPONSE STATION EQUIPMENT. At such
time that Licensee requires more than twenty-five Standard Customer
Packages, Operator shall provide, install for the use of Licensee or
a Permitted End User and activate on the System, additional Standard
Customer Packages ("Additional Standard Customer Packages"), certain
of which may be nonstandard ("Nonstandard Installations"). Each such
Additional Standard Customer Package or Nonstandard Installation
shall be made available at a price equal to the greater of (i) the
price then generally
34
offered to Operator's wholesale customers in the Market Area which
customers are most comparable to Licensee with respect to the price
such customers pay for capacity and the volume of capacity purchased
or, if Operator has no wholesale customers in the Market Area, then
eighty percent (80%) of the price generally offered to those retail
customers in the Market Area who pay the lowest subscription prices
for Operator's services, or (ii) Operator's out-of-pocket cost of
supplying such equipment and installation.
c) MAINTENANCE OF STANDARD CUSTOMER PACKAGES. Operator shall at its
expense provide the first on premises service call required for each
Primary Response Station Site. Operator shall provide any additional
on-premises service at a price no greater than the lowest price
(plus only taxes Operator is required by law to collect from the
party receiving the service call, such as sales taxes) then
generally offered to customers of Operator in the Market Area
ordering comparable amounts of capacity. Notwithstanding any other
provisions of this Agreement: (i) Licensee shall bear the expenses
of maintenance, repair and replacement of Standard Customer Packages
if such maintenance, repair or replacement is required because of
misuse, negligence, theft or vandalism; and (ii) Operator shall not
be required to eliminate or reduce interference caused by Licensee
or a Permitted End User.
d) UPGRADES. Subject to SUBPARAGRAPH 2(k), Operator shall make
available to Licensee and Permitted End Users any equipment or
software upgrades and associated services that Operator makes
generally available to other customers of Operator in the Market
Area receiving comparable services in the event of a System change
in equipment or software, on the same terms and conditions as
Operator makes generally available. In the event that any equipment
upgrade involves any replacement of equipment, the replaced
equipment and the ownership of the replaced equipment shall be
returned to Operator and the equipment provided in replacement of
such equipment shall be owned by Licensee.
7. APPROVAL OF AGREEMENT; PROSECUTION OF APPLICATIONS AND PETITIONS;
PROTECTION OF LICENSES.
a) REASONABLE BEST EFFORTS TO SECURE APPROVAL OF THIS AGREEMENT. The
Parties recognize that this Agreement may be required to be filed
with the FCC and that the FCC may, by formal or informal action
(including oral requests of FCC staff), request Licensee to change
or eliminate one or more provisions in this Agreement, or add one or
more provisions to this Agreement. In that event, the Parties shall
cooperate, at Operator's expense, to defend the provisions of this
Agreement to the extent feasible
35
and, should efforts to defend the provision fail, to comply with any
request for such a change as may be imposed as a condition to
leasing under this Agreement.
b) COOPERATION ON FCC MATTERS. Except for FCC license and license
modification applications, Licensee shall file at the FCC petitions,
requests and other such comments, consents, objections, petitions,
requests or other filings with respect to any other stations,
authorizations, applications, proposals or amendments as may be
reasonably requested by Operator, provided Licensee finds a good
faith basis for the filing of any such comments, objections or
petitions. Licensee shall have no obligation to participate or to
take any position in any rule making proceeding. Licensee and
Operator shall each promptly notify the other of any event of which
it has knowledge that may affect any license, permit or
authorization for any ITFS Channel. Except for the execution and
delivery of interference consents and agreements, Licensee shall
cooperate, at Operator's expense, but shall not be required to
accept any adverse conditions, with Operator's efforts to cause
other ITFS and MDS operators to collocate at the Primary
Transmission Sites and Licensed Booster Station sites. Operator and
Licensee understand that the FCC may change, or may have changed,
after the date of the Spectrum Agreement those actions, activities
and agreements that must be taken or must exist for an ITFS station
licensee to allow third party use of the capacity of its station (a
"FCC Use Change"). In the event that an FCC Use Change occurs, or
has occurred since the date of the Spectrum Agreement, and such FCC
Use Change either by itself or with other FCC Use Changes, increases
the cost to Licensee of complying with this Agreement, then Operator
shall reimburse such costs.
8. DEFAULT AND TERMINATION.
a) TERMINATION OF FCC LICENSES. This Agreement shall terminate as to
any ITFS Channel upon the expiration, without FCC renewal, of any
License necessary to operate on such ITFS Channel, or the revocation
of any License necessary to operate on such ITFS Channel; provided,
however, this Agreement shall not terminate as to such ITFS Channel
notwithstanding the expiration or revocation of any such License for
it for so long as an application to renew the License or reconsider
revocation is pending or subject to lawful and timely
reconsideration, review or appeal and Licensee continues to have
authority to operate such ITFS Channel.
b) TERMINATION BY REASON OF DEFAULT OR NONPERFORMANCE. If a Party is in
material breach of its obligations under this Agreement, then the
other Party shall give notice to the breaching party of such breach
of this Agreement. If the breaching Party fails to cure such breach
(or, if the breach is of a
36
negative covenant, to cease such breach) within (i) thirty (30) days
of written notice if the breach is the failure to make a payment, or
(ii) such period as may be specified in any order of any
governmental authority, which order has not been stayed pending any
appeal or request for reconsideration or (iii) ninety (90) days of
notice of any other material breach, then, in addition to all rights
and remedies available to the other Party under law or at equity,
such other Party may terminate this Agreement by notice to the
breaching Party. Material breaches of this Agreement by Operator
include, but are not limited to, any payment default by Operator,
the failure of Operator to maintain operations on any ITFS Channel
for a one hundred eighty (180) day period, or such longer period as
Licensee may determine in its discretion, (without regard to
Licensee control obligations under FCC Rules), the failure of
Operator within the time frame specified by the FCC to obey any
order of the FCC directed to Operator or Licensee concerning the
ITFS Channels.
c) TERMINATION BY REASON OF INSOLVENCY OR BANKRUPTCY. If either Party
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 that Party, or if either
Party files a petition for relief pursuant to any state insolvency
laws, then, to the extent allowed under law, this Agreement may be
immediately terminated by the other Party upon notice.
d) NO RIGHTS BEYOND TERM OF LICENSES. This Agreement shall not give
rise to any rights or remedies beyond the expiration of any FCC
License necessary for the continued operation of the ITFS Channels;
provided, however, any such expiration shall not be effective so
long as an application to renew such license or reconsider such
revocation is pending or subject to lawful and timely
reconsideration, review or appeal, and Licensee has authority to
operate the related ITFS Channel.
e) LICENSEE'S RIGHT TO PERFORM OPERATOR'S OBLIGATIONS. In the event
that Operator shall fail or refuse to perform any material
obligation or duty of Operator under this Agreement, Licensee may
perform such obligation after notifying Operator of its failure or
refusal to perform such obligation and all of Licensee's reasonable
out-of-pocket costs and expenses in connection with such performance
shall be reimbursed by Operator within thirty (30) days of each
request therefor, along with interest on such amount accruing for
each dollar when paid by Licensee at the rate set forth in
SUBPARAGRAPH 4(c) and also due within thirty (30) days of demand.
9. PURCHASE OPTION UPON EXPIRATION OR TERMINATION. Subject to SUBPARAGRAPHS
8(d), 9(a), 9(b) AND 9(c), in the event this Agreement expires
37
or is terminated for any reason other than a default by Licensee, Licensee
shall have the option upon giving written notice to Operator within thirty
(30) days of such expiration or termination to (i) purchase in the event
that Operator discontinues services in the Market Area following such
expiration or termination ("Equipment Purchase"), or (ii) lease from
Operator, if Operator uses such equipment in connection with other
channels or operations ("Equipment Lease"), only that minimum portion of
the software and/or equipment necessary to continue operation of the
Channels for the provisions of services to Licensee's then existing
customers (the "Transferable Equipment").
a) OPERATOR'S DEFAULT. If this agreement is terminated by reason of a
default by Operator, Licensee shall have the option (i) with respect
to an Equipment Purchase, to purchase the Transferable Equipment at
a price equal the lesser of (A) to the then fair market value of the
Transferable Equipment (taking into account depreciation) or (B) the
net book value of the Transferable Equipment, or (ii) with respect
to an Equipment Lease, to lease the Transferable Equipment from
Operator for a period of not longer than the date on which the FCC
License expires or is otherwise terminated at a lease rate equal to
the then fair market lease value of the Transferable Equipment.
b) TERMINATION WITHOUT DEFAULT. If this Agreement is terminated or
expires for any reason other than a default by Licensee or a default
by Operator, then Licensee shall have the option (i) with respect to
an Equipment Purchase, to purchase the Transferable Equipment at a
price equal to the greater of (A) the then fair market value of the
Transferable Equipment (taking into account depreciation) or (B) the
replacement value of the Transferable Equipment, or (ii) with
respect to an Equipment Lease, to lease the Transferable Equipment
from Operator for a period of not longer than the third (3rd)
anniversary of the date of the termination or expiration of this
Agreement at a lease rate equal to (x) the then fair market lease
value of the Transferable Equipment or (y) a market lease rate based
on the replacement value of the Transferable Equipment.
c) OPTION PROCEDURE. To exercise its purchase or lease rights as set
forth in this PARAGRAPH 9, Licensee shall provide Operator with
notice of its intent to exercise such rights and written notice of
such exercise elections as allowed by SUBPARAGRAPHS 9(a) and (b)
within thirty (30) days after the termination or expiration of this
Agreement. In the event that Licensee elects to purchase the
Transferable Equipment, Licensee shall promptly pay to Operator the
purchase price and Operator shall convey to Licensee title and
possession of the Transferable Equipment. Deliver of the
Transferable Equipment shall be accompanied by a xxxx of sale. In
the event that
38
Licensee elects to lease the Transferable Equipment, Licensee and
Operator shall, in good faith, promptly negotiate the terms of and
enter into a lease agreement
d) FAIR MARKET VALUE OR LEASE RATE OF TRANSFERABLE EQUIPMENT. If the
parties do not agree on the fair market value or fair market lease
value of the Transferable Equipment within thirty (30) days of
Licensee's exercise of its option, the fair market value shall be
submitted to Baseball Arbitration pursuant to PARAGRAPH 14. The cost
of the arbitrator shall be borne equally by both parties.
e) SURVIVAL. The provisions of this PARAGRAPH 9 shall survive the
expiration or termination of this Agreement.
10. ASSIGNMENT AND TRANSFER OF RIGHTS AND OBLIGATIONS.
a) Operator may, without the prior consent of Licensee, assign its
rights and/or obligations under this Agreement; provided that, (i)
Operator gives written notice to Licensee of such assignment; and
(ii) the assignee, upon the effective date of the assignment, either
(w) pays all Monthly Royalty Fees then Due Licensee pursuant to
SUBPARAGRAPH 4(a) on an accelerated basis; (x) provides a letter of
credit or other security reasonably acceptable to Licensee; (y)
Operator provides Licensee with a guaranty of payment at that time;
or (z) Licensee, in its reasonable determination is satisfied that
the assignee is creditworthy and has the financial abilities to
perform the obligations of this Agreement; and (iii) unconditionally
agrees in writing to assume Operator's obligations under this
Agreement.
b) Licensee may assign or transfer the License to (i) a non-profit
Affiliate or wholly-owned subsidiary of Licensee or (ii) subject to
a prior FCC Transfer Decision occurring, a for-profit Affiliate or
wholly-owned subsidiary of Licensee; provided, however that in
either case, Licensee provides Operator written notice on or before
the effective date of the assignment, the assignee agrees in writing
to assume Licensee's obligations under this Agreement, and Licensee
provides Operator with a guaranty of performance of the assignee's
obligations under this Agreement prior to the effectiveness of the
assignment. In addition, Operator acknowledges and understands that
Licensee may at some point, for reasons deemed sufficient to
Licensee, discontinue ITFS operations. Subject to SUBPARAGRAPH 9(c),
Licensee shall notify Operator in writing in advance of finalizing
any such decision and, to the extent not then prohibited by FCC
Rules, shall not discontinue ITFS operations without first assigning
the License to an FCC-qualified entity which is reasonably
acceptable to Operator and which agrees to assume Licensee's
obligations under this Agreement.
39
c) RIGHT OF FIRST REFUSAL UPON SALE OF FCC LICENSES.
(i) If (i) at any time the FCC modifies its rules to permit the
sale, assignment or transfer of the FCC Licenses to for-profit
entities (an "FCC Transfer Decision"), and Licensee chooses,
in its sole discretion to sell, assign or transfer one or more
of the FCC Licenses to a for profit entity (other than a
for-profit entity that is an Affiliate of Licensee)
(collectively such sale, assignment or transfer, a "FCC
Licenses Sale"), or (ii) Licensee chooses, in its sole
discretion to sell, assign or transfer one or more of the FCC
Licenses to a not-for-profit entity (other than a
not-for-profit entity that is an Affiliate of Licensee)
("Not-for-Profit Transfer"), then the following provisions
shall apply with respect to each such FCC License:
(ii) Licensee shall deliver to Operator a written notice ("Transfer
Notice"), which notice shall (A) state Licensee's intention to
make a FCC Licenses Sale or Not-for-Profit Transfer of one or
more FCC Licenses to one or more qualified Persons, a
description of the FCC License involved, the purchase price
therefore and a summary of the other material terms of the
proposed FCC Licenses Sale or Not-for-Profit Transfer (as
applicable) and (B) offer, in accordance with this
SUBPARAGRAPH 10(c), to Operator (x) the option to acquire the
applicable FCC License(s) upon the terms and subject to the
conditions of the proposed FCC Licenses Sale as set forth in
the Transfer Notice (the "FCC Licenses Sale Offer"), or (y)
the option to designate a FCC qualified entity to acquire the
applicable FCC License(s) upon the terms and subject to the
conditions of the proposed Not-for-Profit Transfer as set
forth in the Transfer Notice (the "FCC Transfer Offer"). The
FCC Licenses Sale Offer or FCC Transfer Offer, as applicable,
shall remain open and irrevocable for the periods set forth
below (and, to the extent the FCC Licenses Sale Offer or FCC
Transfer Offer is accepted during such periods, until the
consummation of the FCC Licenses Sale or the Not-for Profit
Transfer as contemplated by the FCC Licenses Sale Offer or the
FCC Transfer Offer, as applicable). Operator (or its FCC
qualified designee with respect to an FCC Transfer Offer)
shall have the right and option, for a period of forty-five
(45) days after receipt of the Transfer Notice ("Acceptance
Period"), to accept the FCC Licenses Sale Offer or the FCC
Transfer Offer, as applicable, on the terms stated in the
Transfer Notice. Such acceptance shall be made by delivering a
written notice of such acceptance to Licensee within the
Acceptance Period.
40
(iii) If the acceptance of the FCC Licenses Sale Offer or FCC
Transfer Offer, as applicable, is not delivered pursuant to
SUBPARAGRAPH 10(c)(ii) within the Acceptance Period, then
Licensee may sell, assign or transfer the applicable FCC
License so offered for sale, assignment or transfer in the
Transfer Notice and not so accepted, at a price not less than
the price and on the terms, taken as a whole, no more
favorable to the purchaser thereof than the price and terms
stated in the Transfer Notice at any time within one hundred
twenty (120) days after the expiration of the Acceptance
Period (the "Licensee Transfer Period"). In the event that the
applicable FCC License is not sold, assigned or transferred by
Licensee during the Licensee Transfer Period, the right of
Licensee to sell, assign, or transfer such FCC License shall
expire and the obligations of this SUBPARAGRAPH 10(c) shall be
reinstated; provided, however, that in the event that Licensee
determines, at any time during the Licensee Transfer Period,
that the sale , assignment or transfer of the FCC License on
the terms set forth in the Transfer Notice is impractical,
then Licensee may terminate the offer and reinstate the
procedure provided in this SUBPARAGRAPH 10(c) without waiting
for the expiration of the Licensee Transfer Period.
(iv) All transfers of FCC Licenses to Operator that are subject to
a Transfer Notice pursuant to this Agreement shall be
consummated contemporaneously at the offices of Operator on a
mutually satisfactory Business Day within thirty (30) days
following the expiration of the Sale Acceptance Period or, if
later, the fifth business day following the receipt of any
regulatory approvals.
11. REPRESENTATIONS AND WARRANTIES OF LICENSEE.
a) ORGANIZATION AND GOOD STANDING; POWER AND AUTHORITY; QUALIFICATIONS.
Licensee is a nonprofit corporation duly organized, validly existing
and in good standing under the laws of the State of New York and has
all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now conducted
and as proposed to be conducted. Licensee is duly qualified or
authorized to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it owns or
leases real property or the Licenses and each other jurisdiction in
which the conduct of its business or the ownership of its properties
requires such qualification or authorization.
b) AUTHORIZATION OF AGREEMENT. Licensee has all requisite corporate
power and authority (i) to enter into, deliver and carry out the
transactions contemplated by this Agreement and each other
agreement, document, or
41
instrument or certificate contemplated by this Agreement, and (ii)
to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly and validly executed and delivered by
Licensee and (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes
the legal, valid and binding obligations of Licensee, enforceable
against it in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law
or in equity).
c) NO CONFLICT.
(i) Neither the execution and delivery by Licensee of this
Agreement, nor compliance by Licensee with any of the
provisions hereof or thereof will (i) conflict with, or result
in the breach of, any provision of the Governing Documents (as
defined in the Spectrum Agreement) of Licensee, (ii) conflict
with, violate, result in the breach of, constitute (with or
without due notice, lapse of time or both) a default under,
result in the acceleration of, create in any party the rights
to accelerate, terminate, modify or cancel, or require any
notice, consent or waiver under, any note, bond, mortgage,
indenture, license, agreement or other obligation to which
Licensee is a party or by which Licensee or any of its
properties or assets is bound or (iii) violate any statute,
rule, regulation, order or decree of any Government Agency or
authority by which Licensee is bound.
(ii) No consent, waiver, approval, order, permit or authorization
of, or declaration or filing with, or notification to, any
Person or Government Agency is required on the part of
Licensee in connection with the execution and delivery of this
Agreement or the compliance by Licensee with any of the
provisions hereof.
d) COMPLIANCE WITH LAWS. Except as provided in Schedule 11(d), Licensee
(a) has complied in all respects with all federal, state, local and
foreign laws, rules, ordinances, codes, consents, authorizations,
registrations, regulations, decrees, directives, judgments and
orders applicable to it and its business other than where
noncompliance would not, individually or in the aggregate,
reasonably be expected to have a Licensee Material Adverse Effect
and (b) has all federal, state, local and foreign governmental
Permits necessary in the conduct of its business as currently
conducted and to own and use its assets in the manner in which such
assets are currently owned
42
and used other than where the failure to possess such Permits would
not, individually or in the aggregate, reasonably be expected to
have a Licensee Material Adverse Effect, such Permits are in full
force and effect, and no violations have been recorded in respect of
any such Permit, and no proceeding is pending or, to the best
knowledge of Licensee, threatened to revoke or limit any such
Permit. Schedule 11(d) sets forth a list of all material licenses,
permits and qualifications (other than the FCC Licenses) and the
expiration dates thereof.
e) FCC MATTERS. Throughout the Term of this Agreement and the term of
this Agreement:
(i) Licensee holds, and is fully qualified in all respects to
hold, the FCC Licenses set forth and described on Exhibit A,
which sets forth the name of the licensee, the FCC call sign,
the Channels, the Market Area, the number of Households and
the number of CPOPs. The Licenses constitute all of the
licenses, permits and authorizations from the FCC that are
necessary or required for and/or used in the operations of
Licensee in the Market Area. To the best knowledge of
Licensee, all information set forth in such Schedule is
complete and accurate in all respects. Except for Pending
Applications (as defined in the Spectrum Agreement) filed
prior to the Effective Date and those modifications that have
been granted by the FCC prior to the Effective Date, neither
Licensee nor any of its Affiliates have modified or sought to
have modified any License.
(ii) Licensee holds all of the Licenses set forth on Exhibit A and
such Licenses are free and clear of all Liens (except for the
rights of first refusal set forth on Schedule 11(e)(ii)). None
of the Licenses set forth such schedule are subject to CCI
Rights (as defined in the Spectrum Agreement) or are otherwise
subject to the terms of the Clearwire Agreement (as defined in
the Spectrum Agreement).
(iii) Except as set forth on Schedule 11(e)(iii), to the best
knowledge of Licensee, (i) the grant, renewal or assignment of
the Licenses to the existing licensee thereof was approved by
the FCC by final order and the Licenses are validly issued and
in full force and effect; (ii) except with respect
construction permit extension requests, there is no Proceeding
pending before the FCC or threatened with respect to any
License; (iii) Licensee and its Affiliates have made on a
timely basis all payments to any applicable Government Agency
with respect to the Licenses, including all payments due to
the FCC and all required copyright royalty fee payments and
all required Statements of Account to the U.S. Copyright
Office relating to
43
retransmission of television and radio broadcast signals; and
(iv) Licensee is otherwise in compliance with the requirements
of the compulsory copyright license described in Section 111
of the Copyright Act and with all applicable rules and
regulations of the Copyright Office..
(iv) Except as set forth on Schedule 11(e)(iv), to the best
knowledge of Licensee, all Pending Applications (as defined in
the Spectrum Agreement) have been timely filed, and the FCC
has not notified any of Licensee that any of the Pending
Applications is subject to denial due to lack of timely filing
or other defect.
(v) Except as set forth on Schedule 11(e)(v), to the best
knowledge of Licensee, (i) the facilities subject to a License
for which a certification or notification of completion of
construction has been filed with the FCC ("Constructed
Facilities") are operating, and have been operating, in
material compliance with the License therefore, the
Communications Act and FCC Rules, (ii) Licensee is not
transmitting from or otherwise operating any Constructed
Facility that is not the subject of an License, (iii) none of
the Constructed Facilities subject to a License (A) is
authorized pursuant to an authorization which is subject to
challenge before any court of competent jurisdiction or (B)
other than as set forth on Schedule 11(e)(v), is subject to
any lease, sub-lease or any agreement to make it available to
a third party; (iv) no License is subject to a revocation
proceeding; and (v) no Constructed Facilities are operating
pursuant to special temporary or developmental authority.
(vi) Except as set forth on Schedule 11(e)(vi), to the best
knowledge of Licensee, Licensee's licensed ITFS facilities are
being operated, and Licensee's operations and activities
pursuant to any Licenses are being conducted, in compliance
with (A) the Communications Act, (B) the terms and conditions
of the Licenses applicable to them, and (C) the FCC Rules.
(vii) Except as set forth Schedule 11(e)(vii), to the best knowledge
of Licensee, all FCC Reports and fees required to be filed by
each Licensee with the FCC with respect to the Licenses and
they have been timely filed. All FCC Reports filed by any of
Licensee are complete and correct in all material respects.
f) TOWER LEASES. Schedule 11(f) sets forth a true and complete list of
each Tower Lease to which Licensee is party in a Market Area, the
Market Area, the expiration date of the lease, the name of the
lessor, the address or
44
location of the leased premises or tower site, and the monthly,
quarterly or annual rent, as applicable, payable under such Tower
Lease. Each Tower Lease is valid, binding on Licensee and, to the
best knowledge of Licensee, each other party thereto and is in full
force and effect, enforceable by Licensee in accordance with its
terms. Neither Licensee nor, to the best knowledge of Licensee, any
other party to any of the Tower Leases has failed to comply with or
is in material breach or material default thereunder. Except as set
forth on Schedule 11(f), to the best knowledge of Licensee, no
condition exists or event has occurred and is continuing which, with
or without the lapse of time or the giving of notice, or both, would
constitute a material default by any party under any Tower Lease.
g) INTERFERENCE COORDINATION AGREEMENTS. To the best knowledge of
Licensee, Schedule 11(g) sets forth a true and complete list of all
interference consents that have been granted by Licensee with
respect to any Licenses and that would have a material impact on the
use of the Channels (excluding routine consents customary in the
industry).
h) LITIGATION. Except as set forth on Schedule 11(h), 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
("Government Agency").
i) DISCLOSURE. Neither this Agreement (including all exhibits, annexes,
schedules or attachments hereto) nor any certificate furnished or
made to Operator or pursuant to or in connection with this Agreement
(including all exhibits, annexes, schedules or attachments hereto)
contains any untrue statement of a material fact or, to the best
knowledge of Licensee, omits to state a material fact necessary in
order to make the statements contained herein and therein not
misleading.
j) KNOWLEDGE. Any representation, warranty, covenant, obligation, or
part thereof that states that it is made to the best knowledge of
Licensee is made to its best knowledge after commercially reasonable
investigation and includes all facts which it knew or should have
known as a result of such investigation, including the best
knowledge after commercially reasonable investigation of Licensee's
executive officers and legal counsel.
45
12. INSURANCE.
From and after the Effective Date, Operator, at its sole expense, shall
secure and maintain (to the extent available at commercially reasonable
rates) with financially reputable insurers one or more policies of
insurance insuring the Transmission Equipment and Operator's utilization
of the ITFS Channels against casualty and other losses of the kinds
customarily carried under similar circumstances by such firms, including,
without limitation: (a) "All risk" property insurance covering such
Transmission Equipment to the extent of one hundred percent (100%) of its
full replacement value without deduction for depreciation; (b)
comprehensive general liability insurance covering liability resulting
from Operator's operation of the ITFS Channels on an occurrence basis
having minimum limits of liability in an amount of not less than Three
Million Dollars ($3,000,000.00) for bodily injury, personal injury, or
death to any person or persons in any one occurrence, and not less than
Six Million Dollars ($6,000,000.00) in the aggregate for all such losses
during each policy year, and not less than Three Million Dollars
($3,000,000.00) with respect to damage to property (such minimum limits in
clauses (a) and (b) to be increased by fifteen percent (15%) as of January
1, 2006 and every five years thereafter); and (c) all workers
compensation, automobile liability and similar insurance required by law.
All such policies shall designate Licensee as either the insured party or
as a named additional insured party, shall be written as primary policies,
not contributory with and not in excess of any coverage which Licensee may
carry, and shall provide that the issuer shall notify Licensee thirty (30)
days prior to any cancellation or lapse of such insurance or in any change
in the coverage thereof. Executed copies of the policies of insurance
required under this Paragraph or certificates thereof shall be delivered
to Licensee prior to the Effective Date. Operator shall furnish Licensee
with evidence of renewal of each such policy prior to the expiration of
the term thereof. All insurance policies obtained pursuant to this
Subparagraph shall reflect that loss proceeds payable thereunder shall be
made payable to the party or parties incurring the related loss except to
the extent that such loss proceeds relate to the repair, maintenance or
replacement of Transmission Equipment or other equipment or facilities the
repair, maintenance, or replacement of which (i) is the financial
responsibility of the Operator or (ii) has been commenced or completed by
the Operator, in which case such loss proceeds shall be made payable to
the Operator only and Operator shall be responsible for such repair,
maintenance or replacement. In the event that any loss proceeds are paid
or intended to be paid other than in accordance with the foregoing
sentence, Licensee agrees to fully cooperate with either the applicable
insurer or the Operator as required to ensure that such loss proceeds are
paid in accordance herewith.
13. RESTRICTIVE COVENANTS.
46
Each Party (the "Protected Party") acknowledges that there may be made
available to it pursuant to this Agreement, or may have been made
available to it, proprietary information of the other Party (the
"Protecting Party") or its board members, Affiliates, agents or
contractors ("Confidential Information"), the value of which may be
reduced or destroyed by unauthorized dissemination. Accordingly, the
Protecting Party agrees that, except and to the extent it may be required
by law or to the extent necessary to enforce or defend its rights under
this Agreement before an appropriate tribunal, neither it nor any of its
board members, Affiliates, employees, agents, controlling parties or
contractors shall, in any manner, directly or indirectly, disclose such
Confidential Information to any person, firm, corporation, agent or
contractor or other entity (other than the Protecting Party's attorneys
and consultants who agree in writing with the Protected Party to these
confidentiality provisions) and said undertakings are enforceable by
injunctive or other equitable relief to prevent any violation or
threatened violation thereof and without prejudice to any other legal
remedies of the Protected Party. Each Protecting Party may disclose this
Agreement to its Affiliates; strategic partners; actual or potential
investors, lenders, acquirers, merger partners; and others whom the
Protecting Party deem in good faith to have a need to know such
information for purposes of pursuing a transaction or business
relationship with the Protecting Party; provided that the Protecting Party
secures an enforceable obligation from such third party to limit the use
and disclosure of Confidential Information as provided herein. To the
extent a copy of this Agreement or any amendment thereto is required to be
filed with the FCC, all terms (including financial terms) stating
compensation, reimbursement or contributions from Operator to Licensee or
third parties must be redacted from such filing to the extent permitted by
the FCC.
14. RESOLUTION OF CERTAIN DISPUTES.
a) If the Parties are unable to resolve any monetary dispute under this
Agreement or any dispute as to the interpretation of a provision of
this Agreement (each, a "Dispute"), subject to the additional
procedures set forth in SUBPARAGRAPHS 2(e) AND 5(b), the baseball
decision rules ("Baseball Arbitration") set forth in SUBPARAGRAPH
14(b) shall apply. If the Parties are unable to resolve any other
disputes (each a "Breach Dispute"), including without limitation
disputes regarding a breach or default under this agreement, the
parties shall arbitrate such dispute pursuant to the rules set forth
in SUBPARAGRAPH 14(c).
b) Any such matter shall be resolved by a single Arbitrator. In the
event of a Dispute, either party may request by written notice to
the other party that it wishes to submit the disputed matter for
resolution by Baseball Arbitration. The parties agree to submit to
an Arbitrator within 30 days after the
47
requesting party's notice has been received by the other party.
Within fifteen (15) days (the "Submission Period") after the
appointment of the arbitrator (the "Arbitrator") in accordance with
the Commercial Arbitration Rules (then in effect) of the American
Arbitration Association for arbitration of commercial disputes (the
"AAA"), each Party shall submit to the Arbitrator its own proposal
for the resolution of the contested issue. Such submissions shall
remain secret until after the Arbitrator has received each Party's
proposal, at which time the Arbitrator shall inform each Party of
the other's proposal. No such proposal may be amended after it is
submitted to the Arbitrator. The Arbitrator shall compare the
proposals. Except as otherwise provided in SUBPARAGRAPH 4(b) for
arbitration thereunder, the Arbitrator shall determine which
proposal he or she believes to be the resolution most closely in
accordance with the relevant provisions of this Agreement and shall
order the adoption of such proposal as the relief granted. If any
Party fails to submit its proposal by the end of the Submission
Period, the Arbitrator shall order the adoption of the other Party's
proposal. The Arbitrator may rely upon such evidence as the
Arbitrator may choose in his or her discretion in making such
determination, and may permit discovery in accordance with the
provisions of this SUBPARAGRAPH 14(a).
c) Any such mater shall be resolved by a single Arbitrator. In the
event of a Breach Dispute either party may request by written notice
to the other party that it wishes to submit the disputed matter for
resolution by an Arbitrator. The parties agree to submit to an
Arbitrator within 30 days after the requesting party's notice has
been received by the other party. During the Submission Period, the
parties shall appoint the Arbitrator in accordance with the
Commercial Arbitration Rules (then in effect) of the American
Arbitration Association for arbitration of commercial disputes (the
"AAA"). The parties agree to permit discovery proceedings of the
type provided by the Federal Rules of Civil Procedure both in
advance of, and during recesses of, the arbitration hearings. 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).
d) The arbitration hearing shall be located at a neutral site as
mutually agreed by the parties, or if the parties cannot so agree,
then (i) if the arbitration is commenced by Licensee, the location
of the arbitration shall be in Seattle, Washington, or (ii) if the
arbitration is commenced by Operator, the location of the
arbitration shall be in New York, New York. The Federal Rules of
Evidence shall apply to the arbitration hearing. The Party bringing
a particular claim or asserting an affirmative defense will have the
burden
48
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 or authority, pursuant to the rules of the AAA or
otherwise, to relieve the Parties from their agreement hereunder to
arbitrate or otherwise to amend or disregard any provision of this
Agreement, including without limitation the provisions of this
Paragraph.
e) Should an Arbitrator refuse or be unable to proceed with arbitration
proceedings as called for by this Paragraph, the Arbitrator shall be
replaced pursuant to the rules of the AAA. If an arbitrator is
replaced after the arbitration hearing has commenced, then a
rehearing shall take place in accordance with this Paragraph and the
rules of the AAA.
f) Within fifteen (15) days after the closing of the arbitration
hearing, the Arbitrator will prepare and distribute to the parties a
writing setting forth the Arbitrator's or Arbitration Panel's
finding of facts and any relevant conclusions of law relating to the
Dispute, including the reasons for the giving or denial of any
award. The findings and conclusions and the award, if any, shall be
deemed to be information subject to the confidentiality provisions
of this Agreement.
g) The Arbitrator is instructed to schedule promptly all discovery and
other procedural steps and otherwise to assume case management
initiative and control to effect an efficient and expeditious
resolution of the Dispute. The Arbitrator or Arbitration Panel is
authorized to issue monetary sanctions against either party if, upon
a showing of good cause, such party is unreasonably delaying the
proceeding.
h) Any award rendered by the Arbitrator will be final, conclusive and
binding upon the Parties and any judgment thereon may be entered and
enforced in any court of competent jurisdiction.
i) Each Party will bear an equal one-half of all fees, costs and
expenses of the Arbitrators, and notwithstanding any law to the
contrary, each Party will bear all the fees, costs and expenses of
its own attorneys, experts and witnesses; provided, however, in
connection with any judicial proceeding to compel arbitration
pursuant to this Agreement or to confirm, vacate or enforce any
award rendered by the Arbitrator, the prevailing party in such a
proceeding shall be entitled to recover reasonable attorney's fees
and expenses incurred in connection with such proceedings, in
addition to any
49
other relief to which it may be entitled; the non-prevailing party
to an arbitration shall pay its own expenses, the fees of each
arbitrator, the administrative fee of the AAA, and the expenses,
including without limitation, attorneys' fees and costs, and expert
and witness fees and costs, incurred by the other party to the
arbitration.
j) Notwithstanding anything to the contrary in this PARAGRAPH 14,
either party may seek injunctive relief from a court of competent
jurisdiction (in accordance with PARAGRAPH 19 at any time without
complying with the foregoing provisions.
15. FORCE MAJEURE.
If by reason of Force Majeure either Party is unable in whole or in part
to perform its obligations hereunder, such Party shall not be deemed to be
in violation or default during the period of such inability solely as a
result of such inability, provided that this provision shall not be
construed to limit in any way or otherwise relieve either Party of its
obligation under any other provision of this Agreement, which is
applicable upon the occurrence of Force Majeure. "Force Majeure" shall
mean the following: acts of God, acts of third parties outside of such
Party's control, acts of public enemies, orders of any branch of the
government of the United States, or any State or any political
subdivisions thereof having legal jurisdiction (unless such order would
otherwise be the basis for a termination pursuant to SUBPARAGRAPH 8(a))
which are not the result of action or inaction of the Party that would
constitute a breach of this Agreement, public insurrections, interference
from unauthorized sources, floods, sinkholes, riots, epidemics, fires,
civil disturbances, explosions, power outages, meteorological or
astronomical events, labor disturbances and strikes or any other cause or
event not reasonably within the control of the Party failing in its
performance hereunder.
16. INDEMNIFICATION.
a) Operator shall indemnify, defend and hold Licensee, its Affiliates,
their respective officers, directors, partners, managing directors,
Affiliates, employees, agents, consultants, representatives,
successors and assigns harmless from and against all Losses (as
hereinafter defined) incurred or suffered by such person or entity
arising out of, relating to, or resulting from (i) harmful
interference caused or allegedly caused by the installation, use or
maintenance by Operator or for Operator's subscribers of
Transmission Equipment or subscriber response station equipment,
(ii) any claims that Operator's operation of equipment using any of
the ITFS Channels including, is causing or has caused or allegedly
is causing or allegedly has caused any adverse effect on health or
the environment; (iii) any claims by third parties related to
Operator's operation of the System;
50
and (iv) any action by the FCC pursuant to or arising directly from
a breach by Operator of the terms or conditions of this Agreement
(as amended from time to time). Notwithstanding the foregoing,
Operator's indemnification obligations hereunder shall be subject to
the deductible of Five Thousand Dollars ($5,000).
b) For purposes of this Agreement, "Losses" shall mean, subject to the
proviso following, each and all of the following items: claims,
losses (including, without limitation, losses of earnings),
liabilities, obligations, payments, damages (actual, punitive or
consequential), charges, judgments, fines, penalties, amounts paid
in settlement, costs and expenses (including, without limitation,
interest which may be imposed in connection therewith), costs and
expenses of investigation, actions, suits, proceedings, demands,
assessments and fees, lost FCC Licenses, expenses and disbursements
of counsel, consultants and other experts; provided, however, Losses
shall not include consequential damages, special damages, loss of
earnings or punitive damages.
c) A Party seeking indemnification under this Agreement shall, promptly
upon becoming aware of the facts indicating that a claim for
indemnification may be warranted, give to the Party from whom
indemnification is being sought a claim notice relating to such Loss
(a "Claim Notice"). Each Claim Notice shall specify the nature of
the claim, the applicable provision(s) of this Agreement or other
instrument under which the claim for indemnity arises, and, if
possible, the amount or the estimated amount thereof. No failure or
delay in giving a Claim Notice (so long as the same is given prior
to expiration of the representation or warranty upon which the claim
is based) and no failure to include any specific information
relating to the claim (such as the amount or estimated amount
thereof) or any reference to any provision of this Agreement or
other instrument under which the claim arises shall affect the
obligation of the Party from whom indemnity is sought except to the
extent such Party is materially prejudiced by such failure or delay.
17. NOTICE.
All notices, requests, consents and other communications hereunder to any
party shall be deemed to be sufficient if contained in a written
instrument delivered in person or sent by telecopy (with a confirmatory
copy sent by a different means within three business days of such notice),
nationally recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by such party to the other Parties:
51
(i) if, to Operator, to:
Fixed Wireless Holdings, LLC
0000 Xxxxxxxxxxxx Xxxxxx XX
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: R. Xxxxxx Xxxxxxx
with a copy to:
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx, Esquire
(ii) if to Licensee:
Hispanic Information and Telecommunications Network, Inc.
000 Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx Xxxx Xxxxxxxxx
with copies to:
Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
and
RJGLaw LLC
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
All such notices, requests, consents and other communications shall be
deemed to have been given when received.
18. GOVERNING LAW.
52
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law that might result in the application of the laws of any
other jurisdiction.
19. 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 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.
20. CONSTRUCTION.
The definitions in this Agreement shall apply to both the singular and
plural forms of the terms defined. For the convenience of the parties,
Exhibit B references the Paragraphs and Subparagraphs of this Agreement in
which terms are defined. The words "include," "includes," and "including"
shall be deemed to be followed by the phrase "without limitation." All
references to Paragraphs, to Subparagraphs and to Exhibits are references
to Paragraphs, to Subparagraphs and to Exhibits of this Agreement. The
terms "this Agreement," "hereof," "hereunder" and similar expressions
refer to this Agreement as a whole unless specifically stated.
21. HEADINGS.
The Paragraph and Subparagraph headings are for the convenience of the
parties and shall not be used to interpret this Agreement.
22. RELATIONSHIP OF PARTIES.
This Agreement creates a capacity use relationship and not a joint venture
or partnership. Each Party will act so as to preserve that intent and
neither shall
53
present itself as the other party or represent itself as having the right
to represent, bind, or contract on behalf of, the other Party.
23. WAIVER.
The express or implied waiver by either Party of any breach of any
representation or warranty or any failure to fulfill any condition,
covenant or other obligation under this Agreement shall not constitute a
waiver of any other representation or warranty or of any other failure in
the future or in the past by the other Party to fulfill such
representation, warranty, condition, covenant or obligation hereunder.
24. ENTIRE AGREEMENT, AMENDMENTS.
This Agreement, along with its Exhibits, the Spectrum Agreement and the
agreements executed pursuant to the Spectrum Agreement, constitutes the
entire Agreement between the Parties regarding its subject matter and
supersedes all oral or prior written agreements of any kind between the
Parties relating to its subject matter. This Agreement may be modified
only by an amendment in writing executed by both Parties.
25. COUNTERPARTS.
This Agreement and any amendments to it may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument. The Parties shall accept
facsimile signatures as original signatures.
26. LICENSEE CONTROL.
To the extent required by FCC Rules, Licensee shall have: (a) access to
and control over the Transmission Equipment upon not less than twenty-four
(24) hours notice outside of business hours and four (4) hours notice
during business hours; (b) reasonable access during normal business hours
to the Transmission Equipment and response station equipment operating on
any ITFS Channels; and (c) the right to consult with Operator's
maintenance personnel at reasonable times, for reasonable periods and upon
reasonable notice concerning the maintenance of Transmission Equipment
used for the ITFS Channels and response station equipment operating on any
ITFS Channels; provided, however, Licensee shall not exercise rights under
this Paragraph in any manner that interferes with Operator's lawful use of
Operator's Capacity in accordance with this Agreement and FCC Rules, or
interferes with Operator's or any third party's lawful use in accordance
with this Agreement and FCC Rules of the equipment utilizing the ITFS
Channels. Operator shall at all times provide Licensee with the capability
of deactivating any
54
and all response stations operating on the ITFS Channels in accordance
with FCC Rule 74.939(o).
27. VALIDITY AND SEVERABILTY.
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid, but if any term or other
provision of this Agreement is invalid, illegal or incapable of being
enforced by any law or public policy, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties hereto affected by such
determination in any material respect shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties
as closely as possible in order that the provisions hereof are given
effect as originally contemplated to the greatest extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
OPERATOR LICENSEE
FIXED WIRELESS HOLDINGS, LLC HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxx Xxxxxxxxx
__________________________ ___________________________
Xxxxx Xxxxxxx, Vice President Xxxx Xxxx Xxxxxxxxx, President
[Signature Page to IUA for Buffalo, NY Market Area]
55
INCLUDED EXHIBITS AND SCHEDULE LIST:
A ITFS LICENSE, CHANNELS, METROPOLITAN AREA, PRIMARY TRANSMISSION SITE,
LOCATION OF LICENSEE'S ORIGINATION POINT AND LICENSEE'S DIGITAL CHANNEL
CAPACITY
B. DEFINITIONS
C. EXAMPLES PURSUANT TO SUBPARAGRAPH 2(d)(i) AND (ii)
56
EXHIBIT A
ITFS LICENSE, CHANNELS, METROPOLITAN AREA,
PRIMARY TRANSMISSION SITE,
LOCATION OF LICENSEE'S ORIGINATION POINT
AND LICENSEE'S DIGITAL CHANNEL CAPACITY
License Call Sign: WLX770
ITFS Channels: X0-X0
Xxxxxx Xxxx: Buffalo, NY
Primary Transmission Site:
57
EXHIBIT B
DEFINITIONS
"AAA" is defined in Paragraph 14(a).
"Acceptance Period" is defined in Subparagraph 9(c)(ii).
"Affiliate" is defined in Subparagraph 2(e)(i).
"Additional Standard Customer Packages" is defined in Subparagraph 6(b).
"Agreement" is defined in the opening paragraph.
"Arbitrator" is defined in Subparagraph 14(a).
"Baseball Arbitration" is defined in Subparagraph 14(a).
"Basic Feature" is defined in Subparagraph 2(g)(i).
"Basic Service Criteria" is defined in Subparagraph 2(g)(iii).
"Breach Dispute" is defined in Section 14(a).
"Claim Notice" is defined in Subparagraph 16(c).
"Collocation" is defined in Subparagraph 2(h)(v).
"Collocation Reference Contract" is defined in Subparagraph 2(h)(v).
"Common Equipment" is defined in Subparagraph 3(a)(vi).
"Confidential Information" is defined in Paragraph 13.
"Decoupling Event" is defined in Subparagraph 4(b).
"Deferral Notice" is defined in Subparagraph 2(f)(ii).
"Dispute" is defined in Subparagraph 14(a).
"Effective Date" is defined in Paragraph 1.
"End User" and "End Users" are defined in Subparagraph 3(a)(x).
"End User Throughput Rate" is defined in Subparagraph 2(d)(ii).
58
"Engineered Throughput Rate" is defined in Subparagraph 2(d)(ii).
"Enhanced Feature" is defined in Subparagraph 2(h)(i).
"Equipment Lease" is defined in Paragraph 9.
"Equipment Purchase" is defined in Paragraph 9.
"Equipment Notice Date" is defined in Subparagraph 2(a)(i)(2)(B).
"Excess Capacity" is defined in Subparagraph 2(f)(ii).
"Excess Usage Situation" is defined in Subparagraph 2(d)(iv).
"Fair Market Value Royalty Fee" is defined in Subparagraph 4(b)(i).
"FCC" is defined in the Recitals.
"FCC Licenses" is defined in Subparagraph 11(d).
"FCC Licenses Sale" is defined in Subparagraph 9(c).
"FCC Licenses Sale Offer" is defined in Subparagraph 9(c)(ii).
"FCC Rules" is defined in the Recitals.
"FCC Transfer Decision" is defined in Subparagraph 9(c).
"FCC Transfer Offer" is defined in Subparagraph 9(c)(ii).
"FCC Use Change" is defined in Subparagraph 7(b).
"Five Percent User" and "Five Percent Users" are defined in Subparagraph
2(d)(i).
"Force Majeure" is defined in Paragraph 15.
"Full Channel Option" is defined in Subparagraph 2(a)(iii).
"High Power Booster Station Equipment" is defined in Subparagraph 3(a)(ii).
"Hold-over Right" is defined in Subparagraph 2(a)(i)(2)(C).
"Hold-over Right Notice Date" is defined in Subparagraph 2(a)(i)(2)(C).
"Hold-over Services" is defined in Paragraph 9.
"Hub Receive Equipment" is defined in Subparagraph 3(a)(v).
59
"Hub Receive Site" is defined in Subparagraph 3(a)(v).
"Identified Legacy Equipment" is defined in Subparagraph 2(a)(ii).
"Initial Term" is defined in Paragraph 1.
"Internet Transit" is defined in Subparagraph 2(h)(iv).
"ITFS" is defined in the Recitals.
"ITFS Channel" and "ITFS Channels" are defined in the Recitals.
"ITFS Engineered Throughput Rate" is defined in Subparagraph 2(d)(i).
"Legacy Equipment" is defined in Subparagraph 2(a)(i)(2)(B).
"License" and "Licenses" are defined in the Recitals.
"Licensed Booster Station" is defined in Subparagraph 3(a)(ii).
"Licensee" is defined in the opening paragraph.
"Licensee Legacy Equipment" is defined in Subparagraph 2(a)(i)(2)(A).
"Licensee Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of Licensee, taken as a whole, other than changes
affecting the broadband wireless business generally.
"Licensee Purchase" is defined in Subparagraph 2(a)(i)(2)(B).
"Licensee Service Contract" is defined in Subparagraph 2(e)(iii).
"Licensee Transfer Period" is defined in Subparagraph 9(c)(iii).
"Licensee's Educational Reservation" is defined in Subparagraph 2(d)(i).
"Licensee's Expenses" is defined in Subparagraph 5(a).
"Licensee's Intermediate Capacity" is defined in Subparagraph 2(f)(i).
"Licensee's Notice Date" is defined in Subparagraph 4(b)(i).
"Licensee's Throughput" is defined in Subparagraph 2(d)(iii).
"Licensee's Throughput Rate Entitlement" is defined in Subparagraph 2(d)(ii).
60
"Licensee's Total Ordered Data Speeds" is defined in Subparagraph 2(d)(iv).
"Losses" is defined in Subparagraph 16(b).
"Low Power Booster Station Equipment" is defined in Subparagraph 3(a)(ii).
"Market Area" is defined in the Recitals.
"MDS" is defined in the Recitals.
"Network Management Services" is defined in Subparagraph 2(h)(iii).
"Nonstandard Installation" is defined in Subparagraph 6(b).
"Non-peak Hours" is defined in Subparagraph 2(d)(iii)(3).
"Not-for-Profit Transfer" is defined in Subparagraph 9(c).
"Operational Period" is defined in Subparagraph 2(d)(i).
"Operator" is defined in the opening paragraph.
"Operator Purchase" is defined in Subparagraph 2(a)(i)(2)(B).
"Operator's Capacity" is defined in Subparagraph 2(c).
"Operator's Group" is defined in Subparagraph 2(e)(i).
"OSHA" is defined in Subparagraph 3(f).
"Oversubscription Level" is defined in Subparagraph 2(d)(ii).
"Partial Channel Option" is defined in Subparagraph 2(a)(iii).
"Party" and "Parties" are defined in the opening paragraph.
"Peak Adjustment Number" is defined in Subparagraph 2(d)(iii)(1)(E).
"Peak Benchmark" is defined in Subparagraph 2(d)(iii)(1)(B).
"Peak Hours" is defined in Subparagraph 2(d)(iii)(3).
"Permitted End Users" is defined in Subparagraph 2(1).
"Permitted Uses" is defined in Subparagraph 2(1).
"Proceeding" means any action, suit, litigation, arbitration proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit,
61
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving any court or other Government Agency or any
arbitrator or arbitration panel..
"Price Index" is defined in Subparagraph 4(b)(iii).
"Primary Response Station Sites" is defined in Subparagraph 6(a).
"Primary Transmission Equipment" is defined in Subparagraph 3(a)(i).
"Primary Transmission Sites" is defined in Subparagraph 3(a)(i).
"Prior Use Agreement" is defined in Subparagraph 2(a)(i)(1).
"Prior User" is defined in Subparagraph 2(a)(i)(1).
"Prior User Legacy Equipment" is defined in Subparagraph 2(a)(i)(2)(B).
"Protected Party" and "Protecting Party" are defined in Paragraph 12.
"Reference Contract" is defined in Subparagraph 2(e)(ii)
"Renewal Term" is defined in Paragraph 1.
"Retail Price" is defined in Subparagraph 2(f)(i).
"Royalty Fee" is defined in Subparagraph 4(b)(i).
"Spectrum Agreement" is defined in the recitals.
"STA" is defined in Subparagraph 3(c).
"Standard Customer Package" is defined in Subparagraph 6(a).
"Start Date" is defined in Subparagraph 2(b)(iii).
"Submission Period" is defined in Subparagraph 14(a).
"System" is defined in the Recitals.
"System Change" is defined in Subparagraph 2(m).
"Target Month" is defined in Subparagraph 2(d)(iii).
"Term" is defined in Paragraph 1.
"Throughput" is defined in Subparagraph 2(d)(i).
62
"Throughput Rate" is defined in Subparagraph 2(d)(i).
"Total ITFS Throughput Rate" is defined in Subparagraph 2(d)(i).
"Transfer Notice" is defined in Subparagraph 9(c)(ii).
"Transferable Equipment" is defined in Paragraph 9.
"Transmission Equipment" is defined in Subparagraph 3(a)(x).
"Underutilization Situation" is defined in Subparagraph 2(d)(v).
"Unlicensed Booster Station" is defined in Subparagraph 3(a)(ii).
"Utilization Report" is defined in Subparagraph 2(d)(iii).
"Wholesale Agreement" is defined in Subparagraph 2(e)(i).
"Wholesale Price" is defined in Subparagraph (2)(f)(i)
63
EXHIBIT C
EXAMPLES PURSUANT TO SUBPARAGRAPH 2(d)(i) AND (ii)
64
Page 1 of 3
EXHIBIT C
EXAMPLE
Rev 1.2
OPERATING PARAMETERS
Base Stations 2
Sectors 6
BASE STATION 1
ITFS Engineered
Maximum Throughput Throughput Rate
(Mbps) Uses ITFS Channels (Mbps)
-------------------------------- ------------------ -------------------------------
Sector Downlink Uplink Combined Downlink Uplink Downlink Uplink Combined
------ -------- ------ -------- -------- ------ -------- ------ --------
1 1.60 1.45 3.05 yes yes 1.60 1.45 3.05
2 1.60 1.45 3.05 yes yes 1.60 1.45 3.05
3 1.60 1.45 3.05 yes yes 1.60 1.45 3.05
4 1.60 1.20 2.80 yes yes 1.60 1.20 2.80
5 1.60 1.20 2.80 yes yes 1.60 1.20 2.80
6 1.60 1.45 3.05 yes yes 1.60 1.45 3.05
----- -----
MARKET THROUGHPUT RATE 1 17.80(a) USING ITFS CHANNELS 17.80(d)
BASE STATION 2
ITFS Engineered
Maximum Throughput Throughput Rate
(Mbps) Uses ITFS Channels (Mbps)
-------------------------------- ------------------ -------------------------------
Sector Downlink Uplink Combined Downlink Uplink Downlink Uplink Combined
------ -------- ------ -------- -------- ------ -------- ------ --------
1 1.60 1.45 3.05 yes yes 1.60 1.38 2.98
2 1.60 1.45 3.05 yes yes 1.60 1.38 2.98
3 1.60 1.45 3.05 yes yes 1.60 1.38 2.98
4 1.60 1.10 2.70 yes no 1.60 0.00 1.60
5 1.60 1.10 2.70 yes no 1.60 0.00 1.60
6 1.60 1.10 2.70 yes no 1.60 0.00 1.60
----- -----
MARKET THROUGHPUT RATE 2 17.25(b) USING ITFS CHANNELS 13.74(e)
Market Throughput Rate (Mbps) (a) + (b) 35.05
Total ITFS Throughput Rate (Mbps) (d) + (e) 31.54(f)
Licensee's Educational Reservation (Mbps) 5% of (f) 1.58(g)
Oversubscription Level 10(h)
Licensee's Throughput Rate Entitlement (Mbps) (g) * (h) 15.77(j)
Page 2 of 3
EXHIBIT C
EXAMPLE
Combined
Downlink Uplink Data Rate
Products (Mbps) (Mbps) (Mbps)
-------- -------- ------ ---------
128 K Symmetrical 0.128 0.128 0.256
384 K Symmetrical 0.384 0.384 0.768
640 K Symmetrical 0.640 0.640 1.280
1 MB Symmetrical 1.000 1.000 2.000
1.5 MB Symmetrical 1.500 1.500 3.000
3.0 MB Symmetrical 3.000 3.000 6.000
1 MB Asymmetrical 1.000 0.512 1.512
End User Licensee's
Throughput Peak Throughput
Five Percent Users Rate Benchmark Peak Hours
User Product (Mbps) (terabytes) (terabytes)
---- ------- --------- ------------ ------------
1 1.5 MB Symmetrical 3.000 2.6 3.0
2 1 MB Symmetrical 2.000 1.7 1.7
3 1 MB Symmetrical 2.000 1.7 1.7
4 1 MB Symmetrical 2.000 1.7 2.9
5 1.5 MB Symmetrical 3.000 2.6 2.6
6 1.5 MB Symmetrical 3.000 2.6 2.6
7 384 K Symmetrical 0.768 0.7 0.4
----- ---- ----
Licensee's Total Ordered Data Speeds (Mbps) 15.77
Benchmark(terabytes) 13.6(p)
Licensee's Throughput (terabytes) 15.0(t)
Peak Non Peak
---- --------
Licensee's Educational Reservation (Mbps) 1.58 1.58(g)
Seconds per minute 60 60(l)
Minutes per Hour 60 60(m)
Hours per Day (Peak) 8 16(n)
Days per Month (example) 30 30(o)
Multiple 1 3(q)
---- ----
Benchmark (terabytes) 13.6 81.8(s)
= (g)*(l)*(m)*(n)*(o)*(q)/1,000,000
The utilization percentage is calculated by dividing the actual throughput of
all Licensee's Five Percent Users in a month by the Licensee's Throughput
Entitlement
Peak Non Peak
---- --------
Adjustment Ratio
Licensee's Throughput (terabytes) 15.0(t) 50.0
Benchmark (terabytes) 13.6 81.8(s)
Adjustment Ratio(t)/(s) 1.10 0.61(u)
The table immediately below shows the calculation of the Adjusted Licensee
Throughput Rate Entitlement which takes the Licensee Data Rate Entitlement and
divides it by the Adjustment Ratio for the month
Peak Non Peak
----- --------
Licensee's Throughput Rate Entitlement (Mbps) 15.77 15.77(l)
Adjustment Ratio 1.10 0.61(u)
Adjusted Licensee's Throughput Rate Entitlement (Mbps) 14.34 25.78(v)
Adjustment Number (Mbps) (v) - (l) (1.43) 10.02
The New Licensee's Throughput Rate is the minimum of the two Rev 1.2
Page 3 of 3
EXHIBIT C
EXAMPLE
Below is the example of Five Percent Users from the prior page. The bottom of
the prior page shows the need to reduce Licensee's Total Ordered Data Speeds
from 15.77 to 14.34
BEFORE ADJUSTMENT
Peak
End User Actual
Throughput Peak Licensee's
Five Percent Users Rate Benchmark Throughput
User Product (Mbps) (terabytes) (terabyte)
---- ------- --------- ----------- ----------
1 1.5 MB Symmetrical 3.000 2.0 3.0
2 1 MB Symmetrical 2.000 1.7 1.7
3 1 MB Symmetrical 2.000 1.7 1.7
4 1 MB Symmetrical 2.000 1.7 2.9
5 1.5 MB Symmetrical 3.000 2.6 2.6
6 1.5 MB Symmetrical 3.000 2.6 2.6
7 384 K Symmetrical 0.768 0.7 0.4
----- ----
Licensee's Total Ordered Data Speeds (Mbps) 15.77
Benchmark (terabytes) 13.6(s)
Licensee's Throughput (terabytes) 15.0(t)
Based on the need to reduce Licensee's Total Ordered Data Speeds, the below
example shows elimination (or conversion to pay) of Customer 2 in order to bring
the sum of the End User Throughput Rate to be equal or below the Adjusted
throughput Rate Entitlement of 14.34 Mbps.
End User
Throughput
Five Percent Users Rate
User Product (Mbps)
---- ------- ----------
1 1.5 MB Symmetrical 3.000
3 1 MB Symmetrical 2.000
4 1 MB Symmetrical 2.000
5 1.5 MB Symmetrical 3.000
6 1.5 MB Symmetrical 3.000
7 384 K Symmetrical 0.768
-----
Licensee's Total Ordered Date Speeds (Mbps) 13.77
Rev 1.2
