Exhibit 10.24
EBS CAPACITY USE AND ROYALTY AGREEMENT
THIS EBS CAPACITY USE AND ROYALTY AGREEMENT (this "Agreement") is made
this 15th day of September, 2005 by and between (i) HISPANIC INFORMATION AND
TELECOMMUNICATIONS NETWORK, INC., a New York not-for-profit corporation
("Licensee") and (ii) CLEARWIRE SPECTRUM 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."
R E C I T A L S:
WHEREAS, the Federal Communications Commission (including any successor
to its functions and powers, "FCC") allows Educational Broadband Service
("EBS"), formerly known as Instructional Television Fixed Service, EBS 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 EBS
channels listed on Exhibit A (each such channel, is referred to individually as
an "EBS Channel," and collectively as the "EBS Channels") in the metropolitan
area where the EBS 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 EBS Channels for these
purposes;
WHEREAS, Operator may enter into capacity use agreements with other EBS
and/or Broadband Radio Service ("BRS"), formerly known as Multipoint
Distribution Service licensees and applicants in the Market Area, may be the
licensee of BRS and EBS 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 EBS, BRS 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 Flux U.S. Corporation are parties to that certain
Option Spectrum Agreement dated March 29, 2004 (the "Option Spectrum
Agreement"), which provides for additional rights and obligations between
Licensee and Operator;
WHEREAS, the excess transmission capacity of the EBS Channels is
available for commercial and/or secondary purposes, consistent with the
Communications Act of
[* * * Portions of this Exhibit have been omitted and filed separately
with the Securities and Exchange Commission as part of an application for
confidential treatment pursuant to the Securities Act of 1933, as amended]
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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 EBS 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
at the current term of the License ("Initial Term"). If further extension of
this Agreement or execution of a new Agreement is not then precluded by the FCC
Rules generally pertaining to EBS licenses, then upon the expiration of the
Initial Term, if Operator is not then in default under this Agreement, this
Agreement will automatically renew for two additional terms (a "Renewal Term")
of ten (10) years each (during the Initial Term or any Renewal Term) plus one
additional term ("Final Term"), if applicable, that continues until September
15, 2035; however, for clarity, in no case shall the aggregate length of the
Initial Term, all Renewal Terms and the Final Term exceed a maximum term of
thirty (30) years; provided that this Agreement may be terminated by Operator at
the expiration of the Initial Term or upon the 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 the Renewal Term
shall be referred to as the "Term". The terms and conditions of this Agreement
for a 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 operate the EBS Channels in
accordance with the Licenses,
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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 EBS 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 EBS 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 EBS 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 that
Operator does not have a need to use such
Prior Use
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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 EBS 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 EBS 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 EBS 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 EBS
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 EBS 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 EBS 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 EBS
Channel as equals the product of the number of EBS 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 EBS 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 EBS 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 EBS 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
EBS 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 any necessary 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 EBS
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 EBS 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 EBS Channels ("Operator's Capacity"),
other than such
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capacity on the EBS 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 EBS 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 and framing). "EBS
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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 EBS Throughput Rate"
shall mean the total of the EBS Engineered Throughput Rates
of all Transmission Equipment as installed in the Market
Area. An example of the calculation of Total EBS 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 EBS 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, *** 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, *** 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, *** 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, *** 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, *** 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 EBS
Channels, including any Transmission Equipment or unlicensed
spectrum, BRS channel and EBS 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 EBS 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 EBS 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.
s) TRANSITION. The FCC expects that most EBS and BRS licensees will
transition their spectrum to a new spectrum plan pursuant to
Sections 27.1230 through 27.1235 of the FCC's Rules within a
specified time period (to be determined by the FCC) (the
"Transition"). Licensee and Operator agree that, for any
Transition involving the Channels, Operator will be the Proponent
or Co-Proponent of the Transition or will determine, based on the
specific circumstances of each market that it will not be the
Proponent and that it will cooperate with a third party which has
decided to be the Proponent, and that Licensee shall not seek,
under any circumstance, to be a Proponent or Co-Proponent of such
Transition. Notwithstanding the foregoing, Licensee agrees that it
will cooperate with all activities undertaken by Operator as part
of a Transition to the new spectrum plan. The parties specifically
agree that the Transition plan for the License shall specify use
of *** technology for spectrum in the Lower Band Segment and the
Upper Band Segment (and, if possible, the Middle Band Segment), or
whatever other technology Operator may choose. Licensee agrees, at
Operator's option and Operator's expense, to cooperate fully with
Operator to take such actions as are reasonably necessary and
appropriate in order to Transition the spectrum and implement
Operator's digital network over some or all of the Channels, as
Operator may designate, including filing any FCC notifications or
applications which may be necessary.
t) TRANSITION FILINGS. Licensee shall fully cooperate with Operator
to assist in a Transition of the spectrum in the Market and
spectrum in other markets which are included within the Major
Economic Area for the Market as defined by FCC Rules. Licensee
shall execute any notices, reports, applications, correspondence
or other documents reasonably necessary and appropriate to
effectuate a Transition as requested by Operator. Operator shall
bear all reasonable and appropriate FCC-related costs and
expenses, including legal, engineering and filing fees, incurred
to prepare, file and prosecute any initiation plans, Transition
plans, applications and notices in connection with a Transition.
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
25
operate the System in accordance with the terms of this Agreement
and the Licenses.
(i) The current primary transmission site(s) of Licensee's EBS
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 EBS 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 EBS 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 EBS Channel in the System then-authorized to Licensee
(the "High Power Booster Station Equipment"). When, during
the Operational Period, any of the EBS 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 EBS 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.
(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 EBS 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 EBS
Channel at any hub receive site ("Hub Receive Site").
26
(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 EBS Channel to the extent necessary
to transmit or receive such EBS 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 transmission and/or
reception equipment operating on the EBS 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
27
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.
STATION MODIFICATIONS.
(xi) 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 EBS Channel(s)
or that additional FCC authorizations are necessary or
convenient for the use of the EBS Channel(s). Examples of
such modifications and/or authorizations include, but are
not limited to, changing the authorized digital emission(s)
of the EBS 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 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
28
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.
(xii) Operator, at its expense, shall construct the facilities
used to operate or receive the EBS 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.
(xiii) 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 EBS
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 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 EBS Channels and the protection of the
reception of the EBS 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
29
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 EBS 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.
b) 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 EBS 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 EBS 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 EBS Channels. Operator shall, pursuant to PARAGRAPH 5,
reimburse Licensee's Expenses for the preparation, filing and
prosecution of each such application or filing.
c) 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
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.
30
d) 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.
e) 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 EBS 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 the date of this Agreement,
Operator shall pay to Licensee monthly royalty fees equal to ***
per CPOP, calculated on a net present value basis, as a ***
annuity discounted at *** and growing at a *** annual growth rate
split into *** 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 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 Option
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
31
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 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
32
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., 00 Xxxxxxxx Xxxxxx, Xxxx 000, Xxxxxxxx, 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 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
33
modify its authorization(s) for the EBS 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);
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.
34
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 EBS 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, if necessary,
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 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
35
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 and Additional Standard
Custom 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 notice of this Agreement is required to be
filed with the FCC within fourteen (14) days following the
execution of this Agreement. The parties agree to cooperate as
required to prepare and file with the FCC all forms and related
exhibits, certifications and other documents necessary to provide
the requisite notice to the FCC of this Agreement. In that event,
the Parties shall cooperate, at Operator's expense, to defend the
provisions of this Agreement to the extent feasible 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
36
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 EBS 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 EBS and BRS 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 Option Spectrum Agreement those
actions, activities and agreements that must be taken or must
exist for an EBS 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
Option 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 EBS Channel upon the expiration, without FCC renewal, of any
License necessary to operate on such EBS Channel, or the
revocation of any License necessary to operate on such EBS
Channel; provided, however, this Agreement shall not terminate as
to such EBS 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 EBS 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 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 EBS Channel for
a one hundred eighty (180) day period, or such longer period as
37
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
EBS 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 EBS 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 EBS 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 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").
38
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.
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.
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 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.
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.
39
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 EBS 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 EBS
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.
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-
40
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.
(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
41
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 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
42
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 Option 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 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.
43
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 Option 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 Option
Spectrum Agreement) or are otherwise subject to the terms
of the Clearwire Agreement (as defined in the Option
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 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 Option
44
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 EBS 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.
(viii) Licensee holds the License free and clear of all Liens. No
Person other than Licensee has any right, title or interest
in or to the License, nor does any Person other than
Licensee have any right to acquire, lease or otherwise use
the License, whether such right may be currently existing
or would become effective on the occurrence of any event,
the failure of an event to occur, notice, or passage of
time, or any of the above.
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
45
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.
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.
46
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 EBS 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 EBS 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, 2009 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.
47
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
48
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
49
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
50
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 EBS 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;
51
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:
52
(i) if, to Operator, to:
Clearwire Spectrum Holdings LLC
0000 Xxxx Xxxxxxxxxx Xxxx. X.X.
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
(ii) if to Licensee:
Hispanic Information and Telecommunications Network, Inc.
00 Xxxxxxxx Xxxxxx, Xxxx 000
Xxxxxxxx, 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 Xxxxx Xxxxxx, Xxxxx 000
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.
53
18. GOVERNING LAW.
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.
54
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 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 Option Spectrum Agreement
and the agreements executed pursuant to the Option 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 EBS 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 EBS Channels and response station
equipment operating on any EBS 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 EBS Channels.
55
Operator shall at all times provide Licensee with the capability of
deactivating any and all response stations operating on the EBS 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
CLEARWIRE SPECTRUM HOLDINGS LLC HISPANIC INFORMATION AND TELECOMMUNICATIONS
NETWORK, INC.
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx Xxxx Xxxxxxxxx
----------------------------- ------------------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxx Xxxx Xxxxxxxxx
Title: Executive Vice President Title: President
[Signature Page to IUA for the Memphis, TN Market Area]
56
INCLUDED EXHIBITS AND SCHEDULE LIST:
A EBS 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)
57
EXHIBIT A
EBS LICENSE, CHANNELS, METROPOLITAN AREA,
PRIMARY TRANSMISSION SITE,
LOCATION OF LICENSEE'S ORIGINATION POINT
AND LICENSEE'S DIGITAL CHANNEL CAPACITY
---------------------------------------
License Call Sign: ***
-----------------
EBS Channels: ***
------------
Market Area: ***
-----------
Primary Transmission Site: ***
-------------------------
58
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).
"BRS" is defined in the Recitals.
"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).
"Communications Act" is defined in Paragraph 26.
"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).
"EBS" is defined in the Recitals.
59
"EBS Channel" and "EBS Channels" are defined in the Recitals.
"EBS Engineered Throughput Rate" is defined in Subparagraph 2(d)(i).
"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).
"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).
60
"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).
"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).
"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).
61
"Licensee's Throughput" is defined in Subparagraph 2(d)(iii).
"Licensee's Throughput Rate Entitlement" is defined in Subparagraph 2(d)(ii).
"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.
"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).
"Option Spectrum Agreement" is defined in the recitals.
"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(l).
62
"Permitted Uses" is defined in Subparagraph 2(l).
"Proceeding" means any action, suit, litigation, arbitration proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving any court or
other Government Agency or any arbitrator or arbitration panel.
"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.
"Purchase Option" is defined in Paragraph 10(d).
"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).
"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).
63
"Term" is defined in Paragraph 1.
"Throughput" is defined in Subparagraph 2(d)(i).
"Throughput Rate" is defined in Subparagraph 2(d)(i).
"Total EBS 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.
"Transition" is defined in Paragraph 2(s).
"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)
64
EXHIBIT C
EXAMPLES PURSUANT TO SUBPARAGRAPH 2(d)(i) AND (ii)
65
