Common use of Spectrum Lease Clause in Contracts

Spectrum Lease. (a) TerreStar Parent, TerreStar Networks, EchoStar and the JV shall use all commercially reasonable efforts to enter into a lease agreement (the “Initial Lease”) within 15 days of the closing date specified in the Master Investment Agreement subject to TerreStar Parent’s reasonable satisfaction with regard to the accounting treatment of the Initial Lease. The Initial Lease may be subject to any required FCC approvals or notifications, provided that the parties will use all commercially reasonable efforts to obtain or make such approvals or notifications as promptly as practicable. The Initial Lease shall be in the form as mutually agreed between EchoStar and TerreStar Networks (each acting reasonably) and in substantially the form attached hereto as Exhibit C and which will substantially reflect the rights and obligations of the licensee and Spectrum Lessee under a long-term de facto transfer lease as set out in 47 CFR § 1.9030. (b) Pursuant to the Initial Lease TerreStar Networks will (i) lease the EchoStar Spectrum from Port for annual payments of $26,500,000, payable on February 1 in each year during the nine-year term of the lease, with the initial payment due February 1, 2009 and (ii) be entitled at its election at the end of lease term to purchase from Port the EchoStar Spectrum for a single cash payment of $82,856,750. If TerreStar Networks elects to exercise the purchase option at the end of the lease term, Port will sell, transfer and convey all of its right, title and interest in the EchoStar Spectrum free and clear of any liens or encumbrances. If TerreStar Parent, TerreStar Networks, EchoStar and Port do not enter into the Initial Lease within 30 days of the closing date specified in the Master Investment Agreement, TerreStar Parent will be deemed to have made the election set forth in Section 2.04(b), subject to the conditions set forth herein. If TerreStar Parent elects to effect one of the Option Transactions and the conditions to TerreStar Parent’s obligations to complete such Option Transaction are not met for any reason that is not caused by TerreStar Parent and that occurs despite TerreStar Parent’s good faith, reasonable best efforts to achieve completion of such Option Transaction, TerreStar Parent may terminate the Initial Lease by written notice to EchoStar and Port.