EXHIBIT 10.45
BUNDLED WIRELESS BROADBAND SERVICES AGREEMENT
THIS BUNDLED WIRELESS BROADBAND SERVICES AGREEMENT (this
"AGREEMENT") is made and entered into effective the 23 day of November,
2005 (the "EFFECTIVE DATE"), by and between America Online, Inc., a
Delaware corporation ("AOL"), and Clearwire LLC, a Nevada limited
liability company ("CLEARWIRE"). Clearwire and AOL may be referred to
herein individually as a "PARTY" and collectively as "PARTIES."
Capitalized terms used but not defined herein shall have the respective
meanings given to them in Exhibit A.
WHEREAS, Clearwire, directly and through its Affiliates, operates
wireless broadband systems and facilities capable of delivering certain
wireless broadband data services to customers, including highspeed
Internet access;
WHEREAS, AOL is an Internet service provider that offers to its
subscribers value-added on-line services including email, chat, message
boards, shopping, instant messaging, internet access and other subscriber
applications, content, and associated services including premium content
and functionality using branding owned or controlled by AOL or an AOL
Affiliate, or using all or a portion of AOL's or an AOL Affiliate's
network or backend systems;
WHEREAS, AOL and Clearwire mutually desire to make available the AOL
Service to End Users in the Initial Markets via the Clearwire Wireless
Broadband Network; and
NOW, THEREFORE, in consideration of the foregoing and the promises
set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, AOL and
Clearwire agree as follows:
1. MARKETING AND DISTRIBUTION OF THE BUNDLED SERVICE.
1.1 Bundled Service in Initial Markets. From and after the Deployment
Date, and thereafter during the Term, AOL shall promote a product
offering in the Initial Markets, consisting of the AOL Service
bundled with the Clearwire Wireless Broadband Service and marketed
as a single product (the "BUNDLED SERVICE").
1.2 Bundled Service in Additional Markets. From time to time, if AOL and
Clearwire jointly decide to offer the Bundled Services in markets
other than the Initial Markets, they may update the attached Exhibit
F to add such new markets, and the terms of this Agreement shall
apply thereafter to such additional markets, as though they were
Initial Markets, unless the Parties agree otherwise.
1.3 Marketing and Promotion. [***] AOL will be responsible for marketing
and selling the Bundled Service to consumers, which AOL will
characterize as its preferred fixed wireless broadband solution.
1.4 Trademark Licenses. For the sole purpose of the co-branding,
marketing and promoting the Bundled Service, and subject to
Clearwire's prior written approval of each use of Clearwire
trademarks or service marks as to content and context, Clearwire
grants AOL a non-transferable, non-sublicensable, royalty-free
license to reproduce and display the current Clearwire logo and
other Clearwire trademarks and service marks. In connection with the
license granted hereunder, Clearwire shall have the unilateral right
to establish and enforce such quality standards and
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additional terms and conditions concerning the use of its trademarks
as it deems necessary to reasonably protect its trademarks. Such
license shall terminate automatically upon the expiration of the
Term or the earlier termination of this Agreement.
1.5 [***]
1.6 The Clearwire Wireless Broadband Service. The Clearwire Wireless
Broadband Service portion of the Bundled Service shall be a
connectivity-only service that is provided at a bandwidth that is
consistent with the bandwidth advertised by Clearwire for the
Clearwire Wireless Broadband Service. In the Initial Markets, and
during the Term, the Clearwire Wireless Broadband Service, as
bundled as part of the Bundled Service, shall not contain any
promotions, advertisements or references to any other Interactive
Service.
1.7 Launch of the Bundled Service. The Parties shall use commercially
reasonable efforts to launch the Bundled Service in at least one
Initial Market no later than March 31, 2006, with such launch date
referred to as the "DEPLOYMENT DATE." The Parties will work together
to try to launch the Bundled Service in at least one Initial Market
by February 15,2006. Following the Deployment _ Date, the Bundled
Service shall be launched in the remainder of the Initial Markets
during a *** month period commencing on the Deployment Date. Subject
to these parameters, the date for the launch of the Bundled Service
in each Initial Market will be at AOL's discretion.
1.8 Implementation Plan. The Parties shall follow the implementation
plan set forth in Exhibit C ("IMPLEMENTATION PLAN"), attached hereto
and incorporated herein, for the provision of the Bundled Service.
1.9 Testing. The Parties shall cooperate with regard to any testing that
either Party needs to perform prior to the Deployment Date.
1.10 Target Subscriber Levels. During the Operational Period, (a) AOL
shall [***] to sell the Bundled Service to up to [***]of the
Eligible AOL Subscribers in aggregate across all the Initial
Markets, and (b) the Parties will work together to try to cause a
migration to the Bundled Service of at least [***] of such Eligible
AOL Subscribers (the number in clause (b), the "ELIGIBLE AOL
SUBSCRIBER TARGET").
2. NETWORK ARCHITECTURE.
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3. ECONOMICS.
3.1 Payment of Wholesale Price. Subject to the last three sentences of this
Section, AOL shall pay Clearwire, within [ * * * ] after the end of
each calendar month during the Term, for each individual who is an End
User during such calendar month, [ * * * ] of the following: (a) the
Average Monthly Service Fee, (b) the average rental fee for the CPE
charged by Clearwire to consumers in the Initial Market in which the
End User is located, and (c) the activation fee charged by Clearwire to
consumers in the Initial Market in which the End User is located
(collectively, the "Wholesale Price"); provided, however, that in no
event shall the Wholesale Price exceed the price set forth in Exhibit E
below for each Retail Pricing Tier in each Initial Market. AOL shall
also pay Clearwire, for each CPE that is delivered to an End User by
Clearwire during such calendar month, a one-time fee equal to [ * * * ]
of Clearwire's cost for the CPE, such amount not to exceed [ * * * ]
(the "CPE Fee"). For purposes of this Section, End Users who are
receiving Bundled Services as part of a Promotional Offer (but only
during the first [ * * * ] of such Promotional Offer) shall be counted
as End Users only to the extent that they are paying for Bundled
Services. All other End Users shall be counted in full, regardless of
whether they are receiving Bundled Services on a paying, promotional or
courtesy basis. As an illustration, if an End User, during the End
User's first month of Bundled Service, is receiving a [ * * * ]
discount under a Promotional Offer, then AOL shall pay Clearwire only [
* * * ] of the Wholesale Price for such End User for such month.
3.2 [ * * * ].
3.3 [ * * * ].
3.4 [ * * * ].
3.5 Retail Price. AOL shall have the right to determine, in its sole
discretion: (a) the pricing of the Bundled Service to End Users, (b)
any Promotional Offers for the Bundled Service, including without
limitation, free trials for or discounts of the Bundled Service, and
(c) the rental price of the CPEs. Clearwire shall give AOL at least
thirty (30) calendar days' advance written notification of any change
in Clearwire's retail pricing for any element of the Clearwire Wireless
Broadband Service in the Initial Markets, including any new Retail
Pricing Tiers that it offers in addition to those listed in Exhibit E.
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3.6 [ * * * ].
3.7 Billing. AOL shall ▇▇▇▇ End Users for the (a) Bundled Service, (b) the
CPE rental, (c) any charges for AOL Premium Products and other
additional charges associated or in connection with the AOL Service
(e.g., dial roaming), and (d) if applicable, any charges associated
with early termination of the Bundled Service and failure to return the
CPE, as defined in the Bundled Services Agreement. Within ninety (90)
days of charging an End User's payment method for failure to return the
CPE, AOL shall remit directly to Clearwire any payment collected from
such End User who fails to return the CPE in accordance with the terms
of this Agreement and the Bundled Services Agreement.
3.8 Reporting. AOL shall provide to Clearwire, contemporaneously with its
monthly payment to Clearwire of Wholesale Prices and CPE Fees, a report
of the number of End Users of the Bundled Service for the preceding
calendar month, broken down by End Users who are being charged for the
Bundled Service and End Users who are benefiting from a Promotional
Offer. In order to facilitate Clearwire's retrieval of CPEs, AOL's
report shall also specifically identify the End Users who discontinued
their use of Bundled Service during or at the end of such calendar
month. Clearwire shall report to AOL, on a real time or daily basis,
line item data that would allow AOL to reconcile, End User by End User,
the number of provisioned users of the Bundled Service. Clearwire shall
also, on a monthly basis within fifteen (15) days after the last day of
each calendar month, provide AOL with the following two (2) reports:
(a) a report that identifies the End Users to whom CPEs were delivered
during such month, and the End Users from whom returned CPEs were
received during such month, and (b) a report outlining the Network
Availability data, broken down on a daily basis, for the previous
calendar month.
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4. OPERATIONAL TERMS.
4.1 Customer Service. AOL will provide End Users with maintenance and
support of the Bundled Service according to the provisions set forth in
Exhibit B - "Customer Service." In order to facilitate AOL's support of
the Bundled Service, Clearwire will maintain and support the Clearwire
Wireless Broadband Network and, under the escalation circumstances
described in Exhibit B, provide direct support services to End Users to
address "Tier 2" connectivity issues, all as more thoroughly described
in Exhibit B. Both Parties agree to meet [ * * * ] following the launch
of the first Initial Market in order to identify and address any
unexpected operational issues pertaining to Customer Service that arise
after such initial launch. Furthermore, both Parties agree to use
commercially reasonable efforts to resolve specific issues identified
during such meeting to the Parties' mutual satisfaction.
4.2 Delivery of Customer Premises Equipment. Clearwire shall, as and when
directed by AOL, deliver CPE to End Users for use of the Bundled
Service, and provide End Users with instructions for installation of
the CPE. If, following such delivery and installation, a personal visit
to the End User's premises is necessary in order to enable the End User
to use the Bundled Service, then AOL shall pay to Clearwire [ * * * ]
for each such visit, but only to the extent that the End Users who
receive such visits constitute less than [ * * * ] of all End Users to
whom Clearwire has delivered CPE. The Parties anticipate that End Users
will, as a general matter, self-install the CPE. Clearwire may
separately charge an End User for any installation assistance that is
requested by the End User. Clearwire will remain the owner of the CPEs,
will file the requisite property tax returns thereon and pay property
taxes associated therewith in each applicable state and indemnify AOL
for all state property tax liability associated therewith. In addition,
Clearwire may take all depreciation charges for the CPE. Clearwire will
be responsible for the costs of shipping and reclaiming the CPE.
4.3 Deployment of CPE. AOL may, but only in accordance with the terms of
the Implementation Plan, test and approve CPEs prior to delivery of
such CPEs by Clearwire to End Users. For the purposes of this Section
and Exhibit C, "test" shall mean to verify the functionality and the
interoperability of the CPE with the AOL client software. "Approve"
shall mean to authorize the CPE for use with the AOL client software.
4.4 Return of CPE. AOL will be solely responsible for reclaiming the CPE
from persons who are no longer End Users. As part of the Bundled
Services Agreement, AOL will include the requirement that upon AOL's
request, the End User shall return the CPE via pre-paid mailers to be
provided by AOL to Clearwire if and when an End User no longer
subscribes to the Bundled Service. AOL shall use commercially
reasonable efforts to reclaim the CPE, and will reserve the right in
the Bundled Services Agreement to charge End Users for any unreturned
CPE units. Within forty-five (45) days of execution of this Agreement,
the Parties will mutually agree upon a reasonable procedure under which
AOL will send notices to End Users who no longer subscribe to the
Bundled Service requesting the return of CPEs ("Reclamation
Procedure"). The Reclamation Procedure shall be AOL's sole obligation
related to the return of the CPEs. At no time shall Clearwire be
entitled to contact any End User regarding such customer's failure to
return the CPE unit without first obtaining prior written authorization
from AOL.
4.5 Communications with End Users. All types of communications between
Clearwire and the End User shall be subject to AOL's prior approval.
For avoidance of doubt, Clearwire acknowledges that AOL End Users are
customers solely of AOL.
4.6 Network Traffic Requirements. Clearwire shall implement bandwidth
management practices in order to protect the integrity and performance
of the Clearwire Wireless Broadband Network and to ensure the fair use
of network resources by all users of the Clearwire Wireless Broadband
Network. To this end, Clearwire will consult with AOL before and
during, the implementation of such bandwidth management practices to
create an optimal user experience on the Clearwire Wireless Broadband
Network for AOL End Users.
4.7 Network Security. Clearwire shall have sole control over access to and
security of the Clearwire Wireless Broadband Network. To the extent
feasible and permitted by law, and at no cost to Clearwire, Clearwire
will assist AOL in its attempts to identify End Users who violate the
Bundled Services Agreement by providing AOL with data from servers in
the form of log files or other forms to identify users of particular IP
addresses during given time intervals.
4.8 Reports. In order to facilitate the flow of information between the
Parties regarding the relationship and the status of the Bundled
Service, the Parties shall prepare and furnish the periodic reports and
information identified in the Implementation Plan. Such reports shall
include a report from AOL that identifies the number of calls fielded
by AOL for Tier 1 support, and the number of calls forwarded to
Clearwire for Tier 2 support. Furthermore, the report shall include the
status of CPEs both shipped and delivered to End Users. The Parties
agree to work together on an ongoing basis to develop additional
enhanced reporting as required.
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4.9 Network Outage. Clearwire shall give AOL advance notification of its
maintenance periods and expected outages, as described in Section 11 of
Exhibit C. As further defined in Section 11(a) of Exhibit C and subject
to the limitations included therein, in the event of a Network Outage,
Clearwire shall notify AOL's Network Operations Center ("NOC") of such
problem as soon as practicable (including providing the details of such
problem and the anticipated length of the outage), provide the NOC with
regular updates as to the status of the resolution of the problem and
use commercially reasonable efforts to restore the service as soon as
practicable.
4.10 Services Agreement. AOL shall provide each End User with an End User
services agreement between each End User and AOL that governs the End
User's use of the Bundled Service (the "Bundled Services Agreement").
The Bundled Services Agreement will, among other things, require each
End User to assume responsibility for the return of all CPE if and when
the End User is no longer an End User, and shall include an
authorization to charge the End User's payment method up to [ * * * ]
for failure to return the CPE. The Parties shall mutually agree upon
the then-current value of the CPE to be charged to the End User's
payment method. The Bundled Services Agreement shall be developed by
AOL (which AOL may amend from time to time in its sole discretion).
4.11 Software. AOL shall be responsible for all costs associated with the
development of the AOL Software and the media and materials used to
install and enable the AOL Software. Clearwire shall be responsible for
all costs associated with the development of the Clearwire Software.
Each Party shall not reverse engineer, decompile or otherwise attempt
to develop the source code of the any software provided by the other
Party or otherwise make any changes to such software.
4.12 Clearwire Wireless Broadband Network Performance: Clearwire will
provide AOL with Network Availability (uptime) statistics. "Network
Availability" shall mean the total number of hours in a month during
which monitoring device(s) are able to exchange IP packets between the
monitoring device(s) site(s) demarcation points and the wireline
network handoff, divided by the total number of hours in a month. If
the Clearwire Wireless Broadband Network is unavailable due to Force
Majeure Events or routine maintenance, such time periods are not
included in calculating Network Availability, except to the extent that
such routine maintenance constitutes a Network Outage as defined in
Exhibit C. The time periods during which there is a Network Outage
shall be included in calculating Network Availability. With respect to
network uptime, Clearwire shall guarantee an overall monthly Network
Availability of not less than [ * * * ]. Clearwire shall be in breach
of this guarantee if during the Operational Period, the monthly Network
Availability is less than [ * * * ] for any [ * * * ], in which case
AOL shall not be responsible for reaching and maintaining the Eligible
AOL Subscriber Target until Clearwire has achieved the guaranteed
Network Availability of [ * * * ] for [ * * * ]. Furthermore, should
the monthly Network Availability fall to less than [ * * * ] for two [
* * * ] or more times during a rolling [ * * * ] time period, AOL shall
be relieved of the Eligible AOL Subscriber Target for the duration of
the Term. Should the monthly Network Availability fall below [ * * * ],
the remedies described in the previous two sentences and Section 7.6 of
this Agreement shall constitute AOL's sole remedies. Notwithstanding
the foregoing and for avoidance of doubt, nothing contained in this
Section shall relieve Clearwire's indemnification obligations pursuant
to Section 8.2 of Exhibit D, to the extent such obligations are
triggered by an outage of the Clearwire Wireless Broadband Service.
4.13 Order Processing. Clearwire acknowledges that AOL has entered into a
services agreement with [ * * * ] whereby [ * * * ] powers AOL's High
Speed Internet Options ("HSIO") area through one or more websites and a
technology platform provided by [ * * * ] that presents offers, and
transmits orders, for third party high speed Internet access
connectivity services in connection with registration for the AOL
Service. AOL and Clearwire shall cooperate with [ * * * ] to accomplish
this task. Furthermore, AOL and Clearwire will utilize the AOL approved
STAR process for all data transfer files that allow for secure data
transmissions between the Parties, and Clearwire shall enter into the
STAR agreement set forth at Exhibit G.
4.14 Nondiscrimination. Whether or not explicitly set forth in any other
Section of this Agreement, Clearwire shall treat all End Users in a
non-discriminatory manner vis-a-vis Clearwire Customers, and including,
without limitation, with respect to customer service, billing and
collections, installation scheduling services, repair time, provision
of CPE (including return policy), service levels and downtime, quality
of service, and any and all fees/payments.
4.15 Non-Solicitation. Clearwire shall not engage in any marketing or
promotional activity or any other effort that targets End Users of the
Bundled Service in order to encourage or promote said End Users of the
Bundled Service to switch from or terminate the AOL Service, provided
that general marketing of Clearwire's service is permissible so long as
Clearwire does not include in such marketing or promotional materials
any language specifically encouraging customers to switch from or
terminate the AOL Service.
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5. AUDIT RIGHTS. The Parties shall have the right to examine the books and
records of the other with respect to the Bundled Service, during normal
business hours, upon not less than ten (10) business days prior written
notice and not more than once during any twelve (12) month period, to the
extent required to verify compliance with the terms of this Agreement,
including with respect to the payment of fees, non-discrimination, and
Network Availability standard. The Party who initiates the Audit Right
shall bear the expense thereof, unless the audit demonstrates an
underpayment of ten percent (10%) or more for the period audited, in which
event the audited Party shall reimburse the initiator its reasonable costs
and expenses.
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6. CANCELLATION OF SERVICE TO END USERS. AOL shall have the sole right to
suspend, cancel or terminate the AOL Service or the Bundled Service
provided to any End User at any time. Clearwire may request that AOL
suspend, cancel or terminate the Bundled Service to an End User either (a)
in connection with a suspension or termination of this Agreement or the
AOL Service, or (b) if such service is being used for illegal activities.
If an End User contacts Clearwire to cancel the Bundled Service, the
Clearwire Wireless Broadband Service portion of the Bundled Service and/or
the AOL Service portion of the Bundled Service, Clearwire shall inform
such End User that cancellation of the Bundled Service or the AOL Service
must be done through AOL and will then transfer such call to AOL's
customer service line in accordance with the Implementation Plan. Only AOL
shall have the right to suspend or terminate the AOL Service to any End
User for any reason. The Party who is terminating, or requesting the
termination of, services or whose services are being cancelled shall
provide reasonable advance notice to the other Party identifying the End
User whose service is to be cancelled or terminated and specifying the
reasons, subject to the Party's privacy policies. Clearwire shall provide
AOL with a weekly report that identifies each End User it intends to
suspend or terminate (and the reason for such suspension or termination)
in accordance with its rights under this Agreement. AOL and Clearwire
shall implement a system to determine whether any service cancellation
request received from an End User applies to the AOL Service, the
Clearwire Wireless Broadband Service or both.
7. TERM; TERMINATION.
7.1 Term. This Agreement shall commence on the Effective Date and shall
continue in effect until [***] after the Deployment Date (the
"TERM"), unless earlier terminated as provided herein.
7.2 Termination for Breach. Either Party may terminate this Agreement
upon written notice at any time in the event of a material breach by
the other Party which remains uncured after thirty (30) days written
notice thereof. A material breach shall include, without limitation,
the failure of the Clearwire Wireless Broadband Network to maintain
the performance standards set forth in Section 4.12.
7.3 Termination for Bankruptcy. Either Party may terminate this
Agreement upon written notice if the other Party (a) ceases to do
business in the normal course, (b) becomes or is declared insolvent
or bankrupt, (c) is the subject of any proceeding related to its
liquidation or insolvency, whether voluntary or involuntary, which
is not dismissed within ninety (90) calendar days or (iv) makes an
assignment for the benefit of creditors.
7.4 Termination for Change of Control. AOL may terminate this Agreement
upon thirty (30) days prior written notice in the event (a) of a
change in Control of Clearwire where such Control is acquired,
directly or indirectly, in a single transaction or series of related
transactions by a competitive Interactive Service, (b) all or
substantially all of the assets of Clearwire used to provide the
Services are acquired by or transferred to any competitive
Interactive Service, or (c) Clearwire is merged with or into another
entity or entities that provide Interactive Service.
7.5 Other Termination. Either Party may terminate this Agreement upon
thirty (30) days prior written notice if Monthly Churn exceeds [***]
for any [***].
7.6 Early Termination. In the event of an Excessive Outage for any [***]
(as defined in Section 11 (d) of Exhibit C). AOL may terminate this
Agreement without liability by providing written notification to
Clearwire sixty [***] in advance of the effective date of the
termination.
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8. Effect of Termination. If, during the Term, upon ninety (90) days' written
notice, Clearwire elects to no longer operate the Clearwire Wireless
Broadband Service or a comparable service, the Parties shall develop a
migration plan that provides for the migration of End Users from the
Bundled Service to an alternate service selected by AOL, provided that AOL
shall not be liable for payment under Section 3 of this Agreement
following migration from the Clearwire Wireless Broadband Service. Except
in the case where Clearwire elects to no longer operate the Clearwire
Wireless Broadband Service as described in the previous sentence, as of
the date on which this Agreement expires or is terminated ("END DATE"),
there shall be no new orders for the Bundled Service, except with respect
to a three (3) month period after the End Date during which the Parties
agree to honor any existing marketing or promotional campaigns that were
deployed prior to the End Date and to take new orders for the Bundled
Service for End Users responding to such marketing and promotional
campaigns. Furthermore, following the End Date, Clearwire agrees to
provide Tier 2 support and continue to provide connectivity services to
End Users of the Bundled Service for a period of six (6) months.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as
of the Effective Date, pursuant to due authority. Each Party acknowledges that
it has read this Agreement, understands it, and agrees to be bound by its terms.
AMERICA ONLINE, INC., CLEARWIRE CORPORATION,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇ Salamme
--------------------- ---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ Name: ▇. ▇▇▇▇▇▇ SALAMME
Title: Vice President Title: Ex. V. P.
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EXHIBITS
TO
BUNDLED BROADBAND SERVICES AGREEMENT
EXHIBIT DESCRIPTION
------- -----------
A DEFINITIONS
B CUSTOMER SERVICE
C IMPLEMENTATION PLAN
D STANDARD LEGAL TERMS AND CONDITIONS
E RETAIL PRICING TIERS
F INITIAL MARKETS
G STAR AGREEMENT
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EXHIBIT A
DEFINITIONS
"AFFILIATE" means, with respect to a person, any person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with such person.
[***]
[***]
"AOL Service" means the U.S. version of the America Online(R) brand commercial
online service, including any special versions thereof, including without
limitation, the "AOL Latino" and "AOL for Small Business" brands.
"AVERAGE MONTHLY SERVICE FEE" means the sum of all monthly service fees that
Clearwire charged consumers for service in each Retail Pricing Tier (other than
promotional services) in the Initial Market in which End User is located that is
substantially identical to the Clearwire Wireless Broadband Service, divided by
the total number of consumers purchasing the substantially identical service
(other than promotional services) in that Initial Market during the preceding
six (6) months. For purposes of calculating the Average Monthly Service Fee, the
initial six-month period for each Initial Market shall begin on the launch date
for that particular Initial Market.
"BUNDLED SERVICE" has the meaning set forth in Section 1.1 of the Agreement.
"BUNDLED SERVICES AGREEMENT" has the meaning set forth in Section 4.10 of this
Agreement.
"CLEARWIRE CUSTOMERS" means subscribers to any Clearwire products and services.
[***]
"CLEARWIRE WIRELESS BROADBAND SERVICE" means the wireless high-speed data
transport and Internet connectivity services to be provided by Clearwire
hereunder using the Clearwire Wireless Broadband Network and CPE provided by
Clearwire.
"CONTROL" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through the ownership of voting securities, by contract, management agreement or
otherwise.
"CUSTOMER PREMISES Equipment" or "CPE" means a stand-alone external device
provided by Clearwire that plugs into a 110 volt and connects to a computer or
router and enables a wireless connection to the Clearwire Wireless Broadband
Network.
"DEPLOYMENT DATE" has the meaning set forth in Section 1.7 of this Agreement.
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"END USER" means an individual residential customer in the Clearwire Wireless
Broadband Network who subscribes to the Bundled Service, whether on a paying,
promotional or courtesy basis.
[***]
"ELIGIBLE AOL SUBSCRIBER TARGET" has the meaning set forth in Section 1.10 of
this Agreement.
"FORCE MAJEURE EVENTS" means the following: acts of God or other catastrophe,
natural or otherwise; any law, order, regulation, direction, action or request
of the United States government or any other government, including state and
local governments having jurisdiction over the Parties, or any department,
agency, commission, bureau, corporation or other instrumentality of any one or
more said governments, or of any civil or military authority; national
emergency; insurrection; riot; war, strike, acts of terrorism, lock-out; energy
shortage; material shortage; or other cause beyond the Parties' reasonable
control; provided, however, that the non-performing Party is without fault in
causing such default or delay, and such default or delay could not have been
prevented by reasonable precautions and cannot reasonably be circumvented by the
non-performing Party through the use of alternate sources, workaround plans or
other means.
"IMPLEMENTATION PLAN" has the meaning set forth in Section 1.8 of this
Agreement.
"INITIAL MARKETS" means the markets described on the attached Exhibit F.
"INTERACTIVE SERVICE" means one or more of the following Internet or online
services: (a) online or Internet connectivity services (each, an "ISP"); (b) an
interactive site or service featuring a broad selection of aggregated third
party interactive content (or navigation thereto) (e.g., an online service or
search and directory service) and/or marketing a broad selection of products
and/or services across multiple interactive commerce categories; or (c)
communications software capable of serving as the principal means through which
a user creates, sends or receives electronic mail or real time or "instant"
online messages (whether by telephone, computer, wireless or other means).
"MONTHLY CHURN" means the number of End Users (exclusive of the Excluded End
Users) on the last day of the calendar month less the number of End Users
acquired during the month less the number of End Users (exclusive of the
Excluded End Users) on the first day of such calendar month) divided by the
number of End Users on the first day of such calendar month. "EXCLUDED END
USERS" are those that are either (a) denied access to the Clearwire Wireless
Broadband Services due to failure to pay or breach of the Bundled Services
Agreement; or (b) not yet being charged for Bundled Service as of the
commencement of the month in which the Monthly Churn is measured.
"NETWORK ACCESS POINT" means, with respect to either Party, the points at which
such Party connects to the Internet. [***]
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"NETWORK AVAILABILITY" has the meaning set forth in Section 4.12 of this
Agreement.
"NETWORK OUTAGE" means the Clearwire Wireless Broadband Service becomes
unavailable as a part of the Bundled Service or fails to comply with the
applicable specifications for the Clearwire Wireless Broadband Service.
[***]
"PROMOTIONAL OFFER" means, and is limited to, an offer to an End User to acquire
Bundled Service at a Discounted Rate. For avoidance of doubt, "DISCOUNTED RATE"
shall mean any available offer of the Bundled Service that includes a price
point made available for a limited period of time and is below the average price
available for the comparable service offered by a Party.
"RETAIL PRICING TIER" means the price for each of the following service speed
tiers offered by Clearwire to its retail customers: [***]
"TAXES" include, but are not limited to, any sales or use tax, or any
assessment, levy, or charge in the nature of a tax (other than taxes on either
Party's net income, net worth, capital stock, franchise, property, items of tax
preference or minimum tax, conduct of business or similarly-based taxes) imposed
by a government authority as a result of having provided services pursuant to
the Agreement.
"TERM" has the meaning set forth in Section 7.1 of this Agreement.
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EXHIBIT B
CUSTOMER SERVICE
***
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LEVEL OF CUSTOMER
CARE CLEARWIRE RESPONSIBILITIES AOL RESPONSIBILITIES
------------------ -------------------------- --------------------
*** *** ***
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LEVEL OF CUSTOMER
CARE CLEARWIRE RESPONSIBILITIES AOL RESPONSIBILITIES
------------------ -------------------------- --------------------
*** *** ***
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EXHIBIT C
IMPLEMENTATION PLAN
***
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***
Bundled Broadband Service Agreement AOL AND CLEARWIRE CONFIDENTIAL
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***
Bundled Broadband Service Agreement AOL AND CLEARWIRE CONFIDENTIAL
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***
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***
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EXHIBIT D
STANDARD LEGAL TERMS AND CONDITIONS
1. [RESERVED]
2.COMPLIANCE WITH LEGAL REQUIREMENTS. Each Party shall comply with all material
requirements of laws, statutes, treaties, ordinances, regulations, orders,
judgments and decrees ("LEGAL REQUIREMENTS") applicable to its performance under
this Agreement. AOL and Clearwire will cooperate in developing and implementing
procedures for addressing emergencies and complying with any applicable rule,
law or regulation set forth in the Communications Act of 1934, Electronic
Communications Privacy Act, Digital Millennium Copyright Act and any other Legal
Requirements.
3. [RESERVED].
4. CONFIDENTIAL INFORMATION.
4.1 Confidential Information. During the Term, Clearwire and AOL may disclose to
one another Confidential Information. For purposes of this Agreement,
Confidential Information shall include, but is not limited to, the terms of this
Agreement, studies, reports, records, books, contracts, instruments, surveys,
discoveries, ideas, concepts, know-how, techniques, designs, specifications,
drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data,
computer data, disks, diskettes, tapes, computer programs or other software,
business plans, marketing plans, financial data, projections, personnel data,
collection data, price changes, forecasts, network architecture, proprietary
technology, parental controls, and other information supplied by or on behalf of
a Party (whether prepared by such Party, its agents, contractors, advisors or
otherwise) relating to its business (including any of its products), inclusive
of information developed from or based on any of the foregoing, including
reports, information packages, memoranda, and transmittal letters, regardless of
whether such information is in written, oral, electronic or other tangible or
intangible form and any other information that is, or should be reasonably
understood to be, confidential or proprietary to the disclosing Party. All such
Confidential Information shall remain the sole property of the disclosing Party.
The receiving Party agrees that it will use such Confidential Information only
in the performance of its obligations under this Agreement and will take
reasonable steps to prevent disclosure of such Confidential Information, other
than to its employees, contractor and agents who must have access to such
Confidential Information for such receiving Party to perform its obligations
hereunder, and who will each agree to comply with this Section and independent
third party auditors that agree in writing to comply with confidentiality
requirements reasonably comparable to those set forth in this Section. At a
minimum, the receiving Party shall protect the Confidential Information of the
disclosing Party with the same degree of care used to protect its own
confidential information, but in any event no less than a reasonable degree of
care, for a period from the date hereof until three (3) years after the
expiration or termination of this Agreement. Confidential Information shall not
include information which (i) is or becomes generally known to the public other
than through an act or omission of the receiving Party or any of its directors,
officers, employees, agents, accountants, counsel, or other advisors; (ii) was
lawfully in the receiving Party's possession prior to the disclosure hereunder
and not subject to independent confidentiality obligations; (iii) is disclosed
to the receiving Party by a third party who was not violating any obligation of
confidentiality to the disclosing Party; or (iv) was independently developed by
the receiving Party or such Party's directors, officers, employees, agents,
accountants, counsel, or other advisors. Notwithstanding the foregoing, either
Party may make a disclosure containing Confidential Information without the
consent of the other Party, to the extent such disclosure is required by law,
rule, regulation or government or court order. In such event, the disclosing
Party will to the extent possible provide at least five (5) business days prior
written notice of
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such proposed disclosure to the other Party. Further, in the event such
disclosure is required of either Party under applicable laws, rules or
regulations, such Party will (a) redact mutually agreed-upon portions of the
Confidential Information to the fullest extent permitted under applicable laws,
rules and regulations, and (b) submit a request to the applicable governing body
that such Confidential Information be held in the strictest confidence to the
fullest extent permitted under such applicable laws, rules or regulations.
Except as required by law, rule, regulation or government or court order, the
Parties also agree to keep confidential and not disclose the terms and
conditions of this Agreement.
4.2 End User Data; Clearwire Customer Data. The term Confidential Information
shall also include personally identifiable information relating to any End User
or Clearwire Customer. Clearwire shall own all Confidential Information that it
collects from prospective, actual and former Clearwire Customers. AOL shall own
all Confidential Information that it collects from prospective, actual and
former End Users. Where both Parties collect the information from the same
prospective, actual or former customer in a manner not violating this Agreement,
both Parties shall own such information, without any duty to the other Party.
Each Party shall abide by the terms of any applicable Legal Requirement
regarding the privacy rights of End Users. Notwithstanding anything in this
Agreement to the contrary, upon expiration or termination of this Agreement, (i)
Clearwire may use End User Confidential Information for the purpose of
terminating the Clearwire Wireless Broadband Service, retrieving any CPE, and
continuing any collection activities; and (ii) AOL may use End User Confidential
Information to terminate the AOL Service or transition End Users to an
alternative transport provider (including AOL).
4.3 Return of Confidential Information. Following termination or expiration of
this Agreement, each Party receiving Confidential Information pursuant to this
Agreement will, at the disclosing Party's option, return or destroy (and so
certify to the disclosing Party) all tangible material embodying Confidential
Information (in any form or medium and including, without limitation, all
summaries, copies and excerpts of Confidential Information) at any such time as
the disclosing Party may so request.
5. REPRESENTATIONS AND WARRANTIES.
5.1 AOL Representations and Warranties. AOL hereby represents and warrants that
it is a corporation duly organized and validly existing under the laws of
Delaware and has all necessary power and authority to carry on its business as
presently conducted. AOL has all necessary power and authority to enter into
this Agreement and to carry out its obligations hereunder.
5.2 Clearwire Representations and Warranties. Clearwire hereby represents and
warrants to AOL that Clearwire is a corporation duly organized and validly
existing under the laws of Delaware and has all necessary power and authority to
carry on its business as presently conducted. Clearwire has all necessary power
and authority to enter into this Agreement and to carry out its obligations
hereunder.
6. DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY STATED TO THE CONTRARY HEREIN,
EACH PARTY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE, OTHER THAN THOSE WARRANTIES (IF ANY) WHICH ARE IMPLIED BY
AND INCAPABLE OF EXCLUSION, RESTRICTION, OR MODIFICATION UNDER THE LAWS
APPLICABLE TO THIS AGREEMENT.
7. LIMITATION OF LIABILITY NEITHER PARTY SHALL HAVE ANY LIABILITY WHATSOEVER FOR
ANY INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR OTHER INDIRECT DAMAGES
SUFFERED BY THE OTHER, EVEN IF INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH
DAMAGES. NOTWITHSTANDING THE FOREGOING, SUCH LIMITATIONS SHALL NOT
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APPLY WITH RESPECT TO (i) DAMAGES WITH RESPECT TO CLAIMS THAT ARE THE SUBJECT OF
INDEMNIFICATION PURSUANT TO SECTION 8 OF THIS EXHIBIT D, AND (ii) DAMAGES CAUSED
BY A PARTY'S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 4.1 OF THIS
AGREEMENT. THE PARTIES ACKNOWLEDGE AND AGREE THAT AMOUNTS PAID TO THIRD PARTIES
BY A PARTY FOR A CLAIM THAT IS THE SUBJECT OF INDEMNIFICATION UNDER SECTION 8 OF
THIS EXHIBIT D SHALL BE DEEMED TO BE DIRECT DAMAGES.
8. INDEMNIFICATION.
[***]
[***]
9. MISCELLANEOUS.
9.1 Independent Contractors. Clearwire and AOL are independent contractors. This
Agreement shall not be interpreted or construed to create an association, joint
venture or partnership between Clearwire and AOL or to impose any liability
attributable to such a relationship upon either such Party.
9.2 Notices. All notices, requests, demands, and determinations under this
Agreement (other than routine operational communications or as otherwise
specifically set forth herein), shall be in writing and shall be deemed duly
given (i) when delivered by hand, (ii) when delivered by e-mail, (iii) one (1)
business day after being given to an express, overnight courier with a reliable
system for tracking delivery, (iv) when sent by confirmed facsimile with a copy
delivered by another means specified in this Section, or (v) four (4) business
days after the day of mailing, when mailed by United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
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If to AOL:
America Online, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President Business Development Access
Marketing
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
America Online, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Deputy General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Clearwire:
Clearwire Spectrum Holdings LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as such Party hereto may
hereafter specify for such purpose by notice to the other Parties hereto.
9.3 Force Majeure. Neither Party shall be liable to the other for any failure of
performance hereunder due to Acts of God or other catastrophe, natural or
otherwise; any law, order, regulation, direction, action or request of the
United States government or any other government, including state and local
governments having jurisdiction over the Parties, or any department, agency,
commission, bureau, corporation or other instrumentality of any one or more said
governments, or of any civil or military authority; national emergency;
insurrection; riot; war, strike, acts of terrorism, lock-out; energy shortage;
material shortage; or other cause beyond the Parties' reasonable control;
provided, however, that the non-performing Party is without fault in causing
such default or delay, and such default or delay could not have been prevented
by reasonable precautions and cannot reasonably be circumvented by the non-
performing Party through the use of alternate sources, workaround plans or other
means.
9.4 Entire Agreement. This Agreement, along with the Exhibits hereto, represents
the entire understanding between the Parties with respect to the subject matter
hereof, supersedes all prior negotiations and agreements between the Parties,
and can be amended only by an agreement in writing signed by the Parties.
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9.5 Governing Law. Each Party agrees to continue performing its obligations
under this Agreement while any dispute is being resolved. This Agreement will be
governed by and construed in accordance with applicable federal laws and the
laws of the State of New York, without regard to principles of conflicts of
laws.
9.6 Injunctive Relief. It is understood and agreed that, notwithstanding any
other provisions of this Agreement, breach of the provisions of this Agreement
by a Party shall cause irreparable damage to the other Party for which recovery
of money damages would be inadequate and that the other Party may therefore seek
timely injunctive relief to protect such Party's rights under this Agreement in
addition to any and all remedies at law.
9.7 Cumulative Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either Party at law, in equity or otherwise.
9.8 Survival. Sections 4, 5, 6, 7, 8 and 9 of the Agreement of this Exhibit D
will survive the completion, expiration, termination or cancellation of the
Agreement. In addition, any obligations Parties under this Agreement that
expressly of by their nature continue beyond the expiration of this Agreement
shall survive any termination or cancellation of this Agreement.
9.9 Assignment. This Agreement shall accrue to the benefit of and be binding
upon the Parties hereto and any purchaser or any successor entity into which a
Party has been merged or consolidated or to which a Party has sold or
transferred all or substantially all of its assets. Except as permitted in this
Section, neither Party may assign this Agreement or assign or delegate its
rights or obligations under this Agreement without the prior written consent of
the other Party, whose consent shall not be unreasonably withheld; except that a
Party may assign or transfer this Agreement to any Affiliate (including to any
entity that it acquires or is acquired by, whether through merger,
reorganization or otherwise) upon notice to the other Party. In addition,
Clearwire may assign this Agreement (i) to any new entity it creates to carry on
the business of providing Clearwire Wireless Broadband Service or (ii) to a
successor in interest, by merger, operation of law, or by assignment, purchase
or otherwise of the business of providing Clearwire Wireless Broadband Service.
9.10 Succession. This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective permitted successors and assigns.
9.11 Severability. If any provision of this Agreement conflicts with the law
under which this Agreement is to be construed or if any such provision is held
invalid by a court with jurisdiction over the Parties, such provision shall be
deemed to be restated to reflect as nearly as possible the original intentions
of the Parties in accordance with applicable law. The remainder of this
Agreement shall remain in full force and effect. In the event any such deemed
restatement of any such provision prevents the accomplishment of a fundamental
purpose of this Agreement, AOL and Clearwire shall immediately commence
negotiations in good faith to provide the Party which has been adversely
affected by such restatement with value (in cash or in kind) equivalent to the
value that such Party would have received had such provision not been restated.
9.12 Waiver. No failure on the part of either Party to exercise, and no delay in
exercising any right or remedy hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by law.
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9.13 No Third Party Beneficiary; Disclaimer of Agency. This Agreement is for the
sole benefit of the Parties hereto, and nothing herein express or implied shall
create or be construed to create any third-party beneficiary rights hereunder.
Neither Party is an agent, representative or partner of the other Party. Except
for provisions herein expressly authorizing a Party to act for another, nothing
herein shall constitute a Party as a legal representative or agent of the other
Party, nor shall a Party have the right or authority to assume, create, incur
any liability or any obligation of any kind, express or implied, against or in
the name or on behalf of any other Party unless otherwise expressly permitted by
such other Party. Except as otherwise expressly provided in this Agreement, no
Party undertakes to perform any obligation of any other Party, whether
regulatory or contractual, or to assume any responsibility for the management of
such other Party's business.
9.14 Captions; Sections. Captions contained herein are inserted only as a matter
of convenience and in no way define, limit, or extend the scope or intent of any
provision hereof. Use of the term "Section" shall include the entire subject
Section and all its subsection where the context requires.
9.15 Press Releases. Except as required by applicable law, none of the Parties
shall make any public announcement regarding the terms of this Agreement or the
relationship established herein without the prior written consent of the other
Parties.
9.16 Taxes. AOL shall be solely responsible for the collection and remittance of
the Bundled Service Taxes, as well as any sales Taxes attributable to AOL's
payments to Clearwire for products and services, and shall indemnify Clearwire
and its Affiliates from and against any and all liabilities in connection
therewith.
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EXHIBIT E
RETAIL PRICING TIERS
***
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EXHIBIT F
INITIAL MARKETS
***
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EXHIBIT G
STAR AGREEMENT
[AMERICA LOGO]
November 1, 2005
▇▇▇▇ ▇▇▇▇▇▇▇
Clearwire
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(W) ▇▇▇-▇▇▇-▇▇▇▇
(F) ▇▇▇-▇▇▇-▇▇▇▇
This Letter Agreement confirms the agreement of Clearwire ("Partner") and
America Online, Inc. ("AOL") where AOL is providing AOL Information for use by
Partner solely for the purpose of secure data transmission between the parties
in accordance with the instructions provided by an authorized representative of
AOL.
"AOL Information" shall mean software and associated hardware, currently
known as the STAR System, a secure electronic information delivery and retrieval
system, any documentation for such STAR System as provided by AOL from time to
time, and any other information provided to Partner under this Agreement.
Partner agrees not to decompile, disassemble or otherwise reverse engineer
the AOL Information. Partner agrees to use the same degree of care, but no less
than a reasonable degree of care, to prevent the unauthorized use, dissemination
or publication of the AOL Information as it uses to protect its own confidential
information of a like nature. Partner agrees not to contest that AOL and its
suppliers are the sole and exclusive owners of all rights, title and interest,
including all trademarks, copyrights, patents, trade secrets and other
intellectual property rights to all of the documentation and computer-recorded
data comprising or included in the AOL Information.
The Star System contains encryption functionality which is subject to U.S.
export control laws and regulations and may not be exported or re-exported to
certain countries, for certain prohibited end uses or to persons or entities
named on the U.S. Dept. of Commerce, Bureau of Industry & Security's Denied
Persons List and Entity List, respectively, and on the U.S. Dept. of Treasury,
Office of Foreign Assets Control's Specially Designated Nationals List. Export,
re-export, resale, or transfer of the Star System is prohibited without prior
authorization from AOL and the U.S. Government. In addition, Partner is also
responsible for insuring compliance with
Bundled Broadband Service Agreement AOL AND CLEARWIRE CONFIDENTIAL
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any applicable foreign government regulations, including restrictions on imports
and use of encryption.
Partner will, at AOL's option, return or destroy and so certify to AOL all
tangible material embodying the AOL Information in any form, including without
limitation, all summaries, copies and excerpts of the AOL Information at any
such time as AOL may request.
Partner acknowledges that disclosure or use of AOL Information could cause
irreparable harm to AOL for which monetary damages may be difficult to ascertain
or be an inadequate remedy. Partner therefore agrees that AOL will have the
right, in addition to its other rights and remedies, to seek and obtain
injunctive relief for any violation of this Agreement.
Sincerely,
------------------------------------
Agreed and Accepted:
Clearwire
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name : ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Date: November 18, 2005
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