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Schedule 3 - Licence Agreement
6. Prohibition during Implementation Period
7. Cancellation and Termination
11. Maintenance of Records and Provision of Information
THIS AGREEMENT is made the [ ] day of [ ] 2005.
BETWEEN HER MAJESTY THE QUEEN in the right of the Government of New Zealand acting by and through [To insert] acting under the delegated authority from the CHIEF EXECUTIVE OF THE MINISTRY OF ECONOMIC DEVELOPMENT ("the Licensor")
AND [To insert] ("the Licensee")
Background
A The Ministry of Economic Development conducted an offer of Area Licences out of Crown-Retained Spectrum at 3.5GHz following a call for applications. The Licensee was the Successful Applicant for the Licence(s) and therefore was required to execute this Licence Agreement with the Ministry as a condition of settlement. The Licence was granted for the purpose of providing a Fixed Wireless Access service.
B The terms and conditions in this Licence Agreement are intended to be read in combination with and in addition to the terms and conditions outlined in the Licence(s) to which this Licence Agreement applies.
1. Interpretation
1.1 In this Licence Agreement, unless the context otherwise requires:
"Act"
- means the Radiocommunications Act 1989, as amended from time to time;
"Agreement"
- includes an agreement, contract, arrangement or understanding whether:
- formal or informal or partly formal and partly informal; or
- written or oral or partly written and partly oral; or
- having legal or equitable force or not, and whether or not based on legal or equitable rights;
"Allocation Rules"
- means the allocation rules dated 30 March 2005 for the allocation of Crown-Retained Spectrum at 3.5GHz;
- For a body corporate:
- a director of the body corporate; or
- a Related Company of the body corporate; or
- a director of a Related Company of the body corporate; or
- a partner of the body corporate in terms of the Partnership Act 1908 in a partnership that relates to or includes as part of its business the holding of radio frequency spectrum or the provision of telecommunications services; or
- any person (including bodies corporate and individuals) who, in making a decision or exercising a power materially affecting a business that relates to or includes as part of its business the holding of radio frequency spectrum or the provision of telecommunications services, is accustomed, or under an obligation, or proposes, or is likely, to act in accordance with the directions, instructions or wishes of the body corporate; or
- an individual who controls directly or indirectly (whether solely or jointly or in concert with any other person) at least 20% of the voting power or holds at least 20% of the issued shares in the body corporate; or
- a trust in terms of the Trustee Act 1956 that relates to or includes as part of its business the holding of radio frequency spectrum or the provision of telecommunications services and in respect of which the body corporate or a director or employee or Associate of the body corporate is a trustee; or
- a nominee of the body corporate; or
- an Associate of any person (including bodies corporate and individuals) that is an Associate of the body corporate; and
- For an individual:
- the individual's spouse; or
- a party to a civil union with the individual; or
- another person who, although not legally married to or a party to a civil union with the individual, lives with the individual on a genuine domestic basis as the spouse of that person in a de facto relationship as defined in the Property (Relationships) Act 1976; or
- a partner of the individual in terms of the Partnership Act 1908 in a partnership that relates to or includes as part of its business the holding of radio frequency spectrum or the provision of telecommunications services; or
- any person (including bodies corporate and individuals) who, in making a decision or exercising a power materially affecting a business that relates to or includes as part of its business the holding of radio frequency spectrum or the provision of telecommunications services, is accustomed, or under an obligation, or proposes, or is likely, to act in accordance with the directions, instructions or wishes of the individual;
- a body corporate in which the individual directly or indirectly (whether solely or jointly or in concert with any other person) controls at least 20% of the voting power or holds at least 20% of the issued shares; or
- a body corporate of which the individual is a director; or
- a body corporate that is a Related Company to a body corporate of which the individual is a director; or
- a nominee of the individual; or
- an Associate of any person (including bodies corporate and individuals) that is an Associate of the individual; and
- For any person (including bodies corporate and individuals), any other person (except the Chief Executive) who has an Agreement with that first person that entitles one of the parties to the Agreement to a substantial degree of influence, or the right to obtain a substantial degree of influence, over radio frequency spectrum in respect of which the other party is or will be (subject to these terms and conditions) a rightholder under the Act. For the avoidance of doubt, a commercial arm lengths Agreement between any persons which solely enables one person to use the other person's spectrum rights will not, of itself, be considered to result in that person being an Associate of the other person.
"Association"
- has a corresponding meaning to Associate;
"Chief Executive"
- means the Chief Executive of the Ministry of Economic Development;
"Controlling Interest"
- in relation to any radio frequency spectrum or a telecommunications network, means an interest which results in the direct or indirect control of that radio frequency spectrum or network, but does not include the non-exclusive right for any person to use any radio frequency spectrum or network on arms length commercial terms, where that frequency or network is controlled directly or indirectly by another person, unless there is evidence that the non-exclusive right is being used for the purpose of or has the effect of the right-holder exercising control of that spectrum or network;
"Date of Registration"
- means that date that the Licence was registered in the name of the Licensee;
"Fixed Wireless Access"
- means a two-way point to multi point service offered to several end-users of fixed telecommunications services over a radio-based telecommunications network that is capable of offering or providing data transmission suitable for broadband Internet access;
"Implementation period"
- means a period ending on the second anniversary of the Date of Registration of a Licence and includes any extension of that period allowed by the Chief Executive under clause 5.10(c);
"Licence"
- means the licence or licences as listed in the Schedule to this Licence Agreement and as registered in accordance with section 48 of the Act, as such licence or licences may be amended from time to time;
"Licence Agreement"
- means this licence agreement and includes the Licence;
"Licence Area"
- means, with respect to each Licence, the area within which the transmitter or transmitters may transmit under the Licence;
- A person exceeds the Licence Cap if it has a Controlling Interest in:
- sufficient alternative spectrum rights or radio licences (excluding general user rights and licences) for the provision of Fixed Wireless Access services or in a substitute broadband delivery system which could reasonably be used to provide the proposed Fixed Wireless Access service. What constitutes a substitute broadband delivery system will be determined at the absolute discretion of the Chief Executive but will include a fixed line network which is capable of (or will be capable of following an upgrade) providing broadband services to at least 25% of the population in the Licence Area; and/or
- spectrum licences granted in the frequency ranges 3410-3424 MHz or 3510-3524 MHz in more than ten (10) areas specified in Part 2 of Schedule 2 of the Allocation Rules.
"Licence Fee"
- means the amount required in settlement under the Allocation Rules for the purchase of the Licence;
"Ministry"
- means the Ministry of Economic Development or any other department given responsibility for the Licences;
"PROBE Contract"
- means a contract between the PROBE Supplier and the Crown to provide broadband telecommunications infrastructure in connection with the project known as Project PROBE, as such contract may be amended or replaced from time to time;
"PROBE Supplier"
- means a person who is a party to a PROBE Contract with the Crown;
"Proximal Rightholder"
- means an adjacent, adjoining, and neighbouring rightholder or any rightholder whose spectrum rights would be affected as a result of the Licensee's Fixed Wireless Access service or any other exercise of rights under the Licence;
"Regulations"
- means regulations made pursuant to the Act, in the form in force at the relevant time;
"Related Company"
- A company is related to another company if -
- The other company is its holding company or subsidiary; or
- At least 20% of the issued shares of the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital, is held by the other company and companies related to that other company (whether directly or indirectly, but other than solely in a fiduciary capacity); or
- At least 20% of the issued shares, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital, of each of them is held by members of the other (whether directly or indirectly, but other than solely in a fiduciary capacity); or
- The businesses of the companies have been so carried on that the separate business of each company, or a substantial part of it, is not readily identifiable; or
- There is another company to which both companies are related;
"Term"
- has the meaning given to it in clause 3;
"Working Day"
- means between the hours of 8.30am to 5.00pm on any day that is not a Saturday or a Sunday or a public holiday within the meaning of section 44 of the Holidays Act 2003 (other than in section 44(1)(k), Wellington Anniversary Day).
1.2 In the event of inconsistency between the terms of this Licence Agreement and the terms of a Licence, the terms of this Licence Agreement prevail.
1.3 In this Licence Agreement, unless the context requires otherwise:
- the singular includes the plural, and vice versa; and
- "including" and similar words do not imply any limitation.
2. Grant
2.1 In consideration of the payment of the Licence Fee made by the Licensee, and subject to the Licensee observing the terms and conditions of this Licence Agreement, the Licensor agrees to grant to the Licensee for the Term, the Licence in accordance with the provisions of this Licence Agreement.
2.2 The Licensee is subject to, and must comply with, all laws (including the Act and the Regulations) pertaining to the Licence.
2.3 The Licensee warrants that, during the Implementation Period, the certifications made by the Licensee under clause 17 (or, in the case of a PROBE Supplier who had priority under the Allocation Rules, those matters disclosed in its application) and clause 27 of the Allocation Rules, are and will remain true and correct.
3. Term
3.1 This Licence Agreement commences on the date of execution and continues until its expiry or termination in accordance with this Licence Agreement.
4. Fees
4.1 The Licensee must pay to the Chief Executive;
- The Licence Fee (plus GST) in accordance with the Allocation Rules (if not paid to the Chief Executive prior to the execution of this Licence Agreement); and
- fees as prescribed in and in accordance with the Regulations.
4.2 If the Licensee defaults on payment, the Ministry reserves the right to cancel the Licence with immediate effect.
5. Obligations of the Licensee
Transmitter Sites
5.1 The Licence gives the Licensee the right to establish transmitter sites at any location within the Licence Area, provided that the establishment of the transmitter sites comply with the boundary conditions specified in the Licence and otherwise obtaining the appropriate rights of physical access to the site. In addition, the Licensee is responsible for obtaining all regulatory or other consents required to establish a transmitter site.
Boundary Conditions and Coordination
5.2 The Licensee acknowledges that co-ordination with Proximal Rightholders at both the frequency and geographic boundary is very likely to be required before the Licensee may provide a Fixed Wireless Access service or exercise any other rights under a Licence.
5.3 At both the design and implementation stages for establishing a Fixed Wireless Access service or any other service, the Licensee must fully employ such interference mitigation techniques such as (without limit) antenna discrimination, polarization, frequency offset, shielding, site selection, and power control, to maximise co-existence with systems of other service providers within the Licence Area and Proximal Rightholder's areas.
5.4 The Licensee must use its best endeavours to negotiate Agreements with Proximal Rightholders (in frequency and geography) to coordinate frequencies to maximise technical efficiency and minimise interference risks in a fair and objective spirit by discussion. Where the Licensee and a Proximal Rightholder are unable to agree, the Licensee must:
- for disputes other than a dispute relating to interference risks, submit the dispute to an agreed alternative method of dispute resolution, such as mediation, or where the parties cannot agree such method, to a method nominated by the Chief Executive; and
- where such dispute is not resolved by the agreed alternative method of dispute resolution or for disputes relating to interference risks (whether such risk arises under the Licence or under a licence of the Proximal Rightholder), submit the dispute to such dispute resolution procedures as are from time to time nominated by the Ministry (which may include arbitration procedures outlined in sections 106-109C of the Act or by an arbitrator nominated by the Chief Executive).
The Ministry agrees to use reasonable endeavours to obtain similar undertakings from other prospective licence-holders. This clause is for the benefit of and enforceable by, the Crown and Proximal Rightholders for the purposes of the Contracts (Privity) Act 1982.
5.5 Notwithstanding section 107 of the Act, the Licensee agrees not to serve a notice of harmful interference under section 108 of the Act unless and until it has taken significant steps towards implementing a Fixed Wireless Access service. For the avoidance of doubt, a person will not have taken significant steps towards implementing a Fixed Wireless Access service until it has obtained landowner consent and has sought all necessary Resource Management Act 1991 consents to establish the base transmitter for the Fixed Wireless Access Service.
Implementation Requirement
5.6 The Licensee must demonstrate that it has implemented a continuous and on-going Fixed Wireless Access service in the Licence Area using the Licence by the second anniversary of the Date of Registration.
5.7 The determination of whether or not implementation has occurred is a matter to be determined by the Chief Executive in his or her sole discretion exercising a common sense judgment. However, a Fixed Wireless Access service that has been operating 24 hours per day, 7 days per week (excluding reasonable outages including those for maintenance and construction) for a continuous period starting no later than 18 months after the Date of Registration and which provides a Fixed Wireless Access service to at least 25% of the population in the Licence Area will be considered implemented.
5.8 To assist the Chief Executive with his or her determination in clause 5.7, the Licensee must submit to the Chief Executive, prior to the second anniversary of the Date of Registration, a statutory declaration:
- stating that a Fixed Wireless Access service has been implemented; and
- detailing the extent of implementation including the period of use, the percentage of population covered by the Fixed Wireless Access service in the Licence Area (and how that is calculated) and average transmitting powers.
5.9 The Chief Executive may request further information from the Licensee to make his or her determination under clause 5.7. The Chief Executive must provide notice in writing to the Licensee of the determination under clause 5.7.
5.10 Without limitation to the terms of this Licence Agreement (including any right or remedy of the Licensor), to the extent that a Fixed Wireless Access service has not been implemented within the Licence Area prior to the second anniversary of the Date of Registration, the Chief Executive may in the exercise of his or her absolute discretion:
- cancel that particular Licence and terminate this Licence Agreement in respect of that Licence;
- amend the Licence to accord to the actual level of implementation achieved if the Licensee has commenced the provision of a Fixed Wireless Access service, and create and allocate other spectrum licences within the Licence Area to any person, provided these new licences do not cause harmful interference within the protection area of an amended spectrum licence; or
- allow an extension of not longer than six (6) months for implementation of a Fixed Wireless Access service.
5.11 The Chief Executive must provide notice in writing to the Licensee of the decision made in 5.10.
5.12 Licences cancelled in accordance with this Licence Agreement will be available for reallocation. The Licensee may reapply for the cancelled licence on the terms of the allocation rules for that licence.
6. Prohibition during Implementation Period
6.1 Prior to the determination that implementation has been achieved, the Licensee must not:
- transfer that Licence; or
- form any Associations which would have the effect of the Licensee or its Associate exceeding the Licence Cap,
without first obtaining the written consent of the Chief Executive which in the absolute discretion of the Chief Executive may be declined or made subject to any conditions.
6.2 Despite clause 6.1, the Licensee:
- may enter into arms length commercial Agreements with persons wishing to provide Fixed Wireless Access services pursuant to section 55 of the Act provided that the person wishing to provide the Fixed Wireless Access service:
- does not, including as a result of the Agreement, exceed the Licence Cap; and
- has agreed in writing to comply with the terms and conditions of this Licence Agreement. To avoid doubt, such Agreement must not be inconsistent with the terms of this Licence Agreement.
- must enter into an Agreement with a PROBE Supplier in respect of those sites within the Licence Area that are notified to the Licensee on the allocation webpage in accordance with clause 24 of the Allocation Rules to enable that PROBE Supplier to meet the service specifications under its PROBE Contract, provided that:
- the Chief Executive provides to the Licensee the name and contact details of the PROBE Supplier; and
- the Agreement requires that PROBE Supplier to use or provide a Fixed Wireless Access service from the site and use the site specific use rights only to the extent that is specified in that PROBE Supplier's PROBE Contract schedule of works; and
- such Agreement is on reasonable commercial terms; and
- where the parties are unable to agree such reasonable commercial terms, the dispute must be referred to dispute resolution in accordance with the dispute resolution procedure set out in clause 5.4 of this Agreement.
7. Cancellation and Termination
7.1 Subject to clause 7.5, this Licence Agreement expires on the expiry of the Licence.
7.2 In addition to the specific rights of cancellation and termination specified in this Licence Agreement, the Chief Executive may, at his or her sole discretion, cancel any Licence (or all Licences) and terminate this Licence Agreement by giving notice in writing to the Licensee, if the Licensee:
- commits any serious breach of its obligations under this Licence Agreement; or
- repeats or continues, after having been warned in writing, any breach of its obligations under this Licence Agreement.
7.3 Cancellation of any Licence and termination of this Licence Agreement by the Licensor in accordance with this Licence Agreement will be effective from the date of service of the written notice of cancellation and termination on the Licensee.
7.4 The Licensee may cancel a Licence at anytime by notifying the Chief Executive in writing at least twenty (20) Working Days prior to the cancellation taking effect. This Licence Agreement expires on such cancellation being effective.
7.5 Despite anything to the contrary in this Licence Agreement, where this Licence Agreement expires or is terminated in respect of one (or some) but not all of the Licences under this Licence Agreement, this Licence Agreement continues in full force and effect in respect of the Licences that have not expired or been cancelled . Cancellation of a Licence and termination of this Licence Agreement is without prejudice to the rights and obligations that accrued prior to the date of cancellation and termination.
7.6 Clauses 9 and 11 of this Licence Agreement will continue after the expiry or cancellation of the Licence and termination of this Licence Agreement.
8. Amendment to Licences
8.1 Following a written request from the Ministry (attaching the notice in the prescribed form in accordance with section 57B of the Act), to modify a Licence in the manner described by the Ministry, where in the Ministry's reasonable opinion, a serious interference or technical incompatibility issue with a Proximal Rightholder has arisen as a result of which a modification to the Licence is necessary or desirable:
- the Licensee agrees to promptly sign such notice and return that notice to the Ministry;
- if the Licensee does not sign the notice within ten (10) Working Days of the request in clause 8.1, the Licensee agrees that the Licensor may modify the Licence on the Licensee's behalf in the manner described in that notice;
- for the purposes of 8.1(b), the Licensee irrevocably appoints the Ministry as its attorney for the purpose of modifying the Licence on its behalf and authorises the Ministry to effect the proposed modification in the name of the Licensee (including granting all necessary rights to do such act).
9. Limitation of Liability
9.1 Neither the Crown nor the Ministry nor any officer of the Ministry will be liable for any indirect, consequential, incidental, or special loss or damage (including loss of profit, loss of revenue, loss of business or any other form of economic loss) resulting from or connected with the performance of its rights and obligations under the Licence or this Licence Agreement.
The total maximum liability of the Crown, the Ministry and any officer of the Ministry for breach of contract, statutory duty, in tort (including negligence), equity or in respect of any other cause of action resulting from or connected with the performance of their rights and obligations under the Licence or this Licence Agreement shall not exceed the GST exclusive Licence Fee paid to the Crown by the Licensee for the Licence in question.
10. Waiver
10.1 A waiver by either party of any rights arising from any breach of any term of this Licence Agreement will not be a continuing waiver of any other rights arising from any other breaches of the same or other terms or conditions of the Licence or this Licence Agreement. To be effective, any waiver by a party must be in writing.
10.2 No failure or delay on the part of either party in the exercise of any right or remedy in this Licence Agreement will operate as a waiver. No single or partial exercise of any such right or remedy will preclude any other or further exercise of that or any other right or remedy.
11. Maintenance of Records and Provision of Information
11.1 The Licensee must maintain all records of information that relates to its obligations and compliance with the terms of this Licence Agreement. The Licensee must make this information available to the Ministry on its written request within 10 (ten) Working Days of receiving the request.
12. Severability
12.1 If any part or provision of this Licence Agreement is invalid, unenforceable or in conflict with the law, the invalid or unenforceable part or provision will be replaced with a provision which, as far as possible, accomplishes the original purpose of the part or provision. The remainder of the Licence Agreement will be binding on the Parties.
13. Notices
13.1 Any notice to be given under this Licence Agreement will be in writing and will be hand delivered or sent by registered post to the Parties' respective addresses as set out in clause 13.3 and clause 13.4.
13.2 Any notice will be deemed to be served on the date of delivery or the Business Day next following the date of posting as the case may be. In proving the giving of a notice it is sufficient to prove that the envelope containing such notice was properly addressed and posted.
13.3 The address for the service of notices on the Ministry, unless otherwise notified in writing, is:
Ministry of Economic Development
33 Bowen Street
PO Box 1473
WELLINGTON
Attention: Manager Radio Spectrum Policy and Planning
13.4 The address for the service of notices on the Licensee, unless otherwise notified, is as described in the Licence.
14. Entire Agreement
14.1 The parties acknowledge that this Licence Agreement sets out the entire agreement and understanding of the parties and supersedes all prior oral or written agreements, understanding or arrangements relating to its subject matter.
15. No Warranties
15.1 The Licensee acknowledges that it has acquired the Licence and entered into this Licence Agreement acting entirely on its own judgment and not in reliance on any warranty or representation made by the Crown or the Ministry or any officer of the Ministry and that it has no cause of action against the Crown or the Ministry or any officer of the Ministry for any pre-contractual statement or action by them or any of them. This acknowledgement is intended for the benefit of the Crown and the Ministry and all officers of the Ministry for the purposes of the Contracts (Privity) Act 1982.
16. Amendments
16.1 Any amendment to this Licence Agreement must be in writing duly executed by both parties in the same manner and with the same formality as this Licence Agreement is executed.
17. New Zealand Law
17.1 This Licence Agreement will be governed by and construed in accordance with the laws of New Zealand and the parties submit to the exclusive jurisdiction of the Courts of New Zealand.
Signed for and on behalf of
HER MAJESTY THE QUEEN
in right of the Government of
New Zealand by the [NAME/TITLE]
[Branch]
Ministry of Economic Development
________________________________
in the presence of:
________________________________
________________________________
Signed for and on behalf of
[PARTY TO THE AGREEMENT]
by ____________________________
in the presence of:
________________________________
________________________________
