Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment to Form S-1 HTML 115K
2: EX-4.6 Investor Rights Agreement 14 77K
3: EX-9.1 Voting Agreement 10 44K
4: EX-10.10 Agreement 9 47K
5: EX-10.11 Amendment to Agreement 31 128K
6: EX-10.12 Agreement and Undertaking 2 14K
7: EX-10.25 Form of Subscription Agreement 45 169K
8: EX-10.26 Market Operation, Spectrum Lease and Sublicense 190 679K
Agreement
9: EX-10.29 Subscription Agreement 21 97K
10: EX-10.30 Master Supply Agreement 105 316K
11: EX-10.31 Side Agreement 17 77K
12: EX-10.39 Vendor Agreement 12± 50K
13: EX-10.40 Subscription Service Addendum to Vendor Agreement 39 100K
14: EX-10.41 Co-Marketing Agreement 22 86K
15: EX-10.42 Purchase and Sale Agreement 48 166K
16: EX-10.45 Bundled Wireless Broadband Services Agreement 32 83K
17: EX-10.46 Subscription Agreement 29 113K
18: EX-10.47 Side Agreement 3 21K
19: EX-10.48 Amended and Restated Limited Liability Company 58 207K
Agreement
20: EX-10.51 Common Stock Purchase Agreement 51 217K
21: EX-10.52 Mobile Wimax Network Collaboration Agreement 36 112K
22: EX-10.53 Stock Purchase Agreement 81 340K
23: EX-10.55 Wireless Broadband System Services Agreement 20 48K
24: EX-10.56 Wireless Broadband System Infrastructure Agreement 146 358K
25: EX-10.57 Wireless Broadband Cpe Supply Agreement 40 94K
26: EX-10.58 Side Letter Agreement 9 51K
27: EX-10.59 Master Royalty and Use Agreement 196 648K
28: EX-10.60 Master Royalty and Use Agreement 103 325K
29: EX-10.61 Membership Interest Purchase Agreement 51 181K
30: EX-10.62 Purchase Agreement 64 201K
31: EX-10.63 Educational Broadband Service Long Term De Facto 84 276K
Transfer Lease Agreement
32: EX-21.1 List of Subsidiaries 2± 13K
Exhibit 10.61
================================================================================
MEMBERSHIP INTEREST PURCHASE AGREEMENT
between
JAMES K. BAUMANN
ROXANE L.GOOGIN,
ELIZABETH NEUSTADT,
AS CUSTODIAN FOR RACHEL NEUSTADT,
MARTIN A. RUBIN,
JAMES H. WIESENBERG
and
CLEARWIRE SPECTRUM HOLDINGS II LLC
Dated as of August 9, 2006
================================================================================
TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS ................................................... 1
ARTICLE 2 PURCHASE AND SALE OF INTERESTS ................................ 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS ..................... 8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER ................... 17
ARTICLE 5 COVENANTS AND OTHER AGREEMENTS ................................ 19
ARTICLE 6 CONDITIONS TO CLOSING ......................................... 24
ARTICLE 7 TERMINATION ................................................... 25
ARTICLE 8 SURVIVAL AND REMEDIES ......................................... 27
ARTICLE 9 MISCELLANEOUS ................................................. 32
LICENSEE ................................................................ 39
MARKET .................................................................. 39
CALL SIGN & CHANNELS .................................................... 39
LICENSE TERM ............................................................ 39
EXHIBIT A Form of Escrow Agreement
EXHIBIT B Form of Assignment of LLC Interest
i
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of August 9, 2006
(the "Effective Date"), is among James K. Baumann, Roxane I. Googin, Elizabeth
Neustadt as custodian for Rachel Neustadt, Martin A. Rubin and James H.
Wiesenberg (each a "Seller" and collectively the "Sellers"), Clearwire Spectrum
Holdings II LLC, a Nevada limited liability company ("Purchaser"), and
Clearwire Corporation, a Delaware corporation ("Clearwire"), the parent
corporation of Purchaser, for the limited purpose of its obligations in Article
2, making its representations and warranties in Section 4.2, and the provisions
of Articles 6, 7 and 9. All Sellers, Clearwire and Purchaser may be referred to
herein collectively as "Parties;" any one of Purchaser, Clearwire or a Seller
may be referred to herein individually as a "Party;" and Purchaser and Clearwire
may be referred to collectively herein as the "Clearwire Parties."
RECITALS
A. The Sellers own one hundred percent (100%) of the limited liability
company interests (the "Interests") of [***] a Delaware limited liability
company (the "Company");
B. Sellers desire to sell to Purchaser, and Purchaser desires to purchase
from Sellers, the Interests for the purchase price and upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, Purchaser, Clearwire and each Seller, severally and not jointly,
agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth or referenced below:
"Accredited Investor" means as this term is defined in Rule 501(a) of
Regulation D as promulgated by the U.S. Securities and Exchange Commission under
the Securities Act.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, alone or through one or more intermediaries, controls,
is controlled by or is under common control with that Person; provided that no
Seller shall be deemed to be an Affiliate of any other Seller based upon his or
her ownership of a share of the Interests or other relationship with the
Company. For purposes of this definition, "control" (including the terms
"controlling" and "controlled") means the power to direct or cause the direction
of the management and policies of a Person, directly or indirectly, whether
through the ownership of securities or partnership or other ownership interests,
by contract or otherwise.
[*** Confidential Treatment Requested]
1
"Agreement" means this Membership Interest Purchase Agreement and all
Exhibits and Schedules hereto, as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Amended and Restated Stockholders Agreement" means the Amended and
Restated Stockholders Agreement, dated March 16, 2004, by and among Clearwire
and Clearwire's stockholders.
"Assets" is defined in Section 3.8.
"Benefit Plan" is defined in Section 3.15.
"Bereny" is defined in Section 2.3(b).
"BRS" means Broadband Radio Service, formerly known as MDS.
"Business Day" means any day, other than a Saturday or Sunday, on which
commercial banks and foreign exchange markets are open for business in Seattle,
Washington.
"Channels" means the BRS channels licensed under a License.
"Claim" is defined in Section 8.5(a).
"Clearwire" is defined in the preamble.
"Clearwire Certificate" is defined in Section 2.3(e).
"Clearwire Parties" is defined in the preamble.
"Clearwire Stock" is defined in Section 2.3(c).
"Closing" is defined in Section 2.5.
"Closing Date" is defined in Section 2.5.
"Company" is defined in Recital A.
"Confidential Information" means any and all information regarding the
business, finances, operations, products, services and customers of the
Purchaser and its Affiliates, in written or oral form or in any other medium.
"Consents" means all consents and approvals of Governmental Authorities or
other third parties necessary to authorize, approve or permit the Parties hereto
to consummate the Transactions.
"Contract" is defined in Section 3.9.
2
"Current Clearwire Price" shall be defined as the lower of (i) Six Dollars
($6.00) per share; (ii) the value per share of Clearwire Stock as determined by
the board of directors of Clearwire Corporation from time to time, as in effect
on the Closing Date; (iii) the price per share of Clearwire Stock in the then
most recently completed funding round of Clearwire Corporation in which Eight
Million (8,000,000) or more shares were sold or, if such funding round did not
include common stock but did include preferred stock or other convertible
securities, the price per share of common stock, based on converting such
preferred stock or other convertible securities to common stock pursuant to the
applicable conversion rights; and (iv) if Clearwire Stock is then listed on a
national securities exchange or on the Nasdaq Stock Market, then the average
closing price of the Clearwire Stock on such national securities exchange or on
the Nasdaq Stock Market for each trading day during the ten (10) calendar days
immediately preceding the Closing Date; in the case of each of items (i) through
(iv) subject to appropriate adjustment in the event of a stock split, stock
dividends, other distribution or recapitalization of Clearwire Stock between the
Effective Date and the time of Closing.
"Damages" means any and all losses, claims, demands, liabilities,
obligations, actions, suits, orders, statutory or regulatory compliance
requirements, or proceedings asserted by any Person (including any Party), and
all damages, costs, expenses, assessments, judgments, recoveries and
deficiencies, including interest, penalties, investigatory expenses, reasonable
consultants' fees, and reasonable attorneys' fees and costs, of every kind and
description, contingent or otherwise.
"Disclosure Memorandum" means that certain Confidential Private Placement
Memorandum of Clearwire dated June 23, 2006, as updated by that certain
Supplement to Confidential Private Placement Memorandum dated June 30, 2006.
"Down Payment Advance" is defined in Section 2.3(a).
"EBS" means Educational Broadband Service, formerly know as ITFS.
"Effective Date" is defined in the preamble.
"Employee" is defined in Section 3.15.
"Escrow Agreement" is defined in Section 2.2.
"Exchange Act" is defined in Section 3.17.
"FCC" means the Federal Communications Commission or any successor agency
thereto.
"FCC Application" is defined in Section 5.6.
"FCC Rules" means Title 47 of the Code of Federal Regulations, as amended
at any time and from time to time, and FCC decisions, published policies,
reports and orders issued pursuant to the adoption of such regulations.
3
"Final Order" means an action or decision of the FCC as to which (i) no
request for a stay or similar request is pending, no stay is in effect, the
action or decision has not been vacated, reversed, set aside, annulled or
suspended and any deadline for filing such request that may be designated by
statute or regulation has passed, (ii) no petition for rehearing or
reconsideration or application for review is pending and the time for the filing
of any such petition or application has passed, (iii) the FCC does not have the
action or decision under reconsideration on its own motion and the time
designated by statute or rale within which it may effect such reconsideration
has passed, and (iv) no appeal is pending including other administrative or
judicial review, or in effect and any deadline for filing any such appeal that
may be designated by statute or rule has passed.
"Governmental Authority" means a Federal, state or local court,
legislature, governmental agency (including the United States Department of
Justice), commission or regulatory or administrative authority or
instrumentality.
"Holdback Amount" means Seven Hundred Thousand Dollars ($700,000) in cash.
"Holdback Period" means the period commencing on the Closing Date and
ending on the first (1st) anniversary of the Closing Date.
"Interests" is defined in Recital A.
"Intellectual Property Rights" is defined in Section 3.12.
"Knowledge", as regards any entity, means the actual knowledge of fact of
that entity, which includes that of managing members in that entity, if the
Party is a limited liability company, and, in each case, excludes knowledge
based upon opinion.
"Law" means applicable common law and any statute, ordinance, code or other
law, rule, permit, permit condition, regulation, order, decree, technical or
other standard, requirement or procedure enacted, adopted, promulgated, applied
or followed by any Governmental Authority.
"Legal Proceeding" shall mean 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 Governmental Authority or any arbitrator or arbitration panel,
but excluding rule makings and legislation of general applicability and market
transitions of BRS and EBS spectrum.
"Licenses" is defined in Section 3.7.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset other than (1)
liens for taxes not yet due and payable (for which Sellers shall be responsible)
and (2) rights and restrictions imposed by FCC Rules or the Communications Act
of 1934, as amended.
4
"Party" or "Parties" is defined in the preamble.
"Permits" is defined in Section 3.16.
"Person" means any general partnership, limited partnership, limited
liability company, corporation, joint venture, trust, business trust,
Governmental Authority, cooperative, association, other entity, or individual,
and the heirs, executors, administrators, legal representatives, successors, and
assigns of such person as the context may require.
"Pre-Closing Tax Period" is defined in Section 8.4.
"Purchase Price" is defined in Section 2.3.
"Purchaser" is defined in the preamble.
"Purchaser Indemnified Parties" is defined in Section 8.2.
"Reasonable Efforts" means the efforts that a reasonably prudent person or
entity desirous of achieving a result would use in similar circumstances to
ensure that such result is achieved lawfully; provided, however, that an
obligation to use Reasonable Efforts under this Agreement does not require the
Party subject to that obligation to take actions or incur costs that would
result in a materially adverse change in the benefits such Party expects to
realize from this Agreement
"Registration Rights Agreement" means the Registration Rights Agreement,
dated March 16, 2004, as amended, by and among Clearwire and Clearwire's
stockholders.
"Regulation S" means Regulation S under the Securities Act.
"Reservation Claims" is defined in Section 8.6(d).
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers" is defined in the preamble.
"Seller Indemnified Parties" is defined in Section 8.3.
"Seller Material Adverse Effect" means any material adverse change having,
or any event or condition which has had, or could reasonably be expected to
have, a material adverse effect on the ability of Sellers to consummate the
Transactions or on the Assets (other than a FCC Rule change affecting BRS
channel 2 authorizations generally).
"Solvent" is defined in Section 3.18.
"Straddle Period" is defined in Section 8.4.
"Subsidiary" means any Person of which a majority of the outstanding voting
securities or other voting equity interests are owned, directly or indirectly,
by the Company.
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"Tax" or "Taxes" means any taxes, assessment, duties, fees, levies,
imposts, deductions, or withholdings, including income, gross receipts, ad
valorem, value added, excise, real or personal property, asset, sales, use,
license, payroll, transaction, capital, net worth and franchise taxes, estimated
taxes, withholding, employment, social security, workers compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes, or other governmental charges of any nature
whatsoever, imposed by any Taxing Authority of any government or country or
political subdivision of any country, and any liabilities with respect thereto,
including any penalties, additions to tax, fines or interest thereon and
includes any liability for Taxes of another person by contract or as a
transferee or successor.
"Tax Return" means any report, return, statement, estimate, declaration,
notice, form or other information required to be supplied to a Taxing Authority
in connection with Taxes.
"Taxing Authority" shall mean the Internal Revenue Service and any other
Governmental Authority responsible for the administration of any Tax.
"Towers" means any towers or other "antenna structures" as defined by the
FCC in Part 17 of the FCC Rules.
"Transactions" means the transactions contemplated by this Agreement.
"Updated Clearwire Certificate" is defined in Section 2.3(e).
ARTICLE 2
PURCHASE AND SALE OF INTERESTS
Section 2.1 Purchase and Sale. On the terms and subject to the conditions
of this Agreement, at the Closing, each Seller shall sell, assign, transfer,
convey and deliver to Purchaser free and clear of all Liens, and Purchaser shall
purchase from such Seller, the portion of the Interests owned by that Seller.
The obligation of the Sellers under the preceding sentence of this Section 2.1
is several and not joint.
Section 2.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") for the Interests shall be an amount equal to [***] provided, however,
that on the Closing Date to the extent the Company has any liabilities that are
not being paid off at Closing (and evidence provided to Purchaser of such
pay-offs), excluding liabilities arising under the Licenses after Closing and
the Transition Liability (as defined below), the Purchase Price shall be
adjusted downwards in an amount equal to the amount of such outstanding
liabilities.
Section 2.3 Payment of Purchase Price.
(a) Purchaser shall advance to Sellers a portion of the Purchase
Price equal to [***] "Down Payment Advance" payable by wire transfer to one
or more accounts specified by Sellers, upon the later of (i) receipt by
Purchaser of a completed IRS Form W-8 or W-9 from
[*** Confidential Treatment Requested]
6
each of the Sellers and (ii) five (5) Business Days following the full
execution of this Agreement. The Down Payment Advance shall be applied
against the Purchase Price dollar-for-dollar at the Closing. The Down
Payment Advance shall be non-refundable except as specifically provided in
Section 7.2(a).
(b) At the Closing, pursuant to the Escrow Agreement by and
between Purchaser and Sellers, the form of which is attached hereto as
Exhibit A (the "Escrow Agreement") Purchaser shall deposit the Holdback
Amount for the Holdback Period to cover Claims pursuant to Section 8.6.
(c) At the Closing, Purchaser shall pay Sellers and, on behalf of and
at the direction of Sellers, Matthew S. Bereny as broker for Sellers
("Bereny"), an aggregate amount of [***] of the Purchase price, or, if the
Down Payment Advance is not paid, [***] of the Purchase Price, in
immediately available funds via wire transfer to accounts-designated by
Sellers and Bereny. The portion of such aggregate amount payable to any one
of the Sellers or Bereny shall be equal to the product of (i) the decimal
shown opposite such person's name in the table in Section 2.3(d) and (ii)
such aggregate amount
(d) At the Closing, Clearwire shall issue to each person shown on
the following table such number of shares of Clearwire's Class A Common
Stock(including any different class of stock as to which existing Class A
shares may have been converted "Clearwire Stock") as equals the quotient
obtained by dividing (A)the product of (i) the decimal shown opposite such
person's name in the table and (ii) [***] by(B) [***]
Table
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James K. Baumann 0.12350
Matthew S. Bereny 0.02500
Roxane I. Googin 0.25175
Elizabeth Neustadt, as Custodian for 0.25175
Rachel Neustadt
Martin A. Rubin 0.04750
James H. Wiesenberg 0.30050
If at the time of Closing, Bereny or any Seller is not an Accredited
Investor, then the portion of the Purchase Price payable to Bereny or such
Seller, as applicable, shall be payable in all cash in immediately available
funds via wire transfer to an account designated by Bereny or such Seller, as
applicable. The number of shares of the Clearwire Stock shall be adjusted, if
necessary to account for any stock split, cash dividend, stock dividend, or
other distribution or recapitalization in respect of Clearwire's issued and
outstanding stock between now and the Closing. No fractional shares of Class A
Common Stock shall be issued pursuant to this Section 2.3.
[*** Confidential Treatment Requested]
7
(e) In the event the Current Clearwire Price falls below $6.00 per
share: (i) Clearwire shall deliver to Sellers a certificate of Clearwire
executed by an officer of Clearwire, certifying as to the Current Clearwire
Price, which certificate shall be delivered to Sellers no later than ten (10)
days prior to Closing (the "Clearwire Certificate") and (ii) each Seller may
elect to receive his or her portion of Four Million Two Hundred Thousand Dollars
in immediately available funds rather than shares of Clearwire Stock, which such
election must be delivered in writing to Clearwire at least two (2) days prior
to the Closing Date, and in the absence of such election, such Seller shall be
deemed to have elected to receive Clearwire Stock at $6.00 per share. In the
event that the Current Clearwire Price changes between the date Clearwire
delivers the Clearwire Certificate to the Sellers and the Closing Date,
Clearwire shall deliver to Sellers an updated Clearwire Certificate, certifying
as to the Current Clearwire Price (an "Updated Clearwire Certificate"). If
Clearwire delivers an Updated Clearwire Certificate to Sellers within four (4)
days of the Closing Date, the Closing Date shall be postponed to the first
business day that is four (4) more days after the delivery of the Updated
Clearwire Certificate, unless the Parties shall agree otherwise.
Section 2.4 Federal Income Tax Treatment; Purchase Price Allocation. The
Parties acknowledge that pursuant to Revenue Ruling 99-6, the transaction
contemplated by this Agreement will be treated for Federal income tax purposes
as (a) a sale of membership interests in the Company from the Sellers'
perspective and (b) a purchase of all of the Assets (as defined below) by
Purchaser for purposes of establishing Purchaser's tax basis and holding period
in the Assets. The Parties further acknowledge and agree that for purposes of
Section 1060 of the Internal Revenue Code of 1986, as amended, and applicable
regulations, for purposes of calculating Purchaser's basis in the Assets and the
character of the gain recognized by Sellers on the sale of the Interests, the
entire Purchase Price shall be allocated to the Licenses, which constitute Class
VI assets.
Section 2.5 Closing. Upon the terms and subject to the conditions hereof,
the closing of the sale of the Interests (the "Closing") shall take place at the
offices of Davis, Wright Tremaine LLP, in Washington, DC, within five (5)
Business Days following the date on which the last condition under ARTICLE 6 has
been satisfied or waived (the 'Target Closing Date"), or at such other time and
place as the Parties may mutually agree; provided, however, the Sellers may
extend the date of Closing to January 3, 2007 by written notice to Purchaser
delivered before the Target Closing Date in the event that the Target Closing
Date would precede January 3, 2007. The date on which Closing occurs is called
the "Closing Date."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby severally, and not jointly, represents and warrants to
Purchaser as follows; it being understood that a representation and warranty as
to Sellers or the Interests shall be limited to a representation and warranty of
such Seller as to his or her self or his or her share of the Interests, and not
as to any other Seller or the share of the Interests of any other Seller even
though a representation and warranty may apply on its face to all Sellers or the
entire Interests:
8
Section 3.1 Organization; Good Standing. The Company is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, and has all requisite limited liability company power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. The Company is duly qualified or authorized to do business as
a foreign company and is in good standing under the laws of each state in which
it conducts business. Section 3.1 of the Disclosure Schedule sets forth all of
the jurisdictions in which the Company conducts business.
Section 3.2 Authorization; Enforceability. Such Seller has all requisite
power and authority to execute and deliver this Agreement and each other
agreement, document or instrument or certificate contemplated by this Agreement
to be signed by such Seller and to consummate the Transactions. This Agreement
has been duly executed and delivered by such Seller and is a legal, valid and
binding obligation of such Seller, enforceable against such Seller in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights, to general equity principles and FCC Consent.
Section 3.3 No Conflicts or Consents. Neither the execution, delivery and
performance by such Seller of this Agreement, nor the consummation of the
Transactions by such Seller, will (i) conflict with, or result in the breach of,
any provision of the certificate of formation or limited liability company
agreement of the Company; (ii) constitute, with or without the giving of notice
or passage of time or both, a breach, violation or default by such Seller, the
Company or any of their respective Affiliates, create a Lien, or give rise to
any right of termination, modification, cancellation, prepayment or
acceleration, under (x) any Law or license (subject to receipt of Consent of the
FCC) or (y) any note, bond, mortgage, indenture, lease, agreement or other
instrument, in each case which is applicable to or binding upon the Company,
such Seller or any of the Assets; (iii) require any Consent, other than the
Consent of the FCC; or (iv) violate any Law by which such Seller or the Company
is bound.
Section 3.4 Capitalization.
(a) Such Seller owns the share of the Interests set forth opposite his
or her name on Section 3.4 of the Disclosure Schedule. Such Seller owns his
or her respective share of the Interests free and clear of all Liens. All
the outstanding Interests are duly authorized and validly issued and were
not issued in violation of any preemptive rights. With respect to the
Company, there are no: (a) other equity interests in the Company; (b)
outstanding or authorized option, warrant, right, call or commitment
relating to the equity interests in the Company, nor any outstanding
securities or obligations convertible into or exchangeable for, or giving
any Person any right to subscribe for or acquire from it, any equity
interests in the Company; (c) outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any equity interests in the
Company; (d) authorized or outstanding membership interest or unit
appreciation plan (or similar plan), profit participation or similar rights
with respect to the Company; (e) voting trusts, proxies or other
9
agreements among holders of equity interests in the Company; and (f)
preemptive or other subscription rights with respect to any other equity
interests of the Company.
(b) Section 3.4 of the Disclosure Schedule contains a list of all
distributions made by the Company during 2006 in respect of the Interests
of the Company through the date hereof.
Section 3.5 Subsidiaries. The Company has no Subsidiaries.
Section 3.6 Absence of Undisclosed Liabilities. Except as disclosed on
Section 3.6 of the Disclosure Schedule and liabilities arising under the
Licenses, the Company does not have any liabilities or obligations (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due).
Section 3.7 FCC Matters.
(a) The Company validly holds the Licenses, permits and authorizations
set forth on Section 3.7 of the Disclosure Schedule. Section 3.7 of the
Disclosure Schedule sets forth a true and correct list of the licenses
granted by the FCC authorizing the Company (the "Licenses") to construct
and operate BRS Channels in the markets listed therein. True and complete
copies of the Licenses have been delivered to Purchaser. There is no
condition outside of the ordinary course imposed on any of the Licenses by
the FCC except those that are either set forth on the face of the Licenses,
as issued by the FCC, or contained in the FCC Rules applicable generally to
incumbent BRS licenses. The applications listed on Section 3.7 of the
Disclosure Schedule are all of the applications that are now pending at the
FCC for the modification or renewal of the Licenses or otherwise filed by
the Company. No Person other than the Company has any right, interest or
claim in or to the Licenses. The Licenses have been granted to the Company
by Final Order and are in full force and effect.
(b) Excluding proceedings of general applicability and the market
transition of BRS and EBS spectrum (a "Transition"), there is not pending
or, to the Knowledge of such Seller, threatened against the Company or the
Licenses any application, action, petition, objection or other pleading, or
any proceeding with the FCC or any other Governmental Authority, which (i)
questions or contests the validity of, or seeks the revocation, forfeiture,
non-renewal or suspension of, any of the Licenses, (ii) seeks the
imposition of any modification or amendment with respect to any of the
licenses, (iii) which would adversely affect the ability of such Seller to
consummate the Transactions or (iv) seeks the payment of a fine, sanction,
penalty, damages or contribution in connection with the use of the
Licenses. To such Seller's Knowledge and excluding proceedings of general
applicability and any Transition, there are no facts or circumstances
existing that would give rise to any such application, action, petition,
objection or other pleading, or proceeding with the FCC or any other
Governmental Authority. There is no unsatisfied adverse FCC order or
10
ruling outstanding against such Seller or any of the Licenses. Such Seller
is not a party to any complaint or proceeding at the FCC regarding any of
the Licenses.
(c) Except as described in Section 3.7(c) of the Disclosure Schedule,
the Company has not agreed to accept or allow any electromagnetic
interference from any other FCC licensees, permittees or applicants with
respect to the Licenses and/or Channels, and no such licensees, permittees
or applicants have agreed to accept electromagnetic interference from the
Company with respect to their respective facilities.
(d) The Company is in compliance with all applicable Laws except for
any non-compliance that, individually or in the aggregate, will not have a
Seller Material Adverse Effect. Since acquiring the Licenses, the Company
has complied in all material respects with FCC Rules applicable to the
Licenses, including without limitation the Communications Act of 1934, as
amended. Since the issuance of the Licenses, the Company has complied in
all material respects with all of the terms and conditions of the Licenses.
The Licenses are free and clear of all Liens and are unimpaired by any acts
or omissions of the Company, its agents, assignees and licensees. Except as
set forth in Section 3.7(c) of the Disclosure Schedule, all material
documents required to be filed at any time by the Company with the FCC with
respect to the Licenses have been timely filed or the time period for such
filing has not lapsed. All such documents filed since the date that the
Licenses were issued to the Company are correct in all material respects.
All amounts owed to the FCC in connection with the Licenses have been
timely paid.
(e) The facilities subject to the Licenses for which certification of
completion of construction has been filed with the FCC are not operating.
None of the facilities subject to the Licenses is (a) authorized pursuant
to an authorization which is presently subject to challenge before the FCC
or any court of competent jurisdiction or (b) subject to any lease,
sublease or any agreement to make it available to a third party. None of
the facilities subject to the Licenses are operating pursuant to special
temporary or developmental authority.
(f) The Company does not lease any Towers for the market area
covered by the Licenses.
Section 3.8 Title to Assets; Condition of Assets. As of the Closing Date,
the Company shall have no assets other than the Licenses and the books and
records of the Company (collectively, the "Assets").
Section 3.9 Contracts. Sellers have disclosed on Section 3.9 of the
Disclosure Schedule any indenture, mortgage, guaranty, lease, license or other
contract, agreement or understanding, written or oral to which the Company is a
party (each a "Contract"). Each of the Contracts will be terminated or assigned
to the Sellers in advance of Closing. No Contract, or any of them, requires the
consent of a party thereto in order to be effectively terminated or assigned to
Sellers on or prior to Closing. Neither the Company nor, to the
11
Knowledge of such Seller, any other party to any of the Contracts has failed to
comply with or is in material breach or material default thereunder. Except as
set forth on Section 3.9 of the Disclosure Schedule, to the Knowledge of such
Seller, no condition exists or event has occurred and is continuing as of the
date hereof and the Closing 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 Contract or give rise to any Lien or right of termination,
modification, cancellation, prepayment, suspension, limitation, revocation or
acceleration against the Company under any such Contract. Other than as
described in Section 3.9 of the Disclosure Schedule, none of such Contracts are
with any Person that is an officer, manager, member (or any family member of
such Person) or Affiliate of Sellers.
Section 3.10 Taxes.
(a) The Company has timely filed all Tax Returns that it was required
to file under applicable laws and regulations. All such Tax Returns are true,
correct, accurate and complete in all material respects. The Company has paid
all Taxes which have been imposed upon the Company or upon any of the assets,
income or franchises of the Company (whether or not shown on any Tax Return). No
claim has ever been made by any Taxing Authority in a jurisdiction where the
Company does not file Tax Returns, but the Company is or may be subject to
taxation by that jurisdiction. There exists no proposed tax assessment against
the Company. The Tax Returns of the Company have never been audited by a Taxing
Authority and the Company has received no notice of any such audit. The Company
has not waived any statute of limitations with respect to Taxes or agreed to any
extension of time with respect to any Tax assessment or deficiency. There are no
Liens for Taxes upon any of the Company's assets.
(b) The Company has withheld and paid over to the appropriate Taxing
Authority all Taxes required to have been withheld and paid over in connection
with any amounts paid or owing to any employee, independent contractor,
creditor, member, or other third party.
(c) The Company has at all times been treated and properly classified
as a partnership for federal income tax purposes, and has never filed, or had
filed on its behalf, any election to be treated as an association taxable as a
corporation for federal income tax purposes.
(d) Sellers have delivered to Purchaser true, complete and correct
copies of the Tax Returns for the Company for the tax years 2003, 2004 and 2005.
12
Section 3.11 Litigation. Except as set forth on Section 3.11 of the
Disclosure Schedule and excluding investigations not revealed to the Company or
any Seller, there is no Legal Proceeding now in progress or pending or
threatened against the Company, such Seller, the Assets or the business of the
Company, nor to the Knowledge of such Seller does there exist any basis
therefore. The Company is not subject to any order, writ, injunction or decree
of any court or any federal, state, municipal or other domestic or foreign
Governmental Authority.
Section 3.12 Intellectual Property. The Company does not own or possess any
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information and other proprietary rights and processes (collectively
"Intellectual Property Rights").
Section 3.13 Books and Records. The records of the Company are materially
true but may not reflect all meetings of and resolutions of, or written consents
by, the members or managers (or committee thereof) since the day of company
formation. The books and records of the Company accurately reflect the assets,
liabilities, business, financial condition and results of operations of the
Company. All books and records of the Company have been made available, or will
be delivered prior to Closing, to Purchaser.
Section 3.14 Employees. The Company (a) currently has no employees, (b)
shall have no employees as of the Closing Date, and (c) and shall have satisfied
all obligations owed to its employees, including, without limitation, for any
wages, salaries, commissions, bonuses or other direct compensation for any
services performed as of the Closing Date or amounts required to be reimbursed
by them by the Closing Date. There are no plans, arrangements or agreements
pursuant to which any employee or other Person may be entitled to any
compensation or payment based upon or as a result of the Transactions other than
as described in Section 3.20 of the Disclosure Schedule. The Company has been at
all times in compliance in all material respects with all applicable federal,
state and local laws, rules and regulations respecting employment, employment
practices, labor, terms and conditions of employment and wages and hours. The
Company is not bound by or subject to (and none of its assets or properties are
bound by or subject to any written or oral, express or implied, commitment or
arrangement with any employee.
Section 3.15 Employee Benefit Plans.
(a) The Company does not have and never has had a plan, program or
policy providing for compensation, severance, termination pay, performance
awards, equity or equity-related awards, fringe benefits or other material
employee benefits of any kind, whether formal or informal, funded or unfunded,
written or oral and whether or not legally binding, which is now or has ever
been sponsored, maintained, contributed to or required to be contributed to by
the Company or pursuant to which the Company has any liability, contingent or
otherwise, including, but not limited to, any "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (each a "Benefit Plan"). The Company does not sponsor,
maintain, contribute to, nor is required to contribute to, nor has the Company
ever sponsored, maintained, contributed to or been required to contribute to, or
incurred or could incur any
13
liability to any Benefit Plan which provides, or has any liability to provide,
life insurance, medical, severance or other employee welfare benefits to any
current, former or retired employee, officer, consultant, independent
contractor, agent or director of the Company upon his or her retirement or
termination of employment, except as required by Code Section 4980B. The Company
does not have any plan or commitment, whether legally binding or not, to
establish any new Benefit Plan, or to modify or terminate any Benefit Plan.
(b) The Company is not nor ever has been (i) a member of a "controlled
group of corporations," under "common control" or a member of an "affiliated
service group" within the meaning of Code Sections 414(b), (c) or (m), (ii)
required to be aggregated under Code Section 414(o), or (iii) under "common
control," within the meaning of Section 4001(a)(14) of ERISA, or any regulations
promulgated or proposed under any of the foregoing Sections, in each case with
any entity other than the Company.
Section 3.16 Compliance with Laws; Permits. Except as provided on Section
3.16 of the Disclosure Schedule, the Company (a) has complied in all respects
with all Laws applicable to it and its business other than where noncompliance
would not, individually or in the aggregate, reasonably be expected to have a
Seller Material Adverse Effect and (b) has all federal, state, local and foreign
governmental permits, authorizations, approvals, licenses, certificates or
consents ("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
Seller Material Adverse Effect, such Permits are in full force and effect, no
violations have been recorded in respect of any such Permit except as stated
Section 3.7(c) of the Disclosure Schedule, and no proceeding is pending or
threatened to revoke or limit any such Permit. Section 3.16 of the Disclosure
Schedule sets form a list of all material Permits and the expiration dates
thereof.
Section 3.17 Absence of Changes. Except as set forth on Section 3.17 of the
Disclosure Schedule, since December 31, 2005, the Company has conducted its
business in the ordinary course and there has not been (a) any material adverse
change having, or any event or condition which has had, or could reasonably be
expected to have, a Seller Material Adverse Effect; (b) any waiver of any
valuable right of the Company, the cancellation of any valuable right of the
Company, or the cancellation of any material debt or claim held by the Company;
(c) any payment or declaration of dividends on, or other distribution with
respect to, or any direct or indirect redemption or acquisition of, any
securities of the Company; (d) any issuance of any stock, bonds or other
securities of the Company or any split, combination or reclassification of the
Company's membership interests; (e) any sale, assignment or transfer of any
tangible or intangible assets of the Company, except in the ordinary course of
business, and assets which are not, individually or in the aggregate, material;
(f) any loan by the Company to any officer, manager or member of the Company
(other than advances to such persons in the ordinary course of business in
connection with travel and travel related expenses); (g) any damage, destruction
or loss (whether or not covered by insurance) materially and adversely affecting
the Assets; (h) any change in the accounting or Tax methods, practices or
policies or in any Tax election of the Company: (i) any indebtedness incurred
for borrowed money other than in the ordinary course of
14
business; (j) any amendment to or termination of any material agreement to which
the Company is a party (other than amendments to or terminations of agreements
pursuant to or contemplated by this Agreement); (k) any satisfaction or
discharge of any lien, claim, or encumbrance or payment of any obligation by the
Company, except in the ordinary course of business; (1) any material change in
any compensation arrangement or agreement with any employee, officer, manager or
member the Company, (m) any mortgage, pledge, transfer of a security interest
in, or Lien, created by the Company, with respect to any of its material
properties or assets, except liens for taxes not yet due or payable; or (n) any
agreement or commitment (contingent or otherwise) to do any of the foregoing.
Section 3.18 Solvency. Such Seller and the Company are Solvent. For
purposes of this Agreement, "Solvent" means as to such Seller and the Company
that (a) the fair value of such Party's property is greater than the amount of
its liabilities (whether subordinated, contingent, unmatured, unliquidated or
otherwise); (b) the present fair saleable value of such Party's property is not
less than the amount that will be required to pay the probable liability of such
Party on its debts as they become absolute and matured; (c) such Party is able
to realize upon his or its property and pay its debts and other liabilities as
they mature in the normal course of business; (d) such Party docs not intend to,
and does not believe that will, incur debts or liabilities beyond its ability to
pay as such debts and liabilities mature; and (e) such Party is not engaged in
business or a transaction for which its property would constitute unreasonably
small capital.
Section 3.19 Related Party Transactions. Section 3.19 of the Disclosure
Schedule sets forth all obligations and transactions (i) between the Company and
the Company's Affiliates, and (ii) between the Company and any of the officers,
managers, equity holders or employees, or any of the affiliates or associates
(each term as defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")') of the Company. Except as set forth on Section 3.19 of the
Disclosure Schedule, no officer or manager of the Company or any parent, child
or spouse of any of such persons, or any trust, partnership or corporation in
which any of such persons has or has had an interest) has or has had, directly
or indirectly, (x) any interest or involvement in any entity which furnished or
sold, or furnishes or sells, services or products which the Company furnishes or
sells, or proposes to furnish or sell, or (y) any interest or involvement in any
entity which purchases from or sells or furnishes to, the Company, any goods or
services; provided, that ownership of no more than one percent of the
outstanding voting stock of a publicly traded corporation in and of itself shall
not be deemed an interest in any entity for purposes of this Section 3.19.
Except as set forth on Section 3.19 of the Disclosure Schedule, no Affiliate of
the Company (a) owns any property or right, tangible or intangible, which is
used in the business of the Company or (b) has any claim or cause of action
against the Company. Except as described on Section 3.19 of the Disclosure
Schedule, each transaction set forth on Section 3.19 of the Disclosure Schedule
is on terms that are (i) consistent with past practice of the Company and (ii)
at least as favorable to the Company as would be available with independent
third parties dealing at arms' length.
Section 3.20 Brokers. Neither Sellers nor the Company or any of their
respective Affiliates has employed any broker or finder or incurred any
liability for any brokerage or finder's fees or commissions in connection with
the Transactions, except Bereny and James
15
H. Wiesenberg who, upon the Closing, will be entitled to the commission
described in Section 3.20 of the Disclosure Schedule.
Section 3.21 Securities Representations.
(a) Such Seller is an Accredited Investor. Such Seller is acquiring
the Clearwire Stock for its own account, for investment purposes only and
not with a view to the distribution (as such term is interpreted for
purposes of Section 2(11) of the Securities Act) thereof. Such Seller
understands that the Clearwire Stock has not been registered under the
Securities Act as of the Effective Date and cannot be sold or otherwise
transferred unless subsequently registered under the Securities Act or an
exemption from such registration is available.
(b) Such Seller is knowledgeable and experienced in the
telecommunications industry and in investments in telecommunications
enterprises, and is capable of evaluating the risks and merits of the
transactions contemplated by this Agreement, including the acquisition of
shares of Clearwire Stock. Such Seller has received the Disclosure
Memorandum from Purchaser in sufficient time prior to entering into this
Agreement. Such Seller and its representatives have had sufficient
opportunity to ask questions of and receive answers from Purchaser and
Clearwire concerning the business of Clearwire, its operations, assets and
liabilities, and have had what such Seller considers to be reasonable
access to information about Clearwire. Such Seller and its representatives
have had an opportunity to review all documents and records concerning
Clearwire and its business that such Seller has requested. Such Seller has
conducted its own independent assessment, analysis and investigation with
respect to Clearwire and its business at the time of entering into this
Agreement and has agreed to enter into this Agreement and to accept
Clearwire Stock as partial payment of the Purchase Price based solely on
this assessment, analysis and investigation, and the representations and
warranties of Purchaser set forth in this Agreement and the information
contained in the Disclosure Memorandum.
(c) Such Seller is aware that Clearwire is a speculative enterprise,
that certain of the information disclosed to it contain forward looking
statements which involve risks and uncertainties, and that Clearwire's
actual results may differ significantly from the results discussed in these
forward looking statements. Such Seller further acknowledges that the value
of Clearwire's respective assets is inherently uncertain and is dependent
upon market, technological, and regulatory developments concerning feasible
and allowable uses. Each Seller represents and warrants to Purchaser and
Clearwire that it has assessed these factors independently and has agreed
to enter into this Agreement without reliance upon or expectation of any
disclosures of any kind from Purchaser or Clearwire, except as set forth in
this Agreement and the Disclosure Memorandum and as contemplated by Section
3.21(b).
(d) Such Seller is aware that the shares of Clearwire Stock issued in
connection with this Agreement will be "restricted securities" within the
meaning of
16
Rule 144(a)(3)(i) and 144(a)(3)(ii) and that such shares may be resold or
otherwise transferred pursuant to an effective registration statement under
the Securities Act or an exemption from such registration. Such Seller
acknowledges that all certificates representing shares of Clearwire Stock
issued in this transaction will bear a legend reflecting such status.
(e) For purposes of application of state securities law, such Seller
is a resident of the state or foreign country indicated opposite his or her
name on Section 3.4 of the Disclosure Schedule.
(f) With respect to any Seller who is not a resident of the United
States, such Seller makes the following representations, warranties and
covenants:
(i) such Seller is not a "U.S." person (as defined in Regulation
S) and is not acquiring the Clearwire Stock for the account
or benefit of any U.S. person;
(ii) such Seller will not engage in hedging transactions with
regard to Clearwire's securities unless conducted in
compliance with the Securities Act;
(iii) such Seller will not resell any of Clearwire's securities
unless in accordance with the provisions of Regulation S and
in accordance with applicable state securities laws in the
United States, or pursuant to an available exemption from
registration under the Securities Act; provided that such
Seller provides an opinion of counsel or other evidence of
exemption, in form reasonably satisfactory to U.S. counsel
to Clearwire; and
(iv) such Seller acknowledges that Clearwire will refuse to
register any transfer of any of the Clearwire Stock not made
in accordance with the provisions of Regulation S, pursuant
to registration under the Securities Act, or pursuant to an
available exemption from registration.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CLEARWIRE
Section 4.1 Purchaser hereby represents and warrants to each Seller and
Bereny as follows:
(a) Existence; Authorization. Purchaser is lawfully existing and in
good standing under the laws of the State of Nevada, has all requisite power and
authority to enter into this Agreement and to perform the obligations to be
performed by it under this Agreement. The execution and delivery of this
Agreement, and the performance by
17
Purchaser of its obligations hereunder, have been duly authorized by all
necessary action on the part of Purchaser.
(b) Enforceability. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. Each other agreement, document, instrument or
certificate contemplated by this Agreement to be delivered by Purchaser to
any one or more Sellers or Bereny, if and when so delivered, will be duly
executed and delivered by Purchaser, and a legal, valid and binding obligation
of Purchaser enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(c) No Conflicts or Consents. Neither the execution, delivery and
performance by Purchaser of this Agreement, nor the consummation of the
Transactions by Purchaser, will (i) constitute, with or without the giving of
notice or passage of time or both, a breach, violation or default by Purchaser
or any of its Affiliates, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration under (x) any Law or
license (subject to receipt of Consent of the FCC), or (y) any note, bond,
mortgage, indenture, lease, agreement or other instrument, in each case which is
applicable to or binding upon Purchaser; or (ii) will require any Consent, other
than the Consent of the FCC.
(d) Brokers. Purchaser has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees or commissions in
connection with the Transactions.
(e) FCC, Qualifications. Purchaser is legally, technically,
financially and otherwise qualified to acquire and hold the Licenses under FCC
Rules and the Communications Act of 1934, as amended.
(f) Proceedings. There is no Legal Proceeding pending or, to the
Knowledge of Purchaser, threatened against Purchaser or Clearwire, or
Purchaser's or Clearwire's property or assets, that would reasonably be expected
to have an adverse effect on Purchaser's ability to consummate the Transactions,
or which seeks to prevent or challenge the Transactions.
4.2 Clearwire Representations and Warranties. Clearwire hereby represents
and warrants to each Seller and Bereny as follows:
(a) Existence Authorization. Clearwire is lawfully existing and in
good standing under the laws of the State of Delaware, has all requisite power
and authority to issue the Clearwire Stock as contemplated by this Agreement,
and to perform the obligations to be performed by it under this Agreement. The
performance by Clearwire of its obligations hereunder, have been duly authorized
by all necessary action on the part of Clearwire.
18
(b) Enforceability. This Agreement has been duly executed and
delivered by Clearwire and is a legal, valid and binding obligation of
Clearwire, enforceable against Clearwire in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. Each other agreement, document, instrument or
certificate contemplated by this Agreement to be delivered by Clearwire, or to
be entered into with Clearwire by joinder of any one or more Sellers or Bereny,
if and when so delivered, will be duly executed and delivered by Clearwire, and
a legal, valid and binding obligation of Clearwire, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(c) No Conflicts or Consents. Neither the execution, delivery and
performance by Clearwire of this Agreement, nor the consummation of the
Transactions by Clearwire, will (i) constitute, with or without the giving of
notice or passage of time or both, a breach, violation or default by Clearwire
or any of its Affiliates, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration under (x) any Law or
license (subject to receipt of Consent of the FCC), or (y) any note, bond,
mortgage, indenture, lease, agreement or other instrument, in each case which is
applicable to or binding upon Clearwire; or (ii) will require any Consent, other
than the Consent of the FCC.
(d) Securities to be Issued to Sellers and Bereny. When issued by
Clearwire to Sellers and Bereny pursuant to this Agreement, the Clearwire Stock
will be duly issued, fully paid and non-assessable, free of liens, encumbrances,
rights of third parties, and restrictions on transfer other than restrictions on
transfer and rights of third parties under this Agreement and as may exist under
the Amended and Restated Stockholders Agreement to which each Seller and Bereny
will be a party by joinder, the Registration Rights Agreement to which each
Seller and Bereny will be a party by joinder, and applicable securities laws.
Clearwire's Board of Directors has approved the issuance of the Clearwire Stock
pursuant to this Agreement in accordance with Clearwire's certificate of
incorporation, Clearwire's bylaws and the Delaware General Corporation Law.
(e) Proceedings. There is no Legal Proceeding pending or, to the
Knowledge of Clearwire, threatened against Purchaser or Clearwire, or
Clearwire's property or assets, that would reasonably be expected to have an
adverse effect on Clearwire's ability to consummate the Transactions, or which
seeks to prevent or challenge the Transactions.
ARTICLE 5
COVENANTS AND OTHER AGREEMENTS
Section 5.1 Consummation of Transactions. From and after the date of this
Agreement, each Party shall use its Reasonable Efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable and consistent with applicable Law to perform its obligations under
this Agreement and to consummate the Transactions as soon as reasonably
practicable.
19
Section 5.2 Certain Notices. Prior to the Closing, each Party shall
promptly notify each other Party in reasonable detail:
(a) upon such Party obtaining Knowledge of the commencement of, or the
impending or threatened commencement of, or of any facts that would give
rise to, any claim, action or proceeding brought to enjoin the consummation
of the Transactions, or against or relating to (i) the notifying Party or
its properties or assets, which could materially adversely affect the
Transactions or its ability to perform its obligations hereunder, or (ii)
the Assets or their use;
(b) upon such Party obtaining Knowledge of the occurrence of, or the
impending or threatened occurrence of, or any facts that would give rise
to, any event which could cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained in this
Agreement, and shall use Reasonable Efforts to prevent or promptly remedy
such breach; and
(c) upon such Party obtaining Knowledge of the occurrence or existence
of any event, condition, circumstance or state of facts, which has had or
could have a material adverse effect on the Transactions or its ability to
perform its obligations hereunder, or which could materially adversely
affect the Assets or their use.
Section 5.3 Confidentiality. Pursuant to this Agreement and the performance
thereof, Sellers may receive certain Confidential Information. Each Seller
agrees not to use for himself or herself, except in performance of the Agreement
and for reliance for purposes of deciding to enter into or close this Agreement,
or disclose to any Person this Agreement or any Confidential Information, except
(a) information that was gained independent of Sellers' relationship with
Purchaser and became publicly available through no breach of any obligation of
confidentiality by Sellers; (b) information that is communicated to a third
party with the prior written consent of Sellers; (c) information that is
required to be disclosed pursuant to the lawful order of a government agency or
disclosure that is required by operation of law, but in such event, only to the
extent such disclosure is required and, to the extent reasonably practicable,
prior written notice must be given to allow Purchaser to seek a protective order
or other appropriate remedy; or (d) disclosure in a proceeding seeking to
enforce this Agreement or any other agreement executed pursuant to the terms of
this Agreement, to seek damages related to the breach of any such agreements or
as required to obtain FCC consent to the Transactions. In the event of a beach
or threatened breach of the terms of this section, Purchaser shall be entitled
to seek an injunction prohibiting any such breach. Any such injunctive relief
shall be in addition to, and not in lieu of, any appropriate relief in the way
of money damages or any other remedies available at law or in equity. Each
Seller acknowledges and agrees that the financial terms of this Agreement may be
required to be separately stated in the consolidated financial statements of
Purchaser and/or its Affiliates and that the disclosure by Purchaser or its
Affiliates of such financial statements shall not be a breach of this Agreement
Purchaser may disclose this Agreement to its affiliates, strategic partners,
actual or potential investors, lenders, acquirers, merger partners; and others
whom Purchaser deems in good faith to have a need to know such information for
purposes of
20
pursuing a transaction or business relationship with Purchaser. The duties under
this Section shall survive the Closing for a period of one (1) year.
Section 5.4 Further Assurances. Prior to, at and following the Closing,
each Party shall forthwith upon request execute and deliver such documents and
take such actions as may reasonably be requested by any other Party in order to
effectuate the purposes of this Agreement; provided, however, that no Party
shall be required to take any action after the Closing which would subject it,
its partners, officers, directors or shareholders to any further liability or
obligation, except as expressly provided in this Agreement.
Section 5.5 FCC Qualifications. Sellers hereby covenant and agree that
prior to the Closing they shall cause the Company to maintain all necessary
qualifications to hold and to obtain renewal in the ordinary course of the
Licenses, and further covenant that they shall not knowingly or negligently take
any action, or fail to take any action, which action or failure to act creates a
material risk that the Company would not be qualified to hold the Licenses or
that the FCC would revoke the Licenses; provided, however, that Purchaser shall
be responsible for the Transition Liability as defined in and pursuant to
Section 5.13.
Section 5.6 Consents. The Parties shall use Reasonable Efforts and shall
cooperate to prepare and file with Governmental Authorities and other Persons,
no later than ten (10) days following the Effective Date, all applications,
notices, petitions and other documentation necessary or advisable to obtain the
Consents (it being understood that the failure to file within such period shall
not constitute a material breach of this Agreement). Each Party shall furnish to
the other Party all information concerning such Party and its Affiliates
reasonably required for inclusion in any application to be made in connection
with the Transactions or to determine compliance with FCC Rules. Neither any one
or more of the Sellers nor the Company shall be required to bear any expense of
seeking or assisting Purchaser in seeking any Consent to the Closing that
Purchaser may require for it to consummate the Transactions but which neither
any Seller nor Company may require for it to consummate the Transactions. Each
Seller and Purchaser will use Reasonable Efforts to prepare all application
forms and related exhibits, certifications and other documents necessary to
secure the Consent of the FCC to the Transactions (collectively, the "FCC
Application") and to file the FCC Application within ten (10) Business Days
following the Effective Date. Each Seller and Purchaser will promptly and
diligently prepare, file and prosecute all necessary amendments, briefs,
pleadings, petitions for reconsideration, applications for review, waiver
requests, documents and supporting data, and take all such actions and give all
such notices as may be required or requested by the FCC or as may be appropriate
to expedite the grant of the FCC Application without conditions materially
adverse to any Seller, Company or Purchaser. If any person or entity petitions
the FCC to deny the FCC Application, or if the FCC grants such application and
any person or entity petitions for reconsideration or review of such grant
before the FCC or appeals or applies for review in any judicial proceeding, then
each Seller and Purchaser will use their respective Reasonable Efforts to oppose
such petition before the FCC or defend such grant by the FCC. If the FCC denies
the FCC Application or grants such application with conditions materially
adverse to any Seller or Purchaser, then if requested to do so by any Party,
each Seller and Purchaser will use their respective Reasonable Efforts to secure
reconsideration or review of
21
such action. If the Closing has not occurred within 180 days following the date
of the grant of the FCC Application, each Seller and Purchaser shall use
Reasonable Efforts to obtain such extensions of the effectiveness of such grant
as is reasonably necessary to permit the scheduling of Closing pursuant to this
Agreement Purchaser will be responsible for the payment of all FCC Application
filing fees incurred in connection with this Section 5.6.
Section 5.7 Seller Affirmative Covenants. Sellers shall use Reasonable
Efforts to cause the Company (a) to carry on its business with respect to the
Licenses as currently conducted and only in the ordinary course of business; (b)
preserve the Licenses intact; (c) comply with all Laws applicable to the
Licenses; and (d) maintain in full force and effect the Licenses and other
licenses necessary to preserve Sellers' ability to consummate the Transactions.
Section 5.8 Seller Negative Covenants. No Seller shall, and each Seller
shall cause the Company not to, (a) sell, transfer, assign, lease, modify or
dispose of any material Assets or of the spectrum to be covered by the Licenses
or any interests therein or portion thereof, or negotiate therefor, other than
Company's rights against George Bott with respect to a Buffalo BRS station and
the Company's bank account; or (b) create, incur or suffer to exist any Lien or
other liability on any Assets or the spectrum to be covered by the Licenses or
any interest therein; (c) sell, assign or otherwise transfer the Interests or
any rights therein; (d) grant any options or other rights in or with respect to
the Interests; (e) create or allow to be created any lien on the Interests; or
(f) enter into any agreement, arrangement or understanding to, or otherwise
offer or commit to do any of the foregoing.
Section 5.9 Access. Between the date of this Agreement and the Closing
Date, Sellers shall cause the Company, during normal business hours, to (a) give
Purchaser and its representatives and advisors access to all books, records,
offices and other facilities and properties of the Company; (b) permit Purchaser
and its representatives and advisors to make such inspections thereof as
Purchaser may reasonably request; and (c) cause the officers and advisors of the
Company to furnish Purchaser with such financial and operating data and other
information with respect to the Company as Purchaser may from time to time
reasonably request other than information protected by the attorney-client
privilege.
Section 5.10 Publicity. Neither Sellers nor Purchaser shall issue any press
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
Party hereto, which approval will not be unreasonably withheld or delayed,
unless disclosure is otherwise required by applicable Law, provided that, to the
extent required by applicable Law, the Party intending to make such release
shall use its Reasonable Efforts consistent with such applicable Law to consult
with the other Party with respect to the text thereof.
Section 5.11 Tax Returns. Sellers shall timely prepare and file a final
year Form 1065 for the Company for the fiscal year ending on the Closing Date
and shall deliver a copy of such Form 1065 to Purchaser. Sellers shall timely
prepare and submit to Purchaser for review, approval, and filing (A) any sales
and use Tax returns with respect to the Pre-Closing Tax Period that are required
to be filed after the Closing Date, (B) any property Tax Returns
22
with respect to the Pre-Closing Tax Period that are required to be filed after
the Closing Date, and (C) any excise Tax Returns with respect to the Pre-Closing
Tax Period that are required to be filed after the Closing Date. Sellers shall
make such revisions to the Tax Returns described in the preceding sentence as
are reasonably requested by Purchaser.
Section 5.12 Cooperation on Tax Matters. Purchaser, the Company, and
Sellers shall cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the provision of
records and information reasonably relevant to any such audit, litigation, or
other proceeding and making employees (other than counsel) available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Company, Sellers, and Purchaser agree (A)
to retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statue of limitations (and, to the extent notified by
Purchaser or Sellers, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any Taxing
Authority, and (B) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other party so requests, the Company or Sellers, as the case may be, shall allow
the other party to take possession of such books and records. Purchaser and
Sellers further agree, upon request, to use their best efforts to obtain any
certificate or other document from any Taxing Authority or any other person as
may be necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including with respect to the transaction contemplated hereby).
Section 5.13 Transition Liability. The Parties acknowledge that the FCC
requires BRS licensees, including the Company, to reimburse certain costs of
proponent-driven Transitions of EBS spectrum and self-Transitions of EBS
spectrum. To the extent the Company is assessed or incurs any costs payable
under FCC Rules 27.1237 and 27.1238 (or any successors thereto) prior to Closing
or prior to the termination of this Agreement (the "Transition Liability"),
Purchaser shall pay for such Transition Liability on behalf of the Company.
Sellers shall provide Purchaser with at least thirty (30) days notice of the
requirement to pay any Transition Liability. Sellers shall provide Purchaser
with notices received from any proponent or self-Transitioning EBS licensee
concerning the calculation or payment of any Transition Liability. In the event
that Purchaser determines in good faith that a requested payment is not a
Transition liability, Sellers shall cause the Company, at Purchaser's expense,
to join with Purchaser in contesting such requested payment within any period
allowed by the FCC for such contest, but (i) Purchaser shall pay the uncontested
amount when due; (ii) Purchaser shall be responsible for any interest, late fees
or FCC-imposed forfeitures related to any contest or delay in making such
requested payment; and (iii), if the making of the requested payment is a
requirement for the grant of the consent of the FCC to the transfer of control
of Company, Purchaser shall make the requested payment under protest so as not
to delay the grant of such consent.
23
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1 Conditions to the Obligations of All Parties. Each Party's
obligation to consummate the Transactions contemplated by this Agreement are
subject to the satisfaction or waiver, on or prior to the Closing Date, of each
of the following conditions, as applicable to the Party specified:
(a) The FCC shall have granted the FCC Application, such grant shall
have become a Final Order, and such Final Order shall be in full force and
effect; and all other notices, filings and Consents required to be made or
obtained prior to the closing by either Party or any of its respective
Affiliates with any Governmental Authority in connection with the execution
and delivery of this Agreement and the consummation of the Transactions
shall have been made or obtained without imposition of conditions outside
of the ordinary course.
(b) No preliminary or permanent injunction or other order, decree
or ruling issued by a Governmental Authority, nor any Law promulgated or
enacted by any Governmental Authority, shall be in effect that would impose
material limitations on the ability of either Party to consummate the
Transactions.
Section 6.2 Conditions to the Obligations of Sellers. Each Seller's
obligation to consummate the Transactions contemplated by this Agreement is
subject to the satisfaction or waiver, on or prior to the Closing Date, of each
of the following conditions:
(a) The representations and warranties of Purchaser and Clearwire
contained herein shall be true and correct in all material respects (except
for representations and warranties that are qualified as to materiality,
which shall be true and correct) as of the Closing as if made on and as of
the Closing Date (except that representations and warranties that are made
as of a specific date need be so true and correct only as of such date).
(b) The covenants and agreements of Purchaser and Clearwire to be
performed under this Agreement on or prior to the Closing shall have been
duly performed in all material respects.
(c) Purchaser and Clearwire shall have delivered the Purchase Price
to sellers and Bereny in accordance with Section 2.3.
(d) Purchaser and Clearwire shall have delivered to Sellers a
certificate of Purchaser and Clearwire dated the Closing Date certifying
that the conditions specified in Section 6.2(a) and (b) have been met.
(e) the Amended and Restated Stockholders Agreement, and
the Registration Rights Agreement shall be in full force and effect, and,
upon the Closing, Sellers and Bereny shall be parties to such agreements by
delivering joinders to Clearwire.
24
Section 6.3 Conditions to the Obligations of Purchaser and Clearwire.
Purchaser's and Clearwire's obligations to consummate the Transactions
contemplated by this Agreement are subject to the satisfaction or waiver on or
prior to the Closing Date of each of the following conditions:
(a) The representations and warranties of each Seller contained
herein shall be true and correct in all material respects (except for
representations and warranties that are qualified as to materiality, which
shall be true and correct) as of the Closing as if made on and as of the
Closing Date (except that representations and warranties that are made as
of a specific date need be so true and correct only as of such date).
(b) The covenants and agreements of each Seller to be performed
under this Agreement on or prior to the Closing shall have been duly
performed in all material respects.
(c) Each Seller (and Bereny, but only with respect to the deliveries
in clause (v)) shall have delivered to the Purchaser the following:
(i) an instrument of conveyance signed in blank and transferring
his or her share of the Interests to Purchaser, substantially in the
form of Exhibit B hereto;
(ii) such other instruments and documents as Purchaser may
reasonably require to vest in Purchaser all right, title and interest
of Sellers in and to the Interests;
(iii) a certificate of such Seller dated the Closing Date and
certifying that the conditions with respect to such Seller specified
in Section 6.3(a) and (b) have been met;
(iv) written resignations of each of the officers and managers of
the Company, effective as of the Closing Date; and
(v) a joinder to the Amended and Restated Stockholders Agreement,
(ii) a completed Stockholder Questionnaire as provided by Clearwire
prior to the Closing and (iii) a joinder to the Registration Rights
Agreement.
ARTICLE 7
TERMINATION
Section 7.1 Termination. This Agreement may be terminated at any time:
(a) by mutual written consent of Purchaser and Sellers;
25
(b) by either Purchaser or Sellers if (A) there shall be any Law that
makes consummation of the Transactions illegal or otherwise prohibited, or
(B) any judgment, injunction, order or decree of any court or other
Governmental Entity having competent jurisdiction enjoining Purchaser and
Sellers from consummating the Transaction is entered and such judgment,
injunction or order shall have become final and non-appealable;
(c) by Sellers holding no less than a fifty-one percent (51%) of the
Interests upon the occurrence of a material breach of any representation,
warranty or covenant in this Agreement by either Clearwire or Purchaser if
such breach is not cured within fifteen (15) days following written notice
by any Seller to Purchaser which notice shall describe the breach;
(d) by Purchaser upon the occurrence of a material breach of any
representation, warranty or covenant in this Agreement by any one or more
Sellers if such breach is not cured within fifteen (15) days following
written notice by Purchaser to all Sellers which notice shall describe the
breach; or
(e) by Purchaser or Sellers holding not less than fifty-one percent
(51%) of the Interests if the Closing has not occurred on or before the
first anniversary of the Effective Date, provided that the failure to close
on or before such date is not the fault of the Party or Parties seeking
termination.
Section 7.2 Effect of Termination. In the event of a termination of this
Agreement prior to the Closing, neither Party shall have any liability or
further obligation to the other, except that
(a) Sellers shall return the Down Payment Advance to Purchaser, within
five (5) Business Days of such termination, only if this Agreement is
terminated (i) pursuant to Section 7.1(a); (ii) by Purchaser pursuant to
Section 7.1(b), provided that the Law, judgment, injunction, order or
decree thereunder is not initiated by Purchaser and is not caused by the
misconduct of Purchaser, (iii) by Purchaser pursuant to Section 7.1(d); or
(iv) by Purchaser pursuant to Section 7.1(e), provided that the failure to
close on or before the date set forth therein is the fault of any Seller;
(b) nothing herein will relieve a Party from liability for any breach
by such Party of this Agreement; and
(c) the last sentence of Section 2.3(a) and the provisions of this
ARTICLE 7, ARTICLE 8 and ARTICLE 9 shall survive the termination of this
Agreement. Whether or not Closing occurs, all costs and expenses incurred
in connection with this Agreement and the Transactions shall be paid by the
Party incurring such expenses.
26
ARTICLE 8
SURVIVAL AND REMEDIES
Section 8.1 Survival.
(a) The representations and warranties contained in this Agreement and
in any Closing certificate as to representations and warranties or covenant
compliance shall survive the Closing until the earlier of [***] after the
Closing Date and the termination of this Agreement, and shall expire at
such time. The covenants and other agreements contained in this Agreement
which by their terms do not expire on or before the Closing shall survive
the Closing until the earlier of (i) one (1) year after the Closing Date
and (ii) the termination of this Agreement and shall expire at such time.
Sellers' obligation to indemnify Purchaser pursuant to Section 8.2 shall
survive the Closing for a period of one (1) year after Closing.
Notwithstanding anything to the contrary in this Agreement: (i) the
representations, warranties, covenants, and indemnities made by Sellers
regarding Taxes shall terminate [***] after the applicable statute of
limitations expires with respect to the Taxes which are the subject of such
claim, (ii) the representations, warranties and indemnities made by Sellers
in Section 3.4(a) shall survive indefinitely, and (iii) Sellers' obligation
to indemnify Purchaser pursuant to Section 8.2(d) below shall survive
indefinitely.
(b) Purchaser's obligation to indemnify Sellers pursuant to Section
8.3 shall survive the Closing for a period of one (1) year after Closing;
provided, however, Purchaser's obligation to indemnify Sellers' pursuant to
Section 8.3(c) and (d) below shall survive indefinitely.
(c) Notwithstanding anything to the contrary in this Agreement, no
party shall be entitled to any Damages pursuant to Section 8.2 or Section
8.3 or to make any claims for breach hereunder unless notice of the Claim
for such Damages or breach has been made to the other party within the
applicable survival periods or Claim period set forth in this Section 8.1;
provided, however, so long as the indemnified party provides notice to the
other party within the applicable survival periods set forth in this
Section 8.1, a Party's obligation to indemnify the other party pursuant to
this Article 8 or obligation to remedy such breach shall survive until such
obligation is fulfilled despite the expiration of the applicable survival
period.
(d) The survival of representations, warranties and covenants binding
on or benefiting any Party in the Amended and Restated Stockholders
Agreement and the Registration Rights Agreement shall be governed by such
agreements.
Section 8.2 Seller Indemnification. Subject to the limitations set forth in
Section 8.6(c) hereof, each Seller shall indemnify Purchaser, its representative
members, managers, officers, employees, agents, successors and assigns (the
"Purchaser Indemnified Parties") and hold the Purchaser Indemnified Parties
harmless from and against any and all Damages based upon, attributable to or
resulting from:
[*** Confidential Treatment Requested]
27
(a) the failure of any representation or warranty of such Seller set
forth in this Agreement, or any representation or warranty contained in any
certificate delivered by such Seller pursuant to this Agreement, to be true
and correct as of the dates made;
(b) the breach of any covenant or other agreement on the part of such
Seller under this Agreement;
(c) the ownership and operation of the Assets prior to the Closing
(other than the Transition Liability); and
(d) any matter disclosed on Section 3.11 of the Disclosure Schedule or
any matter related to the disclosure on Section 3.9 of the Disclosure
Schedule with respect to the Company's 50% interest in [***].
Section 8.3 Purchaser Indemnification. Purchaser shall indemnify each
Seller and his or her agents, successors and assigns (the "Seller Indemnified
Parties") and hold each Seller Indemnified Parties harmless from and against any
and all Damages based upon, attributable to or resulting from:
(a) the failure of any representation or warranty of Purchaser set
forth in this Agreement, or any representation or warranty contained in any
certificate delivered by pursuant to this Agreement, to be true and correct
as of the dates made;
(b) the breach of any covenant or other agreement on the part of
Purchaser under this Agreement;
(c) the ownership and operation of the Assets or Interests after the
Closing; and
(d) the Transition Liability.
Section 8.4 Tax Matters. Subject to the limitations set forth in Section
8.6(c) hereof, each Seller shall indemnify each of the Purchaser Indemnified
Parties and hold them harmless from and against, any Losses attributable to (i)
all Taxes (or the non-payment thereof) of the Company for all taxable periods
ending on or before the Closing Date and for that portion through the end of the
Closing Date for any taxable period that includes (but does not end on) the
Closing Date ("Pre-Closing Tax Period"), and (ii) any and all Taxes of any
person (other than the Company) imposed on the Company as a transferee or
successor, by contract or any Law, which Taxes relate to an event or transaction
occurring on or prior to the Closing Date. In the case of any taxable period
that includes (but does not end on) the Closing Date (a "Straddle Period"), the
amount of any Taxes based on or measured by income or receipts of the Company
for the Pre-Closing Tax Period shall be determined based on an interim closing
of the books as of the close of business on the Closing Date and the amount of
other Taxes of the Company for a Straddle Period which relate to the Pre-Closing
Tax Period shall be deemed to be the amount of such Tax for the entire taxable
period multiplied by a fraction the numerator of which is the number of days in
the taxable period
[*** Confidential Treatment Requested]
28
ending on the Closing Date and the denominator of which is the number of days in
such Straddle Period; provided, however, that any property or ad valorem Taxes
associated with assets that are or have been disposed of by the Company on or
prior to the Closing Date shall be deemed attributable solely to the Pre-Closing
Tax Period.
Section 8.5 Indemnification Procedures.
(a) In the event that any claim shall be asserted by any Person in
respect of which payment may be sought under Section 8.2 or Section 8.3
hereof (each, a "Claim"), the indemnified party shall reasonably and
promptly cause written notice of the assertion of any Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the
indemnifying party, describing with specificity the facts giving rise to
the asserted right Notwithstanding anything to the contrary in this
Agreement, in order for the indemnified party to be entitled to
indemnification hereunder, notice of such claim must given by the
indemnified party to the indemnifying party prior to the expiration of the
applicable survival periods set forth in Section 8.1. The indemnifying
party shall have the right, at its sole option and expense, to be
represented by counsel of its choice, which must be reasonably satisfactory
to the indemnified party, and to defend against, negotiate, settle or
otherwise deal with any Claim which relates to any Damages indemnified
against hereunder. If the indemnifying party elects to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any
Damages indemnified against hereunder, it shall within twenty (20) days (or
sooner, if the nature of the Claim so requires) notify the indemnified
party of its intent to do so. If the indemnifying party elects not to
defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Damages indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its
obligation to indemnify the indemnified party for such Damages under this
Agreement, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Claim. If the indemnified party defends any Claim,
then the indemnifying party shall reimburse the indemnified party for the
reasonable expenses of defending such Claim upon submission of periodic
bills. If the indemnifying party shall assume the defense of any Claim, the
indemnified party may participate, at its own expense, in the defense of
such Claim; provided, however, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the
reasonable expense of the indemnifying party if (i) so requested by the
indemnifying party to participate or (ii) in the reasonable opinion of
counsel to the indemnified party, a conflict or potential conflict exists
between the indemnified party and the indemnifying party that would make
such separate representation advisable; and provided, further, that the
indemnifying party shall not be required to pay for more than one such
counsel for all indemnified parties in connection with any Claim. The
Parties hereto agree to cooperate fully with each other in connection with
the defense, negotiation, or settlement of any such Claim. The indemnifying
party or parties shall not, without the express written consent of the
indemnified party or parties, settle or compromise any Claim, or consent to
the entry of any judgment against the indemnified party or parties that
does not include an unconditional term thereof giving the indemnified
29
party or parties a full and complete release from all liability with
respect to such Claim.
(b) Notwithstanding anything to the contrary in Section 8.5(a) above,
the following procedure shall apply to any Claim with respect to Taxes that
is subject to indemnification pursuant to this ARTICLE 8. Purchaser will,
as to any Taxes in respect of which Sellers have agreed to indemnify the
Purchaser Indemnified Parties pursuant to this ARTICLE 8, promptly inform
Sellers of and permit the participation of Sellers in, at Sellers' sole
cost and expense, any investigation, audit, or other proceeding by or with
the Internal Revenue Service or any other Taxing Authority empowered to
administer or enforce such a Tax and will not consent to the settlement or
final determination in such investigation, audit or other proceeding
without the prior written consent of all Sellers, which shall not be
unreasonably withheld.
(c) After any final judgment or award shall have been rendered by a
court, arbitration board or administrative agency of competent jurisdiction
and the expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the indemnified party and the
indemnifying party shall have arrived at a mutually binding agreement with
respect to a Claim hereunder, the indemnified party shall forward to the
indemnifying party notice of any sums due and owing by the indemnifying
party pursuant to this Agreement with respect to such matter.
(d) The failure of the indemnified party to give reasonably prompt
notice of any Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent
that the indemnifying party can demonstrate actual loss and prejudice as a
result of such failure; provided, however, that in order to be entitled to
indemnification hereunder, notice of such claim must given to the
indemnifying party prior to the expiration of the applicable survival
periods set forth in Section 8.1.
Section 8.6 Escrow and Set Off from Holdback Amount; Several Liability of
Sellers.
(a) On the Closing Date, Purchaser and Sellers shall execute and
deliver and shall cause U.S. Bank or other domestic bank acceptable to the
Parties to execute and deliver as escrow agent (the "Escrow Agent"), the escrow
agreement substantially in the form of Exhibit A (the "Escrow Agreement"). The
Escrow Agreement shall be dated as of the Closing Date. The escrow established
under the Escrow Agreement shall hold the Holdback Amount. Sellers shall be
entitled to direct the investment of the Holdback Amount and to withdraw and
keep the accrued earnings (if any) on the Holdback Amount. The parties hereto
acknowledge and agree that all Sellers shall pay all origination and periodic
escrow administration fees to the Escrow Agent, but each Party shall pay any
wire transfer expenses associated with payments to such Party. If U.S. Bank
declines to serve as the Escrow Agent, either Party shall be entitled to delay
the Closing until such time as a replacement escrow agent and escrow agreement
can be established, but in no event more than thirty (30) days from the
scheduled Closing Date, and the Parties shall mutually select a
30
replacement Escrow Agent from among domestic banks having assets not less than
U.S. Bank and, in that event, the substitute Escrow Agent's form of escrow
agreement, modified to express the information in Attachments I and II of
Exhibit A and the applicable fees, shall be substituted for Exhibit A.
(b) In the event that a Purchaser Indemnified Party receives a Claim
during the Holdback Period pursuant to Section 8.5 for which it is entitled to
indemnification pursuant to this Article 8, and Purchaser notifies Sellers of
the Claim as required by Section 8.5 during that period, Purchaser may classify
the whole or a portion of the Holdback Amount as reserved in such notice to
Sellers. The amount that may be reserved for any such Claim shall not exceed the
lesser of (i) the amount asserted in the Claim provided to Purchaser, plus a
reasonable estimate of additional indemnified expenses associated therewith
(such as reasonable attorneys' fees), (ii) Purchaser's good faith estimate of
the Damages in connection with such Claim as stated in the notice to Sellers,
and (iii) the amount of the Holdback Amount remaining in escrow. In the event of
any such reservation, Purchaser shall promptly notify Sellers of the amount
reserved and the basis upon which such amount was determined.
(c) Within five (5) days after any then pending Claim is resolved in
accordance with Section 8.5, (i) Purchaser and Sellers shall join in providing
the Escrow Agent with joint written and uniform instructions or (ii) Purchaser
may provide Escrow Agent with a final, non-appealable written determination by a
court or governmental authority to pay the applicable Purchaser Indemnified
Parties from the amount reserved for that Claim the Damages, if any, determined
with respect to that Claim.
(d) At the end of the Holdback Period, Purchaser shall provide Sellers
with a summary of all pending Claims for which reserves have been established
pursuant to Section 8.6(b) ("Reservation Claims"), adjusted to eliminate the
portion or whole of any reservation to the extent that the associated Claim has
been resolved favorably to the associated Purchaser Indemnified Party or has
been reduced. Within five (5) Business Days after expiration of the Holdback
Period, Purchaser and Sellers shall provide the Escrow Agent with joint written
and uniform instructions to pay to the order of Sellers the amount (if any) by
which the Holdback Amount then in escrow exceeds the Reservation Claims. Upon
final resolution of any Reservation Claims, the procedure set forth in Section
8.6(c) shall be followed and upon final resolution of all Reservation Claims,
the remaining Holdback Amount, if any, shall be distributed to Sellers. All
amounts due to Sellers under this Section 8.6 shall be paid via wire transfer in
immediately available funds to the accounts designated by Sellers.
(e) Once the Holdback Amount is depleted, Purchaser may recover
against Sellers in accordance with this Article 8 for all Claims properly
asserted prior to the time barred by Section 8.1; provided, however, in no event
shall Damages collected by any one or more of Purchaser Indemnified Parties
against any Seller, whether for indemnification or for a direct claim by
Purchaser against Sellers, exceed the amount of the product of such Seller's
percentage interest in the Interests described in Section 3.4 of the Disclosure
Schedule and the Purchase Price.
31
Section 8.7 Remedies. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR INDIRECT,
SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF A BREACH OF THIS
AGREEMENT, EVEN IF ADVISED AT THE TIME OF BREACH OF THE POSSIBILITY OF SUCH
DAMAGES.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Entire Agreement. This Agreement constitutes the entire
agreement between the Clearwire Parties, on the one hand, and the Sellers, on
the other hand, pertaining to the subject matter hereof and thereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the Clearwire Parties
and the Sellers with respect to the subject matter hereof and thereof.
Section 9.2 Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed (in the case of an amendment) by Sellers and Clearwire Parties or (in the
case of a waiver) by the Party against whom the waiver is to be effective. No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 9.3 Remedies Cumulative. Except as otherwise provided herein, all
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity shall be cumulative and not alternative,
and the exercise or beginning of the exercise of any thereof by a Party shall
not preclude the simultaneous or later exercise of any other such right, power
or remedy by such Party. Each of the Clearwire Parties and the Sellers
acknowledges that its obligations subject to this Agreement are unique and the
loss to any Person within the other due to a failure to perform any such
obligation could not be easily measured with damages. Each of the Clearwire
Parties and the Sellers shall be entitled to injunctive relief and specific
enforcement of this Agreement in a court of equity without proof of specific
monetary damages, showing that monetary damages would resolve the harm or
showing of irreparable harm, but without waiving any right thereto, in the event
of breach of this Agreement by the other.
Section 9.4 Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be assigned by any Party without the
prior written consent of the other Parties.
Section 9.5 Notices. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given or made (i) upon delivery
if delivered personally (by courier service or otherwise), as evidenced by
written receipt or other written proof of delivery (which may be a printout of
the tracking information of a courier service that made such delivery), or (ii)
upon confirmation of dispatch if sent by facsimile
32
transmission, (which confirmation shall be sufficient if shown by evidence
produced by the facsimile machine used for such transmission), in each case to
the applicable addresses set forth below (or such other address which either
Party may from time to time specify):
If to Sellers or any Seller:
James K. Baumann
[***]
Facsimile: [***]
Roxane I. Googin
c/o Matthew S. Bereny
[***]
Facsimile: [***]
Elizabeth Neustadt, as
Custodian for Rachel Neustadt
c/o Matthew S. Bereny
[***]
Facsimile: [***]
Martin A. Rubin
CEO & President
Smart City
[***]
Facsimile: [***]
James H. Wiesenberg
[***]
Facsimile: [***]
With a copy of any communication or notice to any Seller to:
Kilpatrick Stockton LLP
607 14th Street, N.W., Suite 900
[***]
Facsimile: [***]
[*** Confidential Treatment Requested]
33
and to:
Matthew S. Bereny
Baywood Management
[***]
If to Purchaser or Clearwire:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
Attention: [***]
Facsimile: [***]
With a copy to:
Clearwire Spectrum Holdings II LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033
Attention: [***]
Facsimile: [***]
Davis Wright Tremaine LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attn: [***]
Facsimile: [***]
Section 9.6 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York, without reference to the choice of
law principles thereof. Each Party hereto irrevocably consents to the exclusive
jurisdiction and venue of any court within the District of Columbia in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, agrees that process may be served upon them in any
manner authorized by the laws of the District of Columbia for such persons and
waives and covenants not to assert or plead any objection which it might
otherwise have to such jurisdiction, venue or process.
[*** Confidential Treatment Requested]
34
(b) THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS.
Section 9.7 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the Transactions are consummated, the Parties shall
bear their respective expenses (including, but not limited to, all compensation
and expenses of counsel, financial advisors, consultants, actuaries and
independent accountants) incurred in connection with this Agreement and the
Transactions. All filing fees required to be paid to any Governmental Authority
in connection with satisfying the conditions set forth in ARTICLE 5 will be
borne by Purchaser.
Section 9.8 Payment of Sales, Use or Similar Taxes. Purchaser shall be
liable for and shall pay (and shall indemnify and hold harmless the Seller
Indemnified Parties against) all sales, use, stamp, documentary, filing,
recording, transfer, real estate transfer, registration, duty or similar fees or
taxes or governmental charges (together with any interest or penalty, addition
to tax or additional amount imposed) as levied by any Taxing Authority in
connection with the transactions contemplated by this Agreement.
Section 9.9 Invalidity. In the event that any of the provisions contained
in this Agreement or in any other instrument referred to herein, shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or such other instrument and such provision will be
ineffective only to the extent of such invalidity, illegality or
unenforceability, unless the consummation of the Transactions is impaired
thereby.
Section 9.10 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Section 9.11 Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
35
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first above written.
SELLERS:
By: /s/ James K. Baumann
------------------------------------
Name: James K Baumann
By: /s/ Roxane I. Googin
------------------------------------
Name: Roxane I. Googin
By: /s/ Elizabeth Neustadt
------------------------------------
Name: Elizabeth Neustadt, as
Custodian for Rachel Neustadt
By: /s/ Martin A. Rubin
------------------------------------
Name: Martin A. Rubin
By: /s/ James H. Wiesenberg
------------------------------------
Name: James H. Wiesenberg
PURCHASER:
CLEARWIRE SPECTRUM HOLDINGS II LLC
By: /s/ Benjamin Wolff
------------------------------------
Name: Benjamin Wolff
Title: Co-President & CSO
CLEARWIRE:
CLEARWIRE CORPORATION
By: /s/ Benjamin Wolff
------------------------------------
Name: Benjamin Wolff
Title: Co-President & Co-CEO
DECLARATION AND CONSENT OF SPOUSE
The undersigned (a) consents to the execution of this Agreement by Roxane
Googin who is the undersigned's spouse, and to consummation of the transactions
contemplated by this Agreement by my spouse, and (b) agrees that the actions and
obligations of my spouse under this Agreement shall be binding upon the
undersigned's marital community. The undersigned declares that the undersigned
has the opportunity to fully and carefully read this Agreement and to seek the
advice of independent counsel with respect to the Agreement and this Consent.
/s/ Illegible
-------------
DECLARATION AND CONSENT OF SPOUSE
The undersigned (a) consents to the execution of this Agreement by JAMES H.
WIESENBERG Who is the undersigned's spouse, and to consummation of the
transactions contemplated by this Agreement by my spouse, and (b) agrees that
the actions and obligations of my spouse under this Agreement shall be binding
upon the undersigned's marital community. The undersigned declares that the
undersigned has had the opportunity to fully and carefully read this Agreement
and to seek the advice of independent counsel with respect to the Agreement and
this Consent.
/s/ Susan Wiesenberg
----------------------------------------
LICENSES
[***]
[*** Confidential Treatment Requested]
39
EXHIBIT A
FORM OF
ESCROW AGREEMENT
[Attached]
40
ESCROW AGREEMENT
Pursuant to this Escrow Agreement, dated ___________________, the Depositors
identified below (the "Depositors") hereby establish an Escrow Account (the
"Account") with U.S. Bank National Association a national banking association
(the "Agent"), to be maintained and administered in accordance with the
following terms and conditions:
The funds and/or property described on Schedule I attached hereto and
incorporated herein (the "Assets") will be deposited in the Account upon
delivery Thereof to the Agent in the manner and at the time(s) specified in the
said Schedule I. The Agent is hereby authorized and directed by each of the
Depositors, as their escrow agent, to hold, deal with and dispose of the Assets
as provided in the Instructions set forth in Schedule II attached hereto and
incorporated herein; subject, however, to the terms and conditions set forth
below, which in all events, shall govern and control over any contrary or
inconsistent provisions contained in Schedules I or II attached hereto.
1. AGENT'S DUTIES. Agent's duties and responsibilities shall be limited to
those expressly set forth in this Escrow Agreement, and Agent shall not be
subject to, or obliged to recognize, any other agreement between any or all of
the Depositors or any other persons even though reference thereto may be made
herein; provided, however, this Agreement may be amended at any time or times by
an instrument in writing signed by all the parties hereto. Agent shall not be
subject to or obligated to recognize any notice, direction or instruction of any
or all of the parties hereto or of any other person, except as expressly
provided for and authorized in Schedule II and in performing any duties under
the Escrow Agreement ("Agreement"), Agent shall not be liable to any Party for
consequential damages, (including, without limitation lost profits) losses, or
expenses, except for gross negligence or willful misconduct on the part of the
Agent; provided, however that neither the foregoing nor anything else in this
Escrow Agreement shall relieve Agent from its duty to deliver the Assets in
accordance with the terms of this Agreement or shall relieve Agent from
liability for loss or depletion of the Assets due to it's gross negligence or
willful misconduct.
2. COURT ORDERS OR PROCESS. If any controversy arises between or among the
Parties to this Agreement, or with any other Party, concerning the subject
matter of this Agreement, its terms or conditions, Agent will not be required to
determine the controversy or to take any action regarding it. Agent may hold all
documents and funds and may wait for settlement of any such controversy by final
appropriate legal proceedings or other means as, in Agent's discretion, Agent
may require, despite what may be set forth elsewhere in this Agreement. In such
event, Agent will not be liable for interest or damage. Agent is authorized, in
its sole discretion, to comply with orders issued or process entered by any
court with respect to the Account, the Assets or this Escrow Agreement, without
determination by the Agent of such court's jurisdiction in matter. If any Assets
are at any time attached, garnished, or levied upon under any court order, or in
case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in case any order,
judgment or decree shall be made or entered by any court affecting such property
or any part thereof, then in any such events Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree which it is advised by legal counsel of its own choosing is binding upon
it; and if Agent complies with any such order writ, judgment or decree, it shall
not be liable to any of the Depositors or to any other person, firm or
corporation by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
Page 1
3. AGENT'S ACTIONS AND RELIANCE. Agent shall not be personally liable far
any act taken or omitted by it hereunder if taken or omitted by it in good faith
and in the exercise of its own best judgment. Agent shall also be fully
protected in relying upon any written notice, instruction, direction,
certificate or document which in good faith it believes to be genuine.
4. COLLECTIONS. Unless otherwise specifically indicated in Schedule II,
Agent shall proceed as soon as practicable to collect any checks, interest due,
matured principal or other collection items with respect to Assets at any time
deposited in the Account. All such collections shall be subject to the usual
collection procedures regarding items received by Agent for deposit or
collection. Agent shall not be responsible for any collections with respect to
Account Assets if Agent is not registered as record owner thereof or otherwise
is not entitled to request or receive payment thereof as a matter of legal or
contractual right. All collection payments shall be deposited to the Account,
except as otherwise provided in Schedule II. Agent shall not be required or have
a duty to notify anyone of any payment or maturity under the terms of any
instrument, security or obligation deposited in the Account, nor to take any
legal action to enforce payment of any check, instrument or other security
deposited in the Account. The Account is a safekeeping escrow account, and no
interest shall be paid by Agent on any money deposited or held therein, except
as provided in Section 6 hereof.
5. AGENT RESPONSIBILITY. Agent shall not be responsible or liable for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents, instruments or securities now or hereafter deposited in the Account,
or of any endorsement thereon, or for any lack of endorsement thereon, or for
any description therein. Registered ownership of or other legal title to Assets
deposited in the Account shall be maintained in the name of Agent, or its
nominee, only if expressly provided in Schedule II. Agent may maintain
qualifying Assets in a Federal Reserve Bank or in any registered clearing agency
(including, without limitation, the Depository Trust Company) as Agent may
select, and may register such deposited Assets in the name of Agent or its agent
or nominee on the records of such Federal Reserve Bank or such registered
clearing agency or a nominee of either. Agent shall not be responsible or liable
in any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such document,
security or endorsement or this Escrow Agreement.
6. INVESTMENTS. Unless directed in writing otherwise, Escrow Agent is
hereby directed to invest funds in the U.S. Bank Money Market Savings account.
Depositors acknowledge that the U. S. Bank Money Market account is a U. S. Bank
National Association ("U.S. Bank") interest-bearing money market deposit account
designed to meet the needs of U.S. Bank's Corporate Trust Services Escrow Group
and other Corporate Trust customers of U.S. Bank. Selection of this investment
includes authorization to place funds on deposit with U.S. Bank. U. S. Bank uses
the daily balance method to calculate interest on this account (actual/365 or
366). This method applies a daily periodic rate to the principal balance in the
account each day. Interest is accrued daily and credited monthly to the account.
Interest rates currently offered on the accounts are determined at U. S. Bank's
discretion and may be tiered by customer deposit amount. The owner of the
accounts is U. S. Bank as Agent for its trust customers. U.S. Bank's trust
department performs all account deposits and withdrawals. Each customer's
deposit is insured by the Federal Deposit Insurance Corporation up to $100,000.
Any and all interest earned on the Proceeds after the deposit shall be added to
the Proceeds and shall become a part thereof. Escrow Agent shall thereafter
hold, maintain and utilize the Proceeds pursuant to the terms and conditions of
this Agreement. Depositors shall provide Escrow Agent with a W-9 or W-8 IRS tax
form prior to the disbursement of interest and Escrow Agent will file the
appropriate 1099 or other required forms pursuant to Federal and applicable
state laws. A statement of citizenship will be provided if requested by Escrow
Agent. Escrow
Page 2
Agent shall not be responsible for maximizing the yield on the Proceeds. Escrow
Agent shall not be liable for losses, penalties or charges incurred upon any
sale or purchase of any such investment.
7. NOTICES/DIRECTIONS TO AGENT. Notices and directions to Agent from
Depositors, or from other persons authorized to give such notices or directions
as expressly set forth in Schedule II, shall be in writing and signed by an
authorized representative as identified pursuant to Schedule II, and shall not
be deemed to be given until actually received by Agent's employee or officer who
administers the Account. Agent shall not be responsible or liable for the
authenticity or accuracy of notices or directions properly given hereunder if
the written form and execution thereof on its face purports to satisfy the
requirements applicable thereto as set forth in Schedule II, as determined by
Agent in good faith without additional confirmation or investigation.
8. BOOKS AND RECORDS. Agent shall maintain books and records regarding its
administration of the Account, and the deposit, investment, collections and
disbursement or transfer of Assets, shall retain copies of all written notices
and directions sent or received by it in the performance of its duties
hereunder, and shall afford each Depositor reasonable access, during regular
business hours, to review and make photocopies (at Depositor's cost) of the
same.
9. DISPUTES AMONG DEPOSITORS AND/OR THIRD PARTIES. In the event Agent is
notified of any dispute, disagreement or legal action between or among any of
the Depositors, and/or any third parties, relating to or arising in connection
with the Account, the Assets or the performance of the Agent's duties under this
Agreement, the Agent shall be authorized and entitled, subject to Section 2
hereof, to suspend further performance hereunder, to retain and hold the Assets
then in the Account and take no further action with respect thereto until the
matter has been fully resolved, as evidenced by written notification signed by
all Depositors and any other parties to such dispute, disagreement or legal
action.
10. NOTICE BY AGENT. Any notices which Agent is required or desires to give
hereunder to any of the Depositors shall be in writing and may be given by
mailing the same to the address indicated below opposite the signature of such
Depositor (or to such other address as said Depositor may have theretofore
substituted therefor by written notification to Agent), by United States
certified or registered mail, postage prepaid. For all purposes hereof any
notice so mailed shall be as effectual as though served upon the person of the
Depositor to whom it was mailed at the time it is deposited in the United States
mail by Agent whether or not such undersigned thereafter actually receives such
notice. Whenever under the terms hereof the time for Agent's giving a notice or
performing an act falls upon a Saturday, Sunday, or holiday, such time shall be
extended to the next business day.
11. LEGAL COUNSEL. If Agent believes it to be reasonably necessary to
consult with counsel concerning any of its duties in connection with the account
or this Escrow Agreement, or in case Agent becomes involved in litigation on
account of being escrow agent hereunder or on account of having received
property subject hereto, then in either case, its costs, expenses, and
reasonable attorney's fees shall be paid by the parties on an equal basis.
12. AGENT COMPENSATION. Agent shall be paid a fee for its services as set
forth on Schedule III attached hereto and incorporated herein, which shall be
subject to increase upon notice sent to Depositors, and reimbursed for its
reasonable costs and expenses incurred; provided, however, that only increases
as are generally applicable to escrow accounts shall be applied and increases in
any 12 month period shall not exceed five percent (5%). If Agent's fees, or
reasonable costs or expenses, provided for herein, are not promptly paid, Agent
shall have the right to sell such portion of the Assets held in the Account as
Page 3
necessary and reimburse itself therefor from the proceeds of such sale or from
the cash held in the Account. In the event that the conditions of this Agreement
are not promptly fulfilled, or if Agent renders any service not provided for in
this Agreement, or if the Parties request a substantial modification of its
terms, or if any controversy arises, or if Agent is made a Party to, or
intervenes in, any litigation pertaining to this escrow or its subject matter,
Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all costs, attorney's fees, including allocated costs of in-house
counsel, and expenses occasioned by such default, delay, controversy or
litigation and Agent shall have the right to retain all documents and/or other
things of value at any time held by Agent in this escrow until such
compensation, fees, costs, and expenses are paid. The Parties jointly and
severally promise to pay these sums upon demand. Unless otherwise provided, the
Parties each will pay one-half of all Agent's usual charges and Agent may deduct
such sums from the funds deposited. The Depositors and their respective
successors and assigns agree jointly and severally to indemnify and hold Agent
harmless against any and all losses, claims, damages, liabilities, and expenses,
including reasonable costs of investigation, counsel fees, including allocated
costs of in-house counsel and disbursements that may be imposed on Agent or
incurred by Agent in connection with the performance of his/her duties under
this Agreement, including but not limited to any litigation arising from this
Agreement or involving its subject matter. Agent shall have a first lien on the
property and papers held under this Agreement for such compensation and
expenses.
13. AGENT RESIGNATION. It is understood that Agent reserves the right to
resign at any time by giving written notice of its resignation, specifying the
effective date thereof, to the Depositors. Within 30 days after receiving the
aforesaid notice, the Depositors agree to appoint a successor escrow agent to
which Agent may transfer the Assets then held in the Account, less its unpaid
fees, costs and expenses. If a successor escrow agent has not been appointed and
has not accepted such appointment by the end of the 30-day period, Agent may
apply to a court of competent jurisdiction for the appointment of a successor
escrow agent, and the costs, expenses and reasonable attorney's fees which Agent
incurs in connection with such a proceeding shall be paid by the Depositors.
14. ESCROW TERMINATION. This Escrow Agreement shall terminate as provided
in Schedule II.
15. GOVERNING LAW. This Escrow Agreement shall be construed, enforced, and
administered inaccordance with the laws of the State of Washington.
The undersigned Agent hereby agrees to hold, deal with and dispose of the
Assets at any time deposited to the Account in accordance with the foregoing
Escrow Agreement.
16. AUTOMATIC SUCCESSION Any company into which the Agent may be merged or
with which it may be consolidated, or any company to whom Agent may transfer a
substantial amount of its Escrow business, shall be the Successor to the Agent
without the execution or filing of any paper or any further act on the part of
any of the Parties, anything herein to the contrary notwithstanding.
17. DISCLOSURE: The parties hereto hereby agree not to use the name of U.S.
BANK NATIONAL ASSOCIATION to imply an association with the transaction other
than that of a legal escrow agent.
18. BROKERAGE CONFIRMATIONS The parties acknowledge that to the extent
regulations of the Comptroller of Currency or other applicable regulatory entity
grant a right to receive brokerage confirmations of security transactions of the
escrow, the parties waive receipt of such confirmations, to
Page 4
the extent permitted by law. The Escrow Agent shall furnish a statement of
security transactions on its regular monthly reports.
19. COUNTERPARTS: This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be one and the same instrument.
The exchange of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to
be their original signatures for all purposes.
IN WITNESS WHEREOF, the undersigned have affixed their signatures and hereby
adopt as part of this instrument Schedules I, II, and III, which are
incorporated by reference.
DEPOSITOR:
CLEARWERE SPECTRUM HOLDINGS II, LLC ("Purchaser")
By:
---------------------------------
Its: Hope Cochran, its Vice President
Tax I.D.
----------------------------
Notice:
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033-7353
Attention: [***]
Facsimile No.: [***]
With a copy to:
Clearwire Spectrum Holdings LLC
5808 Lake Washington Blvd. N.E.
Suite 300
Kirkland, WA 98033-7353
Attention: [***]
Facsimile No.: [***]
With a copy to:
Davis Wright Tremaine, LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101
Attn: [***]
Facsimile: [***]
DEPOSITORS (collectively, "Sellers"):
By:
---------------------------------
Name: [***]
Tax I.D. [***]
[*** Confidential Treatment Requested]
Page 5
By:
---------------------------------
Name: [***]
Tax I.D. [***]
By:
---------------------------------
Name: [***]
Tax I.D. [***]
By:
---------------------------------
Name: [***]
Tax I.D. [***]
By:
---------------------------------
Name: [***]
Tax I.D. [***]
Notice for all Sellers:
Kilpatrick Stockton LLP
607 14th Street, N.W., Suite 900
Washington, DC 20005
Attention: [***]
Facsimile: [***]
With a copy to:
Matthew S. Bereny
[***]
[***] 420
[***]
Facsimile: [***]
U.S. BANK NATIONAL ASSOCIATION,
as Agent
By:
---------------------------------
Its:
--------------------------------
Notice:
U.S. Bank Corporate Trust Services
60 Livingston Avenue, EP-MN-WS3T
St. Paul, MN 55L07-2292
Attn: [***]
[*** Confidential Treatment Requested]
Page 6
(651)495-3808 With Fax Copy to:
(651) 495-8087 (fax) [***]
[*** Confidential Treatment Requested]
Page 7
EXHIBIT B
FORM OF
ASSIGNMENT OF LLC INTEREST
THIS ASSIGNMENT OF LLC INTEREST (this "LLC Interest Assignment") is
delivered by [____________________], an individual (the "Assignor") effective
the__day of __________________200____, to Clearwire Spectrum Holdings II LLC, a
Nevada limited liability company ("Assignee"), pursuant to that certain
Membership Interest Purchase Agreement, dated as of August 9, 2006, by and among
Clearwire Spectrum Holdings II LLC, James K. Baumann, Roxane I. Googin,
Elizabeth Neustadt as custodian for Rachel Neustadt, Martin A. Rubin and James
H. Wiesenberg.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor hereby assigns, grants, transfers and delivers
unto Assignee all of Assignor's rights, title and interest in and to [HIS/HER]
entire one hundred percent (100%) limited liability company interest (the "LLC
Interest") in [***], a Delaware limited liability company (the "Company"). This
LLC Interest Assignment shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
This LLC Interest Assignment shall be governed by and interpreted according
to the laws of the State of New York.
Assignor has delivered this LLC Interest Assignment on the date first above
written.
ASSIGNOR:
By:
------------------------------------
Name:
----------------------------------
[*** Confidential Treatment Requested]
41
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 1/8/07 | | | | | | | None on these Dates |
| | 1/3/07 | | 10 |
| | 8/9/06 | | 1 | | 51 |
| | 6/30/06 | | 5 |
| | 6/23/06 | | 5 |
| | 12/31/05 | | 16 |
| | 3/16/04 | | 4 | | 7 |
| List all Filings |
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