EXHIBIT 4.7
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of August 5,
2005, by and among Clearwire Corporation, a corporation incorporated under the
laws of the state of Delaware, with headquarters located at 0000 Xxxx Xxxxxxxxxx
Xxxx XX, Xxxxx #000, Xxxxxxxx, Xxxxxxxxxx 00000 (the "COMPANY"), the Guarantors
(as defined below) and the Buyers listed on the Schedule of Buyers attached
hereto (individually, a "BUYER" and collectively, the "BUYERS").
WHEREAS:
A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), and Rule 506 of Regulation D ("REGULATION D") as promulgated by the
United States Securities and Exchange Commission (the "SEC") under the
Securities Act.
B. The Company has authorized the issuance of its Series A Senior Notes due
2010 (the "SERIES A NOTES" and any such notes that may be issued to Accredited
Investors pursuant to Section 1(c), the "SERIES A-1 NOTES") and its Series B
Senior Notes due 2010 (the "SERIES B NOTES"), each in substantially the form
attached hereto as Exhibit A. The payment of principal of, premium and interest
on the Notes will be fully and unconditionally guaranteed (the "GUARANTEES"),
jointly and severally, by each of the Guarantors (as defined below).
C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate principal
amount of Series A Notes set forth opposite such Buyer's name in column (3) on
the Schedule of Buyers (which aggregate principal amount for all Buyers shall
initially be $255,000,000 (the "INITIAL NOTES"); (ii) warrants, in substantially
the form attached hereto as Exhibit B (the "INITIAL WARRANTS"), to acquire up to
that number of shares of the Company's Class A Common Stock, par value $0.0001
(the "CLASS A COMMON STOCK") set forth opposite such Buyer's name in column (4)
of the Schedule of Buyers (as exercised, collectively, the "INITIAL WARRANT
SHARES"); (iii) upon the exercise of the Buyers' Option (as defined below), up
to that aggregate principal amount of Series A or Series B Notes of the Company,
in substantially the form attached hereto as Exhibit A (the "ADDITIONAL NOTES")
set forth opposite such Buyer's name in column (6) on the Schedule of Buyers
(which aggregate principal amount of Additional Notes shall not exceed
$280,000,000 less the amount of interest paid on the Initial Notes prior to the
issuance of the Additional Notes) and warrants, in substantially the form
attached hereto as Exhibit B (the "ADDITIONAL WARRANTS"), to acquire up to that
number of shares of Class A Common Stock set forth opposite such Buyer's name in
column (7) on the Schedule of Buyers. The Initial Notes, the Remaining Notes (as
defined below) and the Additional Notes are collectively referred to herein as
the "NOTES." The Warrants, the Remaining Warrants (as defined below) and the
Additional Warrants are collectively referred to herein as the "WARRANTS."
D. The Notes, the Guarantees, the Warrants and the Warrant Shares
collectively are referred to herein as the "SECURITIES."
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E. Contemporaneously with the execution and delivery of this Agreement, a
portion of the purchase price for the sale of the Notes (the "INITIAL COLLATERAL
FUNDS") will be paid directly to the Collateral Agent to purchase U.S.
government securities in an amount sufficient, upon receipt of scheduled
principal and interest payments thereon, to provide for the payment in full of
the first four (4) scheduled interest payments on the Notes, which (together
with any U.S. government securities purchased with any Additional Funds (as
defined below), the "GOVERNMENT SECURITIES") will be deposited with the
Collateral Agent in an account (the "COLLATERAL ACCOUNT") with The Bank of New
York on the Closing Date. In connection therewith, pursuant to the terms of the
Indenture, the Company is granting a security interest in the Collateral Account
and all cash, cash equivalents, instruments, securities (including any
Government Securities) and other financial or other assets which are maintained
in the Collateral Account, and is executing and delivering an Account Control
Agreement, substantially in the form attached hereto as Exhibit C with The Bank
of New York, as securities intermediary and the Collateral Agent (as defined in
the Security Agreement) (as amended or modified from time to time, the "ACCOUNT
CONTROL AGREEMENT"). In the case of the issuance of any Additional Notes (as
defined below), a portion of the purchase price for the sale of the Additional
Notes (the "ADDITIONAL COLLATERAL FUNDS") will be paid directly to the
Collateral Agent to purchase U.S. government securities in an amount sufficient,
upon receipt of scheduled principal and interest payments thereon, to provide
for the payment in full of the first four (4) scheduled interest payments on the
Additional Notes in the case of Additional Notes issued prior to February 15,
2006, or the payment in full of the first three (3) scheduled interest payments
on the Additional Notes in the case of Additional Notes issued on or after
February 15, 2006 (such scheduled interest payment dates in respect of which
Additional Collateral Funds are to be paid, the "DESIGNATED REMAINING INTEREST
PAYMENT DATES") which Additional Collateral Funds and/or Government Securities
will be deposited in the Collateral Account on the applicable Buyers' Option
Purchase Date (as defined below). Twenty-five percent (25%) of the Initial
Collateral Funds shall mature no later than each of the first four Interest
Payment Dates (as defined in the Indenture) following the issuance of the
Initial Notes. Additional Collateral Funds shall mature on a pro rata basis no
later than each of the Designated Remaining Interest Payment Dates following the
issuance of the Additional Notes to which such Additional Collateral Funds
relate.
F. Contemporaneously with the execution and delivery of this Agreement, the
Company, Clearwire LLC ("CLEARWIRE1"), Fixed Wireless Holdings, LLC ("FWH") and
NextNet Wireless, Inc. ("NEXTNET" and, together with Clearwire1, FWH and each of
their respective Domestic Restricted Subsidiaries (as defined in the Indenture),
the "GUARANTORS") and The Bank of New York (acting in such capacity, the
"TRUSTEE") are executing and delivering an indenture, substantially in the form
attached hereto as Exhibit D (as amended or modified from time to time, the
"INDENTURE").
G. Contemporaneously with the execution and delivery of this Agreement, the
Company and the Buyers are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit E (as amended or
modified from time to time, the "REGISTRATION RIGHTS AGREEMENT"), pursuant to
which the Company has agreed to provide certain registration rights with respect
to the Warrant Shares under the Securities Act and the rules and regulations
promulgated thereunder.
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H. The Notes constitute indebtedness of the Company and will be secured by
a first priority, perfected security interest in certain assets of the Company
and certain stock and assets of its Subsidiaries (as hereinafter defined),
including certain stock and assets of the Guarantors, subject to certain
exceptions, as evidenced by the pledge agreement attached hereto as Exhibit F
(the "PLEDGE AGREEMENT") and the security agreement attached hereto as Exhibit G
(the "SECURITY AGREEMENT" and, together with the Pledge Agreement and the other
security documents listed in Exhibit H, the "SECURITY DOCUMENTS").
I. This Agreement, the Notes, the Indenture, the Guarantees, the
Registration Rights Agreement, the Security Documents, the Warrants, the Account
Control Agreement and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement are
collectively referred to herein as the "TRANSACTION DOCUMENTS."
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF NOTES AND WARRANTS.
(a) Purchase of Notes and Warrants.
(i) Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and
sell to each Buyer, and each Buyer severally, but not jointly, agrees to
purchase from the Company on the Closing Date (as defined below), (x) a
principal amount of Initial Notes as is set forth opposite such Buyer's
name in column (3) on the Schedule of Buyers and (y) Initial Warrants to
acquire up to that number of Warrant Shares as is set forth opposite such
Buyer's name in column (4) on the Schedule of Buyers (the "CLOSING").
(ii) Closing. The date and time of the Closing (the "CLOSING
DATE") shall be 10:00 a.m., New York City Time, on August 5, 2005 (or such
later date as is mutually agreed to by the Company and each Buyer) after
notification of satisfaction (or waiver) of the conditions to the Closing
set forth in Sections 6 and 7 below at the offices of Xxxxxxxx & Xxxxx LLP,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(iii) Purchase Price. The aggregate purchase price for the
Initial Notes and the Initial Warrants to be purchased by each Buyer at the
Closing (the "PURCHASE PRICE") shall be the amount set forth opposite such
Buyer's name in column (5) of the Schedule of Buyers. Each Buyer shall pay
$1,000 for each $1,000 of principal amount of Initial Notes and related
Initial Warrants to be purchased by such Buyer at the Closing.
(iv) Purchase Price Allocation. The Company and the Buyers
agree that solely for United States federal income tax purposes $850.40 per
$1,000 of the Purchase Price is allocated to the Initial Notes and $149.60
per $1,000 of the Purchase Price is allocated to the Initial Warrants and
such allocation of the purchase price shall be binding on all holders of
the Series A Notes and the Warrants.
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(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
portion of the Purchase Price to the Company for the Initial Notes and the
Initial Warrants to be issued and sold to such Buyer at the Closing, by wire
transfer of immediately available funds in accordance with the Company's written
wire instructions and in accordance with Section 4(j), and (ii) the Company
shall deliver or caused to be delivered to each Buyer (A) the Initial Notes (for
the account of such Buyer as such Buyer shall instruct) which such Buyer is then
purchasing and (B) the Initial Warrants (in the amounts as such Buyer shall
request) such Buyer is purchasing, in each case duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.
(c) Purchase of Remaining Notes and Remaining Warrants by Accredited
Investors.
(i) The Buyers hereby agree that, in the event that the
Buyers purchase less than $280.0 million of Initial Notes at the Closing
then, at any time until the date that is thirty (30) days after the Issue
Date, the Company may issue and sell to any of the "accredited investors"
(within the meaning of Rule 501(a) under the Securities Act) set forth on
Schedule 1(c), (the "SUBSEQUENT PURCHASERS"), (x) a principal amount of
Notes that is $280.0 million minus the aggregate amount of Series A Notes
purchased by the Buyers at the Closing (the "REMAINING NOTES") and (y) a
pro rata amount of Warrants (the "REMAINING WARRANTS") (the "SUBSEQUENT
CLOSING"). The Subsequent Purchasers shall be considered Buyers for the
purposes of this Agreement.
(ii) Subsequent Purchase Price. The aggregate purchase price
for the Remaining Notes and the Remaining Warrants to be purchased by each
Subsequent Purchaser at the Subsequent Closing (the "SUBSEQUENT PURCHASE
PRICE") shall be $1,000 for each $1,000 of principal amount of Remaining
Notes and related Remaining Warrants plus accrued and unpaid interest from
the Issue Date through the date of the Subsequent Closing.
(iii) Subsequent Purchase Price Allocation. The Company
agrees and the Subsequent Purchasers are deemed to agree that solely for
United States federal income tax purposes $850.40 per $1,000 of the
Subsequent Purchase Price, plus accrued and unpaid interest, shall be
allocated to the Remaining Notes and $149.60 per $1,000 of the Subsequent
Purchase Price shall be allocated to the Remaining Warrants and such
allocation of the purchase price shall be binding on all holders of the
Remaining Notes and the Remaining Warrants purchased at the Subsequent
Closing. Notwithstanding the foregoing, if the Subsequent Closing occurs
more than thirteen days from and including the Closing, then the Subsequent
Purchase Price shall be allocated (A) to the Remaining Notes in an amount
equal to (x) the amount allocated to the Initial Notes for United States
federal income tax purposes under Section l(a)(iv) plus (y) the amount of
original issue discount accrued on the Initial Notes for United States
federal income tax purposes from their issue date through the issue date of
the Remaining Notes and (B) to the Remaining Warrants in an amount equal to
the Subsequent Purchase Price less the amount determined in clause (A);
provided that if the Company determines in its reasonable judgment that,
during the period between the issue date of the Initial Notes and the issue
date of the Remaining Notes more than 13 days after the Closing, there has
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been a material change in the relative fair market values described above,
the Company may allocate the Subsequent Purchase Price between the
Remaining Notes and the Remaining Warrants in a manner that reflects their
respective fair market values at the time of their issuance, such
allocation to be subject to the consent of the Holders, which consent shall
not be unreasonably withheld. If the Initial Notes and the Remaining Notes
are not part of the same "issue" for United States federal income tax
purposes, then the Remaining Notes issued pursuant to this section shall be
Series A-l Notes. Otherwise, the Remaining Notes issued pursuant to this
section shall be Series A Notes.
(iv) Subsequent Closing. The date and time of the closing
for any purchases of Remaining Notes and Remaining Warrants at the
Subsequent Closing shall be 10:00 a.m., New York City Time, on a date that
is not more than thirty (30) days after the Issue Date after notification
of satisfaction (or waiver) of the conditions set forth in Sections 6 and 7
(other than the conditions set forth in Sections 7(f) and 7(k)) below at
the offices of Xxxxxxxx & Xxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
(d) Buyers' Option. The Company hereby grants to each Buyer a one-time
option (the "BUYERS' OPTION") to purchase, (x) up to that principal amount of
Additional Notes as is set forth opposite such Buyer's name in column (6) on the
Schedule of Buyers and (y) up to that number of Additional Warrants to acquire
up to that number of Additional Warrant Shares as is set forth opposite such
Buyer's name in column (7) on the Schedule of Buyers by mailing a written notice
of such Buyer's exercise of its Buyers' Option (a "BUYERS' OPTION PURCHASE
NOTICE") to the Company and the Trustee at any time until the date that is one
hundred and eighty (180) days after the Issue Date (as defined in the Indenture)
(the date of the closing of any such purchase shall be referred to as a "BUYERS'
OPTION PURCHASE DATE"); provided, that, at any time, the Company, with the
approval of the Company's board of directors, may elect to terminate the Buyers'
Option by delivering a notice to the Buyers stating that (i) the Company has
entered into a letter of intent to consummate a transaction or publicly
announced such a transaction which is likely to result in a Change of Control
with an unaffiliated third-party on an arms' length basis and (ii) the Company
has elected to terminate the Buyers' Option (the "OPTION TERMINATION NOTICE").
The Buyers shall not be permitted to exercise the Buyers' Option following the
delivery of the Option Termination Notice unless the Company fails to enter into
a definitive agreement pursuant to such letter of intent or public announcement
within sixty (60) days of the date of the Option Termination Notice (the "STAY
PERIOD"). If the Company does enter into such a definitive agreement then the
Buyers' Option shall immediately terminate; however, if the Stay Period expires
less than thirty (30) days before the date that is one hundred and eighty (180)
days after the Issue Date, the Buyers shall be entitled to exercise the Buyers'
Option during the period beginning on the expiration of the Stay Period and
ending on the date that is thirty (30) days following the expiration of the Stay
Period. Upon termination of the Buyers' Option, the Company shall then be deemed
to have issued, and shall promptly issue, to each Buyer for no additional
consideration 50% of that number of Additional Warrants to acquire up to that
number of Additional Warrant Shares as is set forth opposite such Buyer's name
in column (7) on the Schedule of Buyers.
(i) If any Buyer elects to exercise the Buyers' Option
pursuant to this Section l(c)(i), it shall notify the Company and the
Trustee at least thirty (30) days prior to the Buyers' Option Purchase
Date.
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(ii) Interest on the Additional Notes shall accrue from the
Interest Payment Date immediately prior to the Buyers' Option Purchase
Date, or if no such Interest Payment Date has occurred, the Issue Date
(such date on which such interest begins to accrue, the "INTEREST ACCRUAL
DATE").
(iii) Buyers' Option Purchase Price. The aggregate purchase
price for the Additional Notes and the Additional Warrants to be purchased
by a Buyer on such Buyers' Option Purchase Date (the "BUYERS' OPTION
PURCHASE PRICE") shall be the sum of (A) $1,000 for each $1,000 principal
amount of Additional Notes and related Additional Warrants that such Buyer
has elected to purchase, in any event not to exceed the aggregate principal
amount of Additional Notes and Additional Warrants and aggregate purchase
price therefor set forth opposite such Buyer's name in columns (6), (7) and
(8), respectively, on the Schedule of Buyers, and (B) accrued and unpaid
interest from the Interest Accrual Date on such Additional Notes up to but
not including the Buyers' Option Purchase Date.
(iv) Buyers' Option Purchase Price Allocation. The Company
and the Buyers agree, solely for United States federal income tax purposes,
to allocate the Buyers' Option Purchase Price (A) to the Additional Notes
in an amount equal to (x) the amount allocated to the Initial Notes for
United States federal income tax purposes under Section l(a)(iv) plus (y)
the amount of original issue discount accrued on the Initial Notes for
United States federal income tax purposes from their issue date through the
issue date of the Additional Notes, less (z) the amount of interest, if
any, paid on the Initial Notes prior to the issue date of the Additional
Notes and (B) to the Additional Warrants in an amount equal to the Buyer's
Option Purchase Price less the amount determined in clause (A); provided
that if the Company determines in its reasonable judgment that during the
period between the issue date of the Initial Notes and the issue date of
the Additional Notes more than 13 days after the Closing, there has been a
material change in the relative fair market values of the Additional Notes
and the Additional Warrants from the values described above, the Company
may allocate the Buyer's Option Purchase Price between the Additional Notes
and the Additional Warrants in a manner that the Company and the Holders
reasonably agree reflects their respective fair market values at the time
of their issuance, such allocation to be subject to the consent of the
Holders, such consent not to be unreasonably withheld. If the Initial Notes
and the Additional Notes are not part of the same issue for United States
federal income tax purposes, then the Additional Notes issued pursuant to
this section shall be Series B Notes. Otherwise, the Additional Notes
issued pursuant to this section shall be Series A Notes.
(v) Closing. The date and time of the closing for any
purchases of Additional Notes and Additional Warrants upon the exercise of
the Buyers' Option shall be 10:00 a.m., New York City Time, on the first
Business Day on or after the date that is thirty (30) days after the Buyer
provides a Buyers' Option Purchase Notice (or such other date as is
mutually agreed to by the Company and such Buyer) after notification of
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7
(other than the conditions set forth in Section 7(k)) below at the offices
of Xxxxxxxx & Xxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer severally represents and warrants, with respect to only
itself, that:
(a) No Public Sale or Distribution. Such Buyer is (i) acquiring the
Initial Notes and the Initial Warrants (and if Buyer elects to exercise the
Buyers' Option, Buyer will acquire the Additional Notes and Additional Warrants
covered by such election) and (ii) upon exercise of the Initial Warrants or, as
the case may be, the Additional Warrants, will acquire the Initial Warrant
Shares and the Additional Warrant Shares, respectively, issuable upon exercise
of the Initial Warrants and the Additional Warrants, respectively, for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. Such Buyer is acquiring the
Securities hereunder in the ordinary course of its business. Such Buyer does not
presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities. As used in this Agreement, "PERSON"
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
(b) Institutional Accredited Investor Status. Such Buyer is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act (an "INSTITUTIONAL ACCREDITED INVESTOR").
Such Buyer is not an entity formed for the sole purpose of acquiring the
Securities.
(c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.
(d) No General Solicitation or Advertising. Such Buyer acknowledges
that it is not purchasing the Notes and the Warrants as a result of any
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television.
(e) Independent Evaluation. Such Buyer has independently evaluated the
merits of its decision to purchase the Notes and the Warrants pursuant to the
Transaction Documents, and such Buyer confirms that it has not relied on the
advice of XX Xxxxxx Securities, Inc., Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Inc. or any other placement agent financial
advisor in making such decision.
(f) Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials
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relating to the offer and sale of the Securities which have been requested by
such Buyer. Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer's right to
rely on the Company's representations and warranties contained herein. Such
Buyer understands that its investment in the Securities involves a high degree
of risk and is able to bear the economic risk of such investment. Such Buyer has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the Securities and has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Securities.
(g) No Governmental Review. Such Buyer understands that no United
States agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
(h) Transfer or Resale. Such Buyer understands that: (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
will not be registered under the Securities Act or any state securities laws;
(ii) such Buyer agrees that if it decides to offer, sell or otherwise transfer
any of the Securities, such Securities may be offered, sold or otherwise
transferred only: (A) pursuant to an effective registration statement under the
Securities Act; (B) to the Company; (C) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act and in compliance with
local laws; or (D) within the United States (1) in accordance with the exemption
from registration under the Securities Act provided by Rule 144A thereunder, if
available, and in compliance with any applicable state securities laws, (2) in
accordance with the exemption from registration under the Securities Act
provided by Rule 144 thereunder, if available, and in compliance with any
applicable state securities laws, and the seller shall be required to furnish to
the Company an opinion to such effect from counsel of recognized standing
reasonably satisfactory to the Company prior to such offer, sale or transfer or
(3) in a transaction that does not require registration under the Securities Act
or applicable state securities laws, and the seller shall be required to furnish
to the Company an opinion to such effect from counsel of recognized standing
reasonably satisfactory to the Company prior to such offer, sale or transfer.
(i) Legends. Such Buyer understands that upon the original issuance
thereof, and until such time as the same is no longer required under applicable
requirements of the Securities Act or applicable state securities laws, the
certificates or other instruments representing the Notes and all certificates or
other instruments issued in exchange therefor or in substitution thereof, shall
bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO CLEARWIRE CORPORATION (THE
"COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
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OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN. THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE IS EXCHANGEABLE FOR
NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS
NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE
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(1) This paragraph should be included only if the Note is a Global Note.
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SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO
A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY
INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902
OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
-10-
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF INTEREST HEREON.(2)
FOR PURPOSES OF SECTIONS 1272, 1273 AND 0000 XX XXX XXXXXX XXXXXX
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THIS NOTE IS
ISSUED WITH ORIGINAL ISSUE DISCOUNT. THE ISSUE DATE OF THIS NOTE IS
___________. THIS NOTE WAS ISSUED AS PART OF AN INVESTMENT UNIT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. IN ADDITION, THIS NOTE IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING
CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272,
1273 AND 1275 OF THE CODE, THE ISSUE PRICE OF THIS NOTE IS $_________
PER $1,000 OF PRINCIPAL AMOUNT AND THE COMPARABLE YIELD FOR THIS NOTE
IS __________ PERCENT PER ANNUM, COMPOUNDED SEMI ANNUALLY, WHICH WILL
BE TREATED AS THE YIELD TO MATURITY OF THIS NOTE FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES.
THE COMPANY AGREES, AND EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS
NOTE BY ITS PURCHASE THEREOF WILL BE DEEMED TO HAVE AGREED, FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, (1) TO TREAT THIS NOTE AS A
CONTINGENT PAYMENT DEBT INSTRUMENT THAT IS SUBJECT TO TREASURY
REGULATIONS SECTION 1.1275-4 (THE "CONTINGENT PAYMENT REGULATIONS"),
(2) TO ACCRUE INTEREST WITH RESPECT TO THIS NOTE AS ORIGINAL ISSUE
DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING TO
THE "NONCONTINGENT BOND METHOD" DESCRIBED IN THE CONTINGENT PAYMENT
REGULATIONS AND (3) TO BE BOUND BY THE COMPANY'S DETERMINATION OF THE
ISSUE PRICE OF THIS NOTE AND THE "COMPARABLE YIELD" AND "PROJECTED
PAYMENT SCHEDULE" OF THIS NOTE, IN EACH CASE WITHIN THE MEANING OF THE
CONTINGENT PAYMENT REGULATIONS. THE COMPANY AGREES TO PROVIDE PROMPTLY
TO THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE AMOUNT OF THE
ORIGINAL ISSUE DISCOUNT, THE ISSUE PRICE, THE ISSUE DATE, THE YIELD TO
MATURITY, THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE WITH
RESPECT TO THIS NOTE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE
COMPANY AT THE FOLLOWING ADDRESS: CLEARWIRE CORPORATION, 5808
----------
(2) This paragraph should be included only if the Note is a Temporary Global
Note under Regulation S.
-00-
XXXX XXXXXXXXXX XXXX XX, XXXXX #000, XXXXXXXX, XXXXXXXXXX 00000,
ATTENTION: TREASURY DEPARTMENT, TELEPHONE NUMBER: (000) 000-0000.
THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF A SECURITIES
PURCHASE AGREEMENT, DATED AS OF AUGUST 5, 2005 BY AND AMONG THE
COMPANY, THE GUARANTORS AND THE BUYERS REFERRED TO THEREIN (THE
"SECURITIES PURCHASE AGREEMENT") AND, BY ITS ACCEPTANCE HEREOF, AGREES
TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH SECURITIES
PURCHASE AGREEMENT. THE HOLDER OF THIS NOTE IS ENTITLED TO THE
BENEFITS OF AN INDENTURE, DATED AS OF AUGUST 5, 2005 BY AND AMONG THE
COMPANY, THE GUARANTORS AND THE TRUSTEE (THE "INDENTURE") AND, BY ITS
ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH INDENTURE. NO TRANSFER OF THIS NOTE SHALL BE MADE
WITHOUT COMPLYING WITH THE PROVISIONS OF THE INDENTURE.
provided, that if any such Notes are being sold pursuant to Rule 144 under the
Securities Act, such legend may be removed by delivering to the Company's
registrar and transfer agent and the Company an opinion of counsel, of
recognized standing reasonably satisfactory to the Company, that such legend is
no longer required under applicable requirements of the Securities Act or state
securities laws; and
(ii) the certificates or other instruments representing the
Warrants and, unless no longer applicable at the time of issuance, the Warrant
Shares, and all certificates or other instruments issued in exchange therefor or
in substitution thereof, shall bear the following legend:
THIS SECURITY AND THE SHARES OF CLASS A COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF CLASS A COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
-12-
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
CLEARWIRE CORPORATION OR ANY AFFILIATE OF CLEARWIRE CORPORATION WAS
THE OWNER OR ISSUER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) ONLY (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (B) TO THE COMPANY, (C) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT), (D) TO A PERSON WHOM
THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (E) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (G) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (G) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
REASONABLY SATISFACTORY TO IT, AND (2) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
SECURITIES PURCHASE AGREEMENT, DATED AS OF AUGUST 5, 2005 BY AND AMONG
THE COMPANY, THE GUARANTORS AND THE BUYERS REFERRED TO THEREIN (THE
"SECURITIES PURCHASE AGREEMENT") AND, BY ITS ACCEPTANCE HEREOF, AGREES
TO BE BOUND BY AND TO
-13-
COMPLY WITH THE PROVISIONS OF SUCH SECURITIES PURCHASE AGREEMENT. THE
HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT, DATED AS OF AUGUST 5, 2005 BY AND AMONG THE COMPANY
AND THE BUYERS REFERRED TO THEREIN (THE "REGISTRATION RIGHTS
AGREEMENT") AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND
TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
NO TRANSFER OF THIS WARRANT SHALL BE MADE WITHOUT COMPLYING WITH THE
PROVISIONS OF SECTION 7(a) OF THIS WARRANT.
provided, that the first paragraph of such legend may be removed from
certificates representing the Warrants in connection with a sale pursuant to an
effective registration statement under the Securities Act; and, provided,
further, that, if any such Warrants are being sold pursuant to Rule 144 under
the Securities Act, such legend may be removed by delivering to the Company's
registrar and transfer agent and the Company an opinion of counsel, of
recognized standing reasonably satisfactory to the Company, that such legend is
no longer required under applicable requirements of the Securities Act or state
securities laws.
(j) Consent. Such Buyer consents to the Company making a notation on
its records or giving instructions to the Trustee and any transfer agent of the
Class A Common Stock in order to implement the restrictions on transfer set
forth and described herein.
(k) Filings. If required by applicable securities legislation,
regulatory policy or order, or if required or requested by any securities
commission, stock exchange or other regulatory authority, at the request of and
at the sole expense of the Company, such Buyer will execute, deliver and file
and otherwise reasonably assist the Company in filing reports, questionnaires,
undertakings and other documents with respect to the issue of the Securities.
(l) Validity; Enforcement. This Agreement, the Registration Rights
Agreement and the Security Documents to which such Buyer is a party have been
duly and validly authorized, executed and delivered on behalf of such Buyer and,
assuming the due execution and delivery thereof by the other parties thereto,
constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies and except that the enforcement of any rights to
indemnity and contribution in the Registration Rights Agreement may be limited
by federal and state securities laws and the principles of public policy
underlying those laws.
(m) Residency. For purposes of U.S. securities laws, such Buyer is a
resident of that jurisdiction specified below its address on the Schedule of
Buyers.
-14-
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company and each of the Guarantors (as applicable), jointly and
severally, represent and warrant to each of the Buyers that, except as set forth
on the schedules attached to this Agreement:
(a) Organization and Qualification. The Company and its Subsidiaries
are entities duly organized and validly existing in good standing under the laws
of the jurisdiction in which they are formed, and have the requisite power and
authorization to own their properties and to carry on their business as now
being conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign entity to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse
effect on the business, properties, assets, operations, results of operations or
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby and
by the other Transaction Documents, or on the authority or ability of the
Company and each of the Guarantors (as applicable) to perform their respective
obligations under the Transaction Documents. Set forth on Schedule 3(a)(i) is a
true, correct and complete list of all Subsidiaries of the Company and set forth
on Schedule 3(a)(ii) is a true, correct and complete list of all Material
Subsidiaries of the Company. Neither the Company nor any of its Subsidiaries is
a participant in any joint venture, partnership or similar arrangement other
than as set forth on Schedule 3(a)(iii). Other than the Subsidiaries set forth
on Schedules 3(a)(i) and 3(a)(ii) and except as set forth on Schedule 3(a)(iii)
and Schedule 3(a)(iv), neither the Company nor any of its Subsidiaries (i) has
or holds, either directly or indirectly, any capital or any other equity
securities or interest in, or control (whether by the ownership or control or
direction of any securities or any other voting or participating interest or by
contract) of, any other Person or (ii) is obligated to make or be bound by any
written, oral or other agreement, contract or understanding of any nature as of
the date hereof or as may hereinafter be in effect under which it may become
obligated to make any future investment in, or capital contribution to, any
other Person. For purposes of this Agreement, (i) "SUBSIDIARIES" means: (a) any
company or limited liability company, fifty percent (50%) or more of whose
outstanding voting shares or interests are owned, directly or indirectly, by the
Company or by one or more of its Subsidiaries, or by the Company and by one or
more of its Subsidiaries, and includes each of the companies and limited
liability companies identified in Schedule 3(a)(i) as a Subsidiary; (b) any
general partnership, fifty percent (50%) or more of whose outstanding
partnership interests shall at the time be owned by the Company, or by one or
more of its Subsidiaries, or by the Company and one or more of its Subsidiaries;
and (c) any limited partnership, of which the Company or any of its Subsidiaries
is a general partner, and "SUBSIDIARY" means any one of them and (ii) "MATERIAL
SUBSIDIARIES" means each Subsidiary with more than $10,000,000 in total assets
and each Spectrum Entity (as defined in the Indenture) and "MATERIAL SUBSIDIARY"
means any one of them.
(b) Authorization; Enforcement; Validity. Each of the Company and the
Guarantors (to the extent that they are parties) has the requisite power and
authority to enter into and perform their respective obligations under the
Transaction Documents and, with respect to the Company, to issue the Securities
in accordance with the terms hereof and thereof. The
-15-
execution and delivery of the Transaction Documents by each of the Company and
the Guarantors (as applicable) and the consummation by each of the Company and
the Guarantors (as applicable) of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Notes, the
Guarantees and the Warrants, the reservation for issuance and issuance of the
Warrant Shares issuable upon exercise of the Warrants, and the granting of a
security interest in the Collateral (as defined in the Security Documents) have
been duly authorized by the Company's or the Guarantors' (as applicable) Board
of Directors, respectively, or Manager (as applicable) and (other than (i) the
filing of appropriate UCC financing statements and analogous registrations with
the appropriate states, provinces and other authorities pursuant to the Security
Documents, (ii) the filing with the SEC of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement, (iii)
the filing of a Form D with respect to the Notes and Warrants as required under
Regulation D, (iv) such filings required under applicable securities or "Blue
Sky" laws of the states of the United States and (v) such filings as may be
required under any rule or regulation promulgated by the Federal Communications
Commission (all of the foregoing, the "REQUIRED APPROVALS")) no further filing,
consent, or authorization is required by the Company or the Guarantors (as
applicable), their respective Boards of Directors or Manager (as applicable) or
their respective stockholders or members (as applicable) in connection
therewith. This Agreement and the other Transaction Documents of even date
herewith have been duly executed and delivered by the Company and each of the
Guarantors (as applicable) and constitute the legal, valid and binding
obligations of the Company or the Guarantors (as applicable), enforceable
against the Company or the Guarantors (as applicable) in accordance with their
respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies, and except that the
enforcement of any rights to indemnity and contribution in the Registration
Rights Agreement may be limited by federal and state securities laws and the
principles of public policy underlying those laws.
(c) Issuance of Securities. The Notes and Warrants have been duly
authorized by the Company, and when duly executed, authenticated, issued and
delivered as provided in the Indenture (assuming due authentication of the Notes
by the Trustee) or the Warrants, as the case may be, and paid for as provided
herein, will be free from all taxes, liens and charges with respect to the
issuance (but not the acquisition, holding or disposition caused by any Buyer)
thereof and will constitute legal, valid and binding obligations of the Company,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and to general principles of equity, including principles of materiality,
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity). The Guarantees have
been duly authorized by the Company and each of the Guarantors, and when duly
executed by each of the Guarantors (assuming due authentication of the Notes by
the Trustee) and paid for as provided herein, will constitute legal, valid and
binding agreements of the Guarantors, enforceable against them in accordance
with their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and to general principles of equity,
including principles of materiality, commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a
-16-
proceeding at law or in equity) and will be entitled to the benefits of the
Indenture. Upon issuance and delivery of the Warrants in accordance with the
terms of this Agreement and the Warrants, the Warrants will be exercisable into
Class A Common Stock at the option of the holder thereof in accordance with the
terms of the Warrants. As of the Closing, a number of shares of Class A Common
Stock shall have been duly authorized and reserved for issuance, free of
pre-emptive or similar rights (except those that have been previously waived),
sufficient for the purpose of enabling the Company to satisfy its obligations to
issue the Warrant Shares upon exercise of the Warrants. Upon exercise in
accordance with the Warrants, the Warrant Shares will be validly issued, fully
paid and nonassessable and free from all preemptive rights (except those that
have been previously waived), and such Warrant Shares will not be subject to any
stamp, issue or similar taxes (excluding, for the avoidance of doubt, income and
withholding taxes), liens and charges on the issue (but not the acquisition,
holding or disposition caused by any Buyer) thereof, with the holders being
entitled to all rights accorded to a holder of Class A Common Stock. Assuming
the accuracy of the representations of the Buyers in Section 2 hereof (and in
the Recertification Letter (as defined in the Warrants) in connection with the
offer and issuance of Warrant Shares) and their compliance with the agreements
set forth in the Transaction Documents, the offer and issuance by the Company of
the Securities to the Buyers is (or will be in the case of the Warrant Shares)
exempt from registration under the Securities Act.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and each of the Guarantors (as applicable)
and the consummation by the Company and each of Guarantors (as applicable) of
the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes and the Warrants, the granting of a security interest
in the Collateral and reservation for issuance and issuance of the Warrant
Shares) will not (i) result in a violation of the Certificate of Incorporation
(as defined in Section 3(o)) or the Bylaws (as defined in Section 3(o)) or any
of the organizational documents of any of the Guarantors or any other Material
Subsidiary or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company, any Guarantor or
any other Subsidiary is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to the Company, any Guarantor or any other
Subsidiary or by which any property or asset of the Company, any Guarantor or
any other Subsidiary is bound or affected, except, in the case of clauses (ii)
and (iii), for such violations as would not be reasonably expected to have a
Material Adverse Effect.
(e) Consents. Other than the Required Approvals, none of the Company
and the Guarantors (as applicable) or any other Subsidiary is required to obtain
any consent, authorization or order of, or make any filing or registration with,
any court, governmental agency or any regulatory or self-regulatory agency or
any other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in
accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company, the Guarantors or any other
Subsidiary are required to obtain prior to the Closing have been obtained or
effected on or prior to the Closing Date, and the Company and its Subsidiaries
are unaware of any facts or circumstances which might prevent the Company from
obtaining or effecting any of the registration, application or filings pursuant
to the preceding sentence.
-17-
(f) No General Solicitation: Placement Agent's Fees. None of the
Company, the Guarantors, any of their respective affiliates and any Person
acting on their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities. The Company shall be responsible for the
payment of any placement agent's fees, financial advisory fees, or brokers'
commissions (other than for Persons engaged by any Buyer) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable and documented attorney's fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges
that it has engaged XX Xxxxxx Securities, Inc., Xxxxxx Xxxxxxx & Co.
Incorporated and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. as placement agents
(each an "AGENT" and, collectively, the "AGENTS") in connection with the sale of
the Notes and the Warrants. Other than the Agents, the Company has not engaged
any placement agent or other agent in connection with the sale of the
Securities.
(g) No Integrated Offering. None of the Company, its Subsidiaries, the
Guarantors, any of their respective affiliates and any Person acting on their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the Securities Act or cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act. None of the Company, its Subsidiaries, the
Guarantors, then respective affiliates and any Person acting on their behalf
will take any action or steps referred to in the preceding sentence that would
require registration of any of the Securities under the Securities Act or cause
the offering of the Securities to be integrated with other offerings.
(h) Application of Takeover Protections; Rights Agreement. The Company
and its board of directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or the laws of
the jurisdiction of its formation or otherwise which is or could become
applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company's issuance of the
Securities and any Buyer's ownership of the Securities. The Company has not
adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership capital stock (including, without
limitation, of Class A Common Stock) or a change of control of the Company.
(i) Financial Statements. As of their respective dates, the unaudited
condensed consolidated financial statements of the Company and its Subsidiaries
for the quarter ended March 31, 2005 and the condensed consolidated audited
financial statements of the Company and its Subsidiaries for the year ended
December 31, 2004 complied as to form in all material respects with applicable
accounting requirements. Such financial statements, including the notes thereto,
have been prepared in all material respects in accordance with generally
accepted accounting principles in the United States ("GAAP"), consistently
applied, during the periods involved, except that the unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods then
ended, subject in the case of the unaudited financial statements to normal
year-end audit
-18-
adjustments. The financial statements of the Company for the year ended December
31, 2004 and for the quarterly period ended March 31,2005 are attached hereto as
Exhibit L.
(j) Absence of Certain Changes. Since December 31, 2004, no event or
circumstance has occurred which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither the Company
nor any Guarantor or any other Material Subsidiary has taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company or any Guarantor
or other Material Subsidiary have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact which would reasonably lead a creditor to do so. Neither
the Company nor any Guarantor or other Material Subsidiary is as of the date
hereof, and after giving effect to the transactions contemplated hereby to occur
at the Closing, will be Insolvent (as defined below). For purposes of this
Section 3(j), "INSOLVENT" means with respect to the Company or any Guarantor:
(i) the present fair saleable value of the assets of the Company or such
Guarantor or other Material Subsidiary is less than the amount required to pay
the total Indebtedness (as defined in the Indenture) of the Company or such
Guarantor or other Material Subsidiary, (ii) the Company or such Guarantor is
unable to pay its debts and liabilities as such debts and liabilities, whether
subordinated, contingent or otherwise, become absolute and matured, (iii) the
Company or such Guarantor or other Material Subsidiary intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company or such Guarantor has unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted.
(i) Except as set forth on Schedule 3(j)(i) and except as
contemplated by the Transaction Documents, since December 31, 2004, the business
of the Company and its Subsidiaries has been conducted in the ordinary course
consistent with past practice and there has not been:
(A) any obligation or liability (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) incurred by
the Company or any of its Subsidiaries, in excess of $1,000,000
individually or $2,500,000 in the aggregate, other than obligations
under customer contracts, current obligations and liabilities, in each
case incurred in the ordinary course of business and consistent with
past practice;
(B) any payment, discharge, satisfaction or settlement of
any suit, action, claim, arbitration, proceeding or obligation of the
Company or any of its Material Subsidiaries, except in the ordinary
course of business and consistent with past practice;
(C) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of the Company or any of its Subsidiaries or any direct or
indirect redemption, purchase or other acquisition of any such shares;
(D) any issuance or sale, or any contract entered into for
the issuance or sale, of any shares of capital stock or securities
convertible into or
-19-
exercisable or exchangeable for shares of capital stock of the Company
or any of its Subsidiaries;
(E) any sale, assignment, pledge, encumbrance, transfer or
other disposition of any tangible asset of the Company or any of its
Subsidiaries (other than sales or the licensing of its products to
customers in the ordinary course of business consistent with past
practice), or any sale, assignment, transfer or other disposition of
any Intellectual Property (as defined below) (other than licensing of
products of the Company or its Subsidiaries in the ordinary course of
business and on a non-exclusive basis);
(F) any creation of any Lien (as defined in the Indenture)
on any property of the Company or any of its Material Subsidiaries;
(G) any write-downs of the value of any asset of the Company
or its Subsidiaries or any write-off as uncollectible of any accounts
or notes receivable or any portion (hereof except in the ordinary
course of business and in a magnitude consistent with historical
practice;
(H) any cancellation of any debts or claims or any material
amendment, termination or waiver of any rights of the Company or its
Subsidiaries;
(I) any material increase in any such compensation or bonus
payable to any officer, stockholder, director, consultant or agent of
the Company or any of its Subsidiaries having an annual salary or
remuneration in excess of $350,000;
(J) any damage, destruction or loss (whether or not covered
by insurance) affecting any asset or property of the Company or any of
its Subsidiaries resulting in any liability, loss, claim, damages,
costs or expenses in excess of $1,000,000 individually or $2,500,000
in the aggregate;
(K) any resignation or termination of any executive officer
or group of employees of the Company or any of its Material
Subsidiaries; or
(L) any agreement, whether in writing or otherwise, to take
any of the actions specified in the foregoing items (A) through (L).
(k) Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 3(k), or as incurred by the Company or any of its Material Subsidiaries
in the ordinary course of business and consistent with past practice, neither
the Company nor any Material Subsidiary has any material liabilities or
obligations of any nature, whether accrued, absolute, contingent, or otherwise
(including liabilities as guarantor or otherwise with respect to obligations of
others) and whether due or to become due. The reserves, if any, established by
the Company or the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and there are no
loss contingencies that are required to be accrued
-20-
by Statement of Financial Accounting Standard No. 5 of the Financial Accounting
Standards Board which are not provided for on the balance sheet of the Company
and its Material Subsidiaries as of March 31, 2005, which is included in the
Financial Statements.
(1) Conduct of Business; Regulatory Permits. Except as set forth on
Schedule 3(1), neither the Company nor any of its Material Subsidiaries is in
violation of any term of or in default under its Certificate of Incorporation
or Bylaws or their organizational charter or certificate of incorporation or
bylaws, respectively. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or its Subsidiaries, and neither the
Company nor any of its Subsidiaries will conduct its business in violation of
any of the foregoing, except for possible violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on Schedule 3(1), the Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit. Nothing set forth on Schedule 3(1) is reasonably
expected to result in a Material Adverse Effect; however, the foregoing does not
apply to anything set forth on Schedule 3(1) with respect to the Company's
ability to acquire additional spectrum rights in the future in accordance with
its business plan.
(m) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor to the knowledge of the Company, any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries, has, in the course of its actions for, or on behalf of, the
Company (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
(n) Transactions With Affiliates. Except as disclosed on Schedule
3(n)(i), there have not been any material transactions or loans (including
guarantees of any kind) between the Company or any of its Subsidiaries and (i)
other Persons that directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control with, the Company or
any of its Subsidiaries, (ii) individuals owning, directly or indirectly, an
interest in the voting power of the Company or any of its Subsidiaries that
gives them significant influence over the Company or any of its Subsidiaries,
(iii) key management personnel, that is, those persons having authority and
responsibility for planning, directing and controlling the activities of the
Company or any of its Subsidiaries, including directors and senior management of
companies and close members of such individuals' families, and (iv) enterprises
in which a substantial interest in the voting power is owned, directly or
indirectly, by any Person described in (ii) or (iii) or over which such a Person
is able to exercise significant influence (including enterprises owned by
directors or major stockholders of the Company or any of its Subsidiaries and
enterprises that have a member of key management in common with the Company or
any of
-21-
its Subsidiaries). For purposes of this Section 3(n): (i) significant influence
over an enterprise is the power to control the financial and operating policy
decisions of the enterprise; and (iii) stockholders beneficially owning a 5%
interest in the voting power of the Company or any of its Subsidiaries are
presumed to have a significant influence on the Company or any of its
Subsidiaries. Except as disclosed on Schedule 3(n)(ii), no employee, officer,
stockholder or director of the Company or any of its Subsidiaries or member of
his or her immediate family is indebted to the Company or its Subsidiaries, as
the case may be, nor is the Company or any of its Subsidiaries indebted (or
committed to make loans or extend or guarantee credit) to any of them, other
than (i) for payment of salary for services rendered, (ii) reimbursement for
reasonable expenses incurred on behalf of the Company, and (iii) for other
standard employee benefits made generally available to all employees or
executives (including stock option agreements outstanding under any stock option
plan approved by the Company's board of directors. Except as disclosed on
Schedule 3(n)(iii), Xxxxx XxXxx does not own, directly or indirectly, any
interest in (excepting less than 5% stock holdings for investment purposes in
securities of publicly held and traded companies), and is not an officer of any
Person that is, or is engaged in business as, a competitor, lessor, lessee,
supplier, distributor or sales agent or material customer of, or lender to or
borrow from, the Company or any of its Subsidiaries. No immediate family member
of Xxxxx XxXxx owns any material interest in any Person that is a party to any
material agreement with the Company of any its Subsidiaries. Except as disclosed
on Schedule 3(n)(iv), no officer, director, stockholder or other security holder
of the Company or any of its Subsidiaries owns, directly or indirectly, in whole
or in part, any material tangible or intangible property that the Company or any
of its Subsidiaries uses in the conduct of business.
(o) Equity Capitalization. As of August 2, 2005, after giving effect
to the transactions contemplated by the Transaction Documents, the authorized
capital stock of the Company consists of: (i) 500,000,000 shares of Class A
Common Stock, par value $0.0001 per share, of which 165,748,763 shares are
issued and outstanding; (ii) 100,000,000 shares of Class B Common Stock, par
value $0.0001 per share (the "CLASS B COMMON STOCK", and together with the Class
A Common Stock, collectively referred to herein as the "COMMON STOCK"), of which
56,072,860 shares are issued and outstanding; and (iii) 5,000,000 shares of
Preferred Stock, par value $0.0001 per share, of which no shares are issued and
outstanding. The Class B Common Stock is convertible into Class A Common Stock
on a one-for one basis at the option of the holders. Other than with respect to
voting and conversion rights as set forth in the Certificate of Incorporation,
all other rights, such as voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of the shares of Class B Common
Stock are identical to that of the shares of Class A Common Stock. All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed on Schedule 3(o)(i), none of
the Company's capital stock is subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company. Except
as disclosed on Schedule 3(o)(ii), there are no outstanding options, warrants,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Material
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Material Subsidiaries is or may become bound to issue
additional capital stock of the Company or any of its Material Subsidiaries or
options, warrants, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company
-22-
or any of its Material Subsidiaries. Except as disclosed on Schedule 3(o)(iii),
there are no agreements or arrangements under which the Company or any of its
Material Subsidiaries is obligated to register the sale of any of their
securities under the Securities Act (except the Registration Rights Agreement).
Except as disclosed on Schedule 3(o)(iv), there are no outstanding securities or
instruments of the Company or any of its Material Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Material
Subsidiaries is or may become bound to redeem, repurchase or otherwise acquire
or retire a security of the Company or any of its Material Subsidiaries. Except
as disclosed on Schedule 3(o)(v), there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities. The Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or agreement.
The Company has furnished to each Buyer true, correct and complete copies of the
Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "CERTIFICATE OF INCORPORATION"), and the Company's Bylaws, as
amended and as in effect on the date hereof (the "BYLAWS"), and the terms of all
securities convertible into, or exercisable or exchangeable for, Common Stock
and the material rights of the holders thereof in respect thereto. Set forth on
Schedule 3(o)(vi) is a true, correct and complete list of the record holders of
shares of capital stock of the Company and each of its Material Subsidiaries as
of the date hereof. As of the date specified therein, such holders own of record
all the outstanding capital stock of the Company and each such Material
Subsidiary, each of them so owning the number of shares set forth opposite such
holder's name on Schedule 3(o)(vi). Set forth on Schedule 3(o)(vi) is a true,
correct and complete list (except as otherwise noted on such schedule) of the
record holders of options and warrants exercisable for shares of capital stock
of the Company and its Material Subsidiaries. Except as disclosed on Schedule
3(o)(vii), the shares held by the Company or any of its Subsidiaries are held
free and clear of all liens or any other restriction on the right to vote, sell
or otherwise dispose of such capital stock, except for restrictions under
securities laws. There are no bonds, debentures, notes or other indebtedness or
securities of the Company or its Subsidiaries having the right to vote (or
convertible into, or exchangeable or exercisable for, securities having the
right to vote) on any matters on which stockholders of the Subsidiaries of the
Company or their respective Subsidiaries may vote.
(p) Indebtedness and Other Contracts. Except as disclosed in Schedule
3(p), neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below) in excess of $1,500,000 individually or
$3,000,000 in the aggregate, (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a Material
Adverse Effect, or (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect. Excluding obligations under spectrum leases and
inter-company loans, Schedule 3(p) provides a description of the material
financial terms of any outstanding Indebtedness of the Company and its
Subsidiaries in excess of $1,500,000 individually or $3,000,000 in the
aggregate. Other than Permitted Liens (as defined in the Indenture), there are
no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company or any of its
Subsidiaries. For purposes of this Agreement, "INDEBTEDNESS" of any Person shall
have the meaning set forth in Section 1.1 of the Indenture.
-23-
(q) Absence of Litigation. Except as set forth on Schedule 3(q), there
is no action, suit, claim, arbitration, proceeding, inquiry or investigation,
whether at law or in equity, before or by any court, public board, Governmental
Authority (as defined below), self-regulatory organization or body pending or,
to the best knowledge of the Company, threatened against or affecting the
Company or any of the Company's Subsidiaries, any of their respective properties
or assets or any of the Company's or the Company's Subsidiaries' officers or
directors in their capacities as such except as would not result, individually
or in the aggregate, in a Material Adverse Effect. The foregoing includes,
without limitation, suits, actions, claims, arbitrations, proceedings or
investigations pending or threatened involving the prior employment of any of
the Company's or its Subsidiaries' employees, their use in connection with the
business of the Company or its Subsidiaries of any information or techniques
allegedly proprietary to such former employers or their obligations under any
agreements with prior employers. There is no outstanding judgment, order,
injunction or decree of any governmental or regulatory authority or arbitrator
against the Company, its Subsidiaries, or to the knowledge of the Company,
against any of their respective properties, assets or business except as would
not result, individually or in the aggregate, in a Material Adverse Effect.
Nothing set forth on Schedule 3(q) is reasonably expected to result in a
Material Adverse Effect.
(r) Insurance. The Company and each of its Material Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its Material
Subsidiaries are engaged. Neither the Company nor any Subsidiary has been
refused any insurance coverage that is material to the business of the Company
and that has been sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(s) Employee Relations, (i) The Company and its Subsidiaries believe
that their relations with their employees are good. No executive officer of the
Company (as defined in Rule 501(f) under the Securities Act), key employee or
group of employees has notified the Company that such officer, employee or group
intends to leave the Company or otherwise terminate such officer's, employee's
or group's employment with the Company. No executive officer or key employee of
the Company, to the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer and key employee does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters.
(ii) The Company and its Subsidiaries are in compliance with all
federal, state, provincial, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. There are no pending or, to the knowledge of the
Company, threatened employment discrimination charges or
-24-
complaints against or involving the Company or its Subsidiaries before any
federal, state, or local board, department, commission or agency, or unfair
labor practice charges or complaints, disputes or grievances affecting the
Company or its Material Subsidiaries.
(iii) Since the Company's inception, neither the Company nor its
Material Subsidiaries has experienced any labor disputes, union organization
attempts or work stoppage due to labor disagreements. There are no unfair labor
practice charges or complaints against the Company or its Material Subsidiaries
pending, or to the knowledge of the Company, threatened before the National
Labor Relations Board or any comparable state agency or authority. Except as set
forth on Schedule 3(s), there are no written or oral contracts, commitments,
agreements, understandings or other arrangements with any labor organization,
nor work rules or practices agreed to with any labor organization or employee
association, applicable to employees of the Company or any of its Subsidiaries,
nor is the Company or its Material Subsidiaries a party to, or bound by, any
collective bargaining or similar agreement; there is not, and since the
Company's inception there has not been, any representation of the employees of
the Company or its Material Subsidiaries by any labor organization and, to the
knowledge of the Company, there are no union organizing activities among the
employees of the Company or its Material Subsidiaries, and to the knowledge of
the Company, no question concerning representation has been raised or is
threatened respecting the employees of the Company or its Material Subsidiaries.
(t) Real Property and Other Assets. Except as set forth on Schedule
3(t), the Company and its Material Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Material Subsidiaries, in each case free and clear of all liens, encumbrances
and defects, except for Permitted Liens (as defined in the Indenture) and such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and any of
its Material Subsidiaries. Any real property and facilities held under lease by
the Company and any of its Material Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries. There exists no default, or any
event which upon notice or the passage of time, or both, would give rise to any
default, in the performance of the Company or by any lessor under any such
lease, nor, to the knowledge of the Company, is the landlord of any such lease
in default except where any such default would not have a Material Adverse
Effect. All tangible personal property owned by the Company and its Subsidiaries
has been maintained in good operating condition and repair, except (x) for
ordinary wear and tear, and (y) where such failure would not have a Material
Adverse Effect. All tangible assets leased by the Company or any of its
Subsidiaries are in the condition required by the terms of the lease applicable
thereto during the term of such lease and upon the expiration thereof.
(u) Intellectual Property Rights. (i) Schedule 3(u)(i) sets forth a
true and complete list of all (i) Registered or otherwise material Owned
Intellectual Property and (ii) material Licensed Intellectual Property other
than intellectual property rights licensed in conjunction with acquisition of
computer hardware, software, and other products used in the ordinary course of
business.
-25-
(ii) Except to the extent as would not have a Material Adverse
Effect, all Owned Intellectual Property is valid, subsisting and enforceable,
and is not subject to any outstanding order, judgment or decree restricting its
use or adversely affecting the Company's or its Subsidiaries' rights thereto. To
the knowledge of the Company and except to the extent as would not have a
Material Adverse Effect, all Licensed Intellectual Property is valid, subsisting
and enforceable, and is not subject to any outstanding order, judgment or decree
restricting its use or adversely affecting the Company's or its Subsidiaries'
rights thereto; provided, however, that the Company represents, without any
knowledge qualification, that no Material Adverse Effect could reasonably be
expected to be caused by the failure of any Licensed Intellectual Property to be
valid, subsisting or enforceable, nor could a Material Adverse Effect reasonably
be expected to be caused by any outstanding order, judgment or decree
restricting its use or adversely affecting the Company or its Subsidiaries'
rights thereto.
(iii) To the knowledge of the Company, neither the Company nor
any of its Subsidiaries is violating or has violated any Intellectual Property
rights. Except as set forth in Schedule 3(u)(iii), there are no suits, actions,
reissues, interferences, arbitrations, mediations, oppositions, cancellations,
Internet domain name dispute proceedings or other proceedings (collectively,
"SUITS") pending, or to the knowledge of the Company, threatened, concerning any
claim that the Company or any of its indemnitees have violated any Intellectual
Property rights.
(iv) Except as set forth on Schedule 3(u)(iv), there are no Suits
or claims pending, or to the knowledge of the Company, threatened, concerning
the Owned Intellectual Property, and, to the knowledge of the Company, no valid
basis for any such Suits or claims exists. Except as set forth on Schedule
3(u)(iv), to the knowledge of the Company, there are no Suits or claims pending
or threatened concerning the Licensed Intellectual Property or the right of the
Company or any Subsidiary to use the Licensed Intellectual Property, and no
valid basis for any such Suits or claims exists.
(v) The Company and its Subsidiaries own or otherwise hold valid
rights to use all Business Intellectual Property used or contemplated to be used
in the operation of the Business as currently conducted and as currently
contemplated to be conducted in the future, except as such failure would not
have a Material Adverse Effect. All such rights are free of all Liens (as
defined in the Indenture) and, except as set forth in Schedule 3(u)(v), are
fully assignable by the Company and its Subsidiaries to any Person, without
payment, consent of any Person or other condition or restriction. The completion
of the transactions contemplated by this Agreement will not alter or impair the
ownership or right of the Company or any Subsidiary to use any of the Business
Intellectual Property. The Business Intellectual Property constitutes all
material Intellectual Property, Computer Software, Computer Hardware and Data
that is used in, contemplated to be used in, or necessary for the conduct of the
Business as currently conducted and as currently contemplated to be conducted in
the future. To the knowledge of the Company, no Person is violating any Business
Intellectual Property.
(vi) The Company and its Subsidiaries have timely made all
filings and payments with the appropriate foreign and domestic agencies required
to maintain in subsistence all Registered Owned Intellectual Property, except
(other than with respect to any Collateral) where any failure to make such
payments or filings would not have a Material Adverse Effect. All documentation
necessary to confirm and effect the Company's and its Subsidiaries'
-26-
ownership of the Owned Intellectual Property, if acquired from other Persons,
has been recorded in the United States Patent and Trademark Office, the United
States Copyright Office and other official offices.
(vii) Except as set forth in Schedule 3(u)(vii), no Person other
than the Company and its Subsidiaries has any ownership interest in, or a right
to receive a royalty or similar payment with respect to, any of the Owned
Intellectual Property. Except as set forth in Schedule 3(u)(vii), neither the
Company nor any of its Subsidiaries has granted any options, licenses,
assignments or agreements of any kind relating to (i) ownership of rights in
Owned Intellectual Property; or (ii) the marketing or distribution of Owned
Intellectual Property.
(viii) Neither the Company nor any of its Subsidiaries has
entered into any agreement to indemnify any other Person against any charge of
infringement of any third party Intellectual Property, except for customary
infringement indemnities agreed to in the ordinary course of business and
included as part of the Company's or its Subsidiaries' contracts for the license
or sale of products or services. Neither the Company nor any of its Subsidiaries
has entered into any agreement granting any third party the right to bring
infringement actions or otherwise to enforce rights with respect to the
Intellectual Property of the Company or its Subsidiaries.
(ix) All inventors, including current or former employees of the
Company and its Subsidiaries, are appropriately named as inventors on any issued
patent or pending patent application listed in Schedule 3(u)(i) as being owned
by the Company or its Subsidiaries, as applicable. Notwithstanding the
foregoing, all such inventors have assigned their right, title and interest in
such issued patents or patent applications to the Company or its Subsidiaries,
as the case may be, or their predecessors in interest to such patents or patent
applications, except where the failure to so assign would not have a Material
Adverse Effect. The Company is not aware of any prior art material to the
patentability of the inventions claimed in any patents and pending patent
applications listed in Schedule 3(u)(i) as being owned by the Company or its
Subsidiaries that has not been disclosed to the U.S. Patent and Trademark
Office. For each patent, pending patent application, and disclosure listed in
Schedule 3(u)(i) as being owned by the Company or its Subsidiaries, each of the
Company and its Subsidiaries has complied with any applicable contractual
obligations, laws, rules, or regulations, regarding inventions conceived or
reduced to practice under a grant or other support from an agency or entity of
the U.S. government, in whole or in part, including without limitation any
requirements to elect to retain title to any federally funded invention except
where the failure to so comply would not have a Material Adverse Effect.
(x) Except as set forth on Schedule 3(u)(x), each former and
current employee, officer, contractor, agent and consultant of the Company and
its Subsidiaries has executed and delivered to the Company or a Subsidiary of
the Company an agreement providing for the assignment to and ownership by the
Company or a Subsidiary of the Company, as applicable, of all inventions and
work product produced by such Person in the course of his or her employment or
other engagement with the Company or any of its Subsidiaries. Except as set
forth in Schedule 3(u)(x), to the knowledge of the Company, no Person (other
than the Company or a Subsidiary of the Company) has any reasonable basis for
claiming any right, title or interest in and to any such Business Intellectual
Property. The Company is not aware that any
-27-
employees of the Company or any of its Subsidiaries is obligated under any
Contract, or subject to any judgment, decree or order of any court or
administrative agency, that would conflict with the Business in any material
respect.
(xi) The Company has no knowledge of any violation, or any claim
of any violation, by any of the Company's or its Subsidiaries' employees,
officers or consultants of any non-disclosure, non-competition,
non-solicitation, assignment of inventions or similar agreements or obligations
that such employee or consultant has with either the Company, any of its
Subsidiaries or any third party. The Company has not received any notice
alleging that any such violation has occurred.
(xii) The Company has taken all reasonable measures to protect
the secrecy and confidentiality of all Trade Secrets used in the Business
(collectively, "BUSINESS TRADE SECRETS"), including, but not limited to,
entering into appropriate confidentiality agreements with all officers,
directors, employees, and other Persons with access to the Business Trade
Secrets. None of the Business Trade Secrets has, to the knowledge of the
Company, been disclosed or has been authorized to be disclosed to any Person
other than to employees or agents of the Company or its Subsidiaries for use in
connection with the Business or pursuant to a confidentiality or non-disclosure
agreement that reasonably protects the interests of the Company and its
Subsidiaries in and to such matters. To the knowledge of the Company, no
unauthorized disclosure of any Business Trade Secrets has been made.
(xiii) All material Computer Software that is used in or held for
use in the Business is in machine readable form and is in good working condition
(normal wear and tear excepted). To the knowledge of the Company, such Computer
Software (i) contains no Disabling Devices; and (ii) other than those errors and
defects inherent in Computer Software that are generally known within the
information technology industry, has not suffered from any material and
recurring malfunctions since January 1, 2002 that has not been remedied in all
material respects.
(xiv) Except as set forth on Schedule 3(u)(xvii), there are no
Suits or claims that are pending, or, to the knowledge of the Company, that have
been threatened by or against the Company or any of its Subsidiaries, concerning
any Computer Software, Computer Hardware or Data that is used in or held for use
in the Business, and, to the knowledge of the Company, there is no valid basis
for any such Suits or claims.
(xv) For purposes of this Section 3(u), the following terms shall
have the following meanings:
"BUSINESS" means the respective businesses of the Company and the Company's
Subsidiaries.
"BUSINESS INTELLECTUAL PROPERTY" means the Owned Intellectual Property and the
Licensed Intellectual Property, and all Computer Software, Computer Hardware and
Data.
"COMPUTER HARDWARE" means any computer hardware, equipment and peripherals of
any kind and of any platform, including desktop and laptop personal computers,
handheld computerized devices, servers, mid-range and mainframe computers,
process control and distributed control systems, and all network and other
communications and telecommunications equipment.
-28-
"COMPUTER SOFTWARE" means any and all computer programs, including operating
system and applications software, implementations of algorithms, and program
interfaces, whether in source code or object code form (including, but not
limited to, all of the foregoing that is installed on the Computer Hardware) and
all documentation, including user manuals relating to the foregoing.
"DATA" means all information and data, whether in printed or electronic form and
whether contained in a database or otherwise.
"DISABLING DEVICES" means computer software viruses, time bombs, logic bombs,
Trojan horses, trap doors, back doors, or other computer instructions,
intentional devices or techniques that are designed to threaten, infect,
assault, vandalize, defraud, disrupt, damage, disable, maliciously encumber,
hack into, incapacitate, infiltrate or slow or shut down a computer system or
any component of such computer system, including any such device affecting
system security or compromising or disclosing user data.
"INTELLECTUAL PROPERTY" means all (a) foreign and domestic trademarks, service
marks, brand names, certification marks, collective marks, d/b/a's, Internet
domain names, logos, symbols, trade dress, assumed names, fictitious names,
trade names, and other indicia of origin, all applications and registrations for
all of the foregoing, and all goodwill associated therewith and symbolized
thereby, including, but not limited to, all extensions, modifications and
renewals of same; (b) foreign and domestic inventions, discoveries and ideas,
whether patentable or not, and all patents, registrations, and applications
therefor, including, but not limited to, divisions, continuations and
continuations-in-part and including, but not limited to, extensions and
reissues; (c) Trade Secrets; (d) foreign and domestic published and unpublished
works of authorship, whether copyrightable or not, copyrights therein and
thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof; and (e) all other intellectual
property or proprietary rights and claims or causes of action arising out of or
related to any infringement, misappropriation or other violation of any of the
foregoing, including, but not limited to, rights to recover for past, present
and future violations thereof.
"LICENSED INTELLECTUAL PROPERTY" means Intellectual Property that the Company
and its Subsidiaries are licensed or otherwise permitted by other Persons to
use.
"OWNED INTELLECTUAL PROPERTY" means Intellectual Property owned by the Company
or its Subsidiaries.
"REGISTERED" means issued, registered, renewed or the subject of a pending
application.
"TRADE SECRETS" means confidential and proprietary information, trade secrets
and know-how, including, but not limited to, processes, schematics, databases,
formulae, drawings, prototypes, models, designs and customer lists.
(v) Compliance with Applicable Laws. (i) Each of the Company and its
Subsidiaries are in compliance with all applicable Legal Requirements,
including, without limitation, laws, statutes, codes, regulations, standards
(including consent decrees and administrative orders) at any time in effect
relating to the environment, hazardous materials and occupational safety and
health and to the status of the Company or its Subsidiaries as a contractor with
any Governmental Authority, except for such instances of noncompliance as
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would not, individually or in the aggregate, have a Material Adverse Effect.
Except as set forth on Schedule 3(v), no investigation or review by any
Governmental Authority with respect to the Company or its Subsidiaries is
pending or, to the knowledge of the Company, threatened. For purposes of this
Agreement, "LEGAL REQUIREMENT" means any constitution, act, statute, law,
ordinance, treaty, rule, regulation or official interpretation of, or judgment,
injunction, order, decision, decree, license, permit or authorization issued by,
any Governmental Authority, and "GOVERNMENTAL AUTHORITY" means any government,
court, regulatory, self-regulatory, administrative agency or commission or other
governmental agency, authority or instrumentality, domestic or foreign, of
competent jurisdiction.
(ii) There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
interfere with or prevent compliance or continued compliance by the Company or
its Subsidiaries with any laws or statutes, regulation, code, plan, order
(including consent decrees and administrative orders), judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except for such instances of noncompliance as would not, individually or in the
aggregate, have a Material Adverse Effect, relating to pollution or protection
of the environment or, to the knowledge of the Company, which may give rise to
any common law or legal liability of the Company or its Subsidiaries including
liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., as amended, or similar
federal, state, county, municipal, or local laws, or otherwise form the basis of
any claim, action, demand, suit, proceeding, hearing, notice of violation, study
or investigation against or affecting the Company or its Subsidiaries, based on
or related to the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment of any pollutant,
contaminant, chemical, or industrial, toxic or hazardous substance or waste
("HAZARDOUS SUBSTANCE").
(iii) There has been no release, discharge, deposit, disposal or
contamination (collectively "Release") of or by a Hazardous Substance caused by
the Company or any of its Subsidiaries or any person or entity lawfully acting
by or through the Company or any of its Subsidiaries on, under or contiguous to
any property owned or leased by the Company or any of its Subsidiaries, except
for such instances of Release as would not, individually or in the aggregate,
have a Material Adverse Effect, and to the knowledge of the Company, none of
such properties has been used at any time as a landfill, storage, or waste
disposal site.
(iv) To the knowledge of the Company, no Hazardous Substance
generated, manufactured, processed, used, treated, or stored by the Company, its
Subsidiaries or any Person lawfully acting by or through the Company or its
Subsidiaries has been disposed of or treated at any site or location, other than
property leased or owned by the Company or its Subsidiaries, that was not
authorized or licensed to receive such materials for disposal or treatment, or
at any site or location for which the Company or any of its Subsidiaries has
received a notice of potential liability or request for information, or at any
site or location that has been placed or proposed to be placed on any cleanup
list or is the subject of a claim, order or directive or consent (including
consent decrees and administrative orders), request, settlement or other demand
from any person or entity for removal, remedial, response, corrective action,
abatement or cleanup.
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(w) Subsidiary Rights. Except as set forth on Schedule 3(w), the
Company or one of its Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.
(x) Tax Status. Except as would not be reasonably expected to have a
Material Adverse Effect, the Company and each of its Subsidiaries (i) has made
or filed all foreign, federal, state, local and provincial income and all other
tax returns, reports and declarations required to be made or filed by it by any
jurisdiction to which it is subject and all such tax returns, reports and
declarations are complete and accurate in all material respects, (ii) has paid
all taxes and other governmental assessments and charges that are due (whether
or not shown as due) and payable by it on such returns, reports and
declarations, except those being contested in good faith for which adequate
reserves have been accrued on the Company's latest balance sheet and (iii) has
set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply and which such taxes are not yet due and payable. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction. There are no liens with respect to any taxes upon any of
the assets or properties of the Company or any of its Subsidiaries other than
for taxes that are not yet due and payable. The Company is not a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended.
(y) Ranking of Notes. No Indebtedness of the Company or any of its
Subsidiaries is senior to the Notes in right of payment, whether with respect of
payment of redemptions, interest, damages or upon liquidation or dissolution or
otherwise. Except as set forth on Schedule 3(y), no Indebtedness of the Company
or any of its Subsidiaries is pari passu with the Notes in right of payment,
whether with respect of payment of redemptions, interest, damages or upon
liquidation or dissolution or otherwise.
(z) Independent Accountants. Deloitte & Touche LLP, who have certified
the consolidated financial statements of the Company as of July 21, 2005, are
independent public accountants within the meaning of the Securities Act.
(aa) Investment Company. Neither the Company nor any entity which it
"controls" (as defined by the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT")) is, and, after giving effect to the offering and sale
of the Notes and Warrants and the application of the proceeds thereof, will be,
required to seek an order permitting registration, under the Investment Company
Act. No entity, which is organized under any "State" (as defined in the
Investment Company Act) and which is "controlled" (as defined by the Investment
Company Act) by the Company, is required to register under the Investment
Company Act. To the Company's knowledge, no entity which "controls" (as defined
by the Investment Company Act) the Company is registered, or is required to
register or seek an order permitting registration, under the Investment Company
Act.
(bb) Trust Indenture Act. Assuming the accuracy of the representations
and warranties of the Buyers contained in Section 2 hereof and the Buyers'
compliance with the agreements set forth therein, it is not necessary in
connection with the offer, issuance, sale and
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delivery of the Securities in the manner contemplated by this Agreement and the
other Transaction Documents to register the offer or sale of any of the
Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(cc) Dilutive Effect. The Company understands and acknowledges that
the number of Warrant Shares issuable upon exercise of the Warrants will
increase in certain circumstances. The Company further acknowledges that its
obligation to issue Warrant Shares upon exercise of the Warrants in accordance
with this Agreement and the Warrants is absolute and unconditional regardless of
the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company.
(dd) Xxxxxxxx-Xxxxx Act. The Company, each of its Subsidiaries and, to
the knowledge of the Company, each of their respective directors and executive
officers, in their capacities as such, are in compliance in all material
respects with any and all applicable requirements of the Xxxxxxxx-Xxxxx Act of
2002 that are effective as of the date hereof, and any and all applicable rules
and regulations promulgated by the SEC thereunder that are effective as of the
date hereof.
(ee) Internal Accounting Controls. The Company and each of its
Material Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.
(ff) Transfer Taxes. On the Closing Date, all applicable stock
transfer or other similar taxes (excluding, for the avoidance of doubt, any
income or similar taxes of the Buyers) that are required to be paid in
connection with the sale and transfer of the Securities to be sold to each Buyer
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been complied with.
(gg) Material Subsidiaries. No Subsidiary other than the Spectrum
Entities (as defined in the Indenture) holds material Communication
Authorizations (as defined below) issued by the FCC or any Collateral.
(hh) Communication Authorizations. The Company and the Subsidiaries
have filed with the FCC all reports, documents, instruments, information and
applications required to be filed pursuant to the rules and regulations of the
FCC, except where the failure to so file would not have a Material Adverse
Effect. Except as would not have a Material Adverse Effect, all Communications
Authorizations are in full force and effect and, to the knowledge of the
Company, there are no pending modification, amendment or revocation proceedings
initiated by the FCC or any equivalent authority in any jurisdiction in which
the Company operates which, if determined against the Company, would have a
Material Adverse Effect. Fees due and payable to domestic and foreign
Governmental Authorities pursuant to the rules governing
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Communications Authorizations held by the Company and its Subsidiaries have been
timely paid, except as would not have a Material Adverse Effect. Each of the
Company and the Subsidiaries is in compliance with the terms of the
Communications Authorizations, as applicable, and there is no condition of which
the Company or any of the Subsidiaries has received notice, nor, to the
knowledge of the Company, is there any proceeding threatened, by any domestic or
foreign governmental authority, which would cause the termination, suspension,
cancellation or non-renewal of any of the Communications Authorizations, or the
imposition of a penalty or fine by any domestic or foreign Governmental
Authority, except, in each case, as would not have a Material Adverse Effect.
The Company and the Subsidiaries have all necessary consents, authorizations and
approvals to utilize the Communication Authorizations in the manner and for the
purposes described in the due diligence materials previously provided by or on
behalf of the Company to each Buyer. For purposes of this Agreement,
"COMMUNICATION AUTHORIZATIONS" means all licenses, permits, orders, spectrum
leasing arrangements and FCC approvals thereof or other authorizations issued to
the Company and its Subsidiaries by the FCC, and any equivalent authority in
each other jurisdiction in which the Company or any of its Subsidiaries operates
or as presently proposed to be operated.
(i) Schedule 3(hh)(i) accurately identifies each of the FCC
Licenses (as defined in the Indenture) held by the Company or its Subsidiaries.
Each of the FCC Licenses described in Schedule 3(hh)(i) is held by a Spectrum
Entity, except as may be set forth on Schedule 3(hh)(i), is on the date hereof
in effect, has not been revoked, cancelled or forfeited, has not expired, is not
subject to any conditions other than conditions that appear on the face of such
FCC License or conditions that are otherwise generally applicable to licenses
issued by the FCC for the same service.
(ii) Schedule 3(hh)(ii) separately and accurately identifies each
of the Spectrum Leases (as defined in the Indenture) held by the Company and its
Subsidiaries. Each of the Spectrum Leases identified in Schedule 3(hh)(ii)
authorizes the Spectrum Entity designated as the lessee under such Spectrum
Lease to use spectrum in the service and the channel block set forth on Schedule
3(hh)(ii). To the knowledge of the Company, each lessor of the Spectrum Leases
set forth on Schedule 3(hh)(ii) is the holder of a license from the FCC (the
"Underlying License") authorizing such lessor to operate in the service and on
the channel block designated for each Spectrum Lease and within a geographic
area that includes the geographic are authorized by the Spectrum Lease; and,
except as may be set forth on Schedule 3(hh)(ii), to the knowledge of the
Company, the Underlying License for each such Spectrum Lease is on the date
hereof in effect, has not been revoked, cancelled or forfeited, and has not
expired. Except as may be set forth on Schedule 3(hh)(ii), all Spectrum Leases
requiring the approval of the FCC under the FCC's spectrum leasing rules have
received such approval except where the failure to do so would not have a
Material Adverse Affect on the Company and its Subsidiaries taken as a whole.
(ii) Contracts. Schedule 3(ii) contains a true, correct and complete
list or description of all current written contracts, agreements, arrangements
and other instruments ("CONTRACTS") to which the Company or any of its
Subsidiaries is a party which: (a) are with any Governmental Authority (other
than for Communications Authorizations), (b) are material to the Business
Intellectual Property, including but not limited to Contracts granting the
Company or its Subsidiaries rights to use the Business Intellectual Property and
trademark coexistence
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agreements, trademark consent agreements and nonassertion agreements, or (c) are
otherwise material to the business, results of operations, financial condition
or prospects of the Company and its Subsidiaries taken as a whole. All Contracts
are valid, binding and in full force and effect as to the Company and its
Subsidiaries, and there is no default, or any event which upon notice or the
passage of time, or both, would give rise to any material default, in the
performance of the Company or its Subsidiaries nor, to the knowledge of the
Company, in the performance of any other party to any such Contracts except
where such default would not have a Material Adverse Effect. The Company has not
entered into and is not planning to enter into any side letters, contracts or
other agreements with any of the Buyers other than the Transaction Documents.
Neither the Company nor any of its Subsidiaries is currently a party to any oral
contract of the nature that would require disclosure under this Section 3(ii) if
such oral contract were in writing.
(jj) Benefit Plans. (i) Each Benefit Plan intended to be tax qualified
under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended (the "CODE") (i) has been determined by the Internal Revenue Service
(the "IRS") to be tax qualified under Sections 401(a) and 501(a) of the Code
and, since such determination, no amendment to or failure to amend any such
Benefit Plan and no other event or circumstance has occurred that could
reasonably be expected to adversely affect its tax qualified status, and (ii)
has or will be submitted to the IRS for a determination that it continues to be
tax qualified in accordance with GUST (as defined in Revenue Procedure 2001-55,
2001-49 I.R.B. 552 (Nov. 15, 2001)) before the end of the GUST remedial
amendment period (as set forth in that same Revenue Procedure or subsequent
guidance from the IRS). There have been no prohibited transactions within the
meaning of Section 4975 of the Code or Section 406 of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), with respect to
any Benefit Plan, except to the extent there is an exemption available under
Section 4975(d) of the Code or Section 408 of ERISA, or a class or individual
exemption issued by the Department of Labor. For purposes of this Agreement,
"BENEFIT PLAN" shall mean any pension, retirement, savings, deferred
compensation or profit-sharing plan, any stock option, stock appreciation, stock
purchase, performance share, bonus or other incentive plan, severance plan,
health, group insurance or other welfare plan, or other similar plan (whether
written or otherwise) and any "employee benefit plan" within the meaning of
Section 3(3) of ERISA, under which the Company has any current or future
obligation or liability (including any potential, contingent or secondary
liability under Title IV of ERISA) or under which any employee or former
employee (or beneficiary of any employee or former employee) of the Company has
or may have any current or future right to benefits (the term "plan" shall
include any contract, agreement (including an employment or independent
contractor agreement), policy or understanding.
(ii) There are no actions, claims, audits, lawsuits or
arbitrations pending, or, to the knowledge of the Company, threatened, with
respect to any Benefit Plan or the assets of any Benefit Plan. Except as set
forth in Schedule 3(jj), each Benefit Plan has been administered in all
material respects in accordance with its terms and with all applicable Legal
Requirements (including, without limitation, the Code and ERISA). There are no
applications pending with the IRS or the United States Department of Labor under
any voluntary compliance program regarding any Benefit Plan. Each of the Company
and its Subsidiaries has satisfied all funding, compliance and reporting
requirements for all Benefit Plans. With respect to each Benefit Plan, if
applicable, each of the Company and its Subsidiaries has paid all contributions
in accordance with the terms of the applicable Benefit Plan (including employee
salary reduction
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contributions) and all insurance premiums that have become due and any such
expense accrued but not yet due has been properly reflected in the Financial
Statements.
(iii) The consummation of the transactions contemplated by this
Agreement will not (A) entitle any employee or independent contractor of the
Company or its Subsidiaries to severance pay or termination benefits, (B)
accelerate the time of payment or vesting, or increase the amount of
compensation due to any current or former employee or independent contractor of
the Company or its Subsidiaries, (C) obligate the Company or any of its
affiliates to pay or otherwise be liable for any compensation, vacation days,
pension contribution or other benefits to any current or former employee,
consultant, agent or independent contractor of the Company or its Subsidiaries
for periods before the Closing Date or the Buyers' Option Purchase Date, (D)
require assets to be set aside or other forms of security to be provided with
respect to any liability under a Benefit Plan, or (5) result in any "parachute
payment" (within the meaning of Section 280G of the Code) under any Benefit
Plan.
(iv) No Benefit Plan is subject to the provisions of Section 412
of the Code or Part 3 of Subtitle B of Title I of ERISA. No Benefit Plan is
subject to Title IV of ERISA and no Benefit Plan is a "multiemployer plan"
(within the meaning of Section 3(37) of ERISA). Since inception, neither the
Company, its Subsidiaries, nor any business or entity treated as a single
employer with the Company or its Subsidiaries for purposes of Title IV of ERISA
contributed to or was obliged to contribute to a pension plan that was at any
time subject to Title IV of ERISA.
(kk) Books and Records. The books of account, ledgers, order books,
records and documents of the Company and its Subsidiaries (in the case of any
acquired Subsidiary, since the date of its acquisition) accurately and
completely reflect all information relating to the respective businesses of the
Company and its Subsidiaries, the nature, acquisition, maintenance, location and
collection of each of their respective assets, and the nature of all
transactions giving rise to material obligations or accounts receivable of the
Company or its Subsidiaries, as the case may be, except where the failure to so
reflect such information would not have a Material Adverse Effect. The minute
books of the Company and its Subsidiaries (in the case of any acquired
Subsidiary, since the date of its acquisition) contain accurate records in all
material respects of all meetings and accurately reflect in all material
respects all other actions taken by the stockholders, boards of directors and
all committees of the boards of directors, and other governing Persons of the
Company and its Subsidiaries, respectively.
(ll) Money Laundering. The Company and its Subsidiaries are in
compliance with, and have not previously violated, the USA PATRIOT ACT of 2001
(the "PATRIOT ACT") and all other applicable U.S. and non-U.S. anti-money
laundering laws and regulations, including, but not limited to, the laws,
regulations and Executive Orders and sanctions programs administered by the U.S.
Office of Foreign Assets Control ("OFAC"), including, but not limited, to (i)
Executive Order 13224 of September 23, 2001 entitled, "Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism" (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31
CFR, Subtitle B, Chapter V (collectively, the "ANTI-MONEY LAUNDERING/OFAC
LAWS").
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(mm) Business Practices. Neither the Company, its Subsidiaries, nor
any Person acting on behalf of the Company or its Subsidiaries has paid or
delivered, or promised to pay or deliver, directly or indirectly through any
other Person, any monies or anything else of value to any government official or
employee of any political party, for the purpose of inducing or rewarding any
action by the official favorable to the Company or its Subsidiaries in violation
of applicable laws.
(nn) Pledged Entities. The Company is the beneficial owner of all of
the capital stock or other ownership interests of each of the Pledged Entities.
All domestic spectrum assets are owned by the Pledged Entities and their
respective Domestic Restricted Subsidiaries that are Guarantors. Neither NextNet
Wireless, Inc., Clearwire LLC nor any of their respective Subsidiaries owns any
Communications Authorizations.
(oo) Eagle River Holdings, LLC. Eagle River Holdings, LLC is a XxXxx
Person (as defined in the Indenture).
4. COVENANTS.
(a) Reasonable Best Efforts. Each party shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.
(b) Form D and Blue Sky. The Company agrees to file a Form D with
respect to the Notes, the Guarantees and Warrants as required under Regulation D
and to provide a copy thereof to counsel for the Buyers promptly after such
filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or "Blue Sky" laws of the
states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date. The Company shall make all filings and reports relating to
the offer and sale of the Securities required under applicable securities or
"Blue Sky" laws of the states of the United States.
(c) Use of Proceeds. Other than the Initial Collateral Funds and
Additional Collateral Funds to be paid to the Collateral Agent pursuant to
Section 4(j), the proceeds from the sale of the Notes, Guarantees and Warrants
will be used by the Company for any business conducted or proposed to be
conducted by the Company and its Subsidiaries (as defined in the Indenture) on
the date hereof and other businesses reasonably related, complementary or
ancillary thereto or a reasonable extension or expansion thereof.
Notwithstanding the preceding sentence, the Company will not use the proceeds
from the sale of the Notes, Guarantees or Warrants for the repayment of any
outstanding Indebtedness of the Company or any of its Subsidiaries if such
repayment is prohibited by the Indenture or for the redemption or repurchase of
any of the Company's or its Subsidiaries' equity securities, except as permitted
under the Indenture, or transfer such proceeds to an Unrestricted Subsidiary (as
defined in the Indenture).
(d) Financial Information. For so long as any Securities remain
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, the
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Company will, during any period in which it is not subject to Section 13 or
15(d) under the United States Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), make available to the Buyer and any holder of Securities in
connection with any sale thereof and any prospective purchaser of Securities and
securities analysts, in each case upon request, the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Securities Act (or
any successor thereto).
(e) Fees and Expenses.
(i) The Company shall pay or reimburse, on the Closing Date, the
reasonable and documented expenses of all legal counsel to the Buyers (including
Xxxxxxx Xxxx & Xxxxx LLP and Shearman and Sterling LLP), incurred in connection
with the negotiation, due diligence and documentation of the Transaction
Documents in an aggregate amount not to exceed $850,000. Except as otherwise set
forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Notes and Warrants to the
Buyers.
(ii) The Company shall pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder, including
without limitation, all fees (including fees of its counsel), costs and expenses
(A) incident to the preparation, issuance, execution, authentication and
delivery of the Securities and (B) incurred in connection with the registration
or qualification and determination of eligibility for investment of the
Securities under United States federal and state laws.
(f) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Holder (as defined in the Registration Rights
Agreement) to an Institutional Accredited Investor in connection with a bona
fide margin agreement or other loan or financing arrangement that is secured by
the Securities; provided, that any such pledgee shall not foreclose on such
pledge other than in compliance with the transfer restrictions set forth in
Section 2(h) hereof. The pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document. The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request
in connection with a pledge of the Securities to such pledgee by a Buyer.
(g) Reservation of Shares. The Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, free
of pre-emptive rights (except those that have been previously waived), after the
Closing Date, a number of shares of Class A Common Stock sufficient for the
purpose of enabling the Company to satisfy all obligations to issue the Warrant
Shares upon exercise of the Warrants.
(h) Conduct of Business. The business of the Company and its
Subsidiaries shall not be conducted in violation of any Legal Requirement,
except where such violations would not result, either individually or in the
aggregate, in a Material Adverse Effect.
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(i) Additional Notes; Variable Securities; Dilutive Issuances. For so
long as any Buyer has the right to purchase any Additional Notes, the Company
will not issue any Notes or Guarantees other than to the Buyers (including any
Subsequent Purchasers) as contemplated hereby and in the Indenture, and the
Company shall not issue any other securities that would cause a breach or
default under the Notes or the Guarantees. For so long as any Warrants remain
outstanding or any Buyer has the right to purchase any Additional Warrants, the
Company shall not, in any manner, issue or sell any rights, warrants or options
to subscribe for or purchase Common Stock or directly or indirectly convertible
into or exchangeable or exercisable for Class A Common Stock at a price that may
vary with the market price of the Class A Common Stock, including by way of one
or more reset(s) to any fixed price unless (i) the conversion, exchange or
exercise price of any such security cannot be less than the then applicable
Exercise Price (as defined in the Warrants) with respect to the Class A Common
Stock into which any Warrant is exercisable or (ii) the anti-dilution provisions
of the Warrants operate to adjust the Exercise Price of the Warrants as if such
security was issued at such price as of the date such price is reset or
adjusted. For so long as any Warrants remain outstanding or any Buyer has the
right to purchase any Additional Warrants, the Company shall not, in any manner,
enter into or affect any Dilutive Issuance (as defined in the Warrants) if the
effect of such Dilutive Issuance is to cause the Company to be required to issue
upon exercise of any Warrant any shares of Class A Common Stock in excess of
that number of shares of Class A Common Stock which the Company may issue upon
exercise of the Warrants, including the Additional Warrants, without breaching
the Company's obligations under the rules or regulations of the principal market
on which the shares of Class A Common Stock are listed for trading, if any.
(j) Deposit of Collateral Funds; Security Interest. On the Closing
Date, the portion of the Purchase Price constituting the Initial Collateral
Funds shall be paid by the Buyers directly to the Collateral Agent, and on any
Buyers' Option Purchase Date, the portion of the Buyers' Option Purchase Price
constituting the Additional Collateral Funds shall be paid by the applicable
Buyer directly to the Collateral Agent. The Collateral Agent, on behalf of the
Buyers, shall have a valid perfected first priority Lien in the Collateral
Account and all cash, cash equivalents, instruments, securities (including any
Governmental Securities) and other financial or other assets which are
maintained from time to time in the Collateral Account.
(k) General Solicitation. None of the Company, any of its affiliates
(for purposes of this Section 4(k), as defined in Rule 501(b) under the
Securities Act) or any person acting on behalf of the Company or such affiliate
will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of
Regulation D, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(l) Integration. None of the Company, any of its affiliates (for the
purpose of this Section 4(l), as defined in Rule 501(b) under the Securities
Act) or any person acting on behalf of the Company or such affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which will be integrated with the
sale of the Securities in a manner which would require the registration under
the Securities Act of the Securities and the Company will take all action that
is appropriate or
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necessary to assure that its offerings of other securities will not be
integrated for purposes of the Securities Act.
(m) Publicity. Prior to the effective date of the registration
statement relating to the Qualified IPO (as defined in the Indenture)(and except
as may be required to be set forth in any registration statement filed or any
prospectus delivered in connection with such offering), the Buyers shall not
issue any press release or otherwise make any public statement, filing or other
communication related to this Agreement, any other Transaction Document, or any
of the transactions contemplated hereby or thereby, without the prior consent of
the Company (such consent not to be unreasonably withheld), except if such
disclosure is required by law or the rules of any national stock exchange or
automated quotation system, in which case the disclosing party shall promptly
provide the other parties with prior notice of such public statement, filing or
other communication. Notwithstanding the foregoing, the Company shall not (a)
prior to the effective date of the registration statement relating to the
Qualified IPO (and except as may be required to be set forth in any registration
statement filed or any prospectus delivered in connection with such offering),
publicly disclose the name of any Buyer or include the name of any Buyer,
without the prior written consent of such Buyer in any other press release or
public statement or filing, except to the extent the Company has received a
legal opinion that such disclosure is required by law, in which case the Company
shall provide such Buyer with prior notice of such disclosure or (b) except if
such disclosure is required by law, disclose the name of any Buyer or include
the name of any Buyer without the prior written consent of such Buyer (which
consent shall not be unreasonably withheld or delayed), to any third party or in
any materials prepared for any third party. This Section 4(m) shall not apply to
the provision of documentation to potential investors in connection with any
potential financings, mergers or acquisitions involving the Company.
(n) Withholding Tax. Each Buyer shall deliver to the Company either
(i) two (2) copies of a properly completed and duly executed applicable Internal
Revenue Service Form W-8 (claiming an exemption under an applicable United
States income tax treaty) or W-9 that establishes a complete exemption from
United States withholding tax or (ii) a certificate to the effect that such
Buyer is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, is
not a "10-percent shareholder" within the meaning of Section 881(c)(3)(B) of the
Code and is not a controlled foreign corporation as described in Section
881(c)(3)(C) of the Code, and two (2) copies of a properly completed and duly
executed Internal Revenue Service Form W-8BEN or Form W-8IMY transmitting one or
more Form W-8BENs. Each Buyer will provide replacement forms on the obsolescence
of such forms or inaccuracy of any information thereon to the extent that it may
lawfully do so.
(o) Capital Stock. Prior to a Qualified IPO or a Change of Control,
the Company shall not amend any voting powers, designations, preferences, rights
and qualifications, limitations or restrictions of any class of the capital
stock of the Company in a manner that would be materially adverse to any Buyer
and that treats such Buyer in a different manner than (i) the other Buyers
holding Class A common stock, or securities convertible into or exercisable or
exchangeable for Class A common stock or (ii) other holders of Class A common
stock of the Company, in each case without the prior written consent of such
Buyer.
-39-
(p) Disclosure of Material Information. From and after the occurrence
of an effective registration statement of the Company under the Securities Act
or the Exchange Act, no Buyer shall be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of its
respective officers, directors, employees or agents, that is not disclosed in
the filings made by the Company with the SEC in compliance with Regulation FD
unless such Buyer (i) has been provided with an opportunity to decline receipt
of such information and (ii) has affirmatively agreed to receive such
information as evidence by its execution of a confidentiality agreement with
respect to such material, nonpublic information prior to its receipt of any such
material, nonpublic information. For the purposes of this paragraph, material,
nonpublic information shall not include any information (i) which the Company is
contractually obligated to provide such Buyer pursuant to such Buyer's rights
under any Transaction Document or (ii) which such Buyer obtains or is privy to
because such Buyer has representation (direct or indirect) on the Company's
Board of Directors.
(q) Compliance With Laws. The Company and its Subsidiaries shall at
all times be in compliance with the Foreign Corrupt Practices Act; the PATRIOT
Act, and all other applicable U.S. and non-U.S. anti-money laundering laws and
regulations; and the laws, regulations and Executive Orders and sanctions
programs administered by the OFAC, including, without limitation, the
"Anti-Money Laundering/OFAC Laws".
(r) FCC Legal Opinion. The Company shall use commercially reasonable
efforts to obtain within thirty (30) days from the Closing, an opinion of
counsel as to FCC regulatory matters in a form which shall be reasonably
satisfactory to Xxxxxxx Xxxx & Xxxxx LLP.
(s) MHz POPS Calculation. The Company shall calculate MHz POPS (as
defined in the Indenture) in a manner consistent with past practice and
consistent with the manner used to calculate MHz POPS on the attached Schedule
4(s). Schedule 4(s) was prepared in good faith as an estimate of the Company's
current MHz POPS, it being understood that estimates are inherently imprecise
and that actual MHz POPS may vary; provided, however that the MHz POPS
thresholds used in the Indenture were negotiated based upon the estimate of MHz
POPS in Schedule 4(s).
5. REGISTER.
The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Warrants, in which the Company shall
record the name and address (including facsimile number) of the Person in whose
name the Warrants have been issued (including the name and address (including
facsimile number) of each transferee) and Warrant Shares issuable upon exercise
of the Warrants held by such Person. The Company shall keep the register open
and available at all times during business hours for inspection of any Buyer or
its legal representatives.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Initial
Notes and the related Initial Warrants to each Buyer at the Closing or to issue
and sell the Additional Notes
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and the related Additional Warrants to each Buyer on the Buyers' Option Purchase
Date, as applicable, is subject to the satisfaction, at or before the Closing
Date or the Buyers' Option Purchase Date, as applicable, of each of the
following conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion by
providing each Buyer with prior written notice thereof:
(a) Such Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.
(b) Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price for the Initial Notes and the related Initial
Warrants being purchased by such Buyer at the Closing (less the amounts withheld
pursuant to Section 4(e)(i)), or such Buyer shall have delivered to the Company
the Buyers' Option Purchase Price for the Additional Notes and the related
Additional Warrants being purchased by such Buyer at the closing of the purchase
on the Buyers' Option Purchase Date, as applicable, by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company.
(c) The representations and warranties of such Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date or the Buyers' Option Purchase Date, as applicable, as though made at that
time (except for representations and warranties that speak as of a specific
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date or the Buyers' Option Purchase Date, as applicable.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
The obligation of each Buyer hereunder to purchase the Initial Notes
and the related Initial Warrants at the Closing or to purchase the Additional
Notes and the related Additional Warrants on the Buyers' Option Purchase Date,
as applicable, is subject to the satisfaction, at or before the Closing Date or
the Buyers' Option Purchase Date, as applicable, of each of the following
conditions, provided that these conditions are for each Buyer's sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the
Company with prior written notice thereof:
(a) The Company and the Guarantors (as applicable) shall have executed
and delivered to such Buyer (i) each of the Transaction Documents, and (ii) the
Initial Notes and the related Initial Warrants being purchased by such Buyer at
the Closing and the Additional Notes and the related Additional Warrants being
purchased by such Buyer on the Buyers' Option Purchase Date, as applicable.
(b) Such Buyer shall have received the opinions of (i) Xxxxxxxx &
Xxxxx LLP, special counsel for the Company and the Guarantors, in substantially
the form of Exhibit I-1 attached hereto and (ii) Xxxxx Xxxxxx Xxxxxxxx LLP, the
general corporate counsel for the Company and the Guarantors, in substantially
the form of Exhibit I-2 attached hereto.
(c) The Company shall have delivered to such Buyer a certificate
evidencing the formation and good standing of the Company and each of its
Domestic Restricted
-41-
Subsidiaries in such entity's jurisdiction of formation issued by the Secretary
of State (or comparable office) of such jurisdiction, as of a date within ten
(10) days of the Closing Date or the Buyers' Option Purchase Date, as
applicable.
(d) The Company shall have delivered to such Buyer a certificate
evidencing the Company's qualification as a foreign or extra-provincial
corporation and good standing issued by the Secretaries of State (or comparable
office) of each of the jurisdictions listed on Schedule 7(d) as of a date within
twenty (20) days of the Closing Date or the Buyers' Option Purchase Date, as
applicable.
(e) The Company shall have delivered to such Buyer a certificate,
executed by the Secretary of the Company and dated as of the Closing Date or the
Buyers' Option Purchase Date, as applicable, as to (i) the resolutions
consistent with Section 3(b) as adopted by the Company's Board of Directors in a
form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
and (iii) the Bylaws, each as in effect at the Closing or the Buyers' Option
Purchase Date, as applicable, in the form attached hereto as Exhibit J.
(f) The representations and warranties of the Company and the
Guarantors (as applicable) shall be true and correct as of the date when made
and as of the Closing Date or Buyers' Option Purchase Date, as applicable, as
though made at that time (except for representations and warranties that speak
as of a specific date) and the Company and the Guarantors (as applicable) shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company and the Guarantors (as applicable) at
or prior to the Closing Date or Buyers' Option Purchase Date, as applicable.
Such Buyer shall have received a certificate, executed by an authorized officer
of the Company and each Guarantor, dated as of the Closing Date or Buyers'
Option Purchase Date, as applicable, to the foregoing effect and as to such
other matters as may be reasonably requested by such Buyer in the form attached
hereto as Exhibit K. Notwithstanding the foregoing, at any Subsequent Closing or
at any closing of a sale of Additional Notes, the Company may deliver updated
disclosure schedules to reflect any updates or developments that occurred after
the initial Closing ("UPDATED SCHEDULES") and such Updated Schedules shall be
deemed to update the disclosure schedules solely with respect to any Subsequent
Closing or closing of a sale of any Additional Notes. The Updated Schedules
shall be deemed to qualify the representations and warranties made as of the
Buyers' Option Purchase Date and any certification as to their accuracy and
completeness shall be subject to such qualification. Notwithstanding the
foregoing, nothing contained in the Updated Schedules shall be deemed to cure
any breach of the representations and warranties made herein with respect to the
initial or any prior closing.
(g) The Collateral Agent shall have accepted for deposit the Initial
Collateral Funds or the Additional Collateral Funds, as applicable.
(h) The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the
Securities and consummation of all other transactions contemplated hereby.
-42-
(i) In accordance with the terms of the Security Documents, the
Company shall have:
(1) filed such financing statements and other documents
in such offices as the Collateral Agent (as defined in the Security Agreement)
may request to perfect the security interests granted by the Security Agreement
(it being understood that in no event shall financing statements be filed
against fixtures in the local jurisdictions of their location);
(2) delivered to the Collateral Agent all certificates
evidencing any of the Pledged Stock (as defined in the Pledge Agreement),
accompanied by undated stock or other powers duly executed in blank;
(3) caused each Share Issuer (as defined in the Pledge
Agreement) (other than a Share Issuer the ownership interests in which are
evidenced by certificates) to agree that it will comply with instructions
regarding perfection and recordation originated by the Collateral Agent;
(4) execute, deliver and record such short form
security agreements relating to Collateral (as defined in the Security
Agreement) consisting of the Trademark Collateral (as defined in the Security
Agreement) as the Collateral Agent may reasonably request; and
(5) The Company shall have delivered to the Collateral
Agent such other documents and certificates as the Collateral Agent may
reasonably require.
(j) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel may reasonably request.
(k) In the case of the Closing, the Company shall have simultaneously
sold to each Buyer the Initial Notes, the related Guarantees and the Initial
Warrants to be purchased by such Buyer hereunder at the Closing and shall have
received payment in full for such Initial Notes, Guarantees and Initial
Warrants.
(l) The Company shall have obtained all consents, authorizations,
approvals, orders, licenses, permits and qualifications from, or secured
exemptions therefrom, and made all necessary filings, declarations and
registrations with, any Governmental Authority (including any required consents
from the FCC) or any other Person (if any) required to be obtained or made by or
with respect to the Company in connection with the offer and sale of the
Securities, the execution and delivery of each of the Transaction Documents or
the consummation of the transactions contemplated hereby and thereby.
(m) No action or proceeding by or before any Governmental Authority
shall be pending or threatened challenging or seeking to restrain or prohibit
the transactions contemplated by the Transaction Documents. No Legal Requirement
preventing the transactions contemplated by the Transaction Documents shall be
in effect.
-43-
(n) The Company shall have delivered an incumbency certificate dated
the Closing Date or the Buyers' Option Purchase Date, as applicable, for the
officers of the Company or any Guarantor executing any of the Transaction
Documents and any documents delivered in connection with the Transaction
Documents and the Closing or the closing of the purchase on the Buyers' Option
Purchase Date, as applicable.
(o) A minimum of $255,000,000 of Initial Notes shall have been sold at
Closing.
(p) The rights enumerated in Section 8(a) of the Warrants shall
survive as if included in this Agreement until the first anniversary of a
Qualified IPO regardless of whether any Warrant is exercised in whole or in part
prior to such date.
8. TERMINATION.
In the event that the Closing shall not have occurred with respect to
a Buyer on or before five (5) Business Days from the date hereof due to the
Company's or such Buyer's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party by
providing written notice of such termination to the breaching party; provided,
however, if this Agreement is terminated pursuant to this Section 8 by reason of
a breach by the Company, the Company shall remain obligated to reimburse the
non-breaching Buyers for the expenses described in Section 4(e) above.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction: Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
-44-
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided; that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate principal amount
of the Notes issued and issuable hereunder, and any amendment to this Agreement
made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Notes, as applicable. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the applicable Securities then
outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents, holders of Notes or holders of the Warrants, as the
case may be. The Company has not, directly or indirectly, made any agreements
with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.
(f) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
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If to the Company or the Guarantors:
Clearwire Corporation
0000 Xxxx Xxxxxxxxxx Xxxx XX, Xxxxx #000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Vice President, Legal Affairs
Copies to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
and
Xxxxx Xxxxxx Xxxxxxxx LLP
Suite 2300
1300.SW Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,
with a copy (for informational purposes only) to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number
-46-
and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the aggregate principal
amount of the Notes issued and issuable hereunder. A Buyer may assign some or
all of its rights hereunder without the consent of the Company, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights and shall agree to be bound by the provisions hereof.
(h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, provided, however, that the Agents may rely upon Section 2
and Section 3 hereof.
(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9 shall survive the Closing. Each Buyer shall be severally responsible only for
its own representations, warranties, agreements and covenants hereunder.
(j) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) Indemnification. In consideration of each Buyer's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's and Guarantors' other obligations under
the Transaction Documents, the Company and the Guarantors', jointly and
severally, shall defend, protect, indemnify and hold harmless each Buyer and
such Buyer's stockholders, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (each, an "INDEMNITEE" and
collectively, the "INDEMNITEES"), as incurred, from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements
(the "INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company or the Guarantors (as applicable)
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company or the Guarantors (as applicable) contained in the
Transaction
-47-
Documents or any other certificate, instrument or document contemplated hereby
or thereby or (c) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative
action brought on behalf of the Company) and arising out of or resulting from
(i) the execution, delivery, performance or enforcement of the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities or
(iii) the status of such Buyer or holder of the Securities as an investor in the
Company pursuant to the transactions contemplated by the Transaction Documents;
provided that indemnification pursuant to this clause (iii) shall not be
available to the extent arising primarily from such Buyer's bad faith, breach of
the Transaction Documents, fraud, gross negligence or willful misconduct. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 9(k)
shall be the same as those set forth in Section 6 of the Registration Rights
Agreement. If a third party claim in respect of Indemnified Liabilities involves
more than one Indemnitee, the Indemnitees shall conduct the defence through the
same legal counsel, at Indemnitor's expense, acceptable to all Indemnitees,
provided that an Indemnitee may employ separate counsel, at indemnitor's
expense, if representation by the same legal counsel would be inappropriate due
to differing interests between the Indemnitees.
(l) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(m) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Payment Set Aside. To the extent that the Company makes a payment
or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the
-48-
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
(o) Independent Nature of Buyers' Obligations. The obligations of each
Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Subject to
the provisions of the Indenture, each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and it
shall not be necessary for any other Buyer to be joined as an additional party
in any proceeding for such purpose.
(p) Currency. Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars.
(q) Termination of Security Documents. Upon the redemption of all of
the Notes pursuant to the terms of the Indenture, all of the Security Documents
shall terminate and the Collateral Agent and the Holders irrevocably authorize
and direct the Company, and any agent under their respective direction, at the
sole expense of the Company, to (a) discharge any and all registrations and
filings made in favor of the Holder or the Collateral Agent on behalf of the
Holders, against the Company or its Subsidiaries (and any predecessor entities
of or to the Company or its Subsidiaries) and any financing change statements
filed in connection with such registrations; and (b) file any UCC financing
statement terminations.
[SIGNATURE PAGES FOLLOW]
-49-
CLEARWIRE CORPORATION
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
CLEARWIRE LLC
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
FIXED WIRELESS HOLDINGS, LLC
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
NEXTNET WIRELESS, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
CLEARWIRE SPECTRUM CORP.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
SIGNATURES CONTINUED
CLEARWIRE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
CLEARWIRE COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
JONSSON COMMUNICATIONS, CORPORATION
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
NEXTNET WIRELESS ASIA, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
NEXTNET INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
SIGNATURES CONTINUED
UNISON WIRELESS, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
XXXXX WIRELESS HONOLULU INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors have
caused their respective signature page to this Securities Purchase Agreement to
be duly executed as of the date first written above.
BUYER: DEUTSCHE BANK AG LONDON
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx, AIF
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title:
---------------------------------
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SATELLITE ASSET MANAGEMENT, L.P.
on behalf of certain of its funds
and accounts
By:
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Counsel
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SATELLITE STRATEGIC FINANCE
PARTNERS LTD
By: Satellite Asset Management, LTD
its Investment Manager
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Counsel
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
By:
By: /s/ X. Xxxxxx
------------------------------------
Name: X. Xxxxxx
Title: Managing Director
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER:
By: EAGLERIVER HOLDINGS, LLC
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: CFO, V.P. and Secretary
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: TEMPO MASTER FUND LP
By:
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Portfolio Manager
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: THIRD POINT PARTNERS QUALIFIED
L.P.
By:
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: THIRD POINT PARTNERS L.P.
By:
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: THIRD POINT OFFSHORE FUND LTD.
By:
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: THIRD POINT ULTRA LTD.
By:
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Highland Crusader Offshore
Partners, L.P.
By: Highland Capital Management,
L.P. As Collateral Manager
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President
Strand Advisors, Inc.,
General Partner of Highland
Capital Management, L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Pioneer Floating Rate Trust
By: Highland Capital Management,
L.P., Its Sub-Advisor
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President Strand
Advisors, Inc., General Partner
of Highland Capital Management,
L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Loan Funding VII LLC
By: Highland Capital Management,
L.P., As Collateral Manager
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President Strand
Advisors, Inc., General Partner
of Highland Capital Management,
L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Loan Funding IV LLC
By: Highland Capital Management,
L.P., As Collateral Manager
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President Strand
Advisors, Inc., General Partner
of Highland Capital Management,
L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Jasper CLO, Ltd.
By: Highland Capital Management,
L.P., As Collateral Manager
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President Strand
Advisors, Inc., General Partner
of Highland Capital Management,
L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: Southfork CLO, Ltd.
By: Highland Capital Management,
L.P., As Collateral Manager
By: Strand Advisors, Inc., Its
General Partner
By:
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx,
Title: Executive Vice President Strand
Advisors, Inc., General Partner
of Highland Capital Management,
L.P.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SCOTTWOOD PARTNERS, LP
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
By: Scottwood Partners, LP
Name: Xxxxxx Xxxxxxx
Title: Managing Partner
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SANKATY CREDIT OPPORTUNITIES I, LP
By:
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: XXXXX X. XXXXX
Title: MANAGING DIRECTOR
PORTFOLIO MANAGER
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SANKATY CREDIT
OPPORTUNITIES II, LP
By:
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: XXXXX X. XXXXX
Title: MANAGING DIRECTOR
PORTFOLIO MANAGER
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: PROSPECT HARBOR CREDIT PARTNERS,
L.P.
By:
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: XXXXXXX XXXXXXX
Title: SENIOR VICE PRESIDENT
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYER: HIGHBRIDGE INTERNATIONAL LLC
By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By: /s/ Xxxx X. Chill
------------------------------------
Name: Xxxx X. Chill
Title: Managing Director
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: CYRUS OPPORTUNITIES MASTER FUND,
LTD.
By: Cyrus Capital Partners, L.P., as
Investment Manager
By: Cyrus Capital Partners GP, LLC,
General Partner
By: /s/ Xxxxxx X. Nisi
------------------------------------
Name: XXXXXX X. NISI
Title: PARTNER, GENERAL COUNSEL
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: CYRUS OPPORTUNITIES MASTER FUND
II, LTD.
By: Cyrus Capital Partners, L.P., as
Investment Manager
By: Cyrus Capital Partners GP, LLC,
General Partner
By: /s/ Xxxxxx X. Nisi
------------------------------------
Name: Xxxxxx X. Nisi
Title: Partner, General Counsel
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: YORK CREDIT OPPORTUNITIES FUND,
L.P.
By:
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: YORK SELECT, L.P.
By:
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: YORK SELECT UNIT TRUST
By:
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO of its investment manager
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: XXXXXXX DISTRESSED
INVESTMENT MASTER FUND, LTD
By: HMC Distressed Investment Offshore
Manager, LLC, its Manager
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: ALPHA US SUB FUND IV, LLC
By: Xxxxxxx Fund Advisors, Inc.*
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
* Pursuant to that certain Investment Advisory Agreement dated as of April
29, 2003, as amended.
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: SILVERBACK MASTER, LTD.
By: Silverback Asset Management, LLC,
Investment Manager for Silverback
Master, Ltd.
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Investment Officer
IN WITNESS WHEREOF, each Buyer, the Company and each of the Guarantors
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.
BUYER: ORCA BAY CAPITAL CORP.
By:
By: /s/ Xxxxxxx X. XxXxxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President
EXHIBITS
Exhibit A Form of Notes
Exhibit B Form of Warrant
Exhibit C Account Control Agreement
Exhibit D Indenture
Exhibit E Registration Rights Agreement
Exhibit F Pledge Agreement
Exhibit G Security Agreement
Exhibit H List of Other Security Documents
Exhibit I-1 Form of Special Counsel Opinion
Exhibit I-2 Form of General Corporate Counsel Opinion
Exhibit J Form of Secretary's Certificate
Exhibit K Form of Officer's Certificate
Exhibit L 2004 Financial Statements
SCHEDULES
Schedule 3(a) Subsidiaries
Schedule 3(k) Absence of Undisclosed Liabilities
Schedule 3(n) Transactions with Affiliates
Schedule 3(o)(A) Equity Capitalization
Schedule 3(o)(B) Equity Capitalization
Schedule 3(o)(C) Equity Capitalization
Schedule 3(o)(D) Equity Capitalization
Schedule 3(o)(E) Equity Capitalization
Schedule 3(o)(F) Equity Capitalization
Schedule 3(p) Indebtedness
Schedule 3(w) Subsidiary Rights
Schedule 4(i) Existing Agreements and Warrants
Schedule 7(d) Foreign Qualifications
