EXHIBIT 10.58
EXECUTION VERSION
INTEL/CLEARWIRE CONFIDENTIAL
June 28, 2006
Intel Pacific, Inc.
c/o Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx., XX0-00
Xxxxx Xxxxx, XX 00000-0000
Attn: Intel Capital Portfolio Manager
Ladies and Gentlemen:
In consideration for the purchase by Intel Pacific, Inc. ("INTEL") of
shares of Class A Common Stock and Class B Common Stock of Clearwire
Corporation, a Delaware corporation (the "COMPANY"), pursuant to that certain
Common Stock Purchase Agreement dated as of June 28, 2006 (the "PURCHASE
AGREEMENT"), the Company and Intel agree to the terms and obligations of this
side letter agreement (this "AGREEMENT"), and Eagle River Holdings, LLC ("EAGLE
RIVER") shall be a party to this Agreement solely for the purpose of Section 7
herein.
The Company and Intel desire to enter into this Agreement in order to
amend, restate and replace certain rights and obligations under the side letter
agreement between the Company, Intel Capital Corporation ("INTEL SUB") and
certain other holders of the Company's capital stock dated October 13, 2004 (the
"PRIOR SIDE LETTER AGREEMENT") with the rights and obligations set forth in this
Agreement. Section 5.3 of the Prior Side Letter Agreement provides that the
Prior Side Letter Agreement may be amended by the written consent of written
consent of Intel Sub and Company.
As used herein, "INTEL" shall refer to Intel, Intel Sub, its ultimate
parent company, Intel Corporation, and/or one or more of the other direct or
indirect subsidiaries of Intel Corporation. Terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Purchase
Agreement, other than defined terms set forth in Section 6 hereof which shall
have the meaning assigned to them in the Stockholders Agreement (as defined
below). This Agreement shall amend and restate the Prior Side Letter Agreement
in its entirety and the Prior Side Letter Agreement shall terminate and no
longer have any force or effect.
1. Confidentiality.
1.1 Disclosure of Current Terms. The Company acknowledges that the terms and
conditions (collectively, the "TRANSACTION TERMS") of this Agreement, the
Purchase Agreement, the Investor Rights Agreement, the Voting Agreement,
the Joinder Agreement, the Collaboration Agreement, and all exhibits,
restatements and amendments thereto (collectively, the "TRANSACTION
DOCUMENTS"), shall be considered confidential information and shall not be
disclosed by the Company to any third party except in accordance with the
provisions set forth below.
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1.2 Continuing Obligations Regarding the Financing Agreements. The Company
acknowledges that the terms and conditions (collectively, the "FINANCING
TERMS") of the Prior Side Letter Agreement, the Joinder Agreement dated
October 13, 2004 relating to the Stockholders Agreement, the Joinder
Agreement dated October 13, 2004 relating to the Registration Rights
Agreement dated March 16, 2004, and the Purchase Agreement dated October
13, 2004 and all exhibits, restatements and amendments thereto
(collectively, the "FINANCING AGREEMENTS") shall be considered confidential
information and shall not be disclosed by the Company to any third party
except in accordance with the provisions set forth below and except as
disclosed by the Company in its S-1 Registration Statement filed with the
U.S. Securities and Exchange Commission (the "SEC") on May 11, 2006.
1.3 Press Releases with Regard to the Intel Agreements. The Company and Intel
agree that there shall be no press release or other public statement issued
by either party relating to the Transaction Documents or the transactions
contemplated hereby, without the prior written consent of each party.
Following an agreed upon press release or other public announcement,
Intel's name and the fact that Intel is an investor in the Company may be
included in a reusable press release boilerplate statement, so long as
Intel has given the Company its initial approval of such boilerplate
statement and the boilerplate statement is reproduced in exactly the form
in which it was approved. No other public announcement regarding Intel in a
press release, conference, advertisement, professional or trade
publication, mass marketing materials or otherwise to the general public
may be made without Intel's prior written consent.
1.4 Permitted Disclosures. The Company may disclose (a) Financing Agreements,
Financing Terms, Transaction Documents and Transaction Terms, other than
the Collaboration Agreement, to its current or bona fide prospective
investors, acquirors of the Company or any of its assets, recipients of the
Company's securities in current or future acquisitions by the Company,
strategic partners, employees, investment bankers, lenders, accountants,
auditors and attorneys, in each case, only where such persons or entities
to whom disclosure is proposed are under reasonable nondisclosure
obligations, (b) the Company may disclose solely the fact that Intel is an
investor in the Company to any third parties without the requirement for
the consent of Intel or nondisclosure obligations; and (c) the Company
shall have the right to disclose to third parties any information regarding
the Financing Terms and/or Transaction Terms disclosed in a press release
or other public announcement by Intel or by the Company, subject to
compliance with Section 1.1 above. Notwithstanding anything else in this
Agreement or the other Transaction Agreements, including, without
limitation, the immediately preceding sentence and Section 13.11 of the
Collaboration Agreement, but subject to Section 1.5 below, none of the
terms and conditions of the Collaboration Agreement, the commercial
relationship established thereunder or any Confidential Information
relating thereto shall be disclosed by the Company or any of its affiliates
without Intel's prior written consent; provided, that, a redacted version
of the Collaboration Agreement, in a form prepared by Intel which shall be
reasonably acceptable to the Company, may be disclosed by the Company to
any of the persons or entities set forth in clause (a) of the preceding
sentence, in each case, only where such persons or entities are under
reasonable nondisclosure obligations; provided, further,
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that the Company may incorporate, to the extent reasonable and necessary,
the economic terms of the Collaboration Agreement into financial models
prepared by the Company for such persons or entities and deliver such
financial models to such persons or entities that are under reasonable
nondisclosure obligations.
1.5 Legally Compelled Disclosure. In the event that the Company is requested or
becomes legally compelled (including without limitation, pursuant to
securities laws and regulations), in the opinion of the Company's legal
counsel, to disclose the existence of any of the Financing Agreements,
Financing Terms, Transaction Documents and/or Transaction Terms hereof in
contravention of Section 1 of this Agreement, to the extent it is lawful to
do so, the Company shall provide Intel with prompt written notice of that
fact before such disclosure and, if requested in writing by Intel before
such disclosure, will fully cooperate with Intel to use its commercially
reasonable efforts to seek a protective order, confidential treatment, or
other appropriate remedy with respect to the disclosure; provided, that,
Intel agree to reimburse the Company for any reasonable costs and expenses
it incurs in connection therewith not to exceed $35,000. If a protective
order, confidential treatment or other remedy is not obtained, the Company
shall furnish for disclosure only that portion of the information which, in
the opinion of the Company's legal counsel, is legally required and the
disclosure of such information shall not result in liability hereunder. The
Company agrees that, to the extent it is lawful to do so, it will provide
Intel with drafts of any documents, press releases or other filings in
which the Company is required, in the opinion of the Company's legal
counsel, to disclose any of the Financing Agreements, Financing Terms,
Transaction Documents and/or Transaction Terms or any other confidential
information subject to the terms of this Agreement at least five (5)
business days prior to the filing or disclosure thereof (or, if the filing
or disclosure thereof is subject to a deadline which is less than five
business days from the date the legal requirement arises, as much time
before the deadline as reasonably practicable), and that it will make any
changes related to the disclosure of confidential information in such
materials as reasonably requested by Intel within a reasonable period of
time, and prior to any filing deadline, if applicable, to the extent
permitted by law or any rules and regulations of the SEC or the FCC, as
applicable. If, as permitted above, confidential treatment is requested by
Intel, the Company agrees to file such a request and use commercially
reasonable efforts in responding to any SEC or FCC comments to pursue
assurance that confidential treatment will be granted, fully cooperating
with Intel (including, without limitation, providing Intel with the
opportunity to review and comment on the request and the responses to any
such SEC comments). The Company will not file this Agreement or the other
Financing Documents or Transaction Documents with any governmental
authority or any regulatory body, or disclose the identity of Intel or any
other Financing Terms or Transaction Terms in any filing except as
permitted above. Notwithstanding the foregoing, to the extent required to
be disclosed by the Company under 47 CFR 1.2112(a), the number of shares
held by Intel and the percentage interest of Intel in the Company may be
disclosed by the Company without the requirement for the consent of Intel
or procedures set forth in this Section 1.4.
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1.6 Confidential Information. The disclosure and exchange of Confidential
Information (as defined in the CNDA) between the Company and Intel
Corporation (including any Intel board observer) shall be governed solely
by the terms of the Corporate Non-Disclosure Agreement No. 6061146 dated
August 4, 2004 (the "CNDA") executed between the Company and Intel. Without
limiting the foregoing, the Company agrees that neither the confidentiality
terms set forth in Section 13.15 of the Stockholders Agreement nor any
similar confidentiality obligation or restriction contained in any of the
Financing Agreements (except for this Agreement) shall be binding upon
Intel.
2. Additional Information Rights.
2.1 The Company shall include a capitalization table, certified by the Chief
Financial Officer of the Company and showing the current owners of the
Company's capital stock, with the quarterly financial statements delivered
pursuant to Section 9.0l(b) of the Stockholders Agreement and deliver such
capitalization to Intel.
2.2 The parties agree that Intel will have the right to either perform an
annual audit of the Company's and any of its consolidated subsidiaries'
books and records, accounting policies, internal controls processes, and
other information relevant to the Company's financial statements
("FINANCIAL INFORMATION") or annual review of the Company's external
auditors' workpapers, at its own expense and as reasonably requested by
Intel, which audit or workpaper review shall occur during normal business
hours. In addition, Intel will have the right to audit specific
transactions, and to make inquiries of management, review policies and
positions papers in connection with such transactions, and to review
original documents supporting such transaction, such as purchase orders,
invoices, signed agreements, and other evidence (the "TRANSACTION
INFORMATION") as reasonably needed to ensure accuracy of financial
statement data. In connection with such audit, the Company agrees that it
will cooperate with Intel and Intel's representatives to provide all
requested Financial Information and Transaction Information either verbally
or in writing, at Intel's option, and to grant access to its employees and
its external accounting firm as reasonably deemed necessary and appropriate
by Intel or Intel's representatives in order to perform such review.
3. Board Observer.
3.1 Intel Representative. So long as Intel beneficially owns, either directly
or indirectly, at least five percent (5%) of the issued and outstanding
capital stock of the Company (or any security exercisable or exchangeable
for or issued or issuable on conversion thereof) of the Company, and if
Intel no longer has the right to designate and nominate a director pursuant
to the Voting Agreement, the Company will permit a representative of Intel
(the "OBSERVER") to attend all meetings of the Company's Board of Directors
(the "BOARD") and all committees thereof (whether in person, telephonic or
other) in a non-voting, observer capacity and shall provide to Intel,
concurrently with the members of the Board, and in the same manner, notice
of such meeting and a copy of all materials provided to such members. The
Company may, in its sole discretion, invite one or more additional
representatives of Intel to attend meetings of the Board
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as additional Observers; provided that the terms set forth in this
Agreement shall apply to the attendance of any such additional Observers.
3.2 Exclusion Rights. The Board shall have the right to exclude the Observer
from portions of meetings of the Board or omit to provide the Observer with
certain information if any of the Company's Chairman, Chief Executive
Officer or a majority of the members of the Board believes in good faith
that:
(a) such exclusion or omission is necessary in order to: (i) preserve the
Company's attorney-client privilege (based on the advice of Company
counsel); (ii) protect the proprietary nature of such information or
the Company's business objectives, opportunities and/or competitive
positioning; or (iii) fulfill the Company's obligations with respect
to confidential or proprietary information of third parties (provided,
however, that the Observer shall not be so excluded unless all other
persons whose receipt of such materials or presence at a meeting would
result in a violation of such third party confidentiality obligations
are also excluded); or
(b) such meeting or information involves information or analysis that
would pose a conflict of interest for Intel.
4. Directors and Officers Insurance Covenant. The Company will purchase and
maintain directors and officers insurance in an amount equal to not less
than $50 million, and the directors appointed or designated by Intel shall
be named as covered insureds thereunder. In the event the Company (i)
merges with another entity and the Company is not the surviving entity or
(ii) transfers all or substantially all of its assets, the Company shall
ensure that the successor of the Company assumes the Company's obligations,
hereunder and under the Company's Certificate of Incorporation and Bylaws,
with respect to indemnification of the Company's directors and the
maintenance of directors and officers insurance covering the Company's
directors.
5. Termination of Put Option Agreement. The Put Option Agreement, dated
October 13, 2004, by and between the Company and Intel Sub shall terminate
as of the Closing and shall no longer have any force or effect.
6. Additional Preemptive Rights. In addition to the preemptive rights (the
"PREEMPTIVE RIGHTS") granted to the Eligible Stockholders and the Eligible
NextNet Stockholders pursuant to Section 1 of the Stockholders Agreement,
in connection with each issuance of New Shares and upon the expiration of
the period to exercise any Preemptive Rights with respect to any issuance
of New Shares, the Company shall make an offering of any New Shares not
purchased by (i) the Eligible Stockholders or the Eligible NextNet
Stockholders pursuant to Section 1 of the Stockholders Agreement, or (ii)
Bell Canada or ERH pursuant to Section 11 of the Side Agreement dated as of
March 16, 2005, among the Company, ERH, and Bell Canada (collectively, the
"UNPURCHASED SHARES"), to Intel and Motorola, Inc. ("MOTOROLA") in
accordance with this Section 6.
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6.1 The Company shall deliver a notice (the "ADDITIONAL PREEMPTIVE RIGHTS
NOTICE") to Intel and Motorola stating (i) the number of Unpurchased
Shares, (ii) that each of Intel and Motorola is entitled to purchase up to
50% of the Unpurchased Shares, and (iii) that the Unpurchased Shares are
being offered at the same price and on the same terms as previously offered
to the Eligible Stockholders and the Eligible NextNet Stockholders.
6.2 By written notification received by the Company, within five (5) business
days after the receipt of the Additional Preemptive Rights Notice, each of
Intel and Motorola may elect to purchase, at the price and on the terms
specified in the Additional Preemptive Rights Notice, up to 50% of the
Unpurchased Shares. Such written notice shall be a binding, irrevocable
commitment to purchase such Unpurchased Shares.
6.3 If either Intel or Motorola (as applicable, the "NON-PARTICIPATING PARTY")
does not elect to purchase all of the Unpurchased Shares that such
Non-Participating Party is entitled to purchase under Section 6.2 above,
the Company must offer the unsubscribed portion of the Non-Participating
Party's allocation of the Unpurchased Shares to the party (if any) that
has elected to purchase all of its allocated portion of the Unpurchased
Shares (the "PARTICIPATING PARTY") by delivering notice (the "NON-
PARTICIPATION NOTICE") to the Participating Party stating the number of
Unpurchased Shares that remain available for purchase (the "REMAINING
UNPURCHASED SHARES").
6.4 By written notification received by the Company, within five (5) business
days after the receipt of the Non-Participation Notice, the Participating
Party may elect to purchase, at the price and on the terms specified in the
Additional Preemptive Rights Notice, all or any part of the Remaining
Unpurchased Shares. Such written notice shall be binding, irrevocable
commitment to purchase such Remaining Unpurchased Shares.
6.5 If Intel and/or Motorola do not elect to subscribe for all New Shares that
they are entitled to purchase under this Section 6, the Company may offer
the unsubscribed portion of such New Shares to any Persons at a price not
less than, and upon terms no more favorable to the offeree, than those
specified in the Additional Preemptive Rights Notice, provided that the
Company completes the offer and sale of such unsubscribed portion within
120 days after the date the applicable Issue Notice is first delivered to
the stockholders under the Stockholders Agreement.
6.6 This Section 6 will terminate upon the closing of the Company's IPO.
6.7 Notwithstanding Section 1.04 of the Stockholders Agreement, if Intel or
Motorola fails to fully exercise its preemptive rights pursuant to Sections
1.01 or 1.02 of the Stockholders Agreement or this Section 6 of this
Agreement at any time, Intel or Motorola shall continue to be entitled to
its Preemptive Rights and Additional Preemptive Rights.
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7. Limitations with Respect to XxXxx Entities.
7.1 Commencing on the date of this Agreement and continuing thereafter for so
long as Xxxxx X. XxXxx ("XXXXX") or any of the XxXxx Entities (as defined
in the Stockholders Agreement) (i) hold more than 25% of the voting power
of the Company, either individually or in the aggregate and have at least
one XxXxx Representative on the Company's board of directors, or (ii) hold
more than 45% of the voting power of the Company, either individually or in
the aggregate neither XxXxx nor any XxXxx Entity (including without
limitation Eagle River Holdings, LLC, Eagle River Investments, LLC and
Eagle River, Inc, but excluding ICO Global Communications ("ICO") and the
Company and any of their respective subsidiaries) will directly or
indirectly, on behalf of any other person or entity, acquire any equity
interest in, or act as a lender, employee or consultant to any company
(excluding ICO and the Company and any of their respective subsidiaries)
for whom a majority of its business, at the time of such acquisition or
action, consists (or is expected to consist) of the provision of
terrestrial based portable and/or mobile wireless broadband services in the
United States ("NON-COMPETE BUSINESS"); provided, however, that the
acquisition of a legal or beneficial ownership of a passive equity
investment of no more than 10% of any entity shall not be deemed to
constitute a violation of this provision. The foregoing limitations shall
not apply to any acquisition of an equity interest in or actions as a
lender to any Non-Compete Businesses ("COMPETITIVE OPPORTUNITY") if XxXxx
or the applicable XxXxx Entity has made the Competitive Opportunity
available to the Company, and the Company's independent directors have not
directed the Company to pursue the Competitive Opportunity within thirty
(30) days following the date on which XxXxx or the applicable XxXxx Entity
sends notice to each of the Company's independent directors.
7.2 Eagle River hereby covenants and agrees that, if ICO acquires a
controlling interest in, or a substantial portion of the assets of, a
company or business that is a Non-Compete Business, as determined in good
faith by the Disinterested Directors of the Company, then they shall take
all necessary steps to ensure that no XxXxx Representative shall
simultaneously serve as a director of ICO and the Company.
7.3 For purposes of this Agreement, a XxXxx Representative is any individual
who is affiliated with the XxXxx Entities as a director, principal,
partner, consultant, employee, shareholder, member or someone with a
relationship similar to those listed herein.
8. Miscellaneous.
8.1 Notices. All notices, requests, demands, instructions, documents and other
communications to be given under this Agreement to any party shall be in
writing and sent to the address/fax number set forth on the signature page
below (provided that any party may at any time change its address for
notice or other such information by giving written notice thereof in
writing to the other parties hereto).
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8.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
8.3 Amendment and Waiver. Sections 1 through 6 and Section 8 of this Agreement
may not be amended or modified without the written consent of Intel and
Company. Section 7 of this Agreement may not be amended or modified without
the written consent of Intel and Eagle River. No waiver of any provision of
this Agreement shall be binding unless and until set forth expressly in
writing and signed by the waiving party. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach of the same or
any other term or provision, or a waiver of any contemporaneous breach of
any other term or provision, or a continuing waiver of the same or any
other term or provision.
8.4 Specific Performance. The parties acknowledge that it will be impossible to
measure in money the damage to them caused by any failure to comply with
the covenants set forth in this Agreement, that each such covenant is
material, and that in the event of any such failure, the injured party will
not have an adequate remedy at law or in damages. Therefore, the parties
consent to the issuance of an injunction or the enforcement of other
equitable remedies against them at the suit of the other, without bond or
other security, to compel performance of all of the terms of this
Agreement, and waive the defense of the availability of relief in damages.
8.5 Severability. If any provision of this Agreement shall be declared void or
unenforceable by any judicial or administrative authority, the validity of
any other provision and of the entire Agreement shall not be affected
thereby.
8.6 Enforceability: Conflicts. In all events, the terms and provisions of this
Agreement shall be enforceable notwithstanding any conflicting term or
provision set forth in any of the other Financing Agreements. In the event
of any conflict between any term or provision of this Agreement and any
term or provision set forth in any of the other Financing Agreements, such
term or provision of this Agreement shall prevail over such term or
provision set forth in any of the other Financing Agreements.
8.7 No Impairment. Each of the parties hereto agree not to take any voluntary
action to avoid or seek to avoid the observance or performance of any of
the terms of this Agreement, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights granted
herein against impairment.
8.8 Further Assurances. Each of the parties hereto shall execute and deliver
all additional documents and instruments and shall do any and all acts and
things reasonably requested in connection with the performance of the
obligations undertaken in the Agreement or otherwise to effectuate in good
faith the intent of the parties.
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8.9 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
Please confirm that the above correctly reflects our understanding and
agreement with respect to the foregoing matters by signing the enclosed copy of
this letter and returning such copy to the Company.
Very truly yours,
CLEARWIRE CORPORATION Address:
Clearwire Corporation
0000 Xxxx Xxxxxxxxxx Xxxx. NE, Suite 300
By: /s/ Xxxxxxxx X. Xxxxx Xxxxxxxx, WA 98033
--------------------------------- Facsimile No:(000)000-0000
Name: Xxxxxxxx X. Xxxxx Attn: Xxxxxx Xxxxxx, General Counsel
Title: Co-Chief Executive Officer
Agreed and Accepted: (STAMP)
INTEL PACIFIC, INC Address:
Intel Pacific, Inc.
c/o Intel Corporation
By: /s/ Xxxxxx Xxxxxxx 0000 Xxxxxxx Xxxxxxx Xxxx., XX0-46
-------------------------------- Santa Clara, CA 95054-1549
Name: Xxxxxx Xxxxxxx Attn: Intel Capital Portfolio Manager
Title: President Fax Number: (000)000-0000
With copy by e-mail to:
xxxxxxxxx.xxxxxxx@xxxxx.xxx
Agreed and Accepted:
EAGLE RIVER HOLDINGS, LLC Address:
By: Eagle River, Inc. Eagle River Holdings, LLC
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
By: /s/ Xxxxxxxx X. Xxxxx Fax Number: 000-000-0000
---------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
[SIGNATURE PAGE TO CLEARWIRE SIDE LETTER]
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