SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.19
This
Securities Purchase Agreement (this “Agreement”)
is
made and entered into as of March 28, 2007, by and among NextWave Wireless
Inc.,
a Delaware corporation (the “Company”),
and
each of the purchasers listed on Schedule
1
attached
hereto (collectively, the “Purchasers”
and
individually, a “Purchaser”).
RECITALS
WHEREAS,
in connection with the transactions contemplated hereby, the Company has
authorized the creation of a new series of preferred stock designated as Series
A Senior Convertible Preferred Stock, par value $0.001 per share (the
“Series
A Senior Preferred Stock”),
of
the Company by filing a Certificate of Designation, Preferences and Rights
of
the Series A Senior Convertible Preferred Stock of NextWave Wireless Inc. in
the
form attached hereto as Exhibit
A
(the
“Certificate
of Designations”)
with
the office of the Secretary of State of the State of Delaware, in accordance
with the General Corporation Law of the State of Delaware, which Series A Senior
Preferred Stock shall be convertible into shares of common stock, par value
$.001 per share, of the Company (the “Common
Stock”)
in
accordance with the terms of the Certificate of Designations;
WHEREAS,
on the terms and subject to the conditions set forth herein, the Company desires
to issue and sell to the Purchasers, and each Purchaser desires to purchase
and
acquire from the Company that number of shares of Series A Senior Preferred
Stock set forth opposite the Purchaser’s name on Schedule
1
(the
“Purchased
Shares”);
WHEREAS,
the Company and each Purchaser are executing and delivering this Agreement
in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation
D”),
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the Securities Act of 1933, as amended (the “Securities
Act”);
and
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit
B
(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 shares of Common Stock issuable upon conversion thereof
(the
“Conversion
Shares”)
under
the Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
NOW,
THEREFORE, in consideration of the foregoing, the mutual promises hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT
TO PURCHASE AND SELL PREFERRED SHARES.
(a) Authorization.
The
Company’s Board of Directors has authorized the issuance and sale, pursuant to
the terms and conditions of this Agreement, of up to 355,000 shares of Series
A
Senior Preferred Stock.
(b) Agreement
to Purchase and Sell Securities.
Subject
to the terms and conditions of this Agreement, at the Closing (as defined
below), each Purchaser severally and not jointly agrees to purchase, and the
Company agrees to sell and issue to each Purchaser, that number of Purchased
Shares set forth opposite such Purchaser’s name on Schedule
1.
The
purchase price of each Purchased Share (the “Per
Share Price”)
shall
be $1,000.00.
(c) Use
of
Proceeds.
The
Company intends to apply the net proceeds from the sale of the Purchased Shares
for working capital and general corporate purposes as determined by the Company
from time to time, and not for the redemption or repurchase of any of its equity
securities, except in connection with an acquisition of assets or securities
by
the Company not for capital raising purposes.
(d) Obligations
Several Not Joint.
The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement, the Registration Rights Agreement, the
Certificate of Designations and the other agreements, instruments and documents
contemplated hereby and thereby (collectively, the “Transaction
Documents”)
. The
decision of each of the Purchasers to purchase the Purchased Shares pursuant
to
this Agreement has been made by such Purchaser independently of any other
Purchaser. Nothing contained herein or in any other Transaction Document, and
no
action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture
or
any other kind of entity, or create a presumption that the Purchasers 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 Purchaser shall
be
entitled to independently protect and enforce such Purchaser’s rights,
including, without limitation, the rights arising out of this Agreement and
any
of the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.
(e) Tax
Treatment.
The
Parties intend that the Series A Senior Preferred Stock not constitute
“preferred stock” within the meaning of Section 305 of the Internal Revenue Code
of 1986, as amended
(“Code”),
and the
Treasury regulations thereunder.
2. CLOSING.
(a) Closing.
The
completion of the purchase and sale of the Purchased Shares shall take place
at
the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, at 9:00 a.m., local time, not later than five (5) Business Days following
the date of the execution of this Agreement, or at such other time and place
as
the Company and Purchasers representing a majority of the Purchased Shares
mutually agree upon (which time and place are referred to in this Agreement
as
the “Closing”).
At
the Closing, the Company shall, against delivery of full payment for the
Purchased Shares by wire transfer of immediately available funds in accordance
with the wire transfer instructions attached hereto as Exhibit
C,
authorize its transfer agent to either issue to each Purchaser via the
Depository Trust Company’s DWAC system to the account of each Purchaser’s broker
the number of Purchased Shares set forth opposite the appropriate Purchaser’s
name on Schedule
1
hereto
or issue to each Purchaser one or more stock certificates (the “Certificates”)
registered in the name of each Purchaser (or in such nominee name(s) as
designated by such Purchaser in the Stock Certificate Questionnaire attached
hereto as Appendix
I
(the
“Stock
Certificate Questionnaire”)),
representing the number of Purchased Shares set forth opposite the appropriate
Purchaser’s name on Schedule
1
hereto,
and bearing the legend set forth in Section 4(i) herein. Closing documents
may
be delivered by facsimile. The date of the Closing is referred to herein as
the
“Closing
Date.”
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(b) For
purposes of this Agreement, “Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to close,
“Disclosure
Letter”
means
the disclosure schedule delivered by the Company to the Purchasers on the date
hereof and attached as Exhibit
D
and
“SEC
Reports”
means
Company’s schedules, forms, statements and other documents filed with the SEC
prior to the date hereof.
3. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF THE COMPANY.
The
Company hereby represents and warrants to each Purchaser, as of the date hereof
and as of the Closing Date, and agrees as follows:
(a) Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all corporate power and
authority required to (i) own, lease, license, operate and occupy its assets
and
properties and to carry on its business as presently conducted and as proposed
to be conducted and (ii) enter into this Agreement and the other Transaction
Documents (as defined below), and to consummate the transactions and perform
the
obligations contemplated hereby and thereby. The Company is duly qualified
or
authorized, as the case may be, to do business and is in good standing in every
jurisdiction in which its ownership or leasing 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
a
material adverse effect on the business, properties, prospects, assets,
condition (financial or otherwise) or results of operations of the Company
and
its Subsidiaries (as defined in Section 3(c) below) taken as a whole or a
material impairment of the enforceability of, or the ability to perform or
consummate the transactions contemplated by, this Agreement or the other
Transaction Documents.
(b) Capitalization.
The
capitalization of the Company as of the date hereof and as of the Closing Date
is as follows:
(i) The
authorized capital stock of the Company consists of (A) four hundred million
(400,000,000) shares of Common Stock, of which 84,470,085 are issued and
outstanding as of the date hereof and (except as may have been issued pursuant
to the exercise of options and warrants existing as of the date hereof) as
of
the Closing Date, 4,110,382 are reserved for issuance upon the exercise of
warrants issued pursuant to that certain Warrant Agreement, dated July 17,
2006,
among the Company and the holders listed on Schedule I thereto, and as of the
Closing Date 32,126,697 will be reserved for issuance as Conversion Shares
and
(B) twenty-five million (25,000,000) shares of preferred stock (“Preferred
Stock”),
of
which as of the Closing Date 355,000 shares will be designated as Series A
Senior Convertible Preferred Stock, par value $0.001 per share, of which as
of
the date hereof none are issued and outstanding and on the Closing Date 355,000
will be issued and outstanding. All of the issued and outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid,
and nonassessable, and were not issued in violation of any preemptive rights
or
any federal or state securities laws.
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(ii) Except
as
set forth in the SEC Reports and except as contemplated by this Agreement,
there
are (A) no authorized or outstanding securities, rights (preemptive or other),
subscriptions, calls, commitments, warrants, options, or other agreements that
give any Person the right to purchase, subscribe for, or otherwise receive
or be
issued capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company, (B) no outstanding
debt or equity securities of the Company that upon the conversion, exchange,
or
exercise thereof would require the issuance, sale, or transfer by the Company
of
any new or additional capital stock of the Company (or any other securities
of
the Company which, whether after notice, lapse of time, or payment of monies,
are or would be convertible into or exchangeable or exercisable for capital
stock of the Company), (C) no agreements or commitments obligating the Company
to repurchase, redeem, or otherwise acquire capital stock or other securities
of
the Company or its Subsidiaries, and (D) no outstanding or authorized stock
appreciation rights, phantom stock, stock rights, or other equity-based
interests in respect of the Company. The Company has not issued any voting
indebtedness.
(iii) For
purposes of this Agreement, “Person”
means
any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, governmental authority or other
entity.
(c) Subsidiaries.
Except
as set forth in Section (c) of the Disclosure Letter, the Company does not
have
any subsidiaries (the entities listed in Section (c) of the Disclosure Letter
as
the Company’s subsidiaries are referred to herein, collectively, as the
“Subsidiaries”
and
individually as a “Subsidiary”),
and,
except as set forth in Section 3(c) of the Disclosure Letter, the Company does
not own any share capital or obligations of, or any other interest (including
any equity or partnership interest) in, any Person. Each of the Subsidiaries
is
duly organized and validly existing in good standing under the laws of the
jurisdiction of its incorporation or organization. Each of the Subsidiaries
has
full power and authority to own, lease, license, operate and occupy its assets
and properties and to conduct its business as presently conducted or proposed
to
be conducted and is registered or qualified to do business and in good standing
in every jurisdiction in which its ownership or leasing 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. There are no outstanding or authorized
options, warrants, purchase rights, conversion rights, exchange rights, or
other
contracts or commitments that could require any of such Subsidiaries to
repurchase, redeem, sell, transfer, or otherwise dispose of any ownership
interests in such Subsidiary.
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(d) Due
Authorization.
All
corporate actions on the part of the Company, its officers, directors and
shareholders necessary for the authorization, execution, delivery of and
performance of all obligations of the Company under this Agreement and the
other
Transaction Documents, and the authorization, issuance, reservation for issuance
and delivery of all of the Purchased Shares being sold under this Agreement
and
the Conversion Shares have been taken; no further consent or authorization
of
the Company, the Board or its stockholders is required (including with respect
to NASD Rule 4350(i)(1)(D)), and this Agreement and the other Transaction
Documents have been duly executed and delivered by the Company and constitute
the legal, valid and binding obligations of the Company, enforceable against
the
Company in accordance with its terms, except (i) as may be limited by (1)
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or other similar laws of general application
relating to or affecting the enforcement of creditors’ rights generally or (2)
the effect of rules of law governing the availability of equitable principles
of
general application, or (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of public policy
thereunder.
(e) Valid
Issuance of Purchased Shares.
The
Purchased Shares will be, upon payment therefor by the Purchasers in accordance
with this Agreement, and the Conversion Shares will be, if and when issued
in
accordance with the terms of the Purchased Shares, duly authorized, validly
issued, fully paid and non-assessable, free from all liens, claims and
encumbrances, as the case may be, and will not be subject to any pre-emptive
rights or similar rights which shall not have been duly waived at the time
of,
and with respect to, the issuance of the Purchased Shares and the Conversion
Shares. No co-sale right, right of first refusal, pre-emptive right or other
similar rights exist with respect to the Purchased Shares and the Conversion
Shares or the issuance and sale thereof.
(f) Compliance
with Securities Laws.
Subject
to the accuracy of the representations made by the Purchasers in Section 4
hereof, the offer and issuance of the Purchased Shares and the Conversion Shares
is exempt from the registration and prospectus delivery requirements of the
Securities Act. Neither the Company, nor any of its Subsidiaries or affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising, including but not limited to,
advertisement, articles notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio,
or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising, in connection with the offer and sale
of
the Purchased Shares and the Conversion Shares.
(g) No
Integrated Offering.
None of
the Company, its Subsidiaries, any of their 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 the offering of the Purchased Shares to be integrated with prior offerings
by the Company for purposes of the Securities Act or any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of the Nasdaq (as defined below). None of the Company, its
Subsidiaries, their 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 Purchased Shares or the Conversion Shares under
the
Securities Act or cause the offering of the Purchased Shares to be integrated
with other offerings.
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(h) Rule
144A.
The
Series A Senior Preferred Stock satisfies the requirements set forth in Rule
l44A(d)(3) under the Securities Act.
(i) Governmental
Consents.
No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, or notice to, any federal, state or
local governmental authority or self regulatory agency on the part of the
Company or any Subsidiary thereof is required in connection with the issuance
of
the Purchased Shares or the Conversion Shares to the Purchasers or their
assignees permitted under Section 4(j), or the consummation of the other
transactions contemplated by the Transaction Documents, except (i) such filings
as have been made prior to the date hereof, (ii) the filings under applicable
securities laws required to comply with the Company’s registration obligations
under Section 5 of this Agreement and under the Registration Rights Agreement,
(iii) the filing of a notification form with The Nasdaq Stock Market within
five
days after the Closing Date and (iv) such additional post-Closing filings as
may
be required to comply with applicable state and federal securities laws and
the
listing requirements of the Nasdaq Global Market (“Nasdaq”).
(j) Non-Contravention.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby (including issuance of the
Purchased Shares and the Conversion Shares), do not (i) contravene, conflict
with or result in a violation of the Amended and Restated Certificate of
Incorporation of the Company (the “Certificate
of Incorporation”)
or
other organizational documents of the Company or any Subsidiary; (ii) constitute
or result in a violation of any provision of any federal, state, local or
foreign law, rule, regulation, order or decree applicable to the Company or
any
Subsidiary; or (iii) constitute a default or require any consent under, give
rise to any right of termination, cancellation or acceleration of, or to a
loss
of any material benefit to which the Company or any Subsidiary is entitled
under, or result in the creation or imposition of any lien, claim or encumbrance
on any asset of the Company or any Subsidiary under, any material contract
(including any Spectrum Lease (as defined in clause (l) below)) to which the
Company or any Subsidiary is a party or any FCC License (as defined in clause
(n) below) or other material permit, license or similar right relating to the
Company or any Subsidiary or by which the Company or any Subsidiary may be
bound
or affected, except, in the cases of clause (ii) and (iii), for such breaches,
defaults or violations that would not have a Material Adverse
Effect.
(k) Litigation.
Except
as disclosed in the SEC Reports, there is no action, suit, proceeding, claim,
arbitration or investigation (“Action”)
pending or, to the Company’s actual knowledge, threatened: (i) against the
Company, any Subsidiary thereof, their activities, properties or assets, or
any
officer, director or employee of the Company or any Subsidiary thereof in
connection with such officer’s, director’s or employee’s relationship with, or
actions taken on behalf of, the Company or any Subsidiary thereof, which, either
singly or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, or (ii) that seeks to prevent, enjoin, alter, challenge or
delay
the consummation of the transactions contemplated by this Agreement (including
the issuance of the Purchased Shares and the Conversion Shares). The Company
is
not a party to nor subject to the provisions of, any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality that
could prevent, enjoin, alter, challenge or delay the consummation of the
transactions contemplated by this Agreement. The U.S. Securities and Exchange
Commission (the “SEC”)
has
not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Securities Exchange Act
of
1934, as amended (the “Exchange
Act”),
or
the Securities Act.
6
(l) Compliance
with Law, Charter Documents and Contracts.
Neither
the Company nor any of its Subsidiaries is in violation or default of any
provisions of its Certificate of Incorporation, Bylaws, or other applicable
charter documents. The Company and each of its Subsidiaries are in compliance
with all applicable statutes, laws, rules, regulations and orders of the United
States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company’s or its
Subsidiaries’ business or properties, except for such non-compliance as, either
singly or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary is in default (i) in
any
material respect in the payment or performance of any bond, debenture, note
or
any other evidence of indebtedness in excess of $7,500,000 or (ii) in the
payment or performance of any other agreement or instrument, including, without
limitation, any Spectrum Lease, to which the Company is a party or by which
the
Company is bound, except (in the case of this clause (ii) only) for such
defaults as could not, either singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(m) SEC
Documents.
(i) Reports.
The
Company has filed all SEC Reports required to be filed by it with the SEC
pursuant to the Securities Act and the reporting requirements of the Exchange
Act and the rules and regulations promulgated thereunder on a timely basis
or
has timely filed a valid extension of such time of filing and has filed any
such
report prior to the expiration of any such extension. Except as set forth in
Section (m) of the Disclosure Letter, each of the SEC Reports, as of the
respective dates thereof (or, if amended or superseded by a filing or
submission, as the case may be, prior to the Closing Date, then on the date
of
such filing or submission, as the case may be), as of the date hereof and as
of
the Closing Date, (i) do not contain any untrue statement of a material fact
nor
omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading and (ii) comply in all material respects with the requirements of
the
Securities Act, the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Report.
(ii) Xxxxxxxx-Xxxxx.
Except
as set forth in Section (m) of the Disclosure Letter, the Company is in
compliance in all material respects with any applicable requirements of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated thereunder,
as amended, that are currently in effect.
(iii) Financial
Statements.
Except
as set forth in Section (m) of the Disclosure Letter, the consolidated financial
statements of the Company included in the SEC Reports (i) comply in all material
respects with the rules and regulations of the SEC with respect thereto as
were
in effect at the time of filing and (ii) present fairly, in accordance with
generally accepted accounting principles in the United States (“U.S.
GAAP”),
consistently applied, the financial position of the Company and its Subsidiaries
as of the dates indicated therein, and the results of its operations and cash
flows for the periods therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal, immaterial, year-end audit
adjustments
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(n) Intellectual
Property.
Except
as set forth in Section 3(n) of the Disclosure Letter, the Company and its
Subsidiaries own or have valid, binding and enforceable licenses or other rights
to use, free and clear of all liens, charges, claims, encumbrances, pledges,
security interests, defects and other like charges, all patents, patent rights,
inventions, designs, processes, trade secrets, know-how, trademarks, service
marks, trade names, licenses or copyrights (collectively, “Intellectual
Property”),
which
are necessary to conduct the businesses of the Company and its Subsidiaries
as
currently conducted, except where the failure to own or possess such rights
could not reasonably be expected, either singly or in the aggregate, to have
a
Material Adverse Effect. Except as set forth in Section 3(n) of the Disclosure
Letter, the Company has not received any written notice of, and has no actual
knowledge of (i) any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property which, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to have
a
Material Adverse Effect, or (ii) that any Person is infringing upon or
misappropriating, or has infringed upon or misappropriated any Intellectual
Property owned or licensed by the Company or any Subsidiary, which infringement
or misappropriation could reasonably be expected to have a Material Adverse
Effect.
(o) Spectrum
Leases; Material Contracts.
Subsidiaries of the Company are the sole owners and holders of all of the
leasehold or license interests granted by each lease, license, agreement or
other arrangement to which the Company or any Subsidiary thereof is now or
may
hereafter become a party pursuant to which the Company or any Subsidiary thereof
leases, licenses or otherwise acquires or obtains any rights, whether exclusive
or non-exclusive, with respect to radio frequency specified in any license
granted by the Federal Communications Commission (the “FCC”),
in
each case, as amended, restated, supplemented or otherwise modified from time
to
time (each, a “Spectrum
Lease”).
Except as would not have a Material Adverse Effect, (i) each Spectrum Lease
is,
and on the Closing Date will be, in full force and effect, constituting valid
and binding obligations of the parties thereto and enforceable in accordance
with their respective terms and (ii) neither the Company nor any Subsidiary
thereof has received any notice that any party to any Spectrum Lease intends
to
cancel or terminate any such Spectrum Lease or written notice alleging a
material default thereunder (other than letters of default that have been
rescinded or with respect to defaults that have been cured or waived).
(p) Title.
Except
as would not have a Material Adverse Effect, the Company and its 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 Subsidiaries, in each case free and clear of
all
liens, encumbrances and defects except as set forth in Section (o) of the
Disclosure Letter and except 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 Subsidiaries. Except as would not have
a
Material Adverse Effect, any real property and facilities held under lease
by
the Company and any of its 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.
8
(q) No
Material Adverse Change; Absence of Undisclosed Liabilities.
Except
as set forth in Section 3(m) of the Disclosure Letter, since the date (the
“Financial
Statement Date”)
of the
most recent financial statements included in the SEC Reports, no event or change
has occurred that has had or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set
forth
in the financial statements referred to in Section 3(m) above, since the
Financial Statement Date, neither the Company nor any of its Subsidiaries has
incurred any obligations or liabilities that would be required to be reflected
on a balance sheet or the notes prepared thereto in accordance with U.S. GAAP
consistently applied, other than (i) obligations or liabilities incurred in
the
ordinary course of business, (ii) obligations and liabilities incurred in
connection with transactions contemplated hereby and (iii) obligations and
liabilities that could not, either singly or in the aggregate, reasonably be
expected to be material to the Company and its Subsidiaries taken as a
whole.
(r) Subsidiary
Rights.
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 the Company’s direct and indirect
Subsidiaries that are owned by the Company or one of its
Subsidiaries.
(s) Spectrum
Licenses.
(i) For
purposes of this Agreement “FCC
License”
means
any paging, mobile telephone, specialized mobile radio, microwave, personal
communications services or other license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued
by
the FCC, including authorizing or permitting the acquisition, construction
or
operation of any system to provide telecommunications services, including,
without limitation, specialized mobile radio system, radio paging system, mobile
telephone system, cellular radio telecommunications system, conventional mobile
telephone system, personal communications system, EBS/ITFS-based system or
BRS/MDS/MMDS-based system, data transmission system or any other paging, mobile
telephone, radio, microwave, communications, broadband or data transmission
system; and “Foreign License”
means
any paging, mobile telephone, specialized mobile radio, microwave, personal
communications services or other license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued
by
any governmental authority other than the FCC.
(ii) (1)
Each
of the material FCC Licenses and Foreign Licenses of the Company or any
Subsidiary is valid, binding, in full force and effect, and enforceable by
the
Company or any Subsidiary party thereto in accordance with its terms;
(2) the Company or any Subsidiary which is the holder of each such material
FCC License or Foreign License has performed all accrued obligations thereunder
in all material respects and has not received written notice of intention to
terminate any such FCC License or Foreign License or written notice alleging
a
material default (other than letters of default that have been rescinded or
with
respect to defaults that have been cured or waived); (3) no event caused
by, relating to or affecting the Company or any Subsidiary which is the holder
of a material FCC License or Foreign License has occurred which (with or without
the giving of notice or lapse of time, or both) would constitute a material
default or material breach by the Company or any Subsidiary party of the terms
of such FCC License or Foreign License, the Communications Act of 1934 (as
amended, the “Communications
Act”)
or the
FCC rules, regulations, written policies, orders and decisions of the FCC
adopted under the Communications Act, in each case as from time to time in
effect (the “FCC
Rules”),
and
(4) to the knowledge of the Company, no holder of any license granted by
the FCC to a Person who is the lessor to the Company or its Subsidiaries under
a
Spectrum Lease or, in the case of a sublease, to the Person who is the lessor
to
the applicable sublessor to the Company or its Subsidiaries (an “Underlying
License”),
is in
breach or default in any material respect thereunder.
Neither
the Company nor any Subsidiary has entered into any agreement, written or oral,
or made any commitment to enter into any such agreement, pursuant to which
the
Company would accept any interference other than such interference contemplated
by the applicable material FCC Licenses or Foreign License, Underlying Licenses
and rules and regulations of the FCC or applicable governmental authority,
or to
permit any additional signals in the geographic area covered by such FCC
Licenses, Foreign License or Underlying Licenses and, to the Company’s
knowledge, there is not any such interference or additional signal.
9
(iii) Neither
the Company nor any of its Subsidiaries is a party to or has knowledge of any
investigation, notice of apparent liability, violation, forfeiture or other
order or complaint issued by or before any court or regulatory body, including
the FCC, or of any other proceedings which could in any manner threaten or
adversely affect the validity or continued effectiveness of the FCC Licenses
or
Foreign License of any such Person or give rise to any order of forfeiture
or
could otherwise reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary has notice of any fact that may
reasonably be expected to result in the failure of any material FCC License
or
Foreign License of the Company or any Subsidiary to be renewed in the ordinary
course. The Company and each Subsidiary have filed in a timely matter all
material reports, applications, documents, instruments and information required
to be filed by it pursuant to the FCC Rules. No licenses, authorizations,
permits or other rights other than the FCC Licenses are required under the
Communications Act or the FCC Rules to operate the business of the Company
in
substantially the manner it is being operated as of the date hereof and as
of
the Closing Date.
(t) Title
to Property and Assets.
Except
as set forth in Section (o) of the Disclosure Letter, the properties and assets
owned by the Company are so owned free and clear of all mortgages, deeds of
trust, liens, charges, encumbrances and security interests except for (i)
statutory liens for the payment of current taxes that are not yet delinquent
and
(ii) liens, encumbrances and security interests that arise in the ordinary
course of business and do not in any material respect affect the business of
the
Company and its Subsidiaries as currently conducted. With respect to the
property and assets it leases, the Company is in compliance with such leases
in
all material respects.
(u) Payment
of Taxes.
(i) All
returns and reports or similar filing (including the attached schedules) of
the
Company and its Subsidiaries required to be filed by any of them with respect
to
material Taxes (“Tax
Returns”)
have
been timely filed (or validly extended), all such filed Tax Returns are true,
complete and accurate in all material respects and all material Taxes imposed
upon the Company or its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
timely paid other than those which are being contested by the Company or such
Subsidiary in good faith and by appropriate proceedings and for which reserves
or other appropriate provisions, if any, as may be required in conformity with
U.S. GAAP shall have been made or provided therefor. There is no audit or
assessment of a material Tax proposed or determined in writing against the
Company or any of its Subsidiaries as of the date of this representation other
than those which are being contested by the Company or such Subsidiary in good
faith and by appropriate proceedings and for which reserves or other appropriate
provisions, if any, as may be required in conformity with U.S. GAAP shall have
been made therefor.
10
(ii) Neither
the Company nor any of its Subsidiaries or any predecessor has waived any
statute of limitations with respect to Taxes or agreed to any extension of
time
with respect to a Tax assessment or deficiency, or has made any request in
writing for any such extension or waiver. None of the Company or any Subsidiary
has been informed by any jurisdiction that the jurisdiction believes that the
Company or any Subsidiary was required to file any Tax Return or pay any tax
that was not filed or was not paid. The
Company and its Subsidiaries have no knowledge of any material tax deficiency
that has been or might be asserted or threatened against any of them.
The
Company and each of the Subsidiaries have withheld and paid all Taxes other
than
immaterial amounts of Taxes required to be withheld and paid in connection
with
amounts paid and owing to any employee, independent contractor, creditor,
stockholder or other third party (whether domestic or foreign). There are no
liens for Taxes upon any property or asset of the Company or its Subsidiaries,
except for (a) liens for Taxes not yet delinquent or (b) liens for Taxes
contested in good faith and reserved against in accordance with U.S. GAAP and
reflected in the Company’s audited financial statements.
(iii) Except
as
set forth in Section (u) of the Disclosure Letter, (A) except for the affiliated
group of which the Company is, or a wholly-owned Subsidiary was, the common
parent, the Company and its Subsidiaries are not and have never been a member
of
an affiliated group of corporations within the meaning of Section 1504 of the
Code (or any similar provision of state, local or foreign Law) or any group
that
has filed a combined, consolidated or unitary Tax Return; (B) neither the
Company nor any of its Subsidiaries has liability for the Taxes of any Person
other than the Company and its Subsidiaries (I) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local or foreign Law),
(II)
as a transferee or successor, (III) by contract, or (IV) otherwise; and (C)
neither the Company nor any of its Subsidiaries is a party to any Tax sharing
agreement, Tax indemnity agreement or Tax allocation agreement, or has assumed
the Tax liability of any other Person under contract, in each case, that is
currently in effect.
(iv) Neither
the Company nor any of its Subsidiaries has been a “controlled corporation” or a
“distributing corporation” in any distribution occurring during the two-year
period ending on the date hereof that was purported or intended to be governed
by Section 355 of the Code. Neither the Company nor any of its Subsidiaries
has entered into any “reportable transaction” as such term is defined in
Treasury Regulation Section 1.6011-4(b)(1) or any “listed transaction” within
the meaning of Treasury Regulation Section 1.6011-4(b)(2), or any other
transaction requiring disclosure under analogous provisions of state, local
or
foreign law. There are no adjustments under Section 481 of the Code (or any
similar adjustments under any provision of the Code or the corresponding
foreign, state or local Laws) that are required to be taken into account by
the
Company or any of its Subsidiaries in any period ending after the Closing Date
by reason of a change in method of accounting in any taxable period ending
on or
before the Closing Date.
11
(v) As
used
in this Agreement, “Taxes”
means
any and all federal, state, local, foreign or other taxes of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any governmental entity, including
taxes on or with respect to income, franchises, windfall or other profits,
gross
receipts, property, sales, use, capital stock, payroll, employment,
unemployment, social security, workers’ compensation or net worth, and taxes in
the nature of excise, withholding, ad valorem or value added.
(vi) The
Company is not a U.S. real property holding corporation with in the meaning
of
Section 897 of the Code.
(v) Labor
Relations.
(i) Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union. The Company and its Subsidiaries
believe that their relations with their employees are good. No executive officer
of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the
Securities Act) has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer's employment with the Company or any such Subsidiary.
No
executive officer of the Company or any of its Subsidiaries 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 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, 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.
(w) Internal
Accounting Controls.
The
Company has established disclosure controls and procedures (as defined in
Exchange Act rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company is made known to the certifying officers by others within the
Company. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of a date within 90 days
prior to the filing date of the Form 10-Q for the Company’s most recently ended
fiscal quarter (such date, the “Evaluation
Date”).
The
Company presented in its most recently filed Form 10-K or Form 10-Q the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date.
Except as set forth in Section (w) of the Disclosure Letter, since the
Evaluation Date, there have been no material changes in the Company’s disclosure
controls and procedures. The Company is not currently required to comply with
the requirements of Section 404 of the Sarbanes Oxley Act of 2002 relating
to
internal controls over financial reporting.
12
(x) Transactions
With Officers and Directors.
Except
as set forth in the SEC Reports, none of the officers or directors of the
Company or any Subsidiary, and, to the actual knowledge of the Company, none
of
the employees of the Company or any Subsidiary is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors or as a Purchaser under this Agreement),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or form, or otherwise requiring payments to or from any officer,
director or such employee or, to the actual knowledge of the Company, any entity
in which any officer, director, or any employee has a substantial interest
or is
an officer, director, trustee or partner, in each case in excess of $120,000
other than (i) for payment of salary or consulting fees (on arm’s length terms)
for services rendered, (ii) reimbursement for expenses incurred on behalf of
the
Company or a Subsidiary and (iii) for other employee benefits, including stock
option agreements under any stock option plan of the Company.
(y) Certain
Registration Matters.
The
Company will meet the eligibility requirements for use of a Form S-3
Registration Statement for the resale of the Purchased Shares and the Conversion
Shares on June 30, 2007. Assuming the completion and timely delivery of the
Notice and Questionnaire attached to the Registration Rights Agreement and
the
Suitability Questionnaire (attached hereto as Appendix
II)
(the
“Suitability
Questionnaire”)
by
each Purchaser to the Company, the Company is not aware of any facts or
circumstances that would prohibit or delay the preparation and filing of a
registration statement with respect to the Registrable Securities (as defined
in
the Registration Rights Agreement) by July 31, 2007.
(z) Nasdaq
Listing Matters.
The
shares of Common Stock are registered pursuant to Section 12(g) of the Exchange
Act and are listed on the Nasdaq under the ticker symbol “WAVE.” The Company has
not received any notice that it is not currently in compliance with the listing
or maintenance requirements of the Nasdaq. The issuance and sale of the
Purchased Shares under this Agreement do not contravene the rules and
regulations of Nasdaq. The Company has taken no action designed to, or likely
to
have the effect of, terminating the registration of the Common Stock under
the
Exchange Act or de-listing the Common Stock from Nasdaq.
(aa) Investment
Company.
Neither
the Company nor any of its Subsidiaries is, or, immediately after receipt of
payment for the Purchased Shares and consummation of the contemplated
transactions, will be an “investment company” within the meaning of such term
under the Investment Company Act of 1940 (as amended) and the rules and
regulations of the SEC thereunder.
(bb) Application
of Takeover Protections.
There
is no control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s Certificate of Incorporation (or similar charter
documents) that would become applicable to the Purchasers as a result of the
issuance of the Purchased Shares or the Conversion Shares.
13
(cc) Insurance.
The
Company and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts and with such
deductibles as is customary in the business in which the Company and its
Subsidiaries are engaged and which management of the Company believes to be
prudent. All material insurance policies are in full force and effect and all
premiums due thereon have been paid. 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.
(dd) 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 or any of its Subsidiaries (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.
(ee) Money
Laundering.
The
operations of the Company and the Subsidiaries are and have been conducted
at
all times in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the “Money
Laundering Laws”),
and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any or its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(ff) OFAC.
Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”);
and
the Company will not, directly or indirectly, use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered
by
OFAC.
(gg) Acknowledgement.
The
Company acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Purchaser or any of its
representatives or agents in connection with the Transaction Documents and
the
transactions contemplated hereby and thereby is merely incidental to such
Purchaser's purchase of the Purchased Shares. The Company further represents
to
each Purchaser that the Company's decision to enter into the Transaction
Documents has been based solely on an independent evaluation by the Company
and
its representatives.
14
(hh) Disclosure.
All
disclosure provided to the Purchasers regarding the Company and its
Subsidiaries, their business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the Company is
true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
4. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF THE PURCHASERS.
Each
Purchaser hereby represents and warrants to the Company, severally and not
jointly, as of the date hereof and as of the Closing Date, and agrees as
follows:
(a) Organization,
Good Standing and Qualification.
Such
Purchaser has all corporate, limited liability company, partnership, trust
or
individual power and authority required to enter into this Agreement and the
other agreements, instruments and documents contemplated hereby and consummate
the transactions contemplated hereby and thereby.
(b) Due
Authorization.
The
execution, delivery and performance of all obligations of such Purchaser under
this Agreement and the Registration Rights Agreement have been duly authorized
by all necessary corporate, limited liability company, partnership, trust or
individual, as the case may be, action on the part of such Purchaser. This
Agreement and the Registration Rights Agreement constitute such Purchaser’s
legal, valid and binding obligation, enforceable against such Purchaser in
accordance with its terms, except (i) as may be limited by (1) applicable
bankruptcy, insolvency, reorganization moratorium, liquidation, conservatorship,
receivership or other similar laws of general application relating to or
affecting the enforcement of creditors’ rights generally or other laws of
general application relating to or affecting the enforcement of creditors’
rights generally or (2) the effect of rules of law governing the availability
of
equitable principles of general application or (ii) as rights to indemnity
or
contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(c) No
Conflicts.
There
is no provision of (i) the organizational documents of such Purchaser; (ii)
any
provision of any federal, state, local or foreign law, rule, regulation, order
or decree applicable to such Purchaser or (iii) any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality
applicable to Purchaser, that could, in any case, prevent, enjoin, alter,
challenge or delay the consummation of the transactions contemplated by this
Agreement or the Registration Rights Agreement.
(d) Purchase
for Own Account.
The
Purchased Shares are being acquired for investment for such Purchaser’s own
account, not as a nominee or agent, in the ordinary course of business, and
not
with a view to the distribution thereof. Such Purchaser (if not an individual)
also represents that it has not been formed for the specific purpose of
acquiring the Purchased Shares. Such Purchaser does not have any agreement
or
understanding, whether or not legally binding, direct or indirect, with any
other Person, to sell or otherwise distribute the Purchased Shares.
Notwithstanding the foregoing, the parties hereto acknowledge (i) that such
Purchaser does not agree to hold any of the Purchased Shares for any minimum
or
other specific term and (ii) such Purchaser’s right at all times to sell or
otherwise dispose of all or any part of such securities in compliance with
applicable federal and state securities laws and as otherwise contemplated
by
this Agreement.
15
(e) Investment
Experience.
Such
Purchaser understands that the purchase of the Purchased Shares involves
substantial risk. Such Purchaser has experience as an investor in securities
of
companies and acknowledges that such Purchaser is able to bear the economic
risk
of its investment in the Purchased Shares and has such knowledge and experience
in financial or business matters to be capable of evaluating the merits and
risks of this investment in the Purchased Shares and protecting such Purchaser’s
own interests in connection with this investment.
(f) Status
of Purchaser.
Such
Purchaser is an “accredited investor,” as such term is defined in Regulation D
of the Securities Act (“Regulation
D”).
Such
Purchaser acknowledges that the Purchased Shares and the Conversion Shares
were
not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements
or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which
such
Purchaser was invited by any of the foregoing means of
communications.
(g) Reliance
Upon Purchaser’s Representations.
Such
Purchaser understands that the issuance and sale of the Purchased Shares to
it
will not be registered under the Securities Act on the ground that such issuance
and sale will be exempt from registration under the Securities Act pursuant
to
Section 4(2) thereof, and that the Company’s reliance on such exemption is based
on each Purchaser’s representations set forth herein and in the Suitability
Questionnaire.
(h) Receipt
of Information.
Such
Purchaser has had an opportunity to ask questions and receive answers from
the
Company regarding the terms and conditions of the issuance and sale of the
Purchased Shares and the business, properties, prospects and financial condition
of the Company and to obtain any additional information requested and has
received and considered all information such Purchaser deems relevant to make
an
informed decision to purchase the Purchased Shares. Neither such inquiries
nor
any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel thereof shall modify, amend or affect such
Purchaser’s right to rely on the truth, accuracy and completeness of such
information and the Company’s representations and warranties contained in this
Agreement.
(i) Restricted
Securities.
Such
Purchaser understands that the Purchased Shares have not been, and will not
upon
issuance be, registered under the Securities Act and such Purchaser will not,
except as contemplated below, sell, offer to sell, assign, pledge, hypothecate
or otherwise transfer any of the Purchased Shares or Conversion Shares except
(i) in the United States to a person who the Purchaser reasonably believes
is a
Qualified Institutional Buyer (as defined in Rule 144A under the Securities
Act)
in a transaction meeting the requirements of Rule 144A (respecting Purchased
Shares), (ii) outside of the United States in an offshore transaction in
accordance with Section 904 under the Securities Act, (iii) pursuant to an
effective registration statement under the Securities Act, (iv) pursuant to
Rule
144(k) under the Securities Act following the applicable holding period set
forth therein, (v) if such Purchaser provides the Company with an opinion of
counsel, in a form reasonably acceptable to the Company, to the effect that
a
sale, assignment or transfer of the Purchased Shares or Conversion Shares may
be
made without registration under the Securities Act pursuant to Section 4 of
the
Securities Act and not involving any public offering and the transferee agrees
to be bound by the terms and conditions of this Agreement or (vi) if such
Purchaser provides the Company with reasonable assurances (in the form of seller
and broker representation letters) that the Purchased Shares or the Conversion
Shares, as the case may be, can be sold pursuant to Rule 144 promulgated under
the Securities Act, as such rule may be amended from time to time (“Rule
144”)
following the applicable holding period set forth therein. Notwithstanding
anything to the contrary contained in this Agreement, such Purchaser may
transfer (without restriction and without the need for an opinion of counsel)
the Purchased Shares or the Conversion Shares, as the case may be, to its
Affiliates provided that such transfer is exempt from the registration
requirements of the Securities Act pursuant to Section 4 of the Securities
Act
and not involving any public offering and such Affiliate agrees to be bound
by
the terms and conditions of this Agreement. For the purposes of this Agreement,
an “Affiliate”
of
any
specified Purchaser means any other Person which directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
with, such specified Purchaser. For purposes of this definition, “control”
as
used
with respect to any Person means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
16
(j) Legends.
Such
Purchaser agrees that the certificates representing the Purchased Shares and
the
Conversion Shares shall bear a legend in substantially the following form (in
addition to any legend required by applicable state securities or “blue sky”
laws):
“THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”), AND THIS SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THERE FROM. 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.
THE
HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO
A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE OF THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
17
The
Company acknowledges and agrees that the Purchasers may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Purchased Shares and Conversion
Shares to a financial institution that is an “accredited investor” as defined in
Rule 501(a) under the Securities Act and, if required under the terms of such
arrangement, the Purchasers may transfer pledged or secured Purchased Shares
and
Conversion Shares to the pledgees or secured parties without the prior consent
of the Company.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Purchased Shares and the
Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) such Purchased Shares or Conversion Shares are
registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion
of counsel, in a form reasonably acceptable to the Company, to the effect that
such sale, assignment or transfer of the Purchased Shares or the Conversion
Shares, as applicable, may be made without registration under the applicable
requirements of the 1933 Act, or (iii) such holder provides the Company with
reasonable assurance that the Purchased Shares or the Conversion Shares, as
applicable, can be sold, assigned or transferred pursuant to Rule
144(k).
In
addition, such Purchaser agrees that the Company may place stop transfer orders
with its transfer agent with respect to such certificates in order to implement
the restrictions on transfer set forth in this Agreement. The Company will
promptly take all necessary actions to promptly remove the appropriate portion
of the legend and the stop transfer orders promptly upon delivery to the Company
of such satisfactory evidence as reasonably may be required by the Company
that
such legend or stop orders are not required to ensure compliance with the
Securities Act.
(k) Questionnaires.
Such
Purchaser has completed or caused to be completed the Stock Certificate
Questionnaire and the Suitability Questionnaire, and the answers to such
questionnaires are true and correct as of the date thereof and as of the
Closing Date.
(l) Restrictions
on Short Sales.
Such
Purchaser represents, warrants and covenants that neither such Purchaser nor
any
Affiliate of such Purchaser which (x) has knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser’s
investments or trading or information concerning such Purchaser’s investments,
including in respect of the Purchased Shares, or (z) is subject to such
Purchaser’s review or input concerning such Affiliate’s investments or trading,
has engaged or will engage, directly or indirectly, during the period beginning
on the date on which UBS Securities LLC, financial advisors to the Company,
first contacted such Purchaser regarding the transactions contemplated by this
Agreement (and involving the Company) and ending on the public announcement
of
the transactions contemplated by this Agreement, in (i) any “short sales” (as
such term is defined in Rule 200 promulgated under the Exchange Act) of the
Purchased Shares and/or the Conversion Shares, including, without limitation,
the maintaining of any short position with respect to, establishing or
maintaining a “put equivalent position” (within the meaning of Rule 16a-1(h)
under the Exchange Act) with respect to, entering into any swap, derivative
transaction or other arrangement (whether any such transaction is to be settled
by delivery of Common Stock, other securities, cash or other consideration)
that
transfers to another, in whole or in part, any economic consequences or
ownership, or otherwise dispose of, any of the Purchased Shares by such
Purchaser or (ii) any hedging transaction which establishes a net short position
with respect to the Purchased Shares (clauses (i) and (ii) together, a
“Short
Sale”);
except for (A) Short Sales by such Purchaser or an Affiliate of such Purchaser
which was, prior to the date on which such Purchaser was first contacted
regarding the transactions contemplated by this Agreement, a market maker for
the Common Stock, provided that such Short Sales are in the ordinary course
of
business of such Purchaser or Affiliate of such Purchaser and are in compliance
with the Securities Act, the rules and regulations of the Securities Act and
such other securities laws as may be applicable, (B) Short Sales by such
Purchaser or an Affiliate of such Purchaser which by virtue of the procedures
of
such Purchaser are made without knowledge of the transactions contemplated
by
this Agreement or (C) Short Sales by such Purchaser or an Affiliate of such
Purchaser to the extent that such Purchaser or Affiliate of such Purchaser
is
acting in the capacity of a broker-dealer executing unsolicited third-party
transactions.
18
(m) Confidentiality.
Such
Purchaser agrees to use any information it receives in the course of and in
connection with this transaction for the sole purpose of evaluating a possible
investment in the Purchased Shares and such Purchaser hereby acknowledges that
it is prohibited from reproducing or distributing any such information, this
Agreement, or any other offering materials provided by the Company in connection
with such Purchaser’s consideration of its investment in the Company, in whole
or in part, or divulging or discussing any of their contents except to its
advisors and representatives for the purpose of evaluating such investment.
The
foregoing agreements shall not apply to any information that (i) is or becomes
publicly available through no fault of such Purchaser, (ii) was
already known to such Purchaser prior to its disclosure by the Company to the
Purchasers, (iii) is or becomes available to such Purchaser on a
non-confidential basis from a source other than the Company (so long as such
Purchaser is not aware such disclosure is in breach of a confidentiality
obligation to the Company), (iv) is independently developed by such Purchaser’s
personnel without access to or use of the confidential information received
from
the Company
or (v)
is legally required to be disclosed by such Purchaser under operation of law
or
judicial or other governmental order; provided,
however,
that if
such Purchaser is requested or ordered to disclose any such information pursuant
to any judicial or other governmental order or any other applicable legal
procedure, it shall provide the Company with reasonably prompt notice of any
such request or order to enable the Company to seek an appropriate protective
order and shall provide the Company with reasonable assistance in obtaining
such
protective order at the Company’s sole expense.
19
(n) Independence.
Each
Purchaser has relied on the representations of the Company herein, the SEC
Reports, information provided by the Company, and its own independent
investigation of the financial condition and affairs of the Company and its
Subsidiaries. No individual Purchaser (or Affiliate or representative of any
Purchaser) is acting as a financial advisor or fiduciary to any other Purchaser,
or shall have any duty or responsibility to any other Purchaser, either
initially or on a continuing basis. Without limiting the foregoing, no
individual Purchaser (or Affiliate or representative of any Purchaser) shall
have any duty or responsibility to any other Purchaser to make any investigation
on behalf of any Purchaser or to provide any Purchaser with any information
with
respect to the Company and its Subsidiaries, whether coming into its possession
before the purchase of the Purchased Shares, or at any time thereafter, and
no
Purchaser (or Affiliate or representative of any Purchaser) shall have any
responsibility with respect to the accuracy or completeness of any information
provided to Purchasers. Each Purchaser severally but not jointly acknowledges
and agrees that (i) the Purchasers, in such capacity, have no right to
representation on the Board of Directors of the Company or any Subsidiary
thereof, or to have an observer at meetings of any such Board, and that (ii)
any
Person affiliated or associated with an individual Purchaser who may serve
as a
member of the Board of Directors of the Company or any Subsidiary thereof is
doing so in that Person’s individual capacity, not as a representative of any
Purchaser, and, in such capacity, shall have no duty or responsibility to any
Purchaser.
5. COVENANTS.
(a) Best
Efforts.
Each
party shall use its best efforts timely to satisfy each of the conditions to
be
satisfied by it as provided in Sections 7 and 8 of this Agreement.
(b) Form
D
Filing.
The
Company hereby agrees that it shall file in a timely manner a Form D relating
to
the sale of the Purchased Shares under this Agreement, pursuant to Regulation
D.
(c) Reporting
Status.
Until
the date on which the Purchasers shall have sold all the Conversion Shares,
and
none of the Purchased Shares are outstanding (the “Reporting
Period”),
the
Company shall use its best efforts to timely file all reports required to be
filed with the SEC pursuant to the Exchange Act, and the Company shall not
terminate its status as an issuer required to file reports under the Exchange
Act (except to the extent that the Company has complied with its obligations
under the Certificate of Designations in connection with (i) a reorganization
of
the Company or a merger or consolidation of the Company with or into another
entity or (ii) an event that is a “deemed liquidation” pursuant to the
Certificate of Designations) even if the Exchange Act or the rules and
regulations thereunder would no longer require or otherwise permit such
termination, and the Company shall take all actions necessary to maintain its
eligibility to register the Conversion Shares for resale by the Purchasers
on
Form S-3.
(d) Financial
Information.
For so
long as any Purchased Shares or Conversion Shares remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to the Purchasers
and any holder of Purchased Shares or the Conversion Shares 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).
20
(e) Listing
of Common Stock.
The
Company hereby agrees to use best efforts to maintain the listing of its Common
Stock on the Nasdaq and as soon as reasonably practicable following the Closing
(but not later than the effective date of the Registration Statement), to list
all of the Conversion Shares on such trading market. The Company further agrees,
if the Company applies to have the Conversion Shares traded on any other trading
market, it will include in such application all of the Conversion Shares to
be
listed on such other trading market as promptly as possible. The Company will
take all action reasonably necessary to continue the listing and trading of
its
Common Stock on the Nasdaq and will comply in all material respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the Nasdaq.
(f) Foreign
Qualifications.
The
Company shall deliver to each Purchaser within ten days following the Closing
Date certificates evidencing NextWave Broadband Inc., NW Spectrum Co., AWS
Wireless Inc., PacketVideo Corporation and Go Networks Inc’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or
comparable office) of each jurisdiction in which such Subsidiaries conduct
business and are required to so qualify.
(g) PORTAL.
The
Company agrees that if requested by a Purchaser, it shall use its best efforts
to designate the Purchased Shares as PORTAL eligible securities; provided that
the terms of the PORTAL eligible securities shall be materially consistent
with
the terms set forth in Certificate of Designations. Each Purchaser hereby agrees
to reasonably cooperate with the Company in designating the Purchased Shares
as
PORTAL eligible.
6. ADVISORY
FEE.
The
Purchasers acknowledge that the Company intends to pay to UBS Securities LLC,
as
financial advisor, a fee in respect of the sale of the Purchased Shares. Each
of
the parties to this Agreement hereby represents that no other broker or finder
is entitled to compensation in connection with the sale of the Purchased Shares
to the Purchasers by reason of any action by or agreement of such party. The
Company shall indemnify and hold harmless the Purchasers from and against all
fees, commissions or other payments owing by the Company to UBS Securities
LLC
or any other Person acting on behalf of the Company hereunder.
7. CONDITIONS
TO THE PURCHASERS’ OBLIGATIONS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREIN.
The
obligation of each Purchaser to consummate the transactions contemplated herein
is subject to the fulfillment or waiver by such Purchaser, on or before the
Closing, of each of the following conditions:
(a) Representations
and Warranties True.
Each of
the representations and warranties of the Company contained in Section 3 shall
be true and correct in all material respects on and as of the date hereof
(provided,
however,
that
such qualification shall only apply to representations or warranties not
otherwise qualified by materiality) and on and as of the Closing Date with
the
same effect as though such representations and warranties had been made as
of
the Closing.
21
(b) Performance.
The
Company shall have performed and complied in all material respects with all
of
its agreements, obligations and conditions contained in this Agreement that
are
required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Compliance
Certificate.
The
Company will have delivered to each of the Purchasers a certificate signed
on
its behalf by a duly authorized officer certifying that the conditions specified
in Sections 7(a) and 7(b) hereof have been fulfilled.
(d) Registration
Rights Agreement.
The
Company shall have executed and delivered to the Purchasers the Registration
Rights Agreement.
(e) Securities
Exemptions.
The
offer and sale of the Purchased Shares to each of the Purchasers pursuant to
this Agreement shall be exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all
applicable state securities laws.
(f) No
Suspension of Trading or Listing of Common Stock.
The
Common Stock (i) shall be designated for quotation or listed on Nasdaq and
(ii)
shall not have been suspended from trading on Nasdaq (except for suspensions
of
trading of not more than one trading day solely to permit dissemination of
material information regarding the Company).
(g) Secretary’s
Certificate.
The
Company shall have delivered to the Purchasers a certificate of the Company
executed by the Company’s Secretary (or other authorized officer), dated as of
the Closing Date, attaching and certifying to the truth and correctness of
(1)
the certificate of incorporation of the Company (including, without limitation,
the Certificate of Designations), (2) the by-laws of the Company, and (3) the
resolutions adopted by the Board of Directors of the Company in connection
with
the transactions contemplated by this Agreement.
(h) No
Statute or Rule Challenging Transaction.
No
statute, rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of,
any
of the transactions contemplated by this Agreement.
(i) Reservation
of Common Stock
The
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of facilitating the conversion of the Purchased Shares,
that number of shares of Common Stock equal to the aggregate number of
Conversion Shares issuable upon conversion of the Purchased Shares (after giving
effect to the Purchased Shares to be issued on the Closing Date and assuming
all
such Purchased Shares were fully convertible on such date regardless of any
limitation on the timing or amount of such conversions).
22
(j) Opinion
of Counsel.
Purchasers shall have received a favorable opinion of counsel to the Company
covering the matters set forth in Exhibit
E
hereto
and otherwise in form and substance satisfactory to Purchasers.
(k) Certificate
of Designations.
The
Certificate of Designations in the form attached as Exhibit
A
shall
have been filed on or prior to the Closing Date with the Secretary of State
of
the State of Delaware and shall be in full force and effect, enforceable against
the Company in accordance with its terms and shall not have been
amended.
(l) Transfer
Agent Instructions.
The
Company shall have delivered to such Purchaser a copy of the Irrevocable
Transfer Agent Instructions, which instructions shall have been delivered to
and
acknowledged in writing by the Company's transfer agent.
(m) Certificates.
The
Company shall have delivered to such Purchaser (i) a certificate evidencing
the
formation and good standing of the Company issued the Secretary of State of
the
State of Delaware; and (ii) a certified copy of the Certificate of Incorporation
as certified by the Secretary of State of the State of Delaware, in each case
as
of a date within 10 days of the Closing Date.
8. CONDITIONS
TO THE COMPANY’S OBLIGATIONS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREIN.
The
obligations of the Company to consummate the transactions contemplated herein
are subject to the fulfillment or waiver, on or before the Closing, of each
of
the following conditions:
(a) Representations
and Warranties True.
Each of
the representations and warranties of the Purchasers contained in Section 4
shall be true and correct in all material respects on and as of the date hereof
(provided,
however,
that
such qualification shall only apply to representations and warranties not
otherwise qualified by materiality) and on and as of the Closing Date with
the
same effect as though such representations and warranties had been made as
of
the Closing.
(b) Performance.
The
Purchasers shall have performed and complied in all material respects with
all
of their agreements, obligations and conditions contained in this Agreement
that
are required to be performed or complied with by them on or before the Closing
and shall have obtained all approvals, consents and qualifications necessary
to
complete the purchase and sale described herein.
(c) Registration
Rights Agreement; Questionnaires.
Each
Purchaser shall have executed and delivered to the Company the Registration
Rights Agreement, and the Suitability Questionnaire and the Stock Certificate
Questionnaire.
(d) Securities
Exemptions.
The
offer and sale of the Purchased Shares to the Purchasers pursuant to this
Agreement shall be exempt from the registration requirements of the Securities
Act and the registration and/or qualification requirements of all applicable
state securities laws.
23
(e) Payment
of Purchase Price.
The
Purchasers shall have delivered to the Company by wire transfer of immediately
available funds full payment of the purchase price for the Purchased Shares
as
specified in Section 1(b).
(f) No
Statute or Rule Challenging Transaction.
No
statute, rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of,
any
of the transactions contemplated by this Agreement.
9. MISCELLANEOUS.
(a) Successors
and Assigns.
The
terms and conditions of this Agreement will inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties.
The
Company shall not assign this Agreement or any rights or obligations hereunder
except by operation of law without the prior written consent of the Purchasers
holding at least 75% of the total aggregate number of Purchased Shares then
outstanding (including, for such purposes, any Conversion Shares into which
any
of the Purchased Shares have been converted but excluding any Conversion Shares
then already sold to the public pursuant to Rule 144 or otherwise). Any
Purchaser may assign its rights under this Agreement to any Person to whom
such
Purchaser assigns or transfers any Purchased Shares, provided that such
transferee agrees in writing to be bound by the terms and provisions of this
Agreement, and such transfer is in compliance with the terms and provisions
of
this Agreement and permitted by federal and state securities laws.
(b) Governing
Law; Enforcement of Judgment and Related Matters.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York without regard to conflicts of laws principles
thereof. 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 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 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
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for 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.
THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
(c) Survival.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties of the Company and the
Purchasers contained in this Agreement and the other Transaction Documents
shall
survive the execution and delivery of this Agreement and the other Transaction
Documents and the Closing. Each Purchaser shall be responsible only for its
own
representations, warranties, agreements and covenants hereunder.
24
(d) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
(e) Headings.
The
headings and captions used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits and schedules
will, unless otherwise provided, refer to sections and paragraphs hereof and
exhibits and schedules attached hereto, all of which exhibits and schedules
are
incorporated herein by reference.
(f) Notices.
Any
notices and other communications required or permitted under this Agreement
shall be in writing and shall be delivered (i) personally by hand or by courier,
(ii) mailed by United States first-class mail, postage prepaid or (iii) sent
by
facsimile directed (A) if to any Purchaser, at such Purchaser’s address or
facsimile number set forth on Schedule
1
to this
Agreement, or at such address or facsimile number as such Purchaser may
designate by giving at least ten (10) days’ advance written notice to the
Company or (b) if to the Company, to its address or facsimile number set forth
below, or at such other address or facsimile number as the Company may designate
by giving at least ten (10) days’ advance written notice to the Purchasers. All
such notices and other communications shall be deemed given upon (i) receipt
or
refusal of receipt, if delivered personally, (ii) three days after being placed
in the mail, if mailed, or (iii) confirmation of facsimile transfer, if
faxed.
The
address and facsimile number of the Company for the purpose of this Section
9(g)
are as follows:
NextWave
Wireless, Inc.
00
Xxxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxxxx 00000
Fax:
(000) 000-0000
Attention:
Xxxxx Xxxxxx, Esq.
with
a
copy to:
Weil,
Gotshal & Xxxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx, Esq.
The
address and facsimile number of each Purchaser is set forth on Schedule
1.
with
a
copy (for informational purposes) to:
O’Melveny
& Xxxxx
Times
Square Tower
0
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Telephone:
(212) 728-5868-
Facsimile:
(000) 000-0000
Attention:
Xxxxx Xxxxxxx , Esq.
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.
25
(g) Amendments
and Waivers.
This
Agreement may be amended and the observance of any term of this Agreement may
be
waived only with the written consent of the Company and the Purchasers holding
at least a majority of the total aggregate number of Purchased Shares then
outstanding (including, for such purposes, any Conversion Shares into which
any
of the Purchased Shares have been converted but excluding any Conversion Shares
then already sold to the public pursuant to Rule 144 or otherwise). Any
amendment effected in accordance with this Section 9(g) will be binding upon
the
Purchasers, the Company and their respective successors and assigns. 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 or holders of
Preferred Shares or Conversion Shares, as the case may be.
(h) Severability.
If any
provision of this Agreement is held to be unenforceable under applicable law,
such provision will be excluded from this Agreement and the balance of the
Agreement will be interpreted as if such provision were so excluded and will
be
enforceable in accordance with its terms.
(i) Entire
Agreement.
This
Agreement and the other Transaction Documents, together with all exhibits and
schedules hereto and thereto constitute the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersede any
and
all prior negotiations, correspondence, agreements, understandings, duties
or
obligations between the parties with respect to the subject matter hereof.
The
Company has not, directly or indirectly, made any agreements which does not
include each Purchaser relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.
(j) Further
Assurances.
From
and after the date of this Agreement, upon the request of the Company or the
Purchasers, the Company and the Purchasers will execute and deliver such
instruments, documents or other writings, and take such other actions, as may
be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
26
(k) Meaning
of “Include” and “Including”.
Whenever in this Agreement the word “include” or “including” is used, it shall
be deemed to mean “include, without limitation” or “including, without
limitation,” as the case may be, and the language following “include” or
“including” shall not be deemed to set forth an exhaustive list.
(l) Fees,
Costs and Expenses.
The
Company will reimburse the Purchasers for their reasonable out of pocket costs
and expenses of obtaining independent legal advice relating to the negotiation
of the Transaction Documents; provided that the maximum payment under this
Section 9(l) shall be $300,000 in the aggregate. Except as set forth above,
all
fees, costs and expenses (including attorneys’ fees and expenses) incurred by
any party hereto in connection with the preparation, negotiation and execution
of this Agreement and the exhibits and schedules hereto and the consummation
of
the transactions contemplated hereby and thereby (including the costs associated
with any filings with, or compliance with any of the requirements of any
governmental authorities), shall be the sole and exclusive responsibility of
such party.
(m) Exchange
Act Reporting and Publicity.
The
Company will describe the terms of the transactions contemplated by this
Agreement and attach this Agreement on its Annual Report on Form 10-K or, if
required, a Current Report on Form 8-K (the “Exchange
Act Submission”
including all attachments). Neither the Company nor any Purchaser shall issue
any press releases or any other public statements with respect to the
transactions contemplated by this Agreement; provided,
however,
that
the Company shall be entitled, without the prior approval of any Purchaser,
to
issue any press release or make any other public disclosure (including a press
release (concerning the offering of the Purchased Shares) pursuant to Rule
135c
under the Securities Act) with respect to such transactions (i) in substantial
conformity with the Exchange Act Submission and (ii) as is required by
applicable law, regulations, and Nasdaq rules.
(n) Waivers.
No
waiver by either party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in
the future or a waiver of any other provisions, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder
in
any manner impair the exercise of any such right accruing to it
thereafter.
(o) Replacement
of Shares.
If any
certificate or instrument evidencing any Purchased Shares is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation thereof, or in lieu of and
substitution therefore, a new certificate or instrument, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested. The applicants
for a new certificate or instrument under such circumstances shall also pay
any
reasonable third-party costs associated with the issuance of such replacement
Purchased Shares.
(p) Indemnification.
(i) Subject
to Section 9(p)(iv) and (v), the Company shall indemnify and hold harmless
each
Purchaser and each permitted transferee of any Purchased Shares or Conversion
Shares (other than Purchased Shares or Conversion Shares sold to the public
pursuant to Rule 144A, pursuant to an effective registration statement or
otherwise) and each of the respective stockholders, partners, members, officers,
directors, employees and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) of such Purchaser or
transferee and each Person, if any, who controls such Purchaser or transferee
within the meaning of the Securities Act from and against any cost, damage,
disbursement, fee, expense, liability, loss, deficiency, penalty, judgment,
fine
or settlement of any kind or nature, including reasonable legal, accounting
and
other professional fees and expenses, that are actually imposed on or otherwise
actually incurred, suffered or sustained by such Person (individually, a
“Loss”
and,
collectively, “Losses”)
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 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 contained in the Transaction 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 Purchased Shares or the
Conversion Shares, or (iii) the status of such Purchaser or holder of the
Purchased Shares or the Conversion Shares as an investor in the
Company.
27
(ii) Promptly
after receipt by an indemnified party under subsection (i) above of written
notice of the commencement of any action, such indemnified party shall, if
a
claim in respect thereof is to be made against the Company pursuant to the
indemnification provisions of this Section 9(p), notify the Company in writing
of the commencement of such action; but the omission so to notify the Company
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under the indemnification provisions of this Section 9(p)
to the extent the Company is not materially prejudiced by such omission. In
case
any such action shall be brought against any indemnified party and it shall
notify the Company of the commencement thereof, the Company shall be entitled
to
participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the
Company), and, after notice from the Company to such indemnified party of its
election so to assume the defense thereof, the Company shall not be liable
to
such indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation
provided, however, that such indemnified party shall have the right to retain
its own counsel with the fees and expenses of not more than one counsel for
such
indemnified party to be paid by the Company, if, in the reasonable opinion
of
such indemnified party the representation by such counsel of such indemnified
party and the Company would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding, and provided,
further,
that
the indemnifying party shall not be required to pay for more than one such
counsel for all indemnified parties in connection with any indemnification
claim. The Company shall not, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or
not
the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (1) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (2) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party. The
indemnification required by this Section 9(p) shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as
and
when bills are received or Losses are incurred.
28
(iii) Notwithstanding
anything to the contrary elsewhere in this Agreement, the Company shall not,
in
any event, be liable to any Person for any consequential, special or punitive
damages of such Person pursuant to this Section 9(p).
(iv) This
obligations of the Company under this Section 9(p) shall be in addition to
any
liability or obligation the Company shall otherwise have hereunder or under
applicable law.
[Remainder
of page intentionally left blank.]
*
*
*
29
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
and year first above written.
| NEXTWAVE WIRELESS INC. | ||
| |
|
|
| By: | /s/ | |
|
Name: |
||
| Title: | ||
[PURCHASER
SIGNATURE PAGES TO FOLLOW]
30
SIGNATURE
PAGE TO
DATED
AS
OF MARCH 28, 2007
BY
AND
AMONG
AND
EACH
PURCHASER NAMED THEREIN
The
undersigned hereby executes and delivers to NextWave Wireless Inc. the
Securities Purchase Agreement (the “Agreement”)
to
which this signature page is attached effective as of the date of the Agreement,
which Agreement and signature sage, together with all counterparts of such
Agreement and signature pages of the other Purchasers named in such Agreement,
shall constitute one and the same document in accordance with the terms of
such
Agreement.
|
Number
of Purchased Shares:
|
|
Purchase
Price: $
|
|
Purchaser:
|
|
Signature:
|
|
Name:
|
|
Title:
|
|
Address:
|
|
|
Telephone:
|
|
Facsimile:
|
|
E-mail:
|
|
Tax
ID Number:
|
31
Schedule
1
Information
about the Purchasers
|
Name,
Address, Facsimile Number
|
Number
of Purchased Shares
|
Purchase
Price
|
|
|
Avenue
International, Ltd.
|
48,739
|
48,739,000
|
|
|
Avenue
Investments, L.P.
|
20,828
|
20,828,000
|
|
|
Avenue
Special Situations Fund IV, L.P.
|
13,726
|
13,726,000
|
|
|
Avenue
CDP Global Opportunities Fund, L.P.
|
15,241
|
15,241,000
|
|
|
GPC
73, LLC
|
1,466
|
1,466,000
|
|
|
D.E.
Shaw Laminar Portfolios, L.L.C.
|
15,000
|
15,000,000
|
|
|
D.E.
Shaw Valence Portfolios, L.L.C.
|
15,000
|
15,000,000
|
|
|
Highbridge
International LLC
|
15,500
|
15,500,000
|
|
|
Investcorp
Interlachen Multi-Strategy Master Fund Limited
|
7,500
|
7,500,000
|
|
|
Kings
Road Investments Ltd.
|
25,000
|
25,000,000
|
|
|
Navation,
Inc.
|
50,000
|
50,000,000
|
|
|
Manchester
Financial, L.P.
|
50,000
|
50,000,000
|
|
|
Saints
Xxxxxxx & Xxxxxxx, LLC
|
2,000
|
2,000,000
|
|
|
Xxxxxxxxx
Offshore Leveraged Assets, Ltd.
|
25,000
|
25,000,000
|
|
|
York
Capital Management, L.P.
|
3,600
|
3,600,000
|
32
|
York
Investment Limited
|
11,800
|
11,800,000
|
|
|
York
Credit Opportunities Fund, L.P.
|
11,000
|
11,000,000
|
|
|
York
Select, L.P.
|
4,000
|
4,000,000
|
|
|
York
Select Unit Trust
|
4,600
|
4,600,000
|
|
|
York
Global Value Partners, L.P.
|
5,000
|
5,00,000
|
|
|
York
Enhanced Strategies Fund, LLC
|
10,000
|
10,000,000
|
33
APPENDIX
I
STOCK
CERTIFICATE QUESTIONNAIRE
Pursuant
to Section 4(m) of the Agreement, please provide us with the following
information:
1. The
exact
name that your Purchased Shares are to be registered in (this is the name that
will appear on your stock certificate(s)). You may use a nominee name if
appropriate:
_________________________________________________________________
2. The
relationship between the Purchaser of the Purchased Shares and the Registered
Holder listed in response to Item 1 above:
_________________________________________________________________
3. The
mailing address of the Registered Holder listed in response to Item 1
above:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
4. The
Social Security Number or Tax Identification Number of the Registered Holder
listed in response to Item 1 above:
_________________________________________________________________
Appendix
II
SUITABILITY
QUESTIONNAIRE
All
capitalized terms not defined in this Appendix II shall have the meanings
assigned to them in the Securities Purchase Agreement, dated as of March 28,
2007 (the “Agreement”),
by
and among NextWave Wireless Inc., a Delaware corporation (the “Company”)
and
each of the purchasers listed on Schedule
1
to the
Agreement.
5. STATUS
AS AN ACCREDITED INVESTOR
Please
confirm that you are, or your organization is, an “accredited investor” as
defined under the Securities Act of 1933, as amended (the “Act”),
by checking all applicable boxes to indicate the exemption qualifying you as
an
accredited investor, as provided in Rule 501(a) under the Securities Act of
1933, as amended.
¨ a
corporation, organization described in Section 501(c)(3) of the Internal Revenue
Code, a Massachusetts or similar business trust or a partnership, in each case,
not formed for the purpose of this investment, with total assets in excess
of
$5,000,000;
¨ a
private
business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
¨ a
Small
Business Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958;
¨ an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that
Act;
¨ a
bank as
defined in Section 3(a)(2) or a savings and loan association or other
institution defined in Section 3(a)(5)(A) of the Act acting in either an
individual or fiduciary capacity;
¨ an
insurance company as defined in Section 2(13) of the Act;
¨ an
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974 whose investment decision is made by a fiduciary
which is either a bank, savings and loan association, insurance company, or
registered investment advisor, or whose total assets exceed $5,000,000, or,
if a
self-directed plan, a plan whose investment decisions are made solely by persons
who are accredited investors;
¨ a
director, executive officer or general partner of the issuer of the securities
being offered or sold;
¨ a
natural
person whose individual net worth, or joint net worth with your spouse, at
the
time of purchase exceeds $1,000,000;
¨ a
natural
person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with your spouse in excess of $300,000 in
each
of those years and has a reasonable expectation of reaching the same income
level in the current year;
¨ a
trust
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the securities offered, purchase is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) of the Act;
¨ an
entity
in which all the equity owners are accredited investors; or
¨ other
-
Please describe:
_________________________________________________
6. RESIDENCE
INFORMATION
Please
indicate the jurisdiction in which the your reside or your organization is
chartered and the jurisdiction in which it maintains its principal offices:
____________________________________________________________________________________________________________________________________________________________
7. INVESTMENT
REPRESENTATION
Are
you
purchasing the securities offered for your own account and for investment
purposes only?
Yes
¨ No
¨
If
no,
please state for whom you are investing and/or the reason for
investing.
____________________________________________________________
____________________________________________________________
____________________________________________________________
8. SIGNATURE
The
above
information is true and correct in all material respects and the undersigned
recognizes that the Company and its counsel are relying on the truth and
accuracy of such information in reliance on the exemption contained in
Subsection 4(2) of the Securities Act of 1933, as amended, and Regulation D
promulgated thereunder. The undersigned agrees to notify the Company promptly
of
any changes in the foregoing information which may occur prior to the
investment.
Executed
at _________________________,_____________________on ___________ ,
2007.
Name
of
Entity:___________________________________________________________
By:
__________________________________
(Signature)
_____________________________________
(Name
and
title of signatory)
IF
THE INVESTMENT WILL BE MADE BY MORE THAN ONE ENTITY, WHETHER
OR
NOT
AFFILIATED, PLEASE COMPLETE A COPY OF THIS QUESTIONNAIRE
FOR
EACH
ENTITY.
EXHIBIT
A
Certificate
of Designation
EXHIBIT
B
Registration
Rights Agreement
EXHIBIT
C
Wire
Instructions
XXXxxxxx
Xxxxx Xxxx
Xxx
Xxxx,
XX 00000
Accnt
No.
304-234427
ABA
No.
000000000
Account
Name: NextWave Wireless LLC
EXHIBIT
D
Disclosure
Letter
EXHIBIT
E
Legal
Opinion
1.
The
Company is a corporation validly existing and in good standing under the laws
of
Delaware. The Company has all requisite corporate power and authority to own,
lease and operate its assets and conduct its business as now
conducted.
2
The
authorized capital stock of the Company consists of […………….]. […………] shares of
Common Stock have been duly and validly reserved for issuance as Conversion
Shares. The outstanding shares of the Common Stock have been duly authorized,
are validly issued, fully paid and nonassessable.
3.
The
Certificate of Designation has been duly filed in Delaware.
4.
The
Purchased Shares and Conversion Shares have been duly authorized, and when
issued in accordance with the terms of the SPA and, in the case of the
Conversion Shares, the Certificate of Designations, will be validly issued,
fully paid, nonassessable and free of preemptive rights pursuant to law or
the
Company’s Articles of Incorporation or by-laws;
5.
The
Company has the power and authority to execute and deliver, and perform its
obligations under, each Transaction Document. The execution, delivery and
performance of each Transaction Document have been duly authorized by all
corporate action on the part of the Company.
6.
Each
Transaction Document has been duly and validly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
subject to customary exceptions.
7
The
execution, delivery and performance of the Transaction Documents will not
violate or conflict with the charter documents of the Company; applicable New
York or Delaware law; any material agreements listed on Schedule __ hereto;
or
any order, judgment etc binding on the Company.
8.
No
Consents, approvals or filings are required under New York or applicable
Delaware law in connection with the execution, delivery and performance of
any
Transaction Document.
9.
Immediately after giving effect to the issuance of the Preferred Shares, the
Company is not an Investment Company.
10.
It is
not necessary in connection with the offer, sale and delivery of the Preferred
Shares to register the Preferred Shares under the Securities Act of
1933.
11.
To
our knowledge, there is no litigation, proceeding or governmental investigation
pending or overtly threatened against the Company or its Subsidiaries that
relates to the transactions contemplated by the Purchase Agreement.
