EXHIBIT 10.25
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement"), dated as of the 18th day of
August, 2006, by and between the undersigned subscriber ("Subscriber"), and
Clearwire Corporation, a Delaware corporation ("Clearwire" or the "Company"), is
being entered into in connection with the sale of shares of common stock by the
Company as described in that letter dated August 4, 2006 to Subscriber from the
Company (the "Offering"). The Company and Subscriber agree as follows:
1. SUBSCRIPTION FOR SHARES; ADJUSTMENT. Subscriber agrees to subscribe for,
and the Company agrees to sell and issue to Subscriber, the number of shares of
the Class A Common Stock, par value $.0001 per share, of Clearwire set forth
above Subscriber's signature to this Agreement (the "Purchased Shares"), on the
terms and conditions set forth in this Agreement.
Subscriber and the Company hereby agree that the Company shall have the
option to adjust the number of Purchased Shares to be sold to Subscriber based
on the total number of shares being sold in the Offering, but not below
Subscriber's pro-rata share of such shares being sold. The Company shall notify
Subscriber of the Subscriber's final share allocation in the Closing Notice (as
defined below). To the extent the number of Purchased Shares subscribed for by
Subscriber exceeds Subscriber's final share allocation set forth in the Closing
Notice, this Agreement shall automatically be amended to reduce the Purchased
Shares to the final share allocation. If Subscriber has elected to purchase
their full pro-rata share, then the number of Purchased Shares shall be
automatically adjusted to equal the final share allocation.
2. SUBSCRIPTION PRICE. The undersigned acknowledges and agrees that the
purchase price for the Purchased Shares shall be $6.00 per share (the "Purchase
Price").
3. PAYMENT OF PURCHASE PRICE. Subscriber agrees to pay the aggregate
Purchase Price for the Purchased Shares to Clearwire at the Closing. The
Purchase Price shall be paid in immediately available funds by wire transfer to
the Company in accordance with the wiring instructions provided by the Company
with the Closing Notice.
4. CLOSING DATE. Subject to the satisfaction or waiver of the conditions
set forth in Section 5 and Section 6 herein, the closing of Subscriber's
purchase of the Purchased Shares (the "Closing") shall take place remotely via
the exchange of documents and signatures after the last of the conditions set
forth in Section 5 and Section 6 herein shall have been satisfied or waived,
other than those conditions that by their nature are to be satisfied at the
Closing (but subject to the fulfillment or waiver of those conditions at the
Closing), at such time and place as the Company shall designate in a written
notice delivered to Subscriber by the Company at least two (2) business days
prior to the Closing (the "Closing Notice").
5. SUBSCRIBER CLOSING CONDITIONS. The obligation of Subscriber to purchase
the Purchased Shares at the Closing is subject to the fulfillment, to
Subscriber's satisfaction, of each of the following conditions:
(a) the Company shall have delivered to Subscriber a stock certificate
representing the Purchased Shares, free and clear of all liens, registered in
Subscriber's name;
(b) the Company shall have executed the joinder agreement, attached as
Exhibit A hereto (the "SA Joinder Agreement"), to that certain Amended and
Restated Stockholders Agreement, dated as of March 16, 2004, between Clearwire
and its stockholders (the "Stockholders Agreement");
(c) the Company shall have executed the joinder agreement, attached as
Exhibit B hereto (the "RRA Joinder Agreement") to that certain Registration
Rights Agreement between Clearwire and certain of its stockholders, dated March
16, 2004 (the "Registration Rights Agreement" and together with this Agreement,
the Stockholders Agreement, the SA Joinder Agreement, and the RRA Joinder
Agreement, the "Transaction Agreements");
(d) no litigation, arbitration, action, suit, proceeding, or
investigation (whether conducted by or before any judicial or regulatory body,
arbitrator, or other person) (collectively, "Litigation") questions the validity
of this Agreement or the other Transaction Agreements or the right of Clearwire
to enter into this Agreement or the other Transaction Agreements or to
consummate the transactions contemplated hereby or thereby; and
(e) as of the Closing, all authorizations, approvals or permits of, or
filings with any governmental authority, including but not limited to state
securities or "Blue Sky" offices and the Federal Communications Commission
("FCC"), that are required by law in connection with the lawful sale and
issuance of the Purchased Shares to be made prior to the closing shall have been
duly obtained by the Company, and shall be effective as of the Closing.
6. CLEARWIRE CLOSING CONDITIONS. The obligation of Clearwire to deliver the
Purchased Shares to Subscriber at the Closing, and the Subsequent Closing, if
any, is subject to the fulfillment, to the Company's satisfaction, of each of
the following conditions:
(a) Subscriber shall have delivered to Clearwire the Purchase Price in
accordance with Section 3 herein;
(b) Subscriber shall have delivered to Clearwire the Transaction
Agreements to which Subscriber is a party, each executed by Subscriber;
(c) the representations and warranties made by Subscriber in Section 7
of this Agreement shall be true and correct in all material respects at and as
of the Closing as if made at and as of such time (except that the accuracy of
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be determined as of such date);
(d) no Litigation questions the validity of this Agreement or the
other Transaction Agreements or the right of Clearwire to enter into this
Agreement or the other Transaction Agreements or to consummate the transactions
contemplated hereby or thereby; and
(e) as of the Closing, all authorizations, approvals or permits of, or
filings with, any governmental authority, including but not limited to state
securities or "Blue Sky" offices or the FCC, that are required by law in
connection with the lawful sale and issuance of
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the Purchased Shares to be made prior to the closing shall have been duly
obtained by the Company, and shall be effective as of the Closing.
7. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. Subscriber represents and
warrants to the Company that the following statements are true and correct on
the date of this Agreement:
(a) Subscriber is an "accredited investor" as that term is defined in
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
(b) The Purchased Shares subscribed for (the "Securities") are being
acquired by Subscriber for investment purposes only, for Subscriber's own
account and not with the view to any resale or distribution thereof, and
Subscriber is not participating, directly or indirectly, in an underwriting of
such Securities, and will not take, or cause to be taken, any action that would
cause Subscriber to be deemed an "underwriter" of such Securities as defined in
Section 2(11) of the Securities Act.
(c) Subscriber acknowledges that Subscriber has been offered an
opportunity to ask questions of, and receive answers from, Clearwire concerning
the Company and Subscriber's proposed purchase of the Securities, and that, to
Subscriber's knowledge, the Company has fully complied with any request for such
information.
(d) Subscriber has been furnished Clearwire's Disclosure Memorandum,
dated ______________, 2006 (the "Disclosure Memorandum"), the exhibits thereto
and any other documents which may have been made available upon request
(collectively, the "Offering Documents"). Subscriber has carefully read the
Offering Documents and understands and has evaluated the risks of a purchase of
Securities, including the risks set forth in the Offering Documents under "Risk
Factors".
(e) Subscriber has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, is able to bear such risks, and has obtained, in
Subscriber's judgment, sufficient information from the Company to evaluate the
merits and risks of an investment in the Securities. Subscriber has evaluated
the risks of investing in the Company and has determined that the Securities are
a suitable investment for Subscriber.
(f) Subscriber has full power and authority to enter into this
Agreement and to perform its obligations hereunder.
(g) To Subscriber's knowledge, neither the Company nor any person
acting on the Company's behalf has offered, offered to sell, offered for sale or
sold the Purchased Shares to Subscriber by means of any form of general
solicitation or general advertising.
(h) The execution, delivery and performance by Subscriber of this
Agreement and the other Transaction Agreements are within Subscriber's powers,
have been duly authorized, will not constitute or result in a breach or default
under or conflict with any law, judgment, order, ruling or regulation of any
court or other tribunal or of any governmental
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commission or agency, or any agreement or other undertaking, to which Subscriber
is a party or by which Subscriber is bound, and will not violate any provisions
of the incorporation papers, bylaws, or stockholders agreement, as may be
applicable, of Subscriber. The signature of Subscriber on the Transaction
Agreements to which Subscriber is, or will be, at the time of execution, be,
genuine, and the Transaction Agreements to which Subscriber is, or will be a
party, will when executed by Subscriber, constitute legal, valid and binding
obligations of Subscriber, enforceable in accordance with their respective
terms.
(i) Subscriber is not relying on the Company with respect to tax and
other investment advice in connection with its decision to purchase the
Purchased Shares. Subscriber acknowledges that Subscriber has been advised by
the Company to consult with its tax or financial consultants prior to entering
into this Agreement.
(j) Subscriber acknowledges that the Company of offering Class B
Common Stock to certain new investors, but that such shares would, if purchased
by Subscriber, automatically convert to Class A Common Stock under the Company's
Restated Certificate of Incorporation, and waives any claim to receive Class B
Common Stock in this offering.
(k) Subscriber acknowledges the Company has negotiated definitive,
binding agreements for the sale of Company shares to certain new investors, and
that such sales may be consummated before its subscription is accepted, and
Subscriber hereby waives any claim that the offering of the Purchased Shares did
not comply as to form with the obligations of the Company under any agreement
granting preemptive rights to the Subscriber.
None of the representations and warranties contained in this Section
7, nor any other due diligence investigation conducted by Subscriber or on its
behalf shall in any way affect the right of Subscriber to rely fully on the
representations and warranties of the Company in this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF CLEARWIRE. Clearwire represents and
warrants to Subscriber that, except as set forth on the Schedules attached to
this Agreement, each of which shall be deemed to be an exception to or exclusion
from only the particular representation and warranty against which it is listed
(unless it is readily apparent from a reading of the disclosure that such
disclosure is applicable to other representations and warranties), whether or
not the listed representation and warranty includes a reference to such
Schedule, and which exceptions (and all other disclosures) set forth in the
Schedules shall be deemed to be representations and warranties of Clearwire, the
following statements are true and correct on the date of this Agreement. Any
reference to the knowledge of any person shall mean the actual knowledge,
information and belief of such person after making reasonable inquiry of such
person's co-Chief Executive Officers, co-Presidents, Chief Operating Officer,
Chief Financial Officer. For each of these executives, reasonable inquiry shall
mean checking with their respective direct reports and other persons whom, by
the nature of the normal duties of their position, would reasonably be expected
to know. In addition, for purposes of these representations and warranties, the
term "the Company" shall include any entity in which Clearwire owns, directly or
indirectly, more than 50% of the outstanding equity interests and which has
assets of $10,000,000 or more, including, without limitation, the following:
Clearwire International LLC, Clearwire US, LLC, Fixed Wireless Holdings, LLC,
and Clearwire Spectrum
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Holdings LLC (the "Subsidiaries"), but shall specifically exclude in all
instances NextNet Wireless, Inc. The term "Clearwire" shall mean Clearwire
Corporation (excluding its Subsidiaries).
(a) The execution, delivery and performance by Clearwire of this
Agreement, the other Transaction Agreements to which it is a party, are within
Clearwire's powers, have been duly authorized, will not, as applicable, give
rise to any right of termination, cancellation or acceleration, or require any
consent or approval under, or constitute or result in a breach or default of, or
conflict with any law, judgment, order, ruling or regulation of any court or
other tribunal or any governmental commission or agency, or any agreement or
other undertaking to which Clearwire is a party or by which Clearwire is bound,
will not violate or result in a breach of any provision of, constitute a default
under, accelerate or terminate any performance required by, or require a consent
or waiver under, any provisions of the Certificate of Incorporation, Bylaws, or
Stockholders Agreement of Clearwire, and will not result in the creation of any
lien, charge, claim or encumbrance on the Company's assets or property. The
signature of Clearwire on the Transaction Agreements is, or will, at the time of
execution be, genuine, and the Transaction Agreements constitute legal, valid
and binding obligations of Clearwire enforceable in accordance with their
respective terms. The Company is not in violation of any term of its (i)
Certificate of Incorporation or Bylaws or other organizational document or (ii)
of any law, statute, regulation, rule, ordinance, consent decree, settlement
agreement or governmental requirement, except, in the case of clause (ii), to
the extent that any such violation or non-compliance would not, individually or
in the aggregate, have a material adverse effect on Clearwire.
(b) The Company is duly incorporated or organized, as applicable, and
validly existing under the laws of the jurisdiction of its incorporation or
formation, as applicable, and is in good standing under such laws. The Company
is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on the Company. The Company has full power and authority:
(i) to own its properties and assets;
(ii) to carry on its business as presently conducted; and
(iii) to enter into the Transaction Agreements and to perform its
obligations thereunder, including the issuance, sale and
delivery of the Purchased Shares.
(c) Clearwire does not own or control, directly or indirectly, any
Subsidiaries other than those listed in Schedule 8(c) attached hereto, and the
shares of the capital stock or membership interests, as applicable, of the
Subsidiaries owned by Clearwire (which are reflected on Schedule 8(c)) are duly
authorized, validly issued, fully paid, and non-assessable, and free and clear
of all liens, charges, claims and encumbrances imposed by or through such
Subsidiaries, except as otherwise provided in Schedule 8(c). All of the
outstanding shares of the capital stock or membership interests, as applicable,
of the Subsidiaries, were offered, issued and sold in compliance in all material
respects with all applicable federal and state securities laws.
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(d) The authorized capital stock of Clearwire and the shares of
capital stock of Clearwire issued and outstanding as of the date of this
Agreement are as set forth on Schedule 8(d) attached hereto. Upon the filing of
the Company's Third Amended and Restated Certificate of Incorporation, the form
of which is attached hereto as Exhibit C (the "Restated Charter"). The
authorized capital stock of Clearwire will be as set forth in the Restated
Charter. All of the outstanding shares of the capital stock of Clearwire are
duly authorized, validly issued, fully paid, and non-assessable, and free and
clear of all liens, charges, claims and encumbrances imposed by or through
Clearwire. The Purchased Shares, when issued, sold and delivered in accordance
with the terms and for the consideration set forth in this Agreement, will be
duly authorized, validly issued, fully paid, and non-assessable, and free and
clear of all liens, charges, claims and encumbrances imposed by or through
Clearwire. Additionally, the Purchased Shares are free of restrictions on
transfer other than restrictions on transfer under this Agreement and the other
Transaction Agreements and under applicable state and federal securities laws.
The outstanding securities of Clearwire are owned by the stockholders specified
in Schedule 8(d) attached hereto.
(e) Other than as disclosed in Schedule 8(e) attached hereto, the
Company does not have, is not bound by, and has no obligation to grant or enter
into, any outstanding subscriptions, options, warrants, rights (including
without limitation conversion or pre-emptive rights), calls, commitments, or
agreements of any character calling for it to issue, deliver, or sell, or cause
to be issued, delivered, or sold, any shares or any other equity securities or
equity securities convertible into, exchangeable for, or representing the right
to subscribe for, purchase, or otherwise acquire any shares or any other equity
securities in the capital of the Company. Other than as set forth in Schedule
8(e) attached hereto, the issuance and sale of the Purchased Shares will not
result in the issuance of any additional shares of capital stock of Clearwire or
the triggering of any other anti-dilution or similar rights contained in any
options, warrants, debentures or other securities agreements or commitments of
Clearwire. Other than the Stockholders Agreement and as disclosed in Schedule
8(e) attached hereto, the Company is not a party or subject to any agreement or
understanding, and, to the Company's knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or relates to
the voting or giving of written consents with respect to any security or by a
director of the Company.
(f) Other than as disclosed in Schedule 8(f) attached hereto, the
Company:
(i) has no outstanding obligations, contractual or otherwise, to
repurchase, redeem, or otherwise acquire any shares or other
equity securities in the capital of the Company; and
(ii) is not a party to or bound by any agreement or instrument
under which any person has the right to require it to
effect, or to include any securities held by such person in,
any registration under any securities legislation or to
distribute any such securities to the public.
(g) All of the outstanding shares of capital stock of Clearwire were
offered, issued, and sold in compliance in all material respects with all
applicable federal and state
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securities laws. Assuming the accuracy of the representations of Subscriber in
Section 7 herein, upon the closing of the transactions contemplated hereby, the
Purchased Shares will have been offered, issued and sold in compliance with all
applicable federal, state and provincial securities laws. Neither Clearwire nor
any person or entity acting on its behalf has taken or will take any action that
would subject the offering, sale or issuance of the Purchased Shares to the
registration requirements of the Securities Act.
(h) Except (i) as disclosed in Schedule 8(h) attached hereto, and (ii)
any filings required under the HSR Act, no consent, approval, authorization,
declaration, filing, or registration with any governmental authority, regulatory
authority or other party is required to be made or obtained by Clearwire in
connection with:
(i) the execution and delivery of any of the Transaction
Agreements; or
(ii) the performance by the Company of its obligations under the
Transaction Agreements.
(i) No Litigation is pending or, to the knowledge of the Company,
currently threatened or contemplated, against the Company that would, if
determined adversely, reasonably be expected to have a material adverse effect
on the business, condition, affairs, operations, properties, or assets of the
Company. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality and no such order, writ, injunction, judgment or decree
questions the validity of this Agreement or the other Transaction Agreements or
the right of Clearwire to enter into this Agreement or the other Transaction
Agreements or to consummate the transactions contemplated hereby or thereby.
There is no action, suit, proceeding or investigation by the Company currently
pending or that the Company currently intends to initiate.
(j) The Company has delivered to Subscriber its audited financial
statements (balance sheet and income statement, statement of shareholders'
equity and statement of cash flows) as of December 31, 2003, December 31, 2004
and December 31, 2005 for the fiscal years then ended and unaudited financial
statements (balance sheet and income statement) as of March 31, 2006 for the
three months then ended (the "Financial Statements"). The Financial Statements
(i) are in accordance with the books and records of the Company (which are true
and complete in all material respects), and (ii) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated, except that the unaudited Financial
Statements do not contain all footnotes and other disclosures required by
generally accepted accounting principles. The Financial Statements fairly
present in all material respects the financial condition and operating results
of the Company as of the dates, and for the periods, indicated therein, subject
to normal audit adjustments with respect to the March 31, 2006 Financial
Statements. Except as set forth in the Financial Statements or on Schedule 8(l),
the Company has no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to December
31, 2005, and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in the Financial Statements, which, in
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both cases, individually or in the aggregate, are not material to the financial
condition or operating results of the Company.
(k) To the knowledge of the Company, the Company has all franchises,
permits, licenses, and any similar authority necessary for the conduct of its
business as now being conducted by it, all of such franchises, permits, licenses
and any similar authority is valid and in full force and effect, and the Company
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. To the knowledge of
the Company, the Company is not in default in any respect under any of such
franchises, permits, licenses or other similar authority.
(l) Except as set forth on Schedule 8(l) attached hereto, since
December 31, 2005, there has not been:
(i) any material change in the assets, liabilities, financial
condition or operating results of the Company from that
reflected in the Financial Statements;
(ii) any material damage, destruction or loss, whether or not
covered by insurance;
(iii) any waiver, compromise or default by the Company of a
valuable right or of a material debt or obligation owed to
it;
(iv) any satisfaction or discharge of any lien, charge, claim or
encumbrance or payment of any obligation by the Company,
except in the ordinary course of business and that is not
material to the assets, properties, financial condition,
operating results or business of the Company;
(v) any transfer of or granting of any security interest in or
any exclusive license with respect to any material asset of
the Company; or
(vi) any material agreement or commitment by the Company to do
any of the things described in this Section 8(l).
(m) To the Company's knowledge, the Company is not in material
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and no material expenditures are
or will be required in order to comply with any such existing statute, law or
regulation.
(n) Except as disclosed in Schedule 8(n) attached hereto and for
rights granted under the Registration Rights Agreement, the Company has not
granted or agreed to grant any registration rights, including without limitation
any piggyback or demand rights, to any person or entity.
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(o) Except as set forth in Schedule 8(o) attached hereto, the Company
is not bound by or subject to (and none of its assets or properties is bound by
or subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the Company's knowledge,
threatened, nor is the Company aware of any labor organization activity
involving its employees. To the Company's knowledge, the Company has complied in
all material respects with all applicable state and federal equal employment
opportunity and other laws related to employment.
9. Antidilution Rights.
(a) Grant of Antidilution Rights. Subject to Section 9(d), any time
after the date of this Agreement that the Company sells or issues or agrees to
sell or issue (or is deemed to do so under Section 9(e)) Dilutive Shares (as
defined below) to any Person for no consideration or consideration per share
that is less than the Trigger Price (as defined below) in effect immediately
prior to such issuance or sale (each, a "Dilutive Issuance"), the Company shall
concurrently issue to Subscriber for no consideration a number of shares of
Class A Common Stock ("Class A Shares") equal to (i) Subscriber's Adjusted
Shares (as defined below) less (ii) Subscriber's Original Shares (as defined
below) (the "Antidilution Shares"). No fractional Class A Shares shall be
issued pursuant to this Section 9(a). The number of Class A Shares issued shall
be rounded to the nearest integral number of whole Class A Shares. For the
purposes of this Section 9, whenever Dilutive Shares are issued for a
consideration other than cash, either in whole or in part, the fair market value
of the Dilutive Shares issued shall be as established by resolution of the
Company's Board of Directors.
(b) Definitions. For the purposes of this Section 9, for each Dilutive
Issuance, the following terms shall have the following meanings:
(i) "Adjusted Shares" means the number of Class A Shares equal
to the product of (x) Subscriber's Original Shares,
multiplied by (y) the quotient of (1) the Trigger Price in
effect immediately prior to a Dilutive Issuance, divided by
(2) the Trigger Price in effect immediately after such
Dilutive Issuance.
(ii) "Common Shares" means Class A Shares, shares of Class B
common stock or any other class of common stock of the
Company.
(iii) "Convertible Securities" means any evidences of
indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common
Shares, but excluding Options.
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(iv) "Dilutive Shares" means Common Shares, Options and
Convertible Securities issued or deemed issued under Section
9(e) of this Agreement after the date of this Agreement
other than:
(1) Common Shares issued pursuant to Article IV, Section
2(d) of the Company's Certificate of Incorporation;
(2) (A) Common Shares outstanding on the date of this
Agreement, (B) Convertible Securities or Options
outstanding on the date of this Agreement (and the
Common Shares issued upon conversion, exchange or
exercise of such Convertible Securities or Options),
and (C) Common Shares (and/or Convertible Securities
and Options, and the Common Shares issuable upon
conversion, exchange or exercise of such Convertible
Securities or Options) issued pursuant to agreements in
effect or other commitments or offers outstanding on
the date of this Agreement that (1) relate to the
acquisition of spectrum rights or related assets by the
Company and/or affiliates of the Company, or (2) are
otherwise set forth in the Schedules attached to this
Agreement;
(3) Common Shares (and/or Convertible Securities and/or
Options, and the Common Shares issuable upon
conversion, exchange or exercise of such Convertible
Securities or Options) issued to employees,
consultants, directors, vendors, lessors or others with
whom the Company conducts business, provided that such
shares, options, warrants or other rights are issued
pursuant to a stock option plan or restricted stock
plan approved by the Company's Board of Directors and
solely for compensation purposes;
(4) Shares actually issued upon exercise of any currently
outstanding Options or conversion or exchange of any
currently existing Convertible Securities or Options or
Convertible Securities issued after the date of this
Agreement in accordance with this clause (iv); and/or
(5) Shares (and/or Convertible Securities and Options, and
the Shares issuable upon conversion, exchange or
exercise of such Convertible Securities or Options)
issued in connection with any stock split, stock
dividend, reverse stock split, recapitalization,
reorganization or other distribution of Shares (each, a
"Recapitalization Event") that does not affect the
relative economic interests or rights of holders of
Shares.
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(v) "Options" means rights, options or warrants to subscribe
for, purchase or otherwise acquire directly or indirectly
Common Shares or Convertible Securities.
(vi) "Original Shares" means (x) with respect to the first
Dilutive Issuance, the total number of Class A Shares
acquired by Subscriber pursuant to this Agreement (as
adjusted for any Recapitalization Event) and (y) with
respect to each Dilutive Issuance thereafter, the total
number of Adjusted Shares immediately prior to such Dilutive
Issuance (as adjusted for any Recapitalization Event). For
the avoidance of doubt, any Shares acquired by Subscriber or
a Subscriber Affiliate from either the Company or any other
stockholder of Clearwire other than pursuant to this
Agreement shall in no event be included in the number of
Original Shares under this Section 9.
(vii) "Person" means any individual, corporation, partnership,
company, trust or other entity.
(viii) "Trigger Price" shall initially mean $6.00 per share (as
subsequently adjusted for any Recapitalization Event, the
"Original Issue Price"). In connection with each Dilutive
Issuance, the Trigger Price shall be adjusted downwards to
equal the lowest price per Dilutive Share paid for the
Dilutive Shares issued or sold in such Dilutive Issuance.
The Trigger Price shall also be proportionately adjusted
from time to time for any Recapitalization Event pursuant to
which securities of the Company are issued with respect to
the Original Shares and/or Adjusted Shares. Notwithstanding
the foregoing, in no event shall the Trigger Price be
adjusted downwards to an amount less than $5.00 per share
(as adjusted for any Recapitalization Event).
(c) Covenant Regarding Antidilution Shares. The Company hereby
represents, warrants and covenants that (i) as a condition precedent to the
issuance or sale of any Dilutive Shares in a Dilutive Issuance, the Company
shall have reserved at the time of such Dilutive Issuance out of its authorized
but unissued capital stock sufficient Class A Shares to enable the Company to
issue all of the applicable Antidilution Shares pursuant to this Section 9, and
(ii) all Antidilution Shares issued pursuant to this Section 9 shall, upon
issuance for no additional consideration, be duly authorized, validly issued,
fully paid and nonassessable.
(d) Termination of Antidilution Rights. The rights granted under this
Section 9 shall terminate immediately after the first to occur of the following:
(i) the date which is nine (9) months following the date of this Agreement or
(ii) the closing of the Company's initial public offering, defined as an
underwritten public offering of equity securities in which the Company raises an
aggregate of not less than US$400,000,000 in cash.
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(e) Deemed Issuances of Shares. In the case of any issuance (whether
on or after the date of this Agreement) by the Company of any Convertible
Securities or Options, the following provisions shall apply for all purposes of
this Section 9:
(i) For any Convertible Securities issued (other than pursuant
to the exercise of Options) after the date of this
Agreement, the aggregate maximum number of Common Shares
deliverable upon conversion or exercise of or in exchange
for any such Convertible Securities shall be deemed to have
been issued at the time such Convertible Securities were
issued and for a consideration equal to the consideration,
if any, received by the Company upon the issuance of such
Convertible Securities plus the minimum additional
consideration, if any, to be paid under the terms of such
Convertible Security upon conversion, exercise or exchange
of such Convertible Securities into the Common Shares
covered thereby.
(ii) For any Options issued, the aggregate maximum number of
Shares deliverable upon exercise of the Options, or, in the
case of Options for Convertible Securities, the conversion,
exercise or exchange of such Convertible Securities, shall
be deemed to have been issued at the time such Options were
issued for a consideration equal to the consideration, if
any, received by the Company for such Options, plus the
minimum exercise price provided in such Options for the
Common Shares or Convertible Securities covered thereby,
and, in the case of Options for Convertible Securities, plus
the amount of additional consideration, if any, to be paid
upon the conversion, exercise or exchange of such
Convertible Securities.
10. RESTRICTED SECURITIES. Subscriber understands that the Securities have
not been, and will not be, registered under the Securities Act, by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of Subscriber's representations as expressed herein. Subscriber
understands that the Securities are "restricted securities" under the Securities
Act, inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Securities may be resold without registration under the Securities Act,
only in certain limited circumstances and Subscriber agrees not to transfer the
Securities unless the transfer of the Securities is made: (i) pursuant to an
effective registration statement under the Securities Act; (ii) to the Company;
(iii) outside the United States in accordance with Rule 904 of Regulation S
under the Securities Act and in compliance with local laws; or (iv) within the
United States (A) in accordance with the exemption from registration under the
Securities Act provided by Rule 144 thereunder, if available, and in compliance
with any applicable state securities laws, and Subscriber shall be required to
furnish to the Company an opinion to such effect from counsel of recognized
standing reasonably satisfactory to the Company prior to such offer, sale or
transfer or (B) in a transaction that does not require registration under the
Securities Act or applicable state securities laws, and Subscriber shall be
required to furnish to the Company an opinion to such
12
effect from counsel of recognized standing reasonably satisfactory to the
Company prior to such offer, sale or transfer. Subscriber acknowledges that the
Company has no obligation to register or qualify the Securities for resale
except as set forth in the Registration Rights Agreement and that the Company is
required to refuse to register any transfer not made in accordance with the
provisions of this Section 10. Subscriber further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Securities, and on requirements relating to the
Company which are outside of Subscriber's control, and which the Company is
under no obligation and may not be able to satisfy. Subscriber also acknowledges
that the certificates representing the Securities shall bear the restrictive
legends required under applicable federal and state securities laws and the
Stockholders Agreement. The provisions of this Section 10 shall survive the
Closing.
11. STOCKHOLDERS AGREEMENT. Subscriber and Clearwire acknowledge and agree
that the Purchased Shares shall be subject to all of the terms of the
Transaction Agreements, including, among other provisions, the restrictions on
transfer and confidentiality obligations set forth therein. Subscriber further
agrees, at the Closing, to sign the SA Joinder Agreement and to become bound by
the terms and conditions of the Transaction Agreements.
12. REGISTRATION RIGHTS AGREEMENT. At the Closing, Subscriber shall become
a party to the Registration Rights Agreement, by executing and delivering the
RRA Joinder Agreement.
13. SURVIVAL OF WARRANTIES. Except as otherwise provided herein, the
representations and warranties of the Company and Subscriber contained in or
made pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the Closing for a period of one (1) year following the Closing.
Notwithstanding the foregoing, nothing in this Section 13 shall be construed to
extend the representations, warranties and covenants contained herein beyond the
period set forth in the applicable statute of limitations.
14. INDEMNITY. Subscriber and Clearwire will indemnify and hold each other,
as well as their respective officers, directors, stockholders, agents, attorneys
and affiliates (the "Indemnified Parties") harmless from and against, and will
reimburse the Indemnified Parties for, any and all losses, damages, debts,
liabilities, obligations, judgments, orders, awards, writs, injunctions,
decrees, fines, penalties, taxes, costs or expenses (including but not limited
to any legal and accounting fees and expenses) ("Losses") arising out of or
based upon any false representation or warranty or breach or failure by
Subscriber or Clearwire, as the case may be, to comply with any covenant or
agreement made by Subscriber or Clearwire, as the case may be, in this
Agreement or in any other document furnished by Subscriber or Clearwire, as the
case may be, to the other in connection with this Agreement (other than the
other Transaction Agreements, which shall be subject to any indemnification or
other remedy provisions contained therein).
15. REVOCABILITY. Subscriber and Clearwire understand and agree that this
Agreement may be canceled, terminated, or revoked only by the mutual written
consent of Subscriber and Clearwire. Notwithstanding the foregoing, however,
this Agreement may be terminated by either Subscriber or Clearwire if the
Closing shall not have occurred on or before December 31, 2006, provided that
the failure to close on or before such date is not the fault of the terminating
party.
13
16. NOTICE. Any notices or other communications in connection herewith
shall be sufficiently given if sent by registered or certified mail, postage
prepaid, or by facsimile transmission, and:
(i) if to the Company, at
Clearwire Corporation
0000 Xxxx Xxxxxxxxxx Xxxx. XX, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No: 000-000-0000
Attn: Xxxxxx Xxxxxx, General Counsel
With a copy to:
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile No: 000-000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
(ii) if to Subscriber, at the address listed on the signature
page hereto.
or at such other address as either Subscriber or the Company shall designate to
the other by notice in writing.
17. ASSIGNABILITY; SUCCESSORS AND ASSIGNS. Neither party may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the other party. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
18. AMENDMENTS AND WAIVERS. The Company may amend this Agreement with the
written consent of the holders of at least a majority of the aggregate number of
shares of Class A Common Stock issued and issuable in connection with this
Agreement and other subscription agreements of even date ("Offered Shares"). The
holders of at least a majority in aggregate principal amount of the Offered
Shares may waive compliance in a particular instance by the Company with any
provision of this Agreement. Any amendment or waiver of this Agreement made in
conformity with the provisions of this Section 19 shall be binding on all
holders of the Offered Shares.
19. ENTIRE AGREEMENT. This Agreement, the other Transaction Agreements and
the documents referred to herein and therein constitute the entire agreement
among the parties with respect to the subject matter hereof and thereof and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, covenants or agreements except as specifically set
forth herein or therein.
14
20. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware and, to the extent it involves
any United States statute, in accordance with the laws of the United States.
21. FINDERS' FEES. Except as provided otherwise in Schedule 22 attached
hereto, each party represents that it neither is nor will be obligated for any
finders' fees or commissions in connection with this Agreement or the
transactions contemplated hereby. Subscriber agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of finders' fees (and the costs and expenses (including legal, travel
and out-of-pocket expenses) of defending against such liability or asserted
liability) for which Subscriber or any of its officers, directors, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless Subscriber from any liability for any commission or compensation in the
nature of a finders' fee (and the costs and expenses (including legal, travel
and out-of-pocket expenses) of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
22. SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
23. FEES AND EXPENSES. Except as otherwise expressly provided for in this
Agreement, the Company, on the one hand, and Subscriber, on the other hand,
shall each pay all of its own expenses incurred in connection with the
transactions contemplated by this Agreement, including any and all legal,
accounting, investment banking and consulting fees and expenses incurred in
negotiating, executing and delivering this Agreement and the other agreements,
exhibits, schedules, documents and instruments contemplated by this Agreement.
24. CURRENCY. All dollar amounts referred to in this Agreement, including
the symbol "$", refer to lawful money of the United States of America.
25. COUNTERPARTS. This Agreement may be executed in two (2) or more
original or facsimile counterparts all of which together shall constitute one
and the same instrument.
26. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of and
shall not be utilized in interpreting this Agreement.
27. DELAYS OR OMISSIONS. No failure to exercise or delay in the exercise of
any right, power or remedy accruing to Subscriber upon any breach or default of
the Company under this Agreement shall impair any such right, power or remedy of
Subscriber nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.
[Remainder of this page is intentionally left blank.]
15
SUBSCRIBER SIGNATURE PAGE
The undersigned Subscriber hereby agrees to purchase the following number of
shares of Clearwire's Class A Common Stock, on the terms and conditions set
forth in the Agreement (check one):
[ ] Subscriber's full pro-rata share of the total Shares subscribed; or
[ ] exactly ___________ shares, but not more than the subscribed pro rata
share of the total Shares subscribed in the offering.
The undersigned Subscriber hereby represents and warrants that it is the
beneficial owner of ___________ Shares of Class A Common Stock and/or
___________ warrants exercisable for Class A Common Stock of the Company.
IN WITNESS WHEREOF, Subscriber has caused this Agreement to be duly executed as
of the date first written above.
SUBSCRIBER:
----------------------------------------
Print Name of Subscriber
By:
------------------------------------
Name:
----------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
----------------------------------------
----------------------------------------
16
COMPANY SIGNATURE PAGE
IN WITNESS WHEREOF, Clearwire Corporation has caused this Agreement to be duly
executed as of the date first written above.
CLEARWIRE CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A TO SUBSCRIPTION AGREEMENT
JOINDER TO STOCKHOLDERS AGREEMENT
(attached)
JOINDER IN STOCKHOLDERS AGREEMENT
This Joinder in Stockholders Agreement ("Joinder") is made and entered into
this ____ day of ________, 2006, by and between Clearwire Corporation, a
Delaware corporation (the "Company"), and the party whose signature appears
below (the "Joining Party").
RECITALS:
WHEREAS, the Joining Party has acquired or intends to acquire shares of capital
stock of the Company; and
WHEREAS, pursuant to Section 13.09 of that certain Amended and Restated
Stockholders Agreement, between the Company and its stockholders, dated as of
March 16, 2004 (the "Stockholders Agreement"), the Joining Party may become a
party to the Stockholders Agreement by execution of an instrument such as this
Joinder.
NOW, THEREFORE, the Joining Party agrees as follows:
1. JOINDER
By execution of this Joinder by the Joining Party and acceptance hereof by
the Company, the Joining Party is and agrees to become a party to, subject to
all the conditions, restrictions, obligations and duties of a Stockholder of
the Company under the Stockholders Agreement, including the restrictions on
transfer of the shares acquired from the Company and the requirement that the
Joining Party vote its shares in accordance with the terms thereof.
2. AGREEMENT TO BE BOUND BY AGREEMENT
This Joinder shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without reference to any
rules governing conflicts of laws.
3. COUNTERPARTS
This Joinder may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
COMPANY: JOINING PARTY:
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
Date: Date:
------------------------------- ----------------------------------
1
EXHIBIT B TO SUBSCRIPTION AGREEMENT
JOINDER TO REGISTRATION RIGHTS AGREEMENT
(attached)
JOINDER
In consideration of the permitted issuance, sale, pledge, or other transfer
to the undersigned of Registrable Securities in the Company, the undersigned
hereby consents and agrees to become a party to and be bound by the Registration
Rights Agreement dated as of the 16th day of March, 2004, as amended, receipt
of a copy of which is hereby acknowledged, as fully as if the undersigned were
one of its original parties, and all of the Registrable Securities owned by the
undersigned will be held in accordance with and restricted by the terms of such
Registration Rights Agreement.
Dated: _________________________
Name of Stockholder:
----------------------------------------
Sign Name:
----------------------------------------
Print Name:
----------------------------------------
Address:
----------------------------------------
----------------------------------------
----------------------------------------
SSN/EIN:
----------------------------------------
Approved by the Company:
COMPANY: CLEARWIRE CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
--------------------------------
Dated:
---------------------------------
1
EXHIBIT C TO SUBSCRIPTION AGREEMENT
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
(attached)
EXHIBIT 3.1
PAGE 1
Delaware
The First State
I, XXXXXXX XXXXX WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "CLEARWIRE CORPORATION", FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF AUGUST, A.D. 2006, AT 11:04 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
(SEAL) /s/ Xxxxxxx Xxxxx Windsor
-----------------------------------------
Xxxxxxx Xxxxx Windsor, Secretary of State
3720220 8100 AUTHENTICATION: 5002509
060798461 DATE: 00-00-00
XXXXX XX XXXXXXXX
XXXXXXXXX XX XXXXX
DIVISION OF CORPORATIONS
DELIVERED 11:08 AM 08/28/2006
FILED 11:04 AM 08/28/206
SRV 060798461 - 3720220 FILE
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CLEARWIRE CORPORATION
CLEARWIRE CORPORATION, a corporation organized and existing under the laws
of the State of Delaware (the "Corporation") hereby certifies that:
1. The name of the Corporation is Clearwire Corporation. The Corporation
was originally incorporated under the name Flux U.S. Corporation.
2. The date of filing of the Corporation's original Certificate of
Incorporation was October 27, 2003.
3. The Third Amended and Restated Certificate of Incorporation of the
Corporation as provided in Exhibit A hereto was duly adopted in accordance with
the provisions of Section 242 and Section 245 of the General Corporation Law of
the State of Delaware by the Board of Directors of the Corporation.
4. Pursuant to Section 245 of the Delaware General Corporation Law,
approval of the stockholders of the Corporation has been obtained.
5. The Third Amended and Restated Certificate of Incorporation so adopted
reads in full as set forth in Exhibit A attached hereto and is hereby
incorporated by reference.
IN WITNESS WHEREOF, the undersigned has signed this certificate this 28th
day of August, 2006, and hereby affirms and acknowledges under penalty of
perjury that the filing of this Third Amended and Restated Certificate of
Incorporation is the act and deed of Clearwire Corporation.
CLEARWIRE CORPORATION
By /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name Xxxxxxxx X. Xxxxx
Title Co-President & Co-CEO
EXHIBIT A
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CLEARWIRE CORPORATION
ARTICLE I
The name of the corporation is Clearwire Corporation (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of Delaware
is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle.
The name of the Corporation's registered agent at such address is Corporation
Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware (the "DGCL").
ARTICLE IV
Section 1. Authorized Capital Stock. The total number of shares of capital
stock that the Corporation is authorized to issue is 805,000,000 shares,
initially consisting of 700,000,000 shares of Class A Common Stock, par value
$0.0001 per share (the "Class A Common Stock"). 100,000,000 shares of Class B
Common Stock, par value $0.0001 per share (the "Class B Common Stock") and
5,000,000 shares of Preferred Stock, par value $0.0001 per share (the "Preferred
Stock"). (In this Certificate of Incorporation, the term "Common Stock" means
the Class A Common Stock and Class B Common Stock collectively).
Section 2. Common Stock
(a) Equality of Rights Generally. Each share of Common Stock will,
except as otherwise provided in this Certificate of Incorporation, be identical
in all respects and will have equal rights, powers and privileges.
(b) Voting Rights. Holders of Class A Common Stock will be entitled to
one vote for each share of Class A Common Stock held of record on the applicable
record date, and holders of Class B Common Stock will be entitled to ten (10)
votes for each share of Class B Common Stock held of record on the applicable
record date, in each case, on each matter submitted to a vote of stockholders.
Holders of Class A Common Stock and Class B Common Stock will vote together as a
single class of Common Stock on each matter submitted to a vote of stockholders.
(c) Dividends.
(i) The holders of the Common Stock will be entitled to receive
dividends at such times and in such amounts as may be determined by the Board of
Directors of the Corporation (the "Board of Directors") and declared out of the
any funds lawfully available therefor. Dividends on Common Stock declared
payable from time to time by the Board of Directors, whether payable in cash,
property or shares of capital stock of the Corporation, will be paid equally, on
a per share basis, to holders of Common Stock.
(ii) In the case of any consolidation, merger, recapitalization,
reorganization or similar event: (i) the consideration payable in respect of
each share of Class A Common Stock will be the same and (ii) prior to the
conversion of all shares of Class B Common Stock into shares of Class A Common
Stock, the consideration payable in respect of each share of Class B Common
Stock will be the same as that payable in respect of each share of Class A
Common Stock. Notwithstanding the foregoing, if the consideration payable in
respect of shares of Class A Common Stock and Class B Common Stock consists of
securities, the securities issued to the holders of Class A Common Stock and
Class B Common Stock will be identical in all respects, except that the
conversion rights and disproportionate voting power of the Class B Common Stock
(i.e., the conversion of Class B Common Stock into Class A Common Stock and the
entitlement of each share of Class B Common Stock to ten (10) votes per share
versus one (1) vote per share with regard to a share of Class A Common Stock)
may be incorporated into the terms of the securities issued to the holders of
the Class B Common Stock.
(d) Conversion of Class B Common Stock.
(i) Right to Convert. At any time or from time to time each share
of Class B Common Stock will be convertible at the option of the holder thereof
into one fully paid and nonassessable share of Class A Common Stock ("Optional
Conversion Rights").
(ii) Automatic Conversion. Each share of Class B Common Stock
will automatically convert, without any action by the holder of such shares,
into one fully paid and nonassessable share of Class A Common Stock, upon the
earliest to occur of (A) the date on which the holder of such share of Class B
Common Stock, together with its Affiliates, has Beneficial Ownership of less
than 5% of the issued and outstanding shares of Class B Common Stock or (B) upon
any transfer by the holder of such share of Class B Common Stock other than a
Permitted Transfer, solely as to any shares of Class B Common Stock so
transferred.
(iii) Mechanics of Conversion. In the event of the conversion of
any Class B Common Stock pursuant to this Section 2(d) of Article TV, such
holder will surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or any transfer agent of such stock, and will
deliver together therewith written notice of the election or requirement to
convert the same and will state therein the name or names in which the
certificate or certificates for shares of Class A Common Stock are to be issued.
The Corporation will, as soon as practical thereafter, issue and deliver at such
office to such holder or the nominee or nominees of such holder, a certificate
or certificates for the number of shares of Class A Common Stock to which such
holder will be entitled. Such conversion will be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares to be converted and the Person or Persons entitled to receive the shares
of Class A Common
2
Stock issuable on the conversion will be treated for all purposes as the record
holder or holders of such shares of Class A Common Stock as of such date.
(iv) Reservation of Class A Common Stock Issuable upon
Conversion. The Corporation will at all times keep available out of its
authorized but unissued shares of Class A Common Stock, solely for the purposes
of effecting the conversion of the shares of Class B Common Stock, such number
of shares of Class A Common Stock as will be sufficient to effect the conversion
of all of the outstanding shares of Class B Common Stock; and if at any time the
number of authorized but unissued shares of Class A Common Stock will not be
sufficient to effect the conversion of all of the then outstanding shares of
Class B Common Stock, in addition to such other remedies as may be available to
the holders of such shares, the Corporation will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Class A Common Stock to such number of shares as will be
sufficient for such purposes, including, without limitation, engaging in best
efforts to obtain the requisite stockholder approval of any necessary amendment
to this Certificate of Incorporation.
(v) No Impairment. The Corporation will not, (i) by amendment of
this Certificate of Incorporation or the Corporation's Bylaws, (ii) by adopting
any provision or entering into any agreement inconsistent therewith or (iii)
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issuance of shares or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out all of the provisions of this
Section 2 of Article IV and in taking all of such action as may be necessary or
appropriate in order to protect the powers, preferences and rights, including
the voting rights and conversion rights of the holders of shares of Class B
Common Stock against impairment.
Section 3. Preferred Stock. The Preferred Stock may be issued in one or
more series as may be determined by the Board of Directors. The Board of
Directors is hereby authorized to issue the shares of Preferred Stock and to fix
from time to time before issuance the number of shares to be included in any
series and the designation, relative powers, preferences and rights and
qualifications, limitations or restrictions of all shares of such series. The
authority of the Board of Directors with respect to each series will include,
without limiting the generality or effect of the foregoing, the determination of
any or all of the following:
(a) the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other series;
(b) the voting powers, if any, and whether the voting powers are full
or limited in such series;
(c) the redemption provision, if any, applicable to the series,
including the redemption price or prices to be paid;
(d) whether dividends, if any, will be cumulative or noncumulative,
the dividend rate of the series and the dates and preferences of dividends on
such series;
3
(e) the rights of the series upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the Corporation;
(f) the provisions, if any, pursuant to which the shares of the series
are convertible into, or exchangeable for, shares of any other class or classes
or of any other series of the same or any other class or classes of stock, or
any other security, of the Corporation or any other corporation or other entity,
and the price or prices or the rate or rates of conversion or exchange
applicable thereto;
(g) the right, if any, to subscribe for or to purchase any securities
of the Corporation or any other corporation or other entity;
(h) the provisions, if any, of a sinking fund applicable to such
series; and
(i) any other relation, participation, option or other special powers,
preferences, rights, qualifications, limitations or restrictions thereof;
all as may be determined from time to time by the Board of Directors and stated
in the resolution or resolutions providing for the issuance of such Preferred
Stock.
Section 4. Stock Ownership and the Federal Communications Laws.
(a) Restrictions on Stock Ownership or Transfer. Notwithstanding any
other provision of this Certificate of Incorporation to the contrary, the
Corporation may restrict the ownership, or proposed ownership, of shares of
capital stock of the Corporation by any Person if such ownership or proposed
ownership (i) is or would reasonably be expected to be inconsistent with, or in
violation of, any provision of the Federal Communications Laws, (ii) limits or
impairs or would reasonably be expected to limit or impair any business
activities or proposed business activities of the Corporation under the Federal
Communications Laws or (iii) subjects or would reasonably be expected to subject
the Corporation to any regulation under the Federal Communications Laws to which
the Corporation would not be subject but for such ownership or proposed
ownership (clauses (i), (ii) and (iii) collectively, the "FCC Regulatory
Limitations").
(b) Beneficial Ownership Inquiry. The Corporation may by written
notice require a Person that is a holder of record of, or that the Corporation
knows to have, or has reasonable cause to believe has, Beneficial Ownership of
capital stock of the Corporation, to certify that, to the knowledge of such
Person:
(i) no capital stock as to which such Person has record ownership
or Beneficial Ownership is, directly or indirectly, Beneficially Owned by
Aliens; or
(ii) the number of shares of capital stock held of record or,
directly or indirectly, Beneficially Owned by such Person that are held of
record or Beneficially Owned by Persons that are Aliens are as set forth in such
certification.
With respect to any capital stock identified by such Person in
response to Section 4(b)(ii) above, the Corporation may require such Person to
provide such further information as the Corporation may reasonably require in
order to implement the provisions of Sections 4(c)
4
and 4(d) of this Article IV. For purposes of applying Sections 4(c) and 4(d) of
this Article IV with respect to any capital stock of the Corporation, if any
Person fails to provide the certification or other information to which the
Corporation is entitled pursuant to this Section 4(b) of Article IV, the
Corporation in its sole discretion may presume that the capital stock of the
Corporation in question is, or is not, directly or indirectly, Beneficially
Owned by Aliens.
(c) Denial of Rights, Refusal to Transfer. If (i) any Person from whom
information is requested pursuant to Section 4(b) of this Article IV should not
provide all the information requested by the Corporation, and (ii) the
Corporation reasonably concludes that a stockholder's ownership or proposed
ownership of, or that a stockholder's exercise of any rights of ownership with
respect to, shares of capital stock of the Corporation results or would
reasonably be expected to result in an FCC Regulatory Limitation or that the
capital stock of the Corporation in question is Beneficially Owned by Aliens,
then, in the case of either clause (i) or clause (ii), the Corporation may (A)
refuse to permit the transfer of shares of capital stock of the Corporation to
such proposed stockholder, (B) suspend those rights of stock ownership the
exercise of which causes or would reasonably be expected to cause such FCC
Regulatory Limitation, (C) redeem such shares of capital stock of the
Corporation held by such stockholder in accordance with the terms and conditions
set forth in Section 4(d) of this Article IV, and/or (D) exercise any and all
appropriate remedies, at law or in equity, in any court of competent
jurisdiction, against any such stockholder or proposed transferee, with a view
towards obtaining such information or preventing or curing any situation which
causes or could cause a FCC Regulatory Limitation. Any such refusal of transfer
or suspension of rights pursuant to clauses (A) and (B), respectively, of the
immediately preceding sentence will remain in effect until the requested
information has been received or the Corporation has determined that such
transfer, or the exercise of such rights, as the case may be, will not result in
a FCC Regulatory Limitation.
(d) Redemption of Shares Held by Aliens. Outstanding shares of capital
stock of the Corporation Beneficially Owned by Aliens may be redeemed by the
Corporation. The terms and conditions of such redemption will be as follows,
subject in any case to any other rights of a particular Alien or of the
Corporation pursuant to any contract or agreement between such Alien and the
Corporation:
(i) except as provided in Section 4(d)(vi) of this Article IV,
the redemption price of the shares to be redeemed pursuant to this Section 4(d)
of Article IV will be equal to the Market Price of such shares on the third
Business Day before the date notice of such redemption is given pursuant to
Section 4(d)(iv) of this Article IV, provided that except as provided in Section
4(d)(vi) of this Article IV, such redemption price as to any Alien who purchased
such shares of Common Stock within one year before the Redemption Date will not
(unless otherwise determined by the Board of Directors) exceed the purchase
price paid by such Alien for such shares;
(ii) the redemption price of such shares will be paid in cash,
Redemption Securities or any combination thereof;
(iii) if less than all of the shares, directly or indirectly,
Beneficially Owned by Aliens are to be redeemed, the shares to be redeemed will
be selected in such manner as will be determined in good faith by the Board of
Directors, which may include selection first
5
of the most recently purchased shares thereof, selection by lot or selection in
any other manner determined in good faith by the Board of Directors to be
equitable;
(iv) the Corporation will give notice of the Redemption Date at
least thirty (30) days before the Redemption Date to the record holders of the
shares selected to be redeemed (unless waived in writing by any such holder) by
delivering a written notice by first class mail, postage pre-paid, to the
holders of record of the shares selected to be redeemed, addressed to such
holders at their last address as shown upon the stock transfer books of the
Corporation (each such notice of redemption specifying the date fixed for
redemption, the redemption price, the place or places of payment and that
payment will be made upon presentation and surrender of the certificates
representing such shares); provided, that the Redemption Date may be the date on
which written notice is given to record holders if the cash or Redemption
Securities necessary to effect the redemption have been deposited in trust for
the benefit of such record holders and subject to immediate withdrawal by them
upon surrender of the stock certificates for their shares to be redeemed;
(v) on the Redemption Date, unless the Corporation shall have
defaulted in paying or setting aside for payment the cash or Redemption
Securities payable upon such redemption, any and all rights of Aliens in respect
of shares so redeemed (including without limitation any rights to vote or
participate in dividends) will cease and terminate, and from and after such
Redemption Date such Aliens will be entitled only to receive the cash or
Redemption Securities payable upon redemption of the shares to be redeemed; and
(vi) such other terms and conditions as the Board of Directors
shall determine to be equitable.
(e) Presumption of Notice. Any notice that is mailed as herein
provided will be conclusively presumed to have been duly given, whether or not
the holder of shares to be redeemed received such notice, and failure to give
such notice by mail, or any defect in such notice, to holders of shares
designated for redemption will not affect the validity of the proceedings for
the redemption of any other shares.
(f) Factual Determination. The Board of Directors will have the power
and duty to construe and apply the provisions of this Section 4 of Article IV
and, with respect to shares of capital stock, to make all determinations
necessary or desirable to implement such provisions, including, but not limited
to: (i) the number of shares of capital stock that are Beneficially Owned by any
Person; (ii) whether a Person is an Alien; (iii) the application of any other
definition of this Certificate of Incorporation to the given facts; and (iv) any
other matter relating to the applicability or effect of Section 4(d) of this
Article IV.
(g) Legends. The Corporation shall, to the extent required by law,
note on the certificates of its capital stock that the shares represented by
such certificates are subject to the restrictions set forth in this Section 4 of
Article IV.
ARTICLE V
The number of the directors of the Corporation will be fixed from time to
time in the manner described in the Bylaws of the Corporation. The manner of
election and removal of such
6
directors and the term such directors will hold office shall be designated in
the Bylaws of the Corporation. Each director will hold office until a successor
is duly elected and qualified or until his or her earlier death, resignation or
removal. Election of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.
ARTICLE VI
To the fullest extent permitted by the DGCL or any other Applicable Law
currently or hereafter in effect, no director of the Corporation will be
personally liable to the Corporation or its stockholders for or with respect to
any acts or omissions in the performance of his or her duties as a director of
the Corporation. Any repeal or modification of this Article VI will not
adversely affect any right or protection of a director of the Corporation in
respect of any act or omission occurring in whole or in part prior to such
repeal or modification.
ARTICLE VII
Section 1. Right to Indemnification. Each individual who was or is a party
to or is threatened to be made a party to or is otherwise involved in, any
action, suit or proceeding, whether pending or threatened, whether civil,
criminal, administrative or investigative and whether brought by or in the right
of the Corporation or otherwise (a "Proceeding"), by reason of the fact that
such individual is or was a director or officer of the Corporation, or is or was
a director or officer of the Corporation and is or was serving at the request of
the Corporation as a director, officer, employee or agent or of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, (an "Indemnitee") will be indemnified and held harmless by the
Corporation to the fullest extent permitted by the DGCL, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment) against all expenses, liability and loss (including, without
limitation, attorneys' fees and expenses, judgments, fines, excise taxes or
penalties pursuant to the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") and amounts paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith. The right to
indemnification will extend to the heirs, executors, administrators and estate
of any such director or officer. The right to indemnification provided in this
Article VII: (a) will not be exclusive of any other rights to which any
individual seeking indemnification may otherwise be entitled, including without
limitation, pursuant to any contract approved by a majority of the Board of
Directors (whether or not the directors approving such contract are or are to be
parties to such contract or similar contracts); and (b) will be applicable to
matters otherwise within its scope whether or not such matters arose or arise
before or after the adoption of this Article VII. Without limiting the
generality or the effect of the foregoing, the Corporation may adopt Bylaws, or
enter into one or more agreements with any individual, that provide for
indemnification greater or otherwise different than that provided in this
Article VII or the DGCL, and any such agreement approved by a majority of the
Board of Directors will be a valid and binding obligation of the Corporation
regardless of whether one or more members of the Board of Directors, or all
members of the Board of Directors, are parties thereto or to similar agreements.
Any amendment or repeal of, or adoption of any provision inconsistent with, this
Article VII will not adversely affect any right or protection existing
hereunder, or arising out of events occurring or circumstances existing, in
whole or in part, prior to such
7
amendment, repeal or adoption, and no such amendment, repeal or adoption will
affect the legality, validity or enforceability of any contract entered into or
right granted prior to the effective date of such amendment, repeal or adoption.
Section 2. Right to Advancement of Expenses. The right to indemnification
conferred in Section 1 of this Article VII will include the right to be paid by
the Corporation the expenses (including, without limitation, attorneys' fees and
expenses) reasonably incurred in defending any such Proceeding in advance of its
final disposition (an "Advancement of Expenses"); provided, however, that, if
the DGCL so requires, an Advancement of Expenses incurred by an Indemnitee in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such Indemnitee, including, without
limitation, service to an employee benefit plan) will be made only upon delivery
to the Corporation of an undertaking (an "Undertaking"), by or on behalf of such
Indemnitee, to repay all amounts so advanced if it will ultimately be determined
by final judicial decision from which there is no further right to appeal (a
"Final Adjudication") that such Indemnitee is not entitled to be indemnified for
such expenses under this Section 2 of Article VII or otherwise. The rights to
indemnification and to the Advancement of Expenses conferred in Sections 1 and 2
of this Article VII shall be contract rights and such rights will continue as to
an Indemnitee who has ceased to be a director or officer and will inure to the
benefit of the Indemnitee's heirs, executors, administrators and estate.
Section 3. Right of Indemnitee to Bring Suit. If a claim under Sections 1
and 2 of this Article VII is not paid in full by the Corporation within sixty
(60) calendar days after a written claim has been received by the Corporation,
except in the case of a claim for an Advancement of Expenses, in which case the
applicable period will be twenty (20) calendar days, the Indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the Indemnitee will be entitled to be paid also the
expense of prosecuting or defending such suit. In (a) any suit brought by the
Indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by the Indemnitee to enforce a right of an Advancement of Expenses) it
shall be a defense that, and (b) any suit brought by the Corporation it shall be
entitled to recover such expenses upon a Final Adjudication that, the Indemnitee
has not met any applicable standard for indemnification set forth in the DGCL.
Neither the failure of the Corporation (including the Board of Directors, legal
counsel or stockholders) to have made a determination prior to the commencement
of such suit that indemnification of the Indemnitee is proper in the
circumstances because the Indemnitee has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation (including
the Board of Directors, legal counsel or stockholders) that the Indemnitee has
not met such applicable standard of conduct, will create a presumption that the
Indemnitee has not met the applicable standard of conduct or, in the case of
such suit brought by the Indemnitee to enforce a right to indemnification or to
an Advancement of Expenses hereunder, or brought by the Corporation to recover
an Advancement of Expenses pursuant to terms of an Undertaking, the burden of
proving that the Indemnitee is not entitled to be indemnified, or to such
Advancement of Expenses, under this Article VII or otherwise will be on the
Corporation.
8
Section 4. Non-Exclusivity of Rights. The rights to indemnification and to
the Advancement of Expenses conferred in this Article VII shall not be exclusive
of any other right which any individual may have or hereafter acquire under any
statute, this Certificate of Incorporation, the Bylaws of the Corporation, any
agreement, any vote of stockholders or directors, or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, manager, trustee, officer, employee
or agent of the Corporation or another corporation, partnership, joint venture,
trust or other enterprise against any expenses, liability or loss, whether or
not the Corporation would have the power to indemnify such individual against
such expense, liability or loss under the DGCL.
Section 6. Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the Advancement of Expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article VII with respect to the indemnification and Advancement of
Expenses of directors and officers of the Corporation.
Section 7. Service for Subsidiaries. Any Person serving as a director,
officer, employee or agent of another corporation, partnership, limited
liability company, joint venture or other enterprise, at least 50% of whose
equity interests are owned by the Corporation (a "subsidiary" for this Article
VII) will be conclusively presumed to be serving in such capacity at the request
of the Corporation.
Section 8. Reliance. Persons who after the date of the adoption of this
provision become or remain directors or officers of the Corporation or who,
while a director, officer or other employee of the Corporation, become or remain
a director, officer, employee or agent of a subsidiary, will be conclusively
presumed to have relied on the rights to indemnity, Advancement of Expenses and
other rights contained in this Article VII in entering into or continuing such
service. The rights to indemnification and to the Advancement of Expenses
conferred in this Article VII shall apply to claims made against an indemnitee
arising out of acts or omissions which occurred or occur both prior and
subsequent to the adoption hereof.
Section 9. Merger or Consolidation. For purposes of this Article VII,
references to the "Corporation" will include, in addition to the resulting
Corporation, any constituent Corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers and employees or agents, so that any Person who is or was a
director, officer, employee or agent of such constituent Corporation, or is or
was serving at the request of such constituent Corporation as a director,
officer, employee or agent of another Corporation, partnership, joint venture,
trust or other enterprise, will stand in the same position under this Article
VII with respect to the resulting or surviving Corporation as he or she would
have with respect to such constituent Corporation if its separate existence had
continued.
Section 10. Savings Clause. If this Article VII or any portion hereof will
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation will nevertheless indemnify each Person entitled to indemnification
under Section 1 of this Article VII as to all expense, liability and loss
(including attorneys' fees and related disbursements,
9
judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid
or to be paid in settlement) actually and reasonably incurred or suffered by
such Person and for which indemnification is available to such Person pursuant
to this Article VII to the fullest extent permitted by any applicable portion of
this Article VII that shall not have been invalidated and to the fullest extent
permitted by Applicable Law.
ARTICLE VIII
Section 1. Definitions. As used in this Certificate of Incorporation, the
term:
(a) "Affiliate" means a Person that directly, or indirectly through
one of more intermediaries, Controls, or is Controlled by, or is under common
Control with, another Person.
(b) "Alien" means "aliens," "their representatives," "a foreign
government or representatives thereof" or "any corporation organized under the
laws of a foreign country" as such terms are used in Section 310(b)(4) of the
Communications Act of 1934 (the "Communications Act").
(c) "Applicable Law" means all applicable provisions of (a)
constitutions, treaties, statutes, laws (including common law), rules,
regulations, ordinances or codes of any Governmental Authority and (b) orders,
decisions, injunctions, judgments, awards and decrees of any Governmental
Authority.
(d) "Associate" has the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
(e) "Beneficial Owner" (including, with its correlative meanings,
"Beneficially Own" and "Beneficial Ownership"), with respect to any securities,
means any Person which:
(i) has, or any of whose Affiliates or Associates has, directly
or indirectly, the right to acquire (whether such right is exercisable
immediately or only after the passage of time) such securities pursuant to any
agreement, arrangement or understanding (whether or not in writing), including,
without limitation, upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise;
(ii) has, or any of whose Affiliates or Associates has, directly
or indirectly, the right to vote or dispose of (whether such right is
exercisable immediately or only after the passage of time) or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 under the Exchange Act but
including all such securities which a Person has the right to acquire beneficial
ownership of whether or not such right is exercisable within the 60-day period
specified therein) such securities, including pursuant to any agreement,
arrangement or understanding (whether or not in writing);
(iii) has, or any of whose Affiliates or Associates has, any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of any securities which are
Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof); or.
10
(iv) holds a direct or indirect beneficial ownership interest in
the Person with record ownership or other beneficial ownership of capital stock
of the Corporation.
(f) "Business Day" means any day other than a day on which commercial
banks in The City of New York are required or authorized by law to be closed.
(g) "Control" means, with respect to a Person or Group, either of the
following:
(i) ownership by such Person or Group of Votes entitling it to
exercise in the aggregate more than 10% of the Voting Power of the entity in
question; or
(ii) possession by such Person or Group of the power, directly or
indirectly, (i) to elect a majority of the board of directors (or equivalent
governing body) of the entity in question, or (ii) to direct or cause the
direction of the management and policies of or with respect to the entity in
question, whether through ownership of securities, by contract or otherwise.
(h) "Disinterested Director Approval" means approval by an independent
committee of the Board comprised of Disinterested Directors.
(i) "Disinterested Directors" means, with respect to any matter to be
acted upon, each of the directors of the Corporation other than (i) for a
transaction between the Corporation and a director, the director who is party to
the transaction, (ii) for a transaction between the Corporation and any entity
other than a wholly-owned subsidiary of the Corporation, each director that is
an Interested Stockholder, or an employee or Affiliate of an Interested
Stockholder, of such entity, or (iii) for a transaction between the Corporation
and an Interested Stockholder of the Corporation, each director who is an
employee or Affiliate of such Interested Stockholder.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Federal Communications Laws" means any law of the United States
now or hereafter in effect (and any regulation thereunder, including, without
limitation, the Communications Act), and regulations thereunder, pertaining to
the ownership and/or operation or regulating the business activities of (x) any
television or radio station, daily newspaper, cable television system, Internet
service provider or other medium of mass communications or (y) any provider of
programming content to any such medium.
(l) "Governmental Authority" means any federation, nation, state,
sovereign or government, any federal, supranational, regional, state or local
political subdivision, any governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative hearing body,
arbitration panel, commission or similar dispute resolving panel or body, and
any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of a government.
(m) "Group" means any group within the meaning of Section 13(d)(3) of
the Exchange Act.
11
(n) "Holder" or "Holders" shall mean (a) Xxxxx X. XxXxx, (b) Eagle
River Holdings, LLC, (c) Intel Corporation, (d) all successors to a Holder by
way of merger, consolidation or sale of all or substantially all of such
Holder's assets and (d) all existing or future corporations, partnerships, joint
ventures, associations and other entities (each a "Subsidiary Entity") in which
such person or entity beneficially owns, directly or indirectly, fifty percent
(50%) or more of the outstanding voting stock, but excluding the Corporation or
any Subsidiary Entity in which the Corporation beneficially owns, directly or
indirectly, fifty percent (50%) or more of the outstanding voting stock.
(o) "Independent Director" means any member of the Board of Directors
who meets the director independence requirements of the rules and regulations of
The Nasdaq Stock Market, Inc. applicable to listed companies, as amended from
time to time, or if the principal United States listing or quotation of the
Common Stock is on another United States securities exchange or inter-dealer
quotation system of a registered national securities association, the director
independence requirements of the rules and regulations of that exchange or
association, as amended from time to time; provided, that if the Class A Common
Stock is not then traded on an exchange or association that maintains director
independence requirements, the Independent Directors will be the Arm's Length
Directors.
(p) "Interested Stockholder" means (i) with respect to any corporation
or other entity, any Person (other than the Corporation and any direct or
indirect wholly-owned subsidiary of the Corporation) that is the Owner of Stock
having (a) the right to vote more than 50% of the aggregate votes attributable
to the Voting Stock of such corporation or other entity or (b) 50% or more of
the economic interests of such corporation or other entity, and (ii) the
Affiliates of any Person determined to be an Interested Stockholder under clause
(i) of this Section 1(p).
(q) "Market Price" means as to any security, the average of the
closing prices of such security's sales on all domestic securities exchanges on
which such security may at the time be listed, or, if there have been no sales
on any such exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if on any day such
security is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M., New York time, on such day,
or, if on any day such security is not quoted in the NASDAQ System, the average
of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of 21 days consisting of the day as of which "Market Price" is
being determined and the 20 consecutive business days prior to such day;
provided that if such security is listed on any domestic securities exchange the
term "business days" as used in this sentence means business days on which such
exchange is open for trading. If at any time such security is not listed on any
domestic securities exchange or quoted in the NASDAQ System or the domestic
over-the-counter market, the "Market Price" shall be the fair value thereof
determined in good faith by a majority of the Independent Directors.
(r) "Owner," including the terms "Own" and "Owned," when used with
respect to any Stock, means a Person that individually or with or through any of
its Affiliates:
(i) Beneficially Owns such Stock, directly or indirectly;
12
(ii) has (A) the right to acquire Beneficial Ownership of such
Stock (whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversation rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Owner of Stock tendered pursuant
to a tender or exchange offer made by such Person or any of such Person's
Affiliates until such tendered Stock is accepted for purchase or exchange; or
(B) the right to vote such Stock pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the Owner of
any Stock because of such Person's right to vote such Stock if the agreement,
arrangement or understanding to vote such Stock arises solely from revocable
proxy or consent given in response to a proxy or consent solicitation made to
all holders of a class or series of such Stock; or
(iii) has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except voting pursuant to a revocable
proxy or consent or disposing of such Stock with any Person that Beneficially
Owns, or whose Affiliates Beneficially Own, directly or indirectly, such stock.
(s) "Permitted Transfer" by a holder of Class B Common Stock means any
transfer to:
(i) any Affiliate of the holder;
(ii) if the holder is a partnership or limited liability company,
any member or partner; or
(iii) if the holder is an individual, any transfer to any
immediate family member or any trust for the benefit of the individual or any
immediate family member.
(t) "Person" means an individual, a partnership, a limited liability
company, an association, a joint venture, a corporation, a trust, any entity
organized or existing under Applicable Law, an unincorporated organization or
any Governmental Authority.
(u) "Redemption Date" means the date fixed by the Board of Directors
for the redemption of any shares of capital stock of the Corporation pursuant to
Section 4(d) of Article IV.
(v) "Redemption Securities" means any debt or equity securities of the
Corporation, any of its Subsidiaries, or any combination thereof having such
terms and conditions as shall be approved by the Board of Directors and which,
together with any cash to be paid as part of the redemption price pursuant to
Section 4(d)(ii) of Article IV, in the opinion of an investment banking firm of
recognized national standing selected by the Board of Directors (which may be a
firm which provides other investment banking, brokerage or other services to the
Corporation), have a Market Price, at the time notice of redemption is given
pursuant to Section 4(d)(iv) of Article IV, at least equal to the redemption
price required to be paid by Section 4(d)(i) of Article IV.
(w) "Subsidiary" means, with respect to any Person (the "Parent"), any
other Person in which the Parent, one or more direct or indirect Subsidiaries of
the Parent, or the
13
Parent and one or more of its direct or indirect Subsidiaries (a) have the
ability, through ownership of securities individually or as a group, ordinarily,
in the absence of contingencies, to elect a majority of the directors (or
individuals performing similar functions) of such other Person, and (b) own more
than 50% of the equity interests.
(x) "Stock" means, with respect to any corporation, capital stock and,
with respect to any other entity, any equity interest.
(y) "Trading Day" means, with respect to any security, any day on
which the principal national securities exchange on which such security is
listed or admitted to trading or The Nasdaq Stock Market, Inc., if such security
is approved for quotation thereon, is open for the transaction of business
(unless such trading shall have been suspended for the entire day) or, if such
security is not listed or admitted to trading on any national securities
exchange or The Nasdaq Stock Market, Inc., any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(z) "Vote" means, with respect to any entity, the ability to cast a
vote at a stockholders', members' or comparable meeting of such entity with
respect to the election of directors, managers or other members of such entity's
governing body, or the ability to cast a general partnership or comparable vote.
(aa) "Voting Power" means, with respect to any entity as at any date,
the aggregate number of Votes outstanding as at such date in respect of such
entity.
(bb) "Voting Stock" means, with respect to any corporation, Stock of
any class or series entitled to vote generally in the election of directors and,
with respect to any entity that is not a corporation, any equity interest
entitled to vote generally in the election of the governing body of such entity,
including, without limitation, the Class A Common Stock and the Class B Common
Stock.
ARTICLE IX
The Board of Directors may make, amend and repeal the Bylaws of the
Corporation. Any Bylaw made by the Board of Directors under the powers conferred
hereby may be amended or repealed by the Board of Directors (except as specified
in any such Bylaw) or by the stockholders in the manner provided in the Bylaws
of the Corporation.
ARTICLE X
Section 1. Certain Acknowledgements. In anticipation that:
(a) each Holder will remain, for some period of time, a stockholder of
the Corporation;
(b) the Corporation and each Holder may engage in the same or similar
activities or lines of business and may have an interest in the same or similar
areas of corporate opportunities;
14
(c) there will or may be benefits to be derived by the Corporation
through its continued or potential contractual, corporate and business relations
with the Holders (including without limitation service of officers of the
Holders as directors of the Corporation); and
(d) there will be benefits in providing guidelines for directors and
officers of the Holders and of the Corporation with respect to the allocation of
corporate opportunities and other matters;
the provisions of this Article X are set forth to regulate, define and guide the
conduct of certain affairs of the Corporation as they may involve each Holder
and its partners, principals, directors, officers, members, managers and/or
employees, and the powers, rights, duties and liabilities of the Corporation and
its officers, directors, employees and stockholders in connection therewith.
Section 2. Competition and Corporate Opportunities. Except as each Holder
may otherwise agree in writing, each Holder shall have the right to, and shall
have no duty not to, (a) engage in the same or similar business activities or
lines of business as the Corporation, (b) compete against the Corporation, (c)
do business with any potential or actual competitor, customer or supplier of the
Corporation, and (d) employ or otherwise engage any officer or employee of the
Corporation. Neither a Holder nor any partners, principals, directors, officers,
members, managers and/or employees thereof (except as provided in Section 3 of
this Article X) shall be liable to the Corporation or its stockholders,
regardless of the impact any such activities may have on the Corporation, for
breach of any fiduciary duty by reason of any such activities of such Holder or
of the participation therein of such person and the Corporation shall have no
interest or expectancy that such Holder will not engage in any of the foregoing
activities, any such interest or expectancy being hereby renounced by the
Corporation. In the event that a Holder acquires knowledge of a potential
transaction or matter that may be a corporate opportunity or otherwise of
interest to such Holder and the Corporation, such Holder shall have no duty to
communicate or present such corporate opportunity to the Corporation, the
Corporation shall have no interest or expectancy in any such transaction or
matter, any such interest or expectancy being hereby renounced by the
Corporation, and, without limiting the generality of the foregoing, shall not be
liable to the Corporation or its stockholders for breach of any fiduciary duty
as a stockholder of the Corporation by reason of the fact that such Holder
pursues or acquires such corporate opportunity for itself, directs such
corporate opportunity to another person, or does not present such corporate
opportunity to the Corporation. Without limiting the generality of the
foregoing, a Holder shall have no such duty and shall not be so liable even if a
director or officer of the Corporation (including, without limitation, any such
director or officer who is also a partner, principal, director, officer, member,
manager and/or employee of such Holder) becomes aware of such transaction or
matter in his or her capacity as a director or officer of the Corporation, so
long as such Holder also learns, discovers, acquires or develops such
transaction or matters independently or otherwise in a manner that was not based
on such director's or officer's awareness of such transaction or matter. The
provisions of this Section 2 of Article X shall apply and not be affected by any
other provision of this Certificate of Incorporation including, without
limitation, Sections 3 or 4 of Article X.
Section 3. Allocation of Corporate Opportunities. In the event that a
director or officer of the Corporation who is also a director, officer or
employee of a Holder acquires knowledge of a potential transaction or matter
that may be a corporate opportunity or otherwise
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of interest to the Corporation and such Holder, such director or officer of the
Corporation (a) shall have fully satisfied and fulfilled the fiduciary duties of
such director or officer to the Corporation and its stockholders with respect to
such corporate opportunity, (b) shall not be liable to the Corporation or its
stockholders for breach of any fiduciary duty with respect to such corporate
opportunity by reason of his or her not communicating information regarding such
corporate opportunity to the Corporation, and/or such Holder's pursuing or
acquiring such corporate opportunity for itself or directing such corporate
opportunity to another person, (c) shall be deemed to have acted in good faith
and in a manner such person reasonably believes to be in and not opposed to the
best interests of the Corporation, and (d) shall be deemed not to have breached
his or her duty of loyalty to the Corporation or its stockholders and not to
have derived an improper benefit therefrom, if such corporate opportunity
belongs to such Holder in accordance with the following policy:
(i) a corporate opportunity offered or disclosed to any person who is
a director but not an officer of the Corporation and who is also a partner,
principal, director, officer, member, manager and/or employee of a Holder shall
belong to such Holder, unless such opportunity is expressly offered to such
person primarily in his or her capacity as a director of the Corporation, in
which case such opportunity shall belong to the Corporation;
(ii) a corporate opportunity offered or disclosed to any person who is
an officer (whether or not a director) of the Corporation and who is also a
partner, principal, director or member, but not an officer or manager of a
Holder shall belong to the Corporation, unless such opportunity is expressly
offered to such person primarily in his or her capacity as a partner, principal,
director or member of such Holder, in which case such opportunity shall belong
to such Holder; and
(iii) a corporate opportunity offered or disclosed to any other person
who is an officer or manager of both the Corporation and a Holder, or a partner,
principal, director or member of both the Corporation and a Holder, shall belong
to such Holder or to the Corporation, as the case may be, if such opportunity is
expressly offered to such person primarily in his or her capacity as an partner,
principal, director, member, officer or manager of such Holder or of the
Corporation, respectively; otherwise, such opportunity shall belong to such
Holder.
Section 4. Certain Matters Deemed Not Corporate Opportunities. In addition
to and notwithstanding the foregoing provisions of this Article X, a corporate
opportunity will not be deemed to belong to the Corporation if it is a business
opportunity or matter (i) that the Corporation is not contractually permitted,
financially able or legally able to undertake, (ii) that is, from its nature,
not in the line of the Corporation's business or that is one in which the
Corporation has no interest as evidenced by a decision of a majority of the
Arm's Length Directors, or (iii) in which the Corporation or a Holder is
permitted to participate pursuant to any agreement between the Corporation and
such Holder that has been approved by a majority of the Arm's Length Directors,
it being acknowledged that the rights of the Corporation under any such
agreement shall be deemed to be contractual rights and shall not be corporate
opportunities of the Corporation for any purpose; provided, however, that no
presumption or implication as to corporate opportunities relating to any
transaction not explicitly covered by such an agreement shall arise from the
existence or absence of any such agreement.
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Section 5. Agreements and Transactions with any Holder. If any contract
agreement, arrangement or transaction between the Corporation and a Holder
involves a corporate opportunity and is approved in accordance with the
procedures set forth in Article XI hereof, such Holder and its officers and
directors (including without limitation, any such person who is also a director
or officer of the Corporation) shall also, for the purposes of this Article X
and the other provisions of this Certificate of Incorporation, be deemed to have
fully satisfied and fulfilled any fiduciary duties they may have to the
Corporation and its stockholders. Any such contract, agreement, arrangement or
transaction involving a corporate opportunity not so approved shall not by
reason thereof result in any such breach of any fiduciary duty, but shall be
governed by the other provisions of Article X, this Certificate of
Incorporation, the bylaws, the Delaware General Corporation Law and other
Applicable Law.
Section 6. Amendment of this Article. Notwithstanding anything to the
contrary elsewhere contained in this Certificate of Incorporation, the
affirmative vote of the holders of at least 75% of the Voting Power of all
shares of Common Stock then outstanding, voting together as a single class,
shall be required to alter, amend or repeal, or to adopt any provision
inconsistent with, this Article X.
Section 7. Deemed Notice. Any person purchasing or otherwise acquiring any
interest in any shares of stock or other securities (including without
limitation stock options) of the Corporation shall be deemed to have notice of
and consented to the provisions of this Article X.
Section 8. No Expansion. Nothing in this Article X is intended to, and
shall not be construed to, expand any party's fiduciary duties under Applicable
Law.
Section 9. Chairman of the Board Not an Officer. For purposes of this
Article X, a director of the Corporation who is Chairman of the Board of
Directors of the Corporation shall not be deemed to be an officer of the
Corporation by reason of holding such position (regardless of whether such
position is deemed an office of the Corporation under the bylaws of the
Corporation), unless such person is a full-time employee of the Corporation.
ARTICLE XI
Section 1. Certain Acknowledgements. In anticipation that:
(a) each Holder will remain, for some period of time, a stockholder of
the Corporation and have continued contractual, corporate and business relations
with the Corporation;
(b) the Corporation and each Holder may enter into contracts or
otherwise transact business with each other and the Corporation may derive
benefits therefrom; and
(c) the Corporation may from time to time enter into contractual,
corporate or business relations with one or more of its directors, or one or
more corporations, partnerships, associations or other organizations in which
one or more of its directors have a financial interest (collectively, "Related
Entities");
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the provisions of this Article XI are set forth to regulate and guide certain
contractual relations and other business relations of the Corporation as they
may involve each Holder, Related Entities and their respective officers and
directors, and the powers, rights, duties and liabilities of the Corporation and
its officers, directors and stockholders in connection therewith.
Section 2. No Limitation. The provisions of this Article XI are in addition
to, and not in limitation of, the provisions of the Delaware General Corporation
Law and the other provisions of this Certificate of Incorporation. Any contract
or business relation which does not comply with procedures set forth in this
Article XI shall not by reason thereof be deemed void or voidable or result in
any breach of any fiduciary duty to, or duty of loyalty to, or failure to act in
good faith or in the best interests of, the Corporation, or the derivation of
any improper personal benefit, but shall be governed by the remaining provisions
of this Certificate of Incorporation, the Bylaws, the Delaware General
Corporation Law and other Applicable Law.
Section 3. Related Party Transactions. No contract, agreement, arrangement
or transaction between the Corporation, on the one hand, and a Holder or a
Related Entity or one or more of the directors or officers of the Corporation,
on the other hand, or any amendment, modification or termination thereof, shall
be void or voidable solely for the reason that a Holder or Related Entity or any
one or more of the officers or directors of the Corporation are parties thereto,
or solely because any such directors or officers are present at or participate
in the meeting of the Board of Directors or committee thereof which authorizes
such contract, agreement, arrangement, transaction, amendment, modification or
termination (each, a "Transaction") or solely because his, her or their votes
are counted for such purpose, and a Holder, any Related Entity and such
directors and officers (a) shall have fully satisfied and fulfilled any
fiduciary duties they may have to the Corporation and its stockholders with
respect thereto, (b) shall not be liable to the Corporation or its stockholders
for any breach of any fiduciary duty they may have by reason of their approving
any such Transaction or the Corporation's entering into, performing or
consummating any such Transaction, (c) shall be deemed to have acted in good
faith and in a manner such persons reasonably believed to be in and not opposed
to the best interests of the Corporation, to the extent such standard is
applicable to such person's conduct, and (d) shall be deemed not to have
breached any duties of loyalty to the Corporation or its stockholders, whether
or not they have derived a personal benefit therefrom, if:
(i) the material facts as to the Transaction are disclosed or are
known to the Board of Directors or the committee thereof that authorizes the
Transaction and the Board of Directors or such committee in good faith
authorizes or approves the Transaction by the affirmative vote of a majority of
me directors on the Board of Directors who are disinterested with respect to the
Transaction ("Arm's Length Directors") or such committee (even though the Arm's
Length Directors are less than a quorum);
(ii) the material facts as to the Transaction are disclosed or are
known to the holders of the voting stock entitled to vote thereon, and the
Transaction is specifically approved in good faith by vote of the holders of a
majority of the then outstanding voting stock not owned by such Holder or such
Related Entity, voting together as a single class;
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(iii) such Transaction is effected pursuant to, and consistent with,
terms and conditions specified in any arrangements, standards, protocols or
guidelines (collectively, the "Guidelines") which are in good faith authorized
or approved, after disclosure or knowledge of the material facts related
thereto, by the affirmative vote of a majority of the Arm's Length Directors on
the Board of Directors or the applicable committee thereof (even though the
Arm's Length Directors are less than a quorum) or by vote of the holders of a
majority of the then outstanding voting stock not owned by such Holder or such
Related Entity, voting together as a single class (such authorization or
approval of such Guidelines constituting or being deemed to constitute
authorization or approval of such Transaction); or
(iv) such Transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified by the Board of Directors, a committee
thereof or the stockholders of the Corporation.
In addition, each Transaction authorized, approved or effected, and such
Guidelines so authorized or approved, as described in (i), (ii), or (iii) above,
shall be deemed to be entirely fair to the Corporation and its stockholders;
provided, however, that if such authorization or approval is not obtained, or
such Transaction is not so effected, no presumption shall arise that such
Transaction or such Guidelines are not fair to the Corporation and its
stockholders.
Section 4. Certain Interested Party Transactions. Except as expressly
permitted under Section 3 of that certain Amended and Restated Stockholders
Agreement, dated as of March 16, 2004, as amended from time to time, between the
Corporation and certain of its stockholders, any transaction between the
Corporation and (i) one or more of the Corporation's directors or officers or
any entity (other than a wholly-owned subsidiary of the Corporation) in which
any of the Corporation's directors or officers is an employee or Affiliate of an
Interested Stockholder of such entity, (ii) an Interested Stockholder, or (iii)
any other transaction otherwise provided for in the Corporation's bylaws, shall
be (x) fair to the Corporation and (y) subject to Disinterested Director
Approval or approval by the disinterested stockholders.
Section 5. Quorum. Directors of the Corporation who are also directors,
officers or employees of a Holder or any Related Entity may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee that authorizes or approves any such Transaction or any such
Guidelines. Voting stock owned by a Holder and any Related Entities may be
counted in determining the presence of a quorum at a meeting of stockholders
that authorizes or approves any such Transaction or any such Guidelines.
Section 6. No Breach. A Holder shall not be liable to the Corporation or
its stockholders for breach of any fiduciary duty it may have by reason of the
fact that such Holder takes any action or exercises any rights or gives or
withholds any consent in connection with any Transaction between such Holder and
the Corporation. No vote cast or other action taken by any person who is an
officer, director or other representative of a Holder, which vote is cast or
action is taken by such person in his capacity as a director of the Corporation,
shall constitute an action of, or the exercise of a right by, or a consent of,
such Holder for the purpose of any such Transaction.
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Section 7. Deemed Notice. Any person purchasing or otherwise acquiring any
interest in any shares of stock or other securities (including without
limitation stock options) of the Corporation shall be deemed to have notice of
and to have consented to the provisions of this Article XI.
Section 8. No Expansion. Nothing in this Article XI is intended to, nor
shall anything in this Article XI be construed to, expand any party's fiduciary
duties under Applicable Law.
ARTICLE XII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereinafter prescribed by statutes, and all rights conferred upon the
stockholders therein are granted subject to this reservation. The number of
authorized shares of any class of capital stock of the Corporation may be
increased or decreased (but not below the number of shares thereof then
outstanding) only by the affirmative vote of the holders of a majority of the
capital stock of the Corporation entitled to vote, voting together as a single
class. As permitted under Section 242(b)(2) of the DGCL, no class of capital
stock of the Company will be entitled to vote as a separate class upon a
proposed amendment to increase or decrease the authorized number of shares of
such class.
ARTICLE XIII
Notwithstanding any other provisions of this Certificate of Incorporation
or any provision of law which might otherwise permit a lesser vote or no vote,
but in addition to any affirmative vote of the holders of the capital stock
required by law or this Certificate of Incorporation, the affirmative vote of
the holders of at least two-thirds of the combined Voting Power of all of the
then outstanding shares of the Corporation eligible to be cast in the election
of directors will be required to amend, alter, change or repeal Articles VI,
VII, X, XII or XIV hereof, or this Article XIII, or any provision thereof or
hereof.
ARTICLE XIV
The Corporation expressly elects to be governed by Section 203 of the DGCL.
Notwithstanding the terms of Section 203 of the DGCL, no Holders or their
respective Affiliates will be deemed at any time and without regard to the
percentage of voting stock of the Corporation owned by the Holders or their
respective Affiliates, as applicable, to be an "interested stockholder" as such
term is defined in Section 203(c)(5) of the DGCL.
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