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EXHIBIT 4.2
CONFIDENTIAL
CLEARWIRE CORPORATION
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This
Amended and Restated Stockholders Agreement ("Agreement") is made
as
of the 16th day of March, 2004 by and among Clearwire Corporation,
a Delaware
corporation (the "Company"), and each stockholder of the Company
listed on
Schedule A hereto executing this Agreement (a "Stockholder").
RECITALS
A. Flux Fixed Wireless, LLC ("FFW") has formed the Company to
engage
in strategic acquisitions to assemble spectrum rights and other
assets to
develop a competitive wireless broadband services company.
B. The parties deem it in their respective best interests to
provide
for an agreed composition of the Board of Directors, for certain
restrictions on
the transfer of any interest in the current or future classes of
the capital
stock of the Company (the "Shares"), and for the purchase of Shares
upon the
occurrence of certain events, and the parties believe that such
restrictions
will minimize the business disruption that could result from
transfers and
decisions not made in accordance with this Agreement.
C. The Company and certain Stockholders entered into that
certain
Stockholders Agreement dated as of November 13, 2003 (the "Original
Agreement").
D. Prior to the date hereof, NextNet Wireless, Inc. ("NextNet")
has
agreed to have a subsidiary of the Company merge with and into
NextNet, and
pursuant to such merger, certain stockholders of NextNet will
receive shares of
the Company's Class A Common Stock and warrants to purchase shares
of the
Company's Class A Common Stock.
E. The Stockholders own 100% of the issued and outstanding
Shares
(such issued and outstanding Shares, together with any securities
of the Company
that Stockholders may later acquire, are referred to collectively
as the
"Stock").
F. The parties desire to amend the Original Agreement as set
forth
herein.
G. Certain capitalized terms used in this Agreement have the
definitions provided in Section 12 hereof.
THEREFORE, for good and valuable consideration, the receipt and
sufficiency
of which are hereby acknowledged, the parties, intending legally to
be bound,
agree as follows:
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AGREEMENT
1. PREEMPTIVE RIGHTS
1.01 GRANT OF PREEMPTIVE RIGHTS
The
Company hereby grants to each Eligible Stockholder and each
Eligible
NextNet Stockholder the preemptive rights set forth in this Section
1 with
respect to each issuance of Shares, or securities or instruments
convertible
into or exchangeable or exercisable for any Shares, of any class of
capital
stock of the Company, other than the Stock that is issued and
outstanding as of
the date of this Agreement and other than Shares issued or issuable
in the
following circumstances (collectively, subject to the following
exceptions, "New
Shares"):
(a)
Shares issued pursuant to Section IV, Section 2.(d) of the
Certificate;
(b)
Shares (and/or options, warrants or other Share purchase rights,
and
the Shares issued pursuant to such options, warrants or other
rights) issuable
or 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 directly in a transaction approved by
the Board of
Directors of the Company or pursuant to a stock option plan or
restricted stock
plan approved by the Board of Directors of the Company and provided
further that
each of the foregoing transactions is primarily for non-financing
purposes;
(c)
Shares (and/or options, warrants or other Share purchase rights,
and
the Shares issued pursuant to such options, warrants or other
rights) issued to
financial institutions or lessors in connection with commercial
credit
arrangements, equipment financing or similar transactions;
(d)
Shares (and/or options, warrants or other Share purchase rights,
and
the Shares issued pursuant to such options, warrants or other
rights) issued
pursuant to transactions involving technology licensing, research
or development
activities, the use or acquisition of strategic assets, properties
or rights, or
the distribution, manufacture or marketing of the Company's
products, provided
that each of the foregoing transactions is primarily for
non-financing purposes;
(e)
Shares issuable or issued in connection with bona fide acquisitions
of
or by the Company whether by merger, consolidation, sale of assets,
sale or
exchange of stock or otherwise, the terms of which are approved by
the Board of
Directors of the Company;
(f)
Shares (and/or options, warrants or other Share purchase rights,
and
the Shares issued pursuant to such options, warrants or other
rights) issued or
issuable (i) to the public pursuant to the IPO or (ii) upon
exercise of warrants
or rights granted to underwriters in connection with such IPO;
(g)
Shares (and/or options, warrants or other Share purchase rights,
and
the Shares issued pursuant to such options, warrants or other
rights) issuable
or issued pursuant to agreements and warrants existing on the date
hereof that
are listed on Schedule 1.01 to this Agreement;
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(h)
Shares issued upon conversion of convertible securities or
instruments
outstanding on the date hereof that are issued in compliance with
the preemptive
rights set forth in this Section 1; and/or
(i)
Shares issued in connection with any stock split, stock
dividend,
reserve stock split or other distribution of shares that does not
affect the
economic interests or rights of holders of Shares.
1.02 EXERCISE OF PREEMPTIVE RIGHTS
Each
time after the date of this Agreement and prior to the time that
the
Company proposes to offer any New Shares, the Company shall first
make an
offering of such New Shares to the Eligible Stockholders and the
Eligible
NextNet Stockholders in accordance with this Section 1.02.
(a)
The Company shall deliver a notice (the "Issue Notice") to the
Eligible
Stockholders and the Eligible NextNet Stockholders stating (i) the
bona fide
intention of the Company to offer such New Shares, (ii) the number
of such New
Shares to be offered, and (iii) the price and terms upon which the
Company
proposes to offer such New Shares.
(b)
By written notification received by the Company, within 10
business
days after receipt of the Issue Notice, each Eligible Stockholder
and each
Eligible NextNet Stockholder may elect to purchase, at the price
and on the
terms specified in the Issue Notice, a portion of such New Shares
that equals
the proportion that the number of shares of Stock including any
options,
warrants or other share purchase rights held by such Stockholder
bears to the
total number of shares of Stock of the Company then outstanding, on
a fully
diluted basis, but excluding (i) any options, warrants or other
rights to
acquire Shares where the fair market value of the Shares issuable
on the
exercise of such options, warrants or other rights, as determined
in good faith
by the Board of Directors of the Company, is less that the exercise
price of
such options, warrants or other rights and (ii) any Shares and
options, warrants
or other rights to acquire Shares that are reserved but unallocated
pursuant to
any stock plan. Such written notification shall be a binding,
irrevocable
commitment to purchase such New Shares.
(c)
If Eligible Stockholders and the Eligible NextNet Stockholders do
not
elect to purchase all of the New Shares that Eligible Stockholders
and the
Eligible NextNet Stockholders are entitled to purchase under
subsection (b), the
Company may offer the unsubscribed portion of such New Shares to
any Persons at
a price not less than, and upon terms no more favorable to the
offeree, than
those specified in the Issue Notice, provided that the Company
completes the
offer and sale of such unsubscribed portion within 120 business
days after the
date the applicable Issue Notice is first delivered to stockholders
of the
Company.
(d)
Each of HITN and Clearwire may assign its rights under this Section
1
to a Designee; provided, that the Company shall only be obligated
to deliver
Issue Notices to HITN and Clearwire. No other Stockholder may
assign its rights
under this Section 1 without the consent of the Company which may
be withheld at
its sole discretion.
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1.03 RECAPITALIZATIONS, REORGANIZATIONS, BANKRUPTCY
The
Company grants to each Eligible Stockholder and each Eligible
NextNet
Stockholder a preemptive right to participate on a pro rata basis
(calculated
pursuant to Section 1.02(b) above) with any McCaw Entity in any
recapitalization, reorganization, bankruptcy or similar transaction
of the
Company effected in such a manner that the preemptive rights
granted pursuant to
Section 1.01 do not apply (a "Restructuring"). The Company shall
deliver a
notice (the "Restructuring Notice") to the Eligible Stockholders
and the
Eligible NextNet Stockholders stating (i) the bona fide intention
of the Company
to engage in a Restructuring, (ii) a description of the
Restructuring, and (iii)
the price and terms upon which the Eligible Stockholders and
Eligible NextNet
Stockholders will be entitled to participate. By written
notification received
by the Company, within 10 business days after receipt of the
Restructuring
Notice, each Eligible Stockholder and each Eligible NextNet
Stockholder may
elect to participate in the Restructuring at the price and on the
terms
specified in the Restructuring Notice, which indicates price and
terms shall be
identical to those offered to the McCaw Entities. Such written
notification
shall be a binding, irrevocable commitment to participate in the
Restructuring
on the same terms and conditions as the McCaw Entities.
1.04 TERMINATION OF PREEMPTIVE RIGHTS
If
an Eligible NextNet Stockholder fails to fully exercise its
preemptive
rights pursuant to Section 1.01 or Section 1.03 at any time, then
such Eligible
NextNet Stockholder shall no longer be entitled to any preemptive
rights
pursuant Section 1.01 and Section 1.03 and such rights shall be
terminated in
their entirety with respect to such NextNet Stockholder; provided,
however, that
such rights shall not terminate in connection with the first
opportunity to
exercise the rights granted under Sections 1.01 and 1.03 so long as
the Eligible
NextNet Shareholder has purchased at least 50% of the Shares that
the Eligible
NextNet Shareholder was entitled to purchase.
2. ANTI-DILUTION RIGHTS
2.01 GRANT OF ANTI-DILUTION RIGHTS
The
Company shall not issue and sell or agree to issue and sell New
Shares
to a McCaw Entity for consideration per share that is less than the
Trigger
Price in effect immediately prior to such issue (each, a "Dilutive
Issuance"),
unless the Company concurrently issues to each of HITN, ISA,
Clearwire and each
NextNet Stockholder (or their respective Permitted Transferees) for
no
consideration a number of New Shares equal to (i) such
Stockholder's Adjusted
Shares less (ii) such Stockholder's Original Shares. No fractional
Shares shall
be issued pursuant to this Section 2.01. The number of Shares
issued shall be
rounded up to the nearest integral number of whole Shares.
For
the purposes of this Section 2.01, for each Dilutive Issuance,
the
following terms shall have the following meanings:
(a)
"Adjusted Shares" means, for each of HITN, ISA, Clearwire and
each
NextNet Stockholder (or their respective Permitted Transferees),
the number
obtained by dividing (x) such Stockholder's Original Shares by (y)
the product
of (1) the Trigger Price in effect immediately prior to such issue
multiplied by
(2) the Adjustment Ratio.
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(b)
"Adjustment Ratio" means the fraction in which (i) the numerator is
the
sum of (A) the total number of all shares of capital stock of the
Company issued
and outstanding immediately prior to Dilutive Issuance, and (B) the
number of
shares that the aggregate consideration received by the Company
from the McCaw
Entities in the Dilutive Issuance would purchase at the Trigger
Price in effect
immediately prior to such Dilutive Issuance, and (ii) the
denominator is the sum
of (C) the total number of all shares of capital stock of the
Company issued and
outstanding immediately prior to the Dilutive Issuance and (D) the
total number
of all New Shares that the Company issues to the McCaw Entities in
the Dilutive
Issuance. For the purposes of this Section 2.01, the total number
of all shares
of capital stock of the Company issued and outstanding immediately
prior to the
Dilutive Issuance shall be determined on a fully-diluted and
as-converted to
Class A Common Stock basis (but excluding any shares and options,
warrants or
other rights to acquire shares that are reserved but unallocated
pursuant to any
stock plan);
(c)
"Original Shares" means, for each of HITN, ISA, Clearwire and
each
NextNet Stockholder (or their respective Permitted Transferees),
the total
number of Shares held by HITN, ISA, Clearwire or NextNet
Stockholders, as
applicable, on March __, 2004 or hereafter acquired by HITN, ISA or
Clearwire,
as applicable, pursuant to an agreement with the Company existing
on the date
hereof (other than pursuant to this Agreement), excluding any
Shares acquired at
an effective price less than the Trigger Price in effect
immediately prior to
the issuance that results in an anti-dilutive adjustment pursuant
to this
Section 2.01, and that are held by such Stockholder immediately
prior to a
Dilutive Issuance (as adjusted for any stock split, stock dividend,
reverse
stock split or other distribution of shares); and
(d)
"Trigger Price" shall initially mean the Original Issue Price.
The
Trigger Price shall be proportionately adjusted from time to time
for any stock
splits (subdivisions or combinations), stock dividends,
recapitalizations or
reorganizations pursuant to which securities of the Company are
issued with
respect to a Stockholder's Original Shares.
2.02 AUTOMATIC WAIVER OF ANTI-DILUTION RIGHTS
If a
Stockholder exercises its preemptive rights pursuant to Section
1
hereof with respect to any new financing that would otherwise
trigger the rights
under this Section 2, such Stockholder's exercise of its preemptive
rights shall
be deemed an automatic waiver of such Stockholder's rights to
receive additional
Shares pursuant to Section 2.01.
2.03 TERMINATION OF ANTI-DILUTION RIGHTS
The
rights granted under this Section 2 shall terminate immediately
after
the closing of one or more equity financing transactions in which
the Company
raises an aggregate of $75,000,000 at a pre-money valuation of at
least
$250,000,000 and a value per Share of Common Stock of at least
$3.00, as
established in good faith by the Company's Board of Directors.
3. ADDITIONAL MCCAW ENTITY INVESTMENTS
The
parties acknowledge and agree that the McCaw Entities shall have
the
unfettered right to invest additional funds and property in the
Company at any
time and from time to time in
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exchange for additional Shares of Class B Common Stock at the
higher of (i) the
higher of the Original Issue Price or the Current Price, or (ii)
the price
otherwise established for such purpose by agreement between the
Company and one
or more of the McCaw Entities or by decision of the Board of
Directors from time
to time, subject only to the rights of the other Stockholders under
Section 1
hereof. If the price for the additional Shares of Class B Common
Stock is less
than the higher of the Original Issue Price or the Current Price,
the
transaction shall be fair to the Company and require the approval
of the
Disinterested Directors; provided further, that the approval of
the
Disinterested Directors shall not be required in the event the
purchase of
Shares by a McCaw Entity is pursuant to the exercise of its
preemptive rights
pursuant to Section 1 hereof.
4. RESTRICTIONS ON TRANSFERS
4.01 DEFINITION OF A TRANSFER
For
purposes of this Agreement the term "Transfer" shall be
interpreted
broadly to include, by way of example and without limitation
whatsoever, any
direct or indirect sale, assignment, award, confirmation,
distribution, bequest,
donation, trust, pledge, encumbrance, hypothecation, or other
transfer or
disposition, for consideration or otherwise, whether voluntarily,
involuntarily,
by operation of law, or otherwise. In addition, with respect to a
Stockholder
that is an entity, the term "Transfer" includes (i) the direct or
indirect
transfer of a controlling ownership or voting interest in such
Stockholder or in
the ultimate direct or indirect controlling Person (or group of
Persons acting
in concert) of such Stockholder, (ii) any transaction such as new
issuances of
equity, a merger or other business combination, spin-off or
distribution that
would result in a Change in Control of such Stockholder or of the
ultimate
direct or indirect controlling Person (or group of Persons) of such
Stockholder,
and (iii) any dividend, distribution, or other transfer of Stock
from the
Stockholder to any of its owners, in dissolution, liquidation, or
otherwise.
4.02 GENERAL RESTRICTIONS
No
Share or any interest therein, whether legal, beneficial or
otherwise,
shall be validly Transferred, and no purported transferee shall be
recognized as
a Stockholder of the Company for any purpose whatsoever, except in
accordance
with the terms of this Agreement. A Transfer or attempt to Transfer
subject to
the terms of this Agreement shall be deemed to occur whenever an
interest in a
Share is transferred or is attempted to be transferred, whether
voluntarily,
involuntarily, by operation of law, or otherwise, whether or not
any change in
the record of the ownership of the Shares occurs.
4.03 PERMITTED TRANSFERS
Except for the purposes of Section 4.04, the definition of the
term
"Transfer" shall not include, and the restrictions on Transfers in
this
Agreement shall not apply to, any of the following transactions
(each, a
"Permitted Transfer"):
(a)
Any issuance of equity securities by the Company or purchase of
Shares
by the Company.
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(b)
Any transfer by a Stockholder of all, but not less than all, of
such
Stockholder's Shares to the spouse or any lineal descendant of such
Stockholder,
including adopted children, or to a trust for the exclusive benefit
of such
Stockholder or such Stockholder's spouse or lineal descendants
(provided, in the
case of a trust, that the existing trustees of such trust have the
power to act
with respect to the trust's assets without court approval).
(c)
Any transfer to the estate or personal representative of the estate
of
a deceased Stockholder.
(d)
Any transfer by Clearwire to any Qualified Clearwire Stockholder or
any
Qualified Transferee, provided, that immediately after giving
effect to such
transfer the total number of Clearwire Stockholders (including
Clearwire itself)
will not exceed thirty-three (33).
(e)
Any transfer after the fourth anniversary of the date of this
Agreement, by a venture capital fund that is winding down and
liquidating to (i)
the partners, members or other equity holders of such fund, (ii)
the partners,
members or other equity holders or employees of the managing or
controlling
partners, members or other equity holders of such fund and (iii) a
trust for the
benefit of any of the foregoing.
(f)
Any transfer of Stock to a McCaw Entity (other than the Company and
its
subsidiaries).
(g)
Any transfer by a McCaw Entity to strategic partners, Associates,
or
Affiliates of a McCaw Entity.
(h)
Any conversion, exchange, or exercise of convertible, exchangeable,
or
exercisable securities, stock options, or warrants if in all cases
the holder of
the issued Stock after such conversion or exercise is the same as
the holder of
the converted or exercised securities.
(i)
Any pledge of Shares pursuant to a bona fide loan transaction
which
creates a mere security interest (with no rights to vote the
Shares), provided
that foreclosure of such pledge is not a Permitted Transfer unless
it otherwise
complies with this Section 4.03.
(j)
Any transfer in connection with a share exchange, merger,
consolidation, or reorganization of the Company that is approved by
the Company
or its stockholders in accordance with the Governing Documents, the
DGCL, and
this Agreement.
(k)
Any transfer by a Stockholder to a Qualified Transferee who is
acquiring all, but not less than all, of such Stockholder's Shares
with the
prior written consent of the Company, which shall not be
unreasonably
conditioned, withheld or delayed.
(l)
Any transfer by a Stockholder with the prior written consent of
the
Company, which it may withhold in its sole discretion.
(m)
Any transfer after a Termination Event.
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4.04 CONDITIONS PRECEDENT TO ALL TRANSFERS AND PERMITTED
TRANSFERS
No
Stockholder shall Transfer any Stock except in compliance with
applicable federal and state securities laws. The Company may, as a
condition to
any proposed Transfer pursuant to an exemption from the
registration
requirements under applicable federal and state securities laws,
require that
the Stockholder proposing to Transfer Stock provide the Company
with an opinion
of counsel reasonably satisfactory to the Company stating that the
Transfer is
so exempt. No Transfer shall be effective unless such Transfer is
made in
accordance with applicable federal and state securities laws and
the transferee
has executed and delivered a Joinder in the form attached as
Exhibit A, in favor
of the Company and each Stockholder, stating that by acquiring such
Stock, the
transferee has agreed to all terms and conditions of this Agreement
as if such
transferee were an original party hereto.
5. MCCAW ENTITY PURCHASE RIGHTS
5.01 RIGHT OF FIRST REFUSAL
With
respect to any Transfer, or agreement to engage in a Transfer,
prior
to the earlier of (i) January 1, 2009 or (ii) a Termination Event,
the McCaw
Entities shall have, and each other Stockholder hereby irrevocably
grants to the
McCaw Entities, the rights (the "Right of First Refusal") described
in this
Section 5.01.
(a)
A Stockholder (other than a McCaw Entity) (the "Selling
Stockholder")
that desires to Transfer its Stock in compliance with this Section
5.01 must
first receive a bona fide, written, binding offer and commitment
("Offer") for
the acquisition of any or all of the Transferor's Shares from a
Qualified
Transferee (other than an Affiliate or an Associate of the Selling
Stockholder),
that is capable of consummating the proposed acquisition on the
terms of the
Offer, conditioned only on the exercise of Stockholder rights under
this
Agreement and satisfaction of customary closing conditions. Upon
receipt and
acceptance of an Offer, the Selling Stockholder shall give written
notice (the
"ROFR Notice") to FFW stating that the Selling Stockholder intends
to Transfer
Stock. The ROFR Notice shall identify the Qualified Transferee,
specify the type
and number of shares of Stock to be Transferred to the Qualified
Transferee (the
"ROFR Shares"), specify the per share price (in cash or other
consideration)
(the "Sale Price") that the Qualified Transferee has agreed to pay
for the ROFR
Shares, and enclose an accurate summary of all terms and conditions
of the
proposed transfer.
(b)
The ROFR Notice shall constitute the Selling Stockholder's
binding
offer to sell the ROFR Shares to the McCaw Entities on the terms
set forth in
the ROFR Notice and this Agreement. The McCaw Entities, or any of
them, shall
have 10 business days after delivery of the ROFR Notice (subject to
any required
regulatory approvals, provided that the appropriate McCaw Entity is
using
commercially reasonable efforts to satisfy such regulatory
condition as soon as
reasonably practicable) (the "ROFR Exercise Period") to exercise
its right to
purchase all, but not less than all of, the ROFR Shares at the Sale
Price and
upon the other terms and conditions set forth in the ROFR Notice by
written
notice to the Selling Stockholder within the ROFR Exercise
Period.
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(c)
Failure to deliver such a notice within the ROFR Exercise Period
shall
constitute waiver of the Right of First Refusal with respect to the
ROFR Shares,
and the Selling Stockholder shall have ninety (90) business days
thereafter to
complete the transfer of the ROFR Shares to the Qualified
Transferee pursuant to
the Offer; otherwise, the ROFR Shares shall thereupon be again
subject to the
right of first refusal described in this Section 5.01 before any
transfer can be
made.
(d)
Delivery of a notice exercising the Right of First Refusal shall
create
a binding contract between the applicable McCaw Entities and the
Selling
Stockholder for the purchase and sale of the ROFR Shares at the
Sale Price and
on the terms and conditions in the Offer and this Section 5.01. In
that event,
the McCaw Entities exercising the right of first refusal shall
deliver the Sale
Price for the ROFR Shares, in immediately available funds, to the
Selling
Stockholder to effectuate the Transfer of the ROFR Shares within
five business
days after the end of the ROFR Exercise Period or the satisfaction
of the
conditions to closing contained in the ROFR Notice provided that
the appropriate
McCaw Entity is using commercially reasonable efforts to cause such
condition to
be satisfied as soon as reasonably practicable. The Selling
Stockholder shall
effectuate the Transfer of the ROFR Shares by promptly delivering
to the
applicable McCaw Entities one or more certificates, properly
endorsed for
transfer, that represent the ROFR Shares, together with stock
powers and such
other closing documentation at the applicable McCaw Entities may
reasonably
request.
(e)
A Transfer to one of the McCaw Entities or a Qualified Transferee
in
accordance with this Section 5.01 is not subject to Section 4.02 or
Section 7.
5.02 RIGHT OF FIRST OFFER
At
any time prior to the earlier of (i) January 1, 2009 or (ii) a
Termination Event, when the McCaw Entities do not have the Right of
First
Refusal (other than with respect to a Permitted Transfer), the
McCaw Entities
shall have, and each Stockholder hereby irrevocably grants to the
McCaw
Entities, the rights (the "Right of First Offer") described in this
Section
5.02:
(a)
A Selling Stockholder that desires to Transfer its Stock in
compliance
with this Section 5.02 must first give written notice (the "ROFO
Notice") to FFW
stating that the Selling Stockholder intends to Transfer Stock. The
ROFO Notice
shall identify the Qualified Transferee, if known, and specify the
type and
number of shares of Stock to be Transferred (the "ROFO Shares") and
specify the
proposed Sale Price.
(b)
The ROFO Notice shall constitute the Selling Stockholder's
binding
offer to sell the ROFO Shares to the McCaw Entities on the terms
set forth in
the ROFO Notice and this Agreement. The McCaw Entities, or any of
them, shall
have 10 business days after delivery of the ROFO Notice (subject to
any required
regulatory approvals, provided that the appropriate McCaw Entity is
using
commercially reasonable efforts to satisfy such regulatory
condition as soon as
reasonably practicable) (the "ROFO Exercise Period") to exercise
its right to
purchase all, but not less than all of, the ROFO Shares at the Sale
Price and
upon the other terms and conditions set forth in the ROFO Notice by
written
notice to the Selling Stockholder within the ROFO Exercise
Period.
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(c)
Failure to deliver such a notice within the ROFO Exercise Period
shall
constitute waiver of the Right of First Offer with respect to the
ROFO Shares,
and the Selling Stockholder shall have ninety (90) calendar days
thereafter to
complete the transfer of the ROFO Shares to a Qualified Transferee
at a price no
lower than the Sale Price and the other terms set forth in the ROFO
Notice, or
other terms that taken as a whole are no less favorable to the
Selling
Stockholder; otherwise, the ROFO Shares shall thereupon be again
subject to the
Right of First Offer described in this Section 5.02 before any
transfer can be
made.
(d)
Delivery of a notice exercising the Right of First Offer shall
create a
binding contract between the applicable McCaw Entities and the
Selling
Stockholder for the purchase and sale of the ROFO Shares at the
Sale Price and
on the terms and conditions in the ROFO Notice and this Section
5.02. In that
event, the McCaw Entities exercising the Right of First Offer shall
deliver the
Sale Price for the ROFO Shares, in immediately available funds, to
the Selling
Stockholder to effectuate the Transfer of the ROFO Shares within
five business
days after the end of the ROFO Exercise Period or the satisfaction
of the
conditions to closing contained in the ROFO Notice provided that
the appropriate
McCaw Entity is using commercially reasonable efforts to cause such
condition to
be satisfied as soon as reasonably practicable. The Selling
Stockholder shall
effectuate the Transfer of the ROFO Shares by promptly delivering
to the
applicable McCaw Entities one or more certificates, properly
endorsed for
transfer, that represent the ROFO Shares, together with stock
powers and such
other closing documentation at the applicable McCaw Entities may
reasonably
request.
(e)
A Transfer in accordance with this Section 5.02 is not subject
to
Section 4.02 or Section 7.
6. PARTICIPATION IN TRANSFERS BY MCCAW ENTITIES
6.01 DRAG/TAG NOTICE
In
the event ("Participation Trigger") any one or more McCaw Entities
(the
"Selling McCaw Entities") commits to a Transfer of 25% or more of
all Stock then
held by all McCaw Entities in a bona fide arm's-length transaction,
or a series
of related bona fide arm's length transactions, with a Person that
is not an
Affiliate of the McCaw Entities, then before consummating the sale,
the Selling
McCaw Entities shall give written notice (the "Drag/Tag Notice") to
all other
Stockholders informing them of the material terms of the Transfer,
including the
identity of the potential purchaser, the type and number of shares
of Stock to
be transferred to the potential purchaser (the "Drag/Tag Shares"),
the weighted
average price per share to be paid by the potential purchaser to
any selling
McCaw Entities (the "Drag/Tag Price"), and the transfer date.
6.02 EXERCISE OF DRAG ALONG RIGHT
(a)
The Selling McCaw Entities shall have the right (subject to the
regulatory approvals), exercisable upon written notice to the other
Stockholders
within 10 business days after the delivery of the Drag/Tag Notice,
to require
all other Stockholders to Transfer their Drag Along Pro Rata Share
(as defined
herein) concurrently with the Transfer by the Selling McCaw
Entities at the
Drag/Tag Price and on the same terms and conditions as those
received by the
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Selling McCaw Entities (the "Drag Along Right"). The Selling McCaw
Entities
shall specify in the Drag/Tag Notice the number of shares to be
sold by each
Stockholder, which shall equal the product of the Stockholder's
Percentage times
the number of Drag/Tag Shares (the "Drag Along Pro Rata
Share").
(b)
Notwithstanding Section 6.01 and subparagraph (a) of this Section
6.02,
with respect to any Shares held by HITN, the Selling McCaw Entities
may only
exercise the Drag Along Right if such Selling McCaw Entity commits
to a Transfer
of 51% or more of all Stock then held by all McCaw Entities in a
bona fide
arm's-length transaction with a Person that is not an Affiliate of
the McCaw
Entities unless the Drag/Tag Price equals 2 times the Original
Issue Price.
6.03 EXERCISE OF TAG-ALONG RIGHT
If,
upon the occurrence of a Participation Trigger, none of the
Selling
McCaw Entities invoke their Drag Along Rights pursuant to Section
6.02, then
before consummating the sale, each Stockholder shall have the right
(subject to
the regulatory approvals) ("Tag Along Right"), exercisable upon
written notice
to the Selling McCaw Entities within 10 business days after the
delivery of the
Drag/Tag Notice, to participate in the Selling McCaw Entities'
Transfer of
Drag/Tag Shares. Such written notice shall constitute the
Stockholder's election
to cause the transferee to purchase, at the Drag/Tag Price and on
the terms and
conditions as those received by the Selling McCaw Entities, a
portion of the
Stockholder's Stock equal the product of the Stockholder's
Percentage times the
number of Drag/Tag Shares.
6.04 DELIVERY OF SHARES; CLOSING
At
least three days prior to the transfer date (provided that the
other
Stockholders shall have received at least 10 business days' advance
notice of
the transfer date), all selling Stockholders shall deliver to the
Company the
certificates evidencing their respective Stock to be sold under
this Section
5.02, duly endorsed for transfer to the potential purchaser. On the
transfer
date and provided that the McCaw Entities consummate the Transfer
of their pro
rata share of the Drag/Tag Shares to the potential purchaser at the
Drag/Tag
Price and on the same terms and conditions, then the Company shall
deliver the
certificates evidencing all Drag/Tag Shares held by the
Stockholders to the
purchaser against payment of the Drag/Tag Price for such Stock, and
the Company
shall promptly remit such payment to the Stockholders in the
respective amounts
due them without reduction or adjustment of any kind except as may
be required
by law.
6.05 INAPPLICABILITY OF TRANSFER RESTRICTIONS
A
Transfer in accordance with this Section 6 is not subject to
Section 4.02
or 7.
6.06 REMEDIES
Each
Stockholder hereby consents to every sale pursuant to this Section
6,
and hereby agrees to sell its Stock on the terms and conditions
approved by the
McCaw Entities. All Stockholders shall take all necessary actions
approved by
the McCaw Entities in connection with the consummation of the sale,
so long as
all such actions are equally applicable to the McCaw
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Entities, including the execution of such agreements and such
instruments and
other actions reasonably necessary (a) to the extent required by
the potential
purchaser, to make, severally but not jointly, the same
customary
representations, warranties, indemnities, covenants, conditions,
escrow
agreements, and other agreements relating to such sale and (b) to
effectuate the
allocation and distribution of the aggregate consideration upon the
sale as set
forth in this Section 5.02.
In
the event a Stockholder fails to comply with the requirements of
this
Section 5.02, the McCaw Entities and the Company shall have, in
addition to
whatever other rights they may have in law or in equity, such call
rights
against such Stockholder as shall be necessary and appropriate to
effect the
intent of this Section 6, and the Stockholders agree to be bound by
such call
rights.
7. OTHER EVENTS CONSTITUTING AN OFFER TO PURCHASE SHARES
7.01 REPURCHASE EVENTS
Except for Permitted Transfers and Transfers pursuant to Section 5
or 6 (as
to Right of First Refusal, Drag-Along Rights, and Tag-Along
Rights), any one or
more of the following events or conditions with respect to a
Stockholder shall
be deemed to constitute a "Repurchase Event" with respect to such
Stockholder's
Shares:
(a)
The filing of a petition in bankruptcy by or against a Stockholder
or
any general assignment by a Stockholder for the benefit of such
Stockholder's
creditors;
(b)
The dissolution or commencement of liquidation of a Stockholder
that is
an entity, except for a Transfer in accordance with Section 4.03(d)
or 4.03(k);
(c)
The Change of Control of a Stockholder that is an entity without
the
prior written consent of the Company, which such consent shall not
be
unreasonably withheld or delayed; or
(d)
Any Transfer, or any other event which, were it not for the
provisions
of this Agreement, would cause any such Shares or any interest
therein to be
transferred, in violation of Section 4 of this Agreement.
7.02 OFFER NOTICE
Within 30 days after the occurrence of a Repurchase Event, the
Stockholder
or the Stockholder's trustee in bankruptcy, personal
representative, guardian,
executor, or administrator, as appropriate (for purposes of this
Section 7, the
"Transferor") shall give notice (for purposes of this Section 7,
the "Offer
Notice") to FFW of such Repurchase Event, specifying the date of
the Repurchase
Event and describing in reasonable detail the nature of the
Repurchase Event and
the number of Shares affected (the "Offered Shares"). The Offer
Notice shall
state that the price per share is the lower of the Original Issue
Price or the
Current Price. If FFW has not received this notice upon the
expiration of the
30-day period, any Stockholder, director, or officer of the Company
who has
knowledge of the Repurchase Event may give such notice (with a copy
of the same
to the Transferor) at any time after the end of such period, and
such notice
shall be deemed to be the Offer Notice.
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7.03 PURCHASE OF SHARES
Upon
the occurrence of any Repurchase Event, the Company shall have
the
right to purchase the Offered Shares for the price and on the terms
described in
this Section 7. Each purchase of Shares pursuant to this Section 7
shall be made
in accordance with the following terms and conditions:
(a)
Within 15 business days after receipt of the Offer Notice (the
"Offer
Period"), the Company shall have the right to purchase all or part
of the
Offered Shares shall deliver to the Secretary notice of its
acceptance of the
offer (the "Acceptance Notice") specifying the number of Offered
Shares that the
Company agrees to purchase. Delivery of an Acceptance Notice to the
Secretary
shall create a binding contract between the Company and the
Transferor for the
purchase and sale of the Offered Shares.
(b)
If the Company does not exercise their right to purchase all of
the
Offered Shares as provided above, the McCaw Entities shall have the
right to
purchase any remaining Offered Shares (the "Remaining Offered
Shares") by giving
an Acceptance Notice to the Secretary during the Offer Period
stating the number
of Remaining Offered Shares that each such McCaw Entity agrees to
purchase.
Delivery of an Acceptance Notice to the Secretary shall create a
binding
contract between each such McCaw Entity and the Transferor for the
purchase and
sale of the Offered Shares. Notwithstanding the foregoing, the
McCaw Entities
may not exercise the purchase right granted under this Section
7.03(b) unless a
majority of the Disinterested Directors have approved the
Company's
determination not to exercise its right to purchase all of the
Offered Shares.
7.04 PAYMENT FOR THE SHARES
Each
purchaser of Offered Shares shall pay the price for its
respective
Offered Shares by making a payment of 25% thereof at closing and by
paying the
balance in three equal annual installments, together with interest
on the unpaid
balance from at a per annum rate equal to the prime rate last
reported by Bank
of America National Association prior to closing, plus 1%. The
first installment
of principal and interest shall be paid on the 15th day of the
month following
closing. Interest shall accrue on the unpaid balance commencing on
the closing
date. The unpaid balance may be prepaid in whole or in part at any
time without
penalty, and may be accelerated in the event of failure to pay any
installment
when due, in which case reasonable attorney's fees and costs may
also be
recovered if any legal action for collection is commenced. The
other terms and
conditions and procedures for transferring Offered Shares shall be
determined in
accordance with Section 5.01(d).
8. BOARD PARTICIPATION RIGHTS
8.01 SIZE OF THE BOARD OF DIRECTORS
The
authorized number of directors on the Company's Board of
Directors
shall be not less than five and not more than eleven; provided,
however, that
such number may be increased or decreased by vote of the Board.
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8.02 SELECTION OF DIRECTORS
(a)
In any election of directors of the Company, each Stockholder
shall
vote such number of shares of Stock as may be necessary to elect as
a director
one individual nominated by the HITN (the "HITN Director"), but
only if the HITN
owns, in the aggregate, Stock representing at least 5% of the
Voting Shares of
the Company, it being understood that the initial HITN Director
shall be Jose
Luis Rodriguez.
(b)
In any election of directors of the Company, each Stockholder
shall
vote such number of shares of Stock as may be necessary to elect as
a director
one individual nominated by the Clearwire Stockholders (the
"Clearwire
Director"),
