EXHIBIT
10.2
STOCKHOLDERS’
AGREEMENT
dated as of July
2, 2009
by and
among
PACKETVIDEO
CORPORATION,
NEXTWAVE
WIRELESS INC.,
NEXTWAVE
BROADBAND INC.
and
NTT DOCOMO,
INC.
TABLE OF CONTENTS
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Page
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1.
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Information and Observer Rights
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1
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(a)
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Delivery of Financial Information
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1
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(b)
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Regulation S-X Information
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3
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(d)
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Information from Parent
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4
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2.
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Dealings Between Company and Parent
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6
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(a)
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Arm’s Length Dealings with
Parent
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6
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(b)
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Intercompany Advances
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6
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(c)
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Limitations on Transfer and Pledge
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6
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3.
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Right of First Negotiation
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7
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(a)
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Proposed Sale; Notice of Proposed Sale;
Exclusivity Period
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7
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(d)
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Permitted Proposed Sale
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8
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(e)
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Consents; Approvals
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9
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4.
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Right of First Refusal
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9
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(a)
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Purchaser Right
of First Refusal on Seller Common Stock and Company
Assets
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9
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(b)
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Company Right of First Refusal on Purchaser
Common Stock
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11
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(b)
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Availability / Procedure
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12
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(a)
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Sale of New Securities
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14
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(b)
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Exempt Transactions
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15
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8.
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Board and Employee Matters
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16
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TABLE OF CONTENTS
(continued)
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Page
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(b)
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Board Composition
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16
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(c)
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Failure to Designate a Board Member
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16
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(d)
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Removal of Board Members
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16
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(e)
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No Liability for Election of Recommended
Directors
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17
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(f)
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Compensation Committee
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17
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(g)
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Non-Board
Technology Oversight Committee; Business Planning
Committee
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17
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(h)
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Staff Assignments
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17
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(i)
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Company Equity Incentive Plan
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18
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(j)
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Parent Equity Incentive Plan
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18
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9.
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Protective Covenants and Other
Matters
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18
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(a)
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Purchaser Approval
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18
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(b)
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Amendment of Restated Certificate
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20
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(c)
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Conversion of Class A Shares
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20
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(a)
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Filing of
Consolidated Tax Returns
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20
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(c)
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Company-Generated
Benefit
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21
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(d)
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Changes in Tax
Liability
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21
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(e)
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Procedural
Matters
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22
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(f)
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Termination of
Affiliation
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23
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(h)
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Other Tax Sharing
Agreements
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23
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(i)
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Retention of
Carryovers
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23
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11.
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Stock Certificates; Joinder
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23
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(a)
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Successors and Assigns
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27
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TABLE OF CONTENTS
(continued)
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Page
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(b)
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Governing Law; Dispute Resolution
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27
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(c)
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Specific Enforcement
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28
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(m)
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Further Assurances
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30
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(n)
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Meaning of “Include” and
“Including”
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31
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(o)
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No Presumption Against Drafting Party
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31
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(p)
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No Third-Party Beneficiaries
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31
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(q)
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Facsimile and E-mail Signatures
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31
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(r)
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Termination of Certain Covenants
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31
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STOCKHOLDERS'
AGREEMENT
This Stockholders’ Agreement
(this “ Agreement ”) is made and entered
into as of July 2, 2009 (the “ Effective Date
”), by and among PacketVideo Corporation, a Delaware
corporation (the “ Company ”), NextWave
Wireless Inc., a Delaware corporation (“ Parent
”), NextWave Broadband Inc., a Delaware corporation and
wholly owned subsidiary of Parent (“ Seller
”) and NTT DoCoMo, Inc. (the “ Purchaser
” and, together with Seller, each a “
Stockholder ” and, collectively, the “
Stockholders ”). The Company, Parent and the
Stockholders are each individually referred to herein as a “
Party ” and collectively as the “
Parties .”
RECITALS
WHEREAS, the Company, Parent,
Seller, and Purchaser entered into a Stock Purchase Agreement dated
as of July 2, 2009 (the “Purchase Agreement”), pursuant
to which Seller agreed to sell, and Purchaser agreed to purchase,
subject to the terms and conditions of the Stock Purchase
Agreement, all of the issued and outstanding shares of Class A
Common Stock of the Company following a recapitalization of the
Company as described in the Stock Purchase Agreement;
WHEREAS, it is a closing condition
to Seller’s and Purchaser’s obligations at the closing
of the Stock Purchase Agreement that the other party execute and
deliver this Agreement;
WHEREAS, the Company and the
Purchaser plan to enter into a Technology Collaboration Agreement
within sixty (60) days of the Effective Date, providing for the
mutual management of the Company’s development efforts
relating to the Purchaser’s products and technologies on the
terms and conditions set forth therein that are mutually
satisfactory to the Company and the Purchaser (the “
Technology Collaboration Agreement ”);
and
WHEREAS, certain capitalized terms
are used herein as defined in Section 12 hereof.
NOW, THEREFORE, in consideration of
the foregoing, the mutual promises hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
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1.
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Information and Observer
Rights
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(a)
Delivery of Financial Information . For so long as
Purchaser, in order to meet its reporting obligations in the United
States pursuant to the Exchange Act, is required in the preparation
of its statutory financial statements under and in accordance with
GAAP to reflect its holdings of shares of Common Stock of the
Company applying the equity -method, the Company shall, at its sole
cost and expense, prepare and submit to Purchaser the following
documents and information no later than the dates or times set out
below, each in form and substance consistent with the financial
statements prepared by the Company for purposes of enabling Parent
to properly comply with its reporting obligations in the United
States pursuant to the Exchange Act:
(i) Unaudited
consolidated financial statements, including consolidated balance
sheets and statement of income, of the Company for the previous
fiscal quarter within ninety (90) days of the end of each fiscal
quarter, all prepared in accordance with GAAP;
(ii) Unaudited
consolidated financial statements, including consolidated balance
sheets and statement of income, of the Company for the previous
fiscal year within ninety (90) days of the end of each fiscal year,
all prepared in accordance with GAAP, and upon the request of
Purchaser, such unaudited annual consolidated financial statements
shall be reviewed by the Company’s outside auditors prior to
such date;
(iii) At such
time as Purchaser is no longer required to account for the Company
as an equity-method affiliate in its statutory financial statements
under and in accordance with GAAP, the Company shall, at its sole
cost and expense, prepare and submit to Purchaser the year-to-date
financial information stipulated in Section 1(a)(i) or
Sections 1(a)(ii), as applicable, depending on the timing of
the change in Purchaser’s accounting treatment of the
Company, for the quarterly fiscal period immediately after the
change; and
(iv) Such
other information relating to the financial condition, business,
prospects, or corporate affairs of the Company as Purchaser may
from time to time reasonably request; provided ,
however , that the Company shall not be obligated under this
Section 1(a) to provide information (A) that the Company reasonably
determines in good faith to be a trade secret or confidential
information (unless covered by an enforceable confidentiality
agreement, in form reasonably acceptable to the Company) or (B) the
disclosure of which would adversely affect the attorney-client
privilege between the Company and its counsel, as reasonably
determined by the Company in good faith and upon the advice of
counsel.
If, for any period, the Company has
any subsidiary whose accounts are consolidated with those of the
Company and the Company reports such information on a consolidated
basis to Parent for purposes of the preparation of Parent’s
financial statements, then in respect of such period the financial
statements to be delivered pursuant to the foregoing sections shall
be the consolidated financial statements of the Company and all
such consolidated subsidiaries.
Purchaser agrees to keep
confidential any financial information provided to Purchaser
pursuant to this Section 1(a), pursuant to Section 1(b) below or
otherwise provided to Purchaser hereunder by the Company, Seller or
Parent and to maintain such information in confidence until such
time as the Company, Seller or Parent, as applicable, publicly
discloses such information in a manner that complies with
Regulation FD. Purchaser agrees to use such information only in the
preparation of Purchaser’s financial statements and, except
as may be required pursuant to Section 1(b)(iii) below, shall not
publish the financial statements of the Company as separate
financial statements.
Notwithstanding anything else in
this Section 1(a) to the contrary, the Company may cease providing
the information described in this Section 1(a) during the period
starting with the date thirty (30) days before the Company’s
good-faith estimate of the date of filing of a registration
statement if it reasonably concludes it must do so to comply with
the SEC rules applicable to such registration statement and related
offering; provided , however , that the
Company’s covenants under this Section 1(a) shall be
reinstated at such time as the Company is
no longer actively employing its
commercially reasonable efforts to cause such registration
statement to become effective.
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(b)
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Regulation S-X
Information .
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(i) Purchaser
represents and warrants that Purchaser is not required to (1)
include summarized financial information of the Company in its
statutory financial statements pursuant to United States Securities
and Exchange Commission Regulation S-X (“ Regulation
S-X ”) Rule 4-08 or (2) include separate financial
statements of the Company in its filings with the United States
Securities Exchange Commission pursuant to Regulation S-X Rule
3-09. In the event that Purchaser in the future is required to
include any such summarized financial information or separate
financial statements of the Company in its filings with the United
States Securities Exchange Commission pursuant to Regulation S-X,
Purchaser shall provide prompt written notice to the Company and
Parent of such requirement, which notice shall be provided to the
Company and Parent at least sixty (60) days prior to the date by
which the Company is required to deliver the financial information
specified in Section 1(a) and this Section 1(b), as applicable, in
accordance with Sections 1(b)(ii) or 1(b)(iii), as
applicable.
(ii) In
the event that Purchaser is required to include summarized
financial information of the Company for 50 percent-or-less-owned
persons accounted for by the equity method in its statutory
financial statements pursuant to United States Securities and
Exchange Commission Regulation S-X (“ Regulation
S-X ”) Rule 4-08, the Company’s obligations in
Section 1(a) will survive for three (3) fiscal year after the last
fiscal year of Purchaser in which the Company is significant to
Purchaser as determined pursuant to Regulation S-X;
(iii) In the
event that Purchaser is required to include separate financial
statements of the Company for 50 percent-or-less-owned persons
accounted for by the equity method in its filings with the United
States Securities Exchange Commission pursuant to Regulation S-X
Rule 3-09, the Company shall provide the documents below in a
timely manner for three (3) fiscal year after the last fiscal year
of Purchaser in which the Company is significant to Purchaser as
determined pursuant to Regulation S-X in addition to the
information required in Section 1(a):
(1) the
Company’s unaudited consolidated financial statements (or the
Company’s audited consolidated financial statements together
with notes thereto for any fiscal year for which audited financial
statements of the Company are required to be included in
Purchaser’s filings with the United States Securities
Exchange Commission pursuant to Regulation S-X Rule 3-09) within
two hundred and forty (240) days after the end of each fiscal year,
all prepared in accordance with GAAP; and
(2) the
auditor’s report within two hundred and forty (240) days
after the end of each of the Company’s fiscal year, all
prepared in accordance with GAAP, for any fiscal year for which
audited financial statements of the Company are required to be
included in Purchaser’s filings with the United States
Securities Exchange Commission pursuant to Regulation S-X Rule
3-09.
(c)
Company Inspection . The Company shall permit Purchaser, at
Purchaser’s expense, to visit and inspect the Company’s
properties; examine its books of account and records; and discuss
the Company’s affairs, finances, and accounts with its
officers, during normal business hours as may be reasonably
requested by the Purchaser from time to time with reasonable
frequency and with reasonable advance notice to the Company;
provided , however , that the Company shall not be
obligated pursuant to this Section 1(b) to provide access to any
information that it considers highly confidential or proprietary or
a trade secret, for which there is a conflict of interest between
the Company and Purchaser, or the disclosure of which would
adversely affect the Company’s business or the
attorney-client privilege between the Company and its counsel, in
each case as reasonably determined by the Company in good
faith.
(d)
Information from Parent . In the event that Parent is no
longer subject to the reporting requirements of the Exchange Act
and, at any such time, any Notes (as defined below) then remain
outstanding, Parent shall deliver or cause to be delivered to
Purchaser:
(i) Any
written notice provided to the Noteholders (as defined below) or to
their collateral agents pursuant to any Notes or the Note
Agreements (as defined below) which indicates Parent’s or any
Affiliate’s non-compliance with, the terms of the Notes or
the Note Agreements, which information shall be provided to
Purchaser within five (5) business days after delivery to such
Noteholders;
(ii) Copies
of all written requests for information received by Parent or any
of its Affiliates from any of the Noteholders or their collateral
agents directly related to Parent’s or any Affiliate’s
ability to comply with or Parent’s or any Affiliate’s
non-compliance with the terms of the Notes or the Note Agreements
in any material manner, within five (5) business days following
receipt thereof; and
(iii) Copies
of any notices of breach or default received by Parent or any of
its Affiliates from any of the Noteholders or their collateral
agents, within five (5) business days following receipt thereof,
and copies of Parent’s and any Affiliate’s responses to
such notices.
(iv) Copies
of any requests by Parent or any of its Affiliates to any of the
Noteholders or their collateral agents for modification or waiver
of any requirement under any agreement therewith, and all
correspondence regarding such requests.
(v) As
used herein “ Notes ” means the (i) 7%
Senior Secured Notes due July 17, 2010 of NextWave Wireless LLC,
(ii) 14% Senior-Subordinated Secured Second Lien Notes due December
31, 2010 of NextWave Wireless LLC, and (iii) 7.5% Third Lien
Subordinated Secured Convertible Notes due December 31, 2011 of
Parent. As used herein, “ Noteholders ”
means, collectively, the holders of Notes. As used herein, “
Note Agreements ” means, as amended from time
to time, (i) the Purchase Agreement, dated as of July 17, 2006,
among NextWave Wireless LLC, each guarantor from time to time party
thereto, the purchasers set forth in Schedule 1.2B thereto, and The
Bank of New York; (ii) the Second Lien Subordinated Note Purchase
Agreement, dated as of October 9, 2008, among NextWave Wireless
LLC, Parent, each guarantor from time to time party thereto, the
purchasers set forth in schedule 1.2B thereto, and The Bank of New
York Mellon; (iii) the Third Lien Subordinated Exchange Note
Exchange Agreement, dated as of October 9, 2008, among Parent,
NextWave Wireless LLC, each
guarantor from time to time party
thereto, the purchasers set forth in Schedule 1.2 thereto, and The
Bank of New York Mellon; and (iv) all loan documents related to the
agreements referenced in (i) through (iii) above.
(vi) Notwithstanding
anything else in this Section 1(d), Parent shall not be required to
provide any information or portion of any information to Purchaser
hereunder if any terms of the Notes or the Note Agreements would
prohibit Parent from providing such information or any portion of
such information, if any, to Purchaser or the disclosure of such
information or any portion of such information, as applicable, to
Purchaser would otherwise breach any confidentiality agreement
between Parent and any third party.
(e)
Observer Rights . The Company shall invite a representative
of the Purchaser to attend and participate in all meetings of its
Board of Directors in a nonvoting observer capacity and, in this
respect, shall give such representative copies of all notices,
minutes, consents, and other materials that it provides to its
directors at the same time and in the same manner as provided to
such directors; provided , however , that such
representative shall agree to hold in confidence all information so
provided; and provided further , that the Company shall be permitted to
exclude such representative of Purchaser from access to any
information that it considers highly confidential or proprietary or
a trade secret, for which there is a conflict of interest between
the Company and Purchaser, or the disclosure of which would
adversely affect the Company’s business or the
attorney-client privilege between the Company and its counsel, in
each case as reasonably determined by the Company in good
faith.
(f)
Confidentiality . The Purchaser agrees that Purchaser will
keep confidential and will not disclose or divulge to any third
party or use for the benefit of any third party any confidential
information obtained by Purchaser from the Company, Parent or
Seller pursuant to the terms of this Agreement (including any
financial information of the Company, any information provided by
Parent pursuant to Section 1(d), and any notice of the
Company’s intention to file a registration statement), unless
such confidential information (i) is known or becomes known to the
public in general (other than as a result of a breach of this
Agreement or other unauthorized disclosure by the Purchaser), (ii)
is or has been independently developed or conceived by the
Purchaser without use of confidential information of the Company,
Parent or Seller, or (iii) is or has been made known or disclosed
to the Purchaser by a third party without a breach of any
obligation of confidentiality such third party may have to the
Company, Parent or Seller, as applicable; provided ,
however , that Purchaser may disclose confidential
information (A) to its attorneys, accountants, consultants, and
other professionals to the extent necessary to obtain their
services in connection with monitoring its investment in the
Company, provided that they are bound by contract, fiduciary duty
or otherwise to maintain the confidentiality of such confidential
information or (B) as may otherwise be required to be disclosed by
law, provided that, to the extent reasonably practicable, the
Purchaser notifies the Company, Parent or Seller, as applicable, in
advance of such proposed disclosure to enable the Company, Parent
or Seller, as applicable, to seek an appropriate protective order
and, upon the reasonable request of the Company, Parent or Seller,
as applicable, Purchaser agrees to take reasonable steps to
cooperate with the Company, Parent, or Seller, as applicable, in
connection therewith, and will take reasonable steps to cooperate
with the Company, Parent or Seller, as applicable, to minimize the
extent of any such required disclosure.
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2.
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Dealings Between Company and
Parent
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(a)
Arm’s Length Dealings with Parent . From and after the
Effective Date, the Company shall not engage in or enter into any
material transactions, agreements, contracts, commitments or other
arrangements, whether oral or written, with Parent or Seller or any
entity that is an Affiliate of Parent or Seller (other than
subsidiaries of the Company), whether or not in the ordinary course
of business, except (i) upon terms and conditions that are at
arm’s length and at least as favorable to the Company as
would be offered to the Company by an independent third party under
comparable circumstances, and (ii) with the prior approval of the
Board. For the avoidance of doubt, any material transactions,
agreements, contracts, commitments or other arrangements between
the Company, on the one hand, and Parent or Seller or any entity
that is an Affiliate of Parent or Seller (other than subsidiaries
of the Company), on the other hand, that are outside the ordinary
course of business shall also require the written approval of
Purchaser pursuant to Section 9(a) of this Agreement.
(b)
Intercompany Advances . From and after the Effective Date,
Parent, Seller, and the Company shall take all steps necessary to
ensure that (i) prior to December 31, 2009 the aggregate
intercompany indebtedness for advances or transfers of working
capital by Parent or Seller to the Company (net of such
indebtedness for advances or transfers of working capital by the
Company to Parent or Seller) does not at any time exceed
$15,000,000 in the aggregate, (ii) all intercompany indebtedness
for advances or transfers of working capital by Parent or Seller to
the Company and by the Company to Parent or Seller that is
outstanding on the Effective Date is repaid on or before December
31, 2009 pursuant to repayment terms set forth in the definitive
documentation satisfying the conditions of Section 2(a)(xiv)(3) of
the Purchase Agreement, (iii) no advances or transfers of working
capital by Parent or Seller to the Company or by the Company to
Parent or Seller may be made after the Effective Date except with
the approval of the Board (including the approval of the Purchaser
Director (as defined below)), (iv) all advances or transfers of
working capital by Parent or Seller to the Company and by the
Company to Parent or Seller that is advanced or transferred after
the Effective Date is repaid on or before December 31, 2009
pursuant to repayment terms approved by the Board (including the
approval of the Purchaser Director), and (v) after December 31,
2009, no intercompany indebtedness is incurred for advances or
transfers of working capital by Parent or Seller to the Company and
by the Company to Parent or Seller without the approval of the
Board (including the approval of the Purchaser
Director).
(c)
Limitations on Transfer and Pledge . From and after the
Effective Date, Parent shall at all times directly or indirectly
own all of the shares of Common Stock held by Seller as of the
Effective Date, and neither Seller nor Parent, nor any of their
Affiliates, shall sell, transfer, pledge or otherwise dispose of or
encumber the Common Stock held by Seller, except in accordance with
the terms of this Agreement, the Notes or the Note Agreements, as
this Agreement, the Notes or the Note Agreements may be amended,
restated, supplemented or otherwise modified from time to time.
From and after the Effective Date, Purchaser shall at all times
directly or indirectly own all of the shares of Common Stock held
by Purchaser as of the Effective Date, and neither Purchaser, nor
any of its Affiliates, shall sell, transfer, pledge or otherwise
dispose of or encumber the Common Stock held by Purchaser, except
in accordance with the terms of this Agreement, as may be amended,
restated, supplemented or otherwise modified from time to
time.
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3.
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Right of First
Negotiation .
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(a)
Proposed Sale; Notice of Proposed Sale; Exclusivity Period .
In the event that (i) Seller desires to sell, transfer or otherwise
dispose of all or any portion of its Company Common Stock, in a
single transaction or series of related transactions, to any third
party, (ii) the Company desires to effect a sale, transfer, lease,
exclusive license or other disposition of all or substantially all
of its assets, in a single transaction or series of related
transactions, to any third party, or (iii) the Company desires to
effect a merger, consolidation or other business combination in
which the then outstanding Company Common Stock would not be
exchanged for or converted into solely the equity securities of the
surviving entity in such merger, consolidation or business
combination or the equity securities of the parent entity of such
surviving entity (each, a “ Proposed Sale
”), Seller or the Company, as the case may be, shall give to
Purchaser written notice of such notifying Party’s desire to
effect a Proposed Sale (a “ Notice of Proposed
Sale ”). Each Notice of Proposed Sale shall set forth
in reasonable detail the nature of the proposed transaction desired
to be effected by Seller or the Company, as applicable, and the
proposed material terms and conditions thereof, including the
proposed amount and type of consideration desired to be received by
Seller or the Company, as applicable, in connection therewith.
Purchaser shall have an exclusive right of first negotiation (the
“ Right of First Negotiation ”) with
regard to each Proposed Sale during the ninety (90) day period (the
“ Exclusivity Period ”) following
Purchaser’s receipt of the applicable Notice of Proposed
Sale. If Purchaser elects in its sole discretion to exercise its
Right of First Negotiation as to any Proposed Sale, Purchaser shall
give written notice of such exercise to Seller or the Company, as
applicable, within thirty (30) days following Purchaser’s
receipt of the applicable Notice of Proposed Sale. In the event
that Purchaser exercises its Right of First Negotiation as to any
Proposed Sale, each of Seller or the Company, as the case may be,
shall be obligated during the applicable Exclusivity Period to
negotiate exclusively, diligently and in good faith with Purchaser
as to the terms and conditions of such Proposed Sale. In connection
with any potential Right of First Negotiation as to any Proposed
Sale, the Company and/or Seller, on the one hand, and Purchaser, on
the other hand, shall enter into an appropriate confidentiality
agreement.
(b)
Auction . If Purchaser exercises its Right of First
Negotiation and, after good faith negotiations by the applicable
Parties during the Exclusivity Period applicable to a Proposed
Sale, such Parties have not entered into a definitive agreement for
such Proposed Sale at or prior to the expiration of such
Exclusivity Period, then Seller or the Company, as the case may be,
shall be free to pursue such Proposed Sale by means of an auction
(“ Auction ”) to be commenced within the
ninety (90) day period following the expiration of such Exclusivity
Period. Each Auction shall involve a bidding process consisting of
a minimum of two rounds of bidding and shall be conducted by an
independent, nationally-recognized investment banking firm selected
by the Board of Directors of Seller or the Company, as the case may
be. In the event of an Auction, Seller or the Company, as
applicable, shall take or cause to be taken all actions necessary
to ensure that Purchaser is (i) invited to participate in each
round of bidding, including the final round involving the
submission of best and final offers (whether or not Purchaser
participates in any preceding round of bidding), and (ii) informed
in writing of the material terms and conditions (including the
amount and type of consideration) of the highest or most favorable
bid submitted during each round of bidding within five (5) days
following the conclusion of each round of bidding and in no event
later than twenty (20) days prior to the bid submission deadline
for the final round of bidding (and prior to such final round of
bidding, to
inform the Purchaser if the Company
or Seller, as applicable, believes that the Person that submitted
the highest or most favorable bid in connection with the most
recent round of bidding is a significant competitor of Purchaser
(without revealing the identity of such Person)). Purchaser from
time to time may provide the Company and Seller with a list of its
ten (10) most significant competitors to serve as the basis for
Company’s or Seller’s general disclosure to Purchaser
as contemplated by the preceding sentence. If the initial round of
bidding of an Auction is not concluded within the one hundred
eighty (180) day period following the expiration of the Exclusivity
Period applicable to a Proposed Sale, then such Proposed Sale and
any subsequent Proposed Sale shall again be subject to
Purchaser’s Right of First Negotiation under this Section
3.
(c)
Drag-Along Sale . In the event that (i) Purchaser receives a
Notice of Proposed Sale from Seller with regard to a Proposed Sale
of all of the Company Common Stock then held by Seller to a third
party, (ii) Purchaser either (A) does not timely exercise its Right
of First Negotiation hereunder with regard to such Proposed Sale or
(B) does not participate in or is not the winning bidder in an
Auction conducted in accordance with this Section 3 with regard to
such Proposed Sale, and (iii) Purchaser receives from Seller a
written notice (C) requesting that Purchaser concurrently sell all
of its Company Common Stock to the same third party to whom Seller
proposes to sell all of its Company Common Stock pursuant to the
Proposed Sale and (D) certifying that Purchaser would thereby
receive cash consideration in an amount greater than the aggregate
purchase price paid by Purchaser for all of its Company Common
Stock, then Purchaser agrees (i) to concurrently (but in any case
only after December 31, 2009) sell all of its Company Common Stock
to such third party upon the same terms and conditions as are
applicable to the Proposed Sale by Seller of all of its Company
Common Stock to such third party, (ii) to vote (in person, by proxy
or by action by written consent, as applicable) its shares of
Company Common Stock in favor of such Proposed Sale, (iii) to
refrain from exercising any dissenters’ rights or rights of
appraisal under applicable law at any time with respect to such
Proposed Sale and (iv) to execute and deliver all customary related
documentation in substantially the same form and content as the
related documentation executed and delivered by Seller and take
such other reasonable and customary action in support of the
Proposed Sale as shall reasonably be requested by Seller or
Company, as the case may be. For the avoidance of doubt, it is
acknowledged and agreed that, if the cash consideration that would
be received by Purchaser from the third party would not exceed the
aggregate purchase price paid by Purchaser for its Company Common
Stock, then Purchaser shall have no obligation, but may elect in
its sole discretion, to concurrently sell all of its Company Common
Stock to the third party upon the same terms and conditions as are
applicable to the Proposed Sale by Seller of all of its Company
Common Stock to such third party.
(d)
Permitted Proposed Sale . For the avoidance of doubt, it is
further acknowledged and agreed that, notwithstanding whether
Purchaser is required hereunder to sell its shares of Company
Common Stock in connection with a Proposed Sale pursuant to Section
3(c), in the event that: (i) Purchaser timely exercise its Right of
First Negotiation hereunder with regard to a Proposed Sale but does
not participate in or is not the winning bidder in an Auction
conducted in accordance with this Section 3 with regard to such
Proposed Sale, Seller or the Company, as the case may be, shall be
permitted to pursue and consummate the Proposed Sale with the
winning bidder in an Auction upon the terms and conditions no less
favorable to Seller or the Company, as applicable, as set forth in
such winning bid; or (ii) Purchaser does not timely exercise
its Right
of First Negotiation hereunder with
regard to a Proposed Sale, Seller or the Company, as the case may
be, shall be permitted to pursue and consummate the Proposed Sale
for an amount and type of consideration no less than the amount and
type of consideration set forth in the Notice of Proposed Sale and
on terms and conditions no less favorable to Seller or the Company,
as applicable, as set forth therein; provided ,
however , that the consummation of the Proposed Sale must
occur no later than within the one hundred eighty (180) day period
following Purchaser’s receipt of the applicable Notice of
Proposed Sale (or such longer period as may be required to obtain
any required stockholder or regulatory approvals or required third
party consents so long as the definitive agreement for such
Proposed Sale is entered into during such one hundred eighty (180)
day period). If the consummation of the Proposed Sale does not
occur within the period of time specified in the proviso to the
preceding sentence, then such Proposed Sale and any subsequent
Proposed Sale shall again be subject to Purchaser’s Right of
First Negotiation under this Section 3.
(e)
Consents; Approvals. For the avoidance of doubt, the obligations of
the Parties with respect to a Proposed Sale pursuant to this
Section 3 shall be subject to obtaining from Governmental
Authorities and other Persons all consents, approvals,
authorizations, qualifications and orders as are necessary for the
consummation by such Parties of the Proposed Sale. The Parties that
are parties to any Proposed Sale shall use commercially reasonable
efforts to consummate any such Proposed Sale in accordance with the
terms and conditions of the definitive agreements for such Proposed
Sale.
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4.
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Right of First
Refusal
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(a)
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Purchaser Right of First Refusal
on Seller Common Stock and Company Assets .
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(i)
Acquisition Offer; Notice of Acquisition Offer . If any
third party makes a bona fide offer to (i) purchase or otherwise
acquire all or any portion of the Company Common Stock held by
Seller in a single transaction or series of related transactions,
(ii) purchase or otherwise acquire, whether by lease, transfer,
exclusive license or other disposition, all or substantially all of
the assets of the Company in a single transaction or series of
related transactions, or (iii) effect a merger, consolidation or
other business combination involving the Company in which the then
outstanding Company Common Stock would not be exchanged for or
converted into solely the equity securities of the surviving entity
in such merger, consolidation or business combination or the equity
securities of the parent entity of such surviving entity (each, an
“ Acquisition Offer ”), and the Board of
Directors of Seller or the Company, as the case may be, has
determined that accepting such Acquisition Offer would be in the
best interests of the Seller’s or the Company’s
stockholders, as applicable, then Seller or the Company, as
applicable, shall give to Purchaser written notice of such
Acquisition Offer (a “ Notice of Acquisition
Offer ”). Each Notice of Acquisition Offer shall (i)
specify in reasonable detail the nature of the proposed
transaction, the amount of Company Common Stock or the type and
amount of Company assets proposed to be acquired, the amount and
type of consideration to be received therefor, and the other
material terms and conditions on which the third party offer or
proposes to consummate the Acquisition Offer and (ii) contain a
certification by Seller or the Company, as applicable, that (A) the
Seller or the Company, as applicable, believes in good faith that
the Acquisition Offer represents a bona fide offer made by such
third party in good faith, and (B) the Board of Directors of Seller
or the Company, as applicable, has determined that it
believes it is in the best interests
of Seller’s or the Company’s stockholders, as the case
may be, to accept the Acquisition Offer on the terms set forth in
the Notice of Acquisition Offer. Purchaser shall have an exclusive
right of first refusal (the “ ROFR ”) to
consummate the same type of transaction as is specified in the
Notice of Acquisition Offer on the same terms and conditions as are
set forth therein. Purchaser shall have a period of twenty (20)
days following its receipt of a Notice of Acquisition Offer in
which to decide whether to exercise its ROFR and to give written
notice of such exercise to Seller or the Company, as applicable. If
Purchaser does not exercise its ROFR as to an Acquisition Offer,
the Company or Seller, as the case may be, may consummate the
proposed transaction pursuant to the terms and conditions of the
Acquisition Offer for an amount of consideration no less than the
amount set forth in the Notice of Acquisition Offer and on terms
and conditions no less favorable to Seller or the Company, as
applicable, as set forth therein; provided , however
, that the consummation of the proposed transaction must occur no
later than ninety (90) days after the date of Purchaser’s
receipt of the applicable Notice of Acquisition Offer (or such
longer period as may be required to obtain any required stockholder
or regulatory approvals or required third party consents so long as
the definitive agreement for such Acquisition Offer is entered into
during such ninety (90) day period). If the consummation of the
proposed transaction does not occur within the period of time
specified in the proviso to the preceding sentence or if the terms
and conditions of the Acquisition Offer are materially modified by
the third party offeror, then a new Notice of Acquisition Offer
must be submitted to Purchaser pursuant to this Section 4(a)(i) and
the provisions of this Section 4(a)(i) shall apply prior to the
consummation of a proposed transaction pursuant to the terms of any
Acquisition Offer. In connection with any ROFR as to an Acquisition
Offer, the Company and/or Seller, on the one hand, and Purchaser,
on the other hand, shall enter into an appropriate confidentiality
agreement.
(ii)
Drag-Along Sale . In the event that (i) Purchaser receives a
Notice of Acquisition Offer from Seller or the Company, as the case
may be, with regard to an Acquisition Offer for the proposed
purchase or other acquisition of all of the Company Common Stock
then held collectively by Seller and Purchaser or, alternatively,
all or substantially all of the assets of the Company for, in
either case, an aggregate cash consideration in excess of
$130,000,000, and (ii) Purchaser does not timely exercise its ROFR
with regard to such Acquisition Offer, then Purchaser agrees, upon
the receipt of written request from Seller (but in any case only
after December 31, 2009), to cooperate with Seller or the Company,
as applicable, in connection with the consummation of the proposed
transaction with the third party offer or upon the same terms and
conditions as are set forth in the Notice of Acquisition Offer,
whether such proposed transaction would be effected by means of a
sale or other disposition of the Company Common Stock by Seller and
Purchaser, a sale or other disposition of assets by the Company, or
a merger, consolidation or other business combination involving the
Company, including without limitation by (i) agreeing to sell all
of its Company Common Stock to such third party upon the same terms
and conditions as are applicable to the Acquisition Offer, (ii) to
vote (in person, by proxy or by action by written consent, as
applicable) its shares of Company Common Stock in favor of such
Acquisition Offer, (iii) to refrain from exercising any
dissenters’ rights or rights of appraisal under applicable
law at any time with respect to such Acquisition Offer and (iv) to
execute and deliver all customary related documentation in
substantially the same form and content as the related
documentation executed and delivered by Seller and take such other
reasonable and customary action in support of the Acquisition Offer
as shall reasonably be requested by Seller or Company, as the case
may be.
(iii)
Consents; Approvals. For the avoidance of doubt, the obligations of
the Parties with respect to an Acquisition Offer pursuant to this
Section 4(a) shall be subject to obtaining from Governmental
Authorities and other Persons all consents, approvals,
authorizations, qualifications and orders as are necessary for the
consummation by such Parties of such Acquisition Offer. The Parties
that are parties to any Acquisition Offer shall use commercially
reasonable efforts to consummate any such Acquisition Offer in
accordance with the terms and conditions of the definitive
agreements for such Acquisition Offer.
(b)
Company Right of First Refusal on Purchaser Common Stock .
If any third party makes a bona fide offer to (i) purchase or
otherwise acquire all or any portion of the Company Common Stock
held by Purchaser in a single transaction or series of related
transactions, or (ii) Purchaser desires to sell, transfer or
otherwise dispose of all or any portion of its Company Common
Stock, in a single transaction or series of related transactions,
to any third party (each, a “ Purchaser Proposed
Transfer ”), and Purchaser intends to accept such
Purchaser Proposed Transfer, then Purchaser shall give to the
Company and Seller written notice of such Purchaser Proposed
Transfer (a “ Purchaser Notice ”). Each
Purchaser Notice shall specify the amount of Company Common Stock
to be transferred or sold by Purchaser, the amount and type of
consideration to be received therefor, and the other material terms
and conditions on which the third party offeror proposes to
consummate the Purchaser Proposed Transfer. The Company first (the
“ Company ROFR ”) and Seller second (the
“ Seller ROFR ”) shall each have a right
of first refusal to acquire the Company Common Stock being
transferred or sold by Purchaser as is specified in the Purchaser
Notice on the same terms and conditions as are set forth therein.
The Company first shall have a period of twenty (20) days following
its receipt of a Purchaser Notice in which to decide whether to
exercise its Company ROFR and to give written notice of such
exercise to Seller and Purchaser. If the Company does not exercise
its Company ROFR during such twenty (20) day period, then Seller
shall have ten (10) additional days ( i.e. , until the
thirtieth (30th) day following its receipt of the Purchaser Notice)
in which to decide whether to exercise its Seller ROFR and to give
written notice of such exercise to the Company and Purchaser. If
the Company and Seller do not exercise their respective Company
ROFR and Seller ROFR as to a Purchaser Proposed Transfer, Purchaser
may consummate the proposed transaction pursuant to the terms and
conditions of the Purchaser Proposed Transfer for an amount of
consideration no less than the amount set forth in the Purchaser
Notice and on terms and conditions no less favorable to Purchaser,
as set forth therein; provided , however , that the
consummation of the proposed transaction must occur no later than
ninety (90) days after the date of Seller’s and the
Company’s receipt of the applicable Purchaser Notice (or such
longer period as may be required to obtain any required stockholder
or regulatory approvals or required third party consents so long as
the definitive agreement for such Purchaser Proposed Transfer is
entered into during such ninety (90) day period). If the
consummation of the proposed transaction does not occur within the
period of time specified in the proviso to the preceding sentence
or if the terms and conditions of the Purchaser Proposed Transfer
are materially modified by the third party offeror, then a new
Purchaser Notice must be submitted to the Company and Seller
pursuant to this Section 4(b) and the provisions of this Section
4(b) shall apply prior to the consummation of a proposed
transaction pursuant to the terms of any Purchaser Proposed
Transfer. In connection with either a Seller ROFR or a Company
ROFR, the Company and/or Seller, on the one hand, and Purchaser, on
the other hand, shall enter into an appropriate confidentiality
agreement.
(a)
Option . Subject to the provisions of this Section 5, upon
the earliest to occur of any of the following: (i) July 31, 2010,
(ii) the taking of any action (including, without limitation, the
giving, issuance or delivery of a notice of acceleration, notice of
default, demand for cure, demand for payment or demand for further
assurances or the commencement of any legal action or proceeding)
by or on behalf of any creditor or other third party in connection
with the enforcement of the terms of any loan, guarantee, or lien
involving an amount in excess of $5,000,000 against or in respect
of any of Parent, NextWave Wireless LLC, Seller or any entity that
is an Affiliate of Parent, NextWave Wireless LLC or Seller (other
than the Company and its Subsidiaries), or (iii) the
Company’s achievement (as determined in good faith
unanimously by the Board of Directors of the Company) of the
technology milestone described in Schedule A , as the same
may be modified, supplemented or elaborated upon by mutual
agreement of Purchaser and the Company and set forth in the
Technology Collaboration Agreement by and between such parties,
then Purchaser shall have the right (but not the obligation) (the
“ Option ”) to purchase all (but not less
than all) of the Company Common Stock then held by Seller (the
“ Option Shares ”) for Fair Market Value.
In the event of the Company’s achievement of such technology
milestone giving rise to the Option, the Company shall notify
Seller and Purchaser within ten (10) days of the occurrence of such
milestone, and in the event of the occurrence of clause (i) or (ii)
of this Section 5(a), Seller shall give Purchaser notice of the
occurrence of the event giving rise to the Option described therein
within ten (10) days of the occurrence of such event (in each case,
the “ Option Event Notice ”). Seller
hereby grants the Option to Purchaser and hereby expressly agrees,
subject to the terms and conditions set forth in this Section 5 and
in any definitive agreement for the purchase of the Option Shares,
to sell the Option Shares to Purchaser upon its exercise of the
Option against payment to Seller of the purchase price for the
Option Shares, which shall be the Fair Market Value of the Option
Shares. In connection with the potential exercise of the Option,
the Company and Seller, on the one hand, and Purchaser, on the
other hand, shall enter into an appropriate confidentiality
agreement.
(b)
Availability / Procedure . The Option may be exercised only
in accordance with this Section 5(b). If Purchaser desires to
exercise the Option (a “ Proposed Exercise
”), then Purchaser shall give written notice (the “
Option Notice ”) to Seller of such Proposed
Exercise no later than thirty (30) days following
delivery
