Exhibit 10.5
CONFIDENTIAL TREATMENT REQUESTED UNDER
17 C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 230.24b-2.
[*****] INDICATES OMITTED MATERIAL THAT IS THE
SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST
FILED SEPARATELY WITH THE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
SETTLEMENT AND RELEASE AGREEMENT
     This Settlement and Release Agreement (the “Settlement Agreement”) is made
and entered into between Sprint Spectrum L.P. (“Sprint”) and Clearwire
Communications LLC (“Clearwire”). Sprint and Clearwire may be referred to
individually as a “Party” or collectively as “Parties.”
RECITALS
A. The Parties, along with other entities, entered into the 4G MVNO Agreement
dated November 28, 2008, which agreement has been amended from time to time (as
amended, the “4G MVNO Agreement”). The parties, along with other entities,
entered into the MVNO Support Agreement dated as of May 7, 2008, which agreement
has been amended from time to time (as amended, the “3G MVNO Agreement”).
B. The parties have numerous disputes about the price and pricing methodology
for usage (whether the usage has been invoiced or not and regardless of when the
usage was invoiced) and subscribers on Clearwire’s Network and Sprint’s Network
from May 7, 2008, to the Effective Date.
C. Clearwire and Sprint have commenced an arbitration proceeding that seeks,
among other things, to resolve disputes over the manner in which certain revenue
related to the use of “smartphones” on the Clearwire Network and Sprint Network
is allocated (the “Smartphone Arbitration”).
D. In order to avoid the costs and risks of litigation and further disputes, the
Parties now desire to resolve and settle all of the disputes pertaining to usage
and pricing on the Clearwire Network and the Sprint Network from May 7, 2008
through and including December 31, 2010, for Sprint’s End Users’ usage on the
Clearwire Network and for Clearwire’s End Users’ usage on the Sprint Network,
and through and including March 13, 2011, for the allocation of MSOs Dual-Mode
Charges, set out in these recitals (“Disputes”).
AGREEMENT
In consideration of the payment of the settlement amounts and the other promises
in this Agreement and in full and final settlement of the Disputes, the Parties
agree as follows:
1. Settlement Amount for Sprint’s End Users’ Usage on Clearwire Network. In
settlement of all claims relating to Sprint’s End Users’ usage on the Clearwire
Network from November 28, 2008 through December 31, 2010; in consideration for
the modifications to the 4G MVNO Agreement; in consideration for the
modifications to the 3G MVNO Agreement; in consideration for the modifications
to the December 23, 2009 Dual Mode Settlement Letter Agreement; in consideration
for all other promises contained in the Omnibus Agreement (“Omnibus Agreement”)
and all documents attached to the Omnibus Agreement, including this Settlement
Agreement; and in consideration for all other modifications described herein,
Sprint will pay Clearwire [*****] within 10 business days after the Effective
Date via wire transfer. For the sake of clarity, Sprint and Clearwire agree that
the foregoing [*****] payment is separate and apart from and in addition to the
Wireless Broadband Services Prepayment, the 2011 Take-or-Pay or the 2012
Take-or-Pay described in Schedule 7.1 of the April 2011 Clearwire / Sprint
Amendment to the 4G MVNO Agreement. Clear Wireless LLC, an affiliate of
Clearwire, provided the services that are a part of the settlement amount in
this paragraph. Notwithstanding the role of Clear Wireless LLC, nothing will
prevent Sprint from enforcing any rights against Clearwire.
2. Settlement Amount for Clearwire’s Customer’s Usage on Sprint Network. In
settlement of all claims relating to Clearwire’s Customer’s usage on the Sprint
Network from May 7, 2008, through December 31, 2010, Clearwire will pay Sprint
[*****] within 10 business days after the Effective Date via wire transfer.
Confidential — Subject to Nondisclosure Obligations

 

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3. Allocation of MSOs Dual-Mode Charges. In settlement of all claims relating to
allocating retail minus Dual-Mode Charges between Sprint and Clearwire under
section 4(c)(iii) of S chedule 7.2 of the 4G MVNO Agreement for the MSO Parties
from May 7, 2008 through and including March 13, 2011, Sprint will pay Clearwire
[*****] within 10 business days after the Effective Date via wire transfer.
Clearwire reserves the right to offer the SIG Parties an amendment to the
current retail-minus based unlimited dual mode rate plans to include [*****].
4. Dismissal of Arbitration. Within ten days of the Effective Date, the Parties
will jointly deliver instructions to the American Arbitration Association
withdrawing the demand for arbitration and terminating the Smartphone
Arbitration. Each Party shall pay all of its own costs and expenses associated
with or arising out of the Smartphone Arbitration.
5. Contingent Nature of Settlement Agreement. This Settlement Agreement is
contingent upon the Parties executing all of the following documents:
(1) April 2011 Clearwire / Sprint Amendment to the 4G MVNO Agreement; (2) Sprint
/ Clearwire First Amendment to the MVNO Support Agreement (3G); (3) First
Amendment to the December 23, 2009 Dual Mode Settlement Letter Agreement;
(4) Amended and Restated Enhanced In-Building Coverage Deployment Agreement; and
(5) Omnibus Agreement.
6. Provision of Information
     6.1 As soon as practicable following any request therefor from Sprint
[*****] Clearwire shall provide to Sprint the best available financial
information relating to Clearwire and its subsidiaries requested by Sprint to
enable Sprint to close its books or accounting records and to issue a press
release with respect to its financial results for any quarterly period or fiscal
year. The financial information is limited to Clearwire’s statement of
operations for the reporting period, including after tax net income/(loss) and
net income/(loss) attributable to Clearwire, a shareholders’ equity
reconciliation including Sprints ownership interest in Clearwire as of the end
of the reporting period and any information required for related party reporting
and, if deemed necessary and separately requested by Sprint, Clearwire
Corporation’s income/(loss) before income taxes for the reporting period.
Clearwire, using its reasonable best efforts, shall provide Sprint additional
information or explanation associated with the financial information delivered
in accordance with this Section 6.1 necessary for Sprint to close its books for
the reporting period. Sprint acknowledges that the financial information
provided by Clearwire will be Clearwire’s best estimate as of the date provided
and that subsequent material adjustments may be made to the financial
information by Clearwire. Clearwire will use its reasonable best efforts to
inform Sprint of any material adjustments to the financial information
previously provided on a timely basis, including an update of any material known
and unresolved issue that could potentially affect amounts previously disclosed
by Clearwire to Sprint. The Parties acknowledge that failure by Clearwire to
provide materially accurate financial information will not result in a breach of
this Settlement Agreement, the 4G MVNO Agreement (as amended), the Omnibus
Agreement, the December 23, 2009 Dual Mode Settlement Letter Agreement (as
amended), the Sprint/Clearwire First Amendment to the MVNO Support Agreement
(3G), the Amended and Restated Enhanced In-Building Coverage Deployment
Agreement, or of the Investment Agreement dated as of November 9, 2009.
     6.2 As soon as practicable following the date of receipt of any request
therefor from Sprint [*****] Clearwire, using its reasonable best efforts, shall
provide to Sprint such information as may be requested by Sprint from time to
time to facilitate an offering and sale of debt or equity securities by Sprint
or its subsidiaries pursuant to the Securities Act of 1933 (an “Offering”),
including providing to Clearwire’s independent registered public accounting firm
information, such management representation letters and other documents, as may
be required for the delivery by such registered public accounting firm of any
consent required for the inclusion of Clearwire’s audited consolidated financial
statements in or their incorporation by reference into a registration statement
or other offering document used in connection with an Offering. As soon as
practicable following the date of receipt of any request therefor from
Clearwire, [*****] Sprint, using its reasonable best efforts, shall provide to
Clearwire such information as may be requested by Clearwire from time to time to
facilitate an Offering by Clearwire or its subsidiaries, including providing to
Sprint’s independent registered public accounting firm information, such
management representation letters and other documents, as may be required for
the delivery by such registered public accounting firm of any consent required
for the inclusion of Sprint’s audited consolidated financial statements in or
their incorporation by reference into a registration statement or other offering
document used in connection with an Offering.

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     6.3 The obligations of Clearwire set forth in this section 6 supersede the
obligations of Clearwire set forth in section 6.5(a)(iii) of the Investment
Agreement dated as of November 9, 2009 among Clearwire, Clearwire Communications
LLC, Sprint, Comcast Corporation, Time Warner Cable Inc., Bright House Networks,
LLC, Eagle River Holdings, LLC, and Intel Corporation.
7. Bundling Letters. The parties agree that as between Sprint and Clearwire only
the following letters are null and void: (a) Sprint’s December 7, 2010 letter
and Sprint’s December 20, 2010 letter regarding the conditional waiver of
limitation on non-bundled sales in the 3G MVNO Agreement; and (b) Clearwire’s
November 18, 2010 letter regarding the conditional waiver of limitation on
non-bundled sales in the 4G MVNO Agreement.
8. Effective Date. The Settlement Agreement is effective and enforceable as of
the later of (a) the date when both Parties have signed the Settlement Agreement
or (b) the date when both Parties have signed all of the documents upon which
the Settlement Agreement is contingent, which are set out in Section 5,
(“Effective Date”).
9. Sprint Release. On behalf of itself and its parents, direct and indirect
subsidiaries, affiliates, affiliated entities, partners, joint venturers,
predecessors, successors, assigns, employees, agents, insurers, attorneys,
accountants and every person or entity acting or purporting to act for or on
behalf of Sprint (the “Sprint Releasing Parties”), the Sprint Releasing Parties
hereby release, discharge, and acquit Clearwire and all of Clearwire’s parents,
direct and indirect subsidiaries, affiliates, affiliated entities, partners,
joint venturers, predecessors, successors, assigns, officers, directors,
employees, agents, insurers, attorneys, accountants, and every person or entity
acting or purporting to act for or on behalf of Clearwire (the “Clearwire
Released Parties”), from any and all claims, liabilities, rights, demands,
suits, matters, liens, obligations, damages, losses or costs, actions or causes
of action of every nature and description, in law or in equity, under statute,
contract, the common law, or otherwise, that the Sprint Releasing Parties have,
had, or may have (whether known or unknown) against the Clearwire Released
Parties, including but not limited to any direct claim, third-party claim, or
assigned claims, whether known or unknown, accrued or which may accrue, asserted
or unasserted, latent or patent, that are, have been, could reasonably have
been, or in the future might reasonably be, asserted, arising from, related to,
or in connection with the Disputes. The Parties agree that Sprint is not
releasing any known or unknown claims related to (a) Sprint’s End Users’ usage
on the Clearwire Network that occurred on or after January 1, 2011m to the
Effective Date and (b) Clearwire’s End Users’ usage on the Sprint Network that
occurred on or after January 1, 2011, to the Effective Date, and that for such
usage Sprint has the right to dispute invoices, payments, and any other matter
as set forth in the appropriate agreement.
10. Clearwire Release. On behalf of itself and its parents, direct and indirect
subsidiaries, affiliates, affiliated entities, partners, joint venturers,
predecessors, successors, assigns, employees, agents, insurers, attorneys,
accountants, and every person or entity acting or purporting to act for or on
behalf of Clearwire (the “Clearwire Releasing Parties”), the Clearwire Releasing
Parties hereby release, discharge, and acquit Sprint and all of Sprint’s
parents, direct and indirect subsidiaries, affiliates, affiliated entities,
partners, joint venturers, predecessors, successors, assigns, officers,
directors, employees, agents, insurers, attorneys, accountants, and every person
or entity acting or purporting to act for or on behalf of Sprint (the “Sprint
Released Parties”), from any and all claims, liabilities, rights, demands,
suits, matters, liens, obligations, damages, losses or costs, actions or causes
of action of every nature and description, in law or in equity, under statute,
contract, the common law, or otherwise, that the Clearwire Releasing Parties
have, had, or may have (whether known or unknown) against the Sprint Released
Parties, including but not limited to any direct claim, third-party claim, or
assigned claims, whether known or unknown, accrued or which may accrue, asserted
or unasserted, latent or patent, that are, have been, could reasonably have
been, or in the future might reasonably be, asserted, arising from, related to,
or in connection with the Disputes. The Parties agree that Clearwire is not
releasing any known or unknown claims related to (a) Sprint’s End Users’ usage
on the Clearwire Network that occurred on or after January 1, 2011 to the
Effective Date and (b) Clearwire’s End Users’ usage on the Sprint Network that
occurred on or after January 1, 2011, to the Effective Date and that for such
usage Clearwire has the right to dispute invoices, payments, and any other
matter as set forth in the appropriate agreement.
11. Cooperation. The Parties will cooperate with each other and will take
further actions and sign further documents as may be necessary to ensure this
Settlement Agreement is effective and enforceable.

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12. Confidentiality. The Parties will maintain the terms of this Settlement
Agreement in strict confidence. A Party may disclose the terms of this
Settlement Agreement to satisfy all securities laws, rules and regulations,
order of a court of competent jurisdiction, a properly issued subpoena, an
inquiry by a duly constituted government agency, or an obligation to report
information to a government agency, provided that such Party takes all
reasonable steps to obtain a protective order to protect the confidentiality of
the terms of this Settlement Agreement. In such event, the disclosing Party will
provide as much notice as possible to the other Party of the intended
disclosure. The Parties are not precluded from disclosing the terms of this
Settlement Agreement to their auditors, accountants, attorneys, officers, or
directors, provided that each such person is bound by confidentiality
obligations consistent with this Settlement Agreement to that Party.
13. Power to Sign and Non-Assignment. Clearwire and Sprint represent and warrant
that each has the power and authority to execute, deliver, and perform this
Settlement Agreement and that neither has previously assigned or in any way
transferred or conveyed all or any of the claims released by this Settlement
Agreement.
14. No Admission. No agreements made herein or other consideration given will be
construed as an admission of liability, all liability being expressly denied by
the Parties, or that either Party has committed or engaged in any deceptive or
unlawful act, violation or breach of contract or duty imposed by law.
15. Governing Law. This Settlement Agreement is and will be governed by and
construed in accordance with the laws of the State of New York.
16. Counterparts and Facsimiles. This Settlement Agreement may be executed in
one or more counterparts, each counterpart will be considered an original
document. The facsimile signature of any Party will be deemed to have the same
effect as its original signature.
17. Modifications. This Settlement Agreement may not be revised, amended or
altered except by a written document signed by both Parties.
18. Covered Parties. This Settlement Agreement shall be binding upon and inure
to the benefit of Clearwire, Sprint, the Clearwire Released and Releasing
Parties, and the Sprint Released and Releasing Parties.
19. Entire Agreement. This Settlement Agreement is intended to be the final
expression of the Parties with respect to the subjects covered. It supersedes
all prior negotiations, agreements or understandings, written or oral,
concerning those subject matters. Each Party declares that no promise,
inducement or agreement not herein expressed has been made to or with any Party
and that this Settlement Agreement contains the entire agreement between the
Parties with respect to the Dispute.
20. Acknowledgment of Understanding. Each Party executing this Settlement
Agreement represents that it has read carefully and understands all the
provisions of the Settlement Agreement and has had sufficient opportunity to
evaluate the merits of entering into this Settlement Agreement.
21. Definitions. Unless otherwise defined in this Settlement Agreement,
capitalized terms will have the same meaning and effect as they have in the 4G
MVNO Agreement.
IN WITNESS WHEREOF, the Parties sign this Settlement Agreement on the dates
stated below:

                      Clearwire Communications LLC   Sprint Spectrum L.P.
 
                   
By:
  /s/ John Stanton By:  /s/ Steven Elfman
 
                   
 
  Name:   John Stanton   Name:  Steven Elfman
 
  Title:   Chairman & CEO       Title: President
 
  Date: April 18, 2011   Date: April 14, 2011

              Confidential — Subject to Nondisclosure Obligations   4