Document:

Exhibit 10.4

 

 

FIRST AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

of

 

SNR WIRELESS HOLDCO, LLC

 

by and between

 

SNR WIRELESS MANAGEMENT, LLC,

 

JOHN MULETA
 and

 

AMERICAN AWS-3 WIRELESS III L.L.C.

 

Dated as of October 13, 2014

 

 

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS.  SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

 

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THIS LIMITED LIABILITY COMPANY AGREEMENT.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1 DEFINITIONS AND   ORGANIZATION
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
Section 1.2.
    	
Formation
    	
17
    
	
Section 1.3.
    	
Name
    	
17
    
	
Section 1.4.
    	
Principal Place of Business
    	
17
    
	
Section 1.5.
    	
Registered Office; Registered Agent
    	
17
    
	
Section 1.6.
    	
Term
    	
18
    
	
Section 1.7.
    	
Purpose and Powers
    	
18
    
	
Section 1.8.
    	
Filings
    	
18
    
	
Section 1.9.
    	
Sole Agreement
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 CAPITALIZATION
    	
18
    
	
 
    	
 
    
	
Section 2.1.
    	
Capital Accounts
    	
18
    
	
Section 2.2.
    	
Capital Contributions
    	
20
    
	
Section 2.3.
    	
No Withdrawals
    	
21
    
	
Section 2.4.
    	
No Interest
    	
21
    
	
Section 2.5.
    	
Interests are Securities
    	
22
    
	
Section 2.6.
    	
Certification of Interests
    	
22
    
	
Section 2.7.
    	
Failure to Fund
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 DISTRIBUTIONS
    	
23
    
	
 
    	
 
    
	
Section 3.1.
    	
Non-Liquidating Distributions
    	
23
    
	
Section 3.2.
    	
Liquidating Distributions
    	
24
    
	
Section 3.3.
    	
Interest Purchase Agreement, Security Agreement and Pledge   Agreement
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 ALLOCATIONS
    	
25
    
	
 
    	
 
    
	
Section 4.1.
    	
Profits
    	
25
    
	
Section 4.2.
    	
Losses
    	
25
    
	
Section 4.3.
    	
Special Allocations
    	
25
    
	
Section 4.4.
    	
Curative Allocations
    	
27
    
	
Section 4.5.
    	
Special Allocations in the Event of Company Audit   Adjustments
    	
27
    
	
Section 4.6.
    	
Allocation of Credits
    	
29
    
	
Section 4.7.
    	
Tax Allocations
    	
29
    
	
Section 4.8.
    	
Change in Members’ Interests
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 ACCOUNTING AND   RECORDS
    	
30
    
	
 
    	
 
    
	
Section 5.1.
    	
Fiscal Year
    	
30
    
	
Section 5.2.
    	
Method of Accounting
    	
30
    
	
Section 5.3.
    	
Books and Records; Inspection
    	
30
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

i

 

	
Section 5.4.
    	
Financial Statements; Internal Controls
    	
31
    
	
Section 5.5.
    	
Taxation
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 MANAGEMENT
    	
36
    
	
 
    	
 
    
	
Section 6.1.
    	
Manager
    	
36
    
	
Section 6.2.
    	
Removal of Manager
    	
37
    
	
Section 6.3.
    	
Supermajority Approval Rights
    	
38
    
	
Section 6.4.
    	
Separateness Covenants
    	
38
    
	
Section 6.5.
    	
Business Plans and Budgets
    	
40
    
	
Section 6.6.
    	
Management Fees
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 TRANSFER   RESTRICTIONS
    	
41
    
	
 
    	
 
    
	
Section 7.1.
    	
Restrictions
    	
41
    
	
Section 7.2.
    	
Exceptions
    	
42
    
	
Section 7.3.
    	
Right of First Refusal
    	
43
    
	
Section 7.4.
    	
Tag-Along Right
    	
45
    
	
Section 7.5.
    	
Substituted Members
    	
45
    
	
Section 7.6.
    	
Invalid Transfers Void
    	
46
    
	
Section 7.7.
    	
Determination of Fair Market Value
    	
46
    
	
Section 7.8.
    	
Acceptance of Prior Acts
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 PUT RIGHT
    	
47
    
	
 
    	
 
    
	
Section 8.1.
    	
Put
    	
47
    
	
Section 8.2.
    	
Conditions to Closing
    	
48
    
	
Section 8.3.
    	
Closing
    	
49
    
	
Section 8.4.
    	
Terminated Auction Purchase
    	
49
    
	
 
    	
 
    	
 
    
	
ARTICLE 9      50
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
REGISTRATION RIGHT
    	
50
    
	
 
    	
 
    
	
Section 9.1.
    	
Registration Right
    	
50
    
	
Section 9.2.
    	
Right to Purchase—Preliminary Range
    	
51
    
	
Section 9.3.
    	
Right to Purchase—IPO Price
    	
51
    
	
Section 9.4.
    	
Right to Defer the Offering
    	
51
    
	
Section 9.5.
    	
Registration Expenses
    	
51
    
	
Section 9.6.
    	
Registration Procedures
    	
52
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 OTHER AGREEMENTS
    	
55
    
	
 
    	
 
    
	
Section 10.1.
    	
Exclusivity
    	
55
    
	
Section 10.2.
    	
Confidentiality
    	
55
    
	
Section 10.3.
    	
Arbitration
    	
56
    
	
Section 10.4.
    	
Right of First Refusal for Sale of License
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 REPRESENTATIONS   AND COVENANTS
    	
59
    
	
 
    	
 
    
	
Section 11.1.
    	
Representations of the Members
    	
59
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

ii

 

	
Section 11.2.
    	
Covenants of the Members
    	
60
    
	
Section 11.3.
    	
Representations and Covenants of SNR
    	
60
    
	
Section 11.4.
    	
Failure to Qualify as a Qualified Person
    	
61
    
	
 
    	
 
    	
 
    
	
ARTICLE 12 EXCULPATION AND   INDEMNIFICATION
    	
63
    
	
 
    	
 
    
	
Section 12.1.
    	
No Personal Liability
    	
63
    
	
Section 12.2.
    	
Indemnification by Company
    	
63
    
	
Section 12.3.
    	
Notice and Defense of Claims
    	
64
    
	
 
    	
 
    	
 
    
	
ARTICLE 13 DISSOLUTION AND   TERMINATION
    	
65
    
	
 
    	
 
    
	
Section 13.1.
    	
No Withdrawal
    	
65
    
	
Section 13.2.
    	
Dissolution
    	
66
    
	
Section 13.3.
    	
Procedures Upon Dissolution
    	
66
    
	
Section 13.4.
    	
Deficit Capital Accounts
    	
67
    
	
Section 13.5.
    	
Termination
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE 14 MISCELLANEOUS
    	
67
    
	
 
    	
 
    
	
Section 14.1.
    	
Entire Agreement
    	
67
    
	
Section 14.2.
    	
Amendment; Waiver
    	
68
    
	
Section 14.3.
    	
Successors and Assigns
    	
68
    
	
Section 14.4.
    	
No Third Party Beneficiaries
    	
68
    
	
Section 14.5.
    	
Disposition of Interests
    	
68
    
	
Section 14.6.
    	
Survival of Rights and Duties
    	
68
    
	
Section 14.7.
    	
Governing Law
    	
69
    
	
Section 14.8.
    	
Specific Performance
    	
69
    
	
Section 14.9.
    	
Remedies Cumulative
    	
64
    
	
Section 14.10.
    	
Further Assurances
    	
65
    
	
Section 14.11.
    	
Expenses
    	
69
    
	
Section 14.12.
    	
Notices
    	
70
    
	
Section 14.13.
    	
Severability
    	
71
    
	
Section 14.14.
    	
Reformation
    	
72
    
	
Section 14.15.
    	
Independent Contractors
    	
67
    
	
Section 14.16.
    	
No Right to Partition
    	
73
    
	
Section 14.17.
    	
Construction
    	
73
    
	
Section 14.18.
    	
Counterparts
    	
73
    
	
Section 14.19.
    	
Headings
    	
68
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

iii

 

FIRST AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of SNR WIRELESS HOLDCO, LLC, a Delaware limited liability company (the “Company”), dated as of October 13, 2014, by and between AMERICAN AWS-3 WIRELESS III L.L.C., a Colorado limited liability company (“American III”), SNR WIRELESS MANAGEMENT, LLC, a Delaware limited liability company (“SNR”) and John Muleta, a U.S. citizen.

 

WHEREAS, the FCC has announced that it will auction licenses to use spectrum in the 1695-1710 MHz and 1755-1780/2155-2180 MHz bands in an auction designated by the FCC as Auction Number 97 (the “Auction”) and that is currently scheduled by the FCC to begin on November 13, 2014, as the same may be rescheduled or modified by the FCC;

 

WHEREAS, Congress has directed the FCC to promote economic opportunity and competition by disseminating licenses among a wide variety of applicants, including small businesses and businesses owned by members of minority groups, and to ensure that small businesses and businesses owned by members of minority groups are given the opportunity to participate in the provision of spectrum-based services;

 

WHEREAS, SNR desires to participate in the provision of spectrum-based services to secure economic opportunity for their shareholders, to develop telecommunications industry expertise for and on behalf of its shareholders and to provide innovative new wireless service offerings;

 

WHEREAS, in pursuit of these goals, SNR desires to participate in the Auction together with American III; and

 

WHEREAS, as of September 12, 2014, American III and SNR entered into a Limited Liability Company Agreement of SNR Wireless HoldCo, LLC relating to the matters set forth herein (“Original Agreement”), and, pursuant to Section 14.2 of the Original Agreement, American III and SNR wish to amend and restate the Original Agreement to read as set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, it is hereby agreed as follows:

 

ARTICLE 1
 DEFINITIONS AND ORGANIZATION

 

Section 1.1.                                 Definitions

 

Capitalized terms used in this Agreement without other definition shall, unless expressly stated otherwise, have the meanings specified in this Section 1.1.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

1

 

“Act” means the Delaware Limited Liability Company Act, as amended from time to time.

 

“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

 

(i)                                     such Capital Account shall be deemed to be increased by any amounts which such Member is obligated to restore to the Company (pursuant to this Agreement or otherwise) or is deemed to be obligated to restore pursuant to the second to last sentence of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) (relating to allocations attributable to nonrecourse debt); and

 

(ii)                                  such Capital Account shall be deemed to be decreased by the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith.

 

“Adverse FCC Action” is defined in Section 14.4(a).

 

“Adverse FCC Action Reformation” is defined in Section 14.4(a).

 

“Affiliate” means, with respect to a Person, any other Person that either directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person at any time during the period for which the determination of affiliation is being made; provided, that the Members shall be deemed not to be Affiliates of the Company for purposes of this Agreement; provided, further, however, that for purposes of this Agreement, EchoStar Corporation and EchoStar Corporation’s direct and indirect subsidiaries will not be considered or deemed to be Affiliates of American III.  For the avoidance of doubt, for purposes of this Agreement, American III is not an Affiliate of the Company or Non-American III Members.

 

“Agents” is defined in Section 10.2(a).

 

“Agreement” means this Limited Liability Company Agreement, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

“American III” is defined in the preamble.

 

“American III Members” means American III and its transferees.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

2

 

“Applicable Law” shall mean with respect to any Person, any federal, state, local or foreign law, statute, ordinance, rule, regulation, Judgment, order, injunction or decree or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether in effect as of the date of execution of this Agreement or thereafter, and in each case as amended, applicable to such Person or its Affiliates or their respective assets, including the FCC Rules.

 

“Appraiser” is defined in Section 7.7.

 

“Auction” is defined in the preamble.

 

“Auction Benefits” means the eligibility of the License Company and its Subsidiaries to hold any of the licenses for which the License Company is the Winning Bidder in the Auction and the ability of the License Company and each of its Subsidiaries to realize the twenty five percent (25%) Bidding Credits and other financial benefits that it derives from its status as a Qualified Person without the payment of unjust enrichment penalties with respect to such Bidding Credits.

 

“Auction Purchase Price” is defined in Section 2.2(c)(i).

 

“Bankruptcy” means, with respect to any Person:

 

(i)                                     the filing by such Person of a voluntary petition seeking liquidation, dissolution, reorganization, rearrangement, readjustment or similar relief, in any form, of its debts under Title 11 of the United States Code (or corresponding provisions of future laws) or any other bankruptcy or insolvency law, or such Person’s filing an answer consenting to, or acquiescing in any such petition, or the adjudication of such Person as a bankrupt or insolvent;

 

(ii)                                  the making by such Person of any assignment for the benefit of its creditors or any similar action for the benefit of creditors, or the admission by such Person in writing of its inability to pay its debts as they mature;

 

(iii)                               the expiration of sixty (60) days after the filing of an involuntary petition under Title 11 of the United States Code (or corresponding provisions of future laws), an application for the appointment of a receiver for the assets of such Person, or an involuntary petition seeking liquidation, dissolution, reorganization, rearrangement or readjustment of its debts or similar relief under any bankruptcy or insolvency law, provided that the same shall not have been vacated, set aside or stayed within such sixty-day period;

 

(iv)                              the giving of notice by such Person to any Governmental Authority of insolvency or pending insolvency or suspension or pending suspension of operations;

 

(v)                                 the appointment (or such Person’s seeking or acquiescing to such appointment) of any trustee, receiver, conservator or liquidator of such Person of all or any substantial part of its properties; or

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

3

 

(vi)                              the entry of an order for relief against such Person under Title 11 of the United States Code (or corresponding provisions of future laws) or any other bankruptcy or insolvency law.

 

The foregoing is intended to supersede and replace the events listed in Section 18-304(a) of the Act.

 

“Bidding Credit” means, with respect to any license for which the License Company was the Winning Bidder, an amount equal to the excess of the gross winning bid placed in the Auction by the License Company for such license over the net winning bid placed in the Auction by the License Company for such license.

 

“Bidding Protocol” means the Bidding Protocol and Joint Bidding Arrangement, dated as of September 12, 2014 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms), by and among SNR, American III, the Company, the License Company and, for purposes of Sections 4 and 5 thereof only, American AWS-3 Wireless I L.L.C.

 

“Book Value” means, with respect to any asset of the Company, the asset’s adjusted basis as of the relevant date for federal income tax purposes, except as follows:

 

(i)                                     the initial Book Value of any asset contributed by a Member to the Company shall be the Fair Market Value of such asset, as determined by the contributing Member and the Company with the concurrence of the Members other than the contributing Member;

 

(ii)                                  the Book Values of all Company assets (including intangible assets, such as goodwill) shall be adjusted to equal their respective Fair Market Values (as adjusted by Section 7701(g) of the Code) as of the following times:

 

(A)                               the acquisition of an additional Interest by any new or existing Member in exchange for more than a de minimis capital contribution or for services;

 

(B)                               the distribution by the Company to a Member of more than a de minimis amount of money or other Company property as consideration for an interest in the Company;

 

(C)                               the termination of the Company for federal income tax purposes pursuant to Section 708(b) of the Code; and

 

(D)                               immediately prior to incorporation of the Company (however effected, in connection with an initial public offering);

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

4

 

(iii)                               the Book Value of any Company asset distributed to any Member shall be the Fair Market Value of such asset (as adjusted by Section 7701(g) of the Code) on the date of distribution;

 

(iv)                              if the Book Value of an asset has been determined or adjusted pursuant to clause (i) or clause (ii) above, such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses, and other items allocated pursuant to ARTICLE 4; and

 

(v)                                 the Book Value of Company assets shall be increased or decreased, as appropriate, to reflect any adjustments to the adjusted tax bases of such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (v) of the definition of “Profits” and “Losses” set forth below; provided, however, that Book Values shall not be adjusted pursuant to this clause (v) to the extent that an adjustment pursuant to clause (ii) or (iii) hereof is required in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (v).

 

The foregoing definition of Book Value is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and shall be interpreted and applied consistently therewith.

 

“Business” means the business (conducted through the License Company and its Subsidiaries) of (i) acquiring licenses in the Auction (and such other FCC licenses as the Members shall mutually agree); (ii) the deployment of such licenses in a manner consistent with Applicable Law, including the FCC Rules, whether by (A) owning, constructing and operating systems to provide wireless broadband services, (B) entering into one or more joint venture, lease, wholesale or other agreements or (C) any other means, in each case (A)-(C) using technology fully compatible and interoperable with the technology or technologies employed by American III and its Affiliates from time to time (without limiting the vendors from whom the equipment comprising such systems may be acquired) solely within the Company Territory; (iii) marketing and offering the services and features described in clause (ii) within the Company Territory, including advertising such services and features using broadcast and other media, so long as such advertising extends beyond the Company Territory only when and to the extent necessary to reach customers and potential customers in the Company Territory and (iv) any other activities upon which the Members may mutually agree.

 

“Business Day” means any day other than Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized or required to close under the laws of the State of New York.

 

“Business Plan” means the Five-Year Business Plan and each annual business plan adopted in accordance with Section 6.5.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

5

 

“Business Purpose” is defined in Section 1.7.

 

“Buyer” is defined in Section 10.4(a).

 

“Capital Account” is defined in Section 2.1(a).

 

“Change of Control of SNR” means (i) any circumstance, event or transaction following which any Person or group (as such term is used in Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated thereunder), other than the members of SNR as of the date of this Agreement and such members’ Affiliates, is the “beneficial owner” (as such term is used in Rules 13d-3, 13d-5 or 16a-1 under the Exchange Act) of at least 50.1% of the Voting Securities of SNR or otherwise has the power to control SNR; (ii) the sale or other disposition of all or substantially all of SNR’s membership interests, business or assets (including through a merger or otherwise); (iii) a change of the sole managing member of SNR; or (iv) any amendment or modification of the limited liability company agreement of SNR which would have the effect of vesting control or management of SNR in any entity other than the sole managing member of SNR.

 

“Claim” is defined in Section 12.3(a).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Company” is defined in the preamble.

 

“Company Minimum Gain” means the aggregate of the amounts of gain, if any, determined for each nonrecourse liability of the Company, that would be realized by the Company for federal income tax purposes if it disposed of the Company property subject to such liability in a taxable transaction in full satisfaction thereof and for no other consideration.  To the extent the foregoing is inconsistent with Treasury Regulations Section 1.704-2(d) or incomplete with respect to such regulation, Company Minimum Gain shall be computed in accordance with such regulation.

 

“Company Territory” means the territory covered by the licenses for which the License Company was the Winning Bidder or thereafter acquired by the License Company (or its Subsidiaries) in accordance with the provisions of this Agreement.

 

“control,” “controlled” and “controlling” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Securities, by contract or otherwise.

 

“Depreciation” means, for each fiscal year or part thereof, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such year or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

6

 

year, Depreciation shall be an amount which bears the same ratio to such Book Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year bears to such adjusted tax basis; provided that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such Book Value using any reasonable method selected by the Manager.

 

“Economic Element” is defined in Section 14.4(a).

 

“Equity Interests” means capital stock, partnership interests, limited liability company interests or other ownership or beneficial interests of any Person.

 

“Excess Cash” means all cash and cash equivalents held by the Company at the time of determination in excess of such amount required for the Company and its Subsidiaries to retain to satisfy the then current liabilities of the Company and its Subsidiaries and to provide a reasonable reserve for the future liabilities and then current and future operating expenses and capital expenditures of the Company and its Subsidiaries.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any asset, as of the date of determination, the cash price at which a willing seller would sell and a willing buyer would buy such asset in a transaction negotiated at arm’s length, each being apprised of and considering all relevant facts, circumstances and factors, and neither acting under compulsion, with the parties being unaffiliated third parties acting without time constraints.

 

“FCC” means the Federal Communications Commission or any successor agency or entity performing substantially the same functions.

 

“FCC Rules” means the Communications Act of 1934, as amended by, inter alia, the Telecommunications Act of 1996, codified at 47 U.S.C. § 151 et seq., as it may be amended in the future, including the rules and regulations established by the FCC and codified in Title 47 of the Code of Federal Regulations, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time hereafter, and effective orders, rulings, and public notices of the FCC.

 

“Five-Year Business Plan” is defined in Section 6.5(a), as the same may be updated from time to time in accordance with the terms hereof.

 

“GAAP” means generally accepted accounting principles as used in the United States by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants, as in effect from time to time.

 

“Governmental Authority” means any government or political subdivision thereof, whether domestic or foreign, including any national, state, regional, provincial, county, city,

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

7

 

municipal, local or other governmental department, ministry, commission, board, bureau, agency, regulatory body or authority, instrumentality, judicial or administrative body, having jurisdiction over the matter or matters in question, including the FCC.

 

“Indemnified Person” is defined in Section 12.1(b).

 

“Initial Application Date” means September 12, 2014.

 

“Initial Grant Date” means, with respect to any license for which the License Company is the Winning Bidder, the date on which such license is granted by the FCC as set forth on the face of such license.

 

“Inspectors” is defined in Section 9.6(h).

 

“Instrument of Assignment” is defined in Section 8.3(a).

 

“Intercreditor and Subordination Agreement” means the Intercreditor and Subordination Agreement dated as of the date of the Original Agreement and entered into by American III and SNR (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms).

 

“Interest” means the interest of a Member (or a Permitted Transferee of a Member pursuant to ARTICLE 7 which has not been admitted as a Member of the Company) in the aggregate distributions by the Company, and the aggregate allocations by the Company of Profits, Losses, income, gain, loss, deduction or credit or any similar item, and all other rights and interests of a Member of the Company.

 

“Interest Purchase Agreement” is defined in Section 3.3.

 

“IPO Price” is defined in Section 9.3.

 

“Judgment” shall mean any judgment, writ, order, injunction, award or decree of any court, judge, justice or magistrate, including any bankruptcy court, or arbiter, and any order of or by any other Governmental Authority.

 

“license” means a license issued by the FCC authorizing the licensee to construct and operate radio transmitting facilities.  Unless otherwise indicated, references to licenses in this Agreement shall refer to licenses to use spectrum in the 1695-1710 MHz and/or 1755-1780/2155-2180 MHz bands.

 

“License Closing” is defined in Section 10.4(b).

 

“License Company” means SNR Wireless LicenseCo, LLC, a Delaware limited liability company and wholly-owned Subsidiary of the Company.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

8

 

“License Company System(s)” means the fixed or mobile wireless system(s) licensed to, constructed and operated by, or to be constructed and operated by, the License Company and/or any License Company Subsidiaries for the purpose of providing service authorized under a license or licenses in each of the Markets.

 

“License Offer” is defined in Section 10.4(a).

 

“License Offer Notice” is defined in Section 10.4(a).

 

“License Payment Date” is defined in Section 2.2(c).

 

“Lien” means, with respect to any asset, any lien (including, without limitation judgment liens and liens arising by operation of Applicable Law), mortgage, pledge, assignment, security interest, charge, right of first refusal or rights of others therein, or encumbrance of any nature whatsoever (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) in respect of such asset.

 

“Liquidator” is defined in Section 13.3(b).

 

“Management Agreement” means the Management Services Agreement, dated as of the date of the Original Agreement, by and between the License Company and the Management Company, as the same may be amended, modified, supplemented or amended and restated from time to time in accordance therewith.

 

“Management Company” means the Management Company under the Management Agreement, which initially is American III.

 

“Management Fee” is defined in Section 6.6.

 

“Manager” means SNR for so long as it serves as the “manager” of the Company (within the meaning of the Act) in accordance with the provisions of this Agreement and, thereafter, any manager of the Company duly appointed in accordance with the terms hereof.

 

“Market” means the geographic area(s) in which a Person is authorized to provide fixed or mobile wireless service under a license issued by the FCC.

 

“Member” means, initially, American III and SNR as long as they have not ceased to be Members, and any Person who, at the time of the reference thereto, has been admitted to the Company as a Member in accordance with the terms of this Agreement and has not ceased to be a Member, in such Person’s capacity as a member (within the meaning of the Act) of the Company.

 

“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

9

 

were treated as a nonrecourse liability, determined in accordance with Treasury Regulations Section 1.704-2(i).

 

“Member Nonrecourse Debt” has the meaning ascribed to the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4), and generally means any nonrecourse debt of the Company for which any Member bears the economic risk of loss (such as a nonrecourse loan to the Company by a Member or certain Affiliates of a Member).

 

“Member Nonrecourse Deduction” has the meaning ascribed to the term “partner nonrecourse deduction” in Treasury Regulations Section 1.704-2(i)(2).  The amount of the Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Company fiscal year equals the net increase, if any, in the amount of Member Minimum Gain attributable to such Member Nonrecourse Debt during that fiscal year, reduced (but not below zero) by the aggregate amount of any distributions during that fiscal year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Minimum Gain attributable to such Member Nonrecourse Debt.

 

“Newco” is defined in Section 9.1.

 

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section 1.704-2(c).  The amount of Nonrecourse Deductions for a fiscal year equals the net increase, if any, in the amount of Company Minimum Gain during that fiscal year, reduced (but not below zero) by any Nonrecourse Distributions during such year.

 

“Nonrecourse Distributions” means the aggregate amount, as determined in accordance with Treasury Regulations Section 1.704-2(c), of any distributions during the fiscal year of proceeds of a nonrecourse liability, as defined in Treasury Regulations Section 1.704-2(b)(3), that are allocable to an increase in Company Minimum Gain.

 

“Non-American III Members” is defined in Section 14.4(a).

 

“Offered Interests” is defined in Section 7.3(a).

 

“Offering” is defined in Section 9.1.

 

“Offeror” is defined in Section 7.3(a).

 

“Participating Members” is defined in Section 9.5.

 

“Percentage Interest” means, with respect to a Member, the percentage determined by dividing (i) the aggregate Unreturned Contributions made by such Member, by (ii) the aggregate Unreturned Contributions made by all Members; provided that at such time as the Unreturned Contributions of all Members are equal to zero, “Percentage Interest” shall be determined by the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

10

 

Percentage Interests of the Members immediately prior to the distribution that reduced the Members’ Percentage Interests to zero.

 

“Permitted Transferee” means, with respect to a Member, an Affiliate, a direct or indirect wholly-owned Subsidiary of such Member, and a direct or indirect wholly-owned Subsidiary of a Person of which such Member is a direct or indirect wholly-owned Subsidiary.

 

“Person” means any individual, corporation, partnership, firm, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, estate, incorporated or unincorporated organization, Governmental Authority or other entity.

 

“Private Equity Investors” means each member of SNR other than John Muleta, and such members’ successors and Permitted Transferees.

 

“Profits” and “Losses” means, for each fiscal year or part thereof, the Company’s taxable income or loss for such year determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss) with the following adjustments:

 

(i)                                     any income of the Company that is exempt from federal income tax shall be added to such taxable income or loss;

 

(ii)                                  any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as such pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) shall be subtracted from such taxable income or loss;

 

(iii)                               in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, Depreciation for such fiscal year shall be taken into account;

 

(iv)                              if the Book Value of any Company asset is adjusted pursuant to clause (ii) or clause (iii) of the definition of Book Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;

 

(v)                                 gain or loss resulting from the disposition of any Company asset with respect to which gain or loss is recognized for federal income tax purposes shall be computed with reference to the Book Value of the asset disposed of, notwithstanding that the adjusted basis of such asset differs from the Book Value of such asset;

 

(vi)                              to the extent an adjustment to the adjusted tax basis of any Company asset under Section 734(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

11

 

the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the adjusted tax basis of the asset) or an item of loss (if the adjustment decreases the adjusted tax basis of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits and Losses; and

 

(vii)                           such taxable income or loss shall not be deemed to include items of income, gain, loss, or deduction allocated pursuant to Section 2.1(c)(iii) (to comply with Treasury Regulations under Section 704(b) of the Code), Section 4.3, Section 4.4 or Section 4.5.

 

“Put Price” is defined in Section 8.1.

 

“Put Right” is defined in Section 8.1.

 

“Qualified Person” means a Person that qualifies as a “very small business” under the terms of FCC Rules applicable to the Auction in effect on the Initial Application Date, including but not limited to Sections 1.2110(b)(1) and 27.1106(a)(2) of the FCC Rules in effect on the Initial Application Date.

 

“Records” is defined in Section 9.6(h).

 

“Reference Date” means the fifth anniversary of the last Initial Grant Date.

 

“Related Agreements” means the Bidding Protocol, the Management Agreement and the Trademark License Agreement.

 

“Required Tax Amount” is defined in Section 3.1(b).

 

“RoFR Closing” is defined in Section 7.3(b).

 

“SEC” means the Securities and Exchange Commission or any successor commission or agency having similar powers.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Sellers” is defined in Section 7.3(a).

 

“Senior Credit Facility” means the secured credit facility created by that certain First Amended and Restated Credit Agreement, dated concurrently herewith, by and among the Company, the License Company and American III, including all schedules, attachments and exhibits thereto and the note, the pledge agreements, the security agreement and the other agreements ancillary thereto, as any of the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with their terms.

 

“Significant Breach” means (i) fraud, embezzlement or any other conduct by the Manager related to the Company or any of its Subsidiaries constituting a criminal or other

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

12

 

material violation of Applicable Law; (ii) gross negligence, any knowingly dishonest act, or knowing bad faith or willful misconduct (in each case, which has a material negative impact on the Company and its Subsidiaries taken together as a whole), (A) by the Manager in the performance of its obligations under this Agreement, or (B) by the Company or any of its Subsidiaries in the performance of their respective obligations under any material agreement to which the Company or any such Subsidiary is a party or by which it is bound; (iii) voluntary or involuntary insolvency or Bankruptcy of the Manager; (iv) any action or omission by the Manager or the Company or any of its Subsidiaries (including any violation of or failure to comply with FCC Rules) that is reasonably likely to materially impair the ability of the License Company or any of its Subsidiaries to realize the Auction Benefits or result in the revocation or non-renewal of any FCC license or (v) any material breach by the Manager of its obligations under this Agreement, unless such breach is cured within thirty (30) days following notice thereof by American III or other Members holding at least fifteen percent (15%) of the Percentage Interests, which notice shall specify in reasonable detail such alleged breach; provided that if such breach cannot be cured within thirty (30) days, then ninety (90) days as long as the Manager is diligently acting in good faith to cure such deviation or failure as soon as reasonably practicable; provided, further, that in the case of (ii)(B), (iv) and (v), such (x) gross negligence, knowingly dishonest act, or knowing bad faith or willful misconduct, (y) action or omission or (z) material breach was not caused (directly or indirectly, and whether as the Management Company, the lender under the Senior Credit Facility or otherwise) or expressly approved or authorized in writing by American III.

 

“Significant Matter” means any of the following:

 

(i)                                     any offering, issuance, purchase, repurchase or reclassification of Interests or other Equity Interests or securities (including warrants, options or other rights convertible into or exchangeable for Equity Interests or securities in the Company or any of its Subsidiaries) by the Company or any of its Subsidiaries, except for issuances of Interests to one or more Members so long as the other Members have the right to participate in such issuances pro rata in accordance with their respective Percentage Interests;

 

(ii)                                  any agreement or arrangement, written or oral, to which the Company or any of its Subsidiaries is a party, involving a payment or liability that, individually or in the aggregate for all such agreements and arrangements (during any twelve-month period), is greater than ten percent (10%) of the annual budget then in effect (other than any such agreements or arrangements approved in any duly adopted annual budget then in effect);

 

(iii)                               the incurrence, directly or indirectly (for example, by way of guarantee), by the Company or any of its Subsidiaries of indebtedness in excess of ten percent (10%) of the annual budget then in effect in the aggregate outstanding amount at any time for all such indebtedness (other than any such indebtedness approved in any duly adopted budget then in effect and other than the obligations of the License Company and its

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

13

 

Subsidiaries under the Interest Purchase Agreement and the SNR Security Agreement and the related Subsidiary guarantees and security agreement supplements);

 

(iv)                              the merger, combination or consolidation of the Company or any of its Subsidiaries with or into any Person other than the Company or a wholly-owned Subsidiary of the Company, regardless of whether the Company or any such Subsidiary is the survivor in any such merger, combination or consolidation; or the sale of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole;

 

(v)                                 the initiation of any Bankruptcy proceeding, liquidation, dissolution or winding up of the Company or any of its Subsidiaries (other than the liquidation of a wholly-owned Subsidiary of the Company into the Company or another wholly-owned Subsidiary of the Company);

 

(vi)                              the acquisition by the Company or any of its Subsidiaries of any significant portion of assets from another Person; and the formation of any partnership or joint venture involving the Company or any of its Subsidiaries;

 

(vii)                           changes in the Business Purpose, including any decision by the Company to conduct its business or own any material assets directly or through any Person other than the License Company and its Subsidiaries;

 

(viii)                        any agreements or arrangements, written or oral, with an Affiliate of the Company or any of its Subsidiaries (whether or not on arm’s-length terms and conditions);

 

(ix)                              any action that is materially inconsistent with the Five-Year Business Plan;

 

(x)                                 (A) termination of the Company’s or any of its Subsidiaries’ independent accountants or tax advisors unless such accountants or advisors are promptly replaced by a Big Four accounting firm or other accounting firm of nationally recognized standing (provided in each case such firm is an independent registered public accounting firm and will not create independence issues for American III under applicable federal and state securities laws), (B) appointment of the Company’s or any of its Subsidiaries’ independent accountants or tax advisors unless such accountants or advisors are a Big Four accounting firm or other accounting firm of nationally recognized standing (provided in each case such firm is an independent registered public accounting firm and will not create independence issues for American III under applicable federal and state securities laws), (C) material changes in tax or accounting methods or elections or (D) taking any tax position or making any tax election on behalf of the Company or any of its Subsidiaries;

 

(xi)                              the authorization or adoption of any amendment to the certificate of formation, limited liability company agreement or any other constituent document

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

14

 

(including the exhibits and attachments thereto) of the Company or any of its Subsidiaries;

 

(xii)                           any agreement or arrangement, written or oral, to pay any director, officer, employee or agent of the Company or any of its Subsidiaries $200,000 or more in any twelve-month period;

 

(xiii)                        any agreement or commitment by the Company or any of its Subsidiaries not to (A) compete with any other Person, which agreement or commitment continues following the payment of the Put Price, (B) solicit any other Person’s business or customers or (C) solicit or hire any other Person’s employees;

 

(xiv)                       the acquisition by the Company or any of its Subsidiaries of any new spectrum licenses (other than those acquired in the Auction);

 

(xv)                           any expenditure in excess of the lesser of: (i) $2,000,000; or (ii) one percent (1%) of the net purchase price of the licenses for which the License Company is the Winning Bidder;

 

(xvi)                        any deviation of more than ten percent (10%) from any line item in any duly adopted annual budget then in effect;

 

(xvii)                    except as permitted by clause (xviii) below, the sale of any asset outside the ordinary course of operation of the License Company Systems (other than pursuant to the Interest Purchase Agreement, SNR Pledge Agreement and SNR Security Agreement);

 

(xviii)                 the sale to (A) any Person of any license prior to the fifth anniversary of the Initial Grant Date of such license if the Person acquiring the license is not a Qualified Person; or (B) any Person of any license at any time except for the licenses set forth on Schedule I to this Agreement to the extent the net winning bids associated with those licenses, either individually or together with licenses previously sold, do not exceed five percent (5%) of the Auction Purchase Price (other than, in any such case of (A) or (B), pursuant to the Interest Purchase Agreement, SNR Pledge Agreement and SNR Security Agreement); and

 

(xix)                       entering into any agreement or commitment to do any of the foregoing.

 

“Significant Violation” means (i) fraud, embezzlement or any other conduct by the Manager related to the Company or any of its Subsidiaries constituting a criminal or other material violation of Applicable Law, (ii) gross negligence, any knowingly dishonest act, or knowing bad faith or willful misconduct, (a) by the Manager in the performance of its obligations under this Agreement, or (b) by the Company or any of its Subsidiaries in the performance of their respective obligations under any material agreement to which the Company or any such Subsidiary is a party or by which it is bound, (iii) voluntary or involuntary insolvency or Bankruptcy of the Manager, (iv) any action or omission by the Manager or the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

15

 

Company or any of its Subsidiaries (including any violation of or failure to comply with FCC Rules) that is reasonably likely to materially impair the ability of the License Company or any of its Subsidiaries to realize the Auction Benefits or result in the revocation or non-renewal of any FCC license owned by the Company or any of its Subsidiaries, or (v) any material breach by the Manager of its obligations under this Agreement, unless such breach is cured within thirty (30) days following notice thereof by American III or other Members holding at least twenty percent (20%) of the Percentage Interests, which notice shall specify in reasonable detail such alleged breach; provided that if such breach cannot be cured within thirty (30) days, then ninety (90) days as long as the Manager is diligently acting in good faith to cure such deviation or failure as soon as reasonably practicable; provided, further, that in the case of any of the foregoing in (i) through (v), such event has a material negative impact on the Company and its Subsidiaries taken together as a whole and was not caused (directly or indirectly, and whether as the Management Company, the lender under the Senior Credit Facility or otherwise) or expressly approved or authorized in writing by American III or any of its Affiliates.

 

“SNR” is defined in the preamble.

 

“SNR Capital” is defined in Section 8.1.

 

“SNR Members” means SNR and its Permitted Transferees.

 

“SNR Pledge Agreement” is defined in Section 3.3.

 

“SNR Return” is defined in Section 8.1.

 

“SNR Security Agreement” is defined in Section 3.3.

 

“Subsidiary” of any Person means any other Person with respect to which either (i) more than fifty percent (50%) of the interests having ordinary voting power to elect a majority of the directors or individuals having similar functions of such other Person (irrespective of whether at the time interests of any other class or classes of such Person shall or might have voting power upon the occurrence of any contingency) or (ii) more than fifty percent (50%) of the Equity Interests of such other Person is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Tax Matters Member” is defined in Section 5.5(d).

 

“Tax Shortfall Amount” is defined in Section 3.1(b).

 

“Third Party Offer” is defined in Section 7.3(a).

 

“Third Party Offer Notice” is defined in Section 7.3(a).

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

16

 

“Trademark License Agreement” means the Trademark License Agreement between the License Company and DISH Network L.L.C., dated as of the date of the Original Agreement, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

“Transfer” means any direct or indirect transfer, sale, assignment, pledge, encumbrance or other disposition.

 

“Treasury Regulations” means regulations issued by the United States Department of the Treasury pursuant to the Code.

 

“Unreturned Contributions” means, with respect to a Member, an amount equal to such Member’s cash contributions to the equity capital of the Company that are credited to such Member’s Capital Account, less any distributions to such Member in excess of such Member’s cumulative share of Profits.

 

“Voting Securities” means Equity Interests of a Person having the right to vote generally in the election of the directors (or persons performing equivalent functions) of such Person.

 

“Winning Bidder” shall mean a Person who is the winning bidder in the Auction for a license offered by the FCC therein (i) as set forth in the FCC’s post-Auction public notice identifying Auction winning bidders or (ii) by virtue of having accepted the FCC’s offer of a license for the amount of its final Auction net bid therefor following the default of the winning bidder for that license described in clause (i) of this definition.

 

Section 1.2.                                 Formation

 

The Company was formed as a Delaware limited liability company by filing a certificate of formation under the Act on August 29, 2014.  The certificate of formation is in all respects approved and the Members hereby agree to continue the Company.

 

Section 1.3.                                 Name

 

The name of the Company shall be SNR Wireless HoldCo, LLC.

 

Section 1.4.                                 Principal Place of Business

 

The Company’s principal office and place of business shall be located at c/o John Muleta, 200 Little Falls Street, Suite 102, Falls Church, VA 22046.

 

Section 1.5.                                 Registered Office; Registered Agent

 

The address of the registered office of the Company in the State of Delaware shall be c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808 or such other address as the Manager may determine.  The name and

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

17

 

address of the registered agent for service of process on the Company in the State of Delaware shall be Corporation Service Company, 2711 Centerville Road, Wilmington, New Castle County, Delaware 19808.

 

Section 1.6.                                 Term

 

The term of the Company commenced on August 29, 2014 and, unless terminated in accordance with this Agreement, shall be perpetual.

 

Section 1.7.                                 Purpose and Powers

 

The purposes of the Company are to establish and conduct the Business and to do any and all things reasonably necessary or advisable in connection therewith (the “Business Purpose”).  The Company shall have the power and authority to take any and all actions necessary or advisable to or for the furtherance of said purposes.

 

Section 1.8.                                 Filings

 

The Manager shall cause to be executed, filed and published all such certificates, notices, statements or other instruments, and amendments thereto under the laws of the State of Delaware and other applicable jurisdictions as the Manager may deem necessary or advisable for the operation of the Company and to enable the Company to conduct business in each applicable jurisdiction.

 

Section 1.9.                                 Sole Agreement

 

The Members intend that their obligations to each other with respect to the Company and the scope of the Company’s activities, including any activities of its Subsidiaries, be as set forth in this Agreement, and that no further authority to bind the other or the Company or any liabilities to each other or any third party be inferred from the relationships described herein.

 

ARTICLE 2
 CAPITALIZATION

 

Section 2.1.                                 Capital Accounts

 

(a)                                 Establishment

 

A separate capital account (“Capital Account”) was established for each Member as of the date of the Original Agreement.

 

(b)                                 General Rules for Adjustment of Capital Accounts

 

The Capital Account of each Member shall be:

 

(i)                                     increased by:

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

18

 

(A)                               the aggregate amount of such Member’s cash contributions to the Company;

 

(B)                               the initial Book Value of property contributed by such Member to the Company;

 

(C)                               such Member’s allocable share of Profits and items of income and gain allocated to such Member pursuant to Section 2.1(c)(iii) or ARTICLE 4 (other than Section 4.6 and Section 4.7(a));

 

(D)                               any positive adjustment to such Capital Account by reason of an adjustment to the Book Value of the Company assets; and

 

(E)                                the amount of Company liabilities assumed by such Member or which are secured by any property distributed to such Member; and

 

(ii)                                  decreased by:

 

(A)                               cash distributions to such Member from the Company;

 

(B)                               the Book Value of property distributed in kind to such Member;

 

(C)                               such Member’s allocable share of Losses and items of loss or deduction allocated to such Member pursuant to Section 2.1(c)(iii) or ARTICLE 4 (other than Section 4.7(a));

 

(D)                               any negative adjustment to such Capital Account by reason of an adjustment to the Book Value of Company assets;

 

(E)                                any amount charged to the Capital Account of such Member pursuant to Section 5.5(e); and

 

(F)                                 the amount of any liabilities of such Member assumed by the Company or which are secured by property contributed by such Member to the Company.

 

(c)                                  Special Rules

 

(i)                                     Time of Adjustment for Capital Contributions.  For purposes of computing the balance in a Member’s Capital Account, no credit shall be given for any capital contribution which such Member is obligated to make until such contribution is actually made.

 

(ii)                                  Capital Account for Transferred Interest.  If any Interest in the Company or part thereof is Transferred in accordance with the terms of this Agreement, the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

19

 

transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Interest.

 

(iii)                               Intent to Comply with Treasury Regulations.  The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such regulation.  To the extent the provisions of this Agreement are inconsistent with such regulation or are incomplete with respect thereto, the Capital Accounts of the Members shall be maintained in accordance with such regulation except to the extent that doing so would materially distort the timing or amount of an allocation or distribution to a Member.

 

Section 2.2.                                 Capital Contributions

 

(a)                                 Initial Contribution

 

On September 12, 2014, SNR contributed one hundred fifty dollars ($150) and American III contributed eight hundred fifty dollars ($850) to the equity capital of the Company.

 

(b)                                 Upfront Payment

 

On or prior to October 15, 2014, SNR shall contribute Nine Million Two Hundred Seventy Thousand and No Dollars ($9,270,000.00) in cash to the equity capital of the Company, and American III shall contribute Fifty Two Million Five Hundred Thirty Thousand and No Dollars ($52,530,000.00) in cash to the equity capital of the Company.  The Company shall, in turn, immediately contribute such amounts to the equity capital of the License Company, which shall use such proceeds to make the upfront payment necessary to permit the License Company to bid on licenses in the Auction in accordance with the Bidding Protocol, it being understood that the balance of the capital needs of the License Company to fund such upfront payment will be funded through the Senior Credit Facility (or from the proceeds of other debt financing available to the Company from senior and/or subordinated debt lenders other than American III).

 

(c)                                  Auction Purchase Price Payment

 

At least two (2) Business Days prior to the FCC’s deadline by which the post-Auction down payment on any license for which the License Company was the Winning Bidder must be made (the “License Payment Date”):

 

(i)                                     SNR shall contribute cash to the equity capital of the Company in an amount equal to 2.25% of the aggregate net purchase price (i.e., taking into account applicable Bidding Credits) of all licenses for which the License Company was the Winning Bidder (such aggregate net amount, the “Auction Purchase Price”), less (B) the amounts contributed by SNR pursuant to Section 2.2(a) and Section 2.2(b), which amount, together with the prior equity capital contributions by SNR, shall represent approximately fifteen percent (15%) of the equity capitalization of the Company at such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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time.  Immediately following such contribution, the Company shall contribute such cash to the equity capital of the License Company.

 

(ii)                                  American III shall contribute cash to the equity capital of the Company in an amount equal to 12.75% of the Auction Purchase Price, less (B) the amounts contributed by American III pursuant to Section 2.2(a) and Section 2.2(b), which amount, together with the prior equity capital contributions by American III, shall represent approximately eighty five (85%) of the equity capitalization of the Company at such time.  Immediately following such contribution, the Company shall contribute such cash to the equity capital of the License Company.  Notwithstanding the foregoing, American III shall have no obligation to make the contribution set forth in this Section 2.2(c)(ii) if SNR, either directly or through the Company (but not the Bidding Manager (as defined in the Bidding Protocol) acting on its own volition or in accordance with the Bidding Protocol), causes the License Company to bid on a license that was not a Target License (as defined in the Bidding Protocol) as set forth in the Bidding Protocol or causes the License Company to purchase a Target License by bidding materially in excess of the established bid limits for such license, in each case, without the prior written consent of American III, which consent may be delivered by email, facsimile or otherwise and which consent shall be deemed given if the member of the Auction Committee (as defined in the Bidding Protocol) appointed by American III has approved thereof.

 

(iii)                               The Company shall cause the License Company to use the amounts set forth in Section 2.2(a), Section 2.2(b), Section 2.2(c)(i) and Section 2.2(c)(ii), together with other funds borrowed by the License Company under the Senior Credit Facility or other senior and/or subordinated debt from lenders other than American III, as may be necessary to timely pay to the FCC all amounts owed in respect of the Auction Purchase Price.

 

(d)                                 No Additional Commitments

 

Other than as set forth in this Section 2.2, neither SNR nor American III shall be required to contribute any additional capital to the Company.  Notwithstanding any provision of this Agreement to the contrary, in no event shall the total equity capital contributions to the Company (i) by SNR exceed the lesser of *** or *** of the Auction Purchase Price and (ii) by American III exceed the lesser of *** or *** of the Auction Purchase Price.

 

Section 2.3.                                 No Withdrawals

 

Except as expressly set forth herein, no Member shall be entitled to withdraw any portion of its capital contribution or Capital Account balance.

 

Section 2.4.                                 No Interest

 

Except as expressly set forth herein, no Member shall be entitled to receive any interest or similar return on its capital contributions or Capital Account balance.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 2.5.                                 Interests are Securities

 

Each Interest shall constitute a “security” within the meaning of and shall be governed by (a) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware and (b) the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

 

Section 2.6.                                 Certification of Interests

 

Interests shall be issued in non-certificated form; provided that at the request of any Member, the Manager shall cause the Company to issue certificates to the Members representing the Interests held by the Members.  If any Interest certificate is issued, then such certificate shall bear a legend substantially in the following form:

 

This certificate evidences a membership interest representing an interest in SNR Wireless HoldCo, LLC and shall constitute a “security” within the meaning of and shall be governed by (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

 

The membership interest in SNR Wireless HoldCo, LLC represented by this certificate is subject to restrictions on transfer set forth in that certain Limited Liability Company Agreement of SNR Wireless HoldCo, LLC, dated as of September 12, 2014, by and among the members from time to time party thereto, as the same may be amended from time to time.

 

The membership interest in SNR Wireless HoldCo, LLC represented by this certificate has not been registered under the United States Securities Act of 1933, as amended, or under any other applicable securities laws.  Such membership interest may not be sold, assigned, pledged or otherwise disposed of at any time without effective registration under such Act and laws or, in each case, exemption therefrom.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 2.7.                                 Failure to Fund

 

American III acknowledges that if the License Company is the Winning Bidder for one or more licenses and (a) it is determined in any arbitration proceeding (whether under this Agreement or under the Senior Credit Facility or any Related Agreement) or (b) if American III admits in writing, in either case (a)( or (b) that American III failed to fund any amounts required to be funded by it under this Agreement or the Senior Credit Facility and that such failure to fund caused the License Company to be or become in default under the FCC Rules (including, without limitation, the provisions of 47 C.F.R. Section 1.2109), then SNR, the Company and its Subsidiaries will have all remedies available to them in law and in equity (including specific performance), and notwithstanding Section 8.4 of the Credit Agreement or any similar provisions in any other Loan Documents (as defined in the Credit Agreement), the Company and its Subsidiaries shall be entitled to recover from American III any and all damages incurred by the Company or any of its Subsidiaries resulting from such failure to fund, including all license default penalty payments due to the FCC as a result of such default.

 

ARTICLE 3
 DISTRIBUTIONS

 

Section 3.1.                                 Non-Liquidating Distributions

 

(a)                                 Except for the payment of the Put Price pursuant to Article 8, non-liquidating distributions shall be made in accordance with the Members’ respective Percentage Interests; provided, however, that, except as provided in Section 3.1(b), no such distribution shall be declared or made without the approval of each Member unless (i) any such declaration or distribution does not and will not result in any breach of any covenant, condition or obligation required to be performed by the Company or the License Company under any material agreement to which it is a party or by which it is bound and (ii) after giving effect to such proposed distribution, the aggregate amount of all distributions paid or made in any fiscal year (including distributions pursuant to Section 3.1(b)) would be less than fifty percent (50%) of the consolidated net income of the Company (without giving effect to extraordinary gains or extraordinary losses) for the fiscal year immediately preceding the fiscal year in which such distribution is declared or made.

 

(b)                                 Notwithstanding the provisions of Section 3.1(a), within thirty (30) days after the end of each fiscal quarter other than the fiscal quarter in which the proceeds from a liquidation are distributed in accordance with Section 3.2, the Company shall make distributions to each Member sufficient to provide such Member with an amount (the “Required Tax Amount”) equal to the estimated amount of all quarterly Federal, state, local and foreign income tax payments that such Member (or its direct and indirect equity owners) would be required to make with respect to such fiscal quarter attributable to the taxable income allocated to (or reasonably estimated to be allocable to) such Member in respect of his, her or its Interest with respect to such fiscal quarter (but in no event more than the net cumulative taxable income allocated to the Member by the Company for such quarter and all preceding quarters), which estimate shall be made by the Manager or a Person designated by the Manager based on information supplied by

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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each such Member as to the maximum tax rates applicable in the jurisdictions in which such Member is so taxable and without regard to any net operating loss carryforwards or similar tax attributes of such Member; provided, that the total amount of such distributions shall not exceed the amount of Excess Cash then held by the Company (except that the Manager may, in its discretion, cause the License Company to borrow amounts available for such purpose under the Senior Credit Facility and cause the License Company to distribute such borrowed amounts to the Company, to enable the Company to make tax distributions hereunder); provided, further, that, in the event that the amount otherwise required to be distributed to the Members pursuant to this Section 3.1(b) for such fiscal quarter, as estimated by the Manager, exceeds the amount of Excess Cash then held by the Company, such that the aggregate distributions made pursuant to this Section 3.1(b) with respect to such fiscal quarter are less than such amount otherwise required to be distributed to the Members pursuant to this Section 3.1(b) for such fiscal quarter (such shortfall, the “Tax Shortfall Amount”), then the Company shall make one or more distributions in an aggregate amount equal to the Tax Shortfall Amount to the Members at such time as the Company holds sufficient Excess Cash to fund, in whole or in part, such remaining Tax Shortfall Amount (or portion thereof).

 

Section 3.2.                                 Liquidating Distributions

 

Subject to Section 6.3, distributions to the Members of cash or property in connection with the liquidation, dissolution or winding up of the Company shall be made in accordance with Section 13.3.

 

Section 3.3.                                 Interest Purchase Agreement, Security Agreement and Pledge Agreement

 

The parties hereto acknowledge that the License Company, on September 12, 2014,  executed and delivered in favor of SNR an Interest Purchase Agreement (the “Interest Purchase Agreement”), a Security Agreement (the “SNR Security Agreement”) and a Pledge Agreement (the “SNR Pledge Agreement”).  Within one (1) Business Day of the date upon which any Subsidiary of the License Company is formed, the Company shall cause the License Company to cause such Subsidiary to execute and deliver to SNR (a) a guarantee of the License Company’s obligations under the Interest Purchase Agreement in the form attached as an exhibit to the Interest Purchase Agreement and (b) a security agreement supplement in the form attached as an exhibit to the SNR Security Agreement.  In addition, within one (1) Business Day of the date upon which any Subsidiary of the License Company holding licenses is formed, the Company shall cause the License Company to take the actions required under the SNR Pledge Agreement to perfect SNR’s first priority Lien in the outstanding equity interests of such Subsidiary.  The parties hereto also acknowledge and agree that, notwithstanding the provisions of Section 3.1, the Company may make payments to SNR in exchange for membership interests in the Company pursuant to the Put Right and the License Company and its Subsidiaries may make payments to SNR in exchange for membership interests in the Company pursuant to the provisions of the Interest Purchase Agreement, the SNR Security Agreement and the SNR Pledge Agreement and such related Subsidiary guarantees and security agreement supplements when due, subject to the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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provisions of the Senior Credit Facility and the Intercreditor and Subordination Agreement.  All such payments to SNR in respect of the obligations of the License Company and its Subsidiaries under the Interest Purchase Agreement or related guarantees, and all proceeds received by SNR in connection with its exercise of remedies under the SNR Security Agreement or related security agreement supplements, shall be credited against the obligations of the License Company and its Subsidiaries under the Interest Purchase Agreement and related guarantees, and, if necessary to avoid duplication in respect of any payments or distributions by the Company to the SNR Members in respect of their Interests, the amount of all such payments or proceeds, as applicable, shall be deemed to be a distribution to the Company (and by the Company to SNR) constituting a return of the SNR Members’ capital contributions to the Company on a pro rata basis.  SNR shall not amend or waive, nor shall the Company permit the License Company or its Subsidiaries to amend or waive, any term or provision of the Interest Purchase Agreement, the SNR Security Agreement or the SNR Pledge Agreement or the related Subsidiary guarantees or security agreement supplements, without the prior written consent of American III in its sole discretion.

 

ARTICLE 4
 ALLOCATIONS

 

Section 4.1.                                 Profits and Losses

 

After giving effect to the special allocations set forth in Section 4.3 through Section 4.5, Profits and Losses with respect to any fiscal year shall be allocated to the Members in accordance with their respective Percentage Interests.

 

Section 4.2.                                 Losses

 

(a)                                 Limitation on Losses

 

Losses allocable to any Member pursuant to Section 4.1 with respect to any fiscal year shall not exceed the maximum amount of Losses that may be so allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of such fiscal year.  All Losses in excess of the limitation set forth in this Section 4.2(a) shall be allocated: (i) first, to the Members that will not be subject to this limitation, ratably based on the aggregate of their Percentage Interests, to the extent possible until such Members become subject to this limitation; and (ii) second, any remaining amount, to the Members, ratably based on their Percentage Interests, unless otherwise required by the Code or Treasury Regulations.

 

Section 4.3.                                 Special Allocations

 

The following special allocations shall be made for any fiscal year of the Company in the following order of priority:

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(a)                                 Minimum Gain Chargeback

 

Notwithstanding any other provision of this ARTICLE 4, if there is a net decrease in Company Minimum Gain (determined without regard to Member Nonrecourse Debts) during any fiscal year, each Member shall, subject to the exceptions provided in Treasury Regulations Section 1.704-2(f), be specially allocated items of income and gain for such fiscal year (and, if necessary, subsequent fiscal years) equal to such Member’s share of the net decrease in Company Minimum Gain (determined without regard to Member Nonrecourse Debts) within the meaning of Treasury Regulations Section 1.704-2(g)(2).  Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(6) and 1.704-2(i)(2).  To the extent that this Section 4.3(a) is inconsistent with Treasury Regulations Section 1.704-2(f), the Minimum Gain Chargeback provided for herein shall be applied and interpreted in accordance with such Treasury Regulation.

 

(b)                                 Member Minimum Gain Chargeback

 

If there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Company fiscal year, each Member that, as of the beginning of such year, has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall, subject to the exceptions provided in Treasury Regulations Section 1.704-2(f), be specially allocated items of income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt determined in accordance with Treasury Regulations Section 1.704-2(i)(4).  Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(i)(2).  To the extent that this Section 4.3(b) is inconsistent with Treasury Regulations Section 1.704-2(i), the Member Minimum Gain chargeback provided for herein shall be applied and interpreted in accordance with such regulation.

 

(c)                                  Qualified Income Offset

 

Notwithstanding anything herein to the contrary, but only if required by Treasury Regulations Section 1.704-1(b) in order for the allocations provided for herein to be considered to have substantial economic effect or to be deemed to be in accordance with the Member’s Percentage Interests, if, for any fiscal year, a Member unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), and such adjustment, allocation or distribution causes or increases an Adjusted Capital Account Deficit with respect to such Member, then, before any other allocations are made, such Member shall be allocated items of income and gain (consisting of a pro rata portion of each item of Company income, including gross income and gain) in the amount and manner sufficient to eliminate such Adjusted Capital Account Deficit as quickly as possible.  This Section 4.3(c) is

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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intended to comply with Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

(d)                                 Nonrecourse Deductions

 

Nonrecourse Deductions shall be allocated to American III; provided, that any allocation of Losses pursuant to the preceding clause that would cause American III’s Capital Account to be less than an amount equal to (i) American III’s cash contributions to the equity capital of the Company that are credited to American III’s Capital Account less (ii) any distributions to American III in excess of American III’s cumulative share of Profits, shall instead be made to the Members in accordance with their respective Percentage Interests.

 

(e)                                  Member Nonrecourse Deductions

 

Any Member Nonrecourse Deductions for any fiscal year or other period shall be allocated to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i).

 

Section 4.4.                                 Curative Allocations

 

The allocations set forth in Section 4.3(a) through (e) are intended to comply with certain regulatory requirements under Section 704(b) of the Code.  The Members intend that, to the extent possible, all allocations made pursuant to such Sections will, over the term of the Company, be offset either with other allocations pursuant to Section 4.3 or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 4.4.  Accordingly, the Manager is hereby authorized and directed to make offsetting allocations of Company income, gain, loss or deduction under this Section 4.4 in whatever manner the Manager determines is appropriate so that, after such offsetting special allocations are made, the Capital Accounts of the Members are, to the extent possible, equal to the Capital Accounts each would have if the provisions of Section 4.3 were not contained in this Agreement and all income, gain, loss and deduction of the Company were instead allocated pursuant to Section 4.1 and Section 4.2.

 

Section 4.5.                                 Special Allocations in the Event of Company Audit Adjustments

 

Notwithstanding the allocation provisions of Section 4.1 and Section 4.2, and prior to making any of the allocations specified in Section 4.3, the following special allocations shall be made in the following order and in a manner, taking into consideration any tiered partnership structure that the Company may be part of, that reflects the relative economic interests of each Member in the Company:

 

(a)                                 If for any fiscal year of the Company, the Company or any Affiliate of the Company is deemed to have additional income for tax purposes as a result of a re-determination

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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by a taxing authority of an item of income, gain, loss or deduction that is attributable to a loan transaction, the provision of services, or the grant of a license or sublicense in intangible property by the Company or any Affiliate of the Company, to or involving any Member or Affiliate of any Member, such additional income shall be allocated to the Member involved in such loan transaction or that received such services, license or sublicense (or the Member whose Affiliate was involved in such loan transaction or received such services, license or sublicense) and any related deemed cash distribution shall be treated as having been made to the same Member.

 

(b)                                 If for any fiscal year of the Company, the Company or any Affiliate of the Company is deemed to have a reduction in income for tax purposes as a result of a re-determination by a taxing authority of an item of income, gain, loss or deduction that is attributable to a loan transaction, the provision of services, or the grant of a license or sublicense in intangible property by the Company or any Affiliate of the Company, to or involving any Member or Affiliate of any Member, such reduction in income shall be allocated to the Member involved in such loan transaction or that received such services, license or sublicense (or the Member whose Affiliate was involved in such loan transaction or received such services, license or sublicense) and any related deemed cash contribution shall be treated as having been made by the same Member.

 

(c)                                  If for any taxable period of a Member, such Member or any Affiliate of the Member is deemed to have additional income for tax purposes as a result of a re-determination by a taxing authority of an item of income, gain, loss or deduction attributable to a loan transaction, the provision of services, or the grant of a license or sublicense in intangible property by such Member or any Affiliate of such Member, to or involving the Company or any Affiliate of the Company, any increase in the amount of a Company deduction associated with such re-determination of such Member’s or any Affiliate of such Member’s income shall be allocated (in the appropriate fiscal year) to the Member involved in such loan transaction or that provided such services, license or sublicense (either directly or through an Affiliate), and any related deemed cash contribution shall be treated as having been made by the same Member.

 

(d)                                 If for any taxable period of a Member, such Member or any Affiliate of the Member is deemed to have a reduction in income for tax purposes as a result of a re-determination by a taxing authority of an item of income, gain, loss or deduction attributable to a loan transaction, the provision of services, or the grant of a license or sublicense in intangible property by such Member or any Affiliate of such Member, to or involving the Company or any Affiliate of the Company, any reduction in the amount of a Company deduction associated with such re-determination of such Member’s or any Affiliate of such Member’s income shall be allocated (in the appropriate fiscal year) to the Member involved in such loan transaction or that provided such services, license or sublicense (either directly or through an Affiliate), and any related deemed cash distribution shall be treated as having been made to the same Member.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(e)                                  A re-determination by a taxing authority shall only be given effect for purposes of this Section 4.5 if such re-determination is (i) a decision, judgment, decree or other order by any court of competent jurisdiction, which has become final and is either no longer subject to appeal or for which a determination not to appeal has been made; (ii) a closing agreement made under Section 7121 of the Code or any comparable foreign, state, local or other income tax statute; (iii) a final disposition by a taxing authority of a claim for refund or (iv) any other written agreement made with respect to a tax re-determination the execution of which is final and prohibits the taxing authority, relevant Member (or any Affiliate of such Members) or the Company (or any Affiliate of the Company) from seeking any further legal or administrative remedies with respect to such tax re-determination.

 

Section 4.6.                                 Allocation of Credits

 

All tax credits shall be allocated among the Members in accordance with their respective allocations of Profits and Losses in accordance with this Agreement or in accordance with applicable provisions of the Code or Treasury Regulations to the extent any such provision is inconsistent with such allocation.

 

Section 4.7.                                 Tax Allocations

 

(a)                                 Contributed Property

 

If any property is contributed to the capital of the Company, income, gain, loss and deduction with respect to such property shall be allocated solely for tax purposes among the Members in accordance with Section 704(c) of the Code and Treasury Regulations Section 1.704-3 so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Book Value.  All decisions regarding the choice of allocation method under Treasury Regulations Section 1.704-3 with respect to assets contributed to the Company shall be made by the Manager, subject to the prior written consent of Members holding a majority of the total outstanding Percentage Interests, not to be unreasonably withheld, conditioned or delayed.

 

(b)                                 Revalued Property

 

If the Company assets are revalued as set forth in the definition of “Book Value” in Section 1.1, then subsequent allocations of income, gain, loss and deduction with respect to revalued Company assets shall take into account any variation between the adjusted basis of such assets for federal income tax purposes and their adjusted value in the same manner as under Section 704(c) of the Code and in compliance with Treasury Regulations Section 1.704-3.  All decisions regarding the choice of allocation method under Treasury Regulations Section 1.704-3 with respect to revalued Company assets shall be made by the Members.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(c)                                  Allocations with Respect to Certain Securities

 

If the Company sells, exchanges or otherwise disposes of any investment security at a loss, to the extent such loss is specifically reimbursed by one or more Members, such reimbursed loss shall be allocated solely for income tax purposes among the Members in accordance with their respective reimbursements to the Company.

 

Section 4.8.                                 Change in Members’ Interests

 

In the event there is any change in the Members’ respective Percentage Interests during any fiscal year, Profits, Losses, Nonrecourse Deductions and other items shall be allocated among the Members in accordance with their respective Percentage Interests from time to time during such fiscal year based on an interim closing of the books as of the close of business on the date of such change.

 

ARTICLE 5
 ACCOUNTING AND RECORDS

 

Section 5.1.                                 Fiscal Year

 

The fiscal year of the Company shall be the year ending December 31.

 

Section 5.2.                                 Method of Accounting

 

Unless otherwise provided herein, the Company books of account shall be maintained in accordance with GAAP; provided that for purposes of making allocations with respect to items of Company income, gain, deduction, loss and credit to the Members, such items shall be allocated to the Members’ Capital Accounts pursuant to ARTICLE 4 and as required by Section 704 of the Code and the Treasury Regulations promulgated thereunder.

 

Section 5.3.                                 Books and Records; Inspection

 

Proper and complete records and books of accounts of the Company business for tax and financial purposes, including all such transactions and other matters as are usually entered into records and books of account maintained by Persons engaged in businesses of like character or as are required by Applicable Law, shall be kept by the Company at the Company’s principal office and place of business.  The Manager may delegate to a third party the duty to maintain and oversee the preparation and maintenance of such records and books of account.  Books and records maintained for financial purposes shall be maintained in accordance with GAAP, and books and records maintained for tax purposes shall be maintained in accordance with the Code and applicable Treasury Regulations.  Subject to Section 10.2, all records and documents described in Section 5.3 shall be open to inspection and copying by any of the Members or their representatives or agents at any reasonable time during normal business hours.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 5.4.                                 Financial Statements; Internal Controls

 

(a)                                 Within ninety (90) days after the end of each fiscal year, and thirty (30) days after the end of each fiscal quarter (other than the fourth fiscal quarter), the Manager shall cause to be furnished to each Member financial statements with respect to such fiscal year or fiscal quarter of the Company, consisting of (i) a consolidated balance sheet showing the Company’s financial position as of the end of such fiscal year or fiscal quarter; (ii) supporting consolidated profit and loss statements (iii) a consolidated statement of cash flows for such fiscal year or fiscal quarter and (iv) Member’s Capital Accounts.  Such financial statements shall be prepared on a consolidated basis for the Company and its Subsidiaries in accordance with GAAP and SEC Regulation S-X except, with respect to the quarterly financial statements which need not be separately audited, for the omission of certain footnotes and other presentation items required by GAAP with respect to audited financial statements.  The annual financial statements of the Company, except for the annual financial statements of the Company for the fiscal year ended December 31, 2014, shall be audited (which audit shall be conducted in accordance with GAAP and SEC Regulation S-X) and certified by the Company’s independent accountants.  Each Member shall receive a copy of all material financial reports and notices delivered by the Company to any third party pursuant to any other agreement.

 

(b)                                 At all times during the continuance of the Company, the Company and each of its Subsidiaries shall maintain, or cause to be maintained on their behalf, a system of internal accounting controls sufficient to provide reasonable assurance that:  (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  From time to time, upon specific written notice thereof, the Company and its Subsidiaries shall promptly remedy any significant deficiencies or material weaknesses in their internal accounting controls.

 

(c)                                  At all times during the continuance of the Company, the Company shall furnish, or cause to be furnished on its behalf, to each Member that files public reports with the SEC, upon written request by such Member to the Manager, such financial statements and financial and other information regarding the Company and its Subsidiaries as may be necessary or reasonably required for such Member and its Affiliates to prepare their financial statements and related information in accordance with GAAP and applicable SEC rules and regulations, including without limitation, Regulations S-X and S-K promulgated by the SEC, and to have such information reviewed or audited from time to time, as applicable, by such Member’s or their Affiliates’ independent auditors (at such Member’s sole cost and expense and subject to all applicable confidentiality obligations).  All such financial statements and financial and other information shall be furnished in such manner and at such times as may be necessary or reasonably required for such Member or its Affiliates to timely prepare and file any registration statements that they may file under the Securities Act and to timely prepare and file any and all

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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current and periodic reports and proxy statements that they may file under the Exchange Act, in each case in accordance with GAAP and applicable SEC rules and regulations, including without limitation, Regulations S-X and S-K promulgated by the SEC.  The Company and its officers shall execute and deliver such certificates, affidavits, representation letters and similar documents as such Member or its Affiliates or their respective independent auditors may reasonably request in connection therewith.

 

(d)                                 At all times during the continuance of the Company, the Company and its Subsidiaries shall design, implement and maintain, or cause to be designed, implemented and maintained on their behalf, proper “internal control over financial reporting” (as defined in Rule 13a-15(f) promulgated under the Exchange Act).  The Company and its Subsidiaries shall prepare and maintain, or cause to be prepared and maintained, adequate documentation of their internal control over financial reporting consistent with the requirements of the Public Company Accounting Oversight Board, Rule 13a-15 promulgated under the Exchange Act and Item 308 of Regulation S-K promulgated by the SEC, and shall make such documentation available to any such Member and its Affiliates and their independent auditors at such reasonable times as such Persons may reasonably request.  Such internal control over financial reporting (and the documentation related thereto) shall be sufficient to permit each Member that files public reports with the SEC to assess and evaluate periodically the effectiveness of the internal control over financial reporting of the Company and its Subsidiaries and to permit each independent auditor of each such Member to evaluate such assessment and to provide any required attestation report with respect thereto.  From time to time, upon notice of any such condition, the Company and its Subsidiaries shall promptly remedy any significant deficiencies or material weaknesses in their internal control over financial reporting.

 

Section 5.5.                                 Taxation

 

(a)                                 Status of the Company.  The Members acknowledge that this Agreement creates a partnership for federal income tax purposes.  Furthermore, the Members hereby agree not to elect to be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute.

 

(b)                                 Tax Elections and Reporting

 

(i)                                     Generally.  The Company shall make the following elections and take the following positions under United States income tax laws and Treasury Regulations and any similar state laws and regulations:

 

(A)                         adopt the year ending December 31 as the annual accounting period (unless otherwise required by the Code and Treasury Regulations);

 

(B)                         adopt the accrual method of accounting;

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(C)                         insofar as permissible, report the Company’s tax attributes and results using principles consistent with those assumed in connection with entering into this Agreement; and

 

(D)                         have the Company treated as a partnership for federal income tax purposes in a manner consistent with Treasury Regulations Section 1-7701.

 

(ii)                                  Code Section 754 Election.  The Manager shall, upon the written request of any Member, cause the Company to file an election under Section 754 of the Code and the Treasury Regulations promulgated thereunder to adjust the basis of the Company’s assets under Section 734(b) or 743(b) of the Code and a corresponding election under the applicable sections of state and local law.

 

(c)                                  Company Tax Returns

 

(i)                                     The Tax Matters Member will prepare or cause to be prepared all required domestic and foreign tax returns and information returns of the Company, drafts of which shall be furnished to the Members within ninety (90) days following the close of each fiscal year.  Final returns shall be filed within one hundred eighty (180) days following each year end.  The Company shall pay for all reasonable out-of-pocket expenses (including accounting fees, if any) in connection with such preparation (it being understood that the Tax Matters Member shall not receive any compensation from the Company for preparing such returns).  Any Member may, at its own expense, engage a third party to review the tax returns and information returns prepared by the Tax Matters Member pursuant to the preceding sentence.  The Tax Matters Member shall not file any such return without the approval of any Member that constitutes a “notice partner” (as defined in Section 6231(a)(8) of the Code) of the Company, which approval shall not be unreasonably withheld, conditioned or delayed.  Such “notice partner” Member shall be deemed to have given such approval if such Member does not indicate its written objection (which may be delivered by facsimile) to the Tax Matters Member within twenty (20) days of the date that such Member receives a draft of such return.  If a “notice partner” Member does not approve of any proposed filing of a return by the Tax Matters Member, such Member and the Tax Matters Member shall seek, in good faith, to resolve their disagreement.  If a “notice partner” Member and the Tax Matters Member cannot resolve their disagreement within ten (10) days of receipt of the “notice partner” Member’s written objection by the Tax Matters Member, either of such Member or the Tax Matters Member may request, in writing with a copy sent to the other Member, that the disagreement be resolved by the Company’s independent public accountants and the independent public accountants shall be instructed to resolve the dispute in such manner as they believe will properly maximize, in the aggregate, the United States federal, state and local income tax advantages and will properly minimize, in the aggregate, the United States federal, state, and local income tax detriments, available to the Company’s Members.  The independent public accountants shall provide their written resolution of the disagreement to both the “notice partner” Member and the Tax Matters Member

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

33

 

within fifteen (15) days from the date that the independent public accountants were requested to resolve such disagreement.  Any and all other tax returns shall be prepared in a manner directed by the Tax Matters Member consistent with the terms of this Agreement.  Each Member shall provide such information, if any, as may be reasonably requested by the Company for purposes of preparing such tax and information returns.

 

(ii)                                  The Tax Matters Member shall furnish a copy of all filed domestic and foreign tax returns and information returns for the Company to each of the Members.  In addition, (A) within seventy five (75) days following the end of each fiscal year (and as otherwise required by Applicable Law), the Company shall furnish each Member with all information relating to the Company required to be reported in any United States federal, state or local tax return of such Member, including a report indicating such Member’s allocable share for United States federal income tax purposes of the Company’s income, gain, credits, losses and deductions, and including a Schedule K-1, and (B) within thirty (30) days following the end of each fiscal quarter, the Company shall furnish each Member with a report of such Member’s allocable share of the Company’s estimated quarterly income for purposes of making estimated tax payments.

 

(iii)                               The Members agree that the Company shall be treated as a partnership for United States federal income tax purposes.  The Members agree to (A) approve electing partnership status with respect to the Company with the United States Internal Revenue Service and such other state and local taxing authorities as may be appropriate and to cooperate in providing all consents, signatures, documents and such other information as may be required with respect thereto and (B) report all “partnership items” (as defined in Section 6231(a)(3) of the Code) of the Company consistent with such classification of the Company for United States federal, state and local tax purposes and with the returns filed by the Company; provided, however, that if any Member intends to file a notice of inconsistent treatment under Section 6222(b) of the Code, such Member shall, at least thirty (30) days prior to the filing of such notice, notify in writing the other Members of such intent and such Member’s intended treatment of the item which is (or may be) inconsistent with the treatment of that item by the Company.

 

(d)                                 Tax Audits.  American III, for so long as it is a Member and, thereafter, the Manager shall be the “tax matters partner” of the Company, as that term is defined in Section 6231(a)(7) of the Code (the “Tax Matters Member”), with all of the rights, duties and powers provided for in sections 6221 through 6232, inclusive, of the Code, provided that the Tax Matters Member shall not pay or agree to pay (or make any agreement that would cause a Member to pay) any audit assessment, or any amount in settlement or compromise of any litigation, in respect of income tax liability of the Members attributable to the Interests in the Company, in excess of $500,000 in any one instance or series of related instances, unless approved by each Member whose financial interest in such matter exceeds $100,000 individually or in the aggregate.  The Tax Matters Member, as an authorized representative of the Company, shall direct the defense of any tax claims made by the Internal Revenue Service or any other taxing jurisdiction to the extent that such claims relate to adjustment of Company items at the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Company level and, in connection therewith, shall retain and cause the Company to pay the fees and expenses of counsel and other advisors chosen by the Tax Matters Member.  The Tax Matters Member shall also be responsible for timely filing all elections made by the Company, subject to any applicable approval requirements set forth in this Agreement.  The Tax Matters Member shall deliver to each Member and the Manager a semi-annual report on the status of all tax audits and open tax years relating to the Company, and shall consult with and keep all Members and the Manager advised of all significant developments in such matters coming to the attention of the Tax Matters Member.  All reasonable out-of-pocket expenses of the Tax Matters Member and its Affiliates and other reasonable fees and expenses in connection with such defense shall be borne by the Company (it being understood that the Tax Matters Member shall not receive any compensation from the Company for acting in such capacity).  Except as provided in ARTICLE 12, neither the Tax Matters Member nor the Company shall be liable for any additional tax, interest or penalties payable by a Member or any costs of separate counsel chosen by such Member to represent the Member with respect to any aspect of such defense.  The Tax Matters Member shall take any steps necessary pursuant to Section 6223(a) to designate American III and SNR as a “notice partner” (as defined in Section 6231(a)(8) of the Code).  In addition, nothing in this Agreement is intended to waive any rights, including rights to participate in administrative and judicial proceedings, that a Member may have under Section 6221 through 6233 of the Code.  Notwithstanding any other provisions of this Agreement, the provisions of Section 5.5(c) and Section 5.5(d) shall survive the dissolution of the Company or the termination of any Member’s interest in the Company and shall remain binding on all Members for a period of time necessary to resolve with the United States Internal Revenue Service or any applicable state or local taxing authority all matters (including litigation) regarding the United States Federal, state and local income taxation, as the case may be, of the Company or any Member with respect to the Company.

 

(e)                                  Withholding

 

(i)                                     The Company shall comply with all withholding requirements under applicable United States federal, state, local and foreign tax laws and shall remit amounts withheld to, and file required forms with, the applicable taxing authorities.  To the extent that the Company withholds and pays over any amounts to any taxing authority with respect to distributions or allocations to any Member, the amount withheld shall be charged to the Capital Account of such Member.  The Company shall notify each of the Members of any withholding with respect to such Member, designating such Member’s allocable share of such withholding tax.  The Members hereby agree that they will not claim a credit in excess of the amount in such notice.

 

(ii)                                  In the event of any claimed over-withholding by the Company, the Member shall have no rights against the Company or any other Member.  Anything in the previous sentence to the contrary notwithstanding, if the Company is required to take any action in order to secure a refund or credit for the benefit of a Member in respect of any amount withheld by it, it shall take any such action including applying for such refund on behalf of the Member and paying it over to such Member.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(iii)                               Except in the case of withholding pursuant to Section 1446 of the Code, if any amount required to be withheld was not withheld from actual distributions that would have otherwise been made to a Member, the Company shall require the Member to which the withholding was credited to reimburse the Company for such withholding; provided  that in the case of withholding pursuant to Section 1446 of the Code, no such reimbursement shall be necessary as long as the other Members are subject to withholding in amounts proportionate to their Percentage Interests or otherwise receive a distribution of an equivalent amount.

 

(iv)                              In the event of any under-withholding by the Company, each Member agrees to indemnify and hold harmless the Company and the Tax Matters Member from and against any liability, including interest and penalties, with respect thereto.

 

(v)                                 Each Member agrees to furnish the Company with any representations and forms as shall reasonably be requested by the Company to assist the Company in determining the extent of, and in fulfilling, the Company’s withholding obligations.

 

(vi)                              Upon the request of any Member, the Company shall make any filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding or similar taxes imposed by any non-United States (whether sovereign or local) taxing authority with respect to amounts distributable or items of income allocable to such Member hereunder.  Such Member shall cooperate with the Company in making any such filings, applications or elections to the extent the Company reasonably determines that such cooperation is necessary or desirable.  Notwithstanding the foregoing, if such Member must make any such filings, applications or elections directly, the Company, at the request of such Member, shall provide such information and take such other action as may reasonably be necessary to complete or make such filings, applications or elections.

 

ARTICLE 6
 MANAGEMENT

 

Section 6.1.                                 Manager

 

The Manager at all times shall exercise control over the Company in compliance with FCC Rules.  The Manager shall, subject to the terms of this Agreement, have the exclusive right and power to manage, operate and control the Company and to make all decisions necessary or appropriate to carry on the business and affairs of the Company, including the authority to appoint, promote, demote and terminate executives who oversee the day-to-day activities of the Company and to select the financial institutions from which the Company may borrow money.  In addition to the specific rights and powers herein granted to the Manager, the Manager shall possess and enjoy and may exercise all the rights and powers of a manager within the meaning of Section 18-101(10) of the Act, including the full and exclusive power and authority to act for and to bind the Company, but subject to the limitations of this Agreement.  In addition to any other rights and powers that the Manager may possess, the Manager shall have all specific rights and

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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powers required or appropriate for the day-to-day management of the Company’s business, which shall be managed by experienced professionals in accordance with the standards of first-rate operators of wireless communications companies.  Except as determined by the Manager pursuant to this Agreement, no Member or representative shall have any right or authority to take any action on behalf of the Company with respect to third parties or to bind the Company.

 

Section 6.2.                                 Removal of Manager

 

(a)              Removal of Manager

 

Subject to FCC approval, if required, SNR shall be removed as the Manager, and the management of the Company shall be transferred to a successor Manager in accordance with Section 6.2(b) and Section 6.2(c) (i) if (A) SNR is unwilling or unable to serve as the Manager,  (B) would not be considered a Qualified Person if SNR itself were the applicant or licensee, as the case may be, in respect of the licenses held by the License Company or its Subsidiaries at any time prior to the fifth anniversary of the last Initial Grant Date and such failure is reasonably likely to materially impair the ability of the License Company or any of its Subsidiaries to realize the Auction Benefits or result in the revocation or non-renewal of any license, or (C) commits a Significant Breach at any time or (ii) in accordance with Section 11.4(a).

 

(b)              Successor Manager

 

If SNR is removed as the Manager pursuant to Section 6.2(a), the management of the Company shall be transferred to a successor Manager, which shall (i) be, if then required in order for the License Company and its Subsidiaries to retain the Auction Benefits, a Qualified Person, provided that SNR shall in no way be liable to the Company or to any other Member for the failure of any successor Manager to be a Qualified Person, and (ii) be subject to the prior approval of American III.  SNR (or, if it fails to do so, the other Members by affirmative vote of a majority of Percentage Interests not held by SNR) shall designate the successor Manager as soon as reasonably practicable, but in any event no later than *** after notice from any other Member that one or more of the events specified in Section 6.2(a) has occurred.  SNR shall continue to act as Manager until the successor Manager assumes the management of the Company.  SNR shall take whatever steps are commercially reasonable to assist the successor Manager in assuming the management of the Company including transferring to the successor Manager all historical financial, tax, accounting and other data and records in the possession of SNR, and giving such consents, assigning such permits and executing such instruments as may be necessary to vest in the successor Manager those rights that were necessary for SNR to perform its obligations.

 

(c)               Dispute Resolution

 

Any dispute over the removal of SNR as the Manager pursuant to Section 6.2(a) shall be resolved by arbitration in accordance with Section 10.3, provided that (i) the arbitrators shall be instructed to render their decision within *** after the commencement of any such proceeding

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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and (ii) the losing Member shall pay the reasonable and documented out-of-pocket fees, costs and expenses of the prevailing Member in connection with the proceeding.

 

Section 6.3.                                 Supermajority Approval Rights

 

In addition to the approval of the Manager, Significant Matters shall require the prior written approval of American III, in its sole and absolute discretion for any reason or no reason; provided that no such approval shall be required solely with respect to the purchase and sale of Interests pursuant to and in accordance with the terms of the Interest Purchase Agreement or pursuant to the Put Right; provided, further, that transfers of assets of the License Company (other than the membership interests of any Subsidiaries that do not hold licenses) or of any of its Subsidiaries solely for the purpose of generating the funds required to satisfy the obligations of the Company under the Put Right or of the License Company and its Subsidiaries that are then due and payable under the Interest Purchase Agreement shall cease to require the approval of American III under any clause of the definition of Significant Matter at such time, subject to the provisions of the Senior Credit Facility and the Intercreditor and Subordination Agreement.

 

Section 6.4.                                 Separateness Covenants

 

(a)                                 SNR shall cause the Company and each of its Subsidiaries to, and the Company shall and shall cause each of its Subsidiaries to, (i) to the extent that such entities have one or more deposit accounts, each maintain their own deposit account or accounts, separate from the accounts of American III and its Subsidiaries and joint ventures, with commercial banking institutions, and (ii) not commingle their funds with those of American III or any of its Subsidiaries or joint ventures;

 

(b)                                 SNR shall cause the Company and each of its Subsidiaries to, and the Company shall and shall cause each of its Subsidiaries to, maintain separate addresses from the addresses of American III and its Subsidiaries and joint ventures, or to the extent the Company or any of its Subsidiaries may have offices in the same location as American III or any of its Subsidiaries or joint ventures, to maintain a fair and appropriate allocation of overhead costs among them, with each such entity bearing its fair share of such expense;

 

(c)                                  SNR shall cause the Company and each of its Subsidiaries to issue, and the Company and each of its Subsidiaries shall issue, quarterly and annual consolidated financial statements from time to time as required by Section 5.4(a);

 

(d)                                 SNR shall cause the Company and each of its Subsidiaries to, and the Company shall and shall cause each of its Subsidiaries to, (i) each maintain its separate status as a limited liability company and (ii) each conduct its affairs in accordance with its certificate of formation and limited liability company agreement and observe all necessary, appropriate and customary company formalities, including, but not limited to, holding all regular and special members’ and managers’ meetings appropriate to authorize company action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts, to the extent applicable;

 

(e)                                  SNR shall not permit the Company or any of its Subsidiaries to, and the Company shall not and shall not permit any of its Subsidiaries to, (i) assume or guarantee any of the liabilities of, or pledge any of its assets as security for the liabilities of, American III or any of its Subsidiaries or joint ventures, or (ii) hold out the credit of American III or any of its Subsidiaries or joint ventures as being able to satisfy the obligations of the Company or any of its Subsidiaries (which shall be deemed not to refer to any disclosure by the Company or any of its Subsidiaries of any capital contributions or loans that American III or any of its Subsidiaries is required to make to the Company or any of its Subsidiaries or of any other obligations that American III or any of its Subsidiaries is required to perform for the benefit of the Company or any of its Subsidiaries), except with respect to any guarantees or assumptions of indebtedness or other liabilities that have been expressly agreed to by American III or any of its Subsidiaries in writing;

 

(f)                                   SNR shall cause the Company and each of its Subsidiaries not to, and the Company shall not and shall cause each of its Subsidiaries not to, authorize the use of its name or trademarks or service marks by American III or any of its Subsidiaries or joint ventures, except pursuant to a written license agreement;

 

(g)                                  SNR shall not permit the Company or any of its Subsidiaries to, and the Company shall not and shall not permit any of its Subsidiaries to, except as permitted under the Trademark License Agreement, conduct its own business with suppliers of goods and services, lenders or purchasers of securities in the name of American III or any of its Subsidiaries or joint ventures. SNR further acknowledges that it shall have no right to conduct any business in the name of American III or on behalf of American III unless specifically authorized herein; and

 

(h)                                 If SNR or the Company or any of its Subsidiaries obtains actual knowledge that American III or any of its Subsidiaries or joint ventures has represented or indicated to any supplier of goods and services to, lender to or purchaser of securities of the Company or any of its Subsidiaries that the credit of American III or any of its Subsidiaries or joint ventures is available to satisfy the obligations of the Company or any of its Subsidiaries (which shall be deemed not to refer to any disclosure by American III or any of its Subsidiaries or joint ventures of any capital contributions or loans that American III or any of its Subsidiaries is required to make to the Company or any of its Subsidiaries or of any other obligations that American III or any of its Subsidiaries is required to perform for the benefit of the Company or any of its Subsidiaries), other than with respect to any guarantees or assumptions of indebtedness or other liabilities that have been expressly agreed to by American III or any of its Subsidiaries in writing, then SNR shall cause the Company and each of its Subsidiaries to, and the Company shall and shall cause each of its Subsidiaries to, provide written notice to any person to whom such representation or indication was made to make clear that the credit of American III and its Subsidiaries and joint ventures is not available to satisfy the obligations of the Company or any of its Subsidiaries other than with respect to any guarantees or assumptions of indebtedness or

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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other liabilities that have been expressly agreed to by American III or any of its Subsidiaries in writing.

 

Section 6.5.                                 Business Plans and Budgets

 

(a)              Five-Year Business Plan

 

Following consultation with American III, on September 12, 2014, the Manager adopted the initial five-year high-level business plan (the “Five-Year Business Plan”) of the Company and its Subsidiaries, which Five-Year Business Plan includes business forecasts, appropriate explanations of the Manager’s proposed strategy, with details of assumptions used, and the general goals and parameters for the Business and operations of the Company and its Subsidiaries consistent with good business practice in the wireless broadband or communications industry.  The Manager shall, after consultation with American III, update the Five-Year Business Plan to address the next five-year period, which update shall be as consistent as practicable with the prior Five-Year Business Plan, and shall be distributed to American III not later than thirty (30) days prior to the end of the fifth fiscal year covered by the Five-Year Business Plan.  In addition, the Manager may, from time to time, in the exercise of its reasonable discretion, modify the Five-Year Business Plan, after consultation with American III, to reflect any material changes affecting the Company and its Subsidiaries or their Business, including changes in availability of capital (including under the Senior Credit Facility).

 

(b)              Annual Business Plans and Budgets

 

The Manager shall, after consultation with American III, prepare and adopt a detailed annual Business Plan and detailed annual budget no later than *** following the first Initial Grant Date.  Drafts of each annual Business Plan and budget after the initial annual Business Plan and budget will be distributed to American III for its review and comment no later than *** after the end of the immediately preceding fiscal year of the Company.  Each such annual Business Plan shall set forth the business and operational parameters and objectives for such year, including appropriate explanations of the Manager’s proposed strategy.  Each such budget shall include, without limitation, a detailed breakdown of the following, together with the details of the material assumptions used, for the Company and its Subsidiaries: (i) monthly revenue, operating expenses and interest expenses; (ii) quarterly capital expenditures and cash flow; (iii) balance sheet and income statement and (iv) expected funding requirements and the proposed methods of meeting such requirements.  Following the initial annual Business Plan and annual budget, each annual Business Plan and annual budget shall be consistent with the Five-Year Business Plan as in effect at such time.  In addition, the Manager may, from time to time, in the exercise of its reasonable discretion, modify the annual Business Plan and budget, after consultation with American III, to reflect any modification made to the Five-Year Business Plan in accordance with Section 6.5(a).

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(c)               No Other Business Plans or Budgets

 

No Business Plans or budgets shall be adopted except in accordance with the provisions of this Section 6.5.

 

Section 6.6.                                 Management Fees

 

If the License Company acquires one or more licenses in the Auction (and American III has not been relieved of its obligation to make its capital contribution pursuant to the last sentence of Section 2.2(c)(ii)), for so long as SNR continues to serve as the Manager, the Company shall cause the License Company to pay a management fee to SNR, by wire transfer of immediately available funds, equal to *** per year (the “Management Fee”), payable in quarterly installments in arrears.

 

ARTICLE 7
 TRANSFER RESTRICTIONS

 

No Member may Transfer all or any part of its Interests, including interests in any of its Subsidiaries that directly or indirectly own Interests, except in compliance with the following provisions of this ARTICLE 7.

 

Section 7.1.                                 Restrictions

 

(a)              Transfers by Certain Members

 

The Members (other than American III) may Transfer Interests (i) at any time after the last Initial Grant Date, to one or more Permitted Transferees; (ii) during the ten (10) years after the last Initial Grant Date with the consent of American III, which may be withheld in its sole and absolute discretion; (iii) to the License Company pursuant to the Interest Purchase Agreement or to the Company pursuant to ARTICLE 8 without the consent of American III but subject to Section 7.1(d) and (iv) following the tenth anniversary of the last Initial Grant Date without the consent of American III, but in each case subject to Section 7.3 and the other provisions of this ARTICLE 7.  American III may not Transfer all or a majority of its Interests until after the last Initial Grant Date, and thereafter may Transfer all or a majority of its Interests to a creditworthy transferee, but only if the transferee thereof either (x) agrees to assume in a written agreement reasonably acceptable to SNR (such consent not to be unreasonably withheld, conditioned or delayed) American III’s obligations under the Senior Credit Facility, the Intercreditor and Subordination Agreement and all related agreements and agrees to be bound by the provisions thereof as if an original party thereto or (y) agrees to provide at least the same level of financing to the Company, the License Company and its Subsidiaries as available to them under the Senior Credit Facility on terms and conditions which are acceptable to SNR; provided that if the terms and conditions, individually and in the aggregate, are, in the reasonable judgment of SNR, no less favorable to SNR, the Company, the License Company and its Subsidiaries as those set forth in the Senior Credit Facility, the Intercreditor and Subordination Agreement and such related agreements (including the priority of Liens set forth therein), then

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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SNR shall not unreasonably withhold, condition or delay such consent.  Notwithstanding the foregoing, at any time after the close of the Auction, the Manager may admit as new, non-controlling members of the Manager, one or more Persons to provide additional capital to the Manager, subject to American III’s consent, which shall not be unreasonably withheld, conditioned or delayed, and provided that such action does not result in SNR failing to qualify as a “very small business” as required by Section 11.3(a)(iii) of this Agreement.

 

(b)              No Transfer of Right to Manage

 

The right to manage the Company pursuant to this Agreement shall not be transferable with the Interests of SNR without the prior written consent of American III.  Accordingly, subject to Section 7.1(a), if SNR Transfers twenty-five percent (25%) or more of its Interests (other than a Transfer of one hundred percent of SNR’s Interests to a Permitted Transferee), and American III elects not to exercise its right of first refusal pursuant to Section 7.3(a), then, subject to FCC approval, the right to manage the Company shall be transferred to a successor Manager, which shall (i) be, if then required in order for the License Company and its Subsidiaries to retain the Auction Benefits, a Qualified Person; (ii) not be a competitor or an Affiliate of a competitor of American III (as determined by American III in its sole and absolute discretion for any reason or no reason) or its Affiliates and (iii) be subject to the prior written approval of American III.

 

(c)               No Transfers to Competitors

 

So long as American III owns an Interest, the Members other than American III may not Transfer any or all of their Interests to a competitor of American III or its Affiliates, or an Affiliate of any such competitor, without American III’s prior written consent, which may be withheld in its sole and absolute discretion.

 

(d)              FCC Compliance

 

All Transfers of Interests are subject to and must comply with all applicable FCC Rules.

 

Section 7.2.                                 Exceptions

 

(a)              Transfers by Members of SNR

 

The provisions of Section 7.1 (other than Section 7.1(d)) shall not apply to (i) the Private Equity Investors, except with respect to Transfers of their interests in SNR, whether held directly by the Private Equity Investors or through one or more intermediaries (it being understood that this exception is intended to restrict Transfers of interests in SNR effected by the Private Equity Investors themselves and their Subsidiaries, rather than Transfers effected by direct and indirect owners of interests in the Private Equity Investors) and (ii) Transfers (except with respect to Transfers of their interests in SNR) or issuances of the Equity Interests of any other member of SNR, unless such Transfer results in a Change of Control of SNR or would impair the ability of the License Company or any of its Subsidiaries to realize the Auction Benefits.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(b)              Transfers by American III Members

 

Notwithstanding anything herein to the contrary, but subject to the provisions of Section 14.3, the restrictions set forth in Section 7.1 (other than Section 7.1(d)) shall not apply to (i) Transfers of Interests in the Company held by American III (or its Permitted Transferees) to any Affiliate of American III or (ii) Transfers of direct or indirect interests in American III or its Affiliates.  In addition, American III (or its Permitted Transferees) may collaterally assign its Interests in the Company to any secured lender of American III or its Affiliates, and American III (or its Permitted Transferees) may Transfer its Interests in the Company held by American III (or its Permitted Transferees) at any time in accordance with Section 14.3.

 

(c)               Pledges by Certain Members

 

The members of SNR may pledge their Equity Interests in SNR to secure loans, provided that any such pledge and its terms (A) shall be subject to the prior approval of American III (which shall not be unreasonably withheld or delayed), but solely with respect to compliance of any such pledge and its terms with FCC Rules, including with respect to the matters set forth in clause (B) below, and (B) shall in no event permit the lender to take any action that would impair the eligibility of the License Company or any of its Subsidiaries to hold any of the licenses won in the Auction or that could result in the License Company or any Subsidiary losing any Auction Benefits.

 

Section 7.3.                                 Right of First Refusal

 

(a)              Notice and Exercise of Right

 

If, following the expiration of the ten-year period referred to in Section 7.1(a), any Members other than American III (the “Sellers”) receive and wish to accept a bona fide written binding offer (the “Third Party Offer”) from a bona fide third party who is not a Permitted Transferee (the “Offeror”) to purchase all or any portion of their Interests (the “Offered Interests”), then the Sellers shall give notice of such Third Party Offer (the “Third Party Offer Notice”) to American III, which notice shall identify the Offeror, enclose a copy of the Third Party Offer and irrevocably offer to American III the right to purchase the Offered Interests at the same purchase price, which must be payable in cash, and on the other terms and conditions as specified in the Third Party Offer if the Offered Interests are the only assets being sold or for cash at the lesser of the designated purchase price for the Offered Interests in the Third Party Offer or at their then Fair Market Value if the Offered Interests are being Transferred in such transaction or series of related transactions with other assets or for consideration other than cash; provided that American III shall be entitled to pay for the Offered Interests with instruments of indebtedness to the extent the Third Party Offer contemplates the delivery of instruments of indebtedness.  American III may exercise its right to purchase the Offered Interests by notifying the Sellers in writing of its election to purchase within *** after the later of (i) delivery of the Third Party Offer Notice and (ii) any determination of Fair Market Value pursuant to Section 7.7 or otherwise.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(b)              Closing of Purchase

 

If American III duly elects to purchase the Offered Interests, the closing of such purchase (the “RoFR Closing”) shall take place on a date agreed to by the Sellers and American III, but in no event later than *** following the exercise by American III of its election to purchase; provided that if any governmental or regulatory approval is required for American III to consummate its purchase and has not been obtained by the date that is *** following the exercise by American III of its election to purchase, the RoFR Closing with respect to such purchase may be deferred until no later than *** following the date on which the governmental or regulatory approval, including an order, decision, or public notice of the FCC or a duly-authorized bureau or division thereof granting such approval, is final and no longer subject to reconsideration, review or appeal, unless such finality is waived by American III, in which case the closing with respect to such purchase shall occur within *** following the later of (i) the date on which such governmental or regulatory approval, including a non-final order, decision, or public notice of the FCC or a duly-authorized bureau or division thereof granting such approval, is released and (ii) the date of American III’s waiver of such finality.

 

(c)               Representations at Closing

 

At any RoFR Closing, the Sellers shall represent and warrant in writing to American III only that the Sellers (i) are the sole beneficial and record owners of the Offered Interests and have good title thereto free and clear of all Liens (other than restrictions imposed pursuant to this Agreement or under any applicable securities laws and other than Liens under or pursuant to the Senior Credit Facility and the other Loan Documents (as defined therein)) and (ii) have full power and authority to sell the Offered Interests without conflict with the terms of any Applicable Law, order or agreement or instrument binding upon them or their assets.  The Sellers shall deliver to American III such customary instruments of assignment with respect to the Offered Interests as may be reasonably requested by American III to vest in American III all right, title and interest therein.

 

(d)              Sale to Third Party

 

If American III fails to exercise its right to purchase the Offered Interests, the Sellers may accept the Third Party Offer and sell the Offered Interests to the Offeror; provided that such sale shall be at a price, and on other terms and conditions, no less favorable to Sellers than those specified in the Third Party Offer Notice and otherwise in accordance with this ARTICLE 7.  If such sale is not consummated within *** after the expiration of the applicable time periods specified in paragraph (a) above, subject to an automatic extension for up to an additional *** to the extent necessary to obtain any required governmental or regulatory approval, such right to sell shall lapse and Transfers of the Offered Interests shall again be subject to the provisions of this Section 7.3.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(e)               Assumption of Agreements

 

At any closing with respect to a sale to a third party, the Offeror shall execute a counterpart to this Agreement and any Related Agreements to which the Sellers or their Affiliates are party and shall be bound by the provisions of and assume the obligations of the Sellers under all such Agreements.  The Sellers and the Offeror shall execute such documents as American III may reasonably request to evidence such assumption.  Notwithstanding the foregoing, the Sellers shall not be relieved of any of their obligations under this Agreement or any Related Agreement arising prior to such sale, to the extent such obligations shall not be discharged by the third party.

 

Section 7.4.                                 Tag-Along Right

 

(a)                                 In lieu of exercising its rights under Section 7.3, American III may, within *** following receipt of any Third Party Offer Notice, elect to participate in such sale by including therein a pro rata portion of its Interests in the Company.  Such sale, if any, shall be made on the same terms and conditions as the sale described in the Third Party Offer Notice and the Sellers may not consummate their sale unless such sale, if any, by American III is consummated simultaneously in accordance with the terms hereof.  If American III fails to elect to participate in such sale and such sale is not consummated within the applicable time periods specified above in Section 7.3(d), the rights and restrictions provided for in this Section 7.4(a) shall again become effective, and no Transfer of Interests may be made thereafter by the Sellers other than in accordance with this ARTICLE 7.

 

(b)                                 If, following the expiration of the ten-year period referred to in Section 7.1(a), American III receives and wishes to accept a bona fide written binding offer from a bona fide third party who is not a Permitted Transferee to purchase all or any portion of its Interests in accordance with Section 14.3(b), then American III shall give notice of such offer to SNR, which notice shall identify the offeror and enclose a copy of such offer.  SNR may, within *** following receipt of such notice, elect to participate in such sale by including therein a pro rata portion of its Interests in the Company.  Such sale, if any, shall be made on the same terms and conditions as the sale described in the notice given by American III pursuant to the first sentence hereof and American III may not consummate its sale unless such sale, if any, by SNR is consummated simultaneously in accordance with the terms hereof.  If SNR fails to elect to participate in such sale and such sale is not consummated within *** after the delivery by American III to SNR of the notice of such third party offer, subject to an automatic extension for up to an additional *** to the extent necessary to obtain any required governmental or regulatory approval, the rights and restrictions provided for in this Section 7.4(b) shall again become effective, and no Transfer of Interests may be made thereafter by American III other than in accordance with this ARTICLE 7.

 

Section 7.5.                                 Substituted Members

 

Prior to any Transfer of Interests by a Member, the transferor shall deliver to other Members a notice setting forth the identity of the transferee, and shall provide such other

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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information as the other Members may reasonably request in connection with such Transfer.  A transferee of Interests Transferred in accordance with this ARTICLE 7 shall be admitted as a Member upon execution of a counterpart to this Agreement evidencing its agreement to be bound hereby.  Upon the admission of any such transferee as a Member, the transferring Member or Members shall be relieved of any obligation arising under this Agreement subsequent to such Transfer with respect to the Interests being transferred (provided that the transferee shall assume all such obligations), and if the transferring Member no longer holds any Interests, the transferring Member shall be relieved of its obligations arising under this Agreement to the extent provided in Section 14.3.  Prior to any Transfer of an Interest or any portion thereof (other than pursuant to the Interest Purchase Agreement or ARTICLE 8) and as a condition thereof, and prior to any admission of an assignee as a Member, the Member making such Transfer and the assignee shall furnish the Manager, and a majority in Percentage Interest of the non-transferring Members, with such documents regarding the Transfer as the Manager or such majority of the non-transferring Members may reasonably request (in form and substance satisfactory to the Manager or such majority, as applicable), including a copy of the Transfer instrument, a ratification by the assignee of this Agreement (if the assignee is to be admitted as a Member), reasonably satisfactory evidence that the Transfer will not cause the Company to be characterized for federal and applicable state income tax purposes as other than a partnership, reasonably satisfactory evidence that the Transfer complies with applicable federal and state securities laws and reasonably satisfactory evidence that the Transfer will not violate the FCC Rules (including adversely affecting the qualification of the License Company as a “very small business” under the relevant FCC Rules if, and to the extent, such qualification is then required for the License Company and its Subsidiaries to retain any Auction Benefits) or this Agreement.  In connection with any Transfer (other than pursuant to the Interest Purchase Agreement or ARTICLE 8), the Company shall, at the request of the Member making such Transfer and at such Member’s sole expense, use commercially reasonable efforts to cause to be made any filing required by the FCC.

 

Section 7.6.                                 Invalid Transfers Void

 

Any purported Transfer of an Interest or any part thereof not in compliance with the provisions of this ARTICLE 7 shall be void and of no force or effect and the transferring Member shall be liable to the other Members and the Company for all liabilities, obligations, damages, losses, costs and expenses (including reasonable attorneys’ fees and court costs) arising out of such non-complying Transfer.

 

Section 7.7.                                 Determination of Fair Market Value

 

The Fair Market Value of Interests to be transferred or other property received pursuant to this Agreement shall be determined in accordance with this Section 7.7.  For purposes of this Section 7.7, the Sellers owning a majority of the applicable Offered Interests shall have the right to act on behalf of the Sellers.  Within *** after the delivery of the notice requiring such determination, the Sellers and American III shall attempt in good faith to agree on the Fair Market Value.  If the Sellers and American III fail within *** thereafter to agree thereon, each of

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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the Sellers and American III shall deliver a notice to the other appointing as its appraiser (“Appraiser”) an independent accounting or investment banking firm or appraisal firm of nationally recognized standing.  The Sellers and American III by mutual agreement shall also appoint a third Appraiser.  If after appointment of the two Appraisers, the Sellers and American III are unable to agree upon a third Appraiser, such appointment shall be made within *** of the request by the American Arbitration Association, or any organization successor thereto, from a panel of arbitrators having experience in the appraisal of the type of property then the subject of appraisal.  The decisions of the three Appraisers so appointed and chosen shall be given within *** after the selection of such third Appraiser.  If the determination of one Appraiser differs from the middle determination by more than twice the amount by which the other determination differs from the middle determination, then the determination of such Appraiser shall be excluded, the remaining two determinations shall be averaged and such average shall be binding and conclusive on the parties; otherwise the average of all three determinations shall be binding and conclusive.  The Sellers’ obligation to provide a Third Party Offer Notice pursuant to Section 7.3(a) shall not be applicable until the date of delivery of such determination to American III.  The costs of conducting any appraisal procedure shall be borne as follows: (a) the costs of the Appraiser designated by the Sellers and other costs separately incurred by the Sellers shall be borne by the Sellers; (b) the costs of the Appraiser designated by American III and other costs separately incurred by American III shall be borne by American III and (c) the costs of the third Appraiser, if any, shall be shared equally by the Sellers and American III.  For purposes of this Section, the Fair Market Value of an Interest shall be equal to the amount the holder thereof would be entitled to receive pursuant to Section 13.3 if the Company’s business and assets (including intangibles, such as goodwill) were sold for their Fair Market Value, all Company liabilities were paid and the Company were liquidated.

 

Section 7.8.                                 Acceptance of Prior Acts

 

Any Permitted Transferee or other Person who becomes a Member of the Company, accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company prior to the date it became a Member and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to such date and which are in force and effect on such date.

 

ARTICLE 8
 PUT RIGHT

 

Section 8.1.                                 Put

 

During the thirty (30) day period following the Reference Date, SNR shall have the right (the “Put Right”) to require the Company to purchase all (but not less than all) of the collective Interests held by the SNR Members at a price (the “Put Price”) equal to (a) the sum of all cash contributions made by the SNR Members to the equity capital of the Company pursuant to and in accordance with this Agreement (the “SNR Capital”), plus (b) an amount equal to a *** per annum return on the contributions described in clause (a) above, from and including the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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respective dates on which such contributions were made until the date the Put Price is actually paid, calculated on the basis of the actual number of days elapsed from the applicable contribution date to the date the Put Price is actually paid, compounded annually, minus (c) all distributions (other than tax distributions made pursuant to Section 3.1(b)) previously made or deemed made to the SNR Members by the Company (collectively, the “SNR Return”); provided, that, if (x) SNR and/or the Company has acted, or failed to act, in a manner that is a Significant Violation, and (y) the Auction Benefits of the License Company are reduced or eliminated as the result of such Significant Violation, then, upon a complete redemption (including the receipt by the SNR Members of the full redemption price in cash) of the SNR Member’s Interests as set forth in Section 11.4, the Put Right shall be void and unenforceable and the applicable provisions of Section 11.4 shall govern.

 

Section 8.2.                                 Conditions to Closing

 

(a)                                 The Company’s obligations to consummate the transactions contemplated by the Put Right shall be subject to the satisfaction (or express waiver by the Company) of each of the following conditions:

 

(i)                                     The parties shall have obtained all required consents, approvals, notices and waivers from governmental or regulatory bodies, including without limitation, any required FCC approval of the transactions contemplated by the Put Right by an effective order, decision, or public notice of the FCC or a duly-authorized bureau or division thereof (or, at the Company’s and American III’s election, within *** after such order, decision, or public notice shall have become final and no longer subject to further reconsideration, review or appeal);

 

(ii)                                  The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if applicable, shall have expired or been terminated; and

 

(iii)                               At the closing of the transactions contemplated by the Put Right, all of the collective Interests held by the SNR Members shall be transferred to the Company free and clear of all Liens, and the SNR Members shall have furnished to the Company documentation reasonably satisfactory to American III providing for the release of all then-existing Liens on such Interests.

 

(b)                                 SNR’s obligations to consummate the transactions contemplated by the Put Right shall be subject to the satisfaction (or express waiver by SNR) of each of the following conditions:

 

(i)                                     The parties shall have obtained all required consents, approvals, notices and waivers from governmental or regulatory bodies, including without limitation, FCC approval of the transactions contemplated by the Put Right by an effective order, decision, or public notice of the FCC or a duly-authorized bureau or division thereof; and

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(ii)                                  The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated.

 

(c)                                  Each of the parties hereto agrees to use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties hereto in doing, all the things reasonably necessary, proper or advisable, in the most expeditious manner practicable, to satisfy the conditions set forth in this Section 8.2 and to consummate and make effective the transactions contemplated by the Put Right and this ARTICLE 8.

 

Section 8.3.                                 Closing

 

(a)                                 At the closing of the transactions contemplated by the Put Right, the Company shall pay or cause to be paid the Put Price, by wire transfer of immediately available funds to an account of SNR (which shall be designated by SNR at least three (3) Business Days prior to the date of payment), against execution and delivery by each SNR Member of an instrument of assignment (“Instrument of Assignment”) in substantially the form attached hereto as Exhibit A, on a date not later than *** following the satisfaction (or express waiver by American III) of each of the conditions set forth in Section 8.2(a) and the satisfaction (or express waiver by SNR) of each of the conditions set forth in Section 8.2(b), or at such other time and place as the parties may agree.  Upon closing of the transactions contemplated by the Put Right, the Members other than American III shall automatically cease to be (i) Members of the Company and (ii) parties to this Agreement, in each case without any further action required of the parties hereto; provided that no such transfer shall relieve any such SNR Member from liability for any prior breach of this Agreement.

 

(b)                                 The Put Price shall not be subject to any set-off or offset of whatsoever nature.

 

(c)                                  American III may fund the Put Price through a capital contribution immediately prior to the Closing of a Put transaction.

 

Section 8.4.                                 Terminated Auction Purchase

 

If (a) the Auction is cancelled by the FCC, or the results of the Auction are dismissed in full by the FCC, because of a failure to meet both of the FCC’s aggregate reserve prices applicable to the Auction; (b) the License Company fails to timely submit all of the applications for all licenses for which it was the Winning Bidder (i.e., long-form applications) as a result of any action or inaction of American III or any of its Affiliates; (c) all of the License Company’s applications for the licenses for which it was the Winning Bidder (i.e., long-form applications) are dismissed by final action of the FCC; (d) all licenses for which the License Company was the Winning Bidder and that were granted to, and are still held by, the License Company or any of its Subsidiaries are cancelled by the FCC or (e) the License Company does not bid in the Auction (including as a result of a termination pursuant to Section 13.1(b)) or is not the Winning Bidder for any license, then, in each instance, the License Company shall apply as promptly as practicable and permitted under the FCC Rules to obtain a refund from the FCC of all of the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Auction funds previously paid by the License Company to the FCC for the Auction, and, to the extent that any upfront payments, down payments or final payments for such licenses are refunded by the FCC, (i) the License Company shall, on behalf of the Company, first pay to the SNR Members an amount equal to (A) the SNR Members’ capital contributions plus (B) a *** per annum return on the aggregate amount of capital contributions provided by the SNR Members from the date of their capital contributions through the date that such return is paid to the SNR Members (or, if earlier with respect to some or all of such equity capital contributions, the date of the return of all or part of any such equity capital contributions excluding any tax distributions made pursuant to Section 3.1(b)), compounded annually, and taking into account all distributions (including any returns of equity capital contributions but excluding any tax distributions made pursuant to Section 3.1(b)) previously made to the SNR Members by the Company plus (C) an amount equal to SNR’s reasonable, documented out-of-pocket expenses (including without limitation legal fees and expenses) incurred in connection with the transactions contemplated hereby and not otherwise previously paid or reimbursed pursuant to Section 14.11 (in the event the License Company does not have adequate capital to pay any portion of the foregoing (A), (B) or (C), then American III shall pay to the SNR Members the amount of such shortfall); (ii) the License Company shall then, to the extent any funds remain after making the payments under the foregoing (i), repay amounts due to American III under the Senior Credit Facility and (iii) the License Company shall then, to the extent any funds remain after making the payments under the foregoing (i) and (ii), on behalf of the Company, return to the Members (other than the SNR Members) their respective amounts of equity capital previously provided by them to the Company; provided that if the License Company’s applications for all licenses for which it was the Winning Bidder (i.e., long-form applications) are dismissed by the FCC or the authorizations for which the License Company was the Winning Bidder and that were granted to, and are still held by, the License Company or any of its Subsidiaries are cancelled by the FCC as the result of a breach by SNR of its representations or covenants in Section 11.3(a), then the SNR Members shall not be entitled to any payment under clause (i)(B) of this Section 8.4.  For the avoidance of doubt, if this Section 8.4 applies, then the rest of this ARTICLE 8 shall not apply.

 

ARTICLE 9

REGISTRATION RIGHT

 

Section 9.1.                                 Registration Right

 

On a single occasion during the *** following the fourteenth (14th) anniversary of the first Initial Grant Date, the SNR Members may elect to cause the Company (a) to convert to a corporation (“Newco”) and (b) subject to the following provisions of this ARTICLE 9, to register for sale in an underwritten public offering (the “Offering”) shares of capital stock of Newco issued to such Members upon conversion, so long as the anticipated gross proceeds to the SNR Members from the Offering are greater than *** in the aggregate.  If the SNR Members make such election, the Members and the Company shall promptly take such steps as may be necessary or desirable to effectuate the provisions of this ARTICLE 9.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 9.2.                                 Right to Purchase—Preliminary Range

 

The underwriters of the Offering (who shall be selected by the SNR Members and shall be reasonably acceptable to American III) will, within *** after delivery of such election, in good faith establish a preliminary range for the price to the public in the Offering.  American III may elect to purchase all, but not less than all, of the Interests of the Company (i.e., prior to the conversion into Newco) then held by the Members other than American III, at a price equal to *** of the midpoint of the preliminary range.  If American III fails to make such election, the Offering will proceed.

 

Section 9.3.                                 Right to Purchase—IPO Price

 

If the final price per share at which shares of capital stock of Newco are to be offered to the public (the “IPO Price”) is lower than the midpoint of the preliminary range by *** or more of the midpoint price, American III may elect, within *** after the determination of the IPO Price (during which time the registration statement shall not become effective), to purchase all, but not less than all, of the Interests of the Company (i.e., prior to the conversion into Newco) then held by the Members other than American III at a price equal to *** of the IPO Price.  If American III fails to make such election, the Members other than American III shall (subject to Section 9.4) have *** to complete the Offering.

 

Section 9.4.                                 Right to Defer the Offering

 

If American III determines that a registration pursuant to this ARTICLE 9 would interfere with any pending or contemplated material acquisition, disposition, financing or other material transaction involving the Company or American III or any of its Affiliates or would require the Company to disclose material information that would otherwise not be disclosed at such time (and such disclosure would be prejudicial to the Company or American III), the Company will defer such registration at the request of American III; provided that the aggregate of all such deferrals shall not exceed *** in any *** period.

 

Section 9.5.                                 Registration Expenses

 

Except as hereinafter provided, all expenses incident to the Company’s performance of or compliance with this ARTICLE 9 shall be borne by the Company.  In addition, the Company shall pay or reimburse the Members participating in the Offering (the “Participating Members”) for the reasonable fees and expenses of one attorney to the Participating Members selected by SNR incurred in connection with a registration pursuant to this ARTICLE 9.  Except as provided in the immediately preceding sentence, each Participating Member shall bear the costs and expenses of any underwriters’ discounts and commissions or other fees, brokerage fees or transfer taxes relating to the Interests in the Company or shares of capital stock of Newco sold by such Member and the fees and expenses of any other attorneys, accountants or other representatives retained by such Member.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 9.6.                                 Registration Procedures

 

If Newco is required to effect the Offering, Newco shall, as promptly as reasonably practicable

 

(a)                                 prepare and file with the SEC a registration statement on an appropriate form, and thereafter use its reasonable best efforts to cause such registration statement to become effective and to remain effective and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until the lesser of (i) such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the Participating Members set forth in such registration statement and (ii) ***; provided that Newco shall, at least *** prior to filing a registration statement or prospectus or any amendment or supplement thereto, furnish to each Participating Member and American III copies of such registration statement or prospectus (or amendment or supplement) as proposed to be filed (including, upon the request of any Participating Member or American III, documents to be incorporated by reference therein) which documents shall be subject to the reasonable review and comments of such Participating Member (and its attorneys) and American III during such *** period and Newco shall not file any registration statement, any prospectus or any amendment or supplement thereto (or any such documents incorporated by reference) containing any statements with respect to such Participating Member to which such Participating Member shall reasonably object in writing or any statements with respect to the Company, the License Company or Newco to which American III shall reasonably object in writing;

 

(b)                                 furnish to American III and each Participating Member and to any underwriter such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act, in conformity with the requirements of the Securities Act, documents incorporated by reference in such registration statement, amendment, supplement or prospectus and such other documents (in each case including all exhibits) as American III or a Participating Member or underwriter may reasonably request;

 

(c)                                  after the filing of the registration statement, promptly notify American III and each Participating Member of the effectiveness thereof and of any stop order issued or threatened by the SEC and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered and promptly notify American III and such Participating Member of such lifting or withdrawal of such order;

 

(d)                                 use its reasonable best efforts to register or qualify all shares held by the Participating Members and other securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as the Participating Members holding a

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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majority of the shares to be included in such registration or the underwriter shall reasonably request, to keep such registration or qualification in effect for so long as such registration statement remains in effect, and take any other action which may be reasonably necessary or advisable to enable the Participating Members to consummate the disposition in such jurisdictions of the securities owned by such Participating Members, except that Newco shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this Section 9.6(d) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

 

(e)                                  use its reasonable best efforts to cause all shares covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Participating Members to consummate the disposition of such shares;

 

(f)                                   furnish to each Participating Member and to each underwriter, if any, a signed counterpart of (i) an opinion of counsel for Newco addressed to such Participating Member and underwriter on which opinion both the Participating Members and such underwriter are entitled to rely and (ii) a “comfort” letter signed by the independent public accountants who have certified Newco’s financial statements included in such registration statement, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the managing underwriter therefor reasonably request.  Newco shall use its commercially reasonable efforts to have such comfort letters addressed to each Participating Member;

 

(g)                                  immediately notify American III and each Participating Member at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and as promptly as practicable under the circumstances prepare and furnish to American III and each such Participating Member a reasonable number of copies of any supplement to or amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

 

(h)                                 make available for inspection by any Participating Member, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any such Participating Member or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of Newco (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and shall cause Newco’s officers, directors

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement.  Each such Participating Member agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be disclosed or used by it as the basis for any market transactions in the securities of Newco or its Affiliates unless and until such information is made generally available to the public.  Each such Participating Member further agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to Newco and allow Newco, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential;

 

(i)                                     use its reasonable best efforts to list all shares covered by such registration statement on any securities exchange or quotation system on which any of Newco’s shares are then listed or traded; and

 

(j)                                    otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

Newco may require each Participating Member to promptly furnish to Newco, as a condition precedent to including such Participating Member’s shares in the Offering, such written information regarding such Participating Member and the distribution of such securities as Newco may from time to time reasonably request in writing.

 

Each Participating Member agrees that upon receipt of any notice from Newco of the happening of any event of the kind described in Section 9.6(g), such Participating Member shall forthwith discontinue such Participating Member’s disposition of shares pursuant to the registration statement relating to such shares until such Participating Member’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 9.6(g) and, if so directed by Newco, shall deliver to Newco (at Newco’s expense) all copies, other than permanent file copies, then in such Participating Member’s possession, of the prospectus and any amendments or supplements thereto relating to such shares current at the time of receipt of such notice.  In the event Newco shall give such notice, Newco shall extend the period during which the effectiveness of such registration statement shall be maintained by the number of days during the period from and including the date of the giving of notice pursuant to Section 9.6(g) to the date when Newco shall make available to the Participating Members a prospectus supplemented or amended to conform with the requirements of Section 9.6(g).

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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ARTICLE 10
 OTHER AGREEMENTS

 

Section 10.1.                          Exclusivity

 

(a)              American III

 

American III’s and its Affiliates’ participation in the Auction shall not be limited in any way by American III’s participation in the Auction through the License Company.  Nothing herein shall be construed or interpreted to limit American III or its Affiliates from participating or not participating in the Auction without an investment in a Designated Entity.

 

(b)              SNR

 

None of John Muleta, SNR, or any Affiliates that any of the foregoing control shall participate directly or indirectly in the Auction (including by providing debt or equity financing or other assistance to a bidder) except as a Member of the Company and through the License Company, or the ownership of up to one percent (1%) of any public company.

 

Section 10.2.                          Confidentiality

 

(a)              Non-Disclosure

 

Each party hereto agrees that it shall, and shall cause each of its Affiliates, and each of its and their respective partners, members, managers, shareholders, directors, officers, employees and agents (collectively, “Agents”) to maintain the confidentiality of all non-public information disclosed to it by the other party or the definitive agreements contemplated herein or through its interest in the Company or the operation of its business or the use or ownership of its assets, by limiting internal disclosure of any such information to those who have an actual need to know such information in connection with the Auction or the transactions contemplated hereby (which shall include disclosure to a party’s attorneys, accountants, potential lenders, lenders, potential investors, investors, financial advisors and consultants), and shall not, without the prior written consent of the disclosing party, use such information other than in connection with the transactions contemplated herein; provided, however, that the confidentiality obligations in this Section 10.2(a) do not apply to information that (i) was or becomes available to the public through no action by the receiving party or (ii) was or becomes available to such receiving party on a non-confidential basis.

 

(b)              Exceptions

 

Notwithstanding Section 10.2(a), any party hereto may disclose the existence and terms of this Agreement and the transactions contemplated hereby (i) to federal and state regulatory agencies in connection with applications for approval of such transactions (or, in the case of any regulated Affiliate of a Member, in connection with audits by the applicable regulatory authorities), including to the FCC as part of any application to participate in the Auction and/or

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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any application for a license or licenses won in the Auction, it being understood and agreed that the contents of such applications are generally available to the public, (ii) to financial institutions in connection with financings of the transactions contemplated hereby and (iii) if counsel for any party advises that a press release or public disclosure is required by Applicable Law or the applicable rules of any stock exchange, then the parties shall use their commercially reasonable  efforts to cause a mutually acceptable press release to be issued, and in all events the party required to make such disclosure shall be free to do so; provided that in each case (other than clause (iii) above and to the extent submitted to the FCC as part of the contents of an application to participate in the Auction or a post-Auction application for licenses on which the License Company is the Winning Bidder) commercially reasonable efforts are used to seek confidential treatment from any such person to whom such information is disclosed and the other parties hereto are notified contemporaneously of such disclosure; provided, further, that the parties acknowledge that the Bidding Protocol constitutes valuable trade secrets of the Company and is extremely sensitive and confidential, and shall not be disclosed by the parties hereto unless disclosure is compelled by regulatory or other legal process and then only upon adequate prior notice to the other party, which party shall have an opportunity to seek an appropriate protective order, and such disclosure shall be made only to the extent necessary to comply with the requirements of the regulatory or legal process under which it is so compelled.

 

Section 10.3.                          Arbitration

 

(a)              Arbitration

 

Except as set forth in Section 5.5(c), any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  Within *** after the commencement of arbitration, each party shall select one person to act as arbitrator and the two selected shall select a third arbitrator within *** of their appointment.  If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association.  The place of arbitration shall be Chicago, Illinois or such other place as the parties may agree.  The arbitrators shall be knowledgeable in the wireless broadband industry and public auctions of FCC licenses.  Notwithstanding the foregoing, if the arbitration is consolidated with a then pending arbitration proceeding pursuant to Section 10.3(d), then the arbitrators and the place of arbitration for such then pending proceeding shall be the arbitrators and place of arbitration hereunder.

 

(b)              Interim Relief

 

Either party may apply to the arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either party also may, without waiving any remedy under this agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the 

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy).

 

(c)               Award

 

The award shall be made within *** of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment.  However, this time limit may be extended by agreement of the parties and the arbitrators if necessary.

 

(d)              Consent to Consolidation of Arbitrations

 

Each party hereto irrevocably consents to consolidating before the same arbitrators any arbitration proceeding under this Agreement with any other arbitration proceedings involving any party hereto that may be then pending or that are brought under the Senior Credit Facility or any other Related Agreement.

 

(e)          Venue

 

Each party hereto irrevocably and unconditionally consents to the exclusive jurisdiction of the courts of the State of Delaware and of the United States District Courts located in the State of Delaware for entering of any judgment on the award rendered by the arbitrators; provided that if such courts do not have jurisdiction to enforce such judgment, then the parties may enter such judgment in any other court having jurisdiction thereof.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Section 10.4.                          Right of First Refusal for Sale of License

 

(a)                                 Subject to Section 10.4(d), if at any time the Company, License Company, or a Subsidiary of the License Company desires to sell or receives and wishes to accept a bona fide written binding offer from a bone fide third party (“Buyer”) for the purchase of one or more licenses by the third party (a “License Offer”), then the Company shall give notice of such License Offer (the “License Offer Notice”) to American III, which notice shall identify the Buyer, enclose a copy of the License Offer and irrevocably offer to American III the right to purchase the subject license(s) at the same purchase price, which must be payable in cash, and on the other terms and conditions as specified in the License Offer; provided that American III shall be entitled to pay for the subject license(s) with instruments of indebtedness to the extent the License Offer contemplates the delivery of instruments of indebtedness; provided further that the License Offer shall not contain any terms or conditions that are commercially unreasonable for American III to accept.  American III may exercise its right to purchase the subject license(s) by notifying Company in writing of its election to purchase within thirty (30) days after the delivery by Company to American III of the License Offer Notice.  If any unjust enrichment payment is due to the FCC under the FCC Rules as a result of the purchase of the subject license(s) by American III, American III shall pay such unjust enrichment payment or reimburse Company for the unjust enrichment payment if Company, the License Company, or a Subsidiary of the License Company is required to pay such unjust enrichment payment.

 

(b)                                 Closing of Purchase

 

If American III duly elects to purchase the subject license(s), the closing of such purchase (the “License Closing”) shall take place on a date agreed to by the Company and American III, but in no event later than thirty (30) days after the later to occur of (i) the issuance of an order, decision, or public notice by the FCC or a duly-authorized bureau or division thereof granting approval of such transaction and (ii) such order, decision, or public notice becoming final and no longer subject to reconsideration, review or appeal, unless finality is waived by American III.  The Company shall deliver to American III such customary instruments of assignment with respect to the subject license(s) as may be reasonably requested by American III to vest in American III all right, title and interest therein.

 

(c)                                  Sale to Third Party

 

If American III fails to exercise its right to purchase the subject license(s), the Company, License Company, or a Subsidiary of the License Company may accept the License Offer and sell the subject license(s) to the Buyer; provided that such sale shall be at a price, and on other terms and conditions, no less favorable than those specified in the License Offer Notice and otherwise in accordance with this Section 10.4.  If such sale is not consummated within ninety (90) days after the expiration of the applicable time periods specified in paragraph (a) above, subject to an automatic extension for up to an additional ninety (90) days to the extent necessary to obtain any required governmental or regulatory approval, including FCC approval, such right to sell shall lapse and the License Offer and subject license(s) shall again be subject to the provisions of this Section 10.4.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(d)                                 Exceptions

 

This Section 10.4 shall not apply, and American III shall have no rights hereunder, with respect to any transfers of licenses solely for the purpose of generating the funds required to satisfy the obligations of the License Company and its Subsidiaries that are then due and payable under the Interest Purchase Agreement.

 

ARTICLE 11
 REPRESENTATIONS AND COVENANTS

 

Section 11.1.                          Representations of the Members

 

Each of the Members represents and warrants to the Company and to each other Member as follows:

 

(a)                                 It is a corporation or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as proposed to be conducted.

 

(b)                                 It has the requisite power and authority to execute, deliver and perform this Agreement and the Related Agreements to which it is a party and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder.

 

(c)                                  This Agreement and the Related Agreements to which it is a party have each been duly executed and delivered by it and constitute its valid and binding obligations, enforceable against it in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and by general principles of equity.

 

(d)                                 Neither its execution, delivery and performance of this Agreement, nor its consummation of the transactions contemplated hereunder or under the Related Agreements to which it is a party, shall (i) conflict with, or result in a breach or violation of, any provision of its constituent documents; (ii) constitute, with or without the giving of notice or passage of time or both, a material breach, violation or default, create a material Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (A) any Applicable Law or license except as may be provided under the FCC Rules or (B) any material note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets or (iii) require any consent which has not already been obtained except as may be required under the FCC Rules.

 

(e)                                  There is no (i) action, claim, proceeding, investigation or controversy pending or, to its knowledge, threatened against it or any of its properties or assets or (ii) judgment, order, award or consent decree outstanding against or affecting it, in either event that could have a 

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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material adverse effect on its ability to consummate the transactions contemplated under this Agreement or to fulfill its obligations hereunder.

 

(f)                                   It shall have on each date it is required to make a capital contribution under this Agreement cash available to it in an amount sufficient to fully fund such capital contribution.

 

Section 11.2.                          Covenants of the Members

 

Each Member shall (a) timely furnish, and shall cause its Affiliates to timely furnish, such information as may be required to be provided under FCC Rules in, or in connection with, the License Company’s short-form application to participate in the Auction and post-Auction long-form application and associated filings; (b) subject to Section 10.1, not participate, and shall cause Affiliates that it controls to refrain from participating, directly or indirectly, in the Auction or in connection with any other actual or potential bidder in the Auction, to the extent such action would disqualify, restrict or limit the License Company from participating fully in the Auction or otherwise would violate any applicable FCC Rule and (c) shall take measures to comply with the FCC’s anti-collusion rule at Section 1.2105 of the FCC Rules and the FCC’s anonymous bidding procedures applicable to the Auction.

 

Section 11.3.                          Representations and Covenants of SNR

 

(a)                                 SNR hereby represents and covenants that:

 

(i)                                     it shall cause the License Company to take all actions necessary and proper under FCC Rules for the License Company to timely file the post-Auction long-form application and any other filings required to be filed under FCC Rules in connection therewith or with the License Company’s short-form application to participate in the Auction; provided that the parties acknowledge and agree that SNR’s ability to comply with this Section 11.3(a)(i) depends upon American III’s compliance with its obligations under this Agreement, the Senior Credit Facility and the other Related Agreements, including Section 2.2 and Section 11.2 of this Agreement and the funding obligations under the Senior Credit Facility, and, if American III breaches its obligations (including under Section 2.2 or Section 11.2 or its funding obligations under the Senior Credit Facility) and such breach results in SNR’s failure to comply with this Section 11.3(a)(i), then SNR shall not be in breach of this Section 11.3(a)(i);

 

(ii)                                  neither it, its Affiliates, its controlling interests, nor Affiliates of its controlling interests (A) is now, or has ever been, in default on any FCC license and (B) is now, or has ever been, delinquent on any non-tax debt owed to any federal agency; and

 

(iii)                               on the Initial Application Date and for so long thereafter as SNR is the Manager and to the extent as may be required under FCC Rules in order for the License Company and its Subsidiaries to retain the Auction Benefits, SNR shall qualify as, and

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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will not knowingly take any action without American III’s consent to cause it to lose the status of, a Qualified Person, as if SNR itself was the applicant (or licensee).

 

(b)                                 SNR shall not permit the amendment, modification or waiver of any provision of its certificate of formation or limited liability company agreement, nor shall SNR enter into any agreement, arrangement or understanding with any Person that could reasonably be expected to result in a material breach or default of any representation or covenant of SNR contained in this Agreement.

 

Section 11.4.                          Failure to Qualify as a Qualified Person

 

(a)                            Failure to Qualify Not Resulting from Change in Applicable FCC Rules

 

(i)                                     Failure to Qualify Not Resulting from Significant Violation.  If the FCC determines that SNR fails to qualify and remain qualified as a Qualified Person as required under Section 11.3(a)(iii), and such failure (i) causes the License Company or any of its Subsidiaries to fail to retain any Auction Benefits and the corresponding unjust enrichment payments in respect thereof have become due and payable to the FCC and (ii) has not resulted from a change in applicable FCC Rules (including through the promulgation of an order or similar action by the FCC) or any action or failure to act by SNR and/or the Company that is a Significant Violation, then SNR agrees that, at the written request of American III, SNR shall pay American III ***, as liquidated damages and not as a penalty.  Such liquidated damages amount shall be payable on demand, subject to the provisions in the next sentence.  Upon the written request of American III requiring SNR to pay such liquidated damages, SNR and the Company shall within five (5) Business Days thereafter file with the FCC an appropriate application for transfer of control of the applicable licenses held by the License Company and its Subsidiaries (and American III shall provide such assistance and information as is reasonably requested by SNR or the Company).  Upon the written request of American III requiring such liquidated damages, following receipt of FCC approval, and subject to and concurrently with American III’s receipt of the aforementioned liquidated damages payment, the Company (or, in the event the Company does not have adequate capital, American III) shall refund capital to the SNR Members in an amount equal to the aggregate amount of equity capital contributions previously made by the SNR Members to the Company, less any prior distributions to the SNR Members (other than tax distributions pursuant to Section 3.1(b)), in full redemption of the SNR Members’ Interests; provided that American III shall promptly pay to the FCC, on behalf of the License Company and its Subsidiaries, an amount equal to the aggregate amount of all payments due to the FCC as a result of, or as a condition to, the redemption of the SNR Members’ Interests (including any unjust enrichment payment) pursuant to American III’s written request.  Following FCC approval of the redemption (if required), SNR shall resign as Manager of the Company, such resignation to be effective on the consummation of the redemption and the appointment of a replacement Manager.  Upon completion of such payment in full redemption, the SNR Members shall automatically cease to be (x) Members of the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Company and (y) parties to this Agreement, in each case without any further action required of the parties hereto.  Such liquidated damages set forth in this Section 11.4(a)(i) shall be the sole and exclusive remedy of American III for any such failure to so qualify under the circumstances described in this Section 11.4(a)(i); provided that such liquidated damages shall not be deemed a remedy for, or otherwise effect the remedies available to, American III with respect to any other breaches by SNR of this Agreement.

 

(ii)                                  Failure to Qualify Resulting from Significant Violation.  If the FCC determines that SNR fails to qualify and remain qualified as a Qualified Person as required under Section 11.3(a)(iii), or that the License Company or any of its Subsidiaries are not qualified to retain the Auction Benefits and such failure (A) causes the License Company or any of its Subsidiaries to fail to retain any Auction Benefits and the corresponding unjust enrichment payments in respect thereof have become due and payable to the FCC, (B) has not resulted from a change in applicable FCC Rules (including through the promulgation of an order or similar action by the FCC) and (C) has resulted from an action or failure to act by SNR and/or the Company that is a Significant Violation, then SNR agrees that, upon the written request of American III, SNR and the Company shall within five (5) Business Days thereafter file with the FCC an appropriate application for transfer of control of the applicable licenses held by the License Company and its Subsidiaries (and American III shall provide such assistance and information as is reasonably requested by SNR or the Company).  Upon the written request of American III (which must be made within 60 days following the date on which the Auction Benefits or portion thereof are forfeited), following receipt of FCC approval, the Company (or, in the event the Company does not have adequate capital, American III) shall refund capital to the SNR Members in an amount equal to the aggregate amount of equity capital contributions previously made by the SNR Members to the Company, less (y) any prior distributions to the SNR Members (other than tax distributions pursuant to Section 3.1(b)), and (z) *** (as liquidated damages and not as a penalty), in full redemption of the SNR Members’ Interests; provided that American III shall promptly pay to the FCC, on behalf of the License Company and its Subsidiaries, an amount equal to the aggregate amount of all payments due to the FCC as a result of, or as a condition to, the redemption of the SNR Members’ Interests (including any unjust enrichment payment) pursuant to American III’s written request.  Following FCC approval of the redemption (if required), SNR shall resign as Manager of the Company, such resignation to be effective on the consummation of the redemption and the appointment of a replacement Manager.  Upon completion of such payment in full redemption, the SNR Members shall automatically cease to be (x) Members of the Company and (y) parties to this Agreement, in each case without any further action required of the parties hereto.  The rights set forth in this Section 11.4(a)(ii) shall be the sole and exclusive remedy of American III for any such failure to so qualify under the circumstances described in this Section 11.4(a)(ii); provided that such rights shall not be deemed a remedy for, or otherwise effect the remedies available to, American III with respect to any other breaches by SNR of this Agreement.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(b)         Failure to Qualify Resulting from Change in Applicable FCC Rules

 

If SNR fails to qualify and remain qualified as Qualified Person as required under Section 11.3(a)(iii) and such failure results from a change in applicable FCC Rules (including through the promulgation of an order or similar action by the FCC), then the parties shall promptly take reasonable steps to enable SNR to so qualify; provided that the relative economic and other rights and benefits expected to be derived by the parties hereunder are preserved.

 

ARTICLE 12
 EXCULPATION AND INDEMNIFICATION

 

Section 12.1.                          No Personal Liability

 

(a)                                 Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Indemnified Person (as defined in Section 12.1(b)) shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being an Indemnified Person.

 

(b)                                 No Member or its Affiliates, or any of their respective shareholders, directors, officers, employees, agents, members, managers or partners (each an “Indemnified Person”) shall be liable, responsible or accountable in damages or otherwise to the Company or to any other Indemnified Person for any act or omission performed or omitted by an Indemnified Person in connection with the transactions contemplated hereby, whether for mistake of judgment or negligence or other action or inaction, unless such action or omission constitutes willful misconduct, gross negligence or bad faith.  Each Indemnified Person may consult with counsel, accountants and other experts in respect of the affairs of the Company and such Indemnified Person shall be fully protected and justified in any action or inaction which is taken in good faith in accordance with the advice or opinion of such counsel, accountants or other experts, provided that they shall have been selected with reasonable care.

 

Section 12.2.                          Indemnification by Company

 

To the maximum extent permitted by Applicable Law, the Company shall protect, indemnify, defend and hold harmless each Indemnified Person for any acts or omissions performed or omitted by an Indemnified Person (in its capacity as such) unless such action or omission constituted willful misconduct, gross negligence or bad faith.  The indemnification authorized under this Section 12.2 shall include payment on demand (with appropriate evidence of the amounts claimed) of reasonable attorneys’ fees and other expenses incurred in connection with, or in settlement of, any legal proceedings between the Indemnified Person and a third party and the removal of any Liens affecting any property of the Indemnified Person.  Such indemnification rights shall be in addition to any and all rights, remedies and recourse to which any Indemnified Person shall be entitled, whether or not pursuant to the provisions of this Agreement, at law or in equity.  The indemnities provided for in this Section 12.2 shall be

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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recoverable only from the assets of the Company, and there shall be no recourse to any Member or other Person for the payment of such indemnities.

 

Section 12.3.                          Notice and Defense of Claims

 

(a)                                 Notice of Claim.  If any action, claim or proceeding (each, a “Claim”) shall be brought or asserted against any Indemnified Person in respect of which indemnity may be sought from the Company under Section 12.2, the Indemnified Person shall give prompt written notice of such Claim to the Company, which may assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Person and the payment of all of such counsel’s fees and expenses; provided that any delay or failure to so notify the Company shall relieve the Company of its obligations hereunder only to the extent, if at all, that it is prejudiced by reason of such delay or failure.  Any such notice shall refer to Section 12.2 and describe in reasonable detail the facts and circumstances of the Claim being asserted.

 

(b)                                 Defense by the Company.  If the Company undertakes the defense of the Claim, the Company shall keep the Indemnified Person advised as to all material developments in connection with any Claim, including by promptly furnishing the Indemnified Person with copies of all material documents filed or served in connection therewith.  The Indemnified Person shall have the right to employ one separate firm per jurisdiction with respect to any of the foregoing Claims and to participate in the defense thereof, but the fees and expenses of such firm shall be at the expense of the Indemnified Person unless both the Indemnified Person and the Company are named as parties and representation by the same counsel is inappropriate due to actual differing interests between them; provided that under no circumstances shall the Company be liable for the fees and expenses of more than one law firm per jurisdiction in any of the foregoing Claims for the Indemnified Persons, taken collectively and not separately.  The Company may, without the Indemnified Person’s consent, settle or compromise any Claim or consent to the entry of any judgment if such settlement, compromise or judgment involves only the payment of money damages by the Company (which payment is made or adequately provided for at the time of such settlement, compromise or judgment) or provides for the unconditional release by the claimant or plaintiff of the Indemnified Person and its Affiliates from all liability in respect of such Claim, does not impose injunctive relief against any of them and does not involve any admissions of wrongdoing by or on behalf of the Indemnified Person or any of his or its Affiliates.  The Indemnified Person shall provide reasonable assistance to the Company in the defense of the Claim.  As between the Company, on the one hand, and the Indemnified Persons, on the other hand, any matter that is not agreed to unanimously by the Indemnified Persons shall be determined by the Indemnified Person that is a party to this Agreement.

 

(c)                                  Defense by the Indemnified Person.  If the Company, within twenty (20) Business Days after receiving written notice of any such Claim, fails to assume the defense thereof, the Indemnified Person shall have the right, subject to the right of the Company at any time thereafter to assume such defense pursuant to the provisions of this ARTICLE 12, to undertake the defense, compromise or settlement of such Claim for the account of the Company.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(d)                                 Advancement of Expenses.  Unless the indemnifying party shall have assumed the defense of any Claim pursuant to Section 12.3(b), the Company shall advance to the Indemnified Person any of its reasonable attorneys’ fees and other costs and expenses incurred in connection with the defense of any such Claim.  Each Indemnified Person shall agree in writing prior to any such advancement, that if it receives any such advance, such Indemnified Person shall reimburse the Company for such fees, costs, and expenses to the extent that it shall be determined that it was not entitled to indemnification under this ARTICLE 12.

 

(e)                                  Contribution.  Notwithstanding any of the foregoing to the contrary, the provisions of this ARTICLE 12 shall not be construed so as to provide for the indemnification of any Indemnified Person for any liability to the extent (but only to the extent) that such indemnification would be in violation of Applicable Law or to the extent such liability may not be waived, modified or limited under Applicable Law, but shall be construed so as to effectuate the provisions of this ARTICLE 12 to the fullest extent permitted by Applicable Law; provided that, if and to the extent that the Company’s indemnification obligation under this ARTICLE 12 is unenforceable for any reason, then the Company hereby agrees to make the maximum contribution permissible under Applicable Law to the payment and satisfaction of the losses of the Indemnified Person, except to the extent such losses are found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the Indemnified Person’s gross negligence or willful misconduct or bad faith.

 

ARTICLE 13
 DISSOLUTION AND TERMINATION

 

Section 13.1.                          No Withdrawal

 

(a)                                 Except as expressly provided in this Agreement or as otherwise provided by Applicable Law, (i) no Member shall have the right, and each Member hereby agrees not, to dissolve, terminate or liquidate the Company, or to resign or withdraw as a Member and (ii) SNR shall have no right, and SNR hereby agrees not to, resign or withdraw as the Manager.

 

(b)                                 If (i) there is any generally applicable change in FCC Rules that is effective prior to the date on which the first round of bidding in the Auction commences and that has the effect of eliminating or substantially reducing the Auction Benefits to be derived by the License Company in the Auction or (ii) the first round of bidding in the Auction has not commenced on or before March 31, 2015, then either Member may at any time prior to the date that is two (2) Business Days prior to the date on which the first round of bidding in the Auction commences, give written notice to the other Member that American III shall withdraw as a Member.  Upon the delivery of such notice, (A) this Agreement and all Related Agreements shall terminate, (B) the provisions of Section 8.4 shall apply, and (C) American III and its Affiliates shall be free (subject to the provisions of Section 10.2 and such other provisions that survive the termination of this Agreement) to participate in the Auction without further obligation to SNR, the Company or the License Company, it being understood that the rights under Section 4 of the Bidding Protocol shall continue in force and effect in accordance with its terms; provided, further, that if the License Company has made the upfront payment to the FCC, and if the License Company

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

65

 

applies as promptly as practicable and permitted under the FCC Rules to obtain a refund from the FCC of all of the Auction funds previously paid by the License Company to the FCC for the Auction, then the amounts due to the SNR Members and American III under (B) above shall not be due until the License Company receives such refund.

 

Section 13.2.                          Dissolution

 

The Company shall be dissolved upon the written determination of the Manager to dissolve the Company, if approved by American III if required pursuant to Section 6.3, but only on the effective date of dissolution specified by the Manager in such determination.

 

Section 13.3.                          Procedures Upon Dissolution

 

(a)                                 General.  If the Company dissolves, it shall commence winding up pursuant to the appropriate provisions of the Act and the procedures set forth in this Section 13.3.  Notwithstanding the dissolution of the Company, until the winding up of the Company’s affairs is completed, the business of the Company and the affairs of the Members, as such, shall continue to be governed by this Agreement.

 

(b)                                 Control of Winding Up.  The winding up of the Company shall be conducted under the direction of the Manager or such other Person as may be designated by a court of competent jurisdiction (herein sometimes referred to as the “Liquidator”); provided that any Member whose breach of this Agreement shall have caused the dissolution of the Company (and the representatives appointed by such Member) shall not participate in the control of the winding up of the Company; and provided, further, that if the dissolution is caused by entry of a decree of judicial dissolution, the winding up shall be carried out in accordance with such decree.

 

(c)                                  Manner of Winding Up.  The Company shall engage in no further business following dissolution other than that necessary for the orderly winding up of business and distribution of assets.  The Company’s maintenance of offices shall not be deemed a continuation of business for purposes of this Section 13.3.  Upon dissolution of the Company, the Liquidator shall, subject to Section 13.3(a), first attempt to distribute assets in kind if it can obtain the consent of each of the Members and, to the extent necessary, the creditors of the Company.  If such consent is not obtained, the Liquidator shall sell the Company or all the Company’s property in such manner and on such terms as it deems fit, consistent with its fiduciary responsibility and having due regard to the activity and condition of the relevant market and general financial and economic conditions.  Each Member shall share Profits, Losses and other items after the dissolution of the Company and during the period of winding up in the same manner as described in ARTICLE 4.

 

(d)                                 Application of Assets.  Upon dissolution of the Company, the Company’s assets (which shall, after the sale or sales referenced in Section 13.3(c), consist of the proceeds thereof) shall be applied as follows:

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

66

 

(i)                                     Creditors.  To creditors, including Members who are creditors, to the extent otherwise permitted by Applicable Law, in satisfaction of liabilities of the Company (whether by payment or the reasonable provision for the payment thereof).  Any reserves set up by the Liquidator may be paid over by the Liquidator to an escrow agent or trustee, to be held in escrow or trust for the purpose of paying any such contingent or unforeseen liabilities or obligations, and, at the expiration of such period as the Liquidator may deem advisable, such reserves shall be distributed to the Members or their assigns in the manner set forth in Section 13.3(d)(ii).

 

(ii)                                  Members.  By the end of the taxable year in which the liquidation occurs (or, if later, within ninety (90) days after the date of such liquidation), to the Members in proportion to the positive balances of their respective Capital Accounts, as determined after taking into account all Capital Account adjustments for the taxable year during which the liquidation occurs (other than those made pursuant to this Section 13.3(d)(ii)).

 

(iii)                               Incorporation.  In the event the Company is incorporated in connection with an IPO or otherwise, each Member shall receive shares in the resulting corporation based on the amount it would receive in liquidation of the Company pursuant to Section 13.3(d)(ii).

 

Section 13.4.                          Deficit Capital Accounts

 

If the Company is “liquidated” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this ARTICLE 13 to the Members who have positive Capital Accounts in compliance with Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).  No Member shall have an obligation to restore a negative Capital Account.

 

Section 13.5.                          Termination

 

Upon completion of the winding up of the Company and the distribution of all Company assets, the Company’s affairs shall terminate and the Members shall cause to be executed and filed any and all documents required by the Act to effect the termination of the Company.

 

ARTICLE 14
 MISCELLANEOUS

 

Section 14.1.                          Entire Agreement

 

This Agreement and the Related Agreements, together with any schedules and exhibits hereto and thereto, constitute the entire agreement and  understanding of the Members with respect to the subject matter hereof and supersede all prior and all contemporaneous oral or written negotiations, proposals, offers, agreements, commitments and understandings relating to such subject matter.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

67

 

Section 14.2.         Amendment; Waiver

 

Neither this Agreement nor any provision hereof may be amended, modified, or waived except in a writing signed by SNR and American III.  No failure or delay of any Member in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce any such right or power, preclude any other further exercise thereof or the exercise of any other right or power.  No waiver by any Member of any departure by any other Member from any provision of this Agreement shall be effective unless the same shall be in a writing signed by the Member against which enforcement of such waiver or consent is sought, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice or similar communication by any Member to another shall entitle such other Member to any other or further notice or similar communication in similar or other circumstances, except as specifically provided herein.

 

Section 14.3.         Successors and Assigns

 

This Agreement may not be assigned without the prior written consent of all the parties hereto and any assignment without such prior written consent shall be null and void and without force or effect; provided that, subject to ARTICLE 7, American III may assign its Interests and this Agreement in whole or in part (provided that American III shall not be relieved of its obligations under this Agreement) to (a) any Affiliate of American III and (b) secured lenders of American III or its Affiliates (as a collateral assignment).  Any such assignment shall be subject to compliance with the requirements of all applicable FCC Rules.

 

Section 14.4.         No Third Party Beneficiaries

 

This Agreement is entered into solely for the benefit of the Members and no Person other than the Members, their respective successors and permitted assigns, their Affiliates to the extent expressly provided herein, and (to the extent provided in ARTICLE 12) the Persons entitled to indemnification pursuant to ARTICLE 12, may exercise any right or enforce any obligation hereunder, and nothing herein expressed or implied will create or be construed to create any other third-party beneficiary rights hereunder.

 

Section 14.5.         Disposition of Interests

 

Upon the sale or other disposition by a Person of all its Interests in the Company, following which such Person and Affiliate thereof is no longer a Member of the Company, this Agreement shall terminate as to such Member and its Affiliates, except as provided in Section 14.3 or Section 14.6.

 

Section 14.6.         Survival of Rights and Duties

 

Termination of this Agreement for any reason, and any Member ceasing to be a Member or a party to this Agreement for any reason, shall not relieve any Member of any liability which

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

68

 

at the time of termination or cessation has already accrued to such Member or which thereafter may accrue in respect of any act or omission prior to such termination or cessation, nor shall any such termination or cessation affect in any way the Related Agreements or the survival of any right, duty or obligation of any Member which is expressly stated elsewhere in this Agreement to survive termination or cessation hereof.  The provisions of ARTICLE 8, Section 10.2, Section 10.3, Section 11.4(a), ARTICLE 12, ARTICLE 13 and ARTICLE 14 shall survive any termination of this Agreement and any Member ceasing to be a Member or a party to this Agreement for any reason.

 

Section 14.7.         Governing Law

 

This Agreement shall be construed in accordance with and governed by the internal laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of law provisions of that or of any other state, all rights and remedies being governed by said laws.

 

Section 14.8.         Specific Performance

 

The Members acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any Member may, in its sole discretion, in an arbitration or a court of competent jurisdiction, to the extent permitted hereunder, apply for specific performance or injunctive or other relief as such arbitration or court may deem just and proper in order to enforce this Agreement or to prevent violation hereof.  Each Member hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by a Member, as the case may be.

 

Section 14.9.         Remedies Cumulative

 

All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity, unless otherwise specifically provided herein, shall not be mutually exclusive and shall be cumulative and not alternative, and the exercise or beginning of the exercise of any one or more right, power or remedy thereof by a Member shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Member hereunder or under Applicable Law or the principles of equity.

 

Section 14.10.      Further Assurances

 

Each Member shall execute and deliver any such further documents and shall take such further actions as any other Member may at any time or times reasonably request, at the expense of the requesting Member, consistent with the provisions hereof in order to carry out and effect the intent and purposes of this Agreement.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

69

 

Section 14.11.      Expenses

 

Unless otherwise specifically agreed to in writing and except as set forth in this Section 14.11, the parties will bear their own costs and expenses (including all legal, accounting and investment expenses) incurred prior to the execution and delivery of the Original Agreement.  Notwithstanding the foregoing, whether or not the Company acquires any licenses, (a) upon the filing with the FCC of the short-form application to participate in the Auction, American III shall pay or reimburse SNR for all of SNR’s, John Muleta’s, and the Private Equity Investor’s reasonable out-of-pocket expenses (including legal fees and expenses) incurred in connection with the transactions contemplated hereby (including any such expenses incurred prior to the date of the Original Agreement) and SNR’s proposed participation in the Auction incurred up to such date, up to a maximum aggregate reimbursement of *** and (b) after such payment or reimbursement, American III shall reimburse SNR, from time to time within thirty (30) days of American III’s receipt of a reasonably detailed invoice from SNR, for all of SNR’s reasonable, documented out-of-pocket expenses (including legal fees and expenses) incurred in connection with the transactions contemplated hereby and SNR’s proposed participation in the Auction incurred from and after the date on which such short-form application is filed with the FCC.  In addition, the Company shall (or shall cause the License Company to) pay directly, or shall (or shall cause the License Company to) reimburse the Members for, the costs and expenses the Members incur (or have incurred) for the benefit of the Company or the License Company in connection with the License Company’s participation in the Auction (e.g., the cost of bidding facilities and related computer hardware and software); provided that such costs and expenses are consistent with the DISH Network Corporation travel policy; provided further that the other Members receive documentation of such expenses in a form reasonably acceptable to such Members.  SNR shall be solely responsible for any investment banking fees and expenses paid or payable to any investment bank hired by SNR.

 

Section 14.12.      Notices

 

All notices or requests that are required or permitted to be given pursuant to this Agreement shall be given in writing and shall be sent by facsimile transmission, or by first-class certified mail, postage prepaid, or by overnight courier service, charges prepaid, to the party to be notified, addressed to such party at the address(es) set forth below, or sent by facsimile to the fax number(s) set forth below, or such other address(es) or fax number(s) as such party may have substituted by written notice (given in accordance with this Section) to the other party.  The sending of such notice with confirmation of receipt of the complete transmission (in the case of facsimile transmission) or receipt of such notice (in the case of delivery by first-class certified mail or by overnight courier service) shall constitute the giving thereof.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

70

 

	
If to be given to SNR or the Company:

SNR   Wireless Management, LLC

SNR   Wireless HoldCo, LLC

John   Muleta

Attn:   John Muleta

 

If by overnight courier service:

200   Little Falls Street, Suite 102

Falls   Church, VA 22046

 

If by first-class certified mail:

200   Little Falls Street, Suite 102

Falls   Church, VA 22046

 

If by facsimile:

Fax   #: (888) 804-0321

 

cc:   Venable LLP

Spear   Tower

One   Market Plaza

Suite 4025

San   Francisco, CA 94105
   Attention: Arthur E. Cirulnick
   Fax: (415) 653-3755
    	
If to be given to American III:

American   AWS-3 Wireless III L.L.C.

Attn:   EVP, Corporate Development

 

 

If by overnight courier service:

 

9601   South Meridian Blvd.

Englewood,   Colorado 80112

 

If by first-class certified mail:

P.O. Box   6655

Englewood,   Colorado 80155

 

If by facsimile:

Fax   #: (303) 723-2020

 

cc:   Office of the General Counsel

American   AWS-3 Wireless III L.L.C.

 

If by overnight courier service:

Same   address as noted above for American III overnight courier delivery

 

If by first-class certified mail:

Same   address as noted above for American III first-   class certified mail delivery

 

If by facsimile:

Fax   #: (303) 723-2050
    

 

Section 14.13.      Severability

 

Subject to Section 14.14, each provision of this Agreement shall be construed as separable and divisible from every other provision and the enforceability of any one provision shall not limit the enforceability, in whole or in part, of any other provision.  In the event that a court or administrative body of competent jurisdiction holds any provision of this Agreement to 

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

71

 

be invalid, illegal, void or less than fully enforceable as to time, scope or otherwise, the parties agree that such provision shall be construed by limiting and reducing it so that such provision is valid, legal, and fully enforceable while preserving to the greatest extent permissible the original intent of the parties; the remaining terms and conditions of this Agreement shall not be affected by such alteration, and shall remain in full force and effect.

 

Section 14.14.      Reformation

 

(a)           If the FCC should (i) change any FCC Rule in a manner that would adversely affect the enforceability of this Agreement; (ii) directly or indirectly reject or take action to challenge the enforceability of this Agreement or (iii) take any other steps whatsoever, on its own initiative or by petition from another Person, to challenge or deny the transactions contemplated hereby, or the eligibility of the License Company to hold any of the licenses won in the Auction or the ability of the License Company to realize the Auction Benefits (each, an “Adverse FCC Action”), then the Members shall promptly consult with each other and negotiate in good faith to reform and amend this Agreement so as to eliminate or amend to make unobjectionable any portion that is the subject of any Adverse FCC Action (each, an “Adverse FCC Action Reformation”).  Furthermore, subject to consent in writing by American III, in the event of an Adverse FCC Action, the Members other than American III (the “Non-American III Members”) shall use their best efforts with respect to all aspects of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American III; provided however that in the event that an element of any such Adverse FCC Action materially adversely impacts the material economic benefits of the Non-American III Members (each, an “Economic Element”), then the Non-American III Members may use commercially reasonable efforts solely with respect to the  Economic Element of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American III.  None of the parties hereto shall take any action that is reasonably likely to contribute to such Adverse FCC Action.

 

(b)           If the FCC should determine that a portion of this Agreement, after having been reformed pursuant to paragraph (a) above, continues to violate FCC Rules, then such provisions shall be null and void and the remainder of this Agreement shall continue in full force and effect, provided that the relative economic and other rights and benefits expected to be derived by the parties hereunder are preserved.

 

Section 14.15.      Relationship of Parties

 

Each Member shall perform services hereunder as an independent contractor and nothing herein shall be construed as creating any other relationship between the Members, except as expressly set forth herein.  Except as specifically provided in this Agreement, nothing in this Agreement will constitute a Member as a legal representative or agent of the other Member, nor will a Member have the right or authority to assume, create or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of the other Member or hold itself out as agent for the other Member, unless otherwise expressly permitted by such other Member.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

72

 

Section 14.16.      No Right to Partition

 

No Member shall have the right to bring an action for partition against the Company.  Each of the Members hereby irrevocably waives any and all rights which it may have to maintain an action to partition Company property or to compel any sale or transfer thereof.

 

Section 14.17.      Construction

 

(a)           The singular includes the plural and the plural includes the singular.

 

(b)           A reference to Applicable Law includes any amendment or modification to such Applicable Law, and all regulations, rulings and other Applicable Law promulgated under such Applicable Law.

 

(c)           A reference to a Person includes its permitted successors and permitted assigns.

 

(d)           Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

 

(e)           The words “include,” “includes” and “including” are not limiting.

 

(f)            Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(g)           A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated.  Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document.  In the event of any conflict between the provisions of this Agreement (exclusive of the Exhibits, Schedules, Annexes and Appendices thereto) and any Exhibit, Schedule, Annex or Appendix thereto, the provisions of this Agreement shall control.

 

(h)           References to any document, instrument or agreement (i) shall include all exhibits, schedules and other attachments thereto; (ii) shall include all documents, instruments or agreements issued or executed in replacement thereof and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, amended and restated, supplemented or otherwise modified from time to time and in effect at any given time.

 

(i)            The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

 

(j)            References to “days” shall mean calendar days, unless the term “Business Days” shall be used.  References to a time of day shall mean such time in New York, New York, unless otherwise specified.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

73

 

(k)           The word “will” shall be construed to have the same meaning and effect as the word “shall.”

 

(l)            Each of the parties hereto acknowledges that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto.

 

(m)          All section and descriptive headings and the recitals herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement, and no construction or reference shall be derived therefrom.

 

Section 14.18.      Counterparts

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument.

 

 [END OF PAGE]
 [SIGNATURE PAGE FOLLOWS]

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

74

 

SIGNATURE PAGE TO LIMITED LIABILITY COMPANY AGREEMENT OF SNR HOLDCO

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
 
    	
MEMBERS:
    
	
 
    	
 
    	
 
    
	
 
    	
AMERICAN AWS-3 WIRELESS III L.L.C.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
SNR WIRELESS MANAGEMENT, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Atelum   LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:John   Muleta
    
	
 
    	
 
    	
Title:Managing   Member
    
	
 
    	
 
    	
 
    
	
 
    	
NON- MEMBER PARTIES:
    
	
 
    	
 
    
	
 
    	
JOHN MULETA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
SNR WIRELESS HOLDCO, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
SNR   Wireless Management, LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Atelum   LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:John   Muleta
    
	
 
    	
 
    	
Title:Managing   Member
    

 

SIGNATURE PAGE TO 
 LIMITED LIABILITY COMPANY AGREEMENT OF SNR HOLDCO

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

SCHEDULE I

 

***

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

EXECUTION COPY

 

EXHIBIT A

 

INSTRUMENT OF ASSIGNMENT

 

INSTRUMENT OF ASSIGNMENT, dated as of                , 20    , by and between SNR WIRELESS HOLDCO, LLC, a Delaware limited liability company (“Assignee”), and SNR WIRELESS MANAGEMENT, LLC, a Delaware limited liability company (“Assignor”).

 

This Instrument of Assignment is being executed and delivered pursuant to Section 8.3 of the Limited Liability Company Agreement of Assignee, dated as of September 12, 2014, by and between American AWS-3 Wireless III L.L.C. and Assignor (as such Agreement may have been or may be hereafter amended, modified, supplemented or amended and restated from time to time in accordance with its terms, the “LLC Agreement”).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth in the LLC Agreement, including the payment of the Put Price as of the date hereof, and other valuable consideration to Assignor, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows (capitalized terms used herein without definition herein having the meanings ascribed to them in the LLC Agreement):

 

1.             Assignment.  Assignor does hereby assign, convey, transfer and deliver (such assignment, conveyance, transfer and delivery being referred to herein as “Delivery”) to Assignee, its successors and assigns all of its right, title and interest in and to, free and clear of Liens (other than restrictions imposed pursuant to the LLC Agreement or under any applicable securities laws and other than Liens under or pursuant to the Senior Credit Facility and the other Loan Documents (as defined therein)), its entire Interest in the Company.

 

2.             Representations and Warranties.  Assignor hereby represents and warrants to Assignee that, subject to the FCC Rules, Assignor (a) is the sole beneficial and record owner of the Interests being delivered by it hereby and has good and marketable title thereto, free and clear of all Liens (other than restrictions imposed pursuant to the LLC Agreement or under any applicable securities laws and other than Liens under or pursuant to the Senior Credit Facility and the other Loan Documents (as defined therein)) and (b) has full power and authority to deliver such Interests without conflict with the terms of any Applicable Law, order or material agreement or instrument binding upon it or its assets.

 

3.             Further Assurances.  Each of the parties agrees that at any time and from time to time upon the request of another party hereto, it shall execute and deliver such further documents and shall take such further actions as such other party may at any time or times reasonably request, at the expense of such requesting party, consistent with the provisions hereof in order to carry out and effect the intent and purposes of this Instrument of Assignment, and to vest in Assignee, and put Assignee in possession of, all the Interests and any portion thereof to be delivered hereunder.

 

4.             Successors.  This Instrument of Assignment is executed by, and shall be binding upon, Assignee and Assignor, and their respective successors and assigns.

 

 

5.             Counterparts.  This Instrument of Assignment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument.

 

6.             Governing Law.  This Instrument of Assignment shall be construed in accordance with and governed by the internal laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of law provisions of that or of any other state, all rights and remedies being governed by said laws.

 

IN WITNESS WHEREOF, the undersigned have caused this Instrument of Assignment to be executed as of the day and year first above written.

 

	
 
    	
SNR WIRELESS MANAGEMENT, LLC  
    
	
 
    	
 
    
	
 
    	
By:
    	
Atelum   LLC, Its Manager 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   John Muleta 
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
SNR WIRELESS HOLDCO, LLC
    
	
 
    	
 
    
	
 
    	
By:   
    	
SNR   Wireless Management, LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Atelum   LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   John Muleta
    
	
 
    	
 
    	
Title:   Managing Member
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

FIRST AMENDMENT TO THE

FIRST AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

SNR WIRELESS HOLDCO, LLC

 

This First Amendment (“Amendment”) to the First Amended and Restated Limited Liability Company Agreement of SNR Wireless HoldCo, LLC (the “Company”) dated as of October 13, 2014 (the “Agreement”) is made and entered into as of February 12, 2015.

 

WHEREAS, in connection with the auction designated by the Federal Communications Commission as Auction Number 97 (the “Auction”), SNR Wireless Management, LLC (“SNR”) and American AWS-3 Wireless III L.L.C. (“American III”), as the members of the Company, desire to modify the schedule and manner in which certain equity contributions are made to the Company as set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein and in the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby amend the Agreement on the terms and conditions contained herein.

 

Notwithstanding Section 2.2(c)(i) and Section 2.2(c)(ii) of the Agreement, the parties hereto have agreed to contribute cash to the equity capital of the Company as follows:

 

1.              On or prior to February 13, 2015, SNR shall contribute $62,801,609.25 in cash to the equity capital of the Company, and American III shall contribute $355,875,785.75 in cash to the equity capital of the Company, which contributions may be made via direct payment to the FCC on behalf of SNR LicenseCo, and shall constitute capital contributions under Section 2.2(c) of the Agreement.  For purposes of Section 8.1 of the Agreement, SNR’s $62,801,609.25 capital contribution shall be deemed to have been deposited on February 11, 2015.

 

2.              On or prior to March 2, 2015, SNR shall contribute $20,443,288.31 in cash to the equity capital of the Company, and American III shall contribute $115,845,300.44 in cash to the equity capital of the Company, which contributions may be made via direct payment to the FCC on behalf of SNR LicenseCo, and shall constitute capital contributions under Section 2.2(c) of the Agreement.  For purposes of Section 8.1 of the Agreement, SNR’s $20,443,288.31 capital contribution shall be deemed to have been deposited on February 11, 2015.

 

3.               SNR and American III hereby ratify the $9,270,000.00 capital contribution made by SNR on October 14, 2014 and the $52,530,000.00 capital contribution made by American III on October 15, 2014, both via direct payment to the FCC on behalf of the License Company, as capital contributions under Section 2.2(b) of the Agreement.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

4.              Terms used herein without definition shall have the meanings set forth in the Agreement.  Except as specifically agreed and amended hereby, the Agreement remains in full force and effect.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

EXECUTION COPY

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

 

	
 
    	
MEMBERS:
    
	
 
    	
 
    
	
 
    	
AMERICAN AWS-3 WIRELESS III L.L.C.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
SNR WIRELESS MANAGEMENT, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Atelum   LLC, Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   John Muleta
    
	
 
    	
 
    	
Title:   Managing Member
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.Exhibit 10.5

 

Management Services Agreement

 

By and Between

 

AMERICAN AWS-3 WIRLESS II L.L.C.

 

and

 

NORTHSTAR WIRELESS, LLC

 

September 12, 2014

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

MANAGEMENT SERVICES AGREEMENT

 

This MANAGEMENT SERVICES AGREEMENT (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into this 12th day of September 2014 (the “Effective Date”), by and between AMERICAN AWS-3 WIRELESS II L.L.C., a Colorado limited liability company (“American II”), and NORTHSTAR WIRELESS, LLC, a Delaware limited liability company (the “License Company”).  Individually, each of American and the License Company is a “Party” and collectively they are “Parties.”

 

RECITALS

 

WHEREAS, the License Company is participating in the Auction and the related Auction Process;

 

WHEREAS, in the event that the License Company is a Winning Bidder in the Auction, the Parties intend that American II will provide management services with respect to the network build-out and operation of the License Company Systems;

 

WHEREAS, the License Company desires to enter into an arrangement for the management of the build-out and operation of the License Company Systems, at all times subject to the License Company’s oversight, review, supervision and control; and

 

WHEREAS, American II desires to provide such management services for the License Company Systems pursuant to the terms set forth in this Agreement.

 

NOW THEREFORE, in consideration of the mutual promises contained herein, the Parties hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

1.1                               Definitions

 

For purposes of this Agreement, and in addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

 

“ADA” shall have the meaning set forth in Section 17.1.

 

“Adverse FCC Action” shall have the meaning set forth in Section 17.22(a).

 

“Adverse FCC Action Reformation” shall have the meaning set forth in Section 17.22(a).

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

2

 

“Affiliate” shall mean, with respect to a Person, any other Person that either directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with such Person at any time during the period for which the determination of affiliation is being made; provided, however, that for purposes of this Agreement, EchoStar Corporation and EchoStar Corporation’s direct and indirect subsidiaries will not be considered or deemed to be Affiliates of American II.  For the avoidance of doubt, for purposes of this Agreement, American II is not an Affiliate of the License Company.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Allocated Costs” shall have the meaning given in Section 7.1(a)(ii).

 

“American II” shall have the meaning set forth in the preamble.

 

“Applicable Law” means with respect to any Person, any federal, state, local or foreign law, statute, ordinance, rule, regulation, Judgment, order, injunction or decree or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether in effect as of the date of execution of this Agreement or thereafter, and in each case as amended, applicable to such Person or its Affiliates or their respective assets, including the FCC Rules.

 

“Auction” means the forthcoming auction of licenses to use spectrum in the 1695-1710 MHz (“Unpaired Block”) and 1755-1780/2155-2180 MHz (“Paired Block”) bands in an auction designated by the FCC as Auction Number 97 and that is currently scheduled by the FCC to begin on November 13, 2014, as the same may be rescheduled or modified by the FCC.

 

“Auction Benefits” means the eligibility of the License Company and its Subsidiaries to hold any of the Licenses for which the License Company is the Winning Bidder in the Auction and the ability of the License Company and each of its Subsidiaries to realize the twenty five percent (25%) Bidding Credits that it derives from its status as a Qualified Person without the payment of unjust enrichment penalties with respect to such Bidding Credits.

 

“Auction Process” means the process and procedure through which those licenses being auctioned by the FCC in the Auction are being offered to qualified bidders commencing with preparation and filing of FCC Form 175 for the Auction through the award of any License for which the License Company is the Winning Bidder.

 

“Bidding Credit” means, with respect to any License for which License Company was the Winning Bidder in the Auction, an amount equal to the excess of the gross winning bid placed in the Auction by License Company for such License over the net winning bid placed in the Auction by License Company for such License.

 

“Breach Notice” shall have the meaning set forth in Section 10.2(a)(i).

 

“Build-Out” means the construction of a fixed or mobile wireless system in accordance with Applicable Law, including the FCC Rules.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

3

 

“CALEA” means the Communications Assistance for Law Enforcement Act of 1994 (47 U.S.C. § 1001 et seq.).

 

“Claim” shall have the meaning set forth in Section 13.1.

 

“Construction Group” shall have the meaning set forth in Section 9.1(b).

 

“Construction Plan” shall have the meaning set forth in Section 9.1(d).

 

“Construction Requirement” means those requirements of 47 C.F.R. Section 27.14(s) that must be satisfied by one holding a license that was offered in the Auction prior to the expiration of the initial term of such license.

 

“Construction Schedule” shall have the meaning set forth in Section 9.1(b).

 

“Control” (including the correlative meanings of the terms “Controlled by,” “Controlling” and “under Common Control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of Voting Securities, by contract or otherwise.

 

“Credit Agreement” means the Credit Agreement by and among the License Company, Northstar Spectrum, LLC, and American II, of even date herewith, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.

 

“Economic Element” shall have the meaning set forth in Section 17.22(a).

 

“Effective Date” shall have the meaning set forth in the preamble.

 

“Equity Interests” means capital stock, partnership interests, limited liability company interests or other ownership or beneficial interests of any Person.

 

“Failed Services” shall have the meaning set forth in Section 10.3.

 

“FCC” means the Federal Communications Commission or any successor agency or entity performing substantially the same functions.

 

“FCC Rules” means the Communications Act of 1934, as amended by, inter alia, the Telecommunications Act of 1996, codified at 47 U.S.C. § 151 et seq., as it may be amended in the future, including the rules and regulations established by the FCC and codified in Title 47 of the Code of Federal Regulations, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time hereafter, and effective orders, rulings, and public notices of the FCC.

 

“Final Order” means an order as to which the time for filing a request for administrative or judicial relief, or for instituting administrative review sua sponte, shall have expired without

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

4

 

any such filing having been made or notice of review having been issued; or, in the event of such filing or review sua sponte, as to which such filing or review shall have been disposed of favorably to the order and the time for seeking further relief with respect thereto shall have expired without any request for such further relief having been filed.

 

“Fiscal Year” shall have the meaning set forth in Section 6 of the License Company LLC Agreement.

 

“GAAP” means generally accepted accounting principles as used in the United States by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants, as in effect from time to time.

 

“Governmental Authority” shall mean any government or political subdivision thereof, whether domestic or foreign, including any national, state, regional, provincial, county, city, municipal, local or other governmental department, ministry, commission, board, bureau, agency, regulatory body or authority, instrumentality, judicial or administrative body, having jurisdiction over the matter or matters in question, including the FCC.

 

“Indemnified Party” shall have the meaning set forth in Section 13.1.

 

“Indemnifying Party” shall have the meaning set forth in Section 13.1.

 

“Independent Contractor” means a Person unaffiliated with American II who provides services involved in the Build-Out or operation of the License Company Systems.

 

“Initial Application Date” means September 12, 2014.

 

“Initial Grant Date” means, with respect to any License for which the License Company is the Winning Bidder, the date on which such License is granted by the FCC as set forth on the face of such License.

 

“Intellectual Property” means any patents, patent applications, copyrights, trade secrets, software, domain names, and domains (e.g., top level domains) and associated trade dress, but specifically excludes Trademarks.

 

“LLC Agreement” means that certain Limited Liability Company of Northstar Spectrum, LLC between Northstar Manager, LLC and American II of even date herewith, as amended, amended and restated, supplemented or otherwise modified from time to time.

 

“License” means any license (a) issued by the FCC to the License Company for which the License Company is the Winning Bidder in the Auction or (b) any other license issued by the FCC (i) now to the License Company or any of its Subsidiaries or (ii) hereafter held by the License Company or any of its Subsidiaries.

 

“License Company” shall have the meaning set forth in the preamble.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

5

 

“License Company LLC Agreement” means the Limited Liability Company Agreement of the License Company entered into as of September 12, 2014.

 

“License Company Market” shall have the meaning set forth in Section 9.1(a).

 

“License Company System(s)” means the fixed or mobile wireless system(s) licensed to, constructed and operated by the License Company and/or any of its Subsidiaries or to be constructed and operated, by the License Company’s Subsidiaries for the purpose of providing service authorized under a License or Licenses in each of the License Company Markets.

 

“License Payment Date” means the date by which the post-Auction down payment on any license for which the License Company was the Winning Bidder must be made.

 

“Market” means the geographic area(s) in which a Person is authorized to provide fixed or mobile wireless service under a license issued by the FCC.

 

“Meet and Confer Period” shall have the meaning set forth in Section 10.2(a)(i).

 

“Non-American II Members” shall have the meaning set forth in Section 17.22(a).

 

“Out-of-Pocket Expenses” shall have the meaning given in Section 7.1(a)(i).

 

“Parent Company” means Northstar Spectrum, LLC, a Delaware limited liability company.

 

“Party” or “Parties” shall have the meaning set forth in the preamble.

 

“Person” means any individual, corporation, partnership, firm, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, estate, incorporated or unincorporated organization, Governmental Authority or other entity.

 

“Proprietary Information” means information of a confidential and proprietary nature that a Party has the right to possess, and that the Party maintains in confidence.

 

“Qualified Person” means a Person that qualifies as a “very small business” under the terms of FCC Rules applicable to the Auction in effect on the Initial Application Date, including but not limited to Sections 1.2110(b)(1) and 27.1106(a)(2) of the FCC Rules in effect on the Initial Application Date.

 

“Shared Services” means the platforms and services listed in Exhibit A attached hereto, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.

 

“Subscribers” means the Persons subscribing to fixed or mobile wireless services offered by the applicable provider.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

6

 

“Subsidiary” of any Person means any other Person with respect to which either (i) more than fifty percent (50%) of the interests having ordinary voting power to elect a majority of the directors or individuals having similar functions of such other Person (irrespective of whether at the time interests of any other class or classes of such Person shall or might have voting power upon the occurrence of any contingency) or (ii) more than fifty percent (50%) of the Equity Interests of such other Person is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Subsidiary Guarantees” shall have the meaning set forth in Section 17.24.

 

“Subsidiary Guarantor” shall have the meaning set forth in Section 17.24.

 

“Supervising Officer” shall have the meaning set forth in Section 6.1.

 

“Systems Manager(s)” shall have the meaning set forth in Section 5.1(a).

 

“Technical Services Plan” shall have the meaning given in Section 9.1(f).

 

“Telecommunications Carrier” shall have the meaning set forth in the FCC Rules.

 

“Trademark License Agreement” means the Trademark License Agreement between the License Company and DISH Network L.L.C. of even date with this Agreement, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

“Trademarks” means trademarks, service marks, trade names, logos, and brands.

 

“Voting Securities” means Equity Interests of a Person having the right to vote generally in the election of the directors (or persons performing equivalent functions) of such Person.

 

“Winning Bidder” shall mean a Person who is the winning bidder in the Auction for a License offered by the FCC therein (a) as set forth in the FCC’s post-Auction public notice identifying Auction winning bidders or (b) by virtue of having accepted the FCC’s offer of a License for the amount of its final Auction net bid therefore following the default of the winning bidder for that License described in clause (a) of this definition.

 

ARTICLE II.

 

OBLIGATIONS OF MANAGER/OPERATION OF SYSTEM

 

2.1                               General

 

American II shall, in accordance with directions and guidance from the License Company and subject to the limitations on American II’s authority described in ARTICLE IV, build-out,

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

7

 

manage and operate the License Company Systems.  To this end, American II shall provide or, as agent of the License Company and its Subsidiaries, shall arrange for (a) administrative, accounting, billing, credit, collection, insurance, purchasing, clerical and such other general services as may be necessary to administer the License Company Systems; (b) operational, engineering, construction, maintenance, repair and such other technical services as may be necessary to complete the Build-Out and operate the License Company Systems; (c) marketing, sales, advertising and such other promotional services as may be necessary to market the products and services of the License Company Systems; provided that the License Company shall determine the nature and type of services offered using the License Company Systems, the terms upon which the License Company Systems’ services are offered, and the prices charged for its services; and (d) subject to Section 4.1 and Section 4.2(b)(ii), and as requested by the License Company, assistance in the preparation of filings with regulatory authorities and in the negotiation of transactions with respect to the Licenses.  Without limiting the foregoing, American II’s management services provided under this Agreement also shall include the Shared Services described on Exhibit A attached hereto.  The License Company shall compensate American II for the build-out, management and operation of the License Company Systems, including the Shared Services, in accordance with the terms of ARTICLE VII of this Agreement.

 

2.2                               Specific Responsibilities

 

American II shall, in accordance with directions and guidance from, and in consultation with, the License Company and in accordance with the License Company’s annual business plan and budget, and in all cases subject to the limitations on American II’s authority described in ARTICLE IV, supervise, directly or through agents or subcontractors, the day-to-day build-out and operation of the License Company Systems, and supervise additional activities integral to the operation of the License Company Systems, such as:

 

(a)                                 negotiating, as agent for the License Company and its Subsidiaries, such agreements as may be necessary for the provision of services, supplies, office or other types of space, utilities, insurance, concessions and the like;

 

(b)                                 implementing plans for the construction of the License Company Systems in accordance with the Technical Services Plan to be developed in consultation with the License Company;

 

(c)                                  implementing promotional programs, including the negotiation, as agent for the License Company and its Subsidiaries, of resale and/or agency arrangements;

 

(d)                                 implementing mechanisms and systems for billing for the products and services provided by the License Company Systems or entering into arrangements to procure on behalf of the License Company and its Subsidiaries such billing mechanisms and systems;

 

(e)                                  implementing plans for the maintenance of the License Company Systems and for monitoring the performance of the License Company Systems;

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

8

 

(f)                                   implementing sales and marketing plans for the services to be provided by the License Company Systems, including arrangements for roaming agreements, retaining necessary sales personnel and technical support for sales operations, and arranging for appropriate marketing vehicles for the sale of the License Company’s services and associated equipment; and

 

(g)                                  subject to Section 4.1 and Section 4.2(b)(ii), assisting the License Company and its Subsidiaries in the preparation of filings, applications, reports and other matters with Governmental Authorities.

 

2.3                               Service

 

American II shall inform the License Company of any services that American II recommends be offered using the License Company Systems, and, at the reasonable request of the License Company, American II shall evaluate and present its recommendations regarding any other service that may be offered using the License Company Systems.  The License Company, at its sole discretion, shall decide whether to cause the License Company Systems or a portion of them to participate in any such plans.

 

2.4                               Performance Standards

 

American II and the License Company shall, promptly following the Effective Date and on such periodic basis thereafter as the Parties may agree, develop performance standards to which American II shall conform in performing its obligations under this Agreement.  The performance standards shall include such measurement elements as are standard in the industry, modified or adjusted as appropriate for the specific Markets for which the License Company or any of its Subsidiaries holds Licenses.  The quality of the products and services offered by the License Company and its Subsidiaries shall be at least as high as the quality of similar products and services provided by a majority of the fixed or mobile wireless systems owned, controlled or operated by American II and its Affiliates.  American II and the License Company shall jointly review these standards periodically, and American II shall recommend to the License Company such modifications to the standards as may be viewed by American II to be appropriate so that the License Company Systems are competitive with other fixed or mobile wireless operators in the Market and nationwide.

 

ARTICLE III.

 

SEPARATENESS COVENANTS

 

3.1                               Separateness Covenants

 

(a)                                 The License Company and each Subsidiary Guarantor shall, and each shall cause each of its Subsidiaries to, (i) to the extent that such entities have one or more deposit accounts, each maintain their own deposit account or accounts, separate from the accounts of

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

9

 

American II and its Subsidiaries and joint ventures, with commercial banking institutions and (ii) not commingle their funds with those of American II or any of its Subsidiaries or joint ventures.

 

(b)                                 The License Company and each Subsidiary Guarantor shall, and each shall cause each of its Subsidiaries to, maintain separate addresses from the addresses of American II and its Subsidiaries and joint ventures, or to the extent the License Company or any of its Subsidiaries may have offices in the same location as American II or any of its Subsidiaries or joint ventures, to maintain a fair and appropriate allocation of overhead costs among them, with each such entity bearing its fair share of such expense.

 

(c)                                  The License Company and each Subsidiary Guarantor shall, and each shall cause each of its Subsidiaries to, (i) each maintain its separate status as a limited liability company and (ii) each conduct its affairs in accordance with its certificate of formation and limited liability company agreement and observe all necessary, appropriate and customary company formalities, including, but not limited to, holding all regular and special members’ and managers’ meetings appropriate to authorize company action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts, to the extent applicable;

 

(d)                                 The License Company and each Subsidiary Guarantor shall not, and each shall not permit any of its Subsidiaries to, (i) assume or guarantee any of the liabilities of, or pledge any of its assets as security for the liabilities of, American II or any of its Subsidiaries or joint ventures or (ii) hold out the credit of American II or any of its Subsidiaries or joint ventures as being able to satisfy the obligations of the License Company or any of its Subsidiaries (which shall be deemed not to refer to any disclosure by the License Company or any of its Subsidiaries of any capital contributions or loans that American II or any of its Subsidiaries is required to make to the License Company or any of its Subsidiaries or of any other obligations that American II or any of its Subsidiaries is required to perform for the benefit of the License Company or any of its Subsidiaries), except with respect to any guarantees or assumptions of indebtedness or other liabilities that have been expressly agreed to by American II or any of its Subsidiaries in writing;

 

(e)                                  The License Company and each Subsidiary Guarantor shall not, and each shall cause each of its Subsidiaries not to, authorize the use of its name or trademarks or service marks by American II or any of its Subsidiaries or joint ventures, except pursuant to a written license agreement;

 

(f)                                   The License Company and each Subsidiary Guarantor shall not, and each shall not permit any of its Subsidiaries to, except as permitted under the Trademark License Agreement, conduct its own business with suppliers of goods and services, lenders or purchasers of securities in the name of American II or any of its Subsidiaries or joint ventures; and

 

(g)                                  If the License Company or any Subsidiary Guarantor obtains actual knowledge that American II or any of its Subsidiaries or joint ventures has represented or

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

10

 

indicated to any supplier of goods and services to, lender to or purchaser of securities of the License Company or any of its Subsidiaries that the credit of American II or any of its Subsidiaries or joint ventures is available to satisfy the obligations of the License Company or any of its Subsidiaries (which shall be deemed not to refer to any disclosure by American II or any of its Subsidiaries or joint ventures of any capital contributions or loans that American II or any of its Subsidiaries is required to make to the License Company or any of its Subsidiaries or of any other obligations that American II or any of its Subsidiaries is required to perform for the benefit of the License Company or any of its Subsidiaries), other than with respect to any guarantees or assumptions of indebtedness or other liabilities that have been expressly agreed to by American II or any of its Subsidiaries in writing, then such Party shall, and shall cause each of its Subsidiaries to, provide written notice to any person to whom such representation or indication was made, to make clear that the credit of American II and its Subsidiaries and joint ventures is not available to satisfy the obligations of the License Company or any of its Subsidiaries, other than with respect to any guarantees or assumptions of indebtedness or other liabilities that have been expressly agreed to by American II or any of its Subsidiaries in writing.

 

ARTICLE IV.

 

AUTHORITY

 

4.1                               General

 

It is the Parties’ express intention, understanding and agreement that Northstar Spectrum, LLC, as the sole member and manager of the License Company, shall retain authority and ultimate control over the day-to-day operations of the License Company and its Subsidiaries; the determination and implementation of policy and business strategy; the preparation and filing of all materials with the FCC and other Governmental Authorities; the employment, supervision and dismissal of all personnel providing services under this Agreement; the payment of all financial obligations and operating expenses (except for Out-of-Pocket Expenses and Allocated Costs, which shall be reimbursed by the License Company pursuant to ARTICLE VII) and the negotiation and execution of all contracts to be entered into by the License Company or any of its Subsidiaries.  The Parties agree that the License Company and its Subsidiaries shall retain unfettered use of, and unimpaired access to, all facilities and equipment associated with the License Company Systems and shall receive all monies and profits and bear the risk of loss from the operation of the License Company Systems.  Nothing in this Agreement is intended to, nor shall it be construed to, give American II de jure or de facto control over the License Company, its Subsidiaries, the Licenses, or the License Company Systems.  Notwithstanding any other provision in this Agreement, (i) no obligations to third parties (other than American II by virtue of the Subsidiary Guarantees) shall be incurred hereunder by or on behalf of any Subsidiary of the License Company that holds Licenses and (ii) American II shall not cause any of the Subsidiaries of the License Company that hold Licenses to incur any obligation or liability to third parties (other than American II by virtue of the Subsidiary Guarantees) nor shall American II permit any of its agents, representatives or Independent Contractors to do so.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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4.2                               Specific Limitations

 

(a)                                 In addition to those matters elsewhere listed in this Agreement for which the License Company’s prior approval is required, American II shall not have authority to undertake any of the following actions without the License Company’s prior written authority:

 

(i)                                     modify an annual budget, an annual business plan, a Construction Schedule, a Construction Plan or a Technical Services Plan;

 

(ii)                                  without expanding or modifying any limitations of Section 4.2(b)(iii), cause the License Company or any of its Subsidiaries that do not hold Licenses to incur any debt not incurred in the ordinary course of business of the License Company or such Subsidiary;

 

(iii)                               without expanding or modifying any limitations of Section 4.2(b)(iii), enter into contracts or commitments or series of contracts or commitments on behalf of the License Company or any of its Subsidiaries that do not hold Licenses, which individually have a value exceeding One Hundred Thousand Dollars ($100,000) or collectively have a value exceeding Two Hundred Fifty Thousand Dollars ($250,000);

 

(iv)                              without expanding or modifying any limitations of Section 4.2(b)(iii), obligate the License Company or any of its Subsidiaries that do not hold Licenses for any expenses exceeding One Hundred Thousand Dollars ($100,000), except under contracts executed by the License Company or the applicable Subsidiary;

 

(v)                                 bring, prosecute, defend, or settle any legal or equitable action or litigation in the name of the License Company or any of its Subsidiaries or the License Company Systems brought by, against or with respect to the License Company or any of its Subsidiaries or the License Company Systems; or

 

(vi)                              perform its obligations under this Agreement in a manner inconsistent with the applicable annual budget, annual business plan, Construction Schedule, Construction Plan or Technical Services Plan.

 

(b)                                 In no circumstances shall American II have authority to undertake any of the following actions:

 

(i)                                     sell, trade or surrender the Licenses, or attempt to modify the Licenses;

 

(ii)                                  sign or make any filings with the FCC or any other Governmental Authority with respect to any License Company System;

 

(iii)                               cause any of the License Company’s Subsidiaries that hold Licenses to incur any debt (whether or not incurred in the ordinary course of business), enter

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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into contracts or commitments or series of contracts or commitments on behalf of any of the License Company’s Subsidiaries that hold Licenses or otherwise obligate any of such Subsidiaries in any respect, in each such case, with or to any third party other than American II by virtue of the Subsidiary Guarantees; or

 

(iv)                              grant a security interest in or hypothecate any assets of any License Company System, except, other than with respect to Subsidiaries of the License Company that hold Licenses, for purchase money security interests granted in the ordinary course of business and in accordance with the then current annual budget.

 

ARTICLE V.

 

MANAGER’S PERSONNEL

 

5.1                               General

 

(a)                                 American II shall designate one individual in its employ or the employ of its Affiliates, reasonably acceptable to the License Company, to serve as the single point of contact responsible for the performance of American II’s functions and duties under this Agreement with respect to all of the License Company Systems (“Systems Manager”).  American II may change the Systems Manager at its discretion, but any replacement Systems Manager shall be reasonably acceptable to the License Company.  In addition to the Systems Manager, American II may designate individuals in its employ or the employ of its Affiliates to serve as the individual contact representative for the License Company System for each Market or several Markets, and may change these individuals at its discretion and upon written notice to the License Company, but any replacement individual contact representative shall be reasonably acceptable to the License Company.

 

(b)                                 American II shall provide the License Company, upon the Effective Date and on such periodic basis thereafter as the Parties may agree, a list of the individuals employed by American II in management and supervisory positions in connection with the operation and maintenance of the License Company Systems, and shall provide the License Company any such information in American II’s possession about such individuals as the License Company may reasonably require concerning their qualifications to perform the functions assigned or otherwise.

 

(c)                                  The License Company shall have the right, subject to Applicable Law, (i) to require, upon reasonable notice, the replacement of any Systems Manager or any contact representative for any License Company System; (ii) to require American II to reassign any employee such that the employee no longer works on any License Company System or (iii) to reject any personnel proposed by American II as the Systems Manager or contact representative for any License Company System.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(d)                                 American II upon the Effective Date and from time to time thereafter shall provide the License Company with its personnel policies, which policies shall include reasonable provisions to ensure the honesty, integrity and good character of all of the personnel that American II assigns to perform its responsibilities under this Agreement, and shall make such reasonable changes and modifications in those policies with respect to the License Company Systems as the License Company may reasonably request.

 

5.2                               Independent Contractors

 

American II may engage qualified Independent Contractors to perform a specific service or services, other than overall management and supervisory functions, necessary to build-out and operate the License Company Systems; provided that any expenses for such Independent Contractors are subject to the limitations set forth in ARTICLE IV of this Agreement.  Notwithstanding the foregoing, the License Company shall have the right, subject in each case to applicable local, state or federal laws, to require American II to discharge any Independent Contractor performing services under this Agreement, or to bar American II from hiring any specific Independent Contractor to perform services under this Agreement.

 

ARTICLE VI.

 

APPROVALS

 

6.1                               The License Company Supervisor

 

In order to administer the License Company’s oversight, supervision and ultimate control of the License Company Systems, the License Company shall, within thirty (30) days after the release of the Public Notice by the FCC announcing that the License Company is a Winning Bidder, designate an individual to whom American II shall report and from whom American II shall request approvals required under this Agreement (the “Supervising Officer”), unless the Supervising Officer delegates such responsibility to another officer or employee of the License Company.  The License Company may change the individual serving as the Supervising Officer at any time in its sole discretion, after consultation with American II, upon prior written notice to American II.  Where the Supervising Officer delegates the responsibilities under this Section 6.1 to another officer or employee of the License Company, American II may rely on any approvals or consents given by such delegate.

 

6.2                               Time Schedule for Approval

 

(a)                                 The License Company shall notify American II in writing, within ten (10) days after the License Company receives a request for an approval required to be obtained under this Agreement (unless the Parties agree in writing to some other period of time with respect to such request), whether the License Company approves or disapproves the request.  Any disapproval shall include the reasons why the License Company has rejected the request such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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that, to the extent the License Company desires, American II may address the License Company’s concerns.

 

(b)                                 The License Company and American II acknowledge that time may be of the essence in connection with certain filings with Governmental Authorities, including FCC applications, reports and other filings, with respect to the Licenses held by the License Company or any of its Subsidiaries and the License Company Systems.  American II shall be held harmless with respect to any damages to the License Company, its Subsidiaries or the License Company Systems and the inability of American II to perform its obligations under this Agreement resulting from the failure of the License Company or any of its Subsidiaries to make necessary filings with Governmental Authorities with respect to the Licenses held by the License Company or any such Subsidiary and the License Company Systems; provided, however, that American II shall not be held harmless under the terms of this sentence if the failure of the License Company or any such Subsidiary to make any such filings, or to make any such filings in a manner that is full, complete, and accurate, shall have been proximately caused by the actions or inactions of American II.

 

6.3                               Failure to Approve

 

If the License Company rejects a request for approval submitted in writing by American II under this Agreement, American II and the License Company shall consult as to the matter and shall attempt to resolve the matter in a mutually acceptable manner. In the event that the Parties cannot agree, the License Company shall have the right to direct the manner in which the matter will be handled, if at all.

 

ARTICLE VII.

 

COMPENSATION

 

7.1                               Reimbursement of Costs and Expenses

 

(a)                                 Subject to the provisions of Section 7.4, the License Company shall reimburse American II for all Out-of-Pocket Expenses and Allocated Costs incurred by American II in the performance of its responsibilities under this Agreement; provided that any such costs and expenses are subject to the limitations described in ARTICLE IV of this Agreement.

 

(i)                                     American II’s reasonable and documented out-of-pocket expenses actually incurred in the execution and fulfillment of its obligations under this Agreement (“Out-of-Pocket Expenses”) include costs and expenses related to (A) administrative, accounting, billing, credit, collection, insurance, purchasing, clerical and such other general services as may be necessary to administer the License Company Systems; (B) operational, engineering, construction, maintenance, repair and such other technical services as may be necessary to

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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operate the License Company Systems; (C) marketing, sales, advertising and such other promotional services as may be necessary to market the products and services of the License Company Systems; (D) occupancy and (E)  Independent Contractors.  In each case in which American II’s costs and expenses for a particular service are based on American II’s volume, then the Out-of-Pocket Expenses charged to the License Company shall be the average cost per unit provided, taking into account the volume of units for both the License Company Systems and American II’s other fixed or mobile wireless systems (whether such systems are owned or controlled by American II or managed by American II pursuant to a management services agreement or similar agreement), rather than the incremental unit cost of providing such service for the License Company Systems; provided, however, that notwithstanding the foregoing, those Out-of-Pocket Expenses related to the Shared Services described on Exhibit A attached hereto shall be charged to the License Company using the applicable cost allocation methodologies set forth on Exhibit A-1 with respect to such costs and expenses.

 

(ii)                                  With respect to costs for employees of American II who devote all or a portion of their time to performing American II’s obligations under this Agreement, all or a proportionate share, as applicable, of the actual costs of those employees’ salaries, taxes, insurance and benefits shall be allocated to the License Company, and such costs shall be calculated at hourly rates determined on the basis of the individual employees’ annual salaries, bonuses, taxes, insurance and benefits (such costs, the “Allocated Costs”); provided, however, that notwithstanding the foregoing, those Allocated Costs for American II employees related to the Shared Services described on Exhibit A attached hereto shall be allocated to the License Company using the applicable cost allocation methodologies set forth on Exhibit A-1 with respect to such costs and expenses.

 

7.2                               Payments

 

(a)                                 The License Company shall maintain its own bank account(s).  All receipts and profits associated with the operation of the License Company Systems shall be deposited in the License Company’s bank accounts.  All expenses associated with the operation of the License Company Systems (except for Out-of-Pocket Expenses and Allocated Costs, which shall be payable in accordance with Sections 7.2(b) and (c) below) shall be paid from the License Company’s accounts.  There shall be no commingling of the License Company’s and American II’s funds.  The License Company, after consultation with American II, shall determine in the License Company’s sole discretion which, if any, of American II’s employees shall have access to the License Company’s accounts.

 

(b)                                 Following the Effective Date, American II shall, within *** of the last day of each month in which this Agreement is in effect, provide to the License Company a statement of Out-of-Pocket Expenses and Allocated Costs incurred during that month, together with such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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documentation for the Out-of-Pocket Expenses and Allocated Costs as the License Company may reasonably request.  In addition, within *** of the last day of each month in which this Agreement is in effect, American II shall provide to the License Company a statement of total receipts for the License Company Systems during that month.

 

(c)                                  Within ten (10) business days of the date on which the License Company has received an American II statement of Out-of-Pocket Expenses and Allocated Costs, the License Company shall remit to American II payment for all non-disputed charges set forth therein from the License Company’s accounts.  Notwithstanding anything to the contrary in this Agreement, the License Company shall not be in breach of its obligations to timely pay American II under this Agreement if and to the extent that, and for so long as, the License Company’s failure to make such payments is proximately caused by American II’s failure to satisfy its funding obligations under the Credit Agreement or the LLC Agreement.

 

(d)                                 American II shall not be entitled to any set-off or offset of whatsoever nature with respect to any funds collected by American II on behalf of the License Company in its capacity as Manager under this Agreement, except that American II may set-off any payment by any amount that the License Company is obligated to pay to American II, as determined in a court order or pursuant to arbitration in accordance with Section 17.5 of this Agreement.

 

7.3                               Checks

 

The License Company shall sign all checks or wire payment authorizations for non-recurring expenses in excess of Fifteen Thousand Dollars ($15,000) and all checks in excess of Twenty-Five Thousand Dollars ($25,000).  The License Company shall receive copies of all checks written or wire payments sent for the License Company Systems, along with accompanying invoices.

 

7.4                               Disputes

 

If the License Company disputes all or any portion of the amount of Out-of-Pocket Expenses or Allocated Costs claimed by American II on any statement, the License Company shall notify American II in writing before the date on which payment of the subject statement amounts is otherwise due, and the Parties will endeavor to resolve the matter informally between them for *** following the date of such written notice.  If the dispute is not resolved by the Parties informally in that *** period, either Party may invoke the dispute resolution procedures set forth in Section 17.5 of this Agreement.

 

7.5                               Nonpayment

 

(a) Any amounts owed and payable pursuant to this Agreement but not timely paid (unless non-payment is proximately caused by American II’s failure to satisfy its funding obligations under the Credit Agreement or the LLC Agreement), other than amounts withheld on the basis of a bona fide dispute raised under the terms of Section 7.4, and (b) the amount of any overpayment (as determined by the Parties hereto or pursuant to the terms of Section 7.4), in

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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each case shall accrue interest at the lower of (i) *** per annum, compounded quarterly from the date payment was due until the date payment is made, or (ii) the maximum amount permitted by Applicable Law.  Each Party shall also be entitled to recover all reasonable and documented out-of-pocket costs of collection, including reasonable attorneys’ fees and costs, from the other Party.

 

ARTICLE VIII.

 

ACCOUNTING AND REPORTS

 

8.1                               Books and Records

 

American II shall keep or cause to be kept accounts and complete books and records with respect to the build-out and operation of the License Company Systems, in accordance in all material respects with GAAP, consistently applied, showing all costs, expenditures, receipts, revenues, assets and liabilities and all other records necessary, convenient or incidental to recording the financial aspects of operation of the License Company Systems.  The License Company shall provide to American II on a timely basis such information concerning the operation of the License Company Systems pursuant to this Agreement that is in its possession and reasonably requested by American II and that will enable American II to fulfill its duties with respect to the books and records of the License Company Systems.

 

8.2                               Quarterly Statements.

 

As soon as practicable following the end of each fiscal quarter (other than the fourth fiscal quarter), but in any event within thirty (30) days after the end of such quarter, American II shall cause to be prepared and delivered to the License Company, an unaudited consolidated statement of income and unaudited consolidated statement of cash flows for such quarter and an unaudited consolidated balance sheet as of the end of such quarter, for the Parent Company and its Subsidiaries on a consolidated basis, prepared in accordance in all material respects with GAAP and the Parent Company’s accounting and tax practices. These reports shall include a monthly report of significant operating and financial statistics including, to the extent applicable, number of subscribers, subscriber churn statistics, minutes of use, average revenues per subscriber, acquisition costs and capital expenditures statistics and such additional statistics and information that may be reasonably available to American II as the License Company determines to be useful.  These reports shall also include information concerning the status of any applications filed with the FCC and any regulatory developments that might affect the business plan or the License Company Systems.  In addition, within thirty (30) days after the end of each calendar quarter, American II shall prepare and deliver to the License Company a true and accurate net revenue and royalty report as required pursuant to Section 5.2 of the Trademark License Agreement.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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8.3                               Monthly Reports

 

As soon as possible following the end of each calendar month but in any event within thirty (30) days after the end of each month, American II shall cause to be prepared and delivered to the License Company a monthly consolidated operating report for the Parent Company and its Subsidiaries, that shall include significant operating and financial statistics including, to the extent applicable, number of subscribers, subscriber churn statistics, minutes of use, average revenues per subscriber, acquisition costs and capital expenditures statistics and such additional statistics and information that may be reasonably available to American II as the License Company determines to be useful.

 

8.4                               Meetings

 

Representatives of the License Company and American II shall meet periodically to discuss the monthly reports and the status of the operation of the License Company Systems.  During the first twelve (12) months after the Effective Date, such meeting shall be held monthly on or about ten (10) days after the release of the reports required under Section 8.3; thereafter, such meetings shall be held at least every other month.  Such meetings may be conducted by teleconference or similar means.

 

8.5                               Cooperation of American II’s Employees

 

(a)                                 Upon reasonable prior written notice, the License Company may meet at its discretion from time to time during normal business hours with American II’s employees that perform American II’s obligations under this Agreement to discuss the reports and the operation of the License Company Systems.  The employees of American II shall be directed to cooperate with and respond to any inquiries made by the License Company’s designated representatives concerning the operation of the License Company Systems.

 

(b)                                 The System Manager for each of the individual systems shall respond to directions from the Supervising Officer or his or her delegate.  In the event that the System Manager believes that the delegate’s directions are not in the best interests of the License Company or American II, the System Manager shall refer the matter to the Supervising Officer for resolution.  If they cannot resolve the matter, or if the directions of the Supervising Officer are at issue, the System Manager shall refer the matter to the Manager of the License Company for resolution.

 

8.6                               Access to Books and Records

 

The License Company shall have access, at all reasonable times during normal business hours, to the books and records maintained by American II pursuant to Section 8.1 of this Agreement, which shall be kept at the principal offices of American II or such other location as the Parties shall agree.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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8.7                               Audits

 

Within ninety (90) days following the end of each Fiscal Year other than the Fiscal Year ended December 31, 2014, the License Company shall cause the books and records and financial statements of the Parent Company and its Subsidiaries, including with respect to the License Company Systems, to be audited by an independent certified public accountant, who shall render certified audit reports, including an audited consolidated statement of income and an audited consolidated statement of cash flows for such Fiscal Year, and an audited consolidated balance sheet and an audited consolidated profit and loss statement for the preceding Fiscal Year, for the Parent Company and its Subsidiaries on a consolidated basis, prepared in accordance with GAAP.  For the purpose of each such audit, American II shall provide the License Company’s designated certified public accountant with reasonable access to American II employees, and to the books, records, operating data, and similar information concerning the License Company Systems; provided that this Section 8.7 shall not be construed so as to limit the access to which the License Company is entitled under Sections 8.5(a) and 8.6.

 

8.8                               Taxes, Fees and Filings

 

The License Company shall cause all annual federal, state and local tax returns and reviews and audits thereof for the Parent Company and its Subsidiaries to be prepared, conducted, fully paid and filed on a timely basis, except to the extent contested in good faith by appropriate proceedings and for which any reserves required by GAAP have been established.  The License Company shall also pay in a timely manner all other fees and assessments imposed on the License Company or any of its Subsidiaries, including any fees imposed by the FCC, except to the extent contested in good faith by appropriate proceedings and for which any reserves required by GAAP have been established.  The License Company shall cause all required applications and other filings required to be submitted to the FCC by the License Company or any of its Subsidiaries to be filed in a timely manner. American II shall provide the License Company with reasonable support in connection with the timely preparation, filing and any audits of such returns, applications and filings.

 

ARTICLE IX.

 

TECHNICAL SERVICES

 

9.1                               Build-Out

 

(a)                                 The License Company hereby designates American II as the manager of the construction and installation of the License Company Systems to be deployed in each of the Markets in which the License Company or any of its Subsidiaries holds a License (each, a “License Company Market”), including negotiating and implementing arrangements for interconnection with the networks of other Telecommunications Carriers in the License Company Markets.  American II’s performance shall be subject to the review, oversight and direction of the License Company.  Notwithstanding any provision of this Agreement to the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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contrary, if the License Company and American II agree in their respective sole discretion that the License Company Systems shall connect to and utilize any mobile telephone switching equipment owned by American II, then the Parties shall enter into a separate agreement setting forth the rights and responsibilities of the Parties with respect to such switch sharing arrangements.

 

(b)                                 Within *** of the release of the Public Notice by the FCC announcing that the License Company is a Winning Bidder, the License Company and American II shall meet to discuss plans for the construction of the system or systems authorized for use under the subject License or Licenses.  The License Company shall designate one or more individuals to constitute the Construction Group (the “Construction Group”), which, in turn, shall develop in accordance with the directions provided by the License Company, a schedule for the construction and installation of the License Company Systems in each of the License Company Markets, which schedule may, in the discretion of the License Company, provide for the satisfaction of the Construction Requirement applicable to all Licenses within a period to be specified by the License Company, but in no event prior to the date that is thirty-six (36) months after the date of the last Initial Grant Date, and in all events in a timely fashion as may be required by the FCC Rules such that no License is subject to being reclaimed by the FCC and no penalties may be imposed on the License Company, and subject to appropriate extension in the event that the Licenses are subject to any spectrum clearing requirements of the FCC.  The schedule shall include (i) the order in which each of the subject Markets will be built and (ii) the date by which the Markets will be ready for testing and ready for service (“Construction Schedule”). The Construction Schedule shall include appropriate benchmarks for completion of the construction in each of the License Company Markets.   The License Company, at its sole discretion, may request that American II provide information to the Construction Group that may be helpful in its preparation of the Construction Schedule including reports and data, and American II shall provide such information to the extent it is reasonably available.  All members of the Construction Group shall serve at the pleasure of the License Company, and the License Company may modify the composition of the Construction Group, including by removing any member thereof or designating additional individuals to serve thereon, or eliminate the Construction Group altogether (in which case the License Company shall perform the responsibilities of the Construction Group specified herein), all in its sole discretion.

 

(c)                                  Within thirty (30) days of receipt of the Construction Schedule, or as promptly thereafter as practicable, the License Company, in consultation with American II, shall review the Construction Schedule and approve, modify or return the Schedule to the Construction Group for modification in accordance with the License Company’s direction. The Construction Group shall revise the Construction Schedule in accordance with the License Company’s directions; provided that American II shall not be required to satisfy the Construction Requirement for any Licenses at any time prior to the date that is thirty-six (36) months after the date of the last Initial Grant Date, subject to appropriate extension in the event that the Licenses are subject to any spectrum clearing requirements of the FCC or any extension provided by the FCC.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(d)                                 Upon approval of the Construction Schedule, the Construction Group shall develop a construction plan for each License Company Market, which shall be consistent with the Construction Schedule and shall set forth the plans for construction of the specific Market, including (i) the location of the proposed cell sites; (ii) the facilities and vendors to be used to interconnect the cell sites; (iii) the budget for the construction and implementation; (iv) the manner in which the system will be interconnected to the networks of other Telecommunications Carriers and (v) such other specifications as the Construction Group deems to be useful or necessary (each, a “Construction Plan”).  The License Company, at its sole discretion, may request that American II provide information to the Construction Group that may be helpful in its preparation of the Construction Plan including reports and data, and American II shall provide such information to the extent it is reasonably available.  The Construction Plan for each Market shall be submitted to the License Company for its approval in sufficient time for American II to complete construction of the system in that License Company Market in accordance with the Construction Schedule.

 

(e)                                  The License Company, in consultation with American II, shall review each Construction Plan within *** of its submission to the License Company, or as promptly thereafter as is practicable, and approve, modify, or return the Construction Plan to the Construction Group for modification in accordance with the License Company’s direction.  The Construction Group shall resubmit any returned Construction Plan to the License Company for approval within *** of receipt of the License Company’s comments.  Within *** after receipt of the revised Construction Plan, the License Company shall approve or modify the Construction Plan and direct American II to implement the Construction Plan as specified by the License Company.

 

(f)                                   The License Company shall, after consultation with American II, develop a technical services plan for the License Company Markets, which plan will address matters related to national distribution/accounts, billing, customer care, activation, credit checks, handset logistics, home locator record, voicemail, prepaid services, directory assistance, operator services, fees, roaming clearing house fees, interconnect fees, inter-service area fees such that the provision of service is transparent to the customer and standards for coverage, quality of coverage, dropped calls, customer service, and reliability (the “Technical Services Plan”).

 

(g)                                  American II will negotiate, as agent for and on behalf of the License Company and its Subsidiaries, all leases or property interests necessary to construct and install the License Company Systems, including tower sites, transmitter buildings, or similar facilities; provided that no such lease or instrument securing any such property interests shall be effective until approved and executed by the License Company or the applicable Subsidiary.  All property interests, including any licenses or easements in connection with the construction and operation of the License Company Systems shall be held in the name of one of the License Company’s Subsidiaries that does not hold any Licenses.

 

(h)                                 American II will make commercially reasonable efforts to assist the License Company and its Subsidiaries in obtaining discounts from vendors of

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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telecommunications infrastructure, billing services and equipment, as long as American II retains an indirect equity interest in the License Company.

 

9.2                               Roaming Arrangements

 

The terms of roaming arrangements between American II and the License Company and its Subsidiaries shall be commercially reasonable.  American II will negotiate on behalf of the License Company and its Subsidiaries roaming arrangements between the License Company and its Subsidiaries and other wireless telecommunications carriers in each of the License Company Markets.  No such roaming agreement shall be effective until approved and executed by the License Company or the applicable Subsidiary.

 

9.3                               Interconnection Agreements

 

American II will use commercially reasonable efforts to negotiate on behalf of the License Company commercially reasonable interconnection agreements with Telecommunications Carriers in each of the License Company Markets that will assure interconnection to the networks of other Telecommunications Carriers. American II shall administer the interconnection agreements on behalf of the License Company and its Subsidiaries and negotiate such modifications or other arrangements for interconnection as the License Company may direct.  No such interconnection agreement, or modification thereof, shall be effective until approved and executed by the License Company or the applicable Subsidiary.

 

9.4                               Interexchange Service

 

American II shall use commercially reasonable efforts to negotiate with other providers and obtain on behalf of the License Company and its Subsidiaries commercially reasonable interexchange telecommunications services for the License Company and its Subsidiaries and for resale to its customers which will permit the License Company and its Subsidiaries to offer interexchange telecommunications services.  No such agreement shall be effective until approved and executed by the License Company or the applicable Subsidiary.

 

9.5                               Regulatory Compliance of Facilities

 

American II hereby covenants that any equipment, facilities and services provided by American II pursuant to this Agreement, including the attachments hereto, comply or will comply with the applicable requirements of CALEA and the FCC’s rules implementing CALEA and with the applicable rules or standards adopted by the FCC, or other Governmental Authorities, with respect to E-911, number portability, number conservation methodologies and access by Persons with disabilities.

 

9.6                               American II’s Covenant of Workmanlike Quality

 

American II hereby covenants and agrees that it will perform services under this Agreement in accordance with the FCC Rules and with all other Applicable Laws, and that such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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services will be performed in a diligent, professional, commercially reasonably and workmanlike manner, consistent with industry standards for the wireless broadband and communications industry.

 

9.7                               Annual Business Plans and Budgets and Other Information

 

(a)                                 Not later than the date that is ninety (90) days following the end of the Auction or as promptly as practicable thereafter, but in any event prior to the earlier to occur of the first Initial Grant Date and the first anniversary of the License Payment Date, and thereafter not later than the date that is forty five (45) days after the end of each Fiscal Year, the License Company, after consultation with American II, shall prepare and deliver to American II an annual business plan and an annual budget for American II’s activities to be performed under this Agreement (other than those performed under any Construction Schedule or Construction Plan) for the period of the next Fiscal Year (or, in the case of the initial annual business plan and budget, for the period beginning on the date thereof and ending on the last day of the then-current Fiscal Year), which business plan and budget shall set forth in reasonable detail, without limitation, approved items of capital and operating expense for the relevant period for the matters addressed in the Technical Services Plan and for the operation, maintenance, repair and improvement of the License Company Systems and services to be provided therewith.  If the License Company does not deliver an annual business plan and budget to American II before the expiration of the then-effective annual business plan and budget, the annual business plan and budget for that prior period shall govern as to the matters set forth therein until the License Company provides a superseding annual business plan and budget to American II.  The License Company, at its sole discretion, may request that American II provide to the License Company information that may be helpful in its preparation of the initial annual business plan and budget and each subsequent annual business plan and budget, including reports and data, and American II shall provide such information to the extent it is reasonably available.

 

(b)                                 At the same time as it delivers each annual business plan and budget to be furnished under paragraph (a), and at such other times as the License Company deems appropriate, the License Company shall notify American II of the nature and type of services that shall be offered through the License Company Systems, the terms upon which such services shall be offered, and the prices to be charged with respect to such services.

 

ARTICLE X.

 

TERM AND TERMINATION

 

10.1                        Term

 

(a)                           The Agreement shall have an initial term of ten (10) years commencing on the Effective Date and may be renewed for additional terms of two (2) years or less by mutual agreement of the Parties.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(b)                           This Agreement shall terminate automatically without further action by the Parties upon termination of the LLC Agreement pursuant to Section 13.1(b) thereof.

 

10.2                        Termination

 

In addition to their other rights at law or equity, either Party may terminate this Agreement in the following circumstances:

 

(a)                                 The License Company may terminate this Agreement:

 

(i)                                     on no less than thirty (30) days’ prior written notice, if the License Company reasonably believes that there has been a material breach of a material provision of this Agreement by American II which has not been cured; provided, however, that in the event that the License Company believes that it has the right to terminate this Agreement pursuant to this section, it shall first comply with the following procedures:

 

The License Company shall notify American II of the events that it reasonably believes give rise to such termination right (“Breach Notice”) and the Parties shall engage in one or more meetings during a period of thirty (30) days (the “Meet and Confer Period”) beginning on the day American II receives the Breach Notice (with the first such meeting occurring no later than five (5) business days after American II’s receipt of such Notice), in order to in good faith try to determine whether a material breach of a material provision has occurred, and if so, an appropriate manner for correcting such breach or failure.  American II shall take commercially reasonable efforts to remedy promptly any such breach or failure.  In the event such confirmed breach or failure is not cured within thirty (30) days after the end of the Meet and Confer Period, the License Company shall have the right to deliver its notice of termination of this Agreement with respect to such breach or failure.  In the event the Parties are unable to agree as to whether a breach or failure occurred, the License Company shall have the right to commence an action affirming the existence of such breach or failure and may terminate this Agreement only upon receipt of a final arbitral award pursuant to Section 17.5 of this Agreement affirming the existence of such breach or failure.

 

(ii)                                  on thirty (30) days’ prior written notice in the event of a Final Order of the FCC revoking, terminating or canceling a License owned by the License Company or any of its Subsidiaries or refusing to renew a License owned by the License Company or any of its Subsidiaries due to any act of omission or commission by American II;

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(iii)                               on ten (10) days’ prior written notice, in the event American II (A) ceases to do business as a going concern; (B) is unable or admits in writing its inability to pay its debts as they become due; (C) commences or authorizes a voluntary case or other proceeding seeking liquidation, reorganization, suspension of payments or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or fails to pay a substantial portion of its debts as they become due, or takes any corporate action to authorize any of the foregoing or (D) has any substantial part of its property subjected to any levy, seizure, assignment or sale for or by any creditor or governmental agency without such levy, seizure, assignment or sale being released, lifted, reversed, or satisfied within ten (10) days;

 

(iv)                              at will, upon one (1) year’s prior written notice; or

 

(v)                                 in accordance with the provisions of Section 12.5.

 

(b)                                 American II may terminate this Agreement:

 

(i)                                     on thirty (30) days’ prior written notice, if the License Company fails to make a timely payment of undisputed amounts due American II under this Agreement, unless the License Company makes the payment due, plus any interest on such amounts, within the notice period; provided that the License Company shall not be in breach of its obligations to timely pay American II under this Agreement if and to the extent that, and for so long as, the License Company’s failure to make such payments is proximately caused by American II’s failure to satisfy its funding obligations under the Credit Agreement or the LLC Agreement;

 

(ii)                                  on thirty (30) days’ prior written notice, if there is a material breach (other than as described under clause (i) above) of a material provision of this Agreement by the License Company which has not been cured within the notice period; provided that the License Company shall not be in breach of its obligations under this Agreement if and to the extent that, and for so long as, the License Company’s breach of such obligations is proximately caused by American II’s failure to satisfy its funding obligations under the Credit Agreement or the LLC Agreement;

 

(iii)                               on ten (10) days’ prior written notice, in the event that the License Company or any of its Subsidiaries (A) ceases to do business as a going

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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concern; (B) is unable or admits in writing its inability to pay its debts as they become due; (C) commences or authorizes a voluntary case or other proceeding seeking liquidation, reorganization, suspension of payments or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or fails to pay a substantial portion of its debts as they become due, or takes any corporate action to authorize any of the foregoing or (D) has any substantial part of its property subjected to any levy, seizure, assignment or sale for or by any creditor or governmental agency without such levy, seizure, assignment or sale being released, lifted, reversed, or satisfied within ten (10) days; provided that American II may not terminate this Agreement if the License Company fails to satisfy its obligation to pay the Put Price pursuant to and in accordance with Section 2.4 of the Interest Purchase Agreement dated of even date herewith by and among the License Company, American II and Northstar Manager, LLC;

 

(iv)                              in accordance with the provisions of Section 12.5; or

 

(v)                                 on ninety (90) days’ prior written notice (but, in any event, such termination cannot be effective until the termination of the Trademark License Agreement), in the event License Company terminates the Trademark License Agreement or breaches that agreement and American II terminates that agreement in accordance with its terms.

 

10.3                        Remedies in Lieu of Termination.

 

In the event that American II fails to provide any of the services required under this Agreement and fails to cure the non-performance within *** after written notice of its non-performance from the License Company (“Failed Services”), the License Company may take any and all action necessary or reasonably required to cause the Failed Services to be performed, including retaining third parties to provide the Failed Services, or otherwise. In that event, American II shall reimburse the License Company for any and all reasonable charges, fees, costs and expenses incurred by the License Company in obtaining the Failed Services.

 

10.4                        Transition

 

(a)                                 After receipt of written notice of termination, but prior to the effective date of such termination, (i) American II shall continue to perform under this Agreement unless the License Company specifically instructs American II to discontinue such performance and (ii) the Parties hereby agree to cooperate in developing and implementing an orderly and efficient

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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transition plan, to last no longer than six (6) months, that will minimize any adverse effects on the quality and availability of the services the License Company’s and its Subsidiaries’ subscribers receive and will permit the License Company to transition to a new manager for the License Company System(s).  American II hereby agrees, among other things, to (w) provide the new manager with such operational and other information in American II’s possession or control as the new manager may require; (x) to provide the new manager access to the equipment and facilities; (y) to assist in the transfer of such data in American II’s possession or control, including billing and operating information, as may be reasonably necessary to permit the new manager to assume operation of the systems and (z) otherwise assist in a reasonable manner with the License Company and its new manager in effecting an orderly transition that will permit the License Company to continue providing quality service to its subscribers.

 

(b)                                 On the effective date of termination, the License Company shall pay to American II all amounts accrued for Out-of-Pocket Expenses and Allocated Costs that are due and payable prior to the effective date of termination, including reasonable and documented out-of-pocket expenses actually incurred in connection with implementing the transition plan.

 

(c)                                  On the effective date of termination, or before such date if so instructed by the License Company upon reasonable prior written notice, American II shall relinquish to the License Company, or its designees, possession of all property of the License Company Systems and the License Company and its Subsidiaries, including all documents, data and records pertaining to the License Company Systems and all keys, access cards, and other devices that permit access to the License Company Systems.

 

ARTICLE XI.

 

INTELLECTUAL PROPERTY AND TRADEMARKS

 

Nothing in this Agreement shall grant or convey to either Party any rights or license under any present or future Intellectual Property or Trademarks disclosed or arising pursuant to this Agreement.

 

ARTICLE XII.

 

COMPLIANCE WITH LAWS

 

12.1                        Compliance with the FCC Rules

 

The Parties acknowledge that the activities and relationships addressed by this Agreement are subject to Applicable Law, including the FCC Rules.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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12.2                        No Violation

 

Nothing in this Agreement will obligate a Party to take any action that violates Applicable Law. In no event will a Party be obligated to perform any acts or to abstain from performing any act if, in the Party’s reasonable legal and/or business judgment, after consulting with the other Party, performance or non-performance will violate the FCC Rules or any other Applicable Law.

 

12.3                        Preservation of Control

 

Nothing in this Agreement permits, or will be deemed to permit, American II to exercise de facto or de jure control over the License Company or its Subsidiaries or their respective operations.

 

12.4                        Regulatory Submissions

 

In the event that either Party reasonably concludes that it is necessary or advisable to file this Agreement with a Governmental Authority or that a Governmental Authority is required to approve or review this Agreement or the arrangement between the Parties, the other Party will reasonably cooperate in the preparation and filing of any regulatory filings which may be necessary or appropriate, including providing such information as may reasonably be necessary or which is requested by the Governmental Authority. Where one Party believes that information to be filed with a Governmental Authority is proprietary or sensitive business information, the Parties will use commercially reasonable efforts to obtain such confidential treatment from the Governmental Authority as may reasonably be secured.

 

12.5                        Modification or Amendment of this Agreement

 

In the event that a Governmental Authority with jurisdiction over a Party or both Parties or their respective assets or over this Agreement determines that one or more provisions of this Agreement are unlawful, contrary to public policy or otherwise unenforceable, the Parties will negotiate in good faith to amend this Agreement in order to comply with any such applicable regulatory requirements or policies while preserving the business objectives of both Parties.  In the event that the Parties cannot reach agreement as to new or revised provisions that will comply with the applicable regulatory requirements or policies and preserve their business objectives, this Agreement will terminate upon ninety (90) days’ written notice from one Party to the other, subject to the transition provisions of Section 10.4.  Either Party may, without the consent of the other Party, appeal or seek reconsideration of any decision or order which holds one or more provisions of this Agreement unlawful, contrary to public policy or otherwise unenforceable, but such appeal or request for reconsideration will not affect the obligations of the Parties under this Section 12.5 to negotiate in good faith, unless a stay of the decision or order is obtained and the terms and conditions of the stay are acceptable to both Parties.  In such event, the obligations of the Parties to negotiate under this Section 12.5 will attach at such time as the stay is lifted and the adverse order or decision is reinstated or becomes effective or the stay is modified in a manner that a Party reasonably finds unsatisfactory.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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ARTICLE XIII.

 

INDEMNIFICATION

 

13.1                        General

 

Each Party (the “Indemnifying Party”) will indemnify and hold harmless the other Party, including any of its Affiliates, officers, directors, shareholders, employees and agents (the “Indemnified Party”), from and against any and all claims, damages, losses, liabilities whatsoever, including reasonable legal fees and any damages (collectively, “Claims”) arising out of, caused by, related to or based upon a Claim (a) by a third party for physical property damage, personal injury, or wrongful death, whether sounding in tort or contract, claim of defamation, invasion of privacy or similar claim based on any act or omission of the other Party, its employees, agents or contractors in connection with this Agreement or (b) subject to Section 13.4, that the Indemnifying Party’s products or services infringe or violate any copyright, trade secret, trademark or service mark, United States patent or other proprietary right of a third party, except where such Claims arise out of the willful misconduct, gross negligence or fraud of the Party seeking indemnification.

 

13.2                        Indemnification Procedure

 

In any case under this Agreement where one Party has indemnified the other against any Claim, indemnification shall be conditioned on compliance with the procedure outlined below:

 

(a)                                 Provided that prompt notice is given of a Claim for which indemnification might be claimed, unless the failure to provide such notice does not actually and materially prejudice the interests of the Party to whom such notice is to be provided, the Indemnifying Party promptly will defend, contest, or otherwise protect against any such Claim at its own cost and expense. Such notice shall describe the Claim in reasonable detail and shall indicate the amount (estimated, if necessary) of the loss that has been or may be suffered by the Indemnified Party.

 

(b)                                 The Indemnified Party may, but will not be obligated to, participate at its own expense in a defense thereof by counsel of its own choosing, but the Indemnifying Party shall be entitled to control the defense unless the Indemnified Party has relieved the Indemnifying Party from liability with respect to the particular matter.  The Indemnifying Party may only settle or compromise the matter subject to indemnification without the consent of the Indemnified Party if such settlement includes a complete release of all Indemnified Parties as to the matters in dispute.  The Indemnified Party will not unreasonably withhold, delay or condition its consent to any settlement or compromise that requires its consent.

 

(c)                                  In the event that the Indemnifying Party fails to timely defend, contest, or otherwise protect against any such Claim, the Indemnified Party may, but will not be obligated to, defend, contest, or otherwise protect against the same, and make any compromise or settlement thereof and recover the entire costs thereof from the Indemnifying Party, including

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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reasonable attorneys’ fees, disbursements and all amounts paid as a result of such Claim or suit or the compromise or settlement thereof; provided, however, that if the Indemnifying Party undertakes the defense of such matter, the Indemnified Party shall not be entitled to recover from the Indemnifying Party for its costs incurred in the defense thereof other than the reasonable costs of investigation undertaken by the Indemnified Party and reasonable costs of providing assistance.

 

(d)                                 The Indemnified Party shall cooperate and provide such assistance as the Indemnifying Party may reasonably request in connection with the defense of the matter subject to indemnification and in connection with recovering from any third parties amounts that the Indemnifying Party may pay or be required to pay by way of indemnification hereunder.  The Indemnified Party shall take commercially reasonable steps to protect its position with respect to any matter that may be the subject of indemnification hereunder in the same manner as it would any similar matter where no indemnification is available.

 

(e)                                  If and to the extent that any indemnification obligation under this Section 13.2 is unenforceable for any reason, the Indemnifying Party hereby agrees to make the maximum contribution permissible under Applicable Law to the payment and satisfaction of the losses of the Indemnified Party, except to the extent such losses are found in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from any Indemnified Party’s gross negligence or willful misconduct.

 

13.3                        Mitigation of Damages

 

An Indemnified Party shall, to the extent practicable and reasonably within its control and at the expense of the Indemnifying Party, make commercially reasonable efforts to mitigate any damages of which it has adequate notice; provided that the Indemnified Party shall not be obligated to act in contravention of Applicable Law or in contravention of reasonable and customary practices of a prudent person in similar circumstances.  The Indemnifying Party shall have the right, but not the obligation, and shall be afforded the opportunity by the Indemnified Party to the extent reasonably possible, to make commercially reasonable efforts to minimize damages before such damages actually are incurred by the Indemnified Party.

 

13.4                        Claim of Infringement

 

In the case of a Claim of infringement of any Intellectual Property or Trademark right, where a court of competent jurisdiction finds such infringement, the Indemnifying Party will, at its option and expense, use all reasonable efforts either (a) to procure for the Indemnified Party the right to continue to use the product, service or other item as provided for herein; (b) to modify the infringing product, service or other item so that it is noninfringing, without materially altering its performance or function or (c) to replace the infringing product, service or other item with a substantially equivalent noninfringing item.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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ARTICLE XIV.

 

REPRESENTATIONS AND WARRANTIES

 

Each Party hereby represents and warrants to the other Party as follows:

 

14.1                        Organization, Standing and Authority

 

The Party is duly organized, validly existing and in good standing under the laws of the jurisdiction where it is formed; that it has all requisite limited liability company or corporate, as applicable, power and authority to enter into this Agreement and to consummate the transactions contemplated herein; that all acts and other proceedings required to be taken to authorize the execution, delivery and performance hereof and the consummation of the transactions contemplated herein have been duly and properly taken and that this Agreement has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of the Party, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

14.2                        No Violation

 

The execution and delivery by the Party of this Agreement and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not (a) conflict with or result in any violation of any provision of the organizational documents of the Party; (b) conflict with, result in a violation or breach of, or constitute a default, or give rise to any right of termination, revocation, cancellation, or acceleration, under, any material contract, concession or permit issued to the Party, except for any such conflict, violation, breach, default or right which is not reasonably likely to have a material adverse effect on the ability of the Party to consummate the transactions contemplated by this Agreement (c) conflict with or result in a violation of any Applicable Law applicable to the Party or to the property or assets of the Party, except for any such conflict or violation which is not reasonably likely to have such a material adverse effect or (d) violate any existing contractual arrangement to which the Party is a party or give rise to a Claim against any other Party for inducing a breach of contract or interfering with contractual or other rights, or similar Claim.

 

14.3                        Consents and Approvals

 

No consent, approval, license, permit, order or authorization of, registration, declaration or filing with, or notice to, any Governmental Authority is required to be obtained or made by or with respect to any Party in connection with the execution and delivery hereof or the consummation of the transactions contemplated hereby, other than those filings that are necessary in order for the License Company to participate in the Auction Process.  The Parties have or will obtain all necessary consents, approvals, authorizations and permits necessary to perform fully hereunder.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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ARTICLE XV.

 

LIMITATION OF LIABILITY

 

15.1                        Limited Responsibility

 

Each Party will be responsible only for services and facilities which are provided by that Party, its Affiliates, authorized agents, subcontractors, or others retained by such Persons, and no Party will bear any responsibility for the services and facilities provided by the other Party, the other Party’s Affiliates, agents, subcontractors, or other Persons retained by such Persons.  No Party will be liable for any act or omission of another Telecommunications Carrier (other than an Affiliate) providing a portion of a service, unless such Telecommunications Carrier is an authorized agent, subcontractor or other Person retained by the Party providing such service.

 

15.2                        Limitation of Damages

 

Neither Party will be liable to the other Party or any of its Affiliates for any indirect, incidental, consequential or special damages (including damages for harm to business, lost revenues, lost savings, or lost profits suffered by such Party or any of its Affiliates), regardless of the form of action, whether in contract, warranty, strict liability, or tort, including negligence of any kind whether active or passive, and regardless of whether the Parties or their respective Affiliates knew of the possibility that such damages could result.  The Parties (for themselves and their respective Affiliates) hereby release each other and their respective Affiliates, officers, directors, employees, and agents from any such Claim.

 

ARTICLE XVI.

 

CONFIDENTIALITY

 

16.1                        General

 

Each Party will hold in confidence and withhold from third parties (other than as permitted below) any and all Proprietary Information received pursuant to this Agreement, and all Proprietary Information used in the preparation and negotiation of this Agreement. Each Party will use such Proprietary Information only to fulfill its obligations or enforce its rights hereunder and for no other purposes unless the disclosing Party will otherwise agree in writing.

 

16.2                        Obligation to Protect Proprietary Information

 

Each Party will use commercially reasonable efforts to safeguard any Proprietary Information received pursuant to this Agreement from theft, loss or disclosure to others, and to limit access to Proprietary Information to those officers, directors and employees within the receiving Party’s organization, and subcontractors, consultants, financing sources, investors, advisors, attorneys, service providers, business partners and others who reasonably require

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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access in order to accomplish the aforesaid purposes.  The receiving Party will not be liable for unauthorized use or disclosure of any such Proprietary Information if it can establish that the same (i) is or becomes public knowledge or part of the knowledge or literature within the telecommunications industry without breach of this Agreement by the receiving Party; (ii) is known to the receiving Party without restriction as to further disclosure when received; (iii) is independently developed by the receiving Party as demonstrated by written records or (iv) is or becomes known to the receiving Party from a third party who had a lawful right to disclose it without breach of its contractual obligations.  Specific Proprietary Information will not be deemed to be available to the public or in the possession of the receiving Party merely because it is included within more general information so available or in the receiving Party’s possession.

 

16.3                        Judicial or Administrative Proceedings

 

Should the receiving Party be faced with judicial, administrative, legal, regulatory, arbitration, governmental or similar action to disclose Proprietary Information received hereunder, said receiving Party will use commercially reasonable efforts to notify the disclosing Party in sufficient time to permit the disclosing Party to intervene in response to such action.

 

16.4                        Loss or Unauthorized Use

 

The receiving Party agrees promptly to notify the disclosing Party of the loss or unauthorized use or disclosure of any Proprietary Information.

 

16.5                        Nondisclosure Agreements

 

Subject to Section 16.3, each Party will have any third party or Person to whom it provides the Proprietary Information of any other Party agree in writing to be bound to protect such Proprietary Information on the same conditions as set forth herein.

 

16.6                        Termination

 

Upon termination of this Agreement for any reason, the Parties will cease use of all Proprietary Information furnished by any other Party and will, at the direction of the furnishing Party, return or destroy all such Proprietary Information, together with all copies made hereof, except if and to the extent that, and only for so long as, the receiving Party retains a license to use such Proprietary Information.  Upon request, the receiving Party will send the other Party a destruction certificate.

 

16.7                        Irreparable Injury by Disclosure to Competitors

 

Specifically, but without limiting the foregoing, each Party agrees and acknowledges that the disclosure by a Party of any Proprietary Information to any competitor of a Party could cause irreparable harm to such Party, and agrees not to make such a disclosure.  Each Party will have the right to enforce the provision of this Section by injunctive relief, including specific performance. Personnel of one Party or its Affiliates present at the premises of one of the other

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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Parties or its Affiliates will refrain from obtaining access to information that is proprietary to the customers of such other Party or its Affiliates. Such personnel will comply with the other Party’s or its Affiliates’ reasonable measures established to restrict such access.

 

16.8                        Survival of Nondisclosure Obligations

 

The obligations set forth in this ARTICLE XVI will survive the termination of this Agreement for two (2) years.

 

ARTICLE XVII.

 

GENERAL PROVISIONS

 

17.1                        Remedies Cumulative

 

All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity, unless otherwise specifically provided herein, shall not be mutually exclusive and shall be cumulative and not alternative, and the exercise or beginning of the exercise of any one or more right, power or remedy thereof by a Party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Party hereunder or under Applicable Law or the principles of equity.

 

17.2                        Amendment; Waiver

 

Neither this Agreement nor any provision hereof may be amended, modified, or waived except in a writing signed by the Parties.  No failure or delay of any Party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce any such right or power, preclude any other further exercise thereof or the exercise of any other right or power.  No waiver by any Party of any departure by any other Party from any provision of this Agreement shall be effective unless the same shall be in a writing signed by the Party against which enforcement of such waiver or consent is sought, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice or similar communication by any Party to another shall entitle such other Party to any other or further notice or similar communication in similar or other circumstances, except as specifically provided herein.

 

17.3                        Assignment

 

No Party may assign or delegate any of its rights or obligations under this Agreement without the prior written consent of the other Party; provided that (a) American II may subcontract its rights and obligations to an Affiliate without the consent of the License Company, so long as American II remains responsible for compliance with the rights and obligations under this Agreement; (b) American II may assign its rights and obligations without the consent of the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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License Company in connection with a sale of all or substantially all of American II’s assets to the purchaser thereof; (c) American II may assign its rights and obligations to an Affiliate of American II with the consent of the License Company, which consent shall not be unreasonably withheld or delayed, so long as American II remains responsible for compliance with the assigned rights and obligations under this Agreement and (d) American II may assign its rights hereunder to its secured lenders (as a collateral assignment) without the consent of the License Company.  Any assignee shall acknowledge and agree in writing to be bound by the terms hereof.

 

17.4                        Expenses

 

Except as specifically provided herein, each Party hereto shall pay all costs and expenses incurred by it or on its behalf in connection with this Agreement, including the preparation of this Agreement, and the transactions contemplated hereby, including, without limiting the generality of the foregoing, fees, and expenses of its own consultants, accountants, and counsel.

 

17.5                        Arbitration

 

(a)                                 Arbitration

 

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  Within *** after the commencement of arbitration, each Party shall select one Person to act as arbitrator and the two selected shall select a third arbitrator within *** of their appointment.  If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association.  The place of arbitration shall be Chicago, Illinois or such other place as the Parties may agree.  The arbitrators shall be knowledgeable in the broadband industry and auctions of FCC licenses.  Notwithstanding the foregoing, if the arbitration is consolidated with a then pending arbitration proceeding pursuant to Section 17.5(d), then the arbitrators and the place of arbitration for such then pending proceeding shall be the arbitrators and place of arbitration hereunder.

 

(b)                                 Interim Relief

 

Either Party may apply to the arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that Party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy).

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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(c)                                  Award

 

The award shall be made within *** of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment.  However, this time limit may be extended by agreement of the Parties and the arbitrators if necessary.

 

(d)                                 Consent to Consolidation of Arbitrations

 

Each Party irrevocably consents to consolidating before the same arbitrators any arbitration proceeding under this Agreement with any other arbitration proceedings involving any Party that may be then pending or that are brought under the LLC Agreement, the Credit Agreement or the related loan documents, the Trademark License Agreement or, in each case, any related agreements.

 

(e)                                  Venue

 

Each Party hereto irrevocably and unconditionally consents to the exclusive jurisdiction of the courts of the State of Delaware and of the United States District Courts located in the State of Delaware for entering of any judgment on the award rendered by the arbitrators; provided that if such courts do not have jurisdiction to enforce such judgment, then the Parties may enter such judgment in any other court having jurisdiction thereof.

 

17.6                        Entire Agreement; Priority

 

This Agreement, together with any schedules and exhibits hereto and thereto, constitute the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersede all prior and all contemporaneous oral or written negotiations, proposals, offers, agreements, commitments and understandings relating to such subject matters.  However, to the extent there is a conflict between this Agreement and the LLC Agreement, the LLC Agreement will control.

 

17.7                        Counterparts

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument.

 

17.8                        Force Majeure

 

(a)                                 Neither Party will be liable for any delay or failure in performance of any part of this Agreement from any cause beyond its control and without its fault or negligence including acts of nature, acts of civil or military authority, government regulations, embargoes, epidemics, terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, work stoppages, equipment failure, cable cuts, power blackouts, volcanic action, other major environmental disturbances or unusually severe weather conditions. In such event, the Party affected will, upon giving prompt notice to the other Party, be excused from such

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

37

 

performance on a day-to-day basis to the extent of such interference (and the other Party will likewise be excused from performance of its obligations on a day-to-day basis to the extent such Party’s obligations are related to the performance so interfered with).  The affected Party will use commercially reasonable efforts to avoid or remove the cause of nonperformance and both Parties will proceed to perform with dispatch once the causes are removed or cease.

 

(b)                                 Notwithstanding the previous subsection, no delay or other failure to perform will be excused pursuant to this Section (i) by the acts or omissions of a Party’s subcontractors, material men, suppliers or other third persons providing products or services to such Party unless such acts or omissions are themselves the product of a force majeure condition and (ii) unless such delay or failure and the consequences thereof are beyond the reasonable control and without the fault or negligence of the Party claiming excusable delay or other failure to perform.

 

17.9                        Good Faith Performance

 

Each Party will act in good faith in its performance under this Agreement and, in each case in which a Party’s consent or agreement is required or requested hereunder, except as otherwise provided herein, such Party will not unreasonably withhold, delay or condition such consent or agreement.

 

17.10                 Governing Law

 

This Agreement shall be construed in accordance with and governed by the internal laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of law provisions of that or of any other state, all rights and remedies being governed by said laws.

 

17.11                 Insurance

 

At all times during the term of this Agreement, each Party (provided that the License Company will obtain insurance only following the close of the Auction) will keep and maintain in force at its own expense all insurance required by Applicable Law, including workers’ compensation insurance and general liability insurance in an amount to be determined promptly upon the close of the Auction for personal injury or death, property damage and automobile liability with coverage for bodily injury and property damage. Upon request by the other Party, a Party will provide to the other Party evidence of such insurance (which may be provided through a program of self-insurance).

 

17.12                 Joint Work Product

 

This Agreement is the joint work product of the Parties and has been negotiated by the Parties and their respective counsel and will be fairly interpreted in accordance with its terms. In the event of any ambiguities, no inferences will be drawn against either Party.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

38

 

17.13                 Labor Relations

 

Each Party will be responsible for labor relations with its own employees.  Each Party agrees to notify the other Party as soon as practicable whenever such Party has knowledge that a labor dispute concerning its employees is delaying or threatens to delay such Party’s timely performance of its obligations under this Agreement and will minimize impairment of service to the other Party (e.g., by using its management personnel to perform work or by other means) to the extent permitted by Applicable Law.

 

17.14                 No Solicitation

 

During the term of this Agreement and for a period of *** thereafter, no Party or its Affiliates will, directly or indirectly, for itself or on behalf of any other Person, induce or attempt to induce any employee of the other Party or its Affiliates engaged in activities related to this Agreement to leave his or her employment.  However, this Section 17.14 will not restrict a Party or its Affiliates from (i) conducting any bona fide general solicitations for employees (including through the use of employment agencies) not specifically directed at the other Party’s or its Affiliates’ employees, and will not restrict such Party or its Affiliates from hiring any person who responds to any such general solicitation; (ii) soliciting or hiring any such person who has been terminated by the other Party or its Affiliate prior to commencement of employment discussions between such Party or its Affiliates and such person or (iii) soliciting or hiring any such person who, by themselves, has terminated his or her employment with the other Party or its Affiliate at least two (2) months prior to commencement of employment discussions between such Party or its Affiliate.

 

17.15                 [Reserved.]

 

17.16                 Notices

 

All notices or requests that are required or permitted to be given pursuant to this Agreement shall be given in writing and shall be sent by facsimile transmission, or by first-class certified mail, postage prepaid, or by overnight courier service, charges prepaid, to the Party to be notified, addressed to such Party at the address(es) set forth below, or sent by facsimile to the fax number(s) set forth below, or such other address(es) or fax number(s) as such Party may have substituted by written notice (given in accordance with this Section) to the other Party.  The sending of such notice with confirmation of receipt of the complete transmission (in the case of facsimile transmission) or receipt of such notice (in the case of delivery by first-class certified mail or by overnight courier service) shall constitute the giving thereof.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

39

 

	
If to   be given to the Company:
    	
If to   be given to American II:
    
	
c/o   Doyon, Limited
    	
American   AWS-3 Wireless II L.L.C.
    
	
Attn:   Allen M. Todd, General Counsel 
    	
Attn:   EVP, Corporate Development 
    
	
 
    	
 
    
	
If by   overnight courier service:
    	
If by   overnight courier service:
    
	
Doyon,   Limited
   1 Doyon Place, Suite 300
   Fairbanks, AK  99701 2941 
    	
9601   South Meridian Blvd.
   Englewood, Colorado 80112 
    
	
 
    	
 
    
	
If by   first-class certified mail:
   Doyon, Limited
   1 Doyon Place, Suite 300
   Fairbanks, AK  99701 2941
    	
If by   first-class certified mail:
   P.O. Box 6655
   Englewood, Colorado 80155
    
	
 
    	
 
    
	
If by   facsimile:
   Fax #: (907) 459-2075
    	
If by   facsimile:
   Fax #: (303) 723-2020
    
	
 
    	
 
    
	
cc:   Lowenstein Sandler LLP
   1251 Avenue of the Americas
   New York, NY 10020
   Attention:  Michael A.   Brosse
   Fax:  (973) 422-6841
    	
cc:   Office of the General Counsel
   American AWS-3 Wireless II L.L.C.

If by   overnight courier service:
   Same address as noted above for American
   II overnight courier delivery

 

If by   first-class certified mail:

Same   address as noted above for American

II   first- class certified mail delivery 
    
	
 
    	
 
    
	
 
    	
If by   facsimile:
   Fax #: (303) 723-2050
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

40

 

17.17      Publicity

 

The Parties agree to cooperate in the preparation and dissemination of publicity concerning this Agreement.  No Party will make a public announcement about this Agreement or the Parties’ discussions related to any aspect of it, without the written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned.  Any Party may at any time make announcements which are required by Applicable Law, regulatory bodies, or securities exchange or securities association rules, so long as the Party so required to make the announcement notifies in advance the other Party of such requirement and promptly discusses with the other Party in good faith the wording of any such announcement.

 

17.18      Regulatory Filings

 

In addition to the performance by American II of its specific obligations under this Agreement, each Party will cooperate to the extent reasonably practicable in the preparation and filing of any regulatory filings necessary or advisable to permit the performances and operations set forth in this Agreement, including the provision of any information as may reasonably be necessary therefor.

 

17.19      Relationship of Parties

 

Each Party shall perform services hereunder as an independent contractor and nothing herein shall be construed as creating any other relationship between the Parties.  The relationship established by this Agreement will not be construed to create a partnership, joint venture, or any other form of legal entity, nor establish any fiduciary relationship among the Parties or any Affiliate of any Party.  The provision of the services described in this Agreement does not establish any joint undertaking, joint venture, pooling arrangement, partnership, fiduciary relationship or formal business organization of any kind.  Except as specifically provided in this Agreement, nothing in this Agreement will constitute a Party as a legal representative or agent of the other Party, nor will a Party have the right or authority to assume, create or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of the other Party or hold itself out as agent for the other Party, unless otherwise expressly permitted by such other Party.

 

17.20      Construction

 

(a)           The singular includes the plural and the plural includes the singular.

 

(b)           A reference to Applicable Law includes any amendment or modification to such Applicable Law, and all regulations, rulings and other Applicable Law promulgated under such Applicable Law.

 

(c)           A reference to a Person includes its permitted successors and permitted assigns.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

41

 

(d)           Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

 

(e)           The words “include,” “includes” and “including” are not limiting.

 

(f)            Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(g)           A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated.  Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document.  In the event of any conflict between the provisions of this Agreement (exclusive of the Exhibits, Schedules, Annexes and Appendices thereto) and any Exhibit, Schedule, Annex or Appendix thereto, the provisions of this Agreement shall control.

 

(h)           References to any document, instrument or agreement (i) shall include all exhibits, schedules and other attachments thereto; (ii) shall include all documents, instruments or agreements issued or executed in replacement thereof and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, amended and restated, supplemented or otherwise modified from time to time and in effect at any given time.

 

(i)            The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

 

(j)            References to “days” shall mean calendar days, unless the term “Business Days” shall be used.  References to a time of day shall mean such time in New York, New York, unless otherwise specified.

 

(k)           The word “will” shall be construed to have the same meaning and effect as the word “shall.”

 

(l)            Each of the Parties hereto acknowledges that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any amendments hereto.

 

(m)          All section and descriptive headings and the recitals herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement, and no construction or reference shall be derived therefrom.

 

(n)           This Agreement will be construed to refer to the provision of services in the United States of America

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

42

 

17.21      Severability

 

Subject to Section 17.22, each provision of this Agreement shall be construed as separable and divisible from every other provision and the enforceability of any one provision shall not limit the enforceability, in whole or in part, of any other provision.  In the event that a court or administrative body of competent jurisdiction holds any provision of this Agreement to be invalid, illegal, void or less than fully enforceable as to time, scope or otherwise, the Parties agree that such provision shall be construed by limiting and reducing it so that such provision is valid, legal, and fully enforceable while preserving to the greatest extent permissible the original intent of the Parties; the remaining terms and conditions of this Agreement shall not be affected by such alteration, and shall remain in full force and effect.

 

17.22      Reformation

 

(a)           If the FCC should (i) change any FCC Rule in a manner that would adversely affect the enforceability of this Agreement; (ii) directly or indirectly reject or take action to challenge the enforceability of this Agreement or (iii) take any other steps whatsoever, on its own initiative or by petition from another person, to challenge or deny the transactions contemplated hereby, or the eligibility of the License Company to hold any of the licenses won in the Auction or the ability of the License Company to realize the Auction Benefits (each, an “Adverse FCC Action”), then the Parties shall promptly consult with each other and negotiate in good faith to reform and amend this Agreement so as to eliminate or amend to make unobjectionable any portion that is the subject of any Adverse FCC Action (each, an “Adverse FCC Action Reformation”).  Furthermore, subject to consent in writing by American II, in the event of an Adverse FCC Action, the Parties other than American II (the “Non-American II Members”) shall use their best efforts with respect to all aspects of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American II; provided, however, that in the event that an element of any such Adverse FCC Action materially adversely impacts the material economic benefits of the Non-American II Members (each, an “Economic Element”), then the Non-American II Members may use commercially reasonable efforts solely with respect to the Economic Element of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American II.  None of the Parties hereto shall take any action that is reasonably likely to contribute to such Adverse FCC Action.

 

(b)           If the FCC should determine that a portion of this Agreement, after having been reformed pursuant to paragraph (a) above, continues to violate FCC Rules, then such provisions shall be null and void and the remainder of this Agreement shall continue in full force and effect; provided that the relative economic and other rights and benefits expected to be derived by the Parties hereunder are preserved.

 

17.23      No Third-Party Beneficiaries

 

This Agreement is entered into solely for the benefit of the Parties and no Person, other than the Parties, their respective successors and permitted assigns, and their Affiliates to the

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

43

 

extent expressly provided herein, may exercise any right or enforce any obligation hereunder, and nothing herein expressed or implied will create or be construed to create any other third-party beneficiary rights hereunder.

 

17.24      Subsidiary Guarantors

 

Within one Business Day following the formation of any Subsidiary of the License Company, the License Company shall cause such Subsidiary (each such Subsidiary, a “Subsidiary Guarantor”) to execute and deliver to American II a Guaranty of the License Company’s obligations under this Agreement, in substantially the form attached hereto as Exhibit B (the “Subsidiary Guarantees”).

 

17.25      Relationship of Parties.

 

Each Party shall perform services hereunder as an independent contractor and nothing herein shall be construed as creating any other relationship between the Parties.  The relationship established by this Agreement will not be construed to create a partnership, franchise, exclusive or non-exclusive distributorship, joint venture, or any other form of legal entity, nor establish any fiduciary relationship among the Parties or any Affiliate of any Party.  The provision of the services described in this Agreement does not establish any joint undertaking, joint venture, pooling arrangement, partnership, fiduciary relationship or formal business organization of any kind. Except as provided in this Agreement, no Party shall act as or hold itself out as agent for the other Party or create or attempt to create liabilities for any other Party.

 

[Signature Page Follows on Next Page]

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

44

 

SIGNATURE PAGE TO MANAGEMENT SERVICES AGREEMENT

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective authorized representatives as of the date and year first above written.

 

	
AMERICAN   AWS-3 WIRELESS II L.L.C.
    	
 
    	
NORTHSTAR   WIRELESS, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
Northstar   Spectrum, LLC
    
	
By:
    	
 
    	
 
    	
 
    	
Its   sole member
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
By:   
    	
Northstar   Manager, LLC
    
	
 
    	
 
    	
 
    	
Its   Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
Doyon,   Limited 
    
	
 
    	
 
    	
 
    	
Its   Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

Exhibit A to Management Services Agreement

 

EXHIBIT A

 

Services and Platforms

 

Reimbursement for the following types of costs and expenses will be calculated and invoiced to the License Company based on the following allocation methodologies.

 

Usage Based Services:

 

*** Such costs shall include, but not be limited to:

 

·                  Long-distance usage

·                  Short message usage

·                  Directory assistance usage

·                  Instant messaging usage

·                  E911

·                  Roaming usage

·                  MMS usage

·                  WAP usage

·                  Roaming (inbound) and inter-carrier billing

·                  All other usage services provided to the License Company or any of its Subsidiaries by American II from time to time at the License Company’s request.

 

Centralized Technical Operations Services and Adjunct Platforms:

 

*** Such costs shall include, but not be limited to:

 

·                  Home Location Register (HLR)

·                  Voicemail system

·                  SMSC for short message service system

·                  MMSC for multimedia applications system

·                  STPs for SS7 signaling and connectivity

·                  Prepaid system

·                  Instant messaging system

·                  Outbound roaming support

·                  Data network (switch and adjunct support only)

·                  VoIP network

·                  1xRTT data

·                  EVDO data

·                  CALEA support and management

·                  LNP number portability support and management

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

46

 

Exhibit A to Management Services Agreement

 

·                  Circuit management and inventory tracking

·                  Fixed asset tracking

·                  Number management

·                  Network operations center (NOC) monitoring services

·                  Contract and vendor management

·                  Monthly depreciation of capital equipment and capitalized costs to support such services

·                  All other adjunct or centralized technical operations platform or services provided to the License Company or any of its Subsidiaries by American II from time to time at the License Company’s request.

 

Other Centralized Services and Platforms:

 

*** Such costs shall include, but not be limited to:

 

·                  Customer care program setup, oversight and administration

·                  Retention and win-back program planning and management

·                  Information technology planning, setup, implementation, management

·                  Central corporate systems (Oracle, OPM, Fulcrum, EIB, HO)

·                  Insurance, corporate safety, and other treasury functions

·                  Accounting, financial reporting, internal audit

·                  Human resources support and administration

·                  Centralized sales and marketing

·                  Monthly depreciation of capital equipment and capitalized costs to support these services

·                  All other centralized services and platforms provided to the License Company or any of its Subsidiaries by American II from time to time at the License Company’s request.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

47

 

Exhibit A-1 to Exhibit A to Management Services Agreement

Allocation Methodologies

 

EXHIBIT A-1 to EXHIBIT A

Allocation Methodologies

 

***

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

48

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

EXHIBIT B

 

FORM OF SUBSIDIARY GUARANTY

 

This Guaranty (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Guaranty”) is entered into as of             ,            (the “Effective Date”), by and between AMERICAN AWS-3 WIRELESS II L.L.C., a Colorado limited liability company (“American II”) and [SUBSIDIARY], a Delaware limited liability company (“Guarantor”).

 

RECITALS

 

WHEREAS, pursuant to that certain Management Services Agreement (the “Management Agreement”) entered into on September 12, 2014, by and between American II and Northstar Wireless, LLC, a Delaware limited liability company (“License Company”), American II has agreed to provide, among other things, management services to License Company and its subsidiaries with respect to the network build-out and operation of the License Company Systems;

 

WHEREAS, Guarantor is a wholly-owned subsidiary of License Company;

 

WHEREAS, Guarantor will derive substantial benefit from the management and other services provided by American II to License Company pursuant to the Management Agreement;

 

WHEREAS, pursuant to Section 17.24 of the Management Agreement, License Company agreed to cause each of its Subsidiaries to execute and deliver to American II a guaranty of License Company’s Obligations under the Management Agreement;

 

WHEREAS, but for License Company’s agreement to cause each Subsidiary to execute and deliver this Guaranty, American II would not have entered into the Management Agreement with License Company; and

 

WHEREAS, Guarantor desires to guarantee and hereby does guarantee all of License Company’s Obligations under the Management Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and for other good and valid consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

49

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

ARTICLE I.

 

DEFINITIONS

 

1.1                               Definitions

 

Unless the context shall otherwise require, capitalized terms used but not defined herein shall have the meaning given them in the Management Agreement.  In addition, unless the context shall otherwise require, as used herein the following terms shall have the following meanings:

 

“American II” shall have the meaning set forth in the preamble.

 

“demand” shall have the meaning set forth in Section 2.3.

 

“Effective Date” shall have the meaning set forth in the preamble.

 

“Guarantor” shall have the meaning set forth in the preamble.

 

“Guarantor Obligations” shall mean all liabilities and obligations of Guarantor that may arise under or in connection with the Management Agreement and this Guaranty.

 

“Intercreditor and Subordination Agreement” shall mean that certain Intercreditor and Subordination Agreement, dated as of September 12, 2014 by and among Northstar Manager, LLC, a Delaware limited liability company, and American II, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

“License Company” shall have the meaning set forth in the recitals.

 

“License Company’s Obligations” means all liabilities and obligations of License Company that arise under or in connection with the Management Agreement.

 

“Management Agreement” shall have the meaning set forth in the recitals.

 

“NSM Collateral Rights” shall have the meaning set forth in that certain Security Agreement, dated as of September 12, 2014 by and among the License Company, Northstar Spectrum, LLC, a Delaware limited liability company, and American II, as amended, amended and restated, supplemented or otherwise modified from time to time.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

50

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

ARTICLE II.

 

GUARANTEE

 

2.1                                       Guarantee

 

(a)                                 Guarantor hereby, unconditionally and irrevocably, guarantees to American II and its respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by License Company of License Company’s Obligations as and when required.

 

(b)                                 Guarantor waives any right or claims of right to cause a marshalling of License Company’s assets to the fullest extent permitted by Applicable Law.

 

(c)                                  Notwithstanding the foregoing or anything else contained herein to the contrary, American II acknowledges and agrees that the obligations of the Guarantor hereunder are subject to the NSM Collateral Rights to the extent and on the terms set forth in the Intercreditor and Subordination Agreement, until the Interest Purchase Agreement, the NSM Security Agreement, and the NSM Pledge Agreement terminate in accordance with the terms thereof.

 

2.2.                            Amendments, Etc. with Respect to License Company’s Obligations

 

Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor and without notice to or further assent by Guarantor, any demand for payment or performance of any of License Company’s Obligations made by American II may be rescinded by it, and License Company’s Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guaranty therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, increased, extended, amended, modified, accelerated, compromised, waived, surrendered or released by American II (in accordance with the terms thereof), and the Management Agreement and any other documents executed and delivered in connection therewith may be amended, amended and restated, supplemented, otherwise modified, or terminated, in whole or in part, as American II may deem advisable from time to time (with the consent of License Company or Guarantor, if required hereunder or thereunder), and any collateral security, guaranty, or right of offset at any time held by American II, for the payment of License Company’s Obligations may be sold, exchanged, waived, surrendered, or released.

 

2.3                               Guarantee Absolute and Unconditional

 

Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of License Company’s Obligations and notice of or proof of reliance by American II upon this Guaranty or acceptance of this Guaranty; License Company’s Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended,

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

51

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

amended or waived, in reliance upon this Guaranty; and all dealings between License Company and Guarantor, on the one hand, and American II, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty.  Guarantor waives diligence, presentment, protest, demand for payment and notice of default, notice of nonpayment, notice of dishonor, and all other notices of any kind to or upon License Company or Guarantor with respect to License Company’s Obligations and any exemption rights that either may have.  Guarantor understands and agrees that this Guaranty shall be construed as a continuing, absolute, and unconditional guaranty of payment and performance without regard to (a) the validity or enforceability of the Management Agreement, any of License Company’s Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by American II; (b) any defense, set off, or counterclaim (other than a defense of payment or performance in full hereunder) that may at any time be available to or be asserted by License Company or any other Person against American II or (c) any other circumstance whatsoever (with or without notice to or knowledge of License Company or Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of License Company for License Company’s Obligations or of Guarantor under this Guaranty, in bankruptcy or in any other instance.  When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Guarantor, American II may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against License Company or any other Person or against any collateral security or guaranty for License Company’s Obligations or any right of offset with respect thereto, and any failure by American II to make any such demand, to pursue such other rights or remedies or to collect any payments from License Company or any other Person or to realize upon any such collateral security or guaranty or to exercise any such right of offset, or any release of License Company or any other Person or any such collateral security, guaranty or right of offset, shall not relieve Guarantor of any Guarantor Obligations, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of American II against Guarantor.  For the purposes hereof, “demand” shall include the commencement and continuance of any legal proceedings.

 

2.4                               Reinstatement

 

This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment or performance, or any part thereof, of any of License Company’s Obligations is rescinded or must otherwise be restored or returned by American II upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of License Company, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or collateral agent or similar officer for, License Company or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

2.5                               Payments and Performance

 

Guarantor hereby guarantees that the Guarantor Obligations shall be paid or performed, as applicable, without set off or counterclaim (other than compulsory counterclaims),

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

52

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

and as applicable, in United States dollars and in immediately available funds at the address of American II set forth in this Guaranty.

 

2.6                               Termination of Guaranty

 

This Guaranty shall terminate upon the earlier to occur of (a) the payment and satisfaction in full of the License Company’s Obligations (other than unaccrued and contingent indemnification obligations) or (b) the mutual agreement of the License Company and American II.  Upon any such termination, American II shall take such actions and execute such documents (at the Guarantor’s expense) as the Guarantor may reasonably request to evidence or give further effect to such termination.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of Guarantor

 

Guarantor hereby represents and warrants to American II as follows:

 

(o)                                 It is a [limited liability company] duly organized, validly existing and in good standing under the laws of the State of [Delaware], and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as proposed to be conducted.

 

(p)                                 It has the requisite power and authority to execute, deliver and perform this Guaranty and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder.

 

(q)                                 Its execution and delivery of this Guaranty and its consummation of the transactions contemplated hereunder have been duly and validly authorized by its Board of Directors (or equivalent governing body) and no other proceedings on its part which have not been taken are necessary to authorize this Guaranty or to consummate such transactions.

 

(r)                                    This Guaranty has been duly executed and delivered by it and constitute its valid and binding obligations, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and by general principles of equity.

 

(s)                                   Neither its execution, delivery and performance of this Guaranty, nor its consummation of the transactions contemplated hereunder shall (i) conflict with, or result in a breach or violation of, any provision of its constituent documents; (ii) constitute, with or without the giving of notice or passage of time or both, a material breach, violation or default, create a material Lien, or give rise to any right of termination, modification, cancellation, prepayment or

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

53

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

acceleration, under (A) any Applicable Law or license or (B) any material note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets or (iii) require any consent which has not already been obtained except as may be required under the FCC Rules.

 

There is no (i) action, claim, proceeding, investigation or controversy pending or, to its knowledge, threatened against it or any of its properties or assets or (ii) judgment, order, award or consent decree outstanding against or affecting it, in either event that could have a material adverse effect on its ability to consummate the transactions contemplated under this Guaranty or to fulfill its obligations hereunder.

 

ARTICLE IV.

 

COVENANTS

 

4.1                               Further Assurances

 

Guarantor shall execute and deliver any such further documents and shall take such further actions as American II may at any time or times reasonably request, at the expense of American II, consistent with the provisions hereof in order to carry out effect the intent and purposes of this Guaranty.

 

ARTICLE V.

 

MISCELLANEOUS

 

5.1                               Entire Agreement; Amendment

 

This Guaranty, together with any schedules and exhibits hereto and thereto, constitute the entire agreement and  understanding of the parties with respect to the subject matter hereof and supersedes all prior and all contemporaneous oral or written negotiations, proposals, offers, agreements, commitments and understandings relating to such subject matters.

 

5.2                               Successors and Assigns

 

This Guaranty may not be assigned by Guarantor without the prior written consent of American II, which consent may be withheld in its sole and absolute discretion. American II may assign all or a portion of its rights under this Guaranty to an Affiliate of American II without the consent of the Guarantor, provided that such Affiliate of American II agrees to be bound by all of the terms hereof, provided further that, unless License Company otherwise consents in its sole and absolute discretion, American II shall remain obligated under this Guaranty. No such permitted assignment shall relieve any Party hereto of any liability for a breach of this Guaranty by such Party or its assignee. This Guaranty shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs or successors in interest.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

54

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

5.3                               Remedies Cumulative

 

Notwithstanding anything to the contrary herein, all rights, powers and remedies of American II hereunder and under the Management Agreement or otherwise available in respect hereof at law or in equity shall not be mutually exclusive, shall be cumulative and not alternative, and the exercise, or beginning of the exercise, of one or more right, power or remedy by American II pursuant to the Management Agreement, this Guaranty, the other related documents, shall not preclude the simultaneous or later exercise by American II of any other such right, power or remedy hereunder, or under Applicable Law or the principles of equity.

 

5.4                               Counterparts

 

This Guaranty may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument.

 

5.5                               Amendment; Waiver

 

Neither this Guaranty nor any provision hereof may be amended, modified, or waived except in a writing signed by the parties.  No failure or delay of any party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce any such right or power, preclude any other further exercise thereof or the exercise of any other right or power.  No waiver by any party of any departure by any other party from any provision of this Guaranty shall be effective unless the same shall be in a writing signed by the party against which enforcement of such waiver or consent is sought, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice or similar communication by any party to another shall entitle such other party to any other or further notice or similar communication in similar or other circumstances, except as specifically provided herein.

 

5.6                               Payments or Performance on Business Days

 

Whenever any payment or performance to be made hereunder or in respect to any Guarantor Obligation shall be stated to be due or performed on a day other than a Business Day, such payment or performance may be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest, if any, in connection with such payment or performance.

 

5.7                               Expenses

 

Except as specifically provided herein or in the Management Agreement, each party hereto shall pay all costs and expenses incurred by it or on its behalf in connection with this Guaranty and the Management Agreement, including their preparation, and the transactions contemplated hereby and thereby, including, without limiting the generality of the foregoing, fees, and expenses of its own consultants, accountants, and counsel.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

55

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

5.8                               Notices

 

All notices or requests that are required or permitted to be given pursuant to this Guaranty shall be given in writing and shall be sent by facsimile transmission, or by first-class certified mail, postage prepaid, or by overnight courier service, charges prepaid, to the Party to be notified, addressed to such Party at the address(es) set forth below, or sent by facsimile to the fax number(s) set forth below, or such other address(es) or fax number(s) as such Party may have substituted by written notice (given in accordance with this Section) to the other Party.  The sending of such notice with confirmation of receipt of the complete transmission (in the case of facsimile transmission) or receipt of such notice (in the case of delivery by first-class certified mail or by overnight courier service) shall constitute the giving thereof.

 

	
If to be given to Guarantor:
    	
 
    	
If to be given to American II:
    
	
c/o Doyon, Limited

 
    	
 
    	
American AWS-3 Wireless II L.L.C.
    
	
Attn: Allen M. Todd, General Counsel

 

If by overnight courier service:
    	
 
    	
Attn: EVP, Corporate Development

 

If by overnight courier service:
    
	
Doyon, Limited

1 Doyon Place, Suite 300

Fairbanks, AK  99701-2941

 

If by first-class certified   mail:

Doyon, Limited

1 Doyon Place, Suite 300

Fairbanks, AK  99701-2941
    	
 
    	
9601 South Meridian Blvd.

Englewood, Colorado 80112

 

If by first-class certified mail:

P.O. Box 6655

Englewood, Colorado 80155

 
    
	
 
    	
 
    	
 
    
	
If by facsimile:

Fax #: (907) 459-2075

 
    	
 
    	
If by facsimile:

Fax #: (303) 723-2020
    
	
 
    	
 
    	
 
    
	
cc: Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, NY 10020

Attention: Michael A. Brosse

Fax: (973) 422-6841

 
    	
 
    	
cc: Office of the General Counsel

American AWS-3 Wireless II L.L.C.

 

If by overnight courier service:

Same address as noted above for American II overnight courier   delivery
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

56

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

	
 
    	
 
    	
If by first-class certified mail:

Same address as noted above for American II first-   class certified mail delivery

 

If by facsimile:
    
	
 
    	
 
    	
Fax #: (303) 723-2050
    

 

5.9                               Severability

 

Subject to Section 5.10, each provision of this Guaranty shall be construed as separable and divisible from every other provision and the enforceability of any one provision shall not limit the enforceability, in whole or in part, of any other provision.  In the event that a court or administrative body of competent jurisdiction holds any provision of this Guaranty to be invalid, illegal, void or less than fully enforceable as to time, scope or otherwise, the parties agree that such provision shall be construed by limiting and reducing it so that such provision is valid, legal, and fully enforceable while preserving to the greatest extent permissible the original intent of the parties; the remaining terms and conditions of this Guaranty shall not be affected by such alteration, and shall remain in full force and effect.

 

5.10                        Reformation

 

(a)                                 If the FCC should (i) change any FCC Rule in a manner that would adversely affect the enforceability of this Guaranty; (ii) directly or indirectly reject or take action to challenge the enforceability of this Guaranty or (iii) take any other steps whatsoever, on its own initiative or by petition from another Person, to challenge or deny the transactions contemplated hereby or the eligibility of the License Company to hold any of the licenses won in the Auction or the ability of the License Company to realize the Auction Benefits (each, an “Adverse FCC Action”), then the Parties shall promptly consult with each other and negotiate in good faith to reform and amend this Guaranty so as to eliminate or amend to make unobjectionable any portion that is the subject of any Adverse FCC Action (each, an “Adverse FCC Action Reformation”).  Furthermore, subject to consent in writing by American II, in the event of an Adverse FCC Action, the Parties other than American II (the “Non-American II Members”) shall use their best efforts with respect to all aspects of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American II; provided, however, that in the event that an element of any such Adverse FCC Action materially adversely impacts the material economic benefits of the Non-American II Members (each, an “Economic Element”), then the Non-American II Members may use commercially reasonable efforts solely with respect to the Economic Element of the Adverse FCC Action to agree upon an Adverse FCC Action Reformation with American II.  None of the Parties hereto shall take any action that is reasonably likely to contribute to such Adverse FCC Action.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

57

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

(b)                                 If the FCC should determine that a portion of this Guaranty, after having been reformed pursuant to paragraph (a) above, continues to violate FCC Rules, then such provisions shall be null and void and the remainder of this Guaranty shall continue in full force and effect; provided that the relative economic and other rights and benefits expected to be derived by the parties hereunder are preserved.

 

5.11                        Governing Law

 

This Guaranty shall be construed in accordance with and governed by the internal laws of the State of New York applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of law provisions of that or of any other state, all rights and remedies being governed by said laws.

 

5.12                        Arbitration

 

(a)                                 Arbitration.  Any controversy or claim arising out of or relating to this Guaranty, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  Within *** after the commencement of arbitration, each Party shall select one Person to act as arbitrator and the two selected shall select a third arbitrator within *** of their appointment.  If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association.  The place of arbitration shall be Chicago, Illinois or such other place as the Parties may agree.  The arbitrators shall be knowledgeable in the broadband industry and auctions of FCC licenses.  Notwithstanding the foregoing, if the arbitration is consolidated with a then pending arbitration proceeding pursuant to Section 5.12(d), then the arbitrators and the place of arbitration for such then pending proceeding shall be the arbitrators and place of arbitration hereunder.

 

(b)                                 Interim Relief.  Any Party may apply to the arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any remedy under this Guaranty or under the Management Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy).

 

(c)                                  Award.  The award shall be made within *** of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment.  However, this time limit may be extended by agreement of the Parties and the arbitrators if necessary.

 

(d)                                 Consent to Consolidation of Arbitrations.  Each party irrevocably consents to consolidating any arbitration proceeding under this Guaranty and with any other arbitration proceedings involving any Party that may be then pending that are brought under the LLC 

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

58

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

Agreement, the Management Agreement (to the extent provided therein) or any related agreements.

 

(e)                                  Venue.  Each Party hereto irrevocably and unconditionally consents to the exclusive jurisdiction of the courts of the State of Delaware and of the United States District Courts located in the State of Delaware for entering of any judgment on the award rendered by the arbitrators; provided that if such courts do not have jurisdiction to enforce such judgment, then the parties may enter such judgment in any other court having jurisdiction thereof.

 

5.13                        American II’s Discretion

 

Unless this Guaranty shall otherwise expressly provide, American II shall have the right to make any decision, grant or withhold any consent, and exercise any other right or remedy hereunder in its sole and absolute discretion.

 

5.14                        Construction

 

(a)                                 The singular includes the plural and the plural includes the singular.

 

(b)                                 A reference to Applicable Law includes any amendment or modification to such Applicable Law, and all regulations, rulings and other Applicable Law promulgated under such Applicable Law.

 

(c)                                  A reference to a Person includes its permitted successors and permitted assigns.

 

(d)                                 Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

 

(e)                                  The words “include,” “includes” and “including” are not limiting.

 

(f)                                   A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated.  Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document.  In the event of any conflict between the provisions of this Guaranty (exclusive of the Exhibits, Schedules, Annexes and Appendices thereto) and any Exhibit, Schedule, Annex or Appendix thereto, the provisions of this Guaranty shall control.

 

(g)                                  References to any document, instrument or agreement (i) shall include all exhibits, schedules and other attachments thereto; (ii) shall include all documents, instruments or agreements issued or executed in replacement thereof and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, amended and restated, supplemented or otherwise modified from time to time and in effect at any given time.

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

59

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

(h)                                 The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

 

(i)                                     References to “days” shall mean calendar days, unless the term “Business Days” shall be used.  References to a time of day shall mean such time in New York, New York, unless otherwise specified.

 

(j)                                    Each of the parties hereto acknowledges that it has reviewed this Guaranty and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Guaranty or any amendments hereto.

 

(k)                                 All section and descriptive headings and the recitals herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Guaranty, and no construction or reference shall be derived therefrom.

 

5.15                        [Reserved.]

 

5.16                        General Limitation on Guarantor Obligations

 

In any action or proceeding involving any state corporate, limited partnership, or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization, or other law affecting the rights of creditors generally, if the obligations of Guarantor under Section 2.1 would otherwise be held or determined to be void, voidable, invalid, or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 2.1, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by Guarantor, or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 

5.17                        Consent

 

Guarantor hereby acknowledges receiving copies of the Management Agreement and the LLC Agreement and consents to the terms and provisions of each thereof as each applies to this Guaranty.

 

[Signature Pages Follow]

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

60

 

Exhibit B to Management Services Agreement

Form of Subsidiary Guaranty

 

IN WITNESS WHEREOF, the parties hereto have executed this Guaranty, or have caused this Guaranty to be signed in their respective names by an officer, hereunto duly authorized, on the date first written above.

 

	
AMERICAN AWS-3 WIRELESS II L.L.C.
    	
 
    	
[SUBSIDIARY],
    
	
 
    	
 
    	
as Guarantor
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By
    	
Northstar Wireless, LLC,
    
	
Name:
    	
 
    	
 
    	
 
    	
Its sole member
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By
    	
Northstar Spectrum, LLC,
    
	
 
    	
 
    	
 
    	
Its sole member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
Northstar Manager, LLC,
    
	
 
    	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
Doyon, Limited,
    
	
 
    	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

*** Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

61

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