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Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
During the fourth quarter 2012, Eagle River delivered a right of first offer notice pursuant to the Equityholders
’ Agreement, to the other
equityholders of its intent to sell
30.9 million shares of Class A Common Stock and 2.7 million shares of Class B Common Stock and a corresponding
number of Class B Common Interests, which we refer to collectively as the Interests. On October 17, 2012, Sprint delivered a response to the notice
notifying Eagle River that they intend to purchase
100% of the Interests. On December 7, 2012, all of the conditions to the closing were met and on
December 11, 2012, the transaction was completed. As a result, Eagle River no longer owns any shares of our Class A Common Stock, Class B
Common Stock, or Class B Common Interests and is no longer a party to the Equityholders' Agreement.
During the second quarter of 2012 we also entered into a sales agreement, which we refer to as the Sales Agreement, with Cantor Fitzgerald &
Co., which we refer to as CF&Co, pursuant to which we offered and sold shares of our Class A Common Stock having an aggregate offering price of
up to $300.0 million from time to time through CF&Co, as sales agent. Subject to the terms and conditions of the Sales Agreement, CF&Co used its
commercially reasonable efforts to sell shares of Class A Common Stock on our behalf on a daily basis or as otherwise agreed by us and CF&Co. We
designated the parameters by which CF&Co would sell shares of Class A Common Stock on our behalf, including the total number of shares of Class
A Common Stock to be issued, the time period during which sales were requested to be made, any limitation on the number of shares of Class A
Common Stock that could be sold in any one trading day and any minimum price below which sales would not be made. We and CF&Co each had the
right, by giving written notice as specified in the Sales Agreement, to terminate the Sales Agreement in each party's sole discretion at any time. We
paid CF&Co a commission equal to 2.0% of the gross sales price per share of Class A Common Stock sold under the Sales Agreement. We also agreed
to reimburse CF&Co for certain of its expenses as set forth in the Sales Agreement and to indemnify CF&Co against certain liabilities. We sold 48.4
million shares of Class A Common Stock under the Sales Agreement for net proceeds of $58.5 million. On July 26, 2012, we announced that we elected
to cease further sales under the Sales Agreement.
During the first quarter of 2012, Clearwire and Clearwire Communications entered into securities purchase agreements with certain institutional
investors, pursuant to which Clearwire issued shares of Class A Common Stock for an aggregate price of $83.5 million, the proceeds of which was used
to repurchase $100.0 million in aggregate principal amount of its Exchangeable Notes, plus accrued but unpaid interest held by the institutional
investors. The price per share was determined based upon the daily volume weighted average price of our Class A Common Stock on the NASDAQ
Global Select Market for the five trading days commencing March 15, 2012, subject to a minimum price and a maximum price per share. The total
number of shares issued was equal to the quotient obtained by dividing the Purchase Price by the price per share, and was 38.0 million shares.
During the first quarter of 2012, Google Inc., which we refer to as Google, sold 29.4 million shares of Class A Common Stock.
Class B Common Stock
The Class B Common Stock represents non
- economic voting interests in Clearwire. Identical to the Class A Common Stock, the holders of
Class B Common Stock are entitled to one vote per share. However, they do not have any rights to receive distributions other than stock dividends
paid proportionally to each outstanding Class A and Class B Common Stockholder or upon liquidation of Clearwire, an amount equal to the par value
per share, which is
$0.0001 per share.
The holders, which include Intel Corporation, which we refer to as Intel, who, along with Sprint, we collectively refer to as the Participating
Equityholders, of Class B Common Stock hold, or are entitled to hold, an equivalent number of Class B Common Interests, which, in substance, reflects
their economic stake in Clearwire. This is accomplished through an exchange feature that provides the holder the right, at any time, to exchange one
share of Class B Common Stock plus one Class B Common Interest for one share of Class A Common Stock.
On October 11, 2012, Bright House, provided us with notice of its intent to exchange 8.5 million shares of Class B Common Stock together with
all of the Class B Common Interests held by Bright House into an equal number of shares of Class A Common Stock. The exchange was completed on
October 18, 2012.
On September 4, 2012, Time Warner Cable provided us with notice of its intent to exchange 46.4 million Class B Common Interests and a
corresponding number of shares of Class B Common Stock for an equal number of shares of Class A Common Stock pursuant to the Amended and
Restated Operating Agreement dated as of November 28, 2008 governing Clearwire Communications, which we refer to as the Operating Agreement.
The exchange was completed on September 13, 2012.
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