Item 1.01
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Entry into a Material Definitive Agreement.
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On April 6, 2016, Unwired Planet, Inc. (the
Company), entered into Purchase and Sale Agreement (the PSA) with Optis UP Holdings, LLC (Optis), pursuant to which Optis will acquire all of the outstanding capital stock of Unwired Planet IP Holdings, Inc., a
Delaware corporation (Sub 1), and all of the outstanding membership interests of Unwired Planet IP Manager, LLC, a Delaware limited liability company (Sub 2, and together with Sub 1, the Holding Companies)
(collectively, the Divestiture). The Holding Companies own all of the outstanding membership interests of Unwired Planet, LLC, a Nevada limited liability company (UPLLC), and UPLLC owns all of the outstanding shares of
Unwired Planet International Limited, an Irish company limited by shares (Unwired Planet Ireland and together with Sub 1, Sub 2 and UPLLC, the Unwired Planet Companies). UPLLC and Unwired Planet Ireland collectively own all
of the Companys patent assets. The aggregate purchase price for the Divestiture will be a total of up to $40,000,000; as specified in the PSA, Optis will pay the Company $30,000,000 less certain adjustments upon the closing of the Divestiture,
and $10,000,000 less certain other potential adjustments upon the second anniversary of the closing. The closing of the transactions contemplated by the PSA is subject to the approval of the transactions contemplated by the PSA by the affirmative
vote of the holders of a majority in voting power of the outstanding shares of the Companys common stock, as well as certain third-party consents.
The PSA contains representations and warranties customary for transactions of this nature. The Company has agreed to various customary covenants and
agreements, including, among others, agreements to conduct its business in the ordinary course during the period between the execution of the PSA and the date of closing, not to engage in certain kinds of transactions or activities during this
period without Optis consent, including certain actions associated with pending litigation to which the Company is a party.
The completion of the
Divestiture is subject to certain conditions, including, among others: (i) the Company stockholders approval, (ii) the absence of an order or law prohibiting consummation of the transactions (including without limitation a stop order
issued by the Securities and Exchange Commission suspending the use of the proxy statement sent to stockholders in connection with meeting scheduled to approve the Divestiture), (iii) the consent of the holders of the Companys Senior
Secured Notes due 2019 and (iv) the consents of Telefonaktiebolaget L M Ericsson (Ericsson) and Cluster LLC. Moreover, each partys obligation to consummate the Divestiture is subject to certain other conditions, including
(a) the accuracy of the other partys representations and warranties (including the absence of a material adverse effect) and (b) the other partys compliance with its obligations.
Under the terms of the PSA, the Company may not solicit or initiate discussions with third parties regarding other acquisition proposals and has agreed to
certain restrictions on its ability to respond to such proposals as provided in the PSA. However, the PSA contains fiduciary out provisions, under which in certain circumstances the Companys Board of Directors may determine to
change its recommendation of the Divestiture or make a change of recommendation to approve a superior proposal. The Companys Board of Directors is obligated to notify Optis in the event of a change in recommendation and to provide certain
match rights to allow Optis an opportunity to modify the terms of the PSA in a manner that causes the superior proposal to no longer be superior or allows the Board of Directors to continue to recommend the Divestiture.
The PSA contains specified termination rights for both Optis and the Company, including that, in general, either party may terminate if the Divestiture is not
consummated on or before July 31, 2016. If the PSA is terminated under certain specified circumstances, including in connection with the Companys entry into a definitive agreement for a superior proposal, the Company must pay Optis a
termination fee of $2.0 million.
The foregoing description of the PSA and the transactions contemplated thereby does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the PSA, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
The
PSA has been filed to provide security holders with information regarding its terms.
It is not intended to provide any other factual information about the Company, Optis or their respective subsidiaries and affiliates. The PSA contains
representations and warranties by each of the parties to the PSA. These representations and warranties were made solely for the benefit of the other party to the PSA and (i)
are not intended to be treated as categorical statements
of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate, (ii)
may have been qualified in the PSA by confidential disclosure schedules that were delivered to the
other party in connection with the signing of the PSA, which disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations, warranties and
covenants set forth in the PSA, (iii) may be subject to standards of materiality applicable to the parties that differ from what might be viewed as material to shareholders and (iv) were made only as of the date of the PSA or such other
date or dates as may be specified in the PSA. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the PSA, which subsequent information may or may not be fully reflected
in public disclosures by the Company or Optis. Accordingly, you should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Optis.
In connection with the PSA, the Company and others entered into a consent agreement, a forebearance agreement and a consent letter agreement with
Ericsson and its affiliates, copies of which are attached as Exhibits 10.1, 10.2 and 10.3 respectively. These agreements relate to the Master Agreement, dated as of January 10, 2103 (as amended, the MSA), by and among the Company,
Holding Companies, UPLLC and Ericsson, and are filed as they may be deemed material amendments to the MSA.