Item 1.01 Entry into a Material Definitive Agreement.
On December 30, 2020, DISH Network Corporation ("DISH Network"), through its
wholly owned subsidiary American AWS-3 Wireless II L.L.C. ("American II"),
entered into a Purchase Agreement (the "Northstar Purchase Agreement") with
Northstar Manager, LLC ("Northstar Manager") and Northstar Spectrum, LLC
("Northstar Spectrum"), pursuant to which American II purchased 80% of Northstar
Manager's Class B Common Interests in Northstar Spectrum (the "Transaction").
The summary below does not purport to be complete and is qualified in its
entirety by reference to the provisions of the agreements referenced herein.
Background
As previously disclosed in its public filings, DISH Network, through American
II, owns a non-controlling interest in Northstar Spectrum, which, immediately
prior to the Transaction, was comprised of 85% of the Class B Common Interests
and 100% of the Class A Preferred Interests of Northstar Spectrum. Northstar
Manager is the sole manager of Northstar Spectrum and owns a controlling
interest in Northstar Spectrum, which, immediately prior to the Transaction, was
comprised of 15% of the Class B Common Interests of Northstar Spectrum.
Northstar Spectrum is the parent company of Northstar Wireless, LLC ("Northstar
Wireless"), which, as previously disclosed in DISH Network's public filings,
participated in Auction 97 (the "AWS-3 Auction") and was granted 261 AWS-3
Licenses in October 2015. On November 23, 2020, the FCC released a Memorandum
Opinion and Order on Remand, FCC 20-160, that found that Northstar Wireless and
SNR Wireless LicenseCo, LLC ("SNR Wireless") are not eligible for bidding
credits based on the FCC's determination that they remain under DISH Network's
de facto control. Northstar Wireless and SNR Wireless have appealed the FCC's
order to the D.C. Circuit Court of Appeals.
Northstar Purchase Agreement
Pursuant to the Northstar Purchase Agreement, American II purchased 80% of
Northstar Manager's Class B Common Interests in Northstar Spectrum for a
purchase price of approximately $312 million. As a result of the Transaction,
DISH Network, through American II, holds 97% of the Class B Common Interests in
Northstar Spectrum and Northstar Manager holds 3% of the Class B Common
Interests in Northstar Spectrum. Other than the change in ownership percentage
of Northstar Spectrum as between Northstar Manager and DISH Network, the
Transaction did not modify or amend in any way the existing arrangements between
or among the Northstar parties. In the Northstar Purchase Agreement, Northstar
Manager decided not to exercise its right to put its Class B Common Interests
back to Northstar Spectrum (the "Put Right") during the First Put Window (as
defined in the LLC Agreement), which began in the fourth quarter of 2020 and
will end in the first quarter of 2021. Northstar Manager retains its right to
exercise the Put Right during the Second Put Window (as defined in the LLC
Agreement), which will begin in the fourth quarter of 2021.
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