Dr. Jonathan L. Kramer, Esq., JD, LL.M, DLP

Clearwire: “You’re Such a Dish!”

Posted on January 8, 2013January 8, 2013 by Dr. Jonathan L. Kramer

Now it gets interesting.

As I previously reported, (Soft)Sprint is trying to buy up the shares of Clearwire not already owned by Sprint. They offered $2.97 per share.

Enter, now, Dish Network with an unsolicited offer to purchase Clearwire at $3.30 per share.

Needless to say, Sprint’s not too impressed with the Dish offer.

Now it’s up to Clearwire’s “Special Committee” to evaluate the offers (and any other interlopers who happen along) to pick the winner.

Here’s Clearwire’s press release from a couple of hours ago:

January 8, 2013

Clearwire Corporation Provides

Transaction Update

BELLEVUE, Wash., Jan. 8, 2013 (GLOBE NEWSWIRE) — Clearwire (Nasdaq:CLWR) today announced that it has received an unsolicited, non-binding proposal (the “DISH Proposal”) from DISH Network Corporation (“DISH”). The DISH Proposal, as further summarized below, provides for DISH to purchase certain spectrum assets from Clearwire, enter into a commercial agreement with Clearwire, acquire up to all of Clearwire’s common stock for $3.30 per share (subject to minimum ownership of at least 25% and granting of certain governance rights) and provide Clearwire with financing on specified terms.

The DISH Proposal is only a preliminary indication of interest and is subject to numerous, material uncertainties and conditions, including the negotiation of multiple contractual arrangements being requested by DISH (some of which, as currently proposed, may not be permitted under the terms of Clearwire’s current legal and contractual obligations). It is also subject to regulatory approval.

As previously announced on December 17, 2012, Clearwire has entered into a definitive agreement with Sprint Nextel Corporation (“Sprint”) for Sprint to acquire the approximately 50 percent stake in Clearwire it does not already own for $2.97 per share (the “Sprint Agreement”). Clearwire’s ability to enter into strategic transactions is significantly limited by its current contractual arrangements, including the Sprint Agreement and its existing Equityholders’ Agreement.

The Special Committee of the Clearwire Board of Directors (the “Special Committee”) has determined that its fiduciary duties require it to engage with DISH to discuss, negotiate and/or provide information in connection with the DISH Proposal. The Special Committee has not made any determination to change its recommendation of the current Sprint transaction. Consistent with its obligations under the Sprint Agreement, Clearwire has provided Sprint with notice, and the material terms, of the DISH Proposal, and received a response from Sprint that is described below.

DISH had, prior to the announcement of the Sprint Agreement, provided Clearwire with a preliminary indication of interest solely with respect to acquiring certain of Clearwire’s spectrum assets, on substantially the same pricing per MHz-POP as the spectrum purchase included in the DISH Proposal described below, and entering into a commercial agreement. Although Clearwire worked with DISH prior to the execution of the Sprint Agreement to improve the overall terms of that proposal, the Special Committee of the Clearwire Board determined that the Sprint transaction was, for a number of reasons, a more-attractive alternative for Clearwire’s non-Sprint Class A stockholders than a transaction with DISH at that time and on the terms then-proposed by DISH.

Summary of DISH Proposal

The following is a summary of the material terms of the proposal:

Spectrum Purchase. DISH would acquire from Clearwire spectrum covering approximately 11.4 billion MHz-POPs (“Spectrum Assets”), representing approximately 24% of Clearwire’s total MHz pops of spectrum, for aggregate net cash proceeds to Clearwire of approximately $2.2 billion (the “Spectrum Purchase Price”). The net cash proceeds are prior to any adjustment for potential tax liabilities which are likely to arise from the sale of spectrum assets even after utilizing the existing net operating losses. At DISH’s option, Clearwire would also sell or lease up to an additional 2 MHz of Clearwire’s spectrum to DISH from a channel that is adjacent to the Spectrum Assets at a price to be calculated in the same manner as the Spectrum Assets.

Commercial Agreement. Clearwire would, at DISH’s request, provide certain commercial services to DISH, including the construction, operation, maintenance, and management of a wireless network covering AWS-4 spectrum and new deployments of 2.5 GHz spectrum.

Acquisition of Clearwire Shares; Governance. DISH would make an offer to Clearwire’s stockholders to purchase up to all of Clearwire’s outstanding shares at a price of $3.30 per share in cash. This tender offer would not be dependent on Sprint’s participation, but would be subject to a number of conditions, including DISH: (i) acquiring no less than 25% of the fully-diluted shares of Clearwire, (ii) being granted the right to designate Clearwire board members commensurate with its pro forma ownership percentage, (iii) receiving certain minority protections, including the right to approve material changes to Clearwire’s organizational documents, change of control and material transactions with related parties (unless these transactions were approved by an independent committee of the Clearwire board and, if over a certain threshold, supported by a written fairness opinion from a nationally recognized investment bank) and (iv) receiving preemptive rights. In addition, the DISH Proposal would require Clearwire to terminate the note purchase agreement under which Sprint has agreed to provide interim financing to Clearwire and is conditional upon the consummation of the spectrum purchase and Clearwire being in compliance with the commercial agreement (both as described above).

Spectrum Purchase Price Funding. DISH would pre-fund the Spectrum Purchase Price within three business days of signing through a senior Unsecured PIK Debenture (the “PIK Debenture”) bearing PIK interest at a rate of 6% per annum in the event the Spectrum Assets are sold to DISH or 12% per annum otherwise. Clearwire would be obligated to either apply the proceeds of the pre-funding to reduce outstanding long-term debt through the redemption or repurchase of the 2015 Senior Secured Notes and 2016 Senior Secured Notes of Clearwire Communications LLC or, in the event that a portion of the Network Build Financing described below is unavailable due to the failure to receive shareholder approval, to use an equivalent portion of the proceeds of the PIK Debenture to fund network build-out costs; in that case, any future make up draws on the Network Build Financing following shareholder approval would be applied to reduce debt as provided in this sentence. If Spectrum Assets are not acquired due to a failure to obtain required regulatory approvals, Clearwire would, within 30 days following termination of the spectrum purchase agreement, repay the PIK Debenture plus interest at 6% per annum. If Clearwire is unable to repay the PIK Debenture during this 30 day period, it would be entitled to convert the principal amount and accrued interest on the PIK Debenture into a note on terms comparable to the 2015 Senior Secured Notes previously repaid, having a maturity of December 1, 2015.

Network Build Financing. DISH proposes to provide additional capital to fund a portion of Clearwire’s network build-out through a credit facility for the purchase of exchangeable notes on substantially similar terms to those which Sprint has agreed to provide, subject to cancellation of the Sprint Financing Agreements (as described below).

Deal Protections. DISH expects appropriate deal protections, including a 5-day match right, similar to those included in the Sprint Agreement. DISH would match Clearwire’s termination rights as provided for in the Sprint transaction (including the possible forgiveness of a portion of the exchangeable notes upon certain termination events).

Sprint Financing. DISH has indicated that the proposal will be withdrawn if Clearwire draws on the financing under the Sprint Financing Agreements.

In connection with the Sprint Agreement, Clearwire and Sprint also entered into agreements that provide up to $800 million of additional financing to Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions (the “Sprint Financing Agreements”). Under the Sprint Financing Agreements, Sprint has agreed to purchase, at Clearwire’s option, $80 million of exchangeable notes per month for up to 10 months beginning on January 2, 2013. The DISH Proposal indicates that it will be withdrawn if Clearwire draws on the financing under the Sprint Financing Agreements. As a result, in order to allow the Special Committee to evaluate the DISH Proposal, at the direction of the Special Committee, Clearwire has revoked its initial draw notice and has not received the first $80 million under the Sprint Financing Agreements. The Special Committee has not made any determination with respect to any future draws under the Sprint Financing Agreements.

Summary of Sprint Response to DISH Proposal

In response to the DISH Proposal, Clearwire has received a letter from Sprint stating, among other things, that Sprint has reviewed the DISH Proposal and believes that it is illusory, inferior to the Sprint transaction and not viable because it cannot be implemented in light of Clearwire’s current legal and contractual obligations. Sprint has stated that the Sprint Agreement would prohibit Clearwire from entering into agreements for much of the DISH Proposal. The following is a summary of Sprint’s statements in its letter regarding the material terms of the DISH Proposal:

Spectrum Purchase. Sprint has stated that, under the Sprint Agreement, Clearwire is prohibited from selling the Spectrum Assets without Sprint’s consent. In addition, Sprint has stated that Clearwire is further subject to various requirements under its commercial agreements with Sprint and the Equityholders’ Agreement applicable to selling Spectrum Assets, even if the Merger Agreement were not in place.

Commercial Agreement. Sprint has stated that, under the Merger Agreement, Clearwire is prohibited from entering into the commercial agreement proposed by DISH so long as the Merger Agreement is in place.

Acquisition of Clearwire Shares. Sprint has stated that the DISH Proposal may constitute a change of control under the Equityholders’ Agreement, which would require the affirmative vote of 75% of the issued and outstanding shares of Clearwire’s stock. Sprint has stated it would not vote in favor of the proposed transaction with DISH.

Governance. Sprint has stated that (i) it would be impermissible under Clearwire’s current Equityholders’ Agreement for Clearwire to agree to nominate DISH’s designees to the Clearwire Board, (ii) it would be impermissible under the Equityholders’ Agreement for Clearwire to create a new independent committee of the Clearwire Board and (iii) under Delaware law, certain governance rights requested by DISH (including the request for proportionate board representation) cannot be granted by Clearwire in a manner that does not require amendment of the certificate of incorporation or consent of Sprint to a shareholder agreement embodying what DISH has requested.

Funding. Among other arguments, Sprint has stated that the complex financing provisions of the DISH Proposal must also be considered in light of the existing Clearwire contractual arrangements (including debt arrangements) and that it is not clear from Sprint’s review that such financing is permitted by or would comply with Clearwire’s existing arrangements. In addition, Sprint has stated that Sprint and the other parties to the Equityholders’ Agreement would have preemptive rights with respect to any issuance of exchangeable notes by Clearwire as contemplated by the DISH Proposal, and any issuance of such notes may also require Clearwire stockholder approval in accordance with the NASDAQ listing requirements.

Sprint Financing. Sprint has stated that it is concerned with Clearwire’s failure to consummate the January 2 tranche of funding under the Sprint Financing Agreements, that it does not believe Clearwire’s initial draw notice was revocable and that it has reserved its rights relating thereto.

Process

The Special Committee will, consistent with its fiduciary duties and in consultation with its independent financial and legal advisors, continue to evaluate the DISH Proposal and the letter from Sprint and discuss them with each of DISH and Sprint, as appropriate. The Special Committee and Clearwire will pursue the course of action that is in the best interests of Clearwire’s non-Sprint Class A stockholders. Neither Clearwire nor the Special Committee has any further comment on this matter at this time.

Evercore Partners is acting as financial advisor and Kirkland & Ellis LLP is acting as counsel to Clearwire. Centerview Partners is acting as financial advisor and Simpson Thacher & Bartlett LLP and Richards, Layton & Finger, P.A. are acting as counsel to Clearwire’s special committee.

Okay, now let’s see who’s got the bigger set of dishes!

jlk

SRT OF OK NW 2 TXT WLE DRVNG N CA

Posted on January 1, 2013January 1, 2013 by Dr. Jonathan L. Kramer

AB 1536, which is effective today, January 1, 2013, changes California law to allow some texting while driving. Texting is allowed if your phone can be used by voice commands, such as using Apple’s iPhone Siri feature. She has powerful friends in Sacramento!

It will be interesting to see how this change to the prior law, which made texting while driving illegal, plays out.

Here is the test of the newly revised California vehicular texting law, effective today:

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 23123.5 of the Vehicle Code is amended to read: 23123.5.

(a) A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication, unless the electronic wireless communications device is specifically designed and configured to allow voice-operated and hands-free operation to dictate, send, or listen to a text-based communication, and it is used in that manner while driving.

(b) As used in this section “write, send, or read a text-based communication” means using an electronic wireless communications device to manually communicate with any person using a text-based communication, including, but not limited to, communications referred to as a text message, instant message, or electronic mail.

(c) For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call or if a person otherwise activates or deactivates a feature or function on an electronic wireless communications device.

(d) A violation of this section is an infraction punishable by a base fine of twenty dollars ($20) for a first offense and fifty dollars ($50) for each subsequent offense.

(e) This section does not apply to an emergency services professional using an electronic wireless communications device while operating an authorized emergency vehicle, as defined in Section 165, in the course and scope of his or her duties.

Clearwire to sink from sight/site

Posted on December 17, 2012December 17, 2012 by Dr. Jonathan L. Kramer

(Updated 4:41 p.m.; added AGL Magazine story link.)

Well, it’s almost over. Clearwire, that is.

Clearwire will sink from site, er, from sight as SoftSprint (or someone else depending on the investor law suits will will claim insufficient value to be paid by Sprint) ponies up the relatively small bucks to buy the rest of Clearwire that Sprint doesn’t already own.

So Clearwire’s WiMax is dead. Clearwire’s shift to LTE is dead. Clearwire’s microwave sites will soon be dead.

Clearwire is all but dead. The corpse is worth more dead, mainly if not entirely because of the FCC’s spectrum licenses it presently owns…and soon will transfer. My gut says that the existing sites are mostly useless expect for some possibility of site-to-MTSO backhaul.

I bet Google’s sorry it jumped ship in February of 2012, receiving only $1.60 for each of its 29 million shares (something greater than a 90% loss on its original investment). With the current buyout at $2.97 per share, that’s nearly $40m that Google would have relieved had it not jumped early. Still quite a loss over what they paid for the shares originally, but $40m is still a lot of money for Google…like a couple of hours of revenue. Okay, maybe Google won’t care so much.

Expect that if you are negotiating with Clearwire now, those negotiations will freeze. The REALLY cold freeze.

A lot of Clearwire site landlords should expect the ‘really bad news’ letter in about 6 months or so. If Sprint wins control of all of Clearwire, and it’s true to form, then they’ll offer landlords sucker deals to take on the liability for the non-removal of portions of Clearwire’s equipment. (See my posting on this subject HERE.)

AGL Magazine has good story coverage with quotes, which you can read by CLICKING HERE.

Another one bites the dust.

jlk

Forget the Cell Site Lease Buyout – Buy The Whole Property

Posted on December 1, 2012December 1, 2012 by Dr. Jonathan L. Kramer

In an interesting twist on a wireless site lease buyout, Global Signal (a unit of Crown Castle) has not only bought out an existing cell site lease in Fort Myers, Florida…it bought the entire underlying property and the existing commercial office building as well.

Crown Castle paid $1,000,000 for a property recently assessed to be worth about $620,000. The property was originally listed for $1,200,000.

Here’s what the seller’s listing agent, Kevin Fitzgerald of NAI Southwest Florida said about the deal, “I think [Crown Castle] liked the property location, and they have an interest in the cell tower in the back of it,” he says. “To the best of our knowledge they are going to try to lease [the building] out.”

Was Crown Castle crazy?

Yeah. Crazy like a fox.

The site is located to serve the Midpoint Bridge as well as Page Field, the local airport. It is certainly in a great location for commuter and fixed high capacity/volume wireless traffic. There appear to be six levels of antennas on this legacy monopole, which is no doubt subject to the relaxed Sec. 6409(a) collocation rules.

The current cell site income was reported as being about $5,500 per month. Using the usual valuation benchmarks, this would have meant that a likely offer on just the lease and easement would be in the range of $792,000 to $990,000, with the higher number being more likely closer the a deal point. The lease buyout value might even be higher if the underlying lease is within 10 years of its natural expiration.

When you look at the rent that Crown Castle was paying, nearly $5,500 per month (presumably tied to the collocations at the site, and also likely to be effectively increasing 2 to 5% per year), as well as the residual value Crown Castle can recognize by flipping the property minus the cell site ($620,000ish minus some value for the internal portion of the building that will continue to be used by one or more of the collocators) plus the short or long term tax loss from the purchase price, the deal seems to make a lot of sense from Crown Castle’s standpoint. A lot of sense, actually. It’s like Crown Castle got the property thrown in nearly for free on top of the wireless lease buyout.

Yes, a sweet deal for Crown Castle.

Likely not so sweet a deal for Peninsula Associates LLP, the seller, which probably also paid a 7% real estate sales commission to NAI while apparently leaving a whole boatload of money on the table on the way out the door.

Reported information regarding the sale (believed to be accurate but not guaranteed):

BUYER: Global Signal Acquisitions IV LLC, Canonsburg, Pa.

SELLER: Peninsula Associates LLP

PROPERTY: 1421 Colonial Blvd Fort Myers, FL 33907 (building constructed in 1965); Alternate address: 1421 Cr 884 W, Fort Myers, FL 33907

LISTED: August, 2012; Contract in October, 2012.

CURRENT SALES PRICE: $1 million (7855 square feet/$127 per square foot; Lot size: 0.83 acres; about 850 square feet inside building used by cell tower tenants.

PREVIOUS SALES RICE: $420,000, December 1988

ASSESSED MARKET VALUE (2011): $620,302 ($404,302 for building; 216,000 for land)

READ NAI’S LISTING FLYER: Click Here.

View Larger Map (and zoom+ satellite view to see the entire tower)

T-Metro Says It Will Shutter 10,000 MetroPCS sites if…

Posted on November 22, 2012November 22, 2012 by Dr. Jonathan L. Kramer

…their merger is approved by the federal government. This represents about 87% of all of the MetroPCS sites, excluding the DAS nodes. MetroPCS estimates that this will save them…really, T-Mobile…about $7B in site lease costs.

Doing some back-of-the-napkin calculations based on a 25 year average term, a $7B savings would work out to average blended going forward monthly rent of $2,333. Over a 30 years term, monthly rent drops out to about $1,944, blended. Frankly, this that sounds high to me, but perhaps my napkin is a bit wet.

MetroPCS’s announcement also alludes to an interesting technology conclusion: T-Mobile is satisfied with the bulk of its existing coverage from its existing sites. It must believe that it can take MetroPCS’s bandwidth and redeploy it from T-Mobile’s existing sites, most likely using upgraded base transceiver/telecommunications station (“BTS”) cabinets. For the non-technical of you reading this, this means that the MetroPCS acquisition is a bandwidth/capacity play; not a coverage play.

Without the passage of Section 6409(a), this pending deal might not have happened. We’ll see how the constitutional challenges to Section 6409(a) impact this deal.

MetroPCS’s announcement is yet another cautionary tale to potential wireless site landlords…

Wireless site landlords are most often bound to lease for 25 to 30 years with few, if any, real ‘outs.’ Conversely, the typical tenant ‘outs’ in a lease make their side of the deal really only a 30 day guarantee (if you’re lucky you might get 6 months).

For those of you who are considering entering into new leases, you are best served to carefully evaluate whether a 30 year v. 30 day commitment makes real sense. If not, then keep negotiating. If you are a wireless site landlord with a tenant requesting a renewal, extension, or modification, this is the time to negotiate a meaningful termination clause. This is what we tell our clients, and what we do for our clients.

We also tell our clients, ‘Sometimes the best deal is the one you walk away from.’

Food for thought on this Thanksgiving.

-Jonathan

Kramer.Firm Thanksgiving Doorbuster Sale

Posted on November 20, 2012 by Dr. Jonathan L. Kramer

As a special incentive to attract new clients and retain our current clients, Kramer.Firm, Inc. will be giving a 95% discount on all work we perform between 8:00 p.m. PST on Thanksgiving through 11:00 a.m. PST on Black Friday. We’re very excited to make this offer. Just mention the Discount Code: “Idiotic Sale” to get this discount. *

Your friends at Kramer.Firm, Inc.

* By the way, we're not open--much 
less working--on Thanksgiving.  
We believe this is a day to spend 
with family and friends.  
We're also not working on Black Friday, 
because we'll fight the 
Mall traffic that day.

Former Mobilitie Site Owners: Beware of Estoppel Letters with Additional Terms

Posted on October 24, 2012October 24, 2012 by Dr. Jonathan L. Kramer

SBA recently acquired Mobilitie’s tower portfolio of over 2,300 tower sites.

My friend and trusted colleague, attorney Mike Ritter of Tower Seekers has sent me a copy of an interesting (and potentially disastrous) letter being sent to tower site landlords by SBA, a tower company that acquired Mobilitie’s tower sites.

SBA (or one of its affiliates) is going after financing, and the SBA letter say, in part:

[SBA] or one of its affiliates is obtaining financing (the “Loan”) from a lender (together with its successors and assigns, the “Lender”), and will be pledging its interest in the Lease as collateral for the Loan and the Lender is also requesting confirmation of certain matters regarding the Lease.

In other words, SBA is going to take your wireless site lease and pledge it to secure a bank loan.

The next part of the letter asks the landlord to confirm certain facts about the existence and status of the cell site lease. This is a request for the landlord to execute what is called an ‘Estoppel Certificate.’ The landlord is being requested to legally certify that the facts stated in the letter are true and correct, and the lender can rely on those facts when making its loan to SBA. Commonly, there’s nothing wrong with such a request as long as the facts stated are entirely correct.

Once signed, however, the landlord is legally estopped (barred) from later claiming that some problem with the lease existed at or prior to the date he or she signed the Estoppel Certificate. If there’s some undiscovered problem, but the landlord signs the Estoppel Certificate, then he or she can be giving up very valuable lease enforcement rights. This is why it is critical for landlords to be exceptionally careful in ascertaining the accuracy of the facts before executing the Estoppal Certificate. In some cases, you (or more likely your attorney) will want or need change the language of the Estoppel Certificate before signing it, if it can be truthfully signed at all.

For example, in a current matter I’m handling for one of my cell tower site landlord clients, a tower company — not SBA — sent a written request to my client asking that he execute an Estoppel Certificate. The tower company even offered to pay $500 for the landlord’s execution of the Estoppel Certificate. At that time, however, the tower company was in serious Rent arrears by many thousands of dollars. Had my client signed the the Estoppel Certificate before I reviewed it, he would have wiped out major claim for the overdue rent for the token payment of $500. That’s a great business deal, but only for the tower company.

Now back to SBA and its zinger: Not only does the SBA letter serve as an Estoppel Certificate, there’s also a lot of added language that is intended to be a legally binding formal amendment to the underlying lease. The amendment would have the landlord give up tremendously valuable legal rights. Here are the Zinger sections from the SBA letter, followed by my translations from Legalese to English:

(e) If Lender exercises any rights of Tenant under the Lease, including the right to exercise any renewal option(s) or purchase option(s) set forth in the Lease, you agree to accept such exercise of rights by Lender as if same had been exercised by Tenant, and Tenant, by signing below, confirms its agreement with this provision.

Plain English Translation: If your lease requires that you receive notice of the tenant extending its term, you agree to accept that notice from the third party lender.

(f) If there is a monetary default by Tenant under the Lease, you will accept the cure thereof by Lender within fifteen (15) days after the expiration of any grace period provided to Tenant under the Lease to cure such default, prior to terminating the Lease. If there is a non-monetary default by Tenant under the Lease, Landlord will accept the cure thereof by lender within thirty (30) days after the expiration of any grace period provided to Tenant under the Lease to cure such default, prior to terminating the Lease.

Plain English Translation:If your tenant stops paying you and you are about to terminate the lease, the lender is given additional time to beyond the grace period to pay you. This negatively affects your rights to terminate the lease for non-payment, and to then enter into a new agreement with better terms…for you.

(g) The Lease may not be amended in any respect which would be reasonably likely to have a material adverse effect on Lender’s interest therein or surrendered, terminated or cancelled, without the prior written consent of Lender.

Plain English Translation: If you negotiate a lease modification in good faith with your tenant, the lender need only claim that amendment would likely have some negative impact on the lender to then nullify the amendment.

(h) If the Lease is terminated as result of a Tenant default or is rejected in any bankruptcy proceeding, you will enter into a new lease with Lender or its designee on the same terms as the Lease within 15 days of Lender’s request made within 30 days of notice of such termination or rejection, provided Lender pays all past due amounts under the Lease. However, this is not applicable to normal expirations of the lease term.

Plain English Translation: If the lease is terminated for virtually any reason, including bankruptcy of your tenant, you have no choice but to enter into a new lease on the same (perhaps lousy) terms of the terminated Lease. You lose virtually all rights to end your lease because of some bad act of the tenant…the most likely result is that the lender says, ‘do over’ and poof: A new lease on the same old terms as the one that you just terminated.

This letter shall be binding on Landlord and Tenant and their respective successors and assigns and shall inure to the benefit of Lender. Tenant shall have the right to record this letter and it shall serve a as a memorandum of the Lease. Tenant shall have the right to record this letter and this recorded letter shall be deemed to provide notice of all of terms of the Lease.

Plain English Translation: This letter is NOT ONLY an Estoppel Certificate, it’s a binding amendment to your lease adding terms that are not very good for you as the landlord, but REALLY good for the lender and the tenant.

Please indicate your agreement to the foregoing matters by countersigning this letter in the space provided in the presence of two witnesses and a notary public and returning an original, countersigned, witnessed and notarized copy of this letter to Tenant in the enclosed prepaid Federal Express envelope.

Plain English Translation: Sign on the dotted line in front of a couple of witnesses and we’ll spring for the cost of returning the stuff to us. Oh boy!

If you are a tower site landlord and get one of these letters, I strongly urge you to talk with your attorney before you even think about signing it. As your attorney will likely tell you, you should not agree to a modification of your lease without knowing all of the upsides and downsides of the modification, and in some cases trying to balance the downsides with new benefits.

Now you know my opinions on regarding letters like the one being sent out by SBA. Be very careful.

Municipal Cell Site Lease Transactions

Posted on October 20, 2012October 20, 2012 by Dr. Jonathan L. Kramer

A couple of years ago, John Pestle and I conducted a cell tower lease rent analysis for the International Municipal Lawyers Association. That study was valuable to show that cell site rents were all over the spectrum by location, deal points, time, and other components.

To assist my municipal attorneys and municipal consultant colleagues evaluate offers and craft better terms for leasing government property for cell sites, I’m starting a separate page here at CellTowerSites.com to track cell site transactions (leases; licenses; amendments; terminations; etc.). The page will contain links to actual documents, and a short analysis of the key points of each transaction. Brief general information about new cell site documents uploaded to this site will be posted in public view.

Note that the tracking site page will only be available to registered users who prove themselves to me to be municipal attorneys, private attorneys who work for municipalities as outside or contract counsel, or selected municipal consultants.

If you’d like to have access to the private site page and you are not already a registered user here, you’ll need for first register for access to this site using THIS PAGE. Once you’ve registered, come back to this page and fill out the form below. I’ll upgrade your registration to note your access to the private page area.

Did Sprint+Network Vision-Lightsquared = Sprint+Clearwire+Softbank?

Posted on October 18, 2012 by Dr. Jonathan L. Kramer

I’ve been thinking about why Sprint has now decided to sell itself to Softbank.

It seems to me that one possible answer would be to blame Clearwire and then LightSquared.

Clearwire was to be Sprint’s first (but not last) 4G answer, but WiMax never took off. In fact, the only thing about Clearwire that took off were some of its major investors, like Google looking elsewhere to invest and actually make money on the investment.

Comes then Lightsquared, with its grand plan to deploy 4G services to various existing carriers using a very odd frequency band adjacent to the widely-relied upon GPS downlink band. Sprint loved its new 4G provider, especially since Lightsquared was to pay $9 billion-ish to Sprint to use the new Network Vision platform. While Lightsquared would be free sell its services through other carriers, it would be in a sense captive to Sprint since it would be a major network platform provider for Lightsquared’s services. It seems clear that Sprint’s Network Vision project moved forward, certainly in significant measure because of Lightsquared’s funding commitment.

Then came that nasty little GPS interference problem and sunk Lightquared, and resulted in a bankruptcy filing.

Sprint was left holding a $9 billion bag looking for another funding source for Network Vision. Before Softbank, no major replacements had stepped up. Sprint began shuttering Nextel sites as quickly as they could to reduce that ongoing lease load while pushing new Network Vision sites out into the field.

Not fast enough, apparently.

Now comes Softbank to offer up a huge capital infusion and other goodies for a 70% stake in Sprint. And, Softbank is eyeing Sprint’s nearly-kaput first 4G love, Clearwire. Word on the street is that Sprint, tracking Softbank’s longing eye, will try to take actual control of Clearwire, which was something denied it by the original investment agreement that kept Clearwire as a separate entity from Sprint. That would certainly make Sprint’s current love very, very happy.

One thing for sure: The T-Mobile+MetroPCS and Softbank+Sprint+Clearwire equations equal big trouble for the rapidly-disappearing smaller regional wireless carriers.

It would not surprise me to see virtually no regional carriers, and only four major wireless carriers in the U.S.: Verizon, AT&T, T-Metro, and SoftSprint. Following, I envision a T-Metro split-up shortly after it figures out that all it did was to replicate the dumb Sprint Nextel technically incompatible deal that started Sprint’s slide into the current Softbank sale.

Then there would be 3. Then you’ll hear the pin dropping on the table.