CONFORMED COPY
SHAREHOLDERS' AGREEMENT
dated as of
January 29, 1999
among
NEXTEL PARTNERS, INC.
AND
THE SHAREHOLDERS NAMED HEREIN
TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS
Section 1.01. Definitions....................................................1
ARTICLE 2 CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board......................................13
Section 2.02. Removal.......................................................14
Section 2.03. Vacancies.....................................................14
Section 2.04. Quorum and Action by the Board................................14
Section 2.05. Notice of Meeting; Participation..............................15
Section 2.06. Actions Requiring Board, NWIP or DLJMB Approval...............15
Section 2.07. Actions Requiring Shareholder Approval........................19
Section 2.08. Subsidiary Governance.........................................19
Section 2.09. Conflicting Charter or Bylaw Provisions.......................19
Section 2.10. Initial Capitalization........................................19
Section 2.11. Stock Options.................................................20
ARTICLE 3 RESTRICTIONS ON TRANSFER
Section 3.01. General.......................................................20
Section 3.02. Legends.......................................................21
Section 3.03. Permitted Transferees.........................................22
Section 3.04. General Restrictions on Transfers.............................22
Section 3.05. Rights of First Offer.........................................24
Section 3.06. Right of First Refusal........................................26
Section 3.07. Major Investor Call Right.....................................28
Section 3.08. Special Nextel Sale Right.....................................30
ARTICLE 4 PUT AND CALL RIGHTS
Section 4.01. Non-Nextel Shareholder Put Rights.............................33
Section 4.02. Nextel Shareholder Call Right.................................40
Section 4.03. Fair Market Value Calculation.................................44
Section 4.04. Management Stockholder Tag Along Right........................48
Section 4.05. Company Repurchase Rights.....................................49
ARTICLE 5 ANTI-DILUTION AND PREEMPTION RIGHTS
Section 5.01. Anti-Dilution Rights..........................................51
Section 5.02. Special NWIP Anti-Dilution Rights.............................53
Section 5.03. Special NWIP Preemption of Registration Rights................54
ARTICLE 6 REGISTRATION RIGHTS
Section 6.01. Demand Registration...........................................56
Section 6.02. Company Registration; Incidental Registration.................59
Section 6.03. Holdback Agreements...........................................61
Section 6.04. Registration Procedures.......................................62
Section 6.05. Indemnification by the Company................................65
Section 6.06. Indemnification by Participating Shareholders.................66
Section 6.07. Conduct of Indemnification Proceedings........................67
Section 6.08. Contribution..................................................68
Section 6.09. Participation in Public Offering..............................69
Section 6.10. Cooperation by the Company....................................69
Section 6.11. No Transfer of Registration Rights............................70
Section 6.12. Limitations on Subsequent Registration Rights.................70
Section 6.13. Obligation to Register Nextel and NWIP Securities.............70
ARTICLE 7 CERTAIN COVENANTS AND AGREEMENTS
Section 7.01. Confidentiality...............................................71
Section 7.02. Reports.......................................................72
Section 7.03. Subsequent Deployment of Alternative Digital
Transmission Technology.....................................72
Section 7.04. Limitations on Subsequent Changes to Company's
Operations..................................................73
Section 7.05. Delivery of Nextel Stock......................................76
Section 7.06. Senior Management Resignation.................................77
ARTICLE 8 MISCELLANEOUS
Section 8.01. Entire Agreement..............................................78
Section 8.02. Binding Effect; Benefit.......................................78
Section 8.03. Assignability.................................................78
Section 8.04. Amendment; Waiver; Termination................................79
Section 8.05. Notices.......................................................79
Section 8.06. Fees and Expenses.............................................80
Section 8.07. Headings......................................................81
Section 8.08. Counterparts..................................................81
Section 8.09. Applicable Law................................................81
Section 8.10. Specific Enforcement..........................................82
Section 8.11. Limitations on Damages........................................82
Section 8.12. Consent to Jurisdiction; Expenses.............................82
Section 8.13. Severability..................................................83
Section 8.14. Amendments to Laws............................................83
Section 8.15. Acknowledgment of Limits on Nextel's Liability................83
SHAREHOLDERS' AGREEMENT
AGREEMENT dated as of January 29, 1999 among Nextel Partners, Inc.,
(the "COMPANY"), Nextel WIP Corp. ("NWIP"), DLJ Merchant Banking Partners II,
L.P. ("DLJMB"), Madison Dearborn Capital Partners II, L.P. ("MDP"), Eagle River
Investments, LLC ("EAGLE RIVER"), Motorola, Inc. ("MOTOROLA") and the
shareholders listed on the signature pages hereto.
W I T N E S S E T H :
WHEREAS, pursuant to the Subscription Agreement (as defined below)
certain parties hereto are acquiring securities of the Company; and
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of
the transactions contemplated by such Subscription Agreement;
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no security holder of the Company shall be deemed an
Affiliate of any other security holder solely by reason of any investment in
the Company nor shall any Person be deemed an Affiliate of the Company solely
by reason of veto, approval or similar rights granted to such Person pursuant
to any of the Transaction Documents. For the purpose of this definition, the
term "control" (including with correlative meanings, the terms "controlling",
"controlled by" 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 the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"ASSET TRANSFER AGREEMENT" shall have the meaning set forth in the
Subscription Agreement.
"BENEFICIALLY OWN" shall have the meaning set forth in Rules 13d-3 or
16a-1 of the Exchange Act.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are required or authorized by law to
close.
"CLOSING" means the Closing Date (as defined in the Subscription
Agreement).
"CO-INVESTOR" means each Shareholder other than the Strategic
Investors, the DLJ Entities and the Management Shareholders.
"COMPANY CAPITAL STOCK" means the Company Common Stock, the
Convertible Preferred Stock, the Series B Preferred (as defined in the
Subscription Agreement), the Warrants (as defined in the Subscription
Agreement) and any other equity security issued by the Company.
"COMPANY COMMON STOCK" shall mean authorized Common Stock, par value
$.001 per share, of the Company.
"CONVERTIBLE PREFERRED STOCK" means the Series A Preferred, Series C
Preferred and Series D Preferred, each as defined in the Subscription
Agreement.
"DLJ" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc.
"DLJ FUNDS" means XXXXX, XXX Xxxxxxxx Xxxxxxxx XX, X.X., XXX
Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ Merchant Banking
Partners II - A, L.P., DLJ Diversified Partners - A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners - A, L.P., UK Investment Plan 1997
Partners, DLJ EAB Partners, L.P., DLJ ESC II L.P., DLJ First ESC X.X., XXX Xxxx
Xxxxxxxxxx
Xxxxxxxx XX, X.X., XXX Private Equity Partners Fund, L.P., and DLJ Private
Equity Employee Partners Fund, L.P.
"DLJ ENTITIES" means the DLJ Funds and MDP. The term "DLJ ENTITIES",
to the extent such entities shall have transferred any of their Shares to
Permitted Transferees, shall mean the DLJ Entities and the Permitted
Transferees of the DLJ Entities, taken together, and any right or action that
may be exercised or taken at the election of the DLJ Entities may be exercised
or taken at the election of the DLJ Entities and such Permitted Transferees.
"DLJMB TRIGGER EVENT" means the transfer of Equity Securities by one
or more of the DLJ Entities so that the Equity Securities beneficially owned by
the DLJ Entities, in the aggregate, is less than 80% of the Initial Ownership
of the DLJ Entities.
"EQUITY SECURITIES" means the Company Common Stock, the Warrants (on a
Fully Diluted basis) and the Convertible Preferred Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission or similar
regulatory authority established in replacement thereof.
"FCC CHANGE OF CONTROL" means the granting or withholding of any
rights, powers or obligations, that either individually or in combination,
would require the approval of the FCC pursuant to Section 310(d) of the
Communications Act of 1934, as amended, or any of the FCC Rules or policies
implementing Section 310(d).
"FCC RULES" means the statutes, rules and regulations administered by
the FCC.
"FULLY DILUTED" means, with respect to any class of Company Capital
Stock and without duplication, all outstanding shares and all shares issuable
in respect of outstanding securities convertible into or exchangeable for
Company Common Stock, stock appreciation rights or options, warrants and other
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irrevocable rights to purchase or subscribe for Company Common Stock or
securities convertible into or exchangeable for Company Common Stock; provided
that no Person shall be deemed to own such number of Fully Diluted shares of
such class as such Person has the right to acquire from any Person other than
the Company.
"INITIAL OWNERSHIP" means, with respect to any Shareholder, the number
of shares of Equity Securities beneficially owned (and (without duplication)
which such Persons have the right to acquire from the Company) as of the date
hereof, taking into account any stock split, stock dividend, reverse stock
split or similar event, provided that with respect to the Initial Ownership of
the DLJ Entities, in the event that either the DLJ Funds or MDP elect to
transfer Shares to a Third Party and MDP or the DLJ Funds, as the case may be,
elects to exercise its rights under Section 3.05, 3.06 or 3.07 and purchase its
Pro Rata Portion, and, in addition, offers irrevocably to purchase all of those
Shares proposed to be transferred to the Third Party that are not purchased by
the other Major Investors, the Initial Ownership of the DLJ Entities, in the
aggregate, will be reduced by the number of Shares sold by the DLJ Funds or
MDP, as the case may be, and purchased by the other Major Investors (excluding
the DLJ Funds and MDP) pursuant to Section 3.05, 3.06 or 3.07.
"INITIAL PUBLIC OFFERING" means the initial Public Offering.
"INITIAL REQUIRED BUILD" means the completion of the Build Out of all
Initial Sections (as defined in the Joint Venture Agreement) assigned to the
first or second Build Year (as defined in the Joint Venture Agreement), and of
any Option Sections (as defined in the Joint Venture Agreement) assigned to the
first or second Build Year that are included in the Territory (as defined in
the Joint Venture Agreement) through the Company's election under Section 6.2B
of the Joint Venture Agreement, but excluding any such Option Sections that are
included in the Territory as a result of the Company's response to a notice
given pursuant to Section 6.2C of the Joint Venture Agreement.
"JOINT VENTURE AGREEMENT" means that certain Joint Venture Agreement,
dated as of the date hereof, by and among the Company, Opco and NWIP, as it may
be amended from time to time.
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"LICENSE CO." means Nextel WIP License Co., a Delaware corporation,
which on the date hereof is a wholly-owned Subsidiary of NWIP and which, upon
receipt of the requisite FCC approval, will automatically become a wholly-owned
Subsidiary of the Company.
"MANAGEMENT AGREEMENT" means that certain interim Management
Agreement, dated as of the date hereof, by and among the Company, Opco, License
Co. and NWIP, as it may be amended from time to time.
"MANAGEMENT SHAREHOLDERS" means Xxxx Xxxxxxx, Xxxx Xxxxxxxx,
Xxxxx Xxxxxx, Xxxxx Aas, Xxxxx Xxxxxxxxx, and Xxxx Xxxxxxx and their Permitted
Transferees.
"NDS" means, individually, a Nextel Subsidiary operating all or any
portion of an ESMR Network (as defined in the Joint Venture Agreement) in the
United States and "the NDS" means, collectively, all of Nextel's Subsidiaries
operating all or any portion of an ESMR Network in the United States.
"NEXTEL" means Nextel Communications, Inc. and its successors and
assigns, including any surviving or transferee Person of a transaction described
in clause (iii) of the definition of Nextel Sale.
"NEXTEL AGREEMENT" means that certain Agreement Specifying Obligations
of, and Limiting Liability and Recourse to Nextel, dated as of the date hereof,
by and among Nextel, the Company, and Opco.
"NEXTEL SHAREHOLDERS" means (i) NWIP and its Permitted Transferees,
(ii) Nextel and its Subsidiaries and (iii) any person or group described in
clause (i) of the definition of Nextel Sale and any controlled Affiliate
thereof.
"1999 STOCK OPTION PLAN" means the Nextel Partners, Inc. 1999
Nonqualified Stock Option Plan as in effect on the date hereof.
"NON-NEXTEL SHAREHOLDERS" means any Shareholder other than a Nextel
Shareholder.
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"OPCO" means Nextel Partners Operating Corp., a wholly owned
subsidiary of the Company.
"PERCENTAGE OWNERSHIP" means, with respect to any Shareholder or any
group of Shareholders at any time, (i) the number of shares of Fully Diluted
Company Common Stock that such Shareholder or group of Shareholders
beneficially owns (and (without duplication) has the right to acquire from the
Company) at such time, divided by (ii) the total number of shares of Fully
Diluted Company Common Stock at such time.
"PERMITTED TRANSFEREE" means (i) in the case of a Shareholder other
than a Management Shareholder, NWIP, Motorola, Eagle River or a DLJ Entity (a)
any Affiliate of such Shareholder (collectively, "SHAREHOLDER AFFILIATES"), (b)
any general partner, limited partner, member, or shareholder of such
Shareholder or a Shareholder Affiliate that receives Shares in a bona fide
distribution pursuant to the terms of the transferor's organizational documents
(so long as such documents are not amended for the purpose of permitting such a
transfer), and any employee, officer or director of such Shareholder or a
Shareholder Affiliate, or any spouse, lineal descendant (whether natural or
adopted), sibling, parent, heir, executor, administrator, testamentary trustee,
legatee or beneficiary of any of the foregoing Persons described in this clause
(b) (collectively, "SHAREHOLDER ASSOCIATES") and (c) any trust, the
beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or general or limited partner of which
include only such Shareholder, such Shareholder Affiliates or Shareholder
Associates;
(ii) in the case of a Management Shareholder (a) a spouse or lineal
descendant (whether natural or adopted), sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of such
Management Shareholder, (b) any trust, the primary beneficiaries of which, or
any corporation, limited liability company or partnership, the stockholders,
members or general or limited partners of which include only the Persons named
in clause (a) or (c) any charitable remainder trust;
(iii) in the case of any DLJ Entity (a) any other DLJ Entity (except
that MDP and the DLJ Funds and their respective Permitted Transferees shall not
be Permitted Transferees of each other), (b) any general or limited partner of
any such
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entity (a "DLJ PARTNER"), and any corporation, partnership, Affiliated Employee
Benefit Trust or other entity which is an Affiliate of any DLJ Partner
(collectively, the "DLJ AFFILIATES"), (c) any managing director, general
partner, director, limited partner, officer or employee of such DLJ Entity or a
DLJ Affiliate, or the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any of the foregoing Persons referred to in this
clause (c) (collectively, "DLJ ASSOCIATES"), (d) any trust, the beneficiaries
of which, or any corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which, include only
such XXX Xxxxxx, XXX Xxxxxxxxxx, XXX Associates, their spouses or their lineal
descendants (whether natural or adopted) and (e) Xxxx Xxxxx, in an amount not
to exceed $100,000 of Convertible Preferred Stock, provided that any XXX
Xxxxxxx, XXX Xxxxxxxxx, XXX Associate, or any Person described in clause (d)
shall be deemed a Permitted Transferee only if (x) a DLJ Entity is required to
transfer Shares to such Person pursuant to the terms of such DLJ Entity's
organizational documents and (y) since the date hereof, such organizational
documents have not been amended specifically to permit a transfer of Shares to
such Person under this Agreement. For purposes of this definition, "AFFILIATED
EMPLOYEE BENEFIT TRUST" means any trust that is a successor to the assets held
by a trust established under an employee benefit plan subject to ERISA or any
other trust established directly or indirectly under such plan or any other
such plan having the same sponsor;
(iv) in the case of NWIP, any wholly-owned Subsidiary of Nextel for
so long as it remains a wholly-owned Subsidiary of Nextel;
(v) in the case of Motorola, any controlled Affiliate who is not a
Competitor for so long as it remains a controlled Affiliate of Motorola; or
(vi) in the case of Eagle River, (a) Xxxxx X. XxXxx, (b) any Person
or Persons (i) that is controlled directly or indirectly by Xxxxx X. XxXxx or
the estate of Xxxxx X. XxXxx and (ii) a majority of the equity interests of
which are owned, directly or indirectly, by Xxxxx X. XxXxx and his family, his
brothers and their families, officers and employees of such entities,
ex-spouses of such persons and estates of, and trusts for the primary benefit
of, the foregoing persons (collectively, the "XXXXX GROUP"), (c) any Affiliate
of Xxxxx X. XxXxx, (d) any current or former member or shareholder of a Person
that is controlled by Xxxxx X. XxXxx,
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provided that any such member or shareholder of a Person described in this
clause (d) shall be deemed a Permitted Transferee only if Eagle River is
required or expressly permitted pursuant to the organizational documents of
Eagle River to transfer Shares to such member or shareholder and, since the
date hereof, such organizational documents have not been amended specifically
to permit a transfer of Shares to such Person under this Agreement and (e) any
group of entities, each controlled by Xxxxx X. XxXxx or the estate of Xxxxx X.
XxXxx and through which the XxXxx Group collectively owns, directly or
indirectly, a majority of the equity interests of Nextel (it being understood
that if the XxXxx Group collectively owns 50% of a Person that owns 20% of
Nextel's equity interests, the XxXxx Group will be deemed to indirectly own 10%
of Nextel's equity interest through such entity).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PUBLIC OFFERING" means any primary or secondary public offering of
Company Common Stock of the Company pursuant to an effective registration
statement under the Securities Act other than pursuant to a registration
statement filed in connection with a transaction of the type described in Rule
145 of the Securities Act or for the purpose of issuing securities pursuant to
an employee benefit plan.
"QUALIFIED DLJ ENTITIES" means (i) the DLJ Entities (other than MDP
and its Permitted Transferees), to the extent that DLJ has the power to vote or
control the vote of the Voting Stock held by such DLJ Entities and (ii) MDP and
its Permitted Transferees, to the extent that MDP (or DLJ) has the power to
vote or control the vote of the Voting Stock held by such Persons.
"QUALIFIED EAGLE RIVER ENTITIES" means Eagle River and its Permitted
Transferees to the extent that Eagle River or its Affiliates has the power to
vote or control the vote of the Voting Stock held by such Persons.
"QUALIFYING DLJ DEMAND" means a Demand Registration involving a sale
of Company Common Stock issued to the DLJ Entities upon conversion of the
Series A Preferred Stock acquired by them at the Closing that will result in
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either: (i) the receipt by the DLJ Entities of gross proceeds of at least $50
million or (ii) the sale of Company Common Stock by the DLJ Entities
representing more than 20% of the DLJ Entities' aggregate Initial Ownership.
"REGISTRABLE SECURITIES" means, at any time, with respect to any
Shareholder, any shares of Company Common Stock then owned by such Shareholder
until (i) a registration statement covering such Company Common Stock has been
declared effective by the SEC and such securities have been disposed of
pursuant to such effective registration statement, (ii) such securities are
sold under circumstances in which all of the applicable conditions of Rule 144
(or any similar provisions then in force) under the Securities Act are met or
such securities may be sold pursuant to Rule 144(k) or (iii) such securities
are otherwise transferred, the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing the legend required
pursuant to this Agreement and such securities may be resold without subsequent
registration under the Securities Act.
"REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 6.04(h)),
(vi) the reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, (vii) reasonable fees and
expenses of up to one counsel to represent collectively all of the Shareholders
participating in the offering, (viii) fees and expenses in connection with any
review of underwriting arrangements by the National Association of Shares
Dealers, Inc. (the "NASD") including fees and expenses of any "qualified
independent underwriter" and (ix) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses (except as set forth in
clause
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(vii) above) of the Shareholders or any fees and expenses of underwriter's
counsel or any other fees and expenses of underwriters.
"RESTRICTED STOCK PURCHASE AGREEMENTS" means the Restricted Stock
Purchase Agreements, dated as of November 20, 1998, as amended, between the
Company and each of the Management Shareholders, as in effect on the date
hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHAREHOLDER" means each Person (other than the Company) who agrees in
writing to be bound by the terms of this Agreement, whether in connection with
its execution and delivery as of the date hereof, pursuant to Sections 3.03,
3.05, 3.06, 3.07 and 8.03 or otherwise, so long as such Person beneficially
owns any Shares.
"SHARES" means shares of Company Capital Stock held by the
Shareholders.
"STRATEGIC INVESTOR" means any of NWIP, Eagle River, Motorola and
their respective Permitted Transferees.
"SUBSCRIPTION AGREEMENT" means the Subscription and Contribution
Agreement dated of even date herewith among the Company and the buyers named
therein relating to the purchase and sale of Company Capital Stock.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"TCW" means TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent
Mezzanine Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged Income
Trust II, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared Opportunity
Fund IIB, LLC and TCW Shared Opportunity Fund III, L.P.
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"THIRD PARTY" means a prospective purchaser of Shares from a
Shareholder in an arm's-length transaction where such purchaser is not a
Permitted Transferee of such Shareholder.
"TRANSACTION DOCUMENTS" has the meaning set forth in the Subscription
Agreement.
"UNDERWRITTEN PUBLIC OFFERING" means an underwritten Public Offering
of Company Common Stock consummated pursuant to an effective registration
statement under the Securities Act.
"VOTING STOCK" means any Company Capital Stock or Capital Stock, as
the case may be, which ordinarily has voting power for the election of
directors (or persons performing similar functions), whether at all times or
only so long as no senior class of securities has such voting power by reason
of any contingency.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Adverse Impact Notice 7.04(a)
Applicable Default 7.04(f)
Approved Purchaser 3.05(a)
Average Share Price 4.02(d)
Beneficial Owner 4.01(h)
Build Out 4.05(e)
Business Objectives 2.06(b)
Call Notice 3.07(b)
Call Right 3.07(a)
Called Interest 3.07(a)
Capital Stock 4.01(h)
Cause 2.02
Challenge Ceiling Price 4.03(h)
Challenge Floor Price 4.03(h)
Challenger's Representative 4.03(d)
Closing Price 4.01(h)
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Common Stock 4.01(h)
Company EBITDA 4.02(d)
Company Equity Value 4.02(d)
Company IPO 5.02(a)
Competitor 3.04(e)
Confidential Information 7.01(b)
control 4.01(h)
Default Outcome 7.04(f)
Demand Registration 6.01(a)
Disqualified Provision 7.04(f)
DLJMB Designee 2.01(a)
Eagle River Designee 2.01(a)
Election Period 4.05(e)
Event of Default 7.04(f)
Fair Market Value 4.03(a)
First Appraiser 4.03(b)
General Repurchase Date 4.05(e)
High Offering Price 5.02(a)
High Value 4.03(c)
Holders 6.01(a)
Improvements 7.04(h)
Indemnified Party 6.07
Indemnifying Party 6.07
Individual Repurchase Date 4.05(e)
Initial Offer Period 3.05(b)
Inspectors 6.04(g)
Investment Formula Price 4.03(h)
Lockup Termination Date 3.04(e)
Low Offering Price 5.02(a)
Low Value 4.03(c)
Major Investors 3.05(a)
Maximum Offering Size 6.01(f)
Mid-Range 4.03(c)
Nextel Determination 7.04(b)
Nextel Multiple 4.02(d)
Nextel Required Upgrade 7.04(a)
Nextel Required Upgrade Analysis 7.04(a)
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Nextel Sale 4.01(h)
Nextel Securities 6.13
Nextel Shares 7.05(a)
Nextel Voting Stock 4.01(h)
Nominee 2.03(a)
Notice of Challenge 4.03(d)
NWIP Call Notice 4.02(b)
NWIP Call Right 4.02(a)
NWIP Designee 2.01(a)
NWIP Preemption Put 4.01(a)
Offering Party 5.03(b)
Offering Price 5.02(b)
Option A 7.04(b)
Option B 7.04(b)
Option C 7.04(b)
Option D 7.04(c)
Option Sections 4.05(e)
Option Section Percentage 4.05(e)
Permitted Holders 4.01(h)
POPs 4.05(e)
Pre-Closing Expenditure 8.06(c)
Preemption Election Notice 5.03(b)
Preemption Notice 5.03(a)
Preemption Right 5.03(a)
Pro Rata Portion 3.05(b)
Purchase Date 7.05(a)
Put Event 4.01(a)
Put Notice 4.01(c)
Put Right 4.01(a)
Records 6.04(g)
Representatives 7.01(b)
Required Services 7.04(h)
Reselling Shareholder 4.05(e)
Second Appraiser 4.03(b)
Section 3.05 Offer 3.05(b)
Section 3.05 Offer Notice 3.05(a)
Section 3.05 Purchaser 3.05(d)
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Section 3.05 Sale 3.05(a)
Section 3.05 Sale Price 3.05(a)
Section 3.05 Shares 3.05(a)
Section 3.06 Offer 3.06(a)
Section 3.06 Offer Notice 3.06(a)
Section 3.06 Offer Period 3.06(b)
Section 3.06 Offer Price 3.06(a)
Section 3.08 Notice 3.08(a)
Section 3.08 Purchaser 3.08(a)
Section 3.08 Sale 3.08(a)
Section 3.08 Sale Price 3.08(a)
Section 5.01 Notice 5.01(a)
Section 5.02 Notice 5.02(a)
Selling Party 3.05(a)
Selling Shareholder 6.01(a)
Service Pricing Structure 7.04(h)
Shareholder 8.03
Special Nextel Sale 4.01(h)
Special Securities 4.05(e)
Start Date 4.03(b)
Superseding IPO 6.01(h)
Technology Change 7.03
Technology Change Notice 7.03
Telecommunications Company 3.04(e)
Telecommunications Revenue 3.04(e)
Third Appraiser 4.03(c)
Third Party Sale 3.07(a)
Third Value 4.03(c)
Total Common Equity 4.01(h)
Total Enterprise Value 4.02(d)
Trading Day 4.01(h)
transfer 3.01(a)
Underwriters' Range 5.02(a)
ARTICLE 2
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CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board. (a) The Board shall consist of
five members, of whom two shall be designated by DLJMB (each such director, a
"DLJMB DESIGNEE"), one shall be designated by NWIP (such director, a "NWIP
DESIGNEE"), one shall be designated by Eagle River (such director, an "EAGLE
RIVER DESIGNEE") and one shall be the chief executive officer of the Company.
(b) Each Shareholder entitled to vote for the election of directors to
the Board agrees that it will vote its shares of Equity Securities or execute
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of shareholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01.
The parties to this Agreement hereby agree that as of the date hereof the Board
shall consist of the following persons: Xxxx Xxxxxxx, Xxxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx and that such agreement
shall constitute shareholder consent to the foregoing for purposes of the
Delaware General Corporation Law.
(c) The right of NWIP, Eagle River or DLJMB, as the case may be, to
designate one member of the Board pursuant to this Article 2 shall terminate at
such time as the number of shares of Equity Securities held by the Nextel
Shareholders, the Qualified Eagle River Entities or the Qualified DLJ Entities,
as the case may be, is less than 50% of the Nextel Shareholders', Eagle River's
or the DLJ Entities' Initial Ownership, as the case may be. The right of DLJMB
to designate a second member of the Board pursuant to this Article 2 shall
terminate at such time as the number of shares of Equity Securities held by the
Qualified DLJ Entities, in the aggregate, is less than 12% of the DLJ Entities'
Initial Ownership. So long as the Strategic Investors, in the aggregate,
beneficially own less than a majority of the Voting Stock, such Strategic
Investors' designees will constitute less than a majority of the Board.
Individuals affiliated with a particular Shareholder or group of Shareholders
shall not constitute a majority of the Board unless, at the time such
individuals are elected, such Shareholder or group of Shareholders owns a
majority of the outstanding Voting Stock, and at no time shall more than one
DLJMB Designee be designated by MDP. Subject to (and to
15
the extent not inconsistent with) the foregoing, in the event that the right of
any Shareholder pursuant to this Section 2.01 to designate a member of the
Board terminates, the Board shall nevertheless continue to consist of five
members, and the member or members no longer designated by such Shareholder
shall instead be designated by the other members of the Board or (if such
members cannot reach agreement thereon within 30 days) by the holders of a
majority of the Voting Stock then outstanding. No member of the Board
designated as described in the preceding sentence will be deemed an NWIP
Designee or a DLJMB Designee for any purpose.
Section 2.02. Removal. Each Shareholder agrees that it will not vote
any of its shares of Voting Stock in favor of the removal of any director who
shall have been designated or nominated pursuant to Section 2.01 unless such
removal shall be for Cause or the Person(s) entitled to designate or nominate
such director shall have consented to such removal in writing, provided that if
the Persons entitled to designate or nominate any director pursuant to Section
2.01 shall request the removal, with or without Cause, of such director in
writing, such Shareholder shall vote its shares of Voting Stock in favor of
such removal. Removal for "CAUSE" shall mean removal of a director because of
such director's (a) willful and continued failure substantially to perform his
duties with the Company in his established position, (b) willful conduct which
is injurious to the Company or any of its Subsidiaries, monetarily or
otherwise, (c) conviction for, or guilty plea to, a felony or a crime involving
moral turpitude or (d) abuse of illegal drugs or other controlled substances or
habitual intoxication.
Section 2.03. Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without Cause) or otherwise, there
shall exist or occur any vacancy on the Board with respect to a DLJMB Designee,
an Eagle River Designee or a NWIP Designee:
(a) the Person(s) entitled under Section 2.01 to designate or
nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy, may, subject to the provisions of Section
2.01, designate another individual (the "NOMINEE") to fill such vacancy and
serve as a director of the Company; and
16
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its shares of
Voting Stock, or execute a written consent, as the case may be, in order to
ensure that the Nominee be elected to the Board.
Section 2.04. Quorum and Action by the Board. (a) A quorum of the
Board shall consist of three directors.
(b) All actions of the Board shall require the affirmative vote of at
least a majority of the directors at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be
to fill such vacancy.
Section 2.05. Notice of Meeting; Participation. (a) Unless waived by
all the directors with respect to a specific meeting, each director will
receive notice and the agenda of each meeting of the Board or any committee
thereof at least 10 days prior to such meeting, provided that if timely notice
was not provided to a director and such director attends a meeting without
objection, then such director shall be deemed to have waived this notice
requirement.
(b) The DLJMB Designee(s) will be permitted to invite two observers
to participate in any meeting of the Board, provided such observers will not be
permitted to vote at such meeting. DLJMB shall cause any such observers to
comply with the provisions of Section 7.01.
Section 2.06. Actions Requiring Board, NWIP or DLJMB Approval. (a) No
action by the Company, License Co., Opco or any other Subsidiary (including but
not limited to any action by the Board or any committee thereof or the board of
directors or any committee thereof of License Co., Opco or any other
Subsidiary) shall be taken after the date hereof with respect to (A) any of the
following matters without the affirmative approval of the Board or the relevant
board of directors, (B) any issuance of any Company Capital Stock at a per
share price lower than the per share price paid by DLJMB for the Series A
Preferred (other than an issuance described in Section 5.01(b)), without the
affirmative approval of a NWIP Designee and a DLJMB Designee, and (C) the
matters referred to in paragraphs (iv), (viii), (xi), (xvi) and (xvii) below
and any
17
transaction (or series of related transactions) covered by paragraph (ix) below
that has a value in excess of $5,000,000 and is not contemplated by the
Transaction Documents, without the affirmative approval (which shall be given
or withheld within 30 days of the Company's written request therefor) of at
least one DLJMB Designee (other than an increase in the percentage of the
Company's shares of Company Common Stock available for grant under the
Company's option plans from 5.6% to 9.16%, which will require only approval of
the Board), provided that approval by a DLJMB Designee under clauses (B) and
(C) above shall no longer be required after the earlier of the Initial Public
Offering or the transfer of Equity Securities by one or more of the DLJ
Entities so that the shares of Equity Securities beneficially owned by the
Qualified DLJ Entities is, in the aggregate, less than 80% of the Initial
Ownership of the DLJ Entities, and provided further that approval of a NWIP
Designee under clause (B) above shall no longer be required after the earlier
of the Initial Public Offering and a Section 3.08 Sale:
(i) any issuance of any Company Capital Stock, except pursuant to
the express terms of the Transaction Documents;
(ii) (x) any merger or consolidation of the Company with or into
any Person, other than a wholly owned Subsidiary, or of any
Subsidiary with or into any Person other than the Company or any
other wholly-owned Subsidiary; or (y) any sale of any Subsidiary or
any significant operations of the Company or any Subsidiary or any
acquisition or disposition of assets, business, operations or
securities by the Company or any Subsidiary (in a single transaction
or a series of related transactions) having a value in each case in
this clause (y) in excess of $25,000,000;
(iii) the declaration of any dividend on or the making of any
distribution with respect to, or the redemption, repurchase or other
acquisition of, any securities of the Company or any Subsidiary,
except as expressly permitted by this Agreement, the terms of the
Series B Preferred, or the Restricted Stock Purchase Agreements;
(iv) any liquidation, dissolution, commencement of bankruptcy, or
similar proceedings with respect to the Company or any material
Subsidiary;
18
(v) any incurrence, refinancing or alteration of material terms
by the Company or any Subsidiary of indebtedness for borrowed money
in excess of $25,000,000 in the aggregate (or the guaranty by the
Company or any Subsidiary of any such indebtedness), or the issuance
of any security by the Company or any Subsidiary (not including
issuances of such securities in connection with employee or stock
option plans previously approved by the Board pursuant to clause
(viii) below), in each case other than as specifically contemplated
by this Agreement or the Restricted Stock Purchase Agreements;
(vi) any capital expenditure in excess of $5,000,000 individually
or in the aggregate in an amount in excess of $25,000,000 per annum,
in either case, which is not specifically contemplated by the annual
budget or business plan of the Company or any Subsidiary;
(vii) any entering into, amending or modifying in any material
respect any agreements of the Company or any Subsidiary providing for
payments by or to the Company or such Subsidiary in excess of
$5,000,000 per annum or $25,000,000 in the aggregate;
(viii) any determination of compensation, benefits, perquisites
and other incentives for senior management of the Company or its
Subsidiaries and the approval or amendment of any plans or contracts
in connection therewith;
(ix) the entrance into any transaction between the Company or any
Subsidiary, on the one hand, and any stockholder, director, officer,
employee or Affiliate of the Company, any Subsidiary or any of the
foregoing, on the other hand, other than (X) transactions pursuant to
the express terms of the Transaction Documents, (Y) a loan from the
Company to Xxxx Xxxxxxxx in an amount not to exceed $2.2 million or
(Z) transactions involving an amount less than $500,000 in the
aggregate;
(x) any appointment of any of the Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer or Chief
Operating Officer or any other executive officer in any similar
capacity of the Company or any material Subsidiary;
19
(xi) any change in the Company's tax status;
(xii) any change in accounting or tax principles or policies with
respect to the financial statements, records or affairs of the
Company or any Subsidiary, except as required by generally accepted
accounting principles or by law or any other matters which could
affect any regulatory status or tax liability of the Company or any
Subsidiary, or any Shareholder with respect to the investment by such
Shareholder in the Company;
(xiii) any appointment or removal of the auditors, primary
outside legal counsel, financial advisors, underwriters (except
underwriters selected as provided in the first sentence of Section
6.04(f) unless such Demand Registration constitutes an Initial Public
Offering), investment bankers or company-wide insurance providers of
the Company or any Subsidiary;
(xiv) any amendment to the certificate of incorporation or bylaws
of the Company or any adoption of or amendment to the certificate of
incorporation or bylaws of any Subsidiary, or any change in the
composition of the board of directors of such Subsidiary from the
initial composition thereof approved by the Board, any formation of
any direct, first-tier Subsidiary of the Company other than Opco or
any formation of or acquisition of any Subsidiary that is not or will
not be a wholly-owned direct or indirect Subsidiary of the Company;
(xv) any approval of the annual business plan, budget and long
term strategic plan of the Company or any Subsidiary;
(xvi) any material modification or renewal (other than in the
ordinary course) or termination of the Management Agreement or the
Analog Management Agreement (as such term is defined in the Joint
Venture Agreement), or any other management agreement as contemplated
by the Joint Venture Agreement; or
(xvii) any modification of the long-term business strategy or
scope of the business of the Company or any material Subsidiary or
any material modification of any material customer relationships
thereof.
20
(b) Notwithstanding anything in Section 2.06(a) to the contrary, no
action by the Company, License Co., Opco or any other material Subsidiary
(including but not limited to any action by the Board or any committee thereof
or the board of directors or any committee thereof of the relevant Subsidiary)
shall be taken after the date hereof with respect to any of the following
matters without the prior written approval (which shall be given or withheld
within 30 days of the Company's written request therefor) of the NWIP Designee,
provided that (A) approval by the NWIP Designee of the matters referred to in
paragraph (ii) below will no longer be required on the earlier of the date on
which (x) NWIP transfers any Shares owned by NWIP as of the date hereof to a
Person (other than the Company) that is not a Permitted Transferee and (y) the
NWIP Call Right expires and (B) approval of the NWIP Designee of any of the
matters referred to in this Section 2.06(b) will no longer be required if the
Nextel Shareholders transfer their Shares to a Third Party pursuant to Section
3.08:
(i) any material change in the technology used by the Company;
(ii) any decision to expand or broaden the scope of the Company's
business beyond building and operating an ESMR digital mobile
communications network in the Territory (as defined in the Joint
Venture Agreement) (the "BUSINESS OBJECTIVES"), including any
decision to make any acquisitions other than 800 MHZ or 900 MHZ SMR
acquisitions;
(iii) any modification or change in the Business Objectives that
is inconsistent with the Company's duties and obligations under the
Transaction Documents;
(iv) any sale, exchange or other disposition of all or
substantially all the assets of the Company;
(v) the entering into any agreement or series of agreements the
terms of which would be materially altered if Nextel or NWIP either
exercised or elected not to exercise its right to acquire the
relevant Company Capital Stock under Sections 3.05, 3.07, 4.01, 4.02,
5.02, 5.03,
21
7.03 or 7.04 or otherwise acquired beneficial ownership of a majority
of the outstanding or Fully Diluted shares of Company Capital Stock.
Section 2.07. Actions Requiring Shareholder Approval. In addition to
any approvals required under Sections 2.06(a) and 2.06(b) and any approvals
required under applicable law, (x) any merger or consolidation of the Company
with or into any Person, other than a wholly-owned Subsidiary, or of any other
Subsidiary with or into any Person other than the Company or any other
wholly-owned Subsidiary, or (y) any sale of any Subsidiary or any significant
operations of the Company or any Subsidiary or any acquisition or disposition
of assets, business, operations or securities by the Company or any Subsidiary
(in a single transaction or a series of related transactions) having a value in
each case in this clause (y) in excess of $25,000,000, will require the
affirmative approval of at least 50% of the Voting Stock held by the Non-Nextel
Shareholders.
Section 2.08. Subsidiary Governance. Each of the Company and each
Shareholder agrees that the board of directors of Opco and, upon transfer of
the stock of License Co. to the Company, License Co. shall be comprised of the
individuals who are serving on the Board in accordance with Section 2.01 and
the board of directors of each other Subsidiary of the Company shall be
comprised of the president of each of the Company and Nextel or, if so
determined by the Board from time to time with respect to any such Subsidiary,
by the same number of individuals then serving on the Board, which individuals
shall be designated and subject to removal, and shall otherwise act, in the
manner specified with respect to the Board in Section 2.01 through 2.06. Each
Shareholder agrees to vote its shares of Voting Stock and to cause its
representatives on the Board, subject to his or her fiduciary duties, to vote
and take other appropriate action to effectuate the agreements in this Section
2.08 in respect of each such Subsidiary.
Section 2.09. Conflicting Charter or Bylaw Provisions. Each
Shareholder shall vote its shares of Voting Stock, and shall take all other
actions necessary, to ensure that the Company's certificate of incorporation
and bylaws facilitate and do not at any time conflict with any provision of
this Agreement.
Section 2.10. Initial Capitalization. (a) The equity capitalization of
the Company as of the date hereof is as set forth in Exhibit A hereto.
22
(b) Each Shareholder agrees that immediately preceding the closing for
the Initial Public Offering, all Company Capital Stock that is convertible into
or exchangeable for Company Common Stock shall be so converted or exchanged in
accordance with the provisions of the Company's certificate of incorporation.
Section 2.11. Stock Options. Once the shares available for issuance
under the 1999 Stock Option Plan are exhausted, if, at such time, the fair
market value of the Series A Preferred (or if such Series A Preferred has been
converted into Common Stock, the Common Stock) (determined by the Board in its
reasonable discretion) represents a compound annual rate of return to the DLJ
Entities of 30% or more (calculated using the same methodology used to
calculate the Investment Formula Price), the Company shall adopt a second
option plan; provided, that if the DLJ Entities have not then achieved a
compound annual rate of return of 30% or more (using the same methodology used
to calculate the Investment Formula Price), the Board, in its reasonable
discretion, may elect to authorize a second option plan, provided, further,
that until there has occurred both an Initial Public Offering and a DLJMB
Trigger Event, the maximum number of shares of Company Common Stock issuable
upon exercise of options available under such second option plan shall in no
event exceed 3.56% of the number of shares of Fully Diluted Common Stock
outstanding at the Closing (after giving effect to the grant and exercise of
all such additional options) without the approval of DLJMB.
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. General. (a) Each Shareholder understands and agrees
that the Shares purchased pursuant to the Subscription Agreement and/or the
Restricted Stock Purchase Agreement, as the case may be, have not been
registered under the Securities Act and are restricted securities. Each
Shareholder agrees that it will not, directly or indirectly, sell, assign,
transfer, grant a participation or derivative interest in, pledge or otherwise
dispose of ("TRANSFER") any Shares (or solicit any offers to buy or otherwise
acquire, or take a pledge of
23
any Shares) except in compliance with applicable federal or state securities
laws and statutes, FCC Rules and the terms and conditions of this Agreement.
(b) Any attempt to transfer any Shares not in compliance with this
Agreement shall be null and void and the Company shall not, and shall cause any
transfer agent not to, give any effect in the Company's stock records to such
attempted transfer.
(c) No (i) transfer of Shares (other than in a transaction involving
a Public Offering or, after a Public Offering, a sale pursuant to Rule 144 of
the Securities Act) or (ii) after the date hereof, issuance of Company Capital
Stock (other than mandatorily redeemable pay-in-kind non-convertible
securities) will be effective until the recipient of such securities has
executed and delivered a counterpart of this Agreement and the Custodial
Agreement agreeing to be bound hereby and thereby.
Section 3.02. Legends. (a) In addition to any other legend that may
be required, each certificate for the Shares that is issued to any Shareholder
shall bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE
THEREWITH. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE
SHAREHOLDERS' AGREEMENT DATED AS OF JANUARY 29, 1999 AND THE
CUSTODIAL AGREEMENT DATED AS OF JANUARY 29, 1999, A COPY OF EACH OF
WHICH THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF REQUEST THEREFOR ADDRESSED
TO
24
THE SECRETARY OF THE COMPANY, AT THE ADDRESS OF THE COMPANY."
(b) If any Shares shall cease to be Registrable Securities under
clause (i) or clause (ii) of the definition thereof, the Company shall, upon
the written request of the holder thereof, issue to such holder a new
certificate evidencing such Shares without the first sentence of the legend
required by Section 3.02(a) endorsed thereon. If any Shares cease to be subject
to any and all restrictions on transfer set forth in this Agreement, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Shares without the second sentence of
the legend required by Section 3.02(a) endorsed thereon.
Section 3.03. Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Shareholder may at any time transfer any or all
of its Shares to one or more of its Permitted Transferees without the consent
of the Board or any other Shareholder or group of Shareholders and without
compliance with Sections 3.04 through 3.07 so long as (a) such Permitted
Transferee shall have agreed in writing to be bound by the terms of this
Agreement and shall have assumed in writing and agreed to discharge any and all
obligations of such Permitted Transferee that relate to such Shares and (b) the
transfer to such Permitted Transferee is not in violation of applicable federal
or state securities laws or FCC Rules.
Section 3.04. General Restrictions on Transfers. (a) Except as
provided in Section 3.03, each of Eagle River, Motorola and each Management
Shareholder and their respective Permitted Transferees may transfer their
Shares only after the Lockup Termination Date, subject to Sections 3.05, 3.06
and 3.07, in a transfer to any Third Party other than a Competitor, provided
that (i) if there is an Initial Public Offering prior to the Lockup Termination
Date, each such Shareholder shall be permitted to transfer Shares, subject to
Sections 3.05, 3.06 and 3.07, in an amount up to 30% of the lesser of such
Shareholder's (x) Initial Ownership (or, in the case of a Shareholder who
transferred Shares after the date hereof and the Person who became a
Shareholder pursuant to such transfer, such Shareholder's and transferee's
respective ownership interest as of the date such transfer occurred) or (y)
ownership interest as of the day after the Initial Public Offering, (ii) if
there is a Put Event under Section 4.01 or Section 12.9 of the Joint Venture
Agreement or an NWIP Call Right under Section 4.02 or 7.03, each Shareholder
25
shall be permitted to sell its Shares to NWIP and (iii) if there is a Section
3.08 Sale, each Shareholder shall be permitted to sell its Shares to the
relevant Third Party.
(b) Except as provided in Section 3.03 or pursuant to a transfer to
the Company in connection with NWIP's repurchase of frequencies from the
Company pursuant to Section 4.14B of the Joint Venture Agreement, a Nextel
Shareholder may not transfer any Shares at any time prior to the exercise or
expiration of the NWIP Call Right and thereafter may transfer such Shares at
any time only pursuant to a Section 3.08 Sale and subject to Section 3.04(d).
(c) The DLJ Entities and each Co-Investor may transfer their Shares at
any time, subject to Sections 3.04(d), 3.05, 3.06 and 3.07. Notwithstanding
anything in this Agreement to the contrary, if any DLJ Entity proposes to sell
shares to a Third Party (x) in a transaction not involving a Public Offering or
(y) pursuant to a Demand Registration or Section 6.02, each of Ares Leveraged
Investment Fund, L.P., Ares Leveraged Investment Fund II, L.P., The Xxxx
Alternative Income Fund L.P., and TCW (each a "HIGH-YIELD INVESTOR") shall have
the nonassignable right, at its option (but following the same procedures and
subject to the same terms as those applicable to the DLJ Entities seeking to
consummate such proposed transfer), to elect to participate in such transfer on
a pro rata basis (determined based on the number of Shares that each DLJ Entity
and each High Yield Investor owns at the time of the proposed transfer). NWIP
acknowledges that any High Yield Investor that voted to sell its Company
Capital Stock to NWIP pursuant to Section 4.01(a) will be deemed to be a DLJ
Entity for purposes of the special put right for DLJ Entities under Section
4.01(b).
(d) In no event shall any Shareholder transfer Shares (i) to a
Competitor without the prior approval of the Board and NWIP or (ii) in
violation of applicable federal or state securities laws.
(e) The following terms shall have the following meanings:
"COMPETITOR" means (i) a Telecommunications Company, or (ii) any
Person beneficially owning more than 50% of the total common equity or Voting
Stock of or otherwise controlling a Telecommunications Company, or (iii) any
Person the total common equity or Voting Stock of which is more than 50%
26
beneficially owned or otherwise controlled by an entity described in clause (i)
or (ii).
"LOCKUP TERMINATION DATE" means the earliest date after the Company
has completed the Initial Required Build and achieved positive Company EBITDA
for the two consecutive fiscal quarters most recently ended for which financial
statements are available, excluding the effect on Company EBITDA of the
financial performance of any Option Sections that are included in the Territory
as a result of the Company's response to a notice given pursuant to Section
6.2C of the Joint Venture Agreement.
"TELECOMMUNICATIONS COMPANY" means any Person whose total
Telecommunications Revenue is at least 10% of its revenues (calculated on a
consolidated basis).
"TELECOMMUNICATIONS REVENUE" of any Person means all revenue derived
from the transmission or exchange of non-video data or voice information by any
form of wire, cable, fiber optic or wireless transmission in geographic markets
where Nextel or the Company is either (1) doing business, or (2) holds a
telecommunications license and has publicly stated its intention to do
business, and includes the revenue that such Person derives by engaging in the
business of transmitting or exchanging video information to the extent that
Nextel or the Company offers services to transmit or exchange video information
in the relevant geographic area. For purposes of this definition, (A) Nextel
includes any entity in which Nextel holds a 10% or greater direct or indirect
ownership interest that uses an iDEN or similar technology platform compatible
with that used by Nextel and (B) the Company includes the Company and all of
its Subsidiaries.
Section 3.05. Rights of First Offer. (a) If any Shareholder desires to
transfer any Shares to any Third Party in a transaction not involving a Public
Offering or, after a Public Offering, a sale pursuant to Rule 144 of the
Securities Act , such Shareholder (the "SELLING PARTY") shall give written
notice (a "SECTION 3.05 OFFER NOTICE") to the Company and each Strategic
Investor, DLJ Entity and Management Shareholder (each a "MAJOR INVESTOR" and
collectively, the "MAJOR INVESTORS") that such Selling Party desires to effect
such a transfer (a "SECTION 3.05 SALE") and setting forth the name of the
purchaser, the number of Shares proposed to be transferred by the Selling Party
(the "SECTION 3.05
27
SHARES"), and the consideration per Share (which must be payable in cash) that
such Selling Party proposes to be paid for such Shares (the "SECTION 3.05 SALE
PRICE"). In addition, if any of the DLJ Entities is the Selling Party, DLJMB
may also deliver to NWIP a list of up to five potential purchasers to whom it
proposes to sell its Shares if the Section 3.05 Shares are not purchased by the
Major Investors pursuant to this Section 3.05. Upon receipt of any such list,
NWIP will have 15 Business Days to approve each such potential purchaser, which
approval may not be unreasonably withheld. In the event NWIP approves a
potential purchaser or fails to provide a reason for withholding approval of
any such potential purchaser, prior to the expiration of the 15-day period,
such potential purchaser will be considered an "Approved Purchaser" for such
Section 3.05 Sale.
(b) The giving of a Section 3.05 Offer Notice to the Company and each
Major Investor shall constitute an irrevocable offer (the "SECTION 3.05 OFFER")
by such Selling Party to sell to such Major Investor for cash on the terms set
forth in the Section 3.05 Offer Notice the Section 3.05 Shares at the Section
3.05 Sale Price. Each Major Investor receiving a Section 3.05 Offer shall have
a 10 Business Day period (the "INITIAL OFFER PERIOD") in which to accept such
offer as to all (but not less than all) of such Major Investor's Pro Rata
Portion plus, to the extent available, any additional Shares such Major
Investor is willing to purchase, by giving a written notice of acceptance of
the Section 3.05 Offer (which notice shall include the maximum number of Shares
such Major Investor is willing to purchase) to such Selling Party (together
with a copy thereof to the other Major Investors and the Company) prior to the
expiration of such Initial Offer Period. If any Major Investor fails to so
notify the Selling Party or the Company prior to the expiration of the Initial
Offer Period, it will be deemed to have declined the Section 3.05 Offer.
If the Major Investors do not elect, in the aggregate, to purchase all
the Shares subject to such Section 3.05 Offer, the Selling Party shall not be
required to sell any Shares accepted pursuant to the Section 3.05 Offer and the
provisions of Section 3.06 or Section 3.07 shall apply. If two or more Major
Investors elect, in the aggregate, to purchase all of the Section 3.05 Shares,
then (i) each Major Investor that elected to purchase no more than its Pro Rata
Portion of the Section 3.05 Shares shall purchase its Pro Rata Portion of the
Section 3.05 Shares and (ii)
28
each Major Investor (if any) that elected to purchase more than its Pro Rata
Portion of the Section 3.05 Shares shall purchase its proportionate share
(based on the number of shares of Fully Diluted Company Common Stock owned by
such Major Investor divided by the number of shares of Fully Diluted Company
Common Stock owned by all Major Investors who have elected to purchase more
than their Pro Rata Portion) of the Section 3.05 Shares remaining to be
purchased (but not to exceed the maximum number of Shares that such Major
Investor is willing to purchase) after giving effect to the purchases pursuant
to clause (i) above.
"PRO RATA PORTION" means, with respect to any Major Investor that
elects to acquire Section 3.05 Shares from a Selling Party under Section 3.05
or 3.06, or from a Third Party under Section 3.07, that fraction that would
result from dividing (i) the number of shares of Fully Diluted Company Common
Stock that such Major Investor beneficially owns (or, without duplication, has
the right to acquire from the Company) by (ii) that number of shares of Fully
Diluted Company Common Stock beneficially owned by all Major Investors (or
which, without duplication, they have the right to acquire from the Company)
other than the Shares, if any, beneficially owned by the Selling Party.
(c) If the Major Investors elect to purchase all the Shares subject
to the Section 3.05 Offer, each Major Investor that accepts the Section 3.05
Offer shall have an unconditional obligation to purchase and pay, by certified
check or wire transfer, for all Section 3.05 Shares allocated to such Major
Investor within 30 days of the expiration of the Initial Offer Period; provided
that if the purchase and sale of such Shares is subject to any prior regulatory
approval, the Selling Party and the relevant Major Investors shall use their
reasonable best efforts to obtain the necessary regulatory approvals and the
time period during which such purchase and sale may be consummated shall be
extended until the later of (i) 60 days after the expiration of the Initial
Offer Period and (ii) if applicable, five Business Days after receipt of FCC
approval. The Company will cooperate with the Selling Party and the Major
Investors in obtaining any such regulatory approval, provided that its
reasonable out-of-pocket costs are reimbursed by the Selling Party as and when
incurred.
(d) Upon the earlier to occur of (i) full rejection of the Section
3.05 Offer by all recipients thereof, (ii) the expiration of the Initial Offer
Period without the
29
Major Investors electing to purchase all the Section 3.05 Shares, (iii) the
deemed rejection of the Section 3.05 Offer pursuant to Section 3.05(b) or (iv)
the failure of any Major Investor to obtain any required consent or regulatory
approval applicable specifically to it (and not the other Major Investors) for
the purchase of the Shares subject thereto within the time periods set forth in
Section 3.05(c) and the failure of the other Major Investors to agree to
purchase such Shares, the Selling Party shall have a 30-day period during which
to enter into a definitive agreement to transfer all of the Section 3.05 Shares
on substantially the same or more favorable (as to the Selling Party) terms and
conditions as were set forth in the Section 3.05 Offer Notice at a price not
less than 95% of the Section 3.05 Sale Price; provided that if such sale is not
by DLJMB to one or more Approved Purchasers, the Selling Party must, prior to
effecting a transfer pursuant to this Section 3.05, comply with the provisions
of Section 3.06 or 3.07. If the Selling Party enters into a definitive
agreement to sell the Section 3.05 Shares, the Selling Party and the purchaser
of such Section 3.05 Shares (the "SECTION 3.05 PURCHASER") shall, subject to
Section 3.06 or 3.07, use all reasonable efforts to consummate the Section 3.05
Sale as promptly as practicable (but in no event later than 270 days)
thereafter and upon consummation of the purchase and sale of such Section 3.05
Shares the Section 3.05 Purchaser shall agree in writing to be bound by the
terms of this Agreement and to assume and agree to discharge any and all
obligations of the Selling Party that relate to such Section 3.05 Shares and
arise under any of the relevant Transaction Documents. If the Selling Party
does not enter into a definitive agreement to sell the Section 3.05 Shares
within the 30- day period, or, subject to Section 3.06 or 3.07, fails to close
such transaction within 270 days after the execution of the definitive
agreement, such Shareholder may not sell any Shares without repeating the
foregoing procedures.
(e) A Major Investor's rights (but not its obligations) pursuant to
this Section 3.05 shall terminate when the number of shares of Equity
Securities held by such Major Investor is less than 25% of its Initial
Ownership.
Section 3.06. Right of First Refusal. (a) If after the Initial Offer
Period the Selling Party receives from or otherwise negotiates with the Section
3.05 Purchaser an offer to purchase for cash the Section 3.05 Shares (a
"SECTION 3.06 OFFER") and such Selling Party intends to pursue such sale of
such Shares to such Third Party, such Selling Party (other than DLJMB in a sale
to an Approved
30
Purchaser) shall either (i) provide the Company and each other Major Investor
written notice of such Section 3.06 Offer (a "SECTION 3.06 OFFER NOTICE") or
(ii) sell the Section 3.05 Shares to the Section 3.05 Purchaser, but subject to
the provisions of Section 3.07. The Section 3.06 Offer Notice shall identify
the Section 3.05 Shares, the Section 3.05 Purchaser, the cash price per Share
at which a sale is proposed to be made (the "SECTION 3.06 OFFER PRICE") and all
other material terms and conditions of the Section 3.06 Offer.
(b) The receipt of a Section 3.06 Offer Notice by the Company and
each Major Investor stating that such Major Investor has the right to purchase
the Section 3.05 Shares pursuant to this Section 3.06 shall constitute an
irrevocable offer by the Selling Party to sell all the Section 3.05 Shares to
the other Major Investors for cash at the Section 3.06 Offer Price on the terms
set forth in the Section 3.06 Offer Notice. Each Major Investor receiving a
Section 3.06 Offer shall have a 10 Business Day period (the "SECTION 3.06 OFFER
PERIOD") in which to accept such offer as to all (but not less than all) of
such Major Investor's Pro Rata Portion, plus, to the extent available, any
additional Shares such Major Investor is willing to purchase, by giving a
written notice of acceptance of the Section 3.06 Offer to each other Major
Investor, the Company and the Selling Party (which notice shall include the
maximum number of Shares such Major Investor is willing to purchase) prior to
the expiration of the Section 3.06 Offer Period. If any Major Investor fails to
so notify the Selling Party or the Company prior to the expiration of the
Section 3.06 Offer Period, it will be deemed to have declined the Section 3.06
Offer.
If the Major Investors do not elect, in the aggregate, to purchase all
the Shares subject to such Section 3.06 Offer, the Selling Party shall not be
required to sell any Shares accepted pursuant to the Section 3.06 Offer. If two
or more Major Investors elect, in the aggregate, to purchase all of the Section
3.05 Shares, then (i) each Major Investor that elected to purchase no more than
its Pro Rata Portion of the Section 3.05 Shares shall purchase its Pro Rata
Portion of the Section 3.05 Shares and (ii) each Major Investor (if any) that
elected to purchase more than its Pro Rata Portion of the Section 3.05 Shares
shall purchase its proportionate share (based on the number of shares of Fully
Diluted Company Common Stock owned by such Major Investor divided by the number
of shares of Fully Diluted Company Common Stock owned by all Major Investors
who have elected to purchase more than their Pro Rata Portion) of the Section
3.05 Shares remaining to be purchased
31
(but not to exceed the maximum number of Shares that such Major Investor is
willing to purchase) after giving effect to the purchases pursuant to clause
(i) above.
(c) If the Major Investors elect to purchase all the Shares subject
to the Section 3.06 Offer, each Major Investor that elects to purchase Shares
pursuant to this Section 3.06 shall have an unconditional obligation to
purchase and pay, by certified check or wire transfer, for all Section 3.05
Shares allocated to such Major Investor within 30 days of the expiration of the
Section 3.06 Offer Period; provided that if the purchase and sale of such
Shares is subject to any prior regulatory approval, the Selling Party and the
relevant Major Investors shall use their reasonable best efforts to obtain the
necessary regulatory approvals and the time period during which such purchase
and sale may be consummated shall be extended until the later of (i) 60 days
after the expiration of the Section 3.06 Offer Period and (ii) if applicable,
five Business Days after receipt of FCC approval. The Company will cooperate
with the Selling Party and the Major Investors in obtaining any such regulatory
approval, provided that its reasonable out-of-pocket costs are reimbursed by
the Selling Party as and when incurred.
(d) Upon the earlier of (i) the rejection or deemed rejection of the
Section 3.06 Offer by the Major Investors or (ii) the failure of any Major
Investor to obtain any necessary regulatory approval applicable specifically to
it (and not the other Major Investors) for the purchase of the Shares subject
thereto within the time periods set forth in Section 3.06(c) and the failure of
the other Major Investors to purchase such Shares, there shall commence a
270-day period during which the Selling Party shall have the right to close the
sale to the Section 3.05 Purchaser of any or all of the Shares subject to the
Section 3.06 Offer at a price not less than the Section 3.06 Offer Price,
provided that, upon consummation of the purchase of such Section 3.05 Shares,
the Section 3.05 Purchaser shall have agreed in writing to be bound by the
terms of this Agreement and to assume and agree to discharge any and all
obligations of the Selling Party that relate to such Section 3.05 Shares and
arise under any of the relevant Transaction Documents. If such Selling Party
does not consummate the sale of any Shares subject to the Section 3.06 Offer in
accordance with the foregoing time limitations, such Selling Party may not sell
any Shares without repeating the foregoing procedures in Section 3.05 and 3.06.
32
(e) A Major Investor's rights (but not its obligations) pursuant to
this Section 3.06 shall terminate when the number of shares of Equity
Securities held by such Major Investor is less than 25% of its Initial
Ownership.
Section 3.07. Major Investor Call Right. (a) If the Selling Party
sells Shares to the Section 3.05 Purchaser (other than a sale by DLJMB to an
Approved Purchaser) without complying with the procedures set forth in Section
3.06, then upon consummation of such sale to the Section 3.05 Purchaser (a
"THIRD PARTY SALE"), the Selling Party shall notify the Major Investors within
five days of such Third Party Sale and such Major Investors shall have the
right (the "CALL RIGHT") to purchase from the Section 3.05 Purchaser all Shares
purchased by the Section 3.05 Purchaser pursuant to the Third Party Sale (the
"CALLED INTEREST"), in each case based on such Major Investor's Pro Rata
Portion (or such other allocation as may be agreed among such Major Investors
exercising the Call Right).
(b) To exercise the Call Right, the Major Investors must agree to
exercise the Call Right in respect of the entire Called Interest and must give
written notice (the "CALL NOTICE") to the Section 3.05 Purchaser no later than
the 30th day following the Third Party Sale. Upon receipt of the Call Notice,
the Section 3.05 Purchaser shall be obligated to sell the Called Interest in
accordance with the provisions of this Section 3.07.
(c) The purchase price payable per Share of Company Capital Stock
shall be an amount in cash equal to 110% of the per Share price paid by the
Third Party in the Third Party Sale.
(d) The closing for the purchase of any Called Interest pursuant to
this Section 3.07 shall occur as promptly as practicable (but in no event later
than 30 days) after receipt by the Section 3.05 Purchaser of the Call Notice,
provided that if the purchase of any Called Interest is subject to prior
regulatory approval, the Section 3.05 Purchaser and the relevant Major
Investors shall use their reasonable best efforts to obtain the necessary
regulatory approvals and the 30-day period in which the purchase may be
consummated shall be extended until the earlier of (i) the expiration of five
Business Days after all such regulatory approvals shall have been received and
(ii) 270 days after receipt by the Section 3.05 Purchaser of the Call Notice.
If the sale of the Called Interest by the Section 3.05 Purchaser to the Major
Investors is not consummated within the time periods set forth in the
33
immediately preceding sentence, the Section 3.05 Purchaser will have no further
obligation to sell the Called Interest provided that, upon consummation of the
purchase of such Section 3.05 Shares, the Section 3.05 Purchaser shall have
agreed in writing to be bound by the terms of this Agreement and to assume and
agree to discharge any and all obligations of the Selling Party that relate to
such Section 3.05 Shares and arise under any of the Transaction Documents. On
or prior to the closing, the Section 3.05 Purchaser shall deliver to the
representative of the Major Investors designated in the Call Notice
certificates representing all the Shares comprising the Called Interest, duly
endorsed, together with all other documents, required to be executed in
connection with the sale of such Shares (it being understood that in no event
shall the Section 3.05 Purchaser be obligated to make any representations and
warranties, or to provide any indemnities, with respect to the Called Interest
other than indemnities concerning the Section 3.05 Purchaser's title to the
Called Interest, such title being free and clear of all liens and encumbrances,
and the Section 3.05 Purchaser's authority, power and right to enter into and
consummate the sale without contravention of any law or agreement, and without
the need for any governmental or other approval). At any such closing, the
relevant Major Investors shall deliver to the Section 3.05 Purchaser the
aggregate purchase price for the Called Interest sold by the Section 3.05
Purchaser, by wire transfer of immediately available funds to such bank account
as the Section 3.05 Purchaser shall have specified in writing no later than two
Business Days prior to the closing.
(e) A Major Investor's rights (but not its obligations) pursuant to
this Section 3.07 shall terminate when the number of shares of Equity
Securities held by such Major Investor is less than 25% of its Initial
Ownership.
Section 3.08. Special Nextel Sale Right. (a) The Nextel Shareholders
may collectively transfer all, but not less than all, of their Shares to a
Third Party after the twelfth anniversary of the date of this Agreement (a
"SECTION 3.08 SALE"), by complying with this Section 3.08. If the Nextel
Shareholders wish to consummate a Section 3.08 Sale, the Nextel Shareholders
shall provide written notice (a "SECTION 3.08 NOTICE") of such Section 3.08
Sale to the Non-Nextel Shareholders and the Company not later than the 45th day
prior to the proposed Section 3.08 Sale. The Section 3.08 Notice shall (i)
identify the Third Party transferee (the "SECTION 3.08 PURCHASER"), the number
of Shares owned by the Nextel Shareholders subject to the Section 3.08 Sale and
the form and amount of
34
consideration per Share for which a transfer is proposed to be made (the
"SECTION 3.08 SALE PRICE"), (ii) enclose true and complete copies of the
documentation in Nextel's possession relating to all transactions,
relationships, agreements, arrangements and understandings (together with
written summaries of any such oral transactions, relationships, agreements,
arrangements or understandings) between Nextel and its Affiliates (but only to
Nextel's knowledge in the case of non-controlled Affiliates) on the one hand
and the Section 3.08 Purchaser and its Affiliates on the other hand and (iii)
disclose all other material terms and conditions of the Section 3.08 Sale.
Within five Business Days of the receipt of such Section 3.08 Notice, the
Company shall notify all Non-Nextel Shareholders of the date and time of a
special meeting of such Shareholders, which date will not be more than 25 days
after receipt of the Section 3.08 Notice (or such later date as required by
applicable law). At such meeting all Non-Nextel Shareholders shall be entitled
to vote whether to sell their Shares to the Section 3.08 Purchaser on the same
terms and conditions as the Nextel Shareholders. If such Non-Nextel
Shareholders elect to sell their Shares to the Section 3.08 Purchaser by the
affirmative vote of at least 50% of the then outstanding Voting Stock held by
such Non-Nextel Shareholders, all Non-Nextel Shareholders shall be required to
participate in the Section 3.08 Sale on the terms and conditions set forth in
the Section 3.08 Notice and to tender all of their Shares as set forth below.
Within five days following such vote, a representative of the Non-Nextel
Shareholders shall deliver to a representative of the Nextel Shareholders
designated in the Section 3.08 Notice a notice indicating whether the
Non-Nextel Shareholders will participate in the Section 3.08 Sale. If the
Non-Nextel Shareholders elect to participate in the Section 3.08 Sale, then, on
or prior to the date of such sale, they shall deliver to the Nextel
Shareholders certificates representing all Shares held by the Non-Nextel
Shareholders, duly endorsed, together with all other documents required to be
executed in connection with such Section 3.08 Sale or, if such delivery is not
permitted by applicable law, an unconditional agreement to deliver such Shares
pursuant to this Section 3.08(a) at the closing for such Section 3.08 Sale
against delivery to the Non-Nextel Shareholders of the consideration therefor.
If any Non-Nextel Shareholder should fail to deliver such certificates or, in
lieu thereof (as provided above) an unconditional agreement to deliver such
Shares at the closing for such Section 3.08 Sale, to the Nextel Shareholders,
such Non-Nextel Shareholder shall have irrevocably agreed that, upon the
closing of the Section 3.08 Sale, such
35
Shares shall no longer be deemed to be outstanding and all rights of a
Shareholder with respect to such Shares will terminate except the right to
receive the Section 3.08 Sale Price and the Company shall (subject to reversal
under Section 3.08(b)) cause the books and records of the Company to show that
such Shares are bound by the provisions of this Section 3.08(a) and that such
Shares shall be transferred to the Section 3.08 Purchaser immediately upon
surrender for transfer by the holder thereof.
(b) If, within 270 days after the Non-Nextel Shareholders give notice
of their election to sell their Shares pursuant to this Section 3.08, the
Nextel Shareholders have not consummated the Section 3.08 Sale, the Non-Nextel
Shareholders shall not be required to sell their Shares to the Section 3.08
Purchaser, the Nextel Shareholders shall return to each of the Non-Nextel
Shareholders all certificates representing Shares that such Non-Nextel
Shareholder delivered for transfer pursuant hereto, together with any documents
in the possession of the Nextel Shareholders executed by the Non-Nextel
Shareholder in connection with such proposed transfer, and all the restrictions
on transfer contained in this Agreement or otherwise applicable at such time
with respect to Shares owned by the Non-Nextel Shareholders shall again be in
effect. No Nextel Shareholder (nor any member of the Nextel Group) shall have
any liability or responsibility to the Company or any Non-Nextel Shareholder
upon or by reason of any termination or failure to consummate a Section 3.08
Sale except as expressly set forth above in this Section 3.08(b).
(c) Promptly after the consummation of the Section 3.08 Sale by the
Section 3.08 Purchaser, the Section 3.08 Purchaser shall give notice thereof to
the Shareholders, shall remit to each of the Shareholders who have surrendered
their certificates the total consideration for the shares of Company Capital
Stock transferred pursuant hereto and shall furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as may
be reasonably requested by such Shareholders, including without limitation true
and complete copies of the closing documentation relating to the Section 3.08
Sale.
(d) The sale obligations of the Non-Nextel Shareholders under this
Section 3.08 shall be subject to the following conditions:
36
(i) upon the consummation of such sale, all of the Non-Nextel
Shareholders participating therein will receive the same form and
amount of consideration per Share, or if any Non-Nextel Shareholders
are given an option as to the form and amount of consideration to be
received, all Non- Nextel Shareholders participating therein will be
given the same option;
(ii) no Non-Nextel Shareholder shall be obligated to pay more
than its pro rata share (based on the number of Shares sold) of
expenses incurred in connection with a consummated sale to the extent
such costs are incurred for the benefit of all Non-Nextel
Shareholders and are not otherwise paid by the Company or the
acquiring party; and
(iii) no Non-Nextel Shareholder shall be required to provide any
representations, indemnities or other agreements in connection with
such sale (other than representations and indemnities concerning each
Shareholder's title to the Shares, such title being free and clear of
all liens and encumbrances and such Shareholder's authority, power
and right to enter into and consummate the sale without contravention
of any law or agreement and without the need of such Shareholder to
obtain any third party (not including any governmental or regulatory)
consent or approval).
(e) If Non-Nextel Shareholders holding more than 33% of the Voting
Stock (not including any Voting Stock held by the Nextel Shareholders)
reasonably believe that, as a result of transactions, relationships, and
understandings between Nextel and the Section 3.08 Purchaser, the Section 3.08
Sale Price does not reflect the fair market value of the Shares to be sold to
the Section 3.08 Purchaser, the Non-Nextel Shareholders shall have the right,
upon consummation of the Section 3.08 Sale, through the Non-Nextel Shareholder
representative identified in this Section 3.08, to submit the Section 3.08 Sale
Price to arbitration and, if on behalf of the Non-Nextel Shareholders, the
Non-Nextel Shareholder representative so elects (which election will be binding
on all the Non-Nextel Shareholders), to receive from the Section 3.08 Purchaser
the price per share as determined by arbitration in lieu of the Section 3.08
Sale Price. If the arbitrator(s) determines that the Section 3.08 Sale Price is
greater than or equal to the fair market value of the Shares, the Non-Nextel
Shareholders shall pay the fees
37
and expenses of the arbitrator(s), otherwise NWIP shall pay such fees and
expenses.
(f) The provisions of this Section 3.08 shall be superseded by the
provisions of Section 5.5 of the Restated Certificate of Incorporation when the
latter become effective.
(g) The Nextel Shareholders shall not be permitted to transfer their
Shares to the Section 3.08 Purchaser unless NWIP shall have assigned (or shall
have caused the assignment) to the Company for $1.00, not later than the
closing day of the Section 3.08 Sale any FCC licenses acquired by Nextel (or
its Subsidiaries) pursuant to Section 4.16 of the Joint Venture Agreement.
ARTICLE 4
PUT AND CALL RIGHTS
Section 4.01. Non-Nextel Shareholder Put Rights. (a) Upon the
occurrence of a Put Event (other than a Nextel Sale), the Company shall, within
five days of such Put Event, notify all Non-Nextel Shareholders of the date and
time of a special meeting of such Shareholders, which date will not be more
than 20 days after the date of the Put Event (or such later date as required by
applicable law, including any requirement to provide such Shareholders with an
effective registration statement relating to the Nextel Shares). Upon the
occurrence of a Nextel Sale, the Company shall, within 5 days of such Nextel
Sale, notify all Non-Nextel Shareholders of the occurrence of a Nextel Sale,
and at any time thereafter Non-Nextel Shareholders holding 20% or more of the
outstanding Voting Stock of such Shareholders shall have the right to require
that the Company notify all Non-Nextel Shareholders of the date and time of a
special meeting of such Shareholders, which date will not be more than 20 days
after the date the Company receives such request (or such later date as
required by applicable law, including any requirement to provide such
shareholders with an effective registration statement relating to Nextel
Shares). At such meeting the Non-Nextel Shareholders, by the affirmative vote
of more than 50% of the then outstanding Voting Stock held by such
Shareholders, will have the right (the
38
"PUT RIGHT") to require NWIP to purchase all the Company Capital Stock (other
than the Series B Preferred) at a price determined in accordance with Section
4.01(d). "PUT EVENT" means any of the following events:
(i) a Nextel Sale;
(ii) the purchase by NWIP of Shares in accordance with its
Preemption Right with respect to a Qualifying DLJ Demand under
Section 5.03 (a "NWIP PREEMPTION PUT"); or
(iii) the exercise of a put right granted by the Board to the
Non- Nextel Shareholders pursuant to Section 7.04.
(b) In the event of a Special Nextel Sale, if there has not been a
DLJMB Trigger Event and the DLJ Entities voted to sell their Company Capital
Stock to NWIP pursuant to paragraph (a) above, but less than 50% of the then
outstanding Voting Stock held by the Non-Nextel Shareholders has voted to
exercise the Put Right, the DLJ Entities shall have the right to require NWIP
to purchase all of the Company Capital Stock held by the DLJ Entities for a
proportionate share of the purchase price (as determined in accordance with
Section 4.01(d)) and otherwise on generally the same terms and conditions as
set forth in this Section 4.01.
(c) To exercise the Put Right, the Non-Nextel Shareholders, acting as
a group, or, in the case of a Special Nextel Sale, DLJMB, on behalf of itself
and the other DLJ Entities, must give written notice (the "PUT NOTICE") to NWIP
no later than (i) in the case of a Nextel Sale, 545 days after the Put Event or
(ii) in the case of a Put Event other than a Nextel Sale, the 30th day after
the Put Event (or such later date if the Shareholder vote is delayed pursuant
to Section 4.01(a)). Upon receipt of the Put Notice, the Non-Nextel
Shareholders or the DLJ Entities, as the case may be, shall be obligated to
sell the relevant Company Capital Stock to NWIP and NWIP shall be obligated to
purchase such Company Capital Stock in accordance with the provisions of this
Section 4.01.
(d) The purchase price paid by NWIP for the Company Capital Stock
purchased pursuant to this Section 4.01 shall be determined as follows:
39
(i) If the Put Event is a Nextel Sale which occurs prior to the
Initial Public Offering, the purchase price paid by NWIP for all
outstanding Company Capital Stock (other than the Series B Preferred)
will be the greater of (A) the Investment Formula Price (as defined
in Section 4.03(h)) and (B) the Fair Market Value of the Company as
determined in accordance with Section 4.03;
(ii) If the Put Event is a Nextel Sale which occurs after the
Initial Public Offering, the purchase price paid by NWIP for all
outstanding Company Capital Stock (other than the Series B Preferred)
will be the Fair Market Value of the Company at the time of the
purchase as determined in accordance with Section 4.03;
(iii) If the Put Event is a NWIP Preemption Put, the purchase
price paid by NWIP will be the same per share price that was paid by
NWIP to purchase the Shares subject to the Qualifying DLJ Demand; and
(iv) If the Put Event is the exercise of put rights under Section
7.04, the purchase price paid by NWIP for all outstanding Company
Capital Stock (other than the Series B Preferred) will be the
Investment Formula Price.
(e) The closing for the purchase of any Company Capital Stock
pursuant to this Section 4.01 shall occur as promptly as practicable (but in no
event later than 30 days) after receipt by NWIP of the Put Notice, provided
that if the purchase is subject to prior regulatory approval or requires the
determination of Fair Market Value in accordance with Section 4.03, NWIP and
the Shareholders shall use their reasonable best efforts to obtain the
necessary regulatory approvals and the 30 day period shall be extended until
the later of (i) the expiration of five Business Days after all such regulatory
approvals shall have been received and (ii) the determination of Fair Market
Value. On or prior to the closing, the Non-Nextel Shareholders shall deliver to
the representative of NWIP designated in the Put Notice certificates
representing all the shares of the relevant Company Capital Stock, duly
endorsed, together with all other documents, required to be executed in
connection with the sale of such Company Capital Stock (it being understood
that in no event shall any Non-Nextel Shareholder be obligated to make any
representations and warranties, or to provide any indemnities, with respect to
any matters other than title to the Company Capital Stock held by such
40
Person, such title being free and clear of all liens and encumbrances, and such
Person's authority, authorization and right to enter into and consummate the
sale without contravention of any law or agreement, and without the need for
any governmental or other approval). At any such closing or as otherwise
permitted under Section 7.05, NWIP shall deliver to each selling Shareholder
such selling Shareholder's proportionate share (based on the number of shares
of Fully Diluted Common Stock that such Shareholder is deemed to be selling
pursuant to the Put Right divided by all outstanding Fully Diluted Common Stock
and taking into account Section 4.01(g)) of the purchase price for all the
outstanding Company Capital Stock as determined pursuant to Section 4.01(d), by
(i) wire transfer of immediately available funds to such bank account as such
selling Shareholder shall have specified in writing no later than two Business
Days prior to the closing or (ii) delivery of Nextel common stock as permitted
by Section 7.05. Any warrants, options or other securities exercisable or
exchangeable for, or convertible into, shares of Company Capital Stock that are
not exercised, exchanged or converted at or prior to such closing or otherwise
in accordance with Section 4.01(f) or 4.01(g) shall be canceled effective upon
such closing, and the Company's books and records shall reflect such
cancellation. If any Non-Nextel Shareholder should fail to deliver such
certificates to the NWIP representative and NWIP has placed such selling
Shareholder's proportionate share of the purchase price for the Company Capital
Stock represented by such certificates in escrow with the custodian under the
Custodial Agreement (or another escrow agent reasonably satisfactory to the
representative of the Non-Nextel Shareholders) on terms reasonably satisfactory
to the representative of the Non-Nextel Shareholders, such Shares shall no
longer be deemed to be outstanding and all rights of such Shareholder with
respect to such Shares will terminate except the right to receive the purchase
price. The Company shall cause the books and records of the Company to show
that such Shares are bound by the provisions of this Section 4.01 and that such
Shares shall be transferred to NWIP immediately upon surrender for transfer by
the holder thereof.
(f) If NWIP is required to purchase all outstanding Company Capital
Stock as set forth in this Section 4.01, vested in-the-money options and
warrants (all of which either will be exercised for cash prior to the closing
of such purchase or will be exchanged at the time of purchase for an amount
equal to the purchase price per share minus the exercise price of such option
or warrant multiplied by the
41
number of Shares subject to such options or which can be purchased pursuant to
such warrants).
(g) If NWIP is required to purchase all outstanding Company Capital
Stock as set forth in this Section 4.01, unvested or out-of-the-money
derivative securities of the Company shall be treated as follows: (i) in the
case of a Put Event described in Section 4.01(a)(ii), all unvested or
out-of-the-money options and warrants issued by the Company that (A) are
granted at any time during the period from 30 days before the Company's
announcement of its intention to proceed with DLJ's delivery of its demand
until the date on which the pre-emptive purchase by NWIP is closed, and (B) are
not granted consistently with ordinary past practice of the Company's employee
compensation programs or policies, shall be terminated; (ii) all other unvested
or out of the money options or warrants (as appropriate) will be converted to
substantially identical options or warrants to acquire shares of common stock
of Nextel on the same substantive economic terms (based on the per common share
price of the Company in the pre-emptive purchase and the per common share price
of Nextel on the pre-emptive purchase date) and other terms as applied to the
Company options or warrants and (iii) all shares of Company Common Stock
subject to vesting under the Restricted Stock Purchase Agreements, and all
shares of Company Common Stock issuable upon exercise of options granted under
the 1999 Stock Option Plan, in each case that are beneficially owned by the
Management Shareholders, shall be purchased by NWIP pursuant to Section 4.01
(it being understood that NWIP's acquisition of all of the outstanding Company
Capital Stock pursuant to this Section 4.01 shall constitute a Change in
Control of the Company for purposes of the Restricted Stock Purchase Agreements
and the 1999 Stock Option Plan).
(h) The following terms shall have the following meanings:
"BENEFICIAL OWNER" means a beneficial owner as defined in Rules 13d-3,
13d-5 or 16a-1 under the Exchange Act (or any successor rules), including the
provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right to acquire within 60
days, but such provision of the Rules will apply only if (i) all conditions
(other than payment of the purchase or acquisition price of such securities) to
such Person's exercise of such rights have been satisfied and (ii) such
securities (if options, warrants, or
42
similar derivatives) are "in-the-money", provided that in all cases a Person
shall not be deemed a Beneficial Owner of, or to own beneficially, any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the applicable rules
and regulations thereunder, and (2) is not also then reportable on Schedule 13D
under the Exchange Act.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of stock of, or other
ownership interests in, such Person.
"CLOSING PRICE" on any Trading Day with respect to the per share price
of any shares of Capital Stock of any Person means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange or if such shares of Capital Stock are not
listed or admitted to trading on such exchange, on the principal national
securities exchange on which such shares are listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on
the NASDAQ Stock Market or, if such shares are not listed or admitted to
trading on any national securities exchange or quoted on the NASDAQ Stock
Market and the issuer and principal securities exchange do not meet such
requirements, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
of national standing that is selected from time to time by such Person for that
purpose.
"COMMON STOCK" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other class of such
Person.
"CONTROL" of a Person means the power, direct or indirect, (i) to vote
or direct the voting of more than 50% of the outstanding shares of Voting Stock
of such Person, or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"NEXTEL SALE" means the occurrence of any of the following events:
43
(i) any person or group (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act and the rules and regulations
thereunder) other than a Permitted Holder as hereinafter defined (A)
is or becomes the Beneficial Owner of more than 50% of the total
Voting Stock of Nextel ("NEXTEL VOTING STOCK") or Total Common Equity
of Nextel, or (B) otherwise has the power to direct the management
and policies of Nextel, directly or through one or more
intermediaries, whether through the ownership of voting securities,
by contract or otherwise (without limiting the generality of this
clause (B), any person or group that succeeds to the rights currently
held by Xxxxx X. XxXxx and his Affiliates in respect of Nextel, or
otherwise has powers and rights comparable thereto, shall be deemed
for purposes of this definition to have the power to direct the
management and policies of Nextel), except that no change of control
will be deemed to have occurred under this clause (B) as a result of
customary rights granted (x) in any indenture, credit agreement or
other agreement for borrowed money unless and until there has been a
default under the terms of that agreement and the trustee or lender
exercises the rights granted therein or (y) to holders of
non-convertible, mandatorily redeemable, preferred stock unless and
until action occurs that would otherwise cause a Nextel Sale as
herein defined, provided that such rights were granted pursuant to a
transaction in the financial markets and not as part of a strategic
alliance or similar transaction;
(ii) Nextel sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
Person (other than a Permitted Holder);
(iii) Nextel, directly or indirectly, consolidates with, or
merges with or into, another Person (other than a Permitted Holder),
or any Person (other than a Permitted Holder), directly or
indirectly, consolidates with, or merges with or into, Nextel, and
pursuant to such transaction (or series of transactions) either: (A)
the outstanding Nextel Voting Stock is converted into or exchanged
for cash, securities or other property, but excluding a transaction
(or series of transactions) where (i) the outstanding Nextel Voting
Stock is converted into or exchanged for Voting Stock of the
surviving or transferee Person and (ii) the holders of Nextel Voting
Stock
44
immediately preceding such transaction receive more than 50% of the
total Voting Stock and Total Common Equity of the surviving or
transferee Person (in substantially the same proportion as such
holders had prior to such transaction), or (B) new shares of Nextel
Voting Stock are issued so that immediately following such
transaction the holders of Nextel Voting Stock immediately preceding
such transaction own less than 50% of the Voting Stock and Total
Common Equity of the surviving Person; or
(iv) during any period of two consecutive years, individuals who
at the beginning of such period constituted the board of directors of
Nextel (together with any directors who are members of the board of
directors of Nextel on the closing date, and any new directors whose
election by such board of directors or whose nomination for election
by the stockholders of Nextel was approved by a vote of 66-2/3% of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the board of directors of Nextel then in office;
provided that it is expressly understood and agreed that (A) the transfer of
Nextel Voting Stock and or Capital Stock in Nextel by a Permitted Holder to an
Affiliate of Xxxxx X. XxXxx or the estate of Xxxxx X. XxXxx, or any successive
transfer by such or another Affiliate to another Affiliate of Xxxxx X. XxXxx or
the estate of Xxxxx X. XxXxx shall not by itself be a Nextel Sale (provided
that, for this purpose, any such Affiliate shall not be controlled by any
Person or group other than Xxxxx X. XxXxx or the estate of Xxxxx X. XxXxx) and
(B) the direct or indirect sale or other disposition of all or any portion of
the Nextel Voting Stock and/or the Capital Stock in Nextel held now or in the
future by any Permitted Holder to any Person other than another Permitted
Holder shall not by itself be a Nextel Sale, unless such sale or disposition,
alone or in conjunction with other transactions, results in the occurrence of
an event of the type described in any of clauses (i), (ii), (iii) or (iv)
above.
"PERMITTED HOLDERS" means, collectively, Xxxxx X. XxXxx and any Person
or Persons (i) that is controlled directly or indirectly by Xxxxx X. XxXxx or
the estate of Xxxxx X. XxXxx and (ii) a majority of the equity interests of
which are owned, directly or indirectly, by Xxxxx X. XxXxx and his family, his
brothers
45
and their families, officers and employees of such entities, ex-spouses of such
persons and estates of, or trusts for the primary benefit of, the foregoing
persons (collectively, the "XxXxx Group"), provided that "Permitted Holders"
also includes a group of entities that is each controlled by Xxxxx X. XxXxx or
the estate of Xxxxx X. XxXxx and through which the XxXxx Group collectively
own, directly or indirectly, a majority of the equity interests of Nextel (it
being understood that if the XxXxx Group collectively owns 50% of a Person that
owns 20% of Nextel's equity interests, the XxXxx Group will be deemed to
indirectly own 10% of Nextel's equity interest through such entity).
"SPECIAL NEXTEL SALE" means a Nextel Sale either (i) prior to an
Initial Public Offering where, as a result of any post-closing equity issuances
by the Company, the Qualified DLJ Entities no longer hold at least 50% of the
votes to be cast under Section 4.02, or (ii) after an Initial Public Offering,
where a majority of the Non-Nextel Shareholders do not vote to sell their
Company Capital Stock to NWIP.
"TOTAL COMMON EQUITY" of any Person means, as of any day of
determination, the product of (i) the aggregate number of outstanding primary
shares of Common Stock of such Person on such day (which shall not include any
options or warrants on, or securities convertible or exchangeable into, shares
of Common Stock of such Person) and (ii) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day. If no such Closing Price exists with respect to shares of any such class,
the value of such shares for purposes of clause (ii) of the preceding sentence
shall be determined by the board of directors of such Person in good faith and
evidenced by a resolution of such board of directors.
"TRADING DAY" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a
full day of trading.
(i) Upon the consummation of an Initial Public Offering, the Put
Rights exercisable by the Non-Nextel Shareholders shall be superseded by the
provisions in the Company's restated certificate of incorporation, which shall
control. Notwithstanding the preceding sentence, the special Put Right set
forth in Section
46
4.01(b) exercisable by the DLJ Entities shall not be superseded by the
Company's restated certificate of incorporation.
(j) Upon the consummation of a Section 3.08 Sale, all the Non-Nextel
Shareholders' Put Rights shall terminate except for the Put Right with respect
to a Nextel Sale described in Section 4.01, which right shall not terminate
until the one year anniversary of the date of the consummation of the Section
3.08 Sale.
Section 4.02. Nextel Shareholder Call Right. (a) Upon (i) the seventh
anniversary of the date of this Agreement, if as of the date of such
anniversary there has not been an Initial Public Offering and NWIP has not
exercised any of its Preemption Rights under Section 5.03, (ii) the eighth
anniversary of the date of this Agreement, if as of the date of such
anniversary there has not been an Initial Public Offering or (iii) the ninth
anniversary of the date of this Agreement, NWIP shall have the right (the "NWIP
CALL RIGHT") to purchase all the outstanding Shares held by all other
Shareholders, provided that if there has been an Initial Public Offering prior
to the exercise of the NWIP Call Right, the Board (by majority vote with the
NWIP Designee abstaining) will have the right to postpone the exercise of the
NWIP Call Right for 365 days on each of two occasions and for 180 days on one
additional occasion by giving written notice of such election to NWIP within
five Business Days after delivery of the applicable NWIP Call Notice (or after
the one-year or six-month anniversary of the postponement of the NWIP Call
Notice, as the case may be, in the event that the NWIP Call Right is
postponed); provided, that NWIP shall not be obligated to consummate the
transaction contemplated by the NWIP Call Right that has been so postponed,
unless NWIP so notifies the Shareholders and the Company not later than 90 days
following the expiration of the relevant postponement period.
(b) To exercise the NWIP Call Right, NWIP must give written notice
(the "NWIP CALL NOTICE") to the Shareholders and the Company no later than the
90th day following the later of (i) the relevant anniversary and (ii) if
applicable, the relevant postponement period. The NWIP Call Right will expire
on the later of (x) the 91st day following the ninth anniversary of the date of
this Agreement and (y) if applicable, the 91st day following the relevant
postponement period, if NWIP has not delivered a NWIP Call Notice by such time.
Upon receipt of the Call Notice, the Shareholders shall be obligated to sell
their Shares in accordance with the provisions of this Section 4.02.
47
(c) The purchase price payable for all outstanding Equity Securities
shall be (i) in the event that the purchase pursuant to the exercise of the
NWIP Call Right is consummated before an Initial Public Offering, the greatest
of (A) the Company Equity Value, (B) the Company's Fair Market Value determined
in accordance with Section 4.03, and (C) the Investment Formula Price; provided
that in no event will the purchase price payable for all outstanding Company
Capital Stock (other than the Series B Preferred) be greater than an amount
that for each tranche of capital actually invested would represent a 40%
internal rate of return (calculated using the same methodology used to
calculate the Investment Formula Price) or (ii) in the event that the purchase
pursuant to the exercise of the NWIP Call Right is consummated after an Initial
Public Offering, the Company's Fair Market Value determined in accordance with
Section 4.03.
(d) The purchase price payable pursuant to Section 4.02(c) shall be
allocated to each Non-Nextel Shareholder based on such Non-Nextel Shareholder's
Percentage Ownership. For purposes of this Section 4.02(d), vested in-the-money
options, together with any shares of Common Stock or options then beneficially
owned by the Management Shareholders that vest upon the consummation of the
NWIP Call Right in accordance with the Restricted Stock Purchase Agreements or
the 1999 Stock Option Plan, as the case may be (it being understood that NWIP's
acquisition of all of the outstanding Company Capital Stock pursuant to this
Section 4.02 shall constitute a Change in Control of the Company for purposes
of the Restricted Stock Purchase Agreements and the 1999 Stock Option Plan),
will be included both in the determination of Percentage Ownership of the
Company and in the allocation of the purchase price among the Shareholders.
The following terms shall have the following meanings:
"COMPANY EBITDA" means earnings before interest, taxes, depreciation
and amortization. For purposes of calculating Company EBITDA, the Company's
accounting and other elections, the accounting treatment or presentation of
various relevant items, and the period of measurement used for the EBITDA
calculation will be the same as those made or used by Nextel in preparing its
financial reports, and the corresponding items, elections or periods of or
affecting the Company will
48
be adjusted as necessary, so that, as nearly as possible, they are identical,
or are calculated, derived or stated identically to those of Nextel. In
addition, if prior to the expiration of the Nextel Call Right, the Company has
entered into an agreement that artificially accelerates or defers income or
expense during the earlier part of the term of such agreement, the calculation
of EBITDA will be adjusted, as necessary, to reflect the terms which would have
existed in the absence of such artificial acceleration or deferral.
"COMPANY EQUITY VALUE" means an amount equal to the sum of (i) the
product of (A) the Company EBITDA for the two most recent quarters for which
financial statements are available, annualized, multiplied by (B) the Nextel
Multiple, minus (ii) the Company's long term debt (including the current
portion thereof and including all amounts that would be required to be paid to
redeem in full all outstanding shares of Series B Preferred (as defined in the
Subscription Agreement) and any other equity securities issued by the Company
(other than the Equity Securities) that are redeemable, whether mandatorily or
at the option of either the Company (other than pursuant to Article XI of the
Certificate of Incorporation) or the holders thereof), plus (iii) the Company's
cash and cash equivalents.
"NEXTEL MULTIPLE" means the Total Enterprise Value of Nextel divided
by Nextel's EBITDA for the most recent two quarters for which financial
statements are available, annualized, rounded to four decimal points. For
purposes of this definition "EBITDA" means earnings before interest, taxes,
depreciation and amortization.
"TOTAL ENTERPRISE VALUE" means the sum of (i) the number of shares of
fully diluted common stock of Nextel multiplied by the Average Share Price,
plus (ii) Nextel's long term debt (including the current portion thereof),
minus (iii) Nextel's cash and cash equivalents. For purposes of this definition
"AVERAGE SHARE PRICE" shall be the average Closing Price of Nextel's common
stock for the 20 consecutive Trading Days prior to the relevant anniversary.
(e) The closing for the purchase of the Shares pursuant to this
Section 4.02 shall occur as promptly as practicable (but in no event later than
30 days) after receipt by the Shareholders of the NWIP Call Notice, provided
that if the purchase of any Shareholder's Shares is subject to prior regulatory
approval or
49
requires the determination of Fair Market Value in accordance with Section
4.03, the parties will use their reasonable best efforts to obtain the
necessary regulatory approvals and the 30 day period shall be extended until
the later of (i) the expiration of five Business Days after all such regulatory
approvals shall have been received and (ii) the determination of Fair Market
Value. At the closing, each Shareholder shall deliver to NWIP certificates
representing such Shareholder's Shares, duly endorsed, together with all other
documents required to be executed in connection with the sale of such Shares
(it being understood that in no event shall a Shareholder be obligated to make
any representations and warranties, or to provide any indemnities, with respect
to any matters other than title to the Shares held by such Person, such title
being free and clear of all liens and encumbrances, and such Person's
authority, authorization and right to enter into and consummate the sale
without contravention of any law or agreement, and without the need for any
third party (not including any governmental or regulatory) consent or
approval). At any such closing or as otherwise permitted by Section 7.05, NWIP
shall deliver to each selling Shareholder such selling Shareholder's purchase
price as allocated pursuant to Section 4.02(d), by (i) wire transfer of
immediately available funds to such bank account as such selling Shareholder
shall have specified in writing no later than two Business Days prior to the
closing or (ii) delivery of Nextel common stock as permitted by Section 7.05.
Any warrants, options or other securities exercisable or exchangeable for, or
convertible into, shares of Company Capital Stock that are not exercised,
exchanged or converted by such Shareholders at or prior to such closing,
subject to Section 4.02(d), shall be canceled effective upon such closing, and
the Company's books and records shall reflect such cancellation. If any
Non-Nextel Shareholder should fail to deliver such certificates to NWIP and
NWIP has placed such selling Shareholder's proportionate share of the purchase
price for such certificates in escrow, such Shares shall no longer be deemed to
be outstanding and all rights of such Shareholder with respect to such Shares
will terminate except the right to receive the purchase price. The Company
shall cause the books and records of the Company to show that such Shares are
bound by the provisions of this Section 4.02 and that such Shares shall be
transferred to the NWIP representative immediately upon surrender for transfer
by the holder thereof.
50
(f) Upon the consummation of an Initial Public Offering, the NWIP
Call Right shall be superseded by the provisions in the Company's restated
certificate of incorporation, which shall control.
Section 4.03. Fair Market Value Calculation. For purpose of this
Agreement, Fair Market Value will be determined as follows:
(a) "FAIR MARKET VALUE" of the Company means the price that would be
paid for all of the Company Capital Stock (excluding the Series B Preferred and
any mandatorily redeemable pay-in-kind non-convertible securities) by a willing
buyer to a willing seller, in an arm's-length transaction, as if the Company
were a publicly traded and non-controlled corporation and the buyer was
acquiring all of such Company Capital Stock, and assuming that the Company was
being sold in a manner designed to attract all possible participants to the
sales process (including Nextel and its Competitors, subject to the provisions
below) and to maximize stockholder value (including, if necessary, through a
public or private market sale or other disposition (including tax-free
spin-offs, if possible) of businesses prohibited by legal restrictions to be
owned by a particular buyer or class of buyer), with both buyer and seller in
possession of all material facts concerning the Company and its business. In
all cases, Fair Market Value for the Company will include a control premium and
there will be no minority or illiquidity discount. Fair Market Value of the
Company shall be determined on the assumption that in a competitive acquisition
market with Nextel and prospective buyers other than Nextel, the Company would
be at least as valuable to other prospective buyers as to Nextel. Fair Market
Value shall be determined on the assumption that the Company is at least as
valuable as if it were a part (although separable) of Nextel, with the
valuation of the Company for purposes of this sentence being derived from a
valuation of Nextel consistent with the first sentence of this paragraph but
without taking into account a control premium for Nextel (it being understood
that a control premium, however, will be applied to the Company). Fair Market
Value of the Company will not include any premium solely due to the fact that a
competitor of Nextel might be willing to pay a premium for the Company in order
to hamper or impede Nextel's growth or strategy. If the Company's stock is
publicly traded, Fair Market Value will take into consideration (i) the trading
activity and history of the Company's stock and (ii) the Company's most recent
"unaffected" public market stock price. In
51
making the determination of Fair Market Value of the Company, the Company will
be given the benefit of the fact that it uses the Nextel brand name, business
and technology pursuant to the Joint Venture Agreement and the other
Transaction Documents, but there will be no discount or premium included in any
valuation of the Company relative to its business as conducted or reasonably
expected to be conducted due to the facts that (v) the Company will not own but
Nextel will directly or indirectly lease or otherwise make available to the
Company certain of its rights, assets and services pursuant to the Joint
Venture Agreement and the other Collateral Agreements, or pursuant to any other
agreements or arrangements entered into from time to time between Nextel and/or
its Subsidiaries, on the one hand, and the Company and/or its Subsidiaries, on
the other hand, (w) in certain circumstances Nextel will have the right to
acquire the Company's FCC licenses, and in such a case, the Company will not
own, but Nextel and/or its Subsidiaries will directly or indirectly make
available to the Company, the right to manage the use of the frequencies
subject to such licenses, (x) Nextel directly or indirectly has, and may
exercise, certain aspects of control over the Company's business and the
Company, (y) Nextel directly or indirectly provides certain services and other
benefits to the Company on a cost or subsidized basis and (z) there may be few
potential buyers for the Company due to any real or perceived control of the
Company exercised by Nextel or due to the fact that only Nextel has an
identical technology platform.
(b) Within 20 days after notice is given of the exercise of a Put
Right or a NWIP Call Right (i) the Non-Nextel Shareholders by the affirmative
vote of more than 50% of the Voting Common Stock held by such Shareholders (at
a special meeting of such Shareholders called by the Company and held within
such 20 day period) or, after an Initial Public Offering, the Board (by
majority vote with the NWIP Designee abstaining) will select and identify to
NWIP a nationally recognized investment banker or appraiser (the "FIRST
APPRAISER") and (ii) NWIP will select and identify to the Non-Nextel
Shareholders a nationally recognized investment banker or appraiser (the
"SECOND APPRAISER"). The date when both appraisers have been identified, is the
"START DATE". NWIP, the Company and the other Shareholders will (and NWIP will
cause Nextel to) cooperate with any appraisers appointed under this Section
4.03 and share with each such appraiser all information relevant to a valuation
of the Company. Within 30 days of the Start Date, the First Appraiser and the
Second Appraiser will each
52
determine its preliminary view of the Fair Market Value of the Company in
accordance with the criteria set forth in Section 4.03(a), and will consult
with each other with respect to their respective preliminary values. On or
prior to the 45th day after the Start Date, the First Appraiser and the Second
Appraiser will each render to the Shareholders its written report on the Fair
Market Value of the Company.
(c) If the higher Fair Market Value determined under 4.03(b) (the
"HIGH VALUE") is not more than 110% of the lower Fair Market Value determined
under 4.03(b) (the "LOW VALUE"), then the Fair Market Value will be the average
of the High Value and the Low Value. If the High Value is more than 110% of the
Low Value, then, not more than 60 days after the Start Date, the First
Appraiser and the Second Appraiser will together designate another nationally
recognized investment banker or appraiser (the "THIRD APPRAISER"), who will not
be informed of the values determined by the First and Second Appraisers. The
Third Appraiser will make a determination of the Fair Market Value of the
Company in accordance with the criteria set forth in Section 4.03(a) and
deliver its written report to the Shareholders (the "THIRD VALUE") not more
than 30 days after the Third Appraiser is designated. If the Third Value is
within the middle one third of the range of values between the High Value and
the Low Value (the "MID-RANGE"), Fair Market Value will be the Third Value. If
the Third Value does not fall within the Mid-Range, the Fair Market Value will
be the average of (x) the Third Value and (y) either (i) the High Value or (ii)
the Low Value, whichever is closest to the Third Value, provided that the Fair
Market Value shall not be less than the Low Value nor greater than the High
Value.
(d) The determination of Fair Market Value under Section 4.03(c)
will be final and binding on all Non-Nextel Shareholders unless a challenge by
any such Shareholder (each, a "NOTICE OF CHALLENGE") is filed with NWIP
pursuant to this Section 4.03(d) within 20 days of the receipt by such
challenging Shareholder of the final determination under Section 4.03(c). As
soon as practicable after the end of the 20-day period for giving a Notice of
Challenge, NWIP will notify the Company and all challengers of the names and
addresses of all challengers. Not more than 10 days after receiving such
notice, the challengers will, in a writing executed by all of them, notify the
Company and NWIP of the challenger that has been selected as their
representative and who has been given irrevocable authority
53
to represent the challengers for all proceedings under this Section 4.03(d)
(the "CHALLENGER'S REPRESENTATIVE"). If the Company and NWIP do not receive the
executed writing from the challengers in the 10-day period, the Company will
select a challenger by lot to act as the Challenger's Representative, and will
notify NWIP and all the challengers of the party selected. If the Challenger's
Representative is selected by lot, each challenger will have 5 days to notify
the Company and NWIP that it elects to irrevocably abandon the challenge, and
to accept its share of the Fair Market Value as determined under Section
4.03(c). Any challenger that does not abandon the challenge as described in the
preceding sentence, will be deemed to have irrevocably designated the
Challenger's Representative selected by lot as its agent for purposes of
proceedings under this Section 4.03(d). No challenger can participate in the
challenge proceeding except through the Challenger's Representative. Any
Shareholder that does not give notice and join the challengers will be paid its
appropriate share of Fair Market Value (as determined under Section 4.03(c)),
but will be forever barred from asserting any objection to Fair Market Value as
so determined. The procedures provided for in this Section 4.03(d), including
the Challenge Floor Price and Challenge Ceiling Price, each as hereinafter
defined, shall not be considered by any appraiser in determining Fair Market
Value.
(e) The determination of Fair Market Value under Section 4.03(c) will
be final and binding on NWIP unless NWIP believes that the Fair Market Value
determined under Section 4.03(c) does not reflect the true Fair Market Value or
was improperly determined and gives notice to each Non-Nextel Shareholder and
to the Company within 20 days of receiving the final determination under
Section 4.03(c) that it is initiating a proceeding under this Section 4.03(e).
Not more than 10 days after receiving a notice under the preceding sentence,
the Non-Nextel Shareholders will designate, by majority vote, a representative
and notify NWIP and the Company in writing of the identity of such
representative (or, if such designation by majority vote does not occur for any
reason, then the Company will select a representative by lot and shall notify
NWIP and the other Non-Nextel Shareholders in writing of such selection), who
will be irrevocably authorized to be the "Challenger's Representative" to act
as the agent of all Non-Nextel Shareholders in the defense of the challenge by
NWIP. No Non-Nextel Shareholder will have the right to participate in the
defense except through the Challenger's Representative.
54
(f) The party or parties bringing the challenge will be required to
demonstrate to a tribunal composed of three persons with expertise in valuing
companies similar to the Company, one selected by each of NWIP and the
Challenger's Representative and the third member of the tribunal selected by
the first two members (i) that the Fair Market Value determined under Section
4.03(c) (or the underlying values determined by the Appraisers on which it was
based) was grossly incorrect or fraudulently obtained; and (ii) what the
correct Fair Market Value should be. The tribunal determining the challenge is
to determine Fair Market Value and no party will seek to have that
determination referred to an investment banker or appraiser (although they may
testify or offer evidence to the tribunal).
(g) If there is a challenge by NWIP pursuant to Section 4.03(e),
regardless of the outcome of the proceeding, the amount to be paid to the Non-
Nextel Shareholders may be higher than their proportionate share of the amount
that they would have received if the Fair Market Value were equal to the
Challenge Ceiling Price but will not be less than their proportionate share of
the amount that they would have received if the Fair Market Value were equal to
the Challenge Floor Price. If there is a challenge by the Non-Nextel
Shareholders pursuant to 4.03(d), regardless of the outcome of the proceeding,
the amount to be paid to the Non-Nextel Shareholders who participate in such
challenge may be less than their proportionate share of the amount that they
would have received if the Fair Market Value were equal to the Challenge Floor
Price but will not be more than their proportionate share of the amount that
they would have received if the Fair Market Value were equal to the Challenge
Ceiling Price.
(h) The following terms have the following meaning:
"CHALLENGE CEILING PRICE" means an amount equal to the sum of those
amounts that for each tranche of capital actually invested in the Company
(whether contributed in cash or in kind and, if in kind, valued as set forth in
Section 4.03(i)), would return to investors in each tranche (regardless of
whether there are any investors from that tranche who continue as equity
holders, and without regard to any purchase or sale transactions or the price
of such transfers among equity holders) an amount that would represent a 30%
internal rate of return on the
55
amount of capital invested in connection with such tranche, compounded annually
from the date that such capital relating to such tranche was contributed to the
date of the determination.
"CHALLENGE FLOOR PRICE" means an amount equal to the sum of those
amounts that for each tranche of capital actually invested in the Company
(whether contributed in cash or in kind and, if in kind, valued as set forth in
the Section 4.03(i)), would return to investors in each tranche (regardless
whether there are any investors from that tranche who continue as equity
holders, and without regard to any purchase or sale transactions or the price
of such transfers among equity holders) an amount that would represent a 10%
internal rate of return on the amount of capital invested in connection with
such tranche, compounded annually from the date that such capital relating to
such tranche was contributed to the date of the determination.
"INVESTMENT FORMULA PRICE" means in respect of each tranche of capital
actually invested in the Company (whether contributed in cash or in kind, but
excluding the Series B Preferred Stock), an amount that would represent a 20%
internal rate of return on the amount of capital invested in connection with
such tranche (regardless of whether there are any investors from such tranche
who continue as equity holders, and without regard to any purchase or sale
transactions or the price of such transfers among equity holders), compounded
annually from the date that such capital relating to such tranche was
contributed to the date of the purchase.
(i) For purposes of calculating the Investment Formula Price,
Challenge Ceiling Price and Challenge Floor Price, except for the frequencies
or frequency rights which will be valued as provided in Exhibit 4.1 to the
Joint Venture Agreement, the Board shall place a cash equivalent value on each
non-cash capital investment made in the Company at the time such investment is
made, and such cash equivalent value shall be used in all calculations of
Investment Formula Price, Challenge Ceiling Price, and Challenge Floor Price
under this Agreement and the other relevant Transaction Documents.
Section 4.04. Management Stockholder Tag Along Right.
Notwithstanding anything herein to the contrary, if, prior to the Initial
Public Offering, NWIP or its Affiliates acquire (in one or a series of
transactions) more than 20% of the Initial
56
Ownership of the DLJ Entities (other than in accordance with the provisions of
this Article 4 in connection with a purchase by NWIP or its Affiliates of all
of the Company's outstanding Company Capital Stock held by the Non-Nextel
Shareholders), the Management Shareholders will have the right, if they so
elect, to require that NWIP purchase from them, pro rata in accordance with
their ownership of Vested Shares (as defined in the Restricted Stock Purchase
Agreements), the same proportion of their aggregate Vested Shares as the
proportion of the aggregate Initial Ownership of the DLJ Entities being
acquired by NWIP or its Affiliates, at the same per share price as that being
paid to the DLJ Entities; provided, that NWIP's obligation to purchase Vested
Shares pursuant to this Section 4.04 will not exceed $20 million in the
aggregate. NWIP shall notify the Management Shareholders in advance of any such
acquisition, and the Management Shareholders shall have five days from receipt
of any such notice to elect (by notice to NWIP) to exercise their rights
pursuant to the preceding sentence. The closing of such purchase and sale shall
occur at the same time and place as the closing of the acquisition between NWIP
or its Affiliates and the DLJ Entities and at any such closing, NWIP shall
deliver to each selling Management Shareholder the purchase price by providing
the same per share consideration that it is providing to the DLJ Entities.
Section 4.05. Company Repurchase Rights. (a) The Company
repurchase rights with respect to the Special Securities are as follows:
(i) Within 30 days after the General Repurchase Date, the Company
shall repurchase from each Reselling Shareholder, and each Reselling
Shareholder shall be obligated to sell, at a repurchase price of $.01
per share, a number of shares of Class A Common Stock (or, in the
case of the DLJ Entities, Warrants) equal to the product of (A) the
number of such Reselling Shareholder's Special Securities multiplied
by (B) the Option Section Percentage.
(ii) Notwithstanding anything in the Restricted Stock Purchase
Agreements to the contrary, if an Individual Repurchase Date occurs
prior to the General Repurchase Date, within 30 days after such
Individual Repurchase Date, the Company shall repurchase from the
applicable Reselling Shareholder, and such Reselling Shareholder
shall be obligated to sell, at a repurchase price of $.01 per share,
a number of shares of Class A
57
Common Stock equal to the product of (A) the number of such Reselling
Shareholder's Special Securities multiplied by (B) the Option Section
Percentage.
(b) Promptly after an applicable Repurchase Date the Company will
deliver written notice to a Reselling Shareholder. Such notice shall specify
the applicable Repurchase Date and shall set forth the number of Shares to be
repurchased from each Reselling Shareholder and the aggregate repurchase price
thereof. Within five days after delivery of such notice, upon delivery to the
Company of the Shares being repurchased, together with one or more related
stock powers executed in blank by the Reselling Shareholders, the Company shall
pay to each Reselling Shareholder, in immediately available funds, an amount
equal to the aggregate repurchase price of the Shares being repurchased
therefrom. Each Reselling Shareholder shall represent that he or it owns the
Shares being repurchased free and clear of liens other than liens created by
the Transaction Documents.
(c) Each of the Reselling Shareholders agrees and acknowledges that
the Special Securities shall not be transferred (other than to the Company)
until 30 days after the General Repurchase Date and until such time shall be
voted in the same proportion as all other Shares are voted by the Shareholders
at any meeting of the shareholders of the Company.
(d) Notwithstanding anything in this Section 4.05 to the contrary, in
the event that the Option Section Percentage is zero or a negative number, the
Company shall not repurchase from the Reselling Shareholders any Special
Securities.
(e) As used in this Section 4.05, the following terms have the
following meanings:
"BUILD OUT" shall have the meaning set forth in the Joint Venture
Agreement.
"ELECTION PERIOD" shall have the meaning set forth in the Joint
Venture Agreement.
00
"XXXXXXX XXXXXXXXXX DATE" means the earliest of the date of (i) the
expiration of the Election Period (as defined in the Joint Venture Agreement),
(ii) the occurrence of any of the events specified in clauses (b) or (c) of the
definition of Change in Control of the Company (as defined in the Restricted
Stock Purchase Agreements) and (iii) the purchase of the Company Capital Stock
(other than the Series B Preferred) by NWIP pursuant to Section 4.01 or 4.02.
"INDIVIDUAL REPURCHASE DATE" means, with respect to any Management
Stockholder, the date on which the Company has a right to repurchase any Class
A Common Stock from such Management Stockholder pursuant to the Restricted
Stock Purchase Agreement between such Management Stockholder and the Company.
"OPTION SECTIONS" shall have the meaning set forth in the Joint
Venture Agreement.
"OPTION SECTION PERCENTAGE" means the product of (A) 3,162,000 minus
the number of POPs represented in the Option Sections the Company has elected
to Build-Out prior to the relevant Repurchase Date divided by (B) 3,162,000.
"POPs" means population equivalents as set forth in Exhibit 6 to the
Joint Venture Agreement.
"RESELLING SHAREHOLDER" means each of Eagle River, the DLJ Entities
and the Management Stockholders.
"SPECIAL SECURITIES" means: (i) 61,880 shares of Class A Common Stock
for Xxxx Xxxxxxx, (ii) 42,770 shares of Class A Common Stock for Xxxx Xxxxxxxx,
(iii) 24,570 shares of Class A Common Stock for Xxxxx Xxxxxx, (iv) 20,475
shares of Class A Common Stock for Xxxxx Aas, (v) 17,290 shares of Class A
Common Stock for Xxxxx Xxxxxxxxx, (vi) 17,290 shares of Class A Common Stock
for Xxxx Xxxxxxx, (vii) 15,295 shares of Class A Common Stock for Eagle River,
(viii) warrants to purchase 24,957 shares of Class A Common Stock for Madison
Dearborn and (ix) warrants to purchase 26,162 shares of Class A Common Stock
for the DLJ Funds.
59
ARTICLE 5
ANTI-DILUTION AND PREEMPTION RIGHTS
Section 5.01. Anti-Dilution Rights. (a) Prior to the Initial Public
Offering, the Company shall provide each Shareholder with a written notice (a
"SECTION 5.01 NOTICE") of any proposed issuance by the Company of Company
Capital Stock at least 30 days prior to the proposed issuance date. The Section
5.01 Notice shall specify the price per share at which the Company Capital
Stock is proposed to be issued and the other proposed material terms of the
issuance. Each Shareholder shall be entitled to purchase, at the price and on
the terms specified in such Section 5.01 Notice, a pro rata portion of the
Company Capital Stock proposed to be issued, based upon such Shareholder's
Percentage Ownership. A Shareholder may exercise its rights under this Section
5.01 by delivering written notice to the Company (which will make such
information available to all Shareholders) of its election to purchase Company
Capital Stock within 15 days of receipt of the Section 5.01 Notice. A delivery
of such a written notice (which notice shall specify the number of shares (or
amount) of Company Capital Stock to be purchased by the Shareholder submitting
such notice) by a Shareholder shall constitute a binding agreement of such
Shareholder to purchase, at the price and on the terms specified in the Section
5.01 Notice, the number of shares (or amount) of Company Capital Stock
specified in such Shareholder's written notice, provided that if the actual
purchase price per share of Company Capital Stock is more than the purchase
price set forth in the Section 5.01 Notice, the Company shall notify such
Shareholders prior to the issuance of such shares and each such Shareholder may
revoke its election at or prior to the time of the relevant issuance and be
released from its obligation to purchase shares pursuant to this Section 5.01.
In the case of any issuance of Company Capital Stock, the Company shall have
120 days from the date of the Section 5.01 Notice to consummate the proposed
issuance of any or all of such Company Capital Stock which the Shareholders
have not elected to purchase at the price and upon terms that are not
materially less favorable to the Company than those specified in the Section
5.01 Notice. At the consummation of such issuance, the Company shall issue
certificates representing the Company Capital Stock to be purchased by each
60
Shareholder exercising anti-dilutive rights pursuant to this Section 5.01
registered in the name of such Shareholder, against payment in cash by such
Shareholder of the purchase price for such Company Capital Stock. If the
Company proposes to issue Company Capital Stock after such 120-day period, it
shall again comply with the procedures set forth in this Section.
(b) Notwithstanding Section 5.01(a), if the Company elects to Build
Out any Option Sections prior to the expiration of the Election Period, and
pursuant thereto, issues additional equity to NWIP in exchange for frequencies,
the Company and the Shareholders will comply with the Notice provisions of
Section 5.01(a) and each Non-Nextel Shareholder (other than the Management
Shareholders) that is a Shareholder as of the date hereof shall have the right,
but not the obligation, to purchase, at a purchase price of $10 per share, as
adjusted for stock splits and combinations, stock dividends and the like (which
represents the initial purchase price for Shares on the date hereof), a number
of shares of Series A Preferred (or, if the Series A Preferred has been
converted into Common Stock, Common Stock) that results in such Shareholder
maintaining the same Percentage Ownership it has on either the date immediately
prior to the date the Company issues additional equity to NWIP in exchange for
frequencies or the date hereof, whichever date results in a lower Percentage
Ownership.
(c) Notwithstanding Section 5.01(a), no Shareholder (except as
provided for NWIP in Section 5.02 solely in connection with the purchase of
Company Capital Stock issued in connection with an Initial Public Offering)
shall be entitled to purchase Company Capital Stock as contemplated by this
Section 5.01 in connection with issuances of Company Capital Stock (i) to
employees of the Company or any Subsidiary pursuant to employee benefit plans
or arrangements approved by the Board (including upon the exercise of employee
stock options), (ii) in connection with a Public Offering initiated by the
Company, (iii) in connection with any bona fide, arm's-length restructuring of
outstanding debt of the Company or any Subsidiary, (iv) in connection with any
bona fide, arm's-length direct or indirect merger, acquisition or similar
transaction, (v) in connection with the issuance of equity securities pursuant
to Article 4 of the Joint Venture Agreement, (vi) in connection with the
conversion of the Convertible Preferred into Company Common Stock or (vii) in
connection with any pro rata stock splits, combinations or reclassifications.
The Company shall not be under any obligation to consummate any proposed
issuance of Company Capital Stock,
61
regardless of whether it shall have delivered a Section 5.01 Notice in respect
of such proposed issuance.
Section 5.02. Special NWIP Anti-Dilution Rights. (a) In connection
with an Initial Public Offering initiated by the Company pursuant to which the
Company will offer newly issued shares of Company Common Stock (a "COMPANY
IPO"), the Company shall provide NWIP with a written notice (a "SECTION 5.02
NOTICE") of such Initial Public Offering at least 45 days prior to the proposed
offering date. The Section 5.02 Notice shall specify (i) a range of prices (the
"UNDERWRITERS' RANGE") for the Company Common Stock as determined by the
underwriters, of which the high per share price (the "HIGH OFFERING PRICE")
will be no more than $3.00 greater than the low per share price (the "LOW
OFFERING PRICE") and (ii) the other material terms of the offering. NWIP shall
be entitled to purchase, at the Offering Price (as defined below) and otherwise
on the terms specified in such Section 5.02 Notice, NWIP's Percentage Ownership
of the Company Common Stock proposed to be issued pursuant to the Company IPO.
NWIP may exercise its rights under this Section 5.02 by delivering written
notice of its election to purchase the Company Common Stock to the Company
within 20 days of receipt of the Section 5.02 Notice. A delivery of such a
written notice (which notice shall specify the number of shares (or amount) of
Company Common Stock to be purchased by NWIP) by NWIP shall constitute a
binding agreement of NWIP to purchase, at the Offering Price (adjusted to
reflect elimination of the underwriters' discount) and otherwise on the terms
specified in the Section 5.01 Notice, the number of shares (or amount) of
Company Common Stock specified in NWIP's written notice, provided that if the
Offering Price is more than $1.00 greater than the High Offering Price, the
Company shall immediately notify NWIP and NWIP shall have 24 hours from receipt
of such notice to revoke its election and be released from its obligation to
purchase shares pursuant to this Section 5.02. The Company shall have 180 days
from the date of the Section 5.02 Notice to consummate the proposed Company
IPO, provided that if NWIP elected to purchase less than NWIP's Percentage
Ownership of the proposed Company Common Stock issuance and if the Offering
Price is more than $1.00 below the Low Offering Price, the Company shall
immediately notify NWIP and NWIP will have 24 hours from receipt of such notice
to elect whether to purchase its Percentage Ownership of the Company Common
Stock proposed to be issued pursuant to the Company IPO at the lower Offering
Price (adjusted to
62
reflect elimination of the underwriters' discount). At the consummation of
such issuance, which will be simultaneous with the closing of the Company IPO,
the Company shall issue certificates representing the Company Common Stock to
be purchased by NWIP registered in the name of NWIP, against payment by
NWIP of the Offering Price (adjusted to reflect elimination of the
underwriters' discount) for such Company Common Stock.
(b) "OFFERING PRICE" means the per share price for the Company Common
Stock to be sold in the Public Offering.
(c) If the Company proposes to offer Company Common Stock after such
180-day period, the Company shall comply with the procedures set forth in this
Section 5.02 before proceeding with the Company IPO.
Section 5.03. Special NWIP Preemption of Registration Rights. (a) If,
prior to the later of (i) the completion of the Initial Required Build and (ii)
the fourth anniversary of the date of this Agreement, DLJMB requests a Demand
Registration pursuant to Section 6.01 or the Company authorizes a Company IPO,
the Company will notify NWIP at the same time that it notifies the other
Shareholders pursuant to Section 6.01 or 5.02, as the case may be, which notice
(the "PREEMPTION NOTICE") will contain the Underwriters' Range and the other
material terms of the proposed offering, including but not limited to the
number of shares of Company Common Stock to be offered and the proposed
offering date. Upon receipt of the Preemption Notice, NWIP, in addition to its
rights under Section 5.02, will have the right (the "PREEMPTION RIGHT"),
subject to Section 5.03(c), to purchase all (but not less than all) of the
Company Common Stock that (i) the Company proposes to offer in the case of a
Company IPO or (ii) the DLJ Entities and the High Yield Investors own as of the
date hereof (assuming conversion of the Series A Preferred) and propose to
offer in the case of a DLJMB Demand Registration pursuant to Section 6.01.
Except as provided in this Section 5.03, NWIP will not have any right, nor any
obligation, to purchase any shares of Company Common Stock that any other
Shareholder proposes to register in connection with the relevant Public
Offering.
(b) If NWIP elects to exercise its Preemption Right and purchase the
relevant shares of Company Common Stock, it will notify the Company and
DLJMB, as the case may be (the "OFFERING PARTY") in writing (the
63
"PREEMPTION ELECTION NOTICE") within 15 days of receipt of the Preemption
Notice. The Preemption Election Notice will state, among other things, (i) the
purchase price to be paid by NWIP for the relevant shares of Company Common
Stock, which purchase price shall be the mid-point of the Underwriters Range
and (ii) the date such purchase will take place, such date not to be later than
the proposed offering date set forth in the Preemption Notice. If the Offering
Party does not receive a timely Preemption Election Notice, it may proceed with
the relevant offering, provided that if the Offering Price is more than $1.00
below the Low Offering Price, the Company shall immediately notify NWIP and
NWIP will have 24 hours from receipt of such notice to elect (by notifying the
Company and the relevant Offering Party) whether to exercise its Preemption
Right at the Lower Offering Price and provided further that if the Offering
Party proposes to offer Company Common Stock more than 90 days after receipt of
the Preemption Election Notice the Offering Party shall, subject to the first
sentence of Section 5.03(a), comply again with the procedures set forth in this
Section 5.03 (at the lower Offering Price, if applicable) before proceeding
with the offering.
(c) The first time that NWIP elects to exercise its Preemption Right
in connection with a proposed Company IPO, the Company shall have the right to
elect, by notice given to NWIP within 10 days after receipt of the applicable
Preemption Election Notice, to reduce the number of shares included in such
offering by up to 50% of the number of shares originally proposed to be
offered. For each subsequent Company IPO with respect to which NWIP elects to
exercise its Preemption Right, the Company may elect, by notice given to NWIP
within 10 days after receipt of the applicable Preemption Election Notice, to
reduce the number of shares included in such offering by up to 75% of the
number of shares originally proposed to be offered, provided that the Company
may elect, for one (and only one) such subsequent Company IPO, to withdraw the
Company IPO in its entirety. If NWIP elects to exercise its Preemption Right in
connection with a proposed DLJMB Demand Registration, DLJMB shall have the
right to elect, by notice given to NWIP and the Company within 10 days after
receipt of the applicable Preemption Election Notice, to withdraw the demand in
its entirety provided that DLJMB reimburses the Company for any out of pocket
fees and expenses incurred in connection with such proposed registration.
64
(d) A delivery of the Preemption Election Notice by NWIP shall
constitute a binding agreement of NWIP to purchase all the relevant shares of
Company Common Stock that the Offering Party proposes to offer. At any closing
of NWIP's purchase of all the relevant shares of Company Common Stock that the
Offering Party proposes to offer, NWIP shall deliver to the Offering Party the
purchase price (i) by wire transfer of immediately available funds to such bank
account as the Offering Party shall have specified in writing no later than two
Business Days prior to the closing or (ii) by delivery of Nextel Shares as
permitted by Section 7.05.
(e) If NWIP purchases Shares in accordance with its Preemption Right
with respect to a Qualifying DLJ Demand, the Non-Nextel Shareholders shall have
the rights set forth in Section 4.01.
ARTICLE 6
REGISTRATION RIGHTS
Section 6.01. Demand Registration. (a) Subject to the provisions set
forth in Section 5.03 and this Section 6.01, if the Company shall receive a
written request by DLJMB (acting on behalf of the DLJ Entities collectively,
the "SELLING SHAREHOLDER"), following the earlier to occur of (x) the 42 month
anniversary of the date hereof and (y) an Initial Public Offering, that the
Company effect the registration under the Securities Act of all or a portion of
such Selling Shareholder's shares of Company Common Stock (after conversion of
Preferred Stock into Company Common Stock) and specifying the intended method
of disposition thereof, then the Company shall promptly give written notice of
such requested registration (a "DEMAND REGISTRATION") at least 30 days prior to
the anticipated filing date of the registration statement relating to such
Demand Registration to the other Shareholders and thereupon will use its
reasonable best efforts to effect, as expeditiously as possible, the
registration under the Securities Act of:
65
(i) the Registrable Securities which the Company has been so
requested to register by the Selling Shareholder, then held by the
Selling Shareholder; and
(ii) subject to the restrictions set forth in Section 6.02(b),
all other Registrable Securities which any other Shareholder entitled
to request the Company to effect an Incidental Registration (as such
term is defined in Section 6.02) pursuant to Section 6.02 (all such
Shareholders, together with the Selling Shareholder, the "HOLDERS")
has requested the Company to register by written request received by
the Company within 15 days after the receipt by such Holders of such
written notice given by the Company, all to the extent necessary to
permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be
registered.
Promptly after the expiration of the 15-day period referred to in
Section 6.01(a)(ii) hereof, the Company will notify all the Holders who have
requested that their Registrable Securities be included in the Demand
Registration of the other Holders and the number of Registrable Securities
requested to be included therein. The Selling Shareholder requesting a
registration under this Section 6.01 may, at any time prior to the effective
date of the registration statement relating to such registration, revoke such
request, without liability to any of the other Holders, by providing a written
notice to the Company revoking such request, in which case such request, so
revoked, shall be considered a Demand Registration unless such revocation arose
out of the fault of the Company or unless the Selling Shareholder reimburses
the Company for all costs incurred by the Company in connection with such
registration, in which case such request shall not be considered a Demand
Registration.
(b) In no event will the Company be required to effect more than one
Demand Registration within any six-month period. If a Company IPO or a Demand
Registration is preempted by NWIP pursuant to Section 5.03 or if the Company or
DLJMB elects to withdraw a registration pursuant to Section 5.03, neither DLJMB
nor the Company may initiate another Public Offering until 180 days after the
date NWIP elected to preempt the registration (or the date such
66
Public Offering is withdrawn by the Company or DLJMB under Section 5.03(c), if
applicable).
(c) Subject to Section 6.01(e), the Company shall be obligated to
effect one Demand Registration for the Selling Shareholder prior to an Initial
Public Offering. After the Initial Public Offering, DLJMB shall be entitled to
(i) one Demand Registration, at the Company's expense, if the Registrable
Securities then owned by the Qualified DLJ Entities and initially issued to a
DLJ Entity by the Company represent at least 10% of the Fully Diluted Company
Common Stock, (ii) a second Demand Registration (at DLJMB's expense) if the
Registrable Securities then owned by the DLJ Entities (and issued to a DLJ
Entity by the Company) represent at least 5% of the Fully Diluted Company
Common Stock and (iii) a third Demand Registration (at DLJMB's expense) if the
Registrable Securities then owned by the DLJ Entities (and issued to a DLJ
Entity by the Company) represent at least 5% of the Fully Diluted Company
Common Stock; provided that the Company shall not be obligated to effect any
Demand Registration unless the aggregate proceeds expected to be received from
the sale of the Company Common Stock requested to be included in such Demand
Registration equal at least (x) $75,000,000, if such Demand Registration would
constitute an Initial Public Offering, or (y) $50,000,000 in any other Public
Offering.
(d) Except as set forth in 5.03(c) and 6.01(c), the Company will pay
all Registration Expenses in connection with any Demand Registration.
(e) A Demand Registration requested pursuant to this Section 6.01
shall not be deemed to have been effected (i) unless the registration statement
relating thereto (A) has become effective under the Securities Act and (B) has
remained effective for a period of at least 90 days (or such shorter period in
which all Registrable Securities of the Holders included in such registration
have actually been sold thereunder); provided that if after any registration
statement requested pursuant to this Section 6.01 becomes effective (x) such
registration statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or court and
(y) less than 75% of the Registrable Securities included in such registration
statement have been sold thereunder (provided that the Holders shall have
exercised all commercially
67
reasonable efforts to effect the sale thereof during the period of
effectiveness of such registration statement), such registration statement
shall not be considered a Demand Registration or (ii) if the Maximum Offering
Size (as defined below) is reduced in accordance with Section 6.01(f) such that
less than 66 2/3% of the Registrable Securities of the Selling Shareholders
sought to be included in such registration are included unless such Selling
Shareholder elects to proceed with registration and sale of such reduced
quantity of Registrable Securities.
(f) If a Demand Registration involves an Underwritten Public Offering
and the managing underwriter shall advise the Company and the Selling
Shareholders that, in its view, (i) the number of shares of Company Common
Stock requested to be included in such registration (including Company Common
Stock which the Company proposes to be included which are not Registrable
Securities) or (ii) the inclusion of some or all of the shares of Company
Common Stock owned by the Holders, in any such case, exceeds the largest number
of shares which can be sold without having an adverse effect on such offering,
including the price at which such shares can be sold (the "MAXIMUM OFFERING
SIZE"), the Company will include in such registration, in the priority listed
below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be registered
by the Selling Shareholder (including any Registrable Securities
requested to be registered by the High Yield Investors) (allocated,
if necessary for the offering not to exceed the Maximum Offering Size
pro rata among the DLJ Entities and the High Yield Investors on the
basis of the relative number of Registrable Securities so requested
to be included in such registration);
(B) second, all Registrable Securities requested to be included
in such registration by any other Holder (allocated, if necessary for
the offering not to exceed the Maximum Offering Size, pro rata among
such other Holders on the basis of the relative number of Registrable
Securities so requested to be included in such registration); and
(C) third, any Company Common Stock proposed to be registered by
the Company.
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(g) Upon written notice to DLJMB, the Company may, as a matter of
right, postpone effecting a registration pursuant to this Section 6.01 on one
occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed except that it may be extended for an additional 30 days if
the request for registration is made during the first quarter of any fiscal
year).
(h) Notwithstanding anything in this Section 6.01 to the contrary,
upon written notice to DLJMB, the Company may supersede a DLJMB Demand
Registration at any time prior to an Initial Public Offering by notifying DLJMB
within 30 days of the Company's receipt of DLJMB's request for a Demand
Registration that the Company is initiating a Company IPO (a "SUPERSEDING
IPO"). If the Company initiates a Superseding IPO then, subject to the
provisions of Sections 5.02 and 5.03, it must file its registration statement
with the SEC not more than 90 days after notifying DLJMB of its intent to
initiate the Superseding IPO and use its reasonable best efforts to have the
registration statement declared effective as soon as practicable thereafter. If
the Superseding IPO is not declared effective within 90 days of filing the
registration statement with the SEC, DLJMB may proceed with its Demand
Registration.
(i) DLJMB's right to have the Company effect a Demand Registration
for DLJMB prior to the Initial Public Offering will terminate when the
Qualified DLJ Entities cease to own 80% of the Initial Ownership of the
Qualified DLJ Entities.
Section 6.02. Company Registration; Incidental Registration. (a)
Subject to the provisions of Sections 5.02 and 5.03, at such time as the
Company has (i) either completed the Initial Required Build or, if such
condition has not been satisfied, received the prior approval of NWIP (which
approval will not be unreasonably withheld, it being understood that
withholding approval because the proceeds from the Company IPO will either be
insufficient to allow the Company to complete the Initial Required Build or
will not be committed to completing the Initial Required Build are among the
reasonable bases for withholding approval) or (ii) elected to supersede a
Demand Registration pursuant to Section 6.01(h), the Company may initiate a
Company IPO and register an offering of its Company
69
Common Stock under the Securities Act, provided that the Company IPO will
generate gross proceeds of no less than $75,000,000.
(b) If the Company proposes to register any of its Company Common
Stock under the Securities Act (other than a registration (x) on Form S-8 or
S-4 or any successor or similar forms, (y) relating to securities issuable upon
exercise of employee stock options or in connection with any employee benefit
or similar plan of the Company or (z) in connection with a direct or indirect
merger, acquisition or other similar transaction), whether or not for sale for
its own account, it will each such time, subject to the provisions of Sections
6.02(c), give prompt written notice to each Shareholder at least 20 days prior
to the anticipated filing date of the registration statement relating to such
registration, which notice shall set forth such Shareholders' rights under this
Section 6.02 and shall offer all Shareholders the opportunity to include in
such registration statement such number of Registrable Securities as each such
Shareholder may request. Upon the written request of any such Shareholder made
within 10 days after the receipt of notice from the Company (which request
shall specify the number of Registrable Securities intended to be disposed of
by such Shareholder), the Company will use all reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by such Shareholders, to the extent
requisite to permit the disposition of the Registrable Securities so to be
registered; provided that (i) if such registration involves an Underwritten
Public Offering, all such Shareholders requesting to be included in the
Company's registration must sell their Registrable Securities to the
underwriters selected as provided in Section 6.04(f) on the same terms and
conditions as apply to the Company or the Selling Shareholder, as applicable,
and (ii) if, at any time after giving written notice of its intention to
register any Company Common Stock pursuant to this Section 6.02(b) and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
Company Common Stock, the Company shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration. No
registration effected under this Section 6.02 shall relieve the Company of its
obligations to effect a Demand Registration to the extent required by Section
6.01. The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 6.02.
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(c) If a registration pursuant to this Section 6.02 involves an
Underwritten Public Offering (other than in the case of an Underwritten Public
Offering requested by any Shareholder in a Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 6.01(f) shall apply) and either (A) the Board (with good reason
relating to the success of the Offering) elects to preclude the DLJ Entities,
the Strategic Investors and/or the Management Shareholders from including
shares in the Company IPO or (B) the managing underwriter advises the Company
in writing that, in its view, the number of shares of Company Common Stock
which the Company and the selling Shareholders intend to include in such
registration exceeds the Maximum Offering Size, the Company will include in
such registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the Company Common Stock proposed to be
registered for the account of the Company as would not cause the
offering to exceed the Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be included
in such registration by any Shareholder pursuant to Section 6.02
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Shareholders on the basis of the
relative number of shares of Registrable Securities so requested to
be included in such registration).
Section 6.03. Holdback Agreements. With respect to each and every
Underwritten Public Offering: (a) each Shareholder agrees not to effect any
public sale or distribution, including any sale pursuant to Rule 144, or any
successor provision, under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other security of
the Company (in each case, other than as part of such Underwritten Public
Offering) during the 14 days prior to the effective date of the applicable
registration statement (except as part of such registration) or during the
period after such effective date that such managing underwriter and the Company
shall agree (but not to exceed 180 days or any such shorter period (but not
less than 90 days) as the managing underwriter may suggest).
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(b) Each Shareholder agrees that, so long as the DLJ Entities have
the right to request one or more Demand Registrations under Section 6.01, such
Shareholder will not effect any public sale or distribution, including any sale
pursuant to Rule 144, or any successor provision, under the Securities Act, of
any Registrable Securities, or any such public sale or distribution of any
other security of the Company, from the date that the Shareholder is first
notified of the Company's intention to make a Public Offering (it being
understood that, for so long as DLJMB has the right to designate one or more
members of the Board pursuant to Section 2.01(a), a resolution of the Board
authorizing the Company to initiate a Public Offering shall constitute notice
to the DLJ Entities of such intention) through the date that is 90 days
following completion of such Public Offering, unless the underwriting group,
not including Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc. or any of its controlled
Affiliates, permits such sales or distributions to be made by the Shareholders
during such 90 day period.
Section 6.04. Registration Procedures. Whenever Shareholders request
that any Registrable Securities be registered pursuant to Section 6.01 or 6.02
hereof, the Company will, subject to the provisions of such Sections, use all
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form selected by counsel for the
Company and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method
of distribution thereof, and use all reasonable efforts to cause such filed
registration statement to become and remain effective for a period of not less
than 90 days (or such shorter period in which all of the Registrable Securities
of the Shareholders included in such registration statement shall have actually
been sold thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Shareholder and each underwriter, if any, of the Registrable Securities covered
by such registration statement copies of such registration statement as
proposed to be filed, and thereafter the Company will furnish to such
Shareholder and underwriter, if any, such number of copies of such registration
statement, each amendment and
72
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as such Shareholder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Shareholder. Each Shareholder shall have the right to request that the Company
modify any information contained in such registration statement, amendment and
supplement thereto pertaining to such Shareholder and the Company shall use all
reasonable efforts to comply with such request, provided, however, that the
Company shall not have any obligation to so modify any information if so doing
would cause the prospectus to contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein (in light of the circumstances under which they
were made) not misleading.
(c) After the filing of the registration statement, the Company will
promptly notify each Shareholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC or any
state securities commission under state blue sky laws and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use all reasonable efforts to (i) register or
qualify the Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions in the United
States as any Shareholder holding such Registrable Securities reasonably (in
light of such Shareholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(e) The Company will immediately notify each Shareholder holding such
Registrable Securities covered by such registration statement, at any time when
a
73
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein (in light of the
circumstances under which they were made) not misleading and promptly prepare
and make available to each such Shareholder and file with the SEC any such
supplement or amendment.
(f) The Board will pick the underwriter(s) of any and all registered
offerings of Company Common Stock, except that in connection with (i) any
Demand Registration requested by DLJMB or their Permitted Transferees, DLJMB
and the Company will agree on the lead underwriter or (ii) any registration for
the account of the Company, DLJMB has the right to veto one lead underwriter.
Any Affiliate of Xxxxxxxxx, Lufkin & Xxxxxxxx, Inc. may be considered for
selection as underwriter for an Underwritten Public Offering. The Company will
enter into customary agreements (including an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of such Registrable Securities,
including the engagement of a "qualified independent underwriter" in connection
with the qualification of the underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Company, the Company will make
available for inspection by any Shareholder and any underwriter participating
in any offering pursuant to a registration statement being filed by the Company
pursuant to this Section 6.04 and any attorney, accountant or other
professional retained by any such Shareholder or underwriter (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "RECORDS") as shall be
reasonably requested by any such Person, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
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(h) The Company will furnish to each such Shareholder and to each
such underwriter, if any, a signed counterpart, addressed to such underwriter
and the participating Shareholders, of (i) an opinion or opinions of counsel to
the Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters, as the
case may be, as a majority in interest of such Shareholders or the managing
underwriter therefor reasonably requests.
(i) The Company will otherwise use all reasonable 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
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(j) The Company may require each such Shareholder (i) to promptly
furnish in writing to the Company information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request,
(ii) to provide such other information as may be legally required in connection
with such registration and (iii) to take such other acts as are reasonably
necessary under the circumstances.
(k) Each such Shareholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
6.04(e), such Shareholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Shareholder's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 6.04(e), and, if so directed by
the Company, such Shareholder will deliver to the Company all copies, other
than any permanent file copies then in such Shareholder's possession, of the
most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event that the Company shall give such notice,
the Company shall extend the period during which such registration statement
shall be maintained effective (including the period referred to in Section
6.04(a)), by the number of days during the period from and including the date
of the giving of notice pursuant
75
to Section 6.04(e) to the date when the Company shall make available to such
Shareholder a prospectus supplemented or amended to conform with the
requirements of Section 6.04(e).
Section 6.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Registrable Securities
covered by a registration statement, its officers, directors, employees,
partners and agents, and each Person, if any, who controls such Shareholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses caused by (i) any untrue statement or alleged untrue statement of
a material fact contained in any registration statement, prospectus, offering
circular or other offering document relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading (in the case of any
prospectus, in light of the circumstances under which they were made), except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission so made in
strict conformity with information furnished in writing to the Company by such
Shareholder or on such Shareholder's behalf expressly for use therein or (iii)
any violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company, or any blue sky or state
securities laws or any rule or regulation thereunder applicable to the Company;
provided that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus, or in any
prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the
prospectus (or, in the case of a prospectus, the prospectus as amended or
supplemented) was not sent or given to the Person asserting any such loss,
claim, damage, liability or expense at or prior to the written confirmation of
the sale of the Registrable Securities concerned to such Person if it is
determined that the Company has provided such prospectus to such Shareholder in
a timely manner prior to such sale and it was the responsibility of such
Shareholder under the Securities Act to provide such Person with a current copy
of the prospectus (or such
76
amended or supplemented prospectus, as the case may be) and such current copy
of the prospectus (or such amended or supplemented prospectus, as the case may
be) would have cured the defect giving rise to such loss, claim, damage,
liability or expense. The Company also agrees to indemnify any underwriters of
the Registrable Securities and each accountant, attorney and other Person who
participates in the offering of the Registrable Securities on behalf of the
Company or any selling shareholder, their officers and directors and each
person who controls such underwriters and other Persons on substantially the
same basis as that of the indemnification of the Shareholders provided in this
Section 6.05.
Section 6.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Shareholder, but only (i) with respect to
information furnished in writing by such Shareholder or on such Shareholder's
behalf expressly for use in any registration statement, prospectus, offering
circular or other document relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus or (ii) to the
extent that any loss, claim, damage, liability or expense described in Section
6.05 results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent
or given to the Person asserting any such loss, claim, damage, liability or
expense at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Shareholder to provide such Person with a current copy
of the prospectus (or such amended or supplemented prospectus, as the case may
be) and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. Each such Shareholder shall be
prepared, if required by the underwriting agreement, to indemnify and hold
harmless any underwriters of the Registrable Securities and each accountant,
attorney and other Person who participates in the offering of the Registrable
Securities on behalf of the Company or any selling shareholder, their officers
and directors and each person who controls such underwriters and other Persons
on substantially the same basis as that of the indemnification of the Company
provided in this Section 6.06. As a condition to including Registrable
Securities in any registration statement
77
filed in accordance with Article 6, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
Section 6.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 6, such Person (an "INDEMNIFIED PARTY"), after the Indemnified
Party has actual notice of any proceeding as to which indemnity may be sought,
shall promptly notify the Person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party, and shall assume the payment of all fees and expenses;
provided that the failure of any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party and the Indemnified Party shall have mutually agreed to
the retention of such counsel or (ii) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties,
and that all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Indemnified Parties, such firm
shall be designated in writing by the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any and all losses, claims,
damages, liabilities and expenses or liability (to the extent stated above) by
reason of such settlement or judgment. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding
78
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability arising out of such proceeding.
Section 6.08. Contribution. If the indemnification provided for in
this Article 6 is held by a court of competent jurisdiction to be unavailable
to the Indemnified Parties in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses (i) as between the Company and the
Shareholders holding Registrable Securities covered by a registration statement
and their related Indemnified Parties on the one hand and the underwriters,
other participating Persons and their related Indemnified Parties on the other,
in such proportion as is appropriate to reflect the relative benefits received
by the Company and such Shareholders on the one hand and the underwriters and
other participating Persons on the other, from the offering of the
Shareholders' Registrable Securities, or if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of the Company and such
Shareholders on the one hand and of such underwriters and other participating
Persons on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations and (ii) as between the Company and
their related Indemnified Parties on the one hand and each such Shareholder and
their related Indemnified Parties on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of each such
Shareholder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and such Shareholders on the one hand and such underwriters and other
79
participating Persons on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and such
Shareholders bear to the total underwriting discounts and commissions received
by such underwriters and fees received by other participating Persons, in each
case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Shareholders on the one hand and of such
underwriters and other participating Persons on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and such
Shareholders or by such underwriters and other participating Persons. The
relative fault of the Company on the one hand and of each such Shareholder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 6.08 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6.08, no
underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to Securities purchased by such underwriter in
such offering, less the aggregate amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Shareholder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities of such Shareholder were offered to the public
exceeds the amount of any damages which such Shareholder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. Each Shareholder's obligation to contribute pursuant to this
Section 6.08 is several in the proportion that the proceeds of the offering
received by such Shareholder bears to the total proceeds of the offering
received by all such Shareholders and not joint.
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Section 6.09. Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions
of this Agreement in respect of registration rights.
Section 6.10. Cooperation by the Company. In the event any Shareholder
shall transfer any Registrable Securities pursuant to Rule 144A under the
Securities Act, the Company shall cooperate, to the extent commercially
reasonable, with such Shareholder and shall provide to such Shareholder such
information as such Shareholder shall reasonably request, provided such
Shareholder shall pay any material expenses incurred by the Company in
connection with its cooperation.
Section 6.11. No Transfer of Registration Rights. None of the rights
of Shareholders under this Article 6 shall be assignable by any Shareholder to
any Person acquiring Securities in any Public Offering or pursuant to Rule 144A
of the Securities Act.
Section 6.12. Limitations on Subsequent Registration Rights. The
Company shall not enter into any agreement with any holder or prospective
holder of any securities of the Company that would allow such holder or
prospective holder to include such securities in any registration filed
pursuant to Section 6.01 or 6.02, (a) unless under the terms of such agreement,
such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of such securities would not
reduce the amount of the Registrable Securities of the Shareholders included
therein or (b) on terms otherwise more favorable to such holder or prospective
holder than the registration rights provided in this Agreement.
Section 6.13. Obligation to Register Nextel and NWIP Securities. In
connection with (i) any shareholder action required to be taken in connection
with the exercise of a Put Right under Section 4.01, (ii) any shareholder
action required to be taken in connection with Option B under Section 7.04(b),
or (iii) any Public
81
Offering, if required by applicable law, NWIP will cause
Nextel to register the Put Rights, NWIP Call Right and/or Nextel Shares, as the
case may be (the "Nextel Securities"), on the appropriate registration form
under the Securities Act, and each of NWIP and Nextel will use its reasonable
best efforts to (A) comply with the Securities Act and the Securities Exchange
Act of 1934 and all applicable rules and regulations thereunder, (B) register
or qualify the relevant securities under applicable blue sky laws and (C)
comply with all other laws applicable to the Nextel Securities. NWIP and Nextel
will complete any such registration of the Nextel Securities in a timely manner
that permits the Shareholders and/or the Company to comply with the relevant
time periods set forth in this Agreement and the Company will use its
reasonable best efforts to assist NWIP and Nextel in the completion of any such
registration and, to the extent any Shareholder has agreed to take any action
or refrain from taking any action hereunder in connection with a registration
of the Company's Shares, such Shareholder shall take such action or refrain
from taking such action in connection with a registration of Nextel Securities,
provided that in no event will such Shareholder be obligated to refrain from
selling Nextel Shares upon receipt of such Nextel Shares pursuant to this
Agreement or the Joint Venture Agreement. NWIP and Nextel will be responsible
for paying promptly any additional costs and expenses incurred by either of
them or the Company in connection with the registration of the Nextel
Securities.
ARTICLE 7
CERTAIN COVENANTS AND AGREEMENTS
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Section 7.01. Confidentiality. (a) Each Shareholder hereby agrees that
Confidential Information (as defined below) furnished and to be furnished to it
was and will be made available in connection with such Shareholder's investment
in the Company. Each Shareholder agrees that it will use the Confidential
Information only in connection with its investment in the Company and not for
any other purpose. Each Shareholder further acknowledges and agrees that it
will not disclose any Confidential Information to any Person; provided that
Confidential Information may be disclosed (i) to such Shareholder's
Representatives (as defined below) in the normal course of the performance of
their duties or to any financial institution providing credit to such
Shareholder, (ii) to the extent required by applicable law, rule or regulation
(including complying with any oral or written questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process to which a Shareholder is subject; provided that such
Shareholder gives the Company prompt notice of such request(s), to the extent
practicable, so that the Company may seek an appropriate protective order or
similar relief (and the Shareholder shall cooperate with such efforts by the
Company, and shall in any event make only the minimum disclosure required by
such law, rule or regulation)), (iii) to any Person to whom such Shareholder is
contemplating a transfer of its Shares (provided that such transfer would not
be in violation of the provisions of this Agreement and as long as such Third
Party is advised of the confidential nature of such information and agrees to
be bound by a confidentiality agreement in form and substance satisfactory to
the Company and consistent with the provisions hereof) or (iv) if the prior
written consent of the Board shall have been obtained. Nothing contained herein
shall prevent the use (subject, to the extent possible, to a protective order)
of Confidential Information in connection with the assertion or defense of any
claim by or against the Company or any Shareholder.
(b) "CONFIDENTIAL INFORMATION" means any information concerning the
Company and Persons which are or become its Subsidiaries or the financial
condition, business, operations or prospects of the Company and Persons which
are or become its Subsidiaries in the possession of or furnished to any
Shareholder (including, without limitation, by virtue of its present or former
right to designate a director of the Company); provided that the term
Confidential Information does not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by a
Shareholder or its partners, directors, officers, employees, agents, counsel,
investment advisers or representatives (all
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such persons being collectively referred to as "REPRESENTATIVES") in violation
of the Subscription Agreement or this Agreement, (ii) is or was available to
such Shareholder on a nonconfidential basis prior to its disclosure to such
Shareholder or its Representatives by the Company or (iii) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Company, provided that such source is or was (at the time of receipt
of the relevant information) not, to the best of such Shareholder's knowledge,
bound by a confidentiality agreement with (or other confidentiality obligation
to) the Company or another Person.
Section 7.02. Reports. The Company will furnish each Shareholder with
the quarterly and annual financial reports that the Company is required to file
with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act.
Section 7.03. Subsequent Deployment of Alternative Digital
Transmission Technology. If the NDS elect to deploy an alternative digital
transmission technology on its 800 MHZ SMR frequencies on a nationwide basis (a
"TECHNOLOGY CHANGE") NWIP must notify the Company (a "TECHNOLOGY CHANGE
NOTICE"). If such Technology Change results in the Company being unable to
provide its customers with nationwide service comparable to the service
available to such customers immediately prior to the Technology Change and the
Company notifies NWIP within 60 days of receipt of the Technology Change Notice
that the Technology Change is materially adverse to the Company, then NWIP will
have the option to either (i) provide the Company at no charge with replacement
equipment that is compatible with the Technology Change together with the
resources necessary to install such equipment so that the Company remains in
the same operational position that it was in prior to the Technology Change or
(ii) purchase all of the Company Capital Stock at a purchase price equal to (A)
if the Technology Change is implemented prior to the Initial Public Offering,
the greater of Fair Market Value (determined as if neither the Company nor the
NDS needed to implement the Technology Change and without diminishing the value
of the Company due to the fact that the Technology Change had not been
implemented) or Investment Formula Price or (B) if the Technology Change is
implemented after the Initial Public Offering, the Fair Market Value
(determined as if neither the Company nor the NDS needed to implement the
Technology Change and without diminishing the value of the Company due to the
fact that the Technology Change had not been implemented). NWIP must notify
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the Company of its election within 60 days of receipt of notice from the
Company and, if NWIP elects to purchase all the Company Capital Stock, such
purchase must be consummated within 90 days of its election or as otherwise
permitted by Section 7.05, subject to all third party consents and the receipt
of customary representations and warranties (it being understood that in no
event shall a Shareholder be obligated to make any representations and
warranties, or to provide any indemnities, other than title to the Company
Capital Stock held by such Person, such title being free and clear of all liens
and encumbrances, and such Person's authority, authorization and right to enter
into and consummate the sale without contravention of any law or agreement, and
without the need for any governmental or other approval with respect to its
Shares).
Section 7.04. Limitations on Subsequent Changes to Company's
Operations. (a) If at any time, and from time to time, after the date hereof,
NWIP requires the Company to implement a change in the Company's business,
operations or systems (including, without limitation, changes to the Service
Pricing Structure or the Required Services or changes relating to Improvements)
under the Joint Venture Agreement (each such change, a "NEXTEL REQUIRED
UPGRADE") and the Company determines that it can not implement it without
causing either (i) the offering of wireless communications services in the
Territory by the Company and its Affiliates to be materially more costly or
difficult to manage than the NDS's offering of wireless communication services
in Comparable Service Areas (as defined in the Joint Venture Agreement), or
(ii) a payment or other material default under the Company's material debt
instruments or any other material adverse financial effect on the Company and
its Subsidiaries, taken as a whole, the Company may elect not to implement the
Nextel Required Upgrade by notifying NWIP of its determination prior to the
date the Company is required to implement such Nextel Required Upgrade (the
"ADVERSE IMPACT NOTICE"). The Adverse Impact Notice shall provide (x) a brief
summary of the problems and/or costs the Company would expect to encounter in
implementing the Nextel Required Upgrade and (y) a dollar estimate of the
adverse financial impact to the Company of such implementation. Within 30 days
of providing NWIP with the Adverse Impact Notice, the Company shall prepare and
deliver to NWIP a profit and loss analysis of the Nextel Required Upgrade (the
"NEXTEL REQUIRED UPGRADE ANALYSIS") which analysis shall provide a summary of
(A) the benefits and burdens of implementing the Nextel Required Upgrade and
any Nextel Required Upgrade
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previously implemented, (B) the expected profits and losses to the Company if
the Nextel Required Upgrade is implemented, (C) any prior changes implemented
by the Company at the Nextel Group's request and (D) reasonable supporting
detail for all of the foregoing. The Company will supplement such analysis and
provide additional detail as NWIP shall reasonably request.
(b) Within 30 days of receipt of the Nextel Required Upgrade
Analysis, NWIP will notify the Company that the Company (i) will not have to
implement the Nextel Required Upgrade, (ii) will be required to implement some
or all of the Nextel Required Upgrade and will be subsidized by NWIP in
accordance with paragraph 7.04(g), or (iii) will be required to implement some
or all of the Nextel Required Upgrade and will not be subsidized by NWIP (the
"NEXTEL DETERMINATION"). The Nextel Determination shall be final and binding on
the Company unless NWIP elects alternative (iii), in which case the Board may
choose to (A) implement the Nextel Required Upgrade without a subsidy ("OPTION
A"), (B) allow the Non-Nextel Shareholders to elect whether to (x) sell all
their Company Capital Stock to Nextel at the Investment Formula Price in
accordance with Section 4.01 or (y) cause the Company to implement the Nextel
Required Upgrade without a subsidy ("OPTION B"), or (C) request arbitration to
determine the subsidy NWIP shall be required to pay in connection with the
implementation of the Nextel Required Upgrade ("OPTION C").
(c) In the event that the Board, by written notice to NWIP within 10
days of receipt of the Nextel Determination, causes the Company to elect Option
C, then the provisions of Section 12.7 of the Joint Venture Agreement shall
apply and after the arbitrators present their findings, the Company, by written
notice to NWIP within 10 days of receipt of the arbitrators determination shall
choose either Option A or Option B or elect to implement the Nextel Required
Upgrade and receive the subsidy as determined by the arbitrators ("Option D").
(d) In the event that the Board elects Option D, NWIP by written
notice to the Company within 10 days of receipt of the Company's election under
Section 7.04(c), shall: (i) inform the Company that it does not need to
implement the Nextel Required Upgrade; (ii) abide by the arbitration and pay
the subsidy; or (iii) determine the Fair Market Value of the Company generally
in accordance with Section 4.03, in which case, after such determination, it
may elect to proceed with
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option (d)(i) or (d)(ii) above or it may elect to purchase all of the Company
Capital Stock (other than the Series B Preferred) at a purchase price equal to
the higher of (A) the Investment Formula Price or (B) the Fair Market Value and
otherwise generally in accordance with Section 4.01.
(e) If NWIP elects to exercise its call option under Section
7.04(d)(iii) then the Company, by written notice to NWIP within 10 days of
receipt of NWIP's election, may elect to cancel such call by electing to
implement the change without the receipt of any subsidy from NWIP.
(f) In the event that any expenditure of funds and/or incurrence of
debt by the Company is required to implement a Nextel Required Upgrade, and
such expenditure or incurrence would result in an Applicable Default or Event
of Default under any material debt document to which the Company is a party (a
"DEFAULT OUTCOME"), then the Company and NWIP shall negotiate in good faith to
develop or identify alternative measures or procedures to (i) implement such
Nextel Required Upgrade, (ii) fund such expenditure, or (iii) substitute for
the incurrence of such debt such that the outcome would not result in such a
Default Outcome, and shall (assuming alternative measures or procedures are
identified that are reasonably acceptable to each of the Company and NWIP)
cooperate to implement the Nextel Required Upgrade as promptly as practicable.
Without limiting the generality of the foregoing, the Company shall be required
to implement a Required Service through any alternative measure or procedure
suggested by NWIP so long as such measures or procedures do not involve actions
or conditions that are reasonably likely to result in a Default Outcome and
either (A) will not result in net losses to the Company, or (B) NWIP agrees to
subsidize any such net losses. Except as provided above, if implementation of a
Nextel Required Upgrade would result in a Default Outcome, the Company shall
not be required to implement such Nextel Required Upgrade. As used herein with
respect to a Nextel Required Upgrade, an "APPLICABLE DEFAULT OR EVENT OF
DEFAULT" means any material default or event of default under any material debt
document to which the Company is a party, other than any default or event of
default under a Disqualified Provision of any such debt document. As used
herein with respect to a Nextel Required Upgrade, "DISQUALIFIED PROVISION"
means any provision (i) entered into by the Company within the 12-month period
preceding the date that NWIP notifies the Company that it is required to
implement a Nextel Required
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Upgrade (except a provision that the Company had become legally obligated to
enter into prior to such 12-month period) and (ii) if the Company has notified
NWIP of such provision, as to which NWIP has within 15 days thereafter advised
the Company in reasonable detail of the nature of such pending or potential
Nextel Required Upgrade and that NWIP believes in good faith such provision
could result in a payment or other material default or event of default
thereunder if such operational changes or upgrades occur, provided that a
provision shall not be a Disqualified Provision if a payment or other material
default or event of default under such debt document would have resulted even
if such provision had not been entered into.
(g) If NWIP is required to pay a subsidy pursuant to this Section
7.04, then the Company and NWIP shall negotiate in good faith to determine when
NWIP shall make such subsidy payments to the Company, with the first such
payment to be made no later than the date on which the Company has implemented
the Nextel Required Upgrade. The Company and NWIP agree that any subsidy paid
by NWIP to the Company will be subject to adjustment such that the subsidy will
not exceed the least of (i) the Company's anticipated aggregate net losses set
forth in the Nextel Required Upgrade Analysis, (ii) the Company's actual net
losses associated with such Nextel Required Upgrade through the date of the
subsidy payment, (iii) the anticipated cumulative losses for all Nextel
Required Upgrades net of all cumulative anticipated profits for all Nextel
Required Upgrades since the date hereof as set forth in the most recent Nextel
Required Upgrade Analysis, or (iv) the actual cumulative losses for all Nextel
Required Upgrades net of all actual cumulative profits for all Nextel Required
Upgrades from the date hereof through the date of the subsidy payment.
(h) For purposes of this Section 7.04, the following terms shall have
the following meanings:
"IMPROVEMENTS" means any changes, modifications, upgrades or
enhancements to the iDEN technology or any other Nextel or NDS network
components.
"REQUIRED SERVICES" means the Nextel and/or NDS products, services and
capabilities identified on Exhibit 6.1 to the Joint Venture Agreement.
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"SERVICE PRICING STRUCTURE" means the Nextel pricing structure
described in Exhibit 9.1A to the Joint Venture Agreement.
Section 7.05. Delivery of Nextel Stock. (a) Any payment for Company
Capital Stock purchased by NWIP from the Company or the Shareholders pursuant
to Section 4.01, 4.02, 4.04, 5.01, 5.02, 5.03, 7.03 or 7.04 may be made at
NWIP's election, by delivery of listed Nextel common stock (the "NEXTEL
SHARES"), provided that (i) NWIP delivers such Nextel Shares within 180 days of
the date of closing for the purchase of such Company Capital Stock (the
"PURCHASE DATE"), and (ii) NWIP (and Nextel with respect to Section 7.05(d)
only) agree to comply with the requirements set forth in this Section 7.05.
Notwithstanding the immediately preceding sentence, if NWIP is (i) preempting a
Company IPO pursuant to Section 5.03, the consideration paid by NWIP for the
relevant securities shall be cash unless provisions in Nextel's agreements for
borrowed money restrict Nextel's or NWIP's ability to pay cash, in which case
NWIP shall pay the applicable purchase price in cash to the extent permitted
under such agreements and deliver (within 90 days of the date of the proposed
Company IPO) an amount of Nextel Shares equivalent (in value) to the difference
between the amount of cash Nextel is permitted to pay under such agreements and
the purchase price of the securities or (ii) exercising its rights under
Section 5.01 or 5.02, the consideration paid by NWIP for the relevant
securities shall be cash or an amount of Nextel Shares equivalent (in value) to
the purchase price, which shares shall be delivered on the Purchase Date.
Notwithstanding the two preceding sentences, if NWIP elects to deliver Nextel
Shares, which election NWIP may change at any time prior to the delivery of
such shares, NWIP will use its reasonable best efforts to deliver Nextel Shares
to the Company or the Shareholders as promptly as practicable, provided that
(x) if NWIP fails to deliver the Nextel Shares or cash within 60 days of the
Purchase Date, it shall pay interest on the purchase price at a rate of 10% per
annum from the Purchase Date and (y) if NWIP fails to deliver Nextel Shares in
accordance with this Section 7.05, NWIP shall deliver cash no later than the
last day of such relevant time period.
(b) If NWIP delivers Nextel Shares, in lieu of cash, pursuant to
Section 7.05(a), NWIP shall use its reasonable best efforts to assist each
Person receiving such Nextel Shares in converting such Nextel Shares to cash
within 30 days of delivery of the Nextel Shares. In the event that Nextel
Shares are delivered to the Company in connection with NWIP's preemption of a
Company IPO, NWIP and
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the Company shall each use their reasonable best efforts to convert promptly
such Nextel Shares into cash. If such Nextel Shares are not converted into cash
within 30 days of their delivery to the Company, NWIP shall immediately pay the
required amount in cash.
(c) NWIP shall not be deemed to have delivered Nextel Shares or to
have discharged its payment obligations under this Agreement unless, at the
time of delivery of such Nextel Shares, (i) NWIP delivers to the Board and the
selling Shareholders a SEC "no action" letter or an opinion of counsel
reasonably acceptable to the Board (excluding the NWIP Designee) that provides
that, assuming that the Shareholder receiving the Nextel Shares is not an
Affiliate of Nextel, the shares to be received by that Shareholder can be
freely sold without complying with the registration requirements of the
Securities Act or (ii) the SEC has declared effective a registration statement
on the appropriate form, Nextel has caused such shares to be quoted on the
NASDAQ National Market and the recipients shall have a continuous period of 60
days from the date of delivery to sell such shares under such registration
statement.
(d) In connection with a registration pursuant to the immediately
preceding clause (c)(ii), (A) Nextel will (x) be responsible for promptly
paying all registration expenses that are substantially similar to the
Registration Expenses that will be paid by the Company pursuant to the terms of
this Agreement, (y) indemnify the relevant Shareholders on terms substantially
similar to those set forth in Sections 6.05, 6.07 and 6.08 and (z) comply with
registration procedures substantially similar to those set forth in Sections
6.04, 6.09 and 6.10 and (B) the Shareholders will indemnify Nextel on terms
substantially similar to those set forth in Sections 6.06, 6.07 and 6.08 and,
if applicable, cooperate to effect the registration on terms substantially
similar to those applicable to Shareholders as set forth in Section 6.04.
(e) For purposes of any payment by NWIP in Nextel Shares, the value
of Nextel common stock will be based on the average Closing Price of Nextel
common stock for the ten Trading Days immediately preceding the date of
delivery of the Nextel Shares. If NWIP elects to consummate a transaction with
Nextel Shares instead of cash, NWIP will take all reasonable steps requested by
the Board (with any NWIP Designee abstaining) to permit the purchase to be tax
deferred to the relevant Shareholders.
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Section 7.06. Senior Management Resignation. If either Xxxx Xxxxxxx or
Xxxx Xxxxxxxx provides notice that he is resigning for Good Reason pursuant to
clause (v) of the definition of "Good Reason" as defined in their employment
agreements with the Company, within 45 days of such notice, prior to the
closing of a Section 3.08 Sale NWIP will have an obligation to replace such
executive with an executive approved by DLJMB (which approval will not be
unreasonably withheld). If NWIP is unable to complete such replacement within
such 45-day period, the Board will be responsible for replacing such
executives. In any such event, NWIP will be responsible for cash compensation
(including, without limitation, any bonus payments other than "signing" bonus
consideration) and any benefit programs for such replacement executives and
NWIP will be responsible for the cost of equity incentives (or "signing" bonus
consideration) needed to attract such replacement executives.
ARTICLE 8
MISCELLANEOUS
Section 8.01. Entire Agreement. This Agreement and the Transaction
Documents constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede all prior and contemporaneous
agreements and understandings, both oral and written (including without
limitation the Memorandum of Agreement, dated as of May 1, 1998, among Wireless
Investment Partners, L.L.C., NWIP and Nextel, the letter agreement, dated
Xxxxxx 00, 0000, xxxxx XXXXX, XXX Capital Corp., Nextel, the Company and Eagle
River and the letter agreement dated December 4, 1998, among DLJMB, DLJ Capital
Corp., Nextel, the Company, Eagle River, MDP and Motorola) between the parties
with respect to the subject matter hereof and thereof.
Section 8.02. Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto and the Indemnified Parties, and their respective heirs,
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successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 8.03. Assignability. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Shareholder, except in connection with a
transfer of shares of Company Common Stock pursuant to the terms hereof. Any
Person acquiring shares of Company Capital Stock who is required by the terms
of this Agreement to agree in writing to be bound by the terms of this
Agreement shall execute and deliver to the Company an agreement to be bound by
this Agreement and shall thenceforth be a "SHAREHOLDER".
Section 8.04. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by the Company with approval of the Board and holders of at
least 75% of the shares of Voting Stock held by the Shareholders at the time of
such proposed amendment or modification.
(b) In addition, any amendment or modification of any provision of
this Agreement that would have a materially disproportionate adverse effect on
one Shareholder as opposed to another Shareholder may be effected only with the
consent of such effected Shareholder. Without limiting the generality of the
foregoing, neither clause (ii) of the definition of Permitted Transferee nor
Sections 4.01(g), 4.02(d), 4.04 or 8.12(b) shall be amended or otherwise
modified without the consent of holders of at least 50% of the Fully Diluted
Common Stock then held by the Management Shareholders.
(c) This Agreement shall terminate on the fifteenth anniversary of
the date hereof unless earlier terminated. Notwithstanding the preceding
sentence, Sections 7.01, 7.03, 7.04 and 7.05 shall survive until the Joint
Venture Agreement is terminated.
Section 8.05. Notices. All notices and other communications given or
made pursuant hereto or pursuant to any other agreement among the parties,
unless otherwise specified, shall be in writing and shall be deemed to have
been
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duly given and received when sent by fax (with confirmation in writing via
first class U.S. mail) or delivered personally or on the third Business Day
after being sent by registered or certified U.S. mail (postage prepaid, return
receipt requested) to the parties at the fax number or address set forth below
or at such other addresses as shall be furnished by the parties by like notice:
if to the Company, to:
Nextel Partners, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
and to DLJ Entities as set forth below and each other Shareholder at
its address set forth on the signature pages attached hereto
if to DLJ Entities, to:
DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
with a copy to:
Madison Dearborn Capital
Partners II, L.P.
3 First Xxxxxxxx Xxxxx
00
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
and to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Any Person (other than a DLJ Entity) who becomes a Shareholder shall provide
its address and fax number to the Company, which shall promptly provide such
information to each other Shareholder.
Section 8.06. Fees and Expenses. (a) The Company shall pay the
following out-of-pocket costs and expenses of Nextel, Eagle River and DLJMB;
(i) Pre-Closing Expenditures incurred by Eagle River, the amount of which will
be estimated and provided to the Company, DLJMB and Eagle River at least ten
days prior to Closing and will be subject to post-closing adjustment and
reconciliation as set forth in Section 8.06(c), and (ii) the reasonable fees
and expenses of counsel for Nextel, Eagle River and DLJMB, incurred through the
Closing Date in connection with the preparation of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby.
(b) Except for the Company's obligation to pay the fees and expenses
set forth in Section 8.06(a) and Registration Expenses as provided herein, and
except as otherwise expressly provided in any of the other Transaction
Documents, all other attorneys' fees and expenses incurred by any
Shareholder(s) in connection with this Agreement and the other Transaction
Documents shall be paid by such Shareholder(s).
(c) The Company shall reimburse NWIP and Eagle River for Pre- Closing
Expenditures set forth in detailed written estimate provided to the Company,
DLJMB and each other Shareholder at least ten days prior to Closing. Within 60
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days after the date hereof, representatives of the Company shall meet with
representatives of NWIP and Eagle River to adjust such estimates and to agree
on the amount of any additional reimbursement by (or refund to) the Company.
Any dispute that arises as a result of such discussions shall be submitted to
arbitration in accordance with the dispute resolution procedures set forth in
Section 12.7 of the Joint Venture Agreement. "PRE-CLOSING EXPENDITURES" means
capital expenditures and operating expenses made and incurred by Nextel (and
its Affiliates) and Eagle River prior to the date hereof for assets,
properties, rights or services (other than the capital expenditures and
operating expenses paid for or reimbursed pursuant to the Asset Transfer
Agreement) in order to facilitate the construction of the Company's ESMR
Network (as defined in the Joint Venture Agreement) in the Territory.
Section 8.07. Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
Section 8.08. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
Section 8.09. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflicts of laws rules of such state.
Section 8.10. Specific Enforcement. Each party hereto acknowledges
that the remedies at law of the other parties for a breach or threatened breach
of this Agreement would be inadequate and, in recognition of this fact, any
party to this Agreement, without posting any bond, and in addition to all other
remedies which may be available, shall be entitled to obtain equitable relief
in the form of specific performance, a temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available.
Section 8.11. Limitations on Damages. Each party hereto acknowledges
that no party is entitled to seek or recover consequential, punitive or
exemplary damages in respect of this Agreement under any circumstances or for
any reason. Consequential damages are, without limitation, lost profits, lost
revenue and the
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like but do not include the actual costs incurred in obtaining substitute
performance where there has been a failure to perform an obligation under an
agreement.
Section 8.12. Consent to Jurisdiction; Expenses. (a) Any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby (other than any matter arising under Section 7.03 or 7.04,
which shall be conducted in accordance with the dispute resolution procedures
set forth in Section 12.7 of the Joint Venture Agreement) shall be brought in
any Federal Court sitting in New York, New York, or any New York State court
sitting in New York, New York, and each of the parties hereby consents to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient form. Process
in any such suit, action or proceeding may be served on any party anywhere in
the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on
such party by any method provided in Section 8.05 shall be deemed effective
service of process on such party and consents to the personal jurisdiction of
any Federal Court sitting in New York, New York, or any New York State court
sitting in New York, New York.
(b) In any dispute arising under this Agreement (other than any
matter arising under Section 7.03 or 7.04, which shall be conducted in
accordance with the dispute resolution procedures set forth in Section 12.7 of
the Joint Venture Agreement) among any of the parties hereto, the costs and
expenses (including, without limitation, the reasonable fees and expenses of
counsel) incurred by the prevailing party shall be paid by the party that does
not prevail. In the event of any conflict between the provisions of the
preceding sentence and the corresponding provisions of the Restricted Stock
Purchase Agreements or the employment agreements between the Company and each
of the Management Shareholders and the provisions of those agreements, with
respect to any dispute involving one or more of the Management Shareholders,
the provisions of the Restricted Stock
96
Purchase Agreements or the employment agreements, as the case may be, shall
prevail.
Section 8.13. Severability. If one or more provisions of this
Agreement are held to be unenforceable to any extent under applicable law, such
provision shall be interpreted as if it were written so as to be enforceable to
the maximum possible extent so as to effectuate the parties' intent to the
maximum possible extent, and the balance of the Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in accordance
with its terms to the maximum extent permitted by law.
Section 8.14. Amendments to Laws. Any reference to a section, form,
rule or regulation of the Securities Act or Exchange Act, any reference to a
law promulgated by any state or pursuant to which the FCC may exercise rule
making authority, and any reference to any rule or regulation promulgated by
the FCC, includes any successor section, form, rule, regulation or law.
Section 8.15. Acknowledgment of Limits on Nextel's Liability. Each
party hereto acknowledges that the maximum cumulative, aggregate monetary
liability of Nextel for any and all actual or alleged claims or causes of
action that arise, result from or are in any way connected with the matters
provided for or contemplated in this Agreement is limited as provided in the
Nextel Agreement.
97
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
NEXTEL PARTNERS, INC., a Delaware
corporation
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief Executive
Officer
NEXTEL WIP CORP., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Address: 0000 Xxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attn: General Counsel
Fax: 000-000-0000
With a copy of notice to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax: 000-000-0000
DLJ MERCHANT BANKING PARTNERS
II, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
with a copy of notice to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Fax: 000-000-0000
DLJ MERCHANT BANKING PARTNERS
II-A, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ OFFSHORE PARTNERS II, C.V., a
Netherlands Antilles Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as advisory general partner
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ DIVERSIFIED PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ DIVERSIFIED PARTNERS-A, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ MILLENNIUM PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Xxx Xxxxx
--------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJMB FUNDING II, INC., a Delaware
corporation
By: /s/ Xxx Xxxxx
--------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ FIRST ESC, L.P.,
By: DLJ LBO Plans Management Corporation,
as manager
By: /s/ Xxx Xxxxx
----------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation,
as managing general partner
By: /s/ Xxx Xxxxx
----------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation,
as manager
By: /s/ Xxx Xxxxx
------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
UK INVESTMENT PLAN 1997 PARTNERS,
a Delaware Limited Partnership
By: UK Investment Plan 1997 Partners, Inc.
as general partner
By: /s/ Xxx Xxxxx
------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Address: c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
MADISON DEARBORN CAPITAL
PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P.,
its General Partner
By: Madison Dearborn Partners, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
Address: 0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
EAGLE RIVER INVESTMENTS, LLC,
a Washington limited liability company
By: /s/ C. Xxxxx Xxxxxx
-----------------------------------------
Name: C. Xxxxx Xxxxxx
Title: Vice President
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
MOTOROLA, INC., a Delaware corporation
By: /s/ Xxx Xxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President and General
Manager Network Systems Group
Address: 0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: General Counsel
Fax: (000) 000-0000
CASCADE INVESTMENTS, L.L.C.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Business Manager
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: 000-000-0000
MADRONA INVESTMENT GROUP, L.L.C.
By: /s/ Xxx X. Xxxxxx
------------------------------------------
Name: Xxx X. Xxxxxx
Title: Principal
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Fax: 000-000-0000
AMPERSAND HOLDINGS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Address: 0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: 000-000-0000
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
------------------------------------------
Address: 0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx
Fax: 000-000-0000
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXX XXXXXXXX
/s/ Xxxx X. Xxxxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXXX XXXXXX
/s/ Xxxxx X. Xxxxxx
------------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
XXXXX AAS
/s/ Xxxxx Aas
-----------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Manager, Operations
Address: c/o GE Capital Services
Structured Finance Group, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Portfolio-Operations
Fax: 000-000-0000
NMS CAPITAL, L.P.
By: NMS Capital Management, LLC,
the sole General Partner
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Member
Address: 0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
Fax: 000-000-0000
ARES LEVERAGED INVESTMENT FUND, L.P.
By: ARES Management, L.P.
By: ARES Operating Member, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
ARES LEVERAGED INVESTMENT
FUND II, L.P.
By: ARES Management II, L.P.
By: ARES Operating Member II, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
THE XXXX ALTERNATIVE INCOME FUND, L.P.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President of General Manager
Address: 1776 On the Green
00 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/CRESCENT MEZZANINE II, L.P.,
its general partner or managing owner
By: TCW/CRESCENT MEZZANINE, L.L.C.,
its general partner
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as Investment Advisor
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Managing Director
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
SHARED OPPORTUNITY FUND IIB, LLC
By: TCW ASSET MANAGEMENT COMPANY,
as Investment Advisor
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Managing Director
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Managing Director
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P.,
as General Partner
By: TCW ADVISORS (BERMUDA), LTD.,
as General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Managing Director
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW (BERMUDA), LIMITED,
as General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Managing Director
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 00000 Xxxxx Xxxxxx Xxxx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
JDT-JRT L.L.C.
By: Xxxx X. Xxxxxxxx, Manager
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Manager
JRC COHO L.L.C.
By: Xxxx X. Xxxxxxx, Manager
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager
