EXHIBIT 10.1
[EXECUTION COPY]
OPTION EXERCISE AND
LENDING COMMITMENT AGREEMENT
by and among
NEXTEL COMMUNICATIONS, INC.
and
DIGITAL RADIO, L.L.C.
Dated as of June 16, 1997
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OPTION EXERCISE AND
LENDING COMMITMENT AGREEMENT
This Option Exercise and Lending Commitment Agreement (this
"Agreement") is entered into as of June 16, 1997, by and among Nextel
Communications, Inc., a Delaware corporation (the "Company"), and Digital
Radio, L.L.C., a Washington limited liability company ("Investor").
Unless the context otherwise requires, terms capitalized and not
otherwise defined in context have the meanings set forth or cross-referenced in
Article 8 of this Agreement.
Recitals
A. Investor has the right under an Option Agreement (First Tranche)
dated as of July 28, 1995 to purchase up to 15 million shares of Common Stock
of the Company.
B. Subject to the terms and conditions of this Agreement, Investor
has agreed to exercise in full such option, and the Company has agreed to issue
to Investor contingent rights to acquire additional shares of Common Stock.
C. Subject to the terms and conditions of this Agreement, Investor
has also agreed to lend up to $50 million to the Company, and the Company has
agreed to end the lock-up imposed on certain shares Common Stock owned by, or
which may be acquired by, Investor and its Affiliates.
D. Simultaneously with the execution and delivery of this Agreement,
Option Acquisition, L.L.C. ("Option Acquisition"), which is also controlled by
Xxxxx X. XxXxx ("Individual") is entering into an Option Purchase Agreement
with the Company and Unrestricted Subsidiary Funding Company (the
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"Option Purchase Agreement") that, among other things, entitles Option
Acquisition to acquire two options to purchase up to 25 million shares of
Common Stock (the "New Options").
Agreement
NOW THEREFORE, in consideration of the recitals and the mutual
covenants of this Agreement, the parties agree:
Article 1. Commitment to Exercise Option and Issuance of CEI.
1.1 Commitment to Exercise Option. The Option Agreement (First
Tranche) issued by the Company to Investor on July 28, 1995 (the "First
Option") will be exercised, in full, at the Closing.
1.2 Payment for CEI. Upon the execution and delivery hereof,
Investor shall pay the Company $1,610 in cash, as payment in full of the
purchase price for the CEI (as described in Section 1.3 below), and the
Company, shall issue and deliver the CEI to Investor.
1.3 Issuance of CEI. Upon the execution and delivery hereof, the
Company shall issue to Investor a Contingent Equity Instrument substantially in
the form of Exhibit A (the "CEI") that is potentially exercisable at and after
the Closing until July 28, 1999 for up to that number of shares as determined
at the Closing in accordance with Exhibit B; provided, that if the CEI would
(under Exhibit B) be exchangeable for zero shares, the CEI shall expire
automatically and shall be of no further force or effect at the Closing, and
shall be delivered by the Investor at the Closing to the Company for
cancellation. The CEI, when issued, will be free and clear of all Encumbrances
(other than as expressly provided in this Agreement or the CEI).
1.4 Pre-Closing. Upon obtaining the Noteholder Consents, the
Company will notify Investor (and will provide confirmation from the Trustee of
the receipt of such Consents and copies of the related supplemental indentures)
and Investor will promptly execute and deliver to the Company the exercise
notice
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for the First Option in the form attached to the First Option (the "Exercise
Notice").
1.5 Closing. (a) The closing of the exercise of the First Option
and the determination of the number of shares of Common Stock issuable upon
exercise of the CEI (the "Closing") is to occur after all of the conditions
(assuming all such conditions have been fulfilled or waived) set forth in
Article 2 have either been fulfilled or waived, but in no event later than
Monday, July 28, 1997. At the Closing,
(i) Investor will pay, by wire transfer of immediately
available funds to an account designated in writing by the Company,
$232,500,000 to exercise the First Option;
(ii) if the proviso of the first sentence of Section 1.3
applies, Investor will deliver the CEI to the Company for
cancellation; in any other case, Investor and the Company shall
execute and deliver a written instrument confirming the number of
shares issuable upon exercise of the CEI determined in accordance
with Exhibit B, which written instrument shall be attached to the
CEI;
(iii) the Company will cause its transfer agent to issue to
investor a certificate for 15,000,000 shares of Common Stock; and
(iv) at the request of either party, the parties will execute
and deliver any agreements or other documents necessary to evidence
the satisfaction or, if appropriate, the waiver of any conditions to
Closing set forth in Article 2.
(b) If no request is made under Section 1.5(a)(iv), the consummation
of the Transactions described in Section 1.5(a) is conclusive evidence that the
parties consider that all conditions to Closing have been satisfied or the
appropriate party or parties have waived the failure of a condition to be
satisfied and neither party after such Closing shall be allowed to assert
non-satisfaction or invalid waiver of any of such conditions for any purpose.
The preceding sentences shall not apply to the extent that a party
intentionally conceals facts or
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intentionally misrepresents facts that, if disclosed, would have resulted in
one or more conditions to the other party's obligations not having been
satisfied.
1.6 Legend. The shares certificate issued to Investor at the
Closing as contemplated in Section 1.5(a)(iii), and any instrument(s) or
certificate(s) representing the CEI (or any part thereof, including
any shares issued upon exercise of any part of the CEI) shall bear the
following legend, together with any and all other legends as may be required
pursuant to applicable law (and the Company may issue appropriate corresponding
stop transfer instructions to any transfer agent for any of such securities):
The securities represented by this certificate or instrument have
not been registered under the Securities Act of 1933, as amended
(the "Act"), or under any applicable state law and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration under the Act or such laws or an opinion of
counsel reasonably satisfactory to the Company that such registration
is not required under the Act or such laws and the rules and
regulations promulgated thereunder.
The securities represented by this certificate or instrument are
subject to certain restrictions on transfer and voting as set forth
in the Securities Purchase Agreement, dated as of April 4, 1995, as
amended, a copy of which is on file at the principal executive
offices of the Company. Any registration of transfer of such
securities on the books of the Company will be subject to compliance
with such restrictions.
1.7 Stamp Tax. The Company shall pay all stamp and other taxes,
if any, which may be payable in respect to the issuance, sale and delivery to
Investor of the CEI and shall save Investor harmless against any loss or
liability resulting from nonpayment or delay in payment of any such tax.
Article 2. Conditions to Closing.
2.1 Conditions to Each Party's Obligations. The obligations of each
party to consummate the transactions
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contemplated by this Agreement and the other Transaction Agreements to be
executed and delivered at or prior to the Closing are subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions, any or all of which may be waived in whole or in part by the party
benefited thereby, to the extent permitted by applicable Law:
(a) No Injunction. There is no pending or threatened injunction or
Order of any Governmental Authority prohibiting consummation of any Transaction
or performance of any party's obligations hereunder or under any other
Transaction Agreement, or prohibiting Individual from enabling or causing
Investor to perform its obligations hereunder.
(b) Motorola Consent Motorola Consent. The consent of Motorola, Inc.
("Motorola") to the Transactions granted by the letter dated April 10, 1997
from the Company to Motorola has not been revoked.
(c) Issuance of New Options. The New Options shall have been issued
to Option Acquisition pursuant to the Option Purchase Agreement.
2.2 Conditions to Investor's Obligations. Investor's obligation to
consummate the Transactions is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, any or all of which may be
waived in whole or in part by Investor, to the extent permitted by applicable
Law:
(a) Representations and Warranties True. The representations and
warranties of the Company in this Agreement were true in all material respects
when made and, in the case of the Basic Representations only, are true in all
material respects at the time of the Closing with the same effect as though
such Basic Representations had been made at such time, except for (i) changes
resulting from the consummation of the Transactions, and (ii) representations
and warranties that speak as of a specific date other than the Closing Date
(which need be correct only as of such other date). The Company shall deliver
an officer's certificate dated the Closing Date confirming that the conditions
set forth in this Section 2.2(a) are satisfied on the Closing Date.
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(b) Performance. The Company has conformed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
(c) Noteholder Consents Noteholder Consents. The consents of the
holders of each outstanding issue of Notes required to amend the Indentures as
described in the Consent Solicitation Statement dated April 14, 1997 as amended
by the Supplemental Consent Solicitation Statement dated June 4, 1997
(collectively, the "Consent Solicitation Materials") shall have been obtained
on the terms described in the Consent Solicitation Materials and such
amendments shall have become operative. Such consents are referred to herein
as the "Noteholder Consents." Exercise Notice has been given and the
Noteholder Consents are in effect.
2.3 Conditions to the Company's Obligations. The Company's
obligation to consummate the Transactions is subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, any or all of
which may be waived in whole or in part by the Company, to the extent permitted
by applicable Law:
(a) Representations and Warranties True.
The representations and warranties of Investor in this Agreement were
true in all material respects when made and are true in all material respects
at the time of the Closing with the same effect as though such representations
and warranties had been made at such time, except for (i) changes resulting
from the consummation of the Transactions and (ii) representations and
warranties that speak as of a specific date other than the Closing Date (which
need be correct only as of such other date). Investor shall deliver a
certificate of its officers or other authorized representatives dated the
Closing Date confirming that the conditions set forth in this Section 2.3(a)
are satisfied on the Closing Date.
(b) Performance. Investor has performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing.
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(c) Noteholder Consents. The Noteholder Consents shall have been
obtained on terms described in the Consent Solicitation materials and the
related amendments described in the Consent Solicitation Materials shall have
become operative.
Article 3. Representations and Warranties of the Company.
The Company hereby represents and warrants to Investor that except as
set forth in the Company Disclosure Statement:
3.1 Corporate Status. (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate or other power and authority to own
or lease and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into and to carry out the
provisions of this Agreement and the other Transaction Agreements and
consummate the transactions contemplated hereby and thereby.
(b) On the date hereof, the Company is duly qualified and in good
standing in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be in good standing or so qualified
would not, individually or in the aggregate, have a material adverse effect on
the Business Condition of the Company and its Subsidiaries taken as a whole.
3.2 Power and Authority. The Company has the corporate power and
authority to execute and deliver, and to perform its obligations under,
this Agreement and the other Transaction Agreements. The Company has taken all
necessary corporate action to authorize this Agreement and the other Transaction
Agreements and its execution, delivery and performance of this Agreement and the
other Transaction Agreements. This Agreement has been and, when executed, each
of the other Transaction Agreements will have been, duly executed and delivered
by the Company and constitutes, or will constitute, a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application which
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may affect the enforcement of creditors' rights generally and by general
equitable principles.
3.3 Non-Contravention. (a) On the date hereof, the Company is
not in violation of any term of its charter, by-laws or other organizational
documents.
(b) Except as set forth in the Company Disclosure Statement, and
based on the Permitted Assumptions, the execution, delivery and performance of
this Agreement and the other Transaction Agreements and the consummation of
the Transactions in accordance with the terms hereof and thereof will not result
in any violation of or conflict with, constitute a default (with or without
notice or the lapse of time) under, or give rise to a right of termination,
cancellation, acceleration of, or a right to put, or compel a tender offer for,
outstanding securities under, or result in the imposition of any Encumbrance
under, or require any consent under, or require any payment by the Company to
any other Person pursuant to any term of (i) the charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries, or (ii) any
note, bond, debt instrument, mortgage, indenture or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries may be bound or, (iii) except as
set forth in Section 3.4, any Law or Order, by which the Company or any of its
Subsidiaries may be bound, except where such violation, conflict or default,
right of termination, cancellation or acceleration, put or similar right,
imposition of an Encumbrance, failure to obtain such consent or the amount of
such required payment, individually or in the aggregate, would not have
a material adverse effect on (X) the Business Condition of the Company and its
Subsidiaries taken as a whole or (Y) the ability of the Company to perform its
obligations under this Agreement and the Transaction Agreements.
3.4 Consents and Approvals. (a) Based on the Permitted Assumptions,
the Company Disclosure Statement lists as of the date hereof (i) all
Authorizations that, to the knowledge of the Company, are required to be made,
filed, given or obtained by the Company and any of its Subsidiaries with, to or
from any Governmental Authority in connection with the Transactions
contemplated to occur at or prior to the Closing and (ii) all consents,
approvals and waivers required to be given by, or obtained from, any other
Persons to or by the Company and any of
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its Subsidiaries in connection with the consummation of the Transactions
contemplated to occur at or prior to the Closing other than those
Authorizations, consents, approvals and waivers as to which the failure to
make, file, give or obtain, individually or in the aggregate, would not have a
material adverse effect on (X) the Business Condition of the Company and its
Subsidiaries, taken as a whole, or (Y) the ability of the Company to perform
its obligations under this Agreement and the other Transaction Agreements.
(b) Based on the Permitted Assumptions, the Company and each of its
Subsidiaries has made, filed, given or obtained all Authorizations and has
been given or obtained all consents, approvals or waivers necessary as of the
date hereof for the Company to perform its obligations under this Agreement and
the other Transaction Agreements at or prior to the Closing.
3.5 Reports and Information. (a) As of the date hereof, the Company
has filed all reports required to be filed with the SEC in the period from
January 1, 1997 to the date hereof, including the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 and the Quarterly Report on Form
10-Q for the quarter ended March 31, 1997 (collectively, the "Company SEC
Reports"), and has furnished or made available to Investor true and complete
copies of all the Company SEC Reports. None of the Company SEC Reports, as of
their respective dates (as amended through the date hereof), contained any
untrue statement of material fact or omitted to state a 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. All of the Company
SEC Reports, as of their respective dates (as amended through the date hereof),
complied in all material respects with the requirements of the Exchange Act and
the applicable rules and regulations thereunder.
(b) As of the date hereof, the Company has not received notice of any
pending investigation of the Company by the SEC.
(c) The Company's audited consolidated financial statements
(including the balance sheet, statement of operations and statement of cash
flows, and, in each case, the related footnotes thereto) as of December 31,
1996 or for the twelve months then ended, as appropriate (the "Audited
Statements"), are
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contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and the Company's unaudited consolidated financial statements
(including the balance sheet, statement of operations and statement of cash
flows and, in each case, the related footnotes thereto) as of March 31, 1997 or
for the quarter then ended, as appropriate (the "Unaudited Statements", and
collectively with the Audited Statements, the "Company Financial Statements"),
are contained in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997. The balance sheet as of March 31, 1997 included in such
Unaudited Statements presents fairly, in all material respects, the consolidated
financial position of the Company and its consolidated Subsidiaries as of March
31, 1997, and each of the other related statements included in such Company
Financial Statements present fairly, in all material respects, the consolidated
results of operations and cash flows of the Company and its consolidated
Subsidiaries for the respective periods thereof, all in conformity with
generally accepted accounting principles consistently applied during the periods
involved except as otherwise noted therein and subject, in the case of the
Unaudited Statements, to year end audit adjustments and the absence of
footnotes.
3.6 Capitalization. (a) As of March 31, 1997, the authorized capital
stock of the Company consists of 613,883,948 shares of capital stock
divided into 6 classes as follows: (i) 515,000,000 shares of Nextel Class A
Common Stock of which 225,533,547 shares were outstanding (including 1,547,158
shares held in treasury), (ii) 35,000,000 shares of Nextel Class B Non-Voting
Common Stock of which 17,880,000 shares were outstanding, (iii) 26,941,933
shares of Class A Convertible Redeemable Preferred Stock of which 8,163,265
shares were outstanding, (iv) 82 shares of Class B Convertible Redeemable
Preferred Stock all of which were outstanding, (v) 26,941,933 shares of Class C
Convertible Redeemable Preferred Stock none of which were outstanding, and
(vi) 10,000,000 shares of Preferred Stock, par value $.01 per share none of
which were outstanding.
(b) All shares of Common Stock outstanding on the date hereof are
duly authorized, validly issued, fully paid and nonassessable.
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(c) When issued in accordance with the CEI or when issued upon
exercise of the First Option in accordance with its terms, as the case may
be, the shares of Common Stock issuable upon exercise of the CEI and the shares
of Common Stock issuable upon exercise of the First Option, as appropriate,
will be duly authorized, validly issued, fully paid and nonassessable.
3.7 Material Facts. Except as and to the extent reflected or
reserved against in the Company Financial Statements or as indicated in the
Company Disclosure Statement, none of the Company nor any Subsidiary of the
Company has, as of the date hereof, any material liabilities or obligations (of
the types that, in accordance with generally accepted accounting principles,
are required to be reflected or reserved against in the Company Financial
Statements) of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due, for the periods covered thereby.
3.8 Brokers and Finders. Except for the fees and expenses payable to
Xxxxxx Xxxxxxx & Co. Incorporated, incurred with respect to certain financial
advice provided to the Company in connection with the Transactions (which fees
and expenses shall be the sole obligation of, and shall be paid by, the
Company), neither the Company nor any of its Subsidiaries has employed any
investment banker, broker, finder, consultant or intermediary in connection
with the transactions contemplated by this Agreement which would be entitled to
any investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
3.9 Permitted Assumptions. Each of the representations and
warranties above that are identified as being made "based on the Permitted
Assumptions" shall be deemed to be made on the assumption that (a) Investor is,
and at all times shall continue to be, controlled by Individual, and (b) the
consent of Motorola described in Section 2.1(b) shall continue in full force
and effect and shall not have been amended, modified or revoked. Such
assumptions are referred to herein as the "Permitted Assumptions."
Article 4. Representations and Warranties of Investor.
Investor represents and warrants to the Company that, except as set
forth in the Investor Disclosure Statement:
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4.1 Status, Power and Authority. Investor is a limited liability
company duly formed and validly existing under the laws of the State of
Washington and has all requisite corporate or other power and authority to own
or lease and operate its properties, to carry on its business as now conducted
and proposed to be conducted, to enter into this Agreement and each of the
other Transaction Agreements to which it is a party and to carry out the
provisions of this Agreement and the other Transaction Agreements to which it
is a party and consummate the Transactions. Investor has paid all taxes, fees
and similar amounts due to the State of Washington and has prepared and filed
with the appropriate authorities of the State of Washington all reports,
returns and similar items as required by, and is substantially in compliance
with, the requirements of applicable laws. To Investor's knowledge, there are
no existing conditions or circumstances that could result in the revocation of
Investor's status, qualification or existence as a limited liability Company
under the laws of the State of Washington. Investor is duly qualified and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be in good standing or so
qualified would not, in the aggregate, have a material adverse effect on the
ability of Investor or any of its Affiliates to perform its obligations under
this Agreement or any other Transaction Agreement to which it is a party.
4.2 Non-Contravention. (a) The execution, delivery and performance
of this Agreement and the other Transaction Agreements and the consummation
of the Transactions in accordance with the terms hereof and thereof by Investor
and by each Affiliate of Investor who is a party thereto will not result in any
violation of or conflict with, constitute a default (with or without notice or
the lapse of time) under, or give rise to a right of termination, cancellation,
or acceleration of, or result in the imposition of any Encumbrance under, or
require any consent (other than such consents as are listed in the Investor
Disclosure Statement), under, any term of (i) the limited liability company or
operating agreement of Investor, or (ii) any note, bond, debt instrument,
mortgage, indenture or other agreement or instrument or, except as set forth in
Section 4.3, any Law or Order, by which Investor or any such Affiliate of
Investor may be bound, except where such violation, conflict or
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default, right of termination, cancellation or acceleration, imposition of
an Encumbrance or failure to obtain such consent, individually or in the
aggregate, would not have a material adverse effect on the ability of Investor
or any such Affiliate of Investor to perform its obligations under this
Agreement and the other Transaction Agreements to which it is a party.
(b) Each consent identified on the Investor Disclosure Statement has
been obtained and is in full force and effect.
4.3 Consents and Approvals. (a) The Investor Disclosure Statement
lists (i) all Authorizations that to the knowledge of Investor are required
to be made, filed, given or obtained by Investor or its Affiliates with, to or
from any Governmental Authority in connection with the Transactions contemplated
to occur at or prior to the Closing to which it is a party and (ii) all
consents, approvals and waivers required to be given by, or obtained from, any
other Persons to or by Investor or its Affiliates in connection with the
consummation of any of the other Transactions contemplated to occur at or prior
to the Closing to which it is a party, other than those Authorizations,
consents, approvals and waivers as to which the failure to make, file, give or
obtain, individually or in the aggregate, would not have a material adverse
effect on the ability of Investor or any of its Affiliates to perform its
obligations under this Agreement and the other Transaction Agreements to which
it or any such Affiliate is a party.
(b) Investor and each of its Affiliates has made, filed, given or
obtained all Authorizations and has been given or obtained all consents,
approvals or waivers of any other Persons necessary for Investor or such
Affiliate to perform its obligations under this Agreement and the Transaction
Agreements at or prior to the Closing, and no further Authorizations or
consents, approvals or waivers of any other Persons are required of Investor or
any such Affiliate to perform its obligations under this Agreement and the
Transaction Agreements at or prior to the Closing.
4.4 Investment Intent. Investor is acquiring the CEI, and will be
acquiring the Common Stock upon exercise of the CEI for its own account and
with no present intention of distributing or selling the CEI or Common Stock
received upon conversion or exercise of any thereof, in violation of the
Securities Act or
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any applicable state securities law. Investor will not sell or otherwise
dispose of the CEI. Investor will not sell or otherwise dispose of shares
of Common Stock received upon exercise of the CEI, unless such sale or other
disposition has been registered or is exempt from registration under
the Securities Act and has been registered or qualified or is exempt from
registration or qualification under applicable state securities laws. Investor
understands that the CEI has not been registered under the Securities Act by
reason of its contemplated issuance in transactions exempt from the
registration and prospectus delivery requirements of the Securities Act
pursuant to Section 4(2) thereof including Rule 506 of Regulation D, and that
the reliance of the Company on this exemption is predicated in part on these
representations and warranties of Investor.
4.5 Accredited Investor Status. Investor is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
investments to be made by it hereunder.
4.6 Authorization of Agreements. (a) This Agreement and each of the
other Transaction Agreements to which Investor or any of its Affiliates is a
party and the consummation of the Transactions have been approved by all
requisite action of the members of Investor (no other action, including,
without limitation, action of any managers of Investor, being necessary) and by
each other Affiliate of Investor who is a party thereto.
(b) This Agreement has been and, when executed, each of the other
Transaction Agreements to which Investor or any of its Affiliates is a party
will have been, duly executed and delivered by an authorized member of Investor
and by each other Affiliate of Investor and constitutes a valid and binding
agreement of Investor or of such Affiliate, enforceable against Investor or
such Affiliate of Investor in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general application which may affect the enforcement of
creditors' rights generally and by general equitable principles.
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4.7 Brokers and Finders. Neither Investor nor any of its Affiliates
has employed any investment banker, broker, finder, consultant or intermediary
in connection with the transactions contemplated by this Agreement, and no such
Person would be entitled, pursuant to the terms of any agreement or arrangement
with Investor or any of its Affiliates, to any investment banking, brokerage,
finder's or similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
4.8 Acquisition of Voting Securities. Except as expressly provided
in the Transaction Documents or as set forth in the Company SEC Reports,
neither Investor nor any of its Affiliates are parties to any agreement or
arrangement (a) that gives any of them or entitles any of them to acquire
"beneficial ownership" (as that term is defined under Rule 13d-3 under the
Exchange Act) of any securities of the Company that are entitled to vote in the
election of Directors or (b) with respect to corporate governance matters
concerning the Company or its Subsidiaries (including, without limitation, the
exercise or failure to exercise voting rights with respect to any Voting
Securities).
4.9 Access to Information. Individual is a member of the Board and
is a member of its Operations Committee.
4.10 Access to Funds. Investor currently hold funds, or is reasonably
assured that it will have access to funds pursuant to existing committed
financing sources (the availability of which is not subject to any material
condition or contingency), in amounts sufficient to permit Investor to perform
its obligations under this Agreement and the other Transaction Agreements.
Article 5. Certain Covenants.
5.1 Public Announcements. Except as required by Law, the exercise of
fiduciary duty, or the policies or rules of any stock exchange (or the
NASDAQ-NM) on which the Company's securities are listed, prior to the Closing
Date, the form and content of all press releases or other public communications
of any sort relating to the subject matter of this Agreement or any other
Transaction Agreement, and the method of their release, or publication thereof
by any of the parties hereto or their
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respective Affiliates, shall be subject to the prior approval of each of the
parties hereto, which approval shall not be unreasonably withheld or delayed.
To the extent reasonably requested by any party hereto, following the Closing
Date each party and its Affiliates will consult with and provide reasonable
cooperation to the other parties in connection with the issuance of further
press releases or other public documents describing the Transactions.
5.2 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of the terms of each of the Transaction Agreements to which it or any
of its Affiliates is a party and the transactions contemplated thereby. Without
limiting the generality of the preceding sentence, the Company and the Investor
shall not (and shall not permit their Affiliates to) take any action or actions
at or prior to the Closing that would (a) cause or reasonably be expected to
cause any Authorization or any consent, approval or waiver of any other Person
that has been made, filed, given or obtained in connection with the Transactions
to be withdrawn or terminated or to otherwise cease to be effective, (b) require
any additional Authorization or any additional consent, approval or waiver of
any other Person to be made, filed, given or obtained in connection with the
Transactions or (c) cause any financing sources contemplated by Section 4.10 to
be unavailable or cause the availability of the funding thereunder to be subject
to any material condition or contingency.
5.3 Cooperation. The Company and Investor each agree to (and to
cause their Affiliates to) cooperate with the other to consummate the
Transactions.
Article 6. Investor Loan Commitment.
6.1 Lending Commitment. (a) Investor commits to enter into a loan
facility (the "Loan Facility") with a Subsidiary of the Company providing for
principal advances of up to $50,000,000 (the "Commitment Amount"). The terms
and conditions of the loan facility will parallel the terms and conditions of
the Motorola Trance E Senior Secured Loan facility in a principal amount up to
$200,000,000 and will rank pari passu with such facility. The terms will be
consistent with the Term Sheet for Debt Financing,
CLCORP01 Doc:230313_4 16
dated as of March 26, 1997, between the Company and Motorola filed as Exhibit
10.36 to the Company report on Form 10-K for the fiscal year ended December 31,
1996, as the same may be amended, from time to time, by the Company and
Motorola, and this Agreement.
(b) On the date of the first borrowing pursuant to the Loan Facility,
the Company will issue to Investor warrants to purchase up to 250,000 shares of
Common Stock at an exercise price equal to the average closing price for a
share of Common Stock on the NASDAQ-NM during the twenty (20) trading days
immediately preceding the date of the first borrowing pursuant to the Loan
Facility. Such warrants shall contain other customary terms and shall be
exercisable from the date on which the first borrowing pursuant to the Loan
Facility occurs until the fifth anniversary of such date.
6.2 Reduction in Commitment. The Commitment Amount is to be reduced
by $20 for every $100 of Qualifying Equity Proceeds received by the Company
after the date hereof and before the Company has drawn down the Commitment
Amount. "Qualifying Equity Proceeds" means cash received by the Company upon
issuance of equity securities but does not include (i) amounts received as a
result of the exercise of the "First Option," or the "Second Option," "Third
Option" or "Incentive Option" (as those terms are defined in the Securities
Purchase Agreement), (ii) amounts received in connection with the purchase
(but not the exercise) of the New Options, or (iii) amounts received as a
result of the exercise of options to purchase up to 3 million shares of Common
Stock originally issued to Motorola in connection with equipment purchase and
financing arrangements entered into in 1991 between the Company and Motorola.
6.3 Deemed Waiver For Investor. Investor, its Affiliates and the
Directors elected by Investor to the Board (acting as members of the Board as a
whole or on its committees) may be required to act to satisfy or to take action
that will bring about the satisfaction of one or more conditions to the
Motorola Tranche E Senior Secured Financing or the financing described in
Section 6.1(a). If any condition to the financing described in Section 6.1(a)
has not been satisfied, in whole or in part, because of any action or inaction
by Investor, by any of its Affiliates or by any Director elected by Investor,
that condition (by such action or inaction) shall be deemed waived by
CLCORP01 Doc:230313_4 17
Investor. If any waiver occurs under this Section 6.3, Investor must fund its
financing commitment despite the failure of the conditions, and Investor
cannot raise the condition as the basis for any claim under this Agreement,
under the financing contemplated by Section 6.1(a) or for any other purpose
whatsoever nor can Investor seek any remedy for the failure.
6.4 Further Documents. As promptly as practicable after the
execution of loan documents evidencing the Motorola Tranche E Senior
Secured Loan, the Company and Investor will each execute and deliver loan
documents to effectuate Investor's commitment made in Section 6.1, together
with such other agreements and documents as are, in the reasonable judgment of
either party, necessary to carry out the intent of this Article 6.
Article 7. Amendment to Securities Purchase Agreement.
7.1 End of Lock-Up Period. Effective upon the Closing, the
Securities Purchase Agreement is amended to delete Section 8.3(g). From and
after the Closing, Section 8.3(g) is void and has no further force or effect.
7.2 No Transfer of CEI. Effective upon the Closing, Section 8.3(f)
of the Securities Purchase Agreement is amended to add the CEI to the list of
Company securities owned by Investor that are subject to restriction on
Transfer by deleting the word "or" before item (D) and adding, before the word
except: "or (E) the Contingent Equity Instrument issued under the Option
Exercise and Lending Commitment Agreement dated June 16, 1997".
Article 8. Definitions.
8.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings:
"Action" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Affiliate" means, as to any Person, another Person that directly or
indirectly through one or more intermediaries, Controls, or is Controlled by,
or is under common Control with, such Person. For the purposes of this
definition, "Control" when
CLCORP01 Doc:230313_4 18
used with respect to any Person, means 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, by contract or
otherwise; the terms "Controlling" and "Controlled" have meanings correlative
to the foregoing; provided, that the Company and Investor shall not be deemed
to be direct or indirect Affiliates of each other.
"Agreement" -- See Preamble.
"Audited Statements" has the meaning set forth in Section 3.5(c).
"Authorization" means any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including pursuant
to the HSR Act) of, or filing, registration, qualification, declaration or
designation with or by, any Governmental Authority.
"Basic Representations" means the representations and warranties made
by the Company pursuant to Sections 3.1(a), 3.2, 3.5(c), 3.6(c) and 3.8.
"Beneficial Owner" with respect to any securities means that a Person
has "beneficial ownership" of such securities as determined pursuant to
Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Business Condition" means the business, properties, operations and
financial condition of a specified corporation or division or area of
operations.
"Business Day" means any day on which there is trading on the New
York Stock Exchange.
"CEI" has the meaning set forth in Section 1.3.
"Closing" has the meaning set forth in Section 1.5.
"Closing Date" means the date on which the Closing occurs as provided
in Section 1.5.
CLCORP01 Doc:230313_4 19
"Commitment Amount" has the meaning set forth in Section 6.1.
"Common Stock" means the Class A (Voting) Common Stock, par value
$.001 per share, of the Company.
"Company" means Nextel Communications, Inc.
"Company Disclosure Statement" means the disclosure statement dated
the date of this Agreement delivered by the Company to Investor.
"Company Financial Statements" has the meaning set forth in Section
3.5(c).
"Company SEC Reports" has the meaning set forth in Section 3.5(a).
"Consent Solicitation Materials" has the meaning set forth in Section
2.2(c).
"Directors" means any and all of the duly elected members of the
Board.
"Encumbrance" means any lien, claim, charge, security interest,
option, mortgage, pledge or other legal or equitable encumbrance, excluding any
such encumbrance arising under or pursuant to federal or state securities laws.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Notice" has the meaning set forth in Section 1.4(a).
"FCC" means the Federal Communications Commission.
"First Option" has the meaning set forth in Section 1.1.
"Governmental Authority" means any governmental or political
subdivision or department thereof, any governmental or regulatory body,
commission, board, bureau, agency or instrumentality, or any court or
arbitrator or alternative
CLCORP01 Doc:230313_4 20
dispute resolution body, in each case whether domestic or foreign, federal,
state or local.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended and the rules promulgated thereunder.
"Indentures" means the Indenture dated as of August 15, 1993, between
the Company and The Bank of New York, as Trustee (the "Trustee"), as amended,
relating to the Senior Redeemable Discount Notes due 2003 (the "Nextel 2003
Notes"); the Indenture dated as of February 15, 1994 between the Company and
the Trustee, as amended, relating to the Senior Redeemable Discount Notes due
2004 (the "Nextel 2004 Notes"); the Indenture dated as of December 22, 1993
between the Company (as successor by merger to Dial Call Communications, Inc.),
and the Trustee, as amended, relating to the Senior Redeemable Discount Notes
due 2005 (the "Nextel/Dial Call 2005 Notes"); the Indenture dated as of April
25, 1994 between the Company (as successor by merger to Dial Call
Communications, Inc.) and the Trustee, as amended, relating to the Senior
Redeemable Discount Notes due 2004 (the "Nextel/Dial Call 2004 Notes"); and the
Indenture dated as of January 13,, 1994, between the Company (as successor by
merger to OneComm Corporation (f/k/a CenCall Communications Corp.)) and the
Trustee, as amended, relating to the Senior Redeemable Discount Notes due 2004
(the "Nextel/CenCall Notes").
"Individual" has the meaning set forth in the Recital D.
"Investor" has the meaning set forth in the Preamble.
"Investor Disclosure Statement" means the disclosure statement dated
the date of this Agreement delivered by Investor to the Company.
"Law" means any domestic or foreign, federal, state or local, law,
statute, ordinance, rule or regulation.
"Motorola" has the meaning set forth in Section 2.1(b).
"NASD" means the National Association of Securities Dealers, Inc.
CLCORP01 Doc:230313_4 21
"NASDAQ-NM" means the Nasdaq Stock Market National Market.
"New Options" has the meaning set forth in Recital D.
"Noteholder Consents" has the meaning set forth in Section 22(c).
"Notes" means the Nextel 2003 Notes, the Nextel 2004 Notes, the
Nextel/Dial Call 2005 Notes, the Nextel/Dial Call 2004 Notes and the
Nextel/CenCall Notes.
"Option Acquisition" has the meaning set forth in Recital D.
"Option Purchase Agreement" has the meaning set forth in Recital D.
"Order" means any judgment, order, injunction, decree, stipulation or
award entered or rendered by any Governmental Authority.
"Permitted Assumptions" has the meaning set forth in Section 3.9.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature or a group, including without limitation any pension, profit sharing or
other benefit plan or trust.
"Qualifying Equity Proceeds" has the meaning set forth in Section
6.2.
"Requirement of Law" means as to any Person, any law, rule,
regulation, order, judgment, decree or determination of any arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its properties or to which such Person or any of its
property is subject.
"SEC" means the Securities and Exchange Commission.
CLCORP01 Doc:230313_4 22
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of April 4, 1995, by and among the Company, Investor and
Individual, as amended.
"Subsidiary" means as to any Person, any other Person of which at
least 50% of the equity interests are owned, directly or indirectly by such
first Person.
"Transaction Agreements" means this Agreement, the CEI and the loan
agreement and other agreements and instruments contemplated by Section 6.4.
"Transactions" means the transactions contemplated by the Transaction
Agreements.
"Transfer" means (i) to sell, exchange, pledge or otherwise transfer
any interest in, and (ii) a sale, exchange, pledge or other transfer of any
interest in.
8.2 Other Definitional Provisions.
(a) All terms defined in this Agreement have the defined meanings
when used in any certificate, report or other documents made or delivered
pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular have a comparable meaning when
used in the plural, and vice versa.
(c) As used herein, the neuter gender also denotes the masculine and
feminine, and the masculine gender also denotes the neuter and feminine, where
the context so permits.
(d) The words "hereof," "herein" and "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(e) The words "include," "including" and "or" mean without
limitation by reason of enumeration.
CLCORP01 Doc:230313_4 23
Article 9. Miscellaneous.
9.1 Notices. All notices, demands, requests, certificates or other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when (i) hand delivered, (ii) sent by facsimile
transmission or by tested or otherwise authenticated telex or cable, (iii) one
day after sent by commercial courier guaranteeing next Business Day delivery or
(iv) five days after posting in the United States mail having been sent by
registered or certified mail return receipt requested, addressed as follows:
(i) if to the Company:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
(ii) if to Individual or Investor:
Digital Radio, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
C. Xxxxx Xxxxxx, Esq.
Digital Radio, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
CLCORP01 Doc:230313_4 24
and
Xxx X. Xxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X. X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Any communication delivered after business hours or on a Saturday, Sunday or
legal holiday at the place designated in such delivery shall be deemed for
purposes of computing any time period hereunder to have been delivered on the
next Business Day.
9.2 Expenses. Each party shall bear its own expenses, including the
fees and expenses of any attorneys, accountants, investment bankers, brokers,
finders or other intermediaries or other Persons engaged by Investor or the
Company, incurred in connection with this Agreement or the other agreements
contemplated hereby.
9.3 Benefits; Assignment. The provisions of this Agreement are
binding upon, and inure to the benefit of, Investor and the Company and their
respective successors. Nothing in this Agreement, express or implied, is
intended to confer upon any Person other than Investor and the Company any
rights, remedies or obligations under or by reason of this Agreement. None of
the rights or obligations of the Company or Investor hereunder may be assigned
to any other Person under any circumstances.
9.4 Entire Agreement; Amendment and Waiver. This Agreement (which
includes the Exhibits and Annexes hereto, the Company Disclosure Statement
and the Investor Disclosure Statement), and the other Transaction Agreements to
which either Investor or any of its Affiliates or the Company is a party
constitute the entire agreement between Investor and the Company with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both written and oral, between Investor and the Company with
respect to the subject matter hereof and thereof including, without limitation
the Memorandum of Understanding dated as of April 10, 1997. This Agreement
may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by each of the parties
CLCORP01 Doc:230313_4 25
hereto, and none of the Transaction Agreements to which the Company is a
party may be amended, supplemented or otherwise modified except by an
instrument in writing signed by the Company and each other party thereto,
provided that any amendment, supplement or other modification of this Agreement
or at any of such other Transaction Agreements which would adversely affect the
rights of the Company or any benefit to the Company hereunder or thereunder
shall require the approval of a majority of the Directors of the Company who
are not elected by the Investor. Except as stated in Section 6.3, no waiver by
either party hereto of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by such party. Except for waivers
effected under Section 6.3, any waiver by either party hereto of a breach of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
9.5 Headings. The headings in this Agreement are for convenience
only and are not to affect its meaning.
9.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
9.7 Remedies. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at Law or in equity shall be
cumulative and not alternative, and the exercise or beginning of the exercise
of any thereof by any party does not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
9.8 Severability. In the event that any provision of this Agreement
is deemed invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions are not to be in any way be affected
or impaired thereby.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and it is not
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
9.10 Communications Act. Nothing in this Agreement is intended or is
to be construed to diminish or affect the control
CLCORP01 Doc:230313_4 26
of the Company or any of its Subsidiaries over any FCC licenses held by the
Company or such Subsidiary in any manner prohibited by the Communications Act
or the rules and regulations issued by the FCC.
9.11 Survival. Any claim for losses or damages resulting from or
arising out of any inaccuracy or breach of any representation and warranty
herein must be asserted in writing before December 31, 1998. All covenants and
agreements, to the extent remaining to be performed after the Closing Date,
survive the Closing Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
DIGITAL RADIO, L.L.C.
By: /s/C. Xxxxx Xxxxxx
Name: C. Xxxxx Xxxxxx
Title: Vice President,
Eagle River Investments, LLC
It's Manager
CLCORP01 Doc: 230313_4 27
EXHIBITS
Exhibit A Calculation of Shares Issuable Pursuant to CEI
Exhibit B Contingent Equity Instrument
CLCORP01 Doc: 230313_4
EXHIBIT A
This Contingent Exercise Instrument ("CEI") will be issued to be
exchangeable for a number ("N") of shares of Nextel Common Stock determined in
accordance with the following formula:
(a) if X is $14.00 or less, N equals 1,607,143 shares;
(b) if X is $15.50 or more, N equals zero shares; and
(c) in any other case, N equals the number of shares resulting
from the equation [D multiplied by 15,000,000], divided by X.,
where X is the average closing price for a share of Nextel Common Stock on
the NASD-National Market during the 20 trading days immediately preceding the
date of the Closing (as defined in Section 1.5), and D is the result of
subtracting X from $15.50. By way of example, if X is $14.50, then N
(determined in accordance with clause (c) above) would be 1,034,482 shares
(rounded up to the nearest whole share), i.e., 1.00 times
15,000,000 = 15,000,000 divided by 14.50 = 1,034,482.76.
CLCORP01 Doc: 230313_4
EXHIBIT B
CONTINGENT EQUITY INSTRUMENT
by and between
Digital Radio, L.L.C.
and
Nextel Communications, Inc.
Dated as of June 16, 1997
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AS SET FORTH
IN THE SECURITIES PURCHASE AGREEMENT, DATED AS OF APRIL 4, 1995, AS
AMENDED, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE COMPANY. ANY REGISTRATION OF TRANSFER OF SUCH
SECURITIES ON THE BOOKS OF THE COMPANY WILL BE SUBJECT TO COMPLIANCE
WITH SUCH RESTRICTIONS.
CONTINGENT EQUITY INSTRUMENT
This CONTINGENT EQUITY INSTRUMENT (the "CEI") is dated as of June 16,
1997, by and between Nextel Communications, Inc., a Delaware corporation (the
"Company") and Digital Radio, L.L.C., a Washington limited liability company
("Buyer"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Commitment Agreement (as
defined below).
RECITALS
The Company and Buyer have entered into an Option Exercise and
Lending Commitment Agreement dated as of June 16, 1997 (the "Commitment
Agreement") pursuant to which, among other things, Seller agreed to sell, and
Buyer agreed to purchase this CEI, which, under certain circumstances, entitles
Buyer to acquire shares of the Company's Class A Common Stock, par value $.001
per share (the "Common Stock"), on the terms set forth in this CEI.
2
AGREEMENT
NOW, THEREFORE, for the consideration set forth in the Commitment
Agreement, $1,610.00 paid to the Company upon the execution and delivery of
this CEI, and other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the Company agrees with Buyer as
follows:
1. GRANT OF CEI.
1.1 Grant. The Company hereby grants to Buyer this CEI, exercisable
as provided herein in whole or in part at any time and from time to time during
the period from (A) the date that Investor has paid the exercise price and
exercised, in full, the Investor's First Option, through (B) 6:00 p.m., local
time in New York, New York, on July 28, 1999 (the "Exercise Period") to acquire
the number of shares of Common Stock determined at the Closing in accordance
with Section 1.3 of the Commitment Agreement (as set forth in the instrument
executed pursuant to Section 1.5(a)(ii) of the Commitment Agreement which is or
shall be attached to this CEI (as such number may be adjusted pursuant to
Section 2 hereof, the "CEI Shares")). No additional payment or other
consideration is to be paid or given upon exercise of the CEI. Buyer and its
permitted successors and assigns are hereinafter referred to as "Holder."
1.2 Shares To Be Issued; Reservation of Shares. The Company covenants
and agrees that all CEI Shares will, upon issuance, be duly authorized,
validly issued and outstanding, fully paid and non-assessable, and free from all
taxes, liens and charges with respect to the issuance thereof, except as
otherwise provided in the Commitment Agreement. The Company further covenants
and agrees that it will from time to time take all actions required to assure
that the aggregate par value of the Common Stock issuable upon exercise of this
CEI is at all times equal to or less than $1610. The Company further covenants
and agrees that, during the Exercise Period, the Company will at all times have
authorized and reserved sufficient shares of Common Stock to provide for the
exercise of this CEI in full.
2. ADJUSTMENTS TO CEI RIGHTS. ADJUSTMENTS TO OPTION RIGHTS.
2.1 Stock Combinations. If the Company combines all of the
outstanding Common Stock proportionately into a smaller number of shares, the
number of CEI Shares issuable to the Holder
cei.doc
3
upon exercise of this CEI will be proportionately decreased, as of the
effective date of such combination.
2.2 Reorganizations. If any of the following transactions (each, a
"Special Transaction") becomes effective: (i) a capital reorganization or
reclassification of the capital stock of the Company, (ii) a consolidation or
merger of the Company with another entity or (iii) a sale or conveyance of all
or substantially all of the Company's assets, then, as a condition of any such
Special Transaction, lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to acquire and receive, at any time
after the consummation of such transaction until the expiration of the Exercise
Period, upon the basis and upon the terms and conditions specified herein, and
in lieu of the CEI Shares immediately theretofore issuable upon exercise of
this CEI, such shares of stock, other securities, cash or other assets as may
be issued or payable in and pursuant to the terms of such Special Transaction
with respect to or in exchange for a number of outstanding shares of Common
Stock equal to the number of CEI Shares immediately theretofore issuable upon
exercise in full of this CEI had such Special Transaction not taken place (pro
rated in the case of any partial exercises). In connection with any Special
Transaction, appropriate provision will be made with respect to the rights and
interests of the Holder to the end that the provisions of this CEI (including
without limitation provisions for adjustment of the Exercise Price and the
number of CEI Shares issuable upon the exercise of the CEI), will thereafter be
applicable, as nearly as may be, to any shares of stock, other securities, cash
or other assets thereafter deliverable upon the exercise of this CEI. The
Company will not effect any Special Transaction unless prior to or
simultaneously with the closing the successor entity (if other than the
Company), if any, resulting from such consolidation or merger or the entity
acquiring such assets assumes by a written instrument executed and mailed by
certified mail or delivered to the Holder (which instrument shall be in form
and substance reasonably satisfactory to Holder) at the address of the Holder
appearing on the books of the Company, the obligation of the Company or such
successor corporation to deliver to such Holder such shares of stock,
securities, cash or other assets as, in accordance with the foregoing
provisions, such Holder has rights to acquire.
2.3 Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, stock splits,
recapitalizations, reclassifications or
cei.doc
4
the like, the type and number of CEI Shares issuable upon exercise of this CEI
will be adjusted appropriately, immediately upon such change. No such
adjustment will be made on account of any dividend payable other than in stock
of the Company.
2.4 Notice. Whenever this CEI or the CEI Shares is to be adjusted
as provided herein or a dividend or distribution (in cash, stock or
otherwise and including, without limitation, any liquidating distributions) is
to be declared by the Company, or a Special Transaction is deemed by the Company
to be substantially certain to occur (other than a Special Transaction in which
the Company is the surviving entity and which would not require the execution of
a written instrument pursuant to Section 2.2 above), the Company will forthwith
cause to be sent to the Holder at the last address of the Holder shown on the
books of the Company, by first-class mail, postage prepaid, at least ten (10)
days prior to the record date specified in (A) below or at least twenty (20)
days before the date specified in (B) below, a notice stating in reasonable
detail the facts requiring such adjustment and the calculation thereof, if
applicable, and stating (if applicable):
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined (provided, that in
the event the Company institutes a policy of declaring cash dividends on a
periodic basis, the Company need only provide the relevant information called
for in this clause (A) with respect to the first cash dividend payment to be
made pursuant to such policy and thereafter provide only notice of any changes
in the amount or the frequency of any subsequent dividend payments), or
(B) the date on which a Special Transaction is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record are entitled to exchange their shares of Common
Stock for securities or other property deliverable upon consummation of the
Special Transaction.
2.5 Fractional Interests. This CEI may be exercised only for a whole
number of shares of Common Stock, other than any fraction of a share of Common
Stock which would result upon this CEI being exercised in full; provided,
however that the Company is not required to issue fractions of shares of Common
Stock on the exercise in full of this CEI. If any fraction of a share of
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Common Stock would, except for the provisions of this Section 2.5, be
issuable upon the exercise in full of this CEI, the Company may (in lieu of
issuing such fractional share) either (A) purchase such fraction for an amount
in cash equal to the current value of such fraction, computed (i) if the Common
Stock is listed or admitted to unlisted trading privileges on the NASDAQ
National Market System or any securities exchange, on the basis of the last
reported sale price of the Common Stock on such exchange on the last business
day prior to the date of exercise upon which such a sale shall have been
effected (or, if the Common Stock shall be listed or admitted to unlisted
trading privileges on more than one such exchange, on the basis of such price on
the exchange designated from time to time for such purpose by the Board of
Directors of the Company) or (ii) if the Common Stock is not so listed or
admitted to unlisted trading privileges, on the basis of the last bid price, or
if there is no reported last bid, the average of the bid prices, for the Common
Stock on the last business day prior to the date of exercise, as reported by the
National Association of Securities Dealers Automated Quotation System or any
successor thereto, or, if such computations cannot be made as aforesaid, as the
Board of Directors of the Company may in good faith determine or (B) issue a
number of whole shares determined by rounding up to the nearest whole share.
3. EXERCISE.
3.1 Exercise of this CEI. Subject to compliance with federal and
state securities laws and to Section 1.1, the Holder may exercise this CEI,
in whole or in part, at any time during the Exercise Period by surrendering this
CEI, with the form of exercise notice attached hereto as Exhibit "A" duly
executed by Holder. Upon any partial exercise of this CEI, the Company, at its
expense, will forthwith issue to the Holder for this CEI a replacement CEI
identical in all respects to this CEI, except that the number of CEI Shares
shall be reduced accordingly.
3.2 Issuance of CEI Shares. The CEI Shares acquired will be issued
to the Holder exercising this CEI as of the close of business on the date
on which all actions required to be taken by Holder, pursuant to Section 3.1,
have been taken. Certificates for the CEI Shares so purchased will be delivered
to the Holder within a reasonable time, not exceeding ten (10) days after this
CEI is surrendered.
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4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or Bylaws or through reorganization,
reclassification, consolidation, merger, dissolution, sale of assets or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this CEI, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company will not increase the par value of any shares of Common Stock
receivable upon the exercise of this CEI above the Exercise Price, and at all
times will take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares
of Common Stock upon the exercise of this CEI. In the event of actions, other
than those specified herein, affecting adversely the rights of the Holder, the
Board of Directors of the Company will make such adjustments as shall be
equitable in the circumstances to preserve for Holder the benefits of this CEI.
5. RIGHTS OF HOLDER. Holder is not, solely by virtue of this CEI
and prior to the issuance of the CEI Shares upon due exercise thereof, entitled
to any rights of a stockholder in the Company.
6. TRANSFERABILITY. Holder may not sell, assign, transfer or
otherwise dispose of this CEI, except in accordance with the terms of the
Commitment Agreement. Subject to compliance with federal and state securities
laws and with the Commitment Agreement, if applicable, the Holder may sell,
assign, transfer or otherwise dispose of any CEI Shares acquired upon any
exercise hereof at any time and from time to time.
7. LEGEND ON CEI SHARES. Certificates evidencing the CEI Shares
will bear the following legend: "THE SECURITIES REPRESENTED BY THIS
CERTIFICATE OR INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR SUCH LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER." Such
certificates will also be legended as appropriate to reflect any and all
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restrictions on transfer of such CEI Shares that are contained in the
Commitment Agreement.
8. MISCELLANEOUS.
8.1 Amendments. The parties may, from time to time, enter into
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this CEI or changing in any manner the rights of either
of the parties hereunder. No amendment, supplement or modification will be
binding on either party unless made in writing and signed by a duly authorized
representative of each party and effected in compliance with Section 9.4 of the
Commitment Agreement, if applicable.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective must be in writing and, unless
otherwise expressly provided herein, are deemed to have been duly given or made
when delivered by hand or by courier, or by certified mail, or, when transmitted
by facsimile and a confirmation of transmission printed by sender's facsimile
machine. A copy of any notice given by facsimile also must be mailed, postage
prepaid, to the addressee. Notices to the respective parties hereto must be
addressed as follows:
(i) If to the Company:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President and General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
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(ii) If to the Buyer:
Digital Radio, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
C. Xxxxx Xxxxxx, Esq.
Digital Radio, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
and
Xxx X. Xxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X. X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Any party may alter the address to which communications or copies are to be
sent by giving notice of the change of address under this Section 8.2.
8.3 Waiver By Consent. The Holder may execute and deliver to the
Company a written instrument waiving, on such terms and conditions as the
Holder may specify in such instrument, any of the requirements of this CEI
otherwise imposed on the Company.
8.4 No Implied Waiver; Rights Are Cumulative. The failure to
exercise or the delay in exercising by either party of any right, remedy,
power or privilege under this CEI, will not operate as a waiver thereof. The
single or partial exercise of any right, remedy, power or privilege under this
CEI will not preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
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8.5 Governing Law. This CEI and rights and obligations of the
parties hereuder are governed by, construed and interpreted in accordance with
the laws of the State of Delaware applicable to agreements executed by
residents of that state, and fully to be performed, in that state.
8.6 Severability. If any provision of this CEI is found to be
unenforceable for any reason whatsoever, such provision shall be deemed null
and void to the extent of such unenforceability but is to be deemed separable
from and is not to invalidate any other provision of this CEI.
8.7 Captions. Captions to the various paragraphs of this Agreement
are provided for convenience only and are not to be used to construe the
provisions of this CEI.
8.8 Entire Agreement. This CEI and the Commitment Agreement
constitute the entire understanding of the parties with respect to the
subject matter of this CEI and supersedes all prior discussions, agreements and
representations, whether oral or written, concerning the subject matter hereof
and whether or not executed by Buyer and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
DIGITAL RADIO, L.L.C.
By:
Name:
Title:
NEXTEL COMMUNICATIONS, INC.
By:
Name:
Title:
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EXHIBIT "A"
[To be signed only upon exercise of CEI]
To Nextel Communications, Inc.:
The undersigned, the Holder of the within CEI, hereby irrevocably elects to
exercise the purchase right represented by such CEI for, and to purchase
thereunder, shares of the Class A Common Stock of Nextel
Communications, Inc. and requests that the certificates for such shares be
issued in the name of, and be delivered to, whose address is
.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the CEI)
Address
