Exhibit II
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
NETWORK ACCESS SOLUTIONS CORPORATION
AND
SBC COMMUNICATIONS INC.
February 4, 2000
TABLE OF CONTENTS
Section 1: Defined Terms....................................................1
Section 2: Terms of Purchase and Sale.......................................7
2.1 Conveyance of Stock..........................................7
2.2 Purchase Price for the Preferred Shares......................7
2.3 Number of Preferred Shares to be Issued at the
Closing....................................................7
Section 3: Closing..........................................................7
3.1 The Closing..................................................7
3.2 Deliveries by SBC............................................8
3.3 Deliveries by NAS............................................8
Section 4: Conditions to NAS's Obligations..................................9
4.1 Consents.....................................................9
4.2 Litigation...................................................9
4.3 SBC Representations; Compliance with Covenants...............9
4.4 Deliveries...................................................9
4.5 SBC Change in Control Event..................................10
4.6 Telmex Agreement.............................................10
Section 5: Conditions to SBC's Obligations..................................10
5.1 Consents.....................................................10
5.2 Litigation...................................................10
5.3 NAS's Representations; Compliance with Covenants.............10
5.4 NAS Change in Control Event..................................11
5.5 Adverse Developments.........................................11
5.6 Deliveries...................................................11
Section 6: Representations and Warranties of SBC............................11
6.1 Organization and Standing....................................11
6.2 Authorization by SBC.........................................11
6.3 Litigation...................................................12
6.4 Finders' and Brokers' Fees...................................12
6.5 Investment Intent; Qualification.............................12
6.6 Representations Not Misleading...............................12
Section 7: Representations and Warranties of NAS............................13
7.1 Organization and Standing of NAS.............................13
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7.2 Authorization by NAS; Consents...............................13
7.3 Corporate Documents..........................................14
7.4 Licenses; Qualification......................................14
7.5 Litigation...................................................14
7.6 Exclusive Dealing............................................15
7.7 Compliance with Applicable Laws..............................15
7.8 Title to Preferred Shares; Absence of Liens..................15
7.9 Financial Statements.........................................15
7.10 Conduct of Business in Ordinary Course.......................16
7.11 No Material Adverse Effect...................................16
7.12 Absence of Defaults..........................................16
7.13 No Conflict..................................................16
7.14 Capital Stock of NAS.........................................17
7.15 Finders' and Brokers' Fees...................................17
7.16 Taxes........................................................17
7.17 Subsidiaries.................................................17
7.18 Representations Not Misleading...............................17
Section 8: Covenants of SBC.................................................18
8.1 Cooperation..................................................18
8.2 Confidentiality; Press Releases..............................18
8.3 Definitive Operating Agreement...............................18
8.4 Consent Relating to Registration Rights......................18
8.5 Further Assurances...........................................19
Section 9: Covenants of NAS.................................................19
9.1 Cooperation..................................................19
9.2 Access to NAS Information....................................19
9.3 Ordinary Course Operation....................................19
9.4 Board Representation.........................................19
9.5 Confidentiality; Press Releases..............................20
9.6 Notification of Change in Control Event......................20
9.7 Registration Rights..........................................20
9.8 Listing......................................................23
9.9 Issuance of Other Securities.................................23
9.10 Further Assurances...........................................23
9.11 Use of Proceeds..............................................23
9.12 Definitive Operating Agreement...............................24
9.13 Right of Primary Offer.......................................24
9.14 Government License Application Amendment.....................25
Section 10: Termination.....................................................25
10.1 Terminating Events...........................................25
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10.2 Effect on Obligations........................................26
Section 11: Indemnification.................................................26
11.1 Indemnification by NAS.......................................26
11.2 Indemnification by SBC.......................................27
11.3 Losses.......................................................27
11.4 Survival.....................................................27
11.5 Procedures Relating to Third Party Claims....................28
Section 12: Arbitration.....................................................29
12.1 Resolution of Disputes.......................................29
12.2 Arbitrators..................................................30
12.3 Costs and Fees...............................................30
12.4 Burden of Proof..............................................30
12.5 Award........................................................30
12.6 Agreement Controls...........................................30
Section 13: Miscellaneous...................................................31
13.1 Entire Agreement; Amendment..................................31
13.2 Successors and Assigns.......................................31
13.3 Rights and Remedies..........................................31
13.4 Counterparts.................................................31
13.5 Modification and Waiver......................................31
13.6 Expenses.....................................................32
13.7 Notices......................................................32
13.8 Severability.................................................33
13.9 Governing Law................................................33
13.10 Rules of Construction........................................33
13.11 Ownership Limitation.........................................34
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Schedules:
7.2 Consents Exceptions
7.4 NAS Licenses
7.5 Litigation
7.6 Exclusive Dealing Exceptions
7.8 Outstanding Options or Rights
7.9 Financial Statements
7.10 Ordinary Course Exceptions
7.13 Conflicts
7.14 NAS Capital Stock
7.15 Finders' and Brokers' Fees
7.17 Subsidiaries
Exhibits:
A Certificate of Designations
B Form of Shook, Hardy & Bacon Legal Opinion
C Summary of Operating Agreement
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement"), dated as of
February 4, 2000, is by and between SBC Communications Inc., a
Delaware corporation ("SBC"), and Network Access Solutions
Corporation, a Delaware corporation ("NAS").
RECITALS
WHEREAS, SBC wishes to acquire, and NAS wishes to sell to
SBC, shares of preferred stock of NAS;
NOW THEREFORE, in consideration of the mutual covenants
contained herein, SBC and NAS agree as follows:
Section 1: Defined Terms
The following terms shall have the following meanings in
this Agreement:
"AAA" means the American Arbitration Association.
"Affiliate" means, with respect to a Person, any other
Person directly or indirectly controlling, controlled by or under
common control with such Person.
"Agreement" shall have the meaning set forth in the preamble
hereto.
"Assets" means the contracts, NAS Licenses, personal
property, intellectual property and real property, and all other
assets, rights and properties, tangible and intangible, of NAS
and used or held for use in the NAS Business, including (without
limitation) cash, cash equivalents and accounts receivable.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or
transaction that forms or could form the basis for any specified
consequences.
"Beneficial Owner" means, with respect to any security, a
Person that Beneficially Owns such security.
"Beneficially Own" means having the right to vote or dispose
of, or "beneficially own" as determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date of this
Agreement, including pursuant to any agreement, arrangement or
understanding.
"Business Day" means a day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions are authorized
or required by law or executive order to remain closed in the
domicile of SBC or NAS.
"Closing" means the consummation of the transactions
contemplated by this Agreement in accordance with the provisions
of Section 2 and Section 3.
"Closing Date" shall mean the date on which the Closing
occurs.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations thereunder, or any subsequent legislative
enactment thereof, as in effect from time to time.
"Common Stock" shall mean, collectively, the Common Stock of NAS.
"Communications Act" means the Communications Act of 1934,
47 U.S.C. Section 151 et seq., as amended and in effect from time
to time.
"Company Control Person" shall have the meaning set forth in
Section 11.2.
"Consents" means all of the consents, permits or approvals
of Governmental Authorities and other Persons necessary or
required to consummate the transactions contemplated hereby.
"Control Person" shall have the meaning set forth in Section
11.1.
"Convertible Securities" means any securities convertible
into, exchangeable for or bearing a right to acquire Common
Stock.
"Definitive Operating Agreement" means a mutually agreeable
definitive operating agreement(s) between NAS and SBC Telecom,
Inc. as contemplated by, and containing terms and conditions
substantially as set forth in, the Summary of Operating Agreement
attached as Exhibit C hereto.
"Dispute" shall have the meaning set forth in Section
12.1(a).
"Dispute Notice" shall have the meaning set forth in Section
12.1(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and in effect from time to time.
"Enforceability Exceptions" shall have the meaning set forth
in Section 6.2(a).
"FCC" means the Federal Communications Commission or any
successor thereto.
"FCC Rules" means Title 47 of the Code of Federal
Regulations, as amended at any time and from time to time, and
FCC decisions issued pursuant to the adoption of such
regulations.
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"Final Order" means an order as to which the time for filing
a request for administrative or judicial relief, or for
instituting administrative review sua sponte, shall have expired
without any such filing having been made or notice of review
having been issued; or, in the event of such filing or review sua
sponte, as to which such filing or review shall have been
disposed of favorably to the order and the time for seeking
further relief with respect thereto shall have expired without
any request for such further relief having been filed.
"Fully Diluted" shall mean, with respect to the number of
Shares outstanding on a fully diluted basis, the number of Shares
which would be outstanding at the time of determination assuming
the conversion, exchange or exercise of all Convertible
Securities (irrespective of any legal or contractual restriction
on such exercise, exchange or conversion), and any reference
herein to the number of Shares outstanding shall mean the number
of Shares outstanding assuming no conversion, exchange or
exercise of Convertible Securities.
"GAAP" means generally accepted accounting principles
consistent with the past practices of NAS.
"Governmental Authority" means (i) the United States, any
state, commonwealth, territory, or possession thereof and any
political subdivision or quasi-governmental authority of any of
the same, including but not limited to courts, tribunals,
departments, commissions, boards, bureaus, agencies, counties,
municipalities, provinces, parishes, and other instrumentalities,
and (ii) any foreign (as to the United States) sovereign entity,
including but not limited to nations, states, republics, kingdoms
and principalities, any province, commonwealth, territory or
possession thereof, and any political subdivision, quasi-
governmental authority, or instrumentality of any of the same.
"Holder" means SBC and each transferee of SBC's rights
hereunder that is a Wholly-Owned SBC Subsidiary and any other
transferee of SBC's rights hereunder to which NAS consents, which
consent shall not be unreasonably withheld.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended and in effect from time to time.
"Indemnified Party" shall have the meaning set forth in
Section 11.5.
"IRS" shall mean the Internal Revenue Service and any
governmental body or agency succeeding to the functions thereof.
"Judgment" means any judgment, writ, order, injunction,
award or decree of any court, judge, justice or magistrate,
including any bankruptcy court, or arbiter, and any order of or
by any other Governmental Authority.
"Knowledge" with respect to NAS means the actual knowledge
of NAS and, with respect to SBC, means the actual knowledge of
SBC.
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"Legal Requirements" means applicable common law and any
applicable statute, ordinance, code or other law, rule,
regulation, order, technical or other standard, requirement or
procedure enacted, adopted, promulgated or applied by any
Governmental Authority, including any Judgment.
"Lien" means any security agreement, financing statement
filed with any Governmental Authority, conditional sale or other
title retention agreement, any lease, consignment or bailment
given for the purpose of security, any lien, mortgage, indenture,
pledge, option, encumbrance, restriction on transfer, adverse
interest, constructive trust or other trust, claim, attachment,
exception to or defect in title or other ownership interest
(including but not limited to reservations, rights of entry,
possibilities of reverter, encroachments, easements, rights-of-
way, restrictive covenants, leases and licenses) of any kind,
which otherwise constitutes an interest in or claim against
property, whether arising pursuant to any Legal Requirement,
contract or otherwise.
"Litigation" means any claim, action, suit, proceeding,
arbitration, investigation, hearing or other activity or
procedure that could result in a Judgment, and any notice of any
of the foregoing.
"Losses" means any losses, liabilities, damages, Liens,
penalties, costs, fines and expenses, whether in connection with
any Litigation or otherwise, including but not limited to
interest which may be imposed in connection therewith, expenses
of investigation, reasonable fees and disbursements of counsel
and other experts, and the cost to any Person making a claim or
seeking indemnification under this Agreement with respect to
funds expended by such Person by reason of the occurrence of any
event with respect to which indemnification is sought.
"Material Adverse Effect" shall mean, with respect to either
party, a material adverse change in the financial condition or
financial results of operations of such party or the occurrence
of any event or combination of events that is reasonably likely
to result in a material adverse change in the financial condition
or financial results of operations of such party and its
Subsidiaries taken as a whole. When the phrase "material
adverse" is used in this Agreement and is not used as a
capitalized term and in the phrase "Material Adverse Effect,"
such "material adverse" reference shall not be defined or
construed as provided in the immediately preceding sentence or in
the context of such party taken as a whole but instead shall mean
a material adverse effect, change or consequences only as to the
matter with respect to which the phrase "material adverse" is
utilized.
"NAS" shall have the meaning set forth in the preamble
hereto.
"NAS Business" means NAS's business as conducted in the
United States in accordance with NAS's existing operations and
business plans.
"NAS Change in Control Event" shall be deemed to have
occurred if (i) there shall be consummated (x) any consolidation
or merger of NAS in which NAS is not the continuing or surviving
corporation or pursuant to which shares of the Common Stock would
be converted into cash, securities or other property, other than
a merger of NAS in which the holders of the Common
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Stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the Assets of NAS,
or (ii) the stockholders of NAS approved any plan or proposal for
the liquidation or dissolution of NAS, or (iii) any Person other
than Xxxxxxxx X. Xxxx and Spectrum Equity Investors II, L.P shall
become the Beneficial Owner of 20% or more of the outstanding
Common Stock or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
entire NAS Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the
nomination for election by NAS's stockholders, of each new
director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the
beginning of the period.
"Nasdaq" means Nasdaq National Market.
"NAS Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of
NAS as of September 30, 1999 and as of December 31, 1998 and the
related consolidated statements of income, shareholders' equity
and cash flows (including related notes and schedules, if any)
and (ii) the consolidated balance sheets of NAS (including
related notes and schedules, if any) and related statements of
income, shareholders' equity and cash flows (including related
notes and schedules, if any) with respect to periods ended
subsequent to September 30, 1999.
"NAS Licenses" means all Section 214 authorizations or
microwave and other spectrum licenses issued by the FCC, and all
certificates of public convenience and necessity or comparable
authorizations issued by any state public utilities commission or
comparable regulatory authority, and held by NAS.
"New Securities" shall have the meaning set forth in Section
9.13(d)(i).
"Note" shall mean that certain Promissory Note dated of even
date herewith, in the original principal amount of
$15,000,000.00, payable by NAS to SBC.
"Notice" shall have the meaning set forth in Section
9.13(a).
"Outstanding" with respect to the number of Shares
outstanding on a fully diluted basis, shall have the meaning set
forth in the definition of the term, "Fully Diluted."
"Percentage" shall have the meaning set forth in Section
9.13(d)(ii).
"Permitted Registration Date" means the date that is the
later of (i) two years from the Closing Date, or (ii) the date of
termination of the Definitive Operating Agreement.
"Person" means any natural person, Governmental Authority,
corporation, general or limited partnership, limited liability
company, limited liability partnership, joint venture, trust,
estate, association, organization or unincorporated entity of any
kind.
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"Preferred Shares" means the Convertible Series B Preferred
Stock of NAS, as the terms of such Preferred Shares are set forth
in the Certificate of Designations attached as Exhibit A hereto.
"Prior Holders" shall have the meaning set forth in Section
9.7.
"Purchase Price" means $75,000,000.00.
"Registration Request" shall have the meaning set forth in
Section 9.7(b).
"Registration Statement" shall have the meaning set forth in
Section 9.7(b).
"SBC" shall have the meaning set forth in the preamble
hereto.
"SEC" shall mean the Securities and Exchange Commission and
any governmental body or agency succeeding to the functions
thereof.
"SBC Change in Control Event" shall be deemed to have
occurred if (i) there shall be consummated (x) any consolidation
or merger of SBC in which SBC is not the continuing or surviving
corporation or pursuant to which shares of the Common Stock would
be converted into cash, securities or other property, other than
a merger of SBC in which the holders of the Common Stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the Assets of SBC,
or (ii) the stockholders of SBC approved any plan or proposal for
the liquidation or dissolution of SBC, or (iii) any Person shall
become the Beneficial Owner of 20% or more of the outstanding
Common Stock or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
entire SBC Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the
nomination for election by SBC's stockholders, of each new
director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the
beginning of the period.
"Securities Act" shall mean the Securities Act of 1933, as
amended and in effect from time to time.
"Selling Shareholder" shall have the meaning set forth in Section
9.7(b).
"Subsidiary" of any corporation shall mean any other
corporation, limited liability company, general or limited
partnership, limited liability partnership, joint venture, trust
or other entity of which the outstanding capital stock possessing
a majority of voting power in the election of directors
(otherwise than as the result of a default) is owned or
controlled by such corporation directly or indirectly through
Subsidiaries.
"Taxes" means all levies and assessments of any kind or
nature imposed on NAS by any Governmental Authority, including
but not limited to all income, sales, use, ad valorem, value
added, franchise, severance, net or gross proceeds, withholding,
payroll, employment, excise or
6
property taxes, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto.
"Telmex" shall mean Telefonos de Mexico, S.A. de C.V.
"Third Party Claim" shall have the meaning set forth in
Section 11.5.
"Wholly-Owned SBC Subsidiary" means any corporation, limited
liability company, general or limited partnership, limited
liability partnership, joint venture, trust or other entity of
which the outstanding capital stock is wholly owned directly or
indirectly by SBC and which is formed for business purposes that
are unrelated to the ability of such entity to receive any rights
or interests hereunder or associated herewith.
Section 2: Terms of Purchase and Sale
2.1 Conveyance of Stock
Subject to the terms and conditions of this Agreement, NAS
shall issue to SBC, free and clear of all Liens, the number of
shares of its newly issued Convertible Preferred Stock set forth
in Section 2.3 (the "Preferred Shares").
2.2 Purchase Price for the Preferred Shares
The aggregate purchase price for the Preferred Shares
("Purchase Price") shall be $75,000,000.00.
2.3 Number of Preferred Shares to be Issued at the Closing
The number of shares of Preferred Shares to be acquired by
SBC at the Closing shall be 750,000.
Section 3: Closing
3.1 The Closing
Upon the terms and subject to the conditions contained
herein (each party agreeing to notify the other when all closing
conditions have occurred), the Closing shall take place at the
offices of Xxxxxx & Xxxxxx in Washington, D.C., at 2:00 p.m.
local time on the date (the "Closing Date") which is five (5)
Business Days after each of the conditions set forth in Section 4
and 5 hereof have been satisfied or waived, or any other mutually
agreed upon time.
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3.2 Deliveries by SBC
On the Closing Date, SBC shall deliver or cause to be
delivered to NAS the following, in form and substance reasonably
satisfactory to NAS and its counsel:
(a) The Purchase Price, (i) by wire transfer in the form of
immediately available funds to an account designated by
NAS and (ii) to the extent of the amount of unpaid
principal and accrued interest on the Note, by tender
of the Note;
(b) The Note, marked "Paid and Cancelled";
(c) A certificate, dated as of the Closing Date, executed
by a Senior Vice President of SBC, certifying that the
conditions set forth in Section 4 have been fulfilled;
(d) A certificate, dated as of the Closing Date, executed
by SBC's Secretary certifying that the execution of
this Agreement and the consummation of the transaction
contemplated hereby have been authorized and approved
by all necessary corporate action of SBC, which remains
in full force and effect and has not been modified or
amended; and
(e) Such other documents and instruments as shall be
reasonably necessary to effect the intent of this
Agreement and consummate the transactions contemplated
by this Agreement.
3.3 Deliveries by NAS
On the Closing Date, NAS shall deliver to SBC the following,
in form and substance reasonably satisfactory to SBC and its
counsel:
(a) A certificate or certificates for all of the Preferred
Shares;
(b) A certificate, dated as of the Closing Date, executed
by the President of NAS, certifying that all the conditions set
forth in Section 5 have been fulfilled;
(c) A certificate, dated as of the Closing Date, executed
by the Secretary of NAS, certifying that the resolutions, as
attached to such certificate, were duly adopted by the Board of
Directors of NAS authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated
hereby, and that such resolutions remain in full force and effect
and have not been modified or amended;
(d) SBC shall have been furnished with a favorable opinion,
dated the Closing Date; of outside counsel to NAS (which counsel
shall be reasonably satisfactory to SBC), confirming the matters
set forth in Sections 7.1, 7.2 (as to all transaction documents),
7.5, 7.8, 7.13, 7.14, and exemption of the issuance and sale of
the Series B Preferred Stock from the registration
8
requirements of the federal and state securities laws, which opinion shall
be in form and substance reasonably satisfactory to SBC.
(e) Opinions of Shook, Hardy & Bacon, NAS's state
regulatory counsel, dated as of the Closing Date, substantially
in the form of Exhibit B hereto; and
(f) Such other documents and instruments as shall be
reasonably necessary to effect the intent of this Agreement and
consummate the transactions contemplated by this Agreement.
Section 4: Conditions to NAS's Obligations
The obligations of NAS to sell the Preferred Shares and
effect the Closing shall be subject to the satisfaction by SBC,
or waiver thereof by NAS, on or prior to the Closing Date of all
of the following conditions:
4.1 Consents
All Consents shall have been obtained.
4.2 Litigation
No Litigation shall be pending, and no Legal Requirement
shall have been enacted, entered, promulgated or issued, or shall
have become or be deemed applicable, to any of the transactions
contemplated by this Agreement by any Governmental Authority,
that would (i) prohibit SBC's ownership of the Stock or prohibit
NAS's operation of the NAS Business in any material respect as it
is being operated as of the date of this Agreement, (ii) prevent
or make illegal the consummation of the transactions contemplated
by this Agreement.
4.3 SBC Representations; Compliance with Covenants
SBC's representations and warranties contained in Section 6
shall be accurate in all material respects when made and at and
as of the Closing with the same effect as though such
representations and warranties had been made at and as of the
Closing, and SBC shall have in all material respects performed
and complied with all covenants and agreements and conditions
required by this Agreement to be performed or complied with by it
prior to or on the Closing, provided that this condition shall be
satisfied if the inaccuracy of any representation or warranty, or
the nonperformance or noncompliance with any covenant, agreement
or condition, individually or in the aggregate, does not have a
Material Adverse Effect.
4.4 Deliveries
SBC shall have made or stand willing and able to make all of
the deliveries to NAS set forth in Section 3.2.
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4.5 SBC Change in Control Event
No SBC Change in Control Event shall have occurred.
4.6 Telmex Agreement
Telmex shall have executed a stock purchase agreement with
respect to the purchase of 750,000 Preferred Shares in the form
of this Agreement except for appropriate changes to reflect
Telmex as a party thereto.
Section 5: Conditions to SBC's Obligations
The obligations of SBC to purchase the Preferred Shares and
effect the Closing shall be subject to the satisfaction, or
waiver by SBC, on or prior to the Closing Date of all of the
following conditions:
5.1 Consents
All Consents shall have been obtained.
5.2 Litigation
No Litigation shall be pending, and no Legal Requirement
shall have been enacted, entered, promulgated or issued, or shall
have become or be deemed applicable, to any of the transactions
contemplated by this Agreement by any Governmental Authority,
that would (i) prohibit SBC's ownership of the Preferred Shares
or prohibit NAS's operation of the NAS Business in any material
respect as it is being operated as of the date of this Agreement,
or (ii) prevent or make illegal the consummation of the
transactions contemplated by this Agreement.
5.3 NAS's Representations; Compliance with Covenants
NAS's representations and warranties contained in Section 7
shall be accurate in all respects when made and at and as of the
Closing with the same effect as though such representations and
warranties had been made at and as of the Closing except:
(i) insofar as any such representation or warranty is made
specifically as of the date of this Agreement or as of any other
specified earlier date (in which event the same shall continue at
and as of the Closing Date to be true and correct as of such
earlier date) and (ii) with respect to changes contemplated by
this Agreement, and NAS shall have in all material respects
performed and complied with all covenants and agreements and
conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date, provided that this
condition shall be satisfied if the inaccuracy of any
representation or warranty, or the nonperformance or
noncompliance with any covenant, agreement or condition,
individually or in the aggregate, does not have a Material
Adverse Effect.
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5.4 NAS Change in Control Event
No NAS Change in Control Event shall have occurred.
5.5 Adverse Developments
Since September 30, 1999, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting the business, operations, properties, Assets or
prospects of NAS which materially impairs the value of the
Preferred Shares.
5.6 Deliveries
NAS shall have made or stand willing and able to make all of
the deliveries to SBC set forth in Section 3.3.
Section 6: Representations and Warranties of SBC
SBC hereby represents and warrants to NAS as follows:
6.1 Organization and Standing
SBC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder.
6.2 Authorization by SBC
(a) This Agreement has been duly and validly executed and
delivered by SBC and constitutes the legal, valid and binding
obligation of SBC enforceable against SBC in accordance with its
terms, except as such enforceability may be limited by
(i) bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally or (ii) general
principles of equity (collectively, the "Enforceability
Exceptions").
(b) Neither the execution, delivery and performance of this
Agreement by SBC nor the consummation by SBC of the transactions
contemplated herein will, with or without the giving of notice or
the lapse of time, or both, (i) violate any Legal Requirements to
which SBC is subject, (ii) conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default
under, the charter or by-laws of SBC or any material agreement or
commitment to which SBC is a party or by which SBC or any of
SBC's assets, may be bound or affected, or (iii) require SBC to
obtain any authorization, consent, approval or waiver from, or to
make any filing with, any Governmental Authority or non-
governmental third party. NAS has informed SBC that the
approvals referred to on Schedule 7.2 are required for
consummation of the transactions contemplated by this Agreement.
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6.3 Litigation
There is no Litigation pending against SBC or, to the best
of SBC's Knowledge, any Basis for Litigation or threatened
Litigation against SBC which seeks to enjoin or obtain damages in
respect of the consummation of the transactions contemplated
hereby. SBC is not a party to or involved in any Litigation
which has a material adverse effect on SBC's ability to
consummate, or would prevent the consummation of, the
transactions contemplated by this Agreement.
6.4 Finders' and Brokers' Fees
Neither SBC, nor anyone on behalf of SBC, has any
obligations to any broker, finder or agent, or agreed to pay any
brokerage fee, finder's fee or commission in connection with this
Agreement or the transactions contemplated hereby.
6.5 Investment Intent; Qualification
(a) SBC is acquiring the Preferred Shares solely for its
own account, for investment purposes only, and not with a view to
any distribution thereof, in whole or in part, within the meaning
of the Securities Act or any applicable state securities laws.
The Preferred Shares will not be resold by SBC unless registered
pursuant to the Securities Act and any applicable state
securities laws or unless an exemption therefrom is available.
SBC hereby acknowledges that NAS will rely upon the truth of the
representations made in this Section 6.5 in determining that an
exemption from the registration requirements of the securities
laws is available in connection with the sale of the Preferred
Shares pursuant to this Agreement.
(b) SBC has the ability to evaluate the merits and risks
associated with its investment in the Preferred Shares on the
basis of SBC's knowledge and experience in financial and business
matters. SBC is an "accredited investor" as defined in Rule 501
of the General Rules and Regulations under the Securities Act.
SBC has not relied upon any representation or warranty made by
NAS, or by any person on behalf of NAS, other than the
representations and warranties contained in this Agreement.
6.6 Representations Not Misleading
The representations made by SBC in this Agreement do not
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
12
Section 7: Representations and Warranties of NAS
NAS hereby represents and warrants to SBC as follows:
7.1 Organization and Standing of NAS
NAS is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with all
requisite power and authority (corporate and other) to own its
properties and conduct its business as now being conducted, and
is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction where the ownership of its
properties or the conduct of its business makes such
qualification necessary, except in those jurisdictions where
failure so to qualify will not permanently impair title to a
material amount of its properties or its rights to enforce in all
material respects contracts against others or expose it to
substantial liabilities in such jurisdictions. Each Subsidiary
of NAS is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation with
all requisite power and authority (corporate and other) to own
its properties and conduct its business as now being conducted,
and is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction where the ownership of its
properties or the conduct of its business makes such
qualification necessary, except in those jurisdictions where
failure so to qualify will not permanently impair title to a
material amount of its properties or its rights to enforce in all
material respects contracts against others or expose it to
substantial liabilities in such jurisdictions.
7.2 Authorization by NAS; Consents
(a) NAS has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement. NAS has taken all corporate action necessary to
authorize this Agreement and the issue, sale and delivery of the
Preferred Shares. This Agreement has been duly authorized,
executed and delivered by NAS and is a legal, valid and binding
obligation of NAS enforceable in accordance with its terms,
except as such enforceability may be limited by the
Enforceability Exceptions.
(b) All material Consents required to be obtained by NAS
are set forth on Schedule 7.2. Except for the Consents set forth
in Schedule 7.2, neither the execution, delivery and performance
of this Agreement by NAS nor the consummation by NAS of the
transactions contemplated herein will, with or without the giving
of notice or the lapse of time, or both, (i) violate any Legal
Requirements to which NAS is subject, (ii) conflict with or
result in a breach of the terms, conditions or provisions of, or
constitute a default under, the charter or by-laws of NAS, or any
NAS License, any material contract to which NAS is a party or by
which NAS may be bound or affected, or (iii) require NAS to
obtain any authorization, consent, approval or waiver from, or to
make any filing with, any Governmental Authority or non-
governmental third party.
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7.3 Corporate Documents
True and correct copies of the Amended and Restated
Certificate of Incorporation and the Amended and Restated By-Laws
of NAS, certified by an appropriate officer of NAS, have been
delivered to SBC and such Amended and Restated Certificate of
Incorporation, as amended, and Amended and Restated By-Laws have
not been amended since the respective dates of certification
thereof, nor has the Board of Directors or the shareholders of
NAS taken any action for the purpose of effecting the amendment
or modification of such Amended and Restated Certificate of
Incorporation or Amended and Restated By-Laws.
7.4 Licenses; Qualification
(a) NAS or its Subsidiaries hold all the NAS Licenses
listed in Schedule 7.4 hereto in its corporate name. The NAS
Licenses listed in Schedule 7.4 are all of the material and
necessary Licenses which are required in connection with the
current operation of the NAS Business. Except as set forth on
Schedule 7.4, all NAS Licenses are currently in full force and
effect and there are no pending or, to the Knowledge of NAS,
threatened revocation proceedings which would have a Material
Adverse Effect on the operation of the NAS Business, nor, to the
Knowledge of NAS, is there any Basis for any such proceeding.
NAS has made available to SBC for SBC's review, accurate and
complete copies of all NAS Licenses.
(b) All fees due and payable to Governmental Authorities
pursuant to the NAS Licenses have been paid and, except as set
forth on Schedule 7.4, no event has occurred which, with or
without the giving of notice or the lapse of time or both, would
constitute grounds for revocation of the NAS Licenses. Except as
set forth on Schedule 7.4, NAS is in compliance in all material
respects with the terms of the NAS Licenses, and there is no
condition, event or occurrence existing, nor is there any
proceeding being conducted of which NAS has received notice, nor,
to NAS's Knowledge, is there any proceeding threatened, by any
Governmental Authority, which would cause the termination,
suspension, cancellation or nonrenewal of any of the NAS
Licenses, or the imposition of any material penalty or fine by
any Governmental Authority, nor, to the Knowledge of NAS, is
there any Basis for any such proceeding.
(c) Except as set forth on Schedule 7.4, to NAS's
Knowledge, all applications, reports, fees, filings and other
submissions required by any Governmental Authority have been made
or paid in a timely fashion, the noncompliance with which
reasonably could have a Material Adverse Effect.
7.5 Litigation
There is no Litigation pending against NAS or any of its
Subsidiaries, or, to the Knowledge of NAS, a Basis for Litigation
or threatened Litigation against NAS or any of its Subsidiaries
which seeks to enjoin or obtain damages in respect of the
consummation of the transactions contemplated hereby. Except for
those matters disclosed on Schedule 7.5, as of the date hereof
there is no Litigation or, to the Knowledge of NAS, Basis for
Litigation, against NAS or any of its Subsidiaries (including
proceedings concerning labor disputes or grievances, civil
14
rights discrimination cases and affirmative action proceedings) nor is
there any governmental investigation pending or, to NAS's Knowledge, Basis for
governmental investigation or threatened governmental investigation relating to
NAS or any of its Subsidiaries or to which NAS or any such Subsidiary is a
party, nor is there any Judgment relating to NAS or any of its Subsidiaries or
to which NAS or any of its Subsidiaries is a party which is unsatisfied or
requires continuing compliance. Neither NAS nor any of its Subsidiaries is a
party to or involved in any Litigation which has a Material Adverse Effect upon
NAS's ability to consummate, or would prevent the consummation of, the
transactions contemplated by this Agreement.
7.6 Exclusive Dealing
Except as set forth on Schedule 7.6, neither NAS nor any of
its Affiliates is a party to any currently effective agreement,
written or oral, involving the sale of any NAS Securities, a
material portion of NAS's Assets, or any of the NAS Business to
any Person other than SBC and Telmex.
7.7 Compliance with Applicable Laws
NAS and each of its Subsidiaries has complied and presently
is in compliance with all applicable Legal Requirements.
7.8 Title to Preferred Shares; Absence of Liens
(a) The Preferred Shares have been duly authorized for
issuance and are validly issued, fully paid and nonassessable.
None of the Preferred Shares has been issued in violation of, or
is subject to, any preemptive or subscription or similar rights.
Except as disclosed on Schedule 7.8 there are no outstanding
options or rights of any kind to acquire or subscribe for any
Preferred Shares nor are there any obligations to issue, sell or
otherwise cause to become outstanding any such options, rights,
capital stock or securities. Except as disclosed on
Schedule 7.8, NAS is not a party to, and does not have any
Knowledge of, any voting trusts, proxies, voting agreements or
other agreements with respect to the voting of the capital stock
of NAS.
(b) SBC will acquire at the Closing good title to the
Preferred Shares, free and clear of all Liens.
(c) NAS owns all of the issued and outstanding capital
stock of each of its Subsidiaries.
7.9 Financial Statements
Attached as Schedule 7.9 are the unaudited NAS Financial
Statements for September 30, 1999 in the form included in NAS's
Form 10-Q for the nine months ended September 30, 1999. The NAS
Financial Statements have been prepared by NAS in accordance with
GAAP and present fairly the financial position of NAS and its
Subsidiaries as of the dates of such
15
statements. There are no material contingent liabilities that are not
disclosed on the NAS Financial Statements.
7.10 Conduct of Business in Ordinary Course
Since September 30, 1999, and except as set forth on
Schedule 7.10, NAS has conducted the NAS Business only in the
ordinary course and consistent with past practices and has not:
(i) made any material increase in compensation payable or to
become payable to any senior executives of NAS, or any material
change in personnel policies, insurance benefits or other
compensation arrangements affecting NAS's employees; (ii) made
any sale, assignment, lease or other transfer of any of the
Assets, other than obsolete Assets no longer usable in the
operation of the NAS Business or other Assets sold or disposed of
in the normal course of business with suitable replacements being
obtained therefor; (iii) experienced any physical damages,
destruction or loss exceeding $50,000.00 in the aggregate
affecting the NAS Business that is not covered by insurance or
has not been remedied within 30 days; (iv) incurred any
indebtedness or Liens except in the ordinary course and
consistent with past practices; (v) paid any dividends; or
(vi) waived any material rights of NAS under any contract or NAS
License.
7.11 No Material Adverse Effect
Since September 30, 1999, there has been no Material Adverse
Effect.
7.12 Absence of Defaults
Neither NAS nor any of its Subsidiaries is in material
default under or in material violation of any provision of its
Amended and Restated Certificate of Incorporation or Amended and
Restated By-Laws or contained in any other agreement or
instrument to which it is a party or by which it is bound or to
which any of its properties is subject, and neither NAS nor any
of its Subsidiaries is in material violation of any statute,
order, rule or regulation of any court or governmental agency or
body having jurisdiction over it or any of its properties.
7.13 No Conflict
Except as set forth on Schedule 7.13, neither the execution
and delivery by NAS of this Agreement, nor the consummation of
the transactions contemplated hereby, nor compliance by NAS with
its obligations hereunder:
(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any provision
of the Amended and Restated Certificate of Incorporation or
Amended and Restated By-Laws of NAS or any law, rule,
regulation, order, injunction or decree of any court,
administrative authority or arbitrator applicable to NAS or
any property or Assets of NAS, or will conflict with, or
result in a breach or violation of or constitute a default
in the performance, observance or fulfillment of any
obligation under, or constitute, or, with the giving of
notice or lapse of time or both, would constitute, an event
of default by NAS, or result in the acceleration of any
obligation, or require any
16
consent or approval, under, any agreement or instrument to which
NAS is a party or by which it or any of its properties or Assets are
bound;
(ii) will result in the creation or imposition of any
Lien upon any of the Assets of NAS; or
(iii) will require any action, consent or approval of,
or filing with, any Governmental Authority.
7.14 Capital Stock of NAS
The authorized capital stock of NAS as of the date hereof is
as set forth on Schedule 7.14 and no other shares are issued or
outstanding, except as a result of the expiration of employee
options on February 4, 2000. Each issued and outstanding share
of Common Stock is duly and validly authorized and issued and is
fully paid and nonassessable. The Preferred Shares, when issued
and delivered to SBC pursuant to this Agreement will be duly and
validly authorized and issued and fully paid and nonassessable.
There is no existing option, warrant, call or commitment of any
kind relating to the capital stock of NAS or securities
convertible into capital stock of NAS except as set forth on
Schedule 7.14. The Preferred Shares are not and will not at the
time of issuance be subject to any preemptive right of any
shareholder.
7.15 Finders' and Brokers' Fees
Neither NAS, nor anyone on behalf of NAS, has any
obligations to any broker, finder or agent, or agreed to pay any
brokerage fee, finder's fee or commission in connection with this
Agreement and the transactions contemplated hereby except as set
forth on Schedule 7.15.
7.16 Taxes
NAS and each of its Subsidiaries has filed or caused to be
filed all federal, state and local tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, including payroll taxes.
7.17 Subsidiaries
Other than as set forth on Schedule 7.17 hereto, NAS has no
Subsidiaries.
7.18 Representations Not Misleading
The representations made by NAS in this Agreement do not
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
17
Section 8: Covenants of SBC
SBC hereby covenants and agrees with NAS as follows:
8.1 Cooperation
SBC will use commercially reasonable efforts and cooperate
with NAS to secure promptly all necessary Consents.
SBC will not sell or otherwise dispose of any Preferred
Shares except in compliance with the provisions of the Securities
Act, the SEC's regulations thereunder and other applicable
federal and state securities and Blue Sky laws.
8.2 Confidentiality; Press Releases
No press release or public disclosure, either written or
oral, of the existence or terms of this Agreement shall be made
by SBC without the consent of NAS, and SBC shall furnish to NAS
advance copies of any release which it proposes to make public
concerning this Agreement or the transactions contemplated hereby
and the date upon which SBC proposes to make such press release.
This provision shall not, however, be construed to prohibit SBC
from making any disclosures to any Governmental Authority or
other Person which it is required to make under any Legal
Requirement, or to obtain any Consents.
8.3 Definitive Operating Agreement
Promptly following the execution of this Agreement, SBC
shall, and shall cause SBC Telecom, Inc. to, negotiate in good
faith the Definitive Operating Agreement. The Definitive
Operating Agreement shall contain the substance of the terms and
conditions set forth in the Summary of Operating Agreement
attached as Exhibit C and such other terms and conditions as the
parties may mutually agree upon.
8.4 Consent Relating to Registration Rights
Upon receipt by NAS of the consents of the Prior Holders
referred to in Section 9.7, SBC (and any Holder) also will
consent (i) to permit each Prior Holder to participate in any
registration statement in which the Holders may participate and
(ii) to the extent not all shares to be offered by the Holders
and Prior Holders may be sold under any such registration
statement, to reduce the number of shares the Holders, as a
group, may sell under such registration statement on a pro rata
basis with the Prior Holders as a group, with such pro rata
reduction based on the number of shares of Common Stock, or the
shares of Common Stock represented by Convertible Securities,
that each group owns or Beneficially Owns at the time of the
relevant Registration Request.
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8.5 Further Assurances
At any time or from time to time after the Closing Date, SBC
shall execute and deliver any further instruments or documents,
and take all such further action as NAS may reasonably request,
in order to effect this Agreement and issue and deliver the
Preferred Shares to SBC free and clear of all Liens.
Section 9: Covenants of NAS
NAS hereby covenants and agrees with SBC as follows:
9.1 Cooperation
NAS will use commercially reasonable efforts and cooperate
with SBC to secure promptly all necessary Consents.
9.2 Access to NAS Information
During the period prior to Closing, NAS will grant to SBC
and its representatives reasonable access to all the premises,
books, records, inventory, and physical plant relating to NAS.
NAS shall cause its representatives and independent auditors to
furnish to SBC such financial and other data and information with
respect to NAS as SBC and/or its independent accountants and
counsel shall reasonably request, to the extent already in
existence and permitted by law.
9.3 Ordinary Course Operation
Between the date of the Agreement and the Closing, NAS (i)
shall, in all material respects, operate the NAS Business, serve
its customers, and preserve and maintain the Assets of NAS and
relationships with customers, vendors and employees in a
reasonable and prudent manner and (ii) shall, in all material
respects, conduct the NAS Business in the ordinary course.
Through the Closing Date, NAS will use its best efforts to
maintain the current status of the NAS Licenses.
9.4 Board Representation
NAS shall ensure that SBC, as long as SBC owns all of the
Preferred Shares issued upon Closing or all of the Common Stock
issued upon conversion of such Preferred Shares (or owns a
greater number of Preferred Shares or shares of Common Stock than
originally issued upon Closing or conversion), shall have the
right to elect its designated nominee as a member of the Board of
Directors of NAS. Until conversion of Preferred Shares to Common
Stock, such member shall be a nonvoting member; thereafter, the
member shall be a full voting member of the Board of Directors.
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9.5 Confidentiality; Press Releases
No press release or public disclosure, either written or
oral, of the existence or terms of this Agreement shall be made
by NAS without the consent of SBC, and NAS shall furnish to SBC
advance copies of any release which it proposes to make public
concerning this Agreement or the transactions contemplated hereby
and the date upon which NAS proposes to make such press release.
This provision shall not, however, be construed to prohibit NAS
from making any disclosures to any Governmental Authority or
other Person which it is required to make under any Legal
Requirement, or to obtain any Consents.
9.6 Notification of Change in Control Event
NAS shall promptly notify SBC upon the occurrence of any NAS
Change in Control Event.
9.7 Registration Rights
(a) The registration rights in this Section 9.7 as they
apply to the Holders, Telmex and the stockholders of NAS who
have, as of the date of this Agreement, registration rights as to
their stock in NAS (the "Prior Holders") are subject to that
certain letter agreement of even date among SBC, Telmex and the
Prior Holders.
(b) After the Permitted Registration Date, any Holder
holding, in the aggregate, at least 500,000 shares of Common
Stock issued upon the conversion of the Preferred Shares, shall
have the right, on one occasion only, by written request (a
"Registration Request") of one or more Holders (the "Selling
Shareholders") to NAS, to require NAS to prepare a registration
statement (the "Registration Statement") on the appropriate form
under the Securities Act with respect to the Common Stock then
owned by such Selling Shareholders for use in connection with an
underwritten public distribution of all or part of the Subject
Stock.
(c) If at any time after the Permitted Registration Date,
NAS shall propose to prepare on its own behalf or on behalf of
any holders of any of its Common Stock a registration statement
in connection with an underwritten public offering of any such
shares of Common Stock, NAS shall give each Holder written notice
at least twenty or, in case of a registration statement proposed
to be filed pursuant to Rule 415 of the Securities Act, ten
Business Days before the anticipated filing date of such
registration statement. Should any Holder desire to have any
shares of Common Stock included in such registration statement,
such Holder shall so notify NAS in writing (which notice, and the
notice of all other Holders with respect to such registration
statement, shall be deemed to be a Registration Request) no later
than ten or, in the case of a registration statement proposed to
be filed pursuant to Rule 415 of the Securities Act, five
Business Days after NAS's notice is given, setting forth the
number of shares of Common Stock which such Holder requests to be
included in the registration statement and providing any other
information requested by NAS in its original notice relating to
inclusion in the registration statement. Any such registration
statement that includes shares of Common Stock owned by any
Holder is hereinafter included in the term "Registration
Statement" and each Holder who owns
20
shares of Common Stock included in a Registration Statement shall be a
Selling Shareholder with respect to such Registration Statement.
(d) NAS may refuse to include in any such Registration
Statement the Common Stock owned by a Holder if in NAS's
reasonable judgment, based on advice of its investment bankers,
inclusion of such shares of Common Stock would have an adverse
effect on the ability of NAS to complete such underwritten public
offering. If in accordance with a Registration Request pursuant
to Section 9.7(b), NAS reduces the number of shares to be
included in any such Registration Statement in accordance with
the foregoing, NAS will include in such registration, to the
extent of the number which NAS is so advised can be sold in such
offering, first, shares of Common Stock requested to be included
in such registration by the Selling Shareholders (subject to the
rights, if any, of Prior Holders) and, second, securities NAS
proposes to sell and other securities of NAS included in such
registration by the holders thereof. If, as a result of this
Section 9.7(d) or as a result of the participation of Prior
Holders in the Registration Statement, the Selling Shareholders
are not able to register all of their shares of Common Stock
requested to be registered pursuant to Section 9.7(b), such
Registration Request will not be deemed to be the single
allowable Registration Request for purposes of Section 9.7(b) and
the Holders' rights to one additional Registration Request will
be restored, and if as a result of such reduction the Selling
Shareholder is left with fewer than 500,000 shares of Common
Stock, then the 500,000 share limit in Section 7(b) shall not
apply.
(e) With respect to any Registration Statement under this
Section 9.7, NAS will:
(i) prepare and file with the SEC the Registration
Statement within 120 days after a Selling Shareholders'
notice requesting registration or inclusion in a proposed
registration, and use its reasonable efforts to cause the
securities covered by such Registration Statement to become
registered and such Registration Statement to be declared
effective as expeditiously as possible under the Securities
Act or other applicable federal law and regulations (and
cause to be prepared and file any amendments or supplements
thereto as may be necessary to comply with applicable
federal law and regulations); provided, however, that NAS
may be allowed to defer filing of the Registration
Statement: (A) if the Vice President - Legal of NAS
reasonably determines in good faith that it is in the best
interests of NAS not to disclose the existence of or facts
surrounding any proposed or pending material developments;
(B) if the underwriters have notified NAS that market
conditions are such as to recommend deferral; (C) pending
the completion of year-end financial statements or quarterly
earnings releases; or (D) if an offering by NAS of any
securities is pending; provided, however, that any deferral
pursuant to clauses (A), (B), (C) or (D) of this paragraph
shall not in the aggregate be for more than 90 days.
(ii) use its reasonable efforts to cause to be
registered or qualified the securities covered by such
Registration Statement under such securities or Blue Sky
laws in such jurisdictions within the United States as any
Selling Shareholder may reasonably request; provided,
however, that NAS reserves the right, in its sole
discretion, not to cause to be registered or qualified such
securities in any jurisdiction where NAS would be
21
required in connection therewith to execute a general consent to
service or to qualify as a foreign corporation or to subject itself
to taxation;
(iii) maintain the effectiveness of any Registration
Statement hereunder for 90 days or such longer period as may
be required by the Securities Act to enable any Selling
Shareholder and the underwriters, if any, to complete such
offering;
(iv) promptly notify each Selling Shareholder of the
happening of any event as a result of which any preliminary
prospectus or prospectuses included in any Registration
Statement hereunder includes an untrue statement of a
material fact or omits to state any material fact required
to be stated therein or necessary to make the statements not
misleading in light of the circumstances then existing;
(v) have the right to reasonably approve the choice of
lead underwriter for underwritten offerings initiated by the
Holders under Section 9.7(b);
(vi) furnish, at the request of any Selling
Shareholder, an opinion, dated the date the Registration
Statement became effective, of counsel representing NAS
(which may be in-house counsel) for the purposes of such
registration, addressed to the underwriters, if any, and to
such Selling Shareholder as to such legal matters as such
Selling Shareholder shall reasonably request; and
(vii) furnish, at the request of any Selling
Shareholder, a letter, dated the date the Registration
Statement became effective, of independent certified public
accountants of NAS, addressed to the underwriters, if any,
and to such Selling Shareholder as to such accounting
matters as such Selling Shareholder shall reasonably
request.
(f) The obligations of NAS to cause a Registration
Statement to be prepared pursuant to the provisions of this
Section 9.7 and each Selling Shareholder's right to have shares
of Common Stock included in any Registration Statement pursuant
to the provisions of this Section 9.7 shall be subject to the
following conditions:
(i) Each Selling Shareholder shall furnish to NAS in
writing such information and documents as, in the opinion of
NAS's counsel, may be reasonably required to properly cause
to be prepared such Registration Statement in accordance
with applicable provisions of the Securities Act and the
SEC's regulations thereunder or federal or state securities
or Blue Sky laws and regulations then in effect; and
(ii) If a Selling Shareholder desires to sell and
distribute such shares of Common Stock over a period of
time, or from time to time, pursuant to a Registration
Statement prepared pursuant to the provisions of this
Section 9.7, then such Selling Shareholder shall execute and
deliver to NAS such written undertakings as NAS and its
counsel may reasonably require in order to assure full
compliance with the relevant provisions of the Securities
Act and the SEC's regulations thereunder or other federal or
state securities or Blue Sky laws and regulations as then in
effect.
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(g) The Selling Shareholder will pay or cause to be paid
all fees and expenses (including all Blue Sky, New York Stock
Exchange and National Association of Securities Dealers, Inc.
filing and registration fees, accounting fees and disbursements,
printing costs, attorneys' fees and disbursements) arising out of
the preparation, filing, amending and supplementing of a
Registration Statement pursuant to Section 9.7(b) hereof in which
only the Selling Shareholder participates and the amount of such
fees and expenses that are reasonably allocable to the Selling
Shareholder for a Registration Statement used under
Section 9.7(c) or a Registration Statement based on the number of
shares offered by the Selling Shareholders relative to the number
of other shares offered by NAS or on behalf of any of its other
holders.
(h) In no event shall NAS be required to maintain the
effectiveness of any Registration Statement for more than 90
days.
9.8 Listing
Upon SBC's request, NAS will use its best efforts, and
diligently take all steps necessary, to list for trading on the
Nasdaq or, if at the time of issuance any Common Stock is listed
on any securities exchange, to list on each such exchange, the
Common Stock to be issued to SBC upon conversion of the Preferred
Shares (promptly after such Common Stock is issued).
9.9 Issuance of Other Securities
NAS shall not issue or agree to issue any securities of NAS
to any Person with voting rights that are more favorable in any
material respect than the voting rights of the Preferred Shares.
9.10 Further Assurances
At any time or from time to time after the Closing Date, NAS
shall execute and deliver any further instruments or documents,
and take all such further action as SBC may reasonably request,
in order to effect this Agreement and to issue to SBC the
Preferred Shares free and clear of all Liens except for Liens as
SBC may cause to attach to the Preferred Shares.
9.11 Use of Proceeds
NAS shall use at least 50% of the Purchase Price for the
purpose of more closely aligning its network and business
operations with the future network and business operations of SBC
Telecom, Inc., as outlined in the Summary of Operating Agreement
attached as Exhibit C hereto. The remainder of the Purchase
Price shall be available for general corporate purposes as
determined by NAS.
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9.12 Definitive Operating Agreement
Promptly following the execution of this Agreement, NAS
shall negotiate in good faith the Definitive Operating Agreement.
The Definitive Operating Agreement shall contain the substance of
the terms and conditions set forth in the Summary of Operating
Agreement attached as Exhibit C and such other terms and
conditions as the parties may mutually agree upon.
9.13 Right of Primary Offer
Subject to the terms and conditions specified in this Section
9.13, NAS hereby grants to each Holder, a right of primary offer
with respect to future sales by NAS of its New Securities (as
defined in Section 9.13(d)(i)) after the date hereof.
(a) In the event NAS proposes to issue New Securities, it
shall give each Holder written notice (the "Notice") of its
intention stating: (i) a description of the New Securities it
proposes to issue, (ii) the number of shares of New Securities it
proposes to offer, (iii) the price per share at which, and other
terms on which, it proposes to offer such New Securities, and
(iv) the number of shares that the Holder has the right to
purchase under this Section 9.13, based on the Holder's
Percentage (as defined in Section 9.13(d)(ii)).
(b) Within 10 Business Days after the Notice is given, the
Holder may elect to purchase, at the price specified in the
Notice, up to the number of shares of the New Securities proposed
to be issued equal to the Holder's Percentage. An election to
purchase shall be made in writing and must be given to NAS within
such 10 Business Day period. The closing of the sale of New
Securities by NAS to the participating Holder upon exercise of
its rights under this Section 9.13 shall take place
simultaneously with the closing of the sale of New Securities to
third parties.
(c) NAS shall have 90 days after the last date on which the
Holder's right of first offer lapsed to enter into an agreement
(pursuant to which the sale of New Securities covered thereby
shall be closed, if at all, within 45 days from the execution
thereof) to sell the New Securities which the Holder did not
elect to purchase under this Section 9.13, at or above the price
and upon terms not materially more favorable to the purchasers of
such securities than the terms specified in the initial Notice
given in connection with such sale. In the event NAS has not
entered into an agreement to sell the New Securities within such
90 day period (or sold and issued New Securities in accordance
with the foregoing within 45 days from the date of such
agreement), NAS shall not thereafter issue or sell any New
Securities without first offering such New Securities to the
Holder in the manner provided in this Section 9.13.
(d) Definitions:
(i) "New Securities" shall mean any shares of, or
securities convertible into or exercisable for any shares
of, any class of NAS's capital stock; provided that "New
Securities" does not include: (A) securities issued
pursuant to the acquisition of another business entity by
NAS by merger, purchase of substantially all of the assets
of such
24
entity, or other reorganization whereby NAS owns not less than a
majority of the voting power of such entity; (B) shares of NAS's
Common Stock, options or warrants to purchase shares of NAS's
Common Stock, and the shares of Common Stock issuable upon
exercise of such options or warrants, issued pursuant to any
arrangement approved by the Board of Directors to employees,
officers and directors of, or consultants, advisors or other
Persons performing services for, NAS; (C) shares of NAS's Common
Stock issued in connection with any stock split, stock dividend
or recapitalization of NAS; or (D) shares of NAS's Common Stock
issued upon exercise of warrants, options or convertible
securities if the issuance of such warrants, options or
convertible securities was a result of the exercise of the right
of first offer granted under this Section 9.13 or was subject to
the right of first offer granted under this Section 9.13.
(ii) The applicable "Percentage" for each Holder shall
be the number of shares of New Securities calculated by
dividing (A) the total number of shares of Common Stock
owned by the Holder (assuming conversion of all outstanding
convertible securities and exercise of all outstanding
options and warrants) by (B) the total number of shares of
Common Stock outstanding at the time the Notice is given
(assuming conversion of all outstanding convertible securities
and exercise of all outstanding options and warrants).
9.14 Government License Application Amendment
NAS shall amend its pending applications for government
licenses to cover the transactions contemplated by this Agreement
and shall use its reasonable best efforts to have those
applications, as amended, approved.
Section 10: Termination
10.1 Terminating Events
This Agreement may be terminated:
(a) By the mutual written consent of NAS and SBC; or
(b) By NAS, by ten (10) Business Days written notice to SBC
(if NAS is not then materially in default or breach of this
Agreement), if SBC shall default in any material respect in the
performance of any of its obligations under this Agreement, and
such default or breach has not been cured by SBC within seven (7)
Business Days following receipt of written notice from NAS of
NAS's intention to terminate this Agreement; or
(c) By SBC, by ten (10) Business Days written notice to NAS
(if SBC is not then materially in default or breach of this
Agreement), if NAS shall default in any material respect in the
performance of any of its obligations under this Agreement, and
such default or breach has
25
not been cured by NAS within seven (7)
Business Days following receipt of written notice from SBC of
SBC's intention to terminate this Agreement; or
(d) By either SBC or NAS if the Closing has not occurred on
or before July 31, 2000 (provided that the right to terminate
this Agreement under this Section 10.1(d) shall not be available
to any party whose breach of any obligation under this Agreement
has been the cause of or resulted in the failure of the Closing
to occur on or before such date).
10.2 Effect on Obligations
In the event of any termination of this Agreement pursuant
to Section 10.1(a) or 10.1(d), neither SBC nor NAS shall have any
further liability hereunder, except with respect to the
confidentiality provisions hereof. In the event of a termination
under Section 10.1(b) or 10.1(c), both parties shall retain all
their rights at law or in equity.
Section 11: Indemnification
11.1 Indemnification by NAS
(a) NAS hereby agrees to indemnify SBC and its Affiliates
and their respective officers and directors against and hold them
harmless from any Losses suffered or incurred by any such
Indemnified Party for or on account of or arising from or in
connection with any breach of any representation, warranty or
covenant of NAS contained in this Agreement, provided, however,
that NAS shall not have any liability under this Section 11.1
unless the aggregate of all Losses relating thereto exceed on a
cumulative basis $750,000.00, and then only to the extent of such
excess, and (ii) in excess of the Purchase Price. SBC
acknowledges and agrees that its sole and exclusive remedy with
respect to any and all claims for monetary damages relating to
the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Section 11.
(b) NAS agrees to indemnify and hold harmless each Selling
Shareholder and each Person, if any, who controls (within the
meaning of Section 15 of the Securities Act and Section 20 of the
34 Act) such Selling Shareholder (a "Control Person") against any
Losses to which such Selling Shareholder or any such Control
Person may become subject, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement
of any material fact contained in any preliminary or final
Registration Statement prepared pursuant to Section 9.7 of this
Agreement or prospectus with respect thereto, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that NAS will not be
liable in any case to the extent that any such Losses arise out
of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission from any of such
documents in reliance upon and in conformity with written
information furnished by or on behalf of such Selling Shareholder
or any such Control Person specifically for use in the
preparation thereof.
26
11.2 Indemnification by SBC
(a) SBC hereby agrees to indemnify NAS and its Affiliates
and their respective officers and directors against and hold them
harmless from any Losses suffered or incurred by any such
Indemnified Party for or on account of or arising from or in
connection with any breach of any representation, warranty or
covenant of SBC contained in this Agreement, provided, however,
that SBC shall not have any liability under this Section 11.2
unless the aggregate of all Losses relating thereto exceed on a
cumulative basis $750,000.00, and then only to the extent of such
excess. NAS acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims for monetary damages
relating to the subject matter of this Agreement shall be
pursuant to the indemnification provisions set forth in this
Section 11.
(b) SBC and any other Selling Shareholder to whom SBC's
rights under this Agreement have been transferred will, severally
and not jointly, indemnify and hold harmless NAS and each of its
directors, officers and each Person, if any, who controls (within
the meaning of Section 15 of the Securities Act and Section 20 of
the 34 Act) NAS (a "Company Control Person") to the same extent
as set forth in the foregoing indemnity from NAS to each Selling
Shareholder set forth in Section 11.1(b), but only with reference
to written information included in any preliminary or final
Registration Statement prepared pursuant to Section 9.7 of this
Agreement or prospectus with respect thereto, or amendment or
supplement thereto, furnished by or on behalf of such Selling
Shareholder specifically for use in the preparation of such
documents.
11.3 Losses
The amount of any Losses for which indemnification is
provided under this Section 11 shall be net of any amounts
recovered or recoverable by the Indemnified Party under insurance
policies with respect to such Losses and shall be increased to
take account of any Tax cost to the Indemnified Party and reduced
to take account of any Tax benefit to the Indemnified Party
arising from the incurrence or payment of any Losses.
11.4 Survival
The representations and warranties made by NAS contained in
Section 7 hereof, and the obligation of NAS to indemnify SBC
pursuant to Section 11.1 hereof, shall survive the execution and
delivery of this Agreement, any examination or due diligence
inquiry by a party and the Closing until the date which is one
year after the Closing Date, except that the representations and
warranties made by NAS in Section 7.8 (Title to Preferred Shares;
Absence of Liens) shall survive for the applicable statute of
limitations. The representations and warranties made by SBC
contained in Section 6 hereof, and the obligation of SBC to
indemnify SBC pursuant to Section 11.2 hereof, survive the
execution and delivery of this Agreement, any examination or due
diligence inquiry by a party and the Closing until the date which
is one year after the Closing Date. All covenants and agreements
of NAS or SBC contained in this Agreement (which terms do not
include representations and warranties) shall survive the Closing
for a period of one year
27
unless otherwise expressly provided
herein. The obligations to indemnify and hold harmless a party
hereto, pursuant to Section 11.1 and Section 11.2 hereof, shall
survive only until the expiration of the applicable survival
period for the representation and warranty or covenant under
which the claim for indemnification is being made; provided,
however, that such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the
Person to be indemnified shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice
(stating in reasonable detail the basis of such claim) to the
party to be providing the indemnification.
11.5 Procedures Relating to Third Party Claims
In order for a party (the "Indemnified Party") to be
entitled to any indemnification provided for under this Agreement
in respect of, arising out of or involving a claim or demand made
by any Person against the Indemnified Party (a "Third Party
Claim"), such Indemnified Party must notify the indemnifying
party in writing of the Third Party Claim within 10 Business Days
after receipt by such Indemnified Party of written notice of the
Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have
been actually prejudiced as a result of such failure (except that
the indemnifying party shall not be liable for any expenses
incurred during the period in which the Indemnified Party failed
to give such notice). Thereafter, the Indemnified Party shall
deliver to the indemnifying party, within five Business Days
after the Indemnified Party's receipt thereof copies of all
notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnified Party,
the indemnifying party will be entitled to participate in the
defense thereof and upon notice to the Indemnified Party to
assume the defense thereof provided that (i) the indemnifying
party's counsel is reasonably satisfactory to the Indemnified
Party and (ii) the indemnifying party shall thereafter consult
with the Indemnified Party upon the Indemnified Party's request
for such consultation from time to time with respect to such
suit, action or proceeding. If the indemnifying party assumes
such defense, the Indemnified Party shall have the right (but not
the duty) to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed
by the indemnifying party. The indemnifying party shall be
liable for the fees and expenses of counsel employed by the
Indemnified Party for any period during which the indemnifying
party has not assumed the defense thereof. Should the
indemnifying party so elect to assume the defense of a Third
Party Claim, the indemnifying party will not be liable to the
Indemnified Party for any legal expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof.
Whether or not the indemnifying party chooses to defend or
prosecute any Third Party Claim, all of the parties hereto shall
cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the
indemnifying party's request) the provision to the indemnifying
party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not
the indemnifying party shall have assumed the defense of a Third
Party Claim, the Indemnified Party
28
shall not admit any liability
with respect to, or settle, compromise or discharge, such Third
Party Claim without the indemnifying party's prior written
consent.
Any payment pursuant to this Section 11.5 shall be made not
later than 15 days after receipt by the indemnifying party of
written notice from the Indemnified Party stating that any Third
Party Claim has been paid by any Indemnified Party and the amount
thereof and the indemnity payment requested.
Section 12: Arbitration
12.1 Resolution of Disputes
(a) The parties shall attempt in good faith to resolve any
controversy, dispute or claim arising out of or relating to this
Agreement or the breach, termination, enforceability or validity
thereof (collectively, a "Dispute") promptly by negotiation
between officers or employees who have authority to settle the
Dispute. Either party may give the other a written notice (a
"Dispute Notice") setting forth with reasonable specificity the
nature of the Dispute and the identity of such party's
representatives who will attend and participate in the meeting at
which the parties will attempt to settle the Dispute. Following
the receipt of a Dispute Notice, the representatives of both
parties shall meet as soon as is practicable at a mutually
acceptable time and place to negotiate in good faith a settlement
of the Dispute, and shall meet thereafter as they reasonably deem
necessary. All negotiations pursuant to this Section 12.1(a)
shall be confidential and shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any
document produced, in the course of such negotiations which is
not otherwise independently discoverable shall be offered or
received as evidence or used for impeachment or for any other
purpose in any current of future arbitration or litigation.
(b) If the Dispute has not been resolved within 30 days
after the receipt of a Dispute Notice through negotiation as
provided in Section 12.1(a), then the Dispute shall be finally
settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA")
then in effect. However, in all events, the arbitration
provisions in this Section 12 shall govern over any conflicting
rules that may now or hereafter be contained in the AAA rules.
The arbitration shall be held in Washington, D.C., unless the
parties mutually agree to have the arbitration held elsewhere,
and Judgment upon the award made therein may be entered by any
court having jurisdiction in the United States; provided,
however, that nothing contained in this Section 12 shall be
construed to limit or preclude a party from bringing any action
in any court of competent jurisdiction for injunctive or other
provisional relief to compel another party to comply with its
obligations under this Agreement during the pendency of the
arbitration proceedings. Any Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction
over the subject matter hereof. The arbitrator shall have the
authority to grant any equitable and legal remedies that would be
available in any judicial proceeding instituted to resolve any
claim hereunder.
29
12.2 Arbitrators
Any such arbitration will be conducted before three (3)
arbitrators, one of which shall be chosen by NAS, one of which
shall be chosen by SBC, and the third chosen by the other two
arbitrators. Each person chosen to serve as an arbitrator shall
be a neutral and impartial attorney who has had training and
experience as an arbitrator. The decision of a majority of the
arbitrators will be the decision of the arbitrators. The
arbitrators shall permit such discovery of information related to
the controversy or claim in arbitration as they shall determine
is appropriate in the circumstances, taking into account the
needs of the parties and the desirability of making discovery
expeditious and cost-effective.
12.3 Costs and Fees
All fees and expenses of the arbitrators, expenses for
hearing facilities and other expenses of the arbitration shall be
borne equally by the parties unless the arbitrators in the award
assess such fees and expenses other than equally against the
parties. Each party shall bear the fees and expenses of its own
attorneys and witnesses except to the extent otherwise provided
in this Agreement or by law; provided, that if the arbitrators
determine that the claim or defense of any party was frivolous or
lacked a reasonable basis in fact or law, the arbitrators may
assess against such party all or part of the fees and expenses of
attorneys and witnesses for the other party.
12.4 Burden of Proof
For any Dispute submitted to arbitration, the burden of
proof will be as it would be if the claim were litigated in a
judicial proceeding.
12.5 Award
Upon the conclusion of any arbitration proceedings
hereunder, the arbitrators will render findings of fact and
conclusions of law and a written opinion setting forth the basis
and reasons for any decision reached and will deliver such
documents to each party to this Agreement along with a signed
copy of the award.
12.6 Agreement Controls
The arbitrators chosen in accordance with these provisions
will not have the power to alter, amend or otherwise affect the
terms of these arbitration provisions or the provisions of this
Agreement.
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Section 13: Miscellaneous
13.1 Entire Agreement; Amendment
This Agreement (including the attached Schedules and
Exhibits) constitutes the sole understanding of the parties with
respect to the subject matter hereof, and supersedes all prior
oral or written agreements, commitments or understandings with
respect to such matters. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be
binding unless the same shall be in writing and duly executed by
the parties hereto.
13.2 Successors and Assigns
This Agreement may not be assigned by either NAS or SBC
without the consent of the other party (which consent shall not
be unreasonably withheld) except that SBC may assign this
Agreement to any Wholly-Owned SBC Subsidiary that agrees to be
bound by all of the terms hereof, and provided that no such
permitted assignment shall relieve the parties hereto of any
liability for a breach of this Agreement by such party or its
assignee. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs
or successors in interest.
13.3 Rights and Remedies
Unless otherwise provided herein, the rights and remedies of
the parties hereunder shall not be mutually exclusive, and the
exercise of one or more provisions of this Agreement shall not
preclude the exercise of any other provisions. Each of the
parties confirms that damages at law may be an inadequate remedy
for a breach or threatened breach of any provision hereof. The
respective rights and obligations hereunder shall be enforceable
by specific performance, injunction or other suitable remedy, it
being the intention of this Section 13.3 to make clear the
agreement of the parties that the respective rights and
obligations of the parties hereunder shall be enforceable in
equity as well as at law or otherwise.
13.4 Counterparts
This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
13.5 Modification and Waiver
At any time on or prior to the Closing Date, the parties by
mutual agreement may (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or
(c) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall only be valid if set forth in
an instrument in writing signed on behalf of such party.
31
13.6 Expenses
Except as specifically provided herein, SBC and NAS shall
each pay all costs and expenses incurred by it or on its behalf
in connection with this Agreement and the transactions
contemplated hereby, including, without limiting the generality
of the foregoing, fees and expenses of its own consultants,
accountants and counsel.
13.7 Notices
Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be
in writing and shall be deemed given upon receipt if delivered
personally or by telex or facsimile, the next day if by express
mail or three days after being sent by registered or certified
mail, return receipt requested, postage prepaid to the following
addresses (or at such other address for a party as shall be
specified by like notice provided that such notice shall be
effective only after receipt thereof):
If to SBC: Xxxxx Xxxxx
Senior Vice President -
Corporate Development
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
Voice: 000-000-0000
With a copy (which shall Xxxxxxx X. Xxxxx
not constitute notice) to: General Attorney
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
Voice 000-000-0000
If to NAS: Xxxxxxxx X. Xxxx
President and Chief Executive
Officer
Network Access Solutions
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Voice: 000-000-0000
32
With a copy (which shall Worth X. XxxXxxxxx
not constitute notice) to: Vice President, Legal and
Strategic Planning
Network Access Solutions
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Voice: 000-000-0000
13.8 Severability
In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect by a court or other authority of
competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and
this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein and, in
lieu of each such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid
and enforceable, it being the intent of the parties to maintain
the benefit of the bargain for all parties.
13.9 Governing Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware applicable to
agreements made and to be performed wholly within such
jurisdiction.
13.10 Rules of Construction
Words used in this Agreement, regardless of the gender and
number specifically used, shall be deemed and construed to
include any other gender and any other number as the context
requires. As used in this Agreement, the word "including" is not
limiting, and the word "or" is not exclusive. Except as
specifically otherwise provided in this Agreement in a particular
instance, a reference to a Section, Schedule or Exhibit is a
reference to a Section of this Agreement or a Schedule or Exhibit
hereto, and the terms "this Agreement," "hereof," "herein," and
other like terms refer to this Agreement as a whole, including
the Schedules to this Agreement, and not solely to any particular
part of this Agreement. The descriptive headings in this
Agreement are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or
interpretation of this Agreement. The parties to this Agreement
do not intend that NAS Employees or any other Person shall obtain
any rights as third party beneficiaries of this Agreement.
33
13.11 Ownership Limitation
Notwithstanding anything else to the contrary in this
Agreement, nothing set forth in this Agreement shall be construed
or interpreted to provide SBC with the right to Beneficially Own
any shares of Common Stock or other class of capital stock of NAS
to the extent that it would violate any Legal Requirements of the
FCC or any other Governmental Authority.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement, or have caused this Agreement to be signed in their
respective names by an officer, hereunto duly authorized, on the
date first above written.
NETWORK ACCESS SOLUTIONS
CORPORATION
By: /s/ Xxxxxxxx X. Xxxx
Name: Xxx Xxxx
Title: CEO
SBC COMMUNICATIONS INC.
By: /s/ Xxxxx X. Xxxxx
Name:
Title:
