EXHIBIT 10.3
[EXECUTION COPY]
OPTION PURCHASE AGREEMENT
by and among
NEXTEL COMMUNICATIONS, INC.,
UNRESTRICTED SUBSIDIARY FUNDING COMPANY
and
OPTION ACQUISITION, L.L.C.
Dated as of June 16, 1997
OPTION
PURCHASE AGREEMENT
This Option Purchase Agreement (this "Agreement") is entered into as
of June 16, 1997, by and among Nextel Communications, Inc., a Delaware
corporation (the "Company"), Unrestricted Subsidiary Funding Company, a
Delaware corporation and a wholly owned subsidiary of the Company ("USFC"),
and Option Acquisition, L.L.C., a Washington limited liability company
("Option Acquisition").
Unless the context otherwise requires, terms capitalized and not
otherwise defined in context have the meanings set forth or cross-referenced in
Article 9 of this Agreement.
Recitals
On March 21, 1997, USFC paid $25 million to acquire from an affiliate
of Comcast Corporation options held by the Comcast affiliate to acquire 25
million shares of Common Stock (the "Comcast Options").
Option Acquisition wishes to enter into a transaction with the
Company and USFC in which Option Acquisition would obtain from USFC the Comcast
Options, which would in turn be exchanged for two new options from the Company
entitling Option Acquisition to acquire 25 million shares of Common Stock, as
more fully set forth herein.
Option Acquisition is controlled by Xxxxx X. XxXxx ("Individual").
Simultaneously with the execution and delivery of this Agreement,
Digital Radio, L.L.C., a Washington limited liability company ("Investor")
controlled by Individual, is entering into an agreement by which Investor is
committing to exercise an
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option it holds to purchase Common Stock and Investor is committing, subject to
certain terms and conditions, to loan up to $50 million to affiliates of the
Company.
Agreement
NOW THEREFORE, in consideration of the recitals and the mutual
covenants of this Agreement, the parties agree:
Article 1. Purchase and Exchange of Options.
1.1 Purchase of Comcast Option. At the Closing, (a) Option
Acquisition shall purchase from USFC, and USFC shall sell to Option
Acquisition, the Comcast Options, (b) Option Acquisition shall pay to USFC cash
in an aggregate amount of $25 million as payment in full of the purchase of the
Comcast Options, and (c) USFC shall deliver to Option Acquisition the Comcast
Options (together with appropriate instruments assigning the Comcast Options to
Option Acquisition).
1.2 Exchange of Comcast Options. At the Closing, upon delivery of
the Comcast Options by USFC to Option Acquisition pursuant to Section 1.1,
Option Acquisition will thereupon deliver the Comcast Options to the Company
(together with appropriate instruments assigning the Comcast Options to the
Company) in exchange for the issuance of the Options described in Section 1.3.
1.3 Issuance of New Options. At the Closing, in exchange for the
Comcast Options, the Company shall issue to Option Acquisition:
(a) An option to acquire up to 15,000,000 shares of Common Stock as
set forth in the Option Agreement (First New Option) in the form attached as
Exhibit A (the "First New Option"); and
(b) An option to acquire up to 10,000,000 shares of Common Stock as
set forth in the Option Agreement (Second New Option) in the form attached as
Exhibit B (the "Second New Option");
in each case, free and clear of all Encumbrances (other than as expressly
provided in this Agreement or in the First New Option or Second New Option).
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1.4 Closing. The closing of the sale and issuance of the First New
Option and the Second New Option (the "Closing") is to occur after all of the
conditions set forth in Article 2 have either been fulfilled or waived. At the
Closing,
(a) Option Acquisition will pay, by wire transfer of immediately
available funds to an account designated in writing by USFC, $25 million;
(b) USFC will deliver the Comcast Options to Option Acquisition
(together with appropriate instruments assigning the Comcast Options to Option
Acquisition);
(c) Option Acquisition will then deliver the Comcast Options to the
Company (together with appropriate instruments assigning the Comcast Options to
the Company);
(d) the Company and Option Acquisition will each execute, and the
Company will deliver to Option Acquisition, the First New Option and the Second
New Option;
(e) the Company and Option Acquisition will each execute and deliver
a registration rights agreement substantially in the form of Exhibit C (the
"Option Acquisition Registration Rights Agreement");
(f) the Company, Option Acquisition and Investor will each execute
and deliver the First Amendment to Registration Rights Agreement substantially
in the form of Exhibit D;
(g) the Individual will execute and deliver to the Company the
representation letter substantially in the form of Exhibit E;
(h) the other owners of interests in Option Acquisition will execute
and deliver a letter substantially in the form of Exhibit F; and
(i) the parties will execute and deliver any agreements or other
documents necessary to evidence the satisfaction or, if appropriate, the waiver
of any conditions to Closing set forth in Article 2.
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1.5 Adjustment Upon the Occurrence of Certain Events. Prior to the
Closing, the First New Option and the Second New Option (the "New Options") are
subject to adjustment from time to time as follows:
(a) If the Company at any time prior to the Closing declares a
dividend or makes any distribution on its Common Stock payable in Common
Stock, or subdivides, combines or consolidates its outstanding shares of Common
Stock, the Company shall notify Option Acquisition of such event and (i) the
number of shares of Common Stock purchasable under the New Options (the
"Reserved Common Shares") shall be adjusted by multiplying the number of
Reserved Common Shares immediately prior to such event by a fraction, of which
the numerator shall be the number of outstanding shares of Common Stock
immediately following such event and the denominator shall be the number of
outstanding shares of Common Stock immediately prior to such event, and (ii) the
exercise price for each Reserved Common Share purchasable under a New Option
shall be adjusted by multiplying such price by a fraction, of which the
numerator is one and the denominator is the fraction determined pursuant to
clause (i) above. Such adjustments will become effective immediately following
the record date for determination of the stockholders entitled to receive such
dividend or distribution in the case of a dividend or distribution or
immediately after the effective date in the case of a subdivision, combination
or consolidation.
(b) If the Company at any time prior to the Closing reclassifies or
otherwise changes its outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or a subdivision,
combination or consolidation referred to in Section 1.5(a)) or if the Company at
any time prior to the Closing merges or consolidates with or into any other
corporation (other than a merger in which the Company is the surviving
corporation and in connection with which there is no reclassification or other
change of Common Stock or any issuance of stock, securities or property to the
holders of the Company's outstanding shares of Common Stock), then the Company
shall notify Option Acquisition of any such event and, effective upon the record
or other date of determination of Persons affected by such reclassification,
change, merger or consolidation, each Reserved Common Share purchasable under
the New Options shall be deemed to consist solely of the kind and amount of
securities, cash and property that would have been held by Option Acquisition if
on such determination date Option
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Acquisition had been the holder of record of such a Reserved Common Share
(or the right thereto prior to the effective date thereof). In the event of any
reclassification, change, merger or consolidation referred to above in this
subsection (b), the Company shall, and shall cause any successor corporation as
a condition precedent to such transaction to, execute and deliver to Option
Acquisition an agreement (i) providing that Investor shall have the right to
purchase the New Options reflecting appropriate adjustments to the underlying
Reserved Common Shares as described in this Agreement and (ii) containing
provisions for subsequent adjustments, if any, prior to the Closing, in the
Reserved Common Shares underlying the New Options as nearly equivalent as may be
practicable to the adjustments provided for in this Section 1.5.
1.6 Legend. Any certificate or certificates representing the New
Options (or any part thereof, including any shares issued upon exercise of
any part of the New Options) shall bear the following legend, together with any
and all other legends as may be required pursuant to applicable law (and the
Company may issue appropriate corresponding stop transfer instructions to any
transfer agent for any of such securities):
The securities represented by this certificate or instrument
have not been registered under the Securities Act of 1933, as
amended (the "Act"), or under any applicable state law and may
not be transferred, sold or otherwise disposed of in the absence
of an effective registration under the Act or such laws or an
opinion of counsel reasonably satisfactory to the Company that
such registration is not required under the Act or such laws
and the rules and regulations promulgated thereunder.
The securities represented by this certificate or instrument are
subject to certain restrictions on transfer and voting as set
forth in the Option Purchase Agreement, dated as of June 16,
1997, a copy of which is on file at the principal executive
offices of the Company. Any registration of transfer of such
securities on the books of the Company will be subject to
compliance with such restrictions.
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1.7 Stamp Tax. The Company shall pay all stamp and other taxes, if
any, which may be payable in respect to the issuance, sale and delivery to
Option Acquisition of the New Options and shall save Option Acquisition
harmless against any loss or liability resulting from nonpayment or delay in
payment of any such tax.
Article 2. Conditions to Closing.
2.1 Conditions to Each Party's Obligations. The obligations of each
party to consummate the Transactions are subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, any or all of
which may be waived in whole or in part by the party benefited thereby, to the
extent permitted by applicable Law:
(a) No Injunction. There is no pending or threatened injunction or
Order of any Governmental Authority prohibiting consummation of any Transaction
or performance of any party's obligations hereunder or under any other
Transaction Agreement, or prohibiting Individual from enabling or causing
Option Acquisition to perform its obligations hereunder.
(b) Motorola Consent. The consent of Motorola Inc.("Motorola") to
the transactions contemplated by the Transaction Agreements granted by the
letter dated April 10, 1997 from the Company to Motorola has not been revoked.
2.2 Conditions to Option Acquisition's Obligations. Option
Acquisition's obligation to consummate the Transactions is subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions, any or all of which may be waived in whole or in part by Option
Acquisition, to the extent permitted by applicable Law:
(a) Representations and Warranties TrueRepresentations and Warranties
True. The representations and warranties of the Company in this Agreement
were true in all material respects when made and are true in all material
respects at the time of the Closing with the same effect as though such
representations and warranties had been made at such time, except for (i)
changes resulting from the consummation of the Transactions, and (ii)
representations and warranties that speak as of a specific date other than the
Closing Date (which need be correct only as of such other date). The Company
shall deliver an officer's certificate dated the Closing Date
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confirming that the conditions set forth in this Section 2.2(a) are
satisfied on the Closing Date.
(b) Performance. The Company has performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
(c) Noteholder Consents. The consents of the holders of each
outstanding issue of Notes required to amend the Indentures as described in
the Consent Solicitation Statement dated April 14, 1997 as amended and
supplemented by the Supplemental Consent Solicitation Statement dated June 4,
1997 (collectively, the "Consent Solicitation Materials") shall have been
obtained on the terms described in the Consent Solicitation Materials and such
amendments shall have become operative. Such consents are referred to herein as
the "Noteholder Consents."
2.3 Conditions to the Company's Obligations. The Company's
obligation to consummate the Transactions is subject to the satisfaction,
on or before the Closing Date, of each of the following conditions, any or all
of which may be waived in whole or in part by the Company, to the extent
permitted by applicable Law:
(a) Representations and Warranties TrueRepresentations and Warranties
True. The representations and warranties of Option Acquisition in this
Agreement were true in all material respects when made and are true in all
material respects at the time of the Closing with the same effect as though such
representations and warranties had been made at such time, except for (i)
changes resulting from the consummation of the Transactions and (ii)
representations and warranties that speak as of a specific date other than the
Closing Date (which need be correct only as of such other date). Option
Acquisition shall deliver a certificate of its officers or other authorized
representatives dated the Closing Date confirming that the conditions set forth
in this Section 2.3(a) are satisfied on the Closing Date.
(b) Performance. Option Acquisition has performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
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(c) Noteholder Consents. The Noteholder Consents shall have been
obtained on terms described in the Consent Solicitation Materials and the
related amendments described in the Consent Solicitation Materials shall have
become operative.
Article 3. Representations and Warranties of the Company.
The Company hereby represents and warrants to Option Acquisition
that, except as set forth in the Company Disclosure Statement:
3.1 Corporate Status. (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate or other power and authority
to own or lease and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into and to carry out the
provisions of this Agreement and the other Transaction Agreements and consummate
the transactions contemplated hereby and thereby.
(b) The Company is duly qualified and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be in good standing or so qualified would not,
individually or in the aggregate, have a material adverse effect on the Business
Condition of the Company and its Subsidiaries taken as a whole.
3.2 Power and Authority. The Company has the corporate power and
authority to execute and deliver, and to perform its obligations under,
this Agreement and the other Transaction Agreements. The Company has taken all
necessary corporate action to authorize this Agreement and the other Transaction
Agreements and its execution, delivery and performance of this Agreement and the
other Transaction Agreements. This Agreement has been and, when executed, each
of the other Transaction Agreements will have been, duly executed and delivered
by the Company and constitutes, or will constitute, a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application which
may affect the enforcement of creditors' rights generally and by general
equitable principles.
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3.3 Non-Contravention. (a) On the date hereof, the Company is not in
violation of any term of its charter, by-laws or other organizational
documents.
(b) Except as set forth in the Company Disclosure Statement, and
based upon the Permitted Assumptions, the execution, delivery and
performance of this Agreement and the other Transaction Agreements and the
consummation of the Transactions in accordance with the terms hereof and thereof
will not result in any violation of or conflict with, constitute a default (with
or without notice or the lapse of time) under, or give rise to a right of
termination, cancellation, acceleration of, or a right to put, or compel
a tender offer for, outstanding securities under, or result in the imposition of
any Encumbrance under, or require any consent under, or require any payment by
the Company to any other Person pursuant to any term of (i) the charter, by-laws
or other organizational documents of the Company or any of its Subsidiaries, or
(ii) any note, bond, debt instrument, mortgage, indenture or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries may be bound or, (iii) except as
set forth in Section 3.4, any Law or Order, by which the Company or any of its
Subsidiaries may be bound, except where such violation, conflict or default,
right of termination, cancellation or acceleration, put or similar right,
imposition of an Encumbrance, failure to obtain such consent or the amount of
such required payment, individually or in the aggregate, would not have
a material adverse effect on (X) the Business Condition of the Company and its
Subsidiaries taken as a whole or (Y) the ability of the Company to perform its
obligations under this Agreement and the Transaction Agreements.
3.4 Consents and Approvals. (a) Based on the Permitted Assumptions,
the Company Disclosure Statement lists as of the date hereof (i) all
Authorizations that, to the knowledge of the Company, are required to be made,
filed, given or obtained by the Company and any of its Subsidiaries with, to or
from any Governmental Authority in connection with the Transactions contemplated
to occur at or prior to the Closing and (ii) all consents, approvals and waivers
required to be given by, or obtained from, any other Persons to or by the
Company and any of its Subsidiaries in connection with the consummation of the
Transactions contemplated to occur at or prior to the Closing other than those
Authorizations, consents, approvals and waivers as to which the failure to make,
file, give or obtain,
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individually or in the aggregate, would not have a material adverse effect
on (X) the Business Condition of the Company and its Subsidiaries, taken as a
whole, or (Y) the ability of the Company to perform its obligations under this
Agreement and the other Transaction Agreements.
(b) Based on the Permitted Assumptions, the Company and each of its
Subsidiaries has made, filed, given or obtained all Authorizations and has
been given or obtained all consents, approvals or waivers necessary as of the
date hereof for the Company and USFC to perform its obligations under this
Agreement and the other Transaction Agreements at or prior to the Closing.
3.5 Reports and Information. (a) As of the date hereof, the Company
has filed all reports required to be filed with the SEC in the period from
January 1, 1997 to the date hereof, including the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 and the Quarterly Report on Form
10-Q for the quarter ended March 31, 1997(collectively, the "Company SEC
Reports"), and has furnished or made available to Option Acquisition true and
complete copies of all the Company SEC Reports. None of the Company SEC Reports,
as of their respective dates (as amended through the date hereof), contained any
untrue statement of material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All of the Company
SEC Reports, as of their respective dates (as amended through the date hereof),
complied in all material respects with the requirements of the Exchange Act and
the applicable rules and regulations thereunder.
(b) As of the date hereof, the Company has not received notice of any
pending investigation of the Company by the SEC.
(c) The Company's audited consolidated financial statements
(including the balance sheet, statement of operations and statement of cash
flows, and, in each case, the related footnotes thereto) as of December 31, 1996
or for the twelve months then ended, as appropriate (the "Audited Statements"),
are contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, and the Company's unaudited consolidated financial statements
(including the balance sheet, statement of operations and statement of cash
flows and, in each case, the related footnotes thereto) as of March 31, 1997 or
for the quarter then ended, as appropriate (the "Unaudited Statements,"
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and collectively with the Audited Statements, the "Company Financial
Statements"), are contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997. The balance sheet as of March 31, 1997
included in such Unaudited Statements presents fairly, in all material respects,
the consolidated financial position of the Company and its consolidated
Subsidiaries as of March 31, 1997, and each of the other related statements
included in such Company Financial Statements present fairly, in all material
respects, the consolidated results of operations and cash flows of the Company
and its consolidated Subsidiaries for the respective periods thereof, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved except as otherwise noted therein and subject, in
the case of the Unaudited Statements, to year end audit adjustments and the
absence of footnotes.
3.6 Capitalization. (a) As of March 31, 1997, the authorized capital
stock of the Company consists of 613,883,948 shares of capital stock
divided into 6 classes as follows: (i) 515,000,000 shares of Nextel Class A
Common Stock of which 225,533,547 shares were outstanding (including 1,547,158
shares held in treasury), (ii) 35,000,000 shares of Nextel Class B Non-Voting
Common Stock of which 17,880,000 shares were outstanding, (iii) 26,941,933
shares of Class A Convertible Redeemable Preferred Stock of which 8,163,265
shares were outstanding, (iv) 82 shares of Class B Convertible Redeemable
Preferred Stock all of which were outstanding, (v) 26,941,933 shares of Class C
Convertible Redeemable Preferred Stock none of which were outstanding, and (vi)
10,000,000 shares of Preferred Stock, par value $.01 per share none of which
were outstanding.
(b) All shares of Common Stock outstanding on the date hereof are
duly authorized, validly issued, fully paid and nonassessable.
(c) When issued in accordance with the New Options, the shares of
Common Stock issuable upon exercise of any of the New Options will be, duly
authorized, validly issued, fully paid and nonassessable.
3.7 Material Facts. Except as and to the extent reflected or reserved
against in the Company Financial Statements or as indicated in the Company
Disclosure Statement, none of the Company nor any Subsidiary of the Company
has, as of the date
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hereof, any material liabilities or obligations (of the types that, in
accordance with generally accepted accounting principles, are required to be
reflected or reserved against in the Company Financial Statements) of any
nature, whether absolute, accrued, contingent or otherwise, and whether due or
to become due, for the periods covered thereby.
3.8 Brokers and Finders. Except for the fees and expenses payable to
Xxxxxx Xxxxxxx & Co. Incorporated incurred with respect to certain
financial advice provided to the Company in connection with the Transactions
(which fees and expenses shall be the sole obligation of, and shall be paid by,
the Company), neither the Company nor any of its Subsidiaries has employed any
investment banker, broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
3.9 Permitted Assumptions. Each of the representations and
warranties above that are identified as being made "based on the Permitted
Assumptions" shall be deemed to be made on the assumption that (a) Option
Acquisition is, and at all times shall continue to be, controlled by
Individual, and (b) the consent of Motorola described in Section 2.1(b) shall
continue in full force and effect and shall not have been amended, modified or
revoked. Such assumptions are referred to herein as the "Permitted
Assumptions."
Article 4. Representations and Warranties of USFC.
USFC hereby represents and warrants to Option Acquisition that:
4.1 Corporate Status. USFC is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate or other power and authority to own or
lease and operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into and to carry out the provisions of this
Agreement and consummate the transactions contemplated hereby.
4.2 Power and Authority. USFC has the corporate power and authority
to execute and deliver, and to perform its obligations under, this Agreement.
USFC has taken all necessary corporate
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action to authorize this Agreement and its execution, delivery and
performance of this Agreement. This Agreement has been, duly executed and
delivered by USFC and constitutes a valid and binding agreement of USFC
enforceable against USFC in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application which may affect the enforcement of
creditors' rights generally and by general equitable principles.
4.3 Non-Contravention. (a) On the date hereof, USFC is not in
violation of any term of its charter, by-laws or other organizational documents.
(b) Based upon the Permitted Assumptions, the execution, delivery and
performance of this Agreement and the consummation of the Transactions in
accordance with the terms hereof will not result in any violation of or conflict
with, constitute a default (with or without notice or the lapse of time) under,
or give rise to a right of termination, cancellation, acceleration of, or a
right to put, or compel a tender offer for, outstanding securities under, or
result in the imposition of any Encumbrance under, or require any consent under,
or require any payment by USFC to any other Person pursuant to any terms of (i)
the charter, by-laws or other organizational documents of USFC, or (ii) any
note, bond, debt instrument, mortgage, indenture or other agreement or
instrument to which USFC is a party or by which it may be bound or, (iii) except
as set forth in Section 3.4, any Law or Order, by which USFC may be bound,
except where such violation, conflict or default, right of termination,
cancellation or acceleration, put or similar right, imposition of an
Encumbrance, failure to obtain such consent or the amount of such required
payment, individually or in the aggregate, would not have a material adverse
effect on (X) the Business Condition of the Company and its Subsidiaries taken
as a whole or (Y) the ability of USFC to perform its obligations under this
Agreement.
Article 5. Representations and Warranties of Option
Acquisition.
Option Acquisition represents and warrants to the Company that,
except as set forth in the Option Acquisition Disclosure Statement:
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5.1 Status, Power and Authority. Option Acquisition is a limited
liability company duly formed and validly existing under the laws of the
State of Washington and has all requisite corporate or other power and authority
to own or lease and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into this Agreement and each of
the other Transaction Agreements to which it is a party and to carry out the
provisions of this Agreement and the other Transaction Agreements to which it is
a party and consummate the Transactions. Option Acquisition has paid all taxes,
fees and similar amounts due to the State of Washington and has prepared and
filed with the appropriate authorities of the State of Washington all reports,
returns and similar items as required by, and is substantially in compliance
with, the requirements of applicable laws. To Option Acquisition's knowledge,
there are no existing conditions or circumstances that could result in the
revocation of Option Acquisition's status, qualification or existence as a
limited liability Company under the laws of the State of Washington. Option
Acquisition is duly qualified and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be in good standing or so qualified would not, in the aggregate, have a material
adverse effect on the ability of Option Acquisition or any of its Affiliates to
perform its obligations under this Agreement or any other Transaction Agreement
to which it is a party.
5.2 Non-Contravention. (a) The execution, delivery and performance
of this Agreement and the other Transaction Agreements and the consummation
of the Transactions in accordance with the terms hereof and thereof by Option
Acquisition and by each Affiliate of Option Acquisition who is a party thereto
will not result in any violation of or conflict with, constitute a default (with
or without notice or the lapse of time) under, or give rise to a right of
termination, cancellation, or acceleration of, or result in the imposition of
any Encumbrance under, or require any consent, (other than such consents as are
listed in the Option Acquisition Disclosure Statement), under, any term of
(i) the limited liability company or operating agreement of Option Acquisition,
or (ii) any note, bond, debt instrument, mortgage, indenture or other agreement
or instrument or, except as set forth in Section 5.3, any Law or Order, by which
Option Acquisition or any such Affiliate of Option Acquisition may be bound,
except where such violation, conflict
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or default, right of termination, cancellation or acceleration, imposition of
an Encumbrance or failure to obtain such consent, individually or in the
aggregate, would not have a material adverse effect on the ability of
Option Acquisition or any such Affiliate of Option Acquisition to perform its
obligations under this Agreement and the other Transaction Agreements to which
it is a party.
(b) Each consent identified on the Option Acquisition Disclosure
Statement has been obtained and is in full force and effect.
5.3 Consents and Approvals. (a) The Option Acquisition Disclosure
Statement lists (i) all Authorizations that to the knowledge of Option
Acquisition are required to be made, filed, given or obtained by Option
Acquisition or its Affiliates with, to or from any Governmental Authority in
connection with the Transactions contemplated to occur at or prior to the
Closing and (ii) all consents, approvals and waivers required to be given by, or
obtained from, any other Persons to or by Option Acquisition or its Affiliates
in connection with the consummation of any of the Transactions contemplated to
occur at or prior to the Closing, other than those Authorizations, consents,
approvals and waivers as to which the failure to make, file, give or obtain,
individually or in the aggregate, would not have a material adverse effect on
the ability of Option Acquisition or any of its Affiliates to perform its
obligations under this Agreement and the other Transaction Agreements to which
it or any such Affiliate is a party.
(b) Option Acquisition and each of its Affiliates has made, filed,
given or obtained all Authorizations and has been given or obtained all
consents, approvals or waivers of any other Person necessary for Option
Acquisition or such Affiliate to perform its obligations under this Agreement
and the Transaction Agreements at or prior to the Closing, and no further
Authorizations or consents, approvals or waivers of any other Persons are
required of Option Acquisition or any such Affiliate to perform its obligations
under this Agreement and the Transaction Agreements at or prior to the Closing.
5.4 Investment Intent. Option Acquisition is acquiring the New
Options for its own account and with no present intention of distributing or
selling any of the New Options or Common Stock received upon exercise thereof,
in violation of the Securities
CLCORP01 Doc: 229734_4 15
Act or any applicable state securities law. Option Acquisition will not
sell or otherwise dispose of any of the New Options, or shares of Common Stock
received upon exercise of any thereof, unless such sale or other disposition has
been registered or is exempt from registration under the Securities Act and has
been registered or qualified or is exempt from registration or qualification
under applicable state securities laws. Option Acquisition understands that the
New Options being acquired by Option Acquisition hereunder and any shares of
Common Stock issuable upon exercise of the New Options have not been registered
under the Securities Act by reason of their contemplated issuance in
transactions exempt from the registration and prospectus delivery requirements
of the Securities Act pursuant to Section 4(2) thereof including Rule 506 of
Regulation D, and that the reliance of the Company on this exemption is
predicated in part on these representations and warranties of Option
Acquisition.
5.5 Accredited Investor Status. Option Acquisition and each of its
members is an "accredited investor" as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act and, either alone or in
connection with its financial advisors, has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investments to be made by it hereunder.
5.6 Authorization of Agreements. (a) This Agreement and each of the
other Transaction Agreements to which Option Acquisition or any of its
Affiliates is a party and the consummation of the Transactions have been
approved by all requisite action of the members of Option Acquisition (no other
action, including, without limitation, action of any managers of Option
Acquisition, being necessary) and by each other Affiliate of Option Acquisition
who is a party thereto.
(b) This Agreement has been and, when executed, each of the other
Transaction Agreements to which Option Acquisition or any of its Affiliates
is a party will have been, duly executed and delivered by an authorized member
of Option Acquisition and by each other Affiliate of Option Acquisition and
constitutes a valid and binding agreement of Option Acquisition or of such
Affiliate, enforceable against Option Acquisition or such Affiliate of Option
Acquisition in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency,
CLCORP01 Doc: 229734_4 16
reorganization, moratorium and other similar laws of general application which
may affect the enforcement of creditors' rights generally and by general
equitable principles.
5.7 Brokers and Finders. Neither Option Acquisition nor any of its
Affiliates has employed any investment banker, broker, finder, consultant or
intermediary in connection with the transactions contemplated by this
Agreement, and no such Person would be entitled, pursuant to the terms of any
agreement or arrangement with Option Acquisition or any of its Affiliates, to
any investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
5.8 Acquisition of Voting Securities. Except as expressly provided
in the Transaction Agreements or as set forth in the Company SEC Reports,
neither Option Acquisition nor any of its Affiliates are parties to any
agreement or arrangement (a) that gives any of them or entitles any of them to
acquire "beneficial ownership" (as that term is defined under Rule 13d-3 under
the Exchange Act) of any securities of the Company that are entitled to vote for
the election of Directors or (b) with respect to corporate governance matters
concerning the Company or its Subsidiaries (including, without limitation, the
exercise or failure to exercise voting rights with respect to any Voting
Securities).
5.9 Access to Information. Individual is a member of the Board and
is a member of its Operations Committee.
5.10 Access to Funds. Option Acquisition currently holds funds, or
is reasonably assured that it will have access to funds pursuant to existing
committed financing sources (the availability of which is not subject to any
material condition or contingency), in amounts sufficient to permit Option
Acquisition to perform its obligations under this Agreement and the Transaction
Agreements.
Article 6. Certain Covenants.
6.1 Public Announcements. Except as required by Law, the exercise of
fiduciary duty, or the policies or rules of any stock exchange (or the
NASDAQ-NMS) on which the Company's securities are listed, prior to the Closing
Date, the form and content of all press releases or other public communications
of any sort
CLCORP01 Doc: 229734_4 17
relating to the subject matter of this Agreement or any other Transaction
Agreement, and the method of their release, or publication thereof by any of
the parties hereto or their respective Affiliates, shall be subject to the
prior approval of each of the parties hereto, which approval shall not be
unreasonably withheld or delayed. To the extent reasonably requested by any
party hereto, following the Closing Date each party and its Affiliates will
consult with and provide reasonable cooperation to the other parties in
connection with the issuance of further press releases or other public
documents describing the Transactions.
6.2 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of the terms of each of the Transaction Agreements to which it or any
of its Affiliates is a party and the transactions contemplated thereby. Without
limiting the generality of the preceding sentence, the Company and Option
Acquisition shall not (and shall not permit their Affiliates to) take any action
or actions at or prior to the Closing that would (a) cause any Authorization or
any consent, approval or waiver of any other Person that has been made, filed,
given or obtained in connection with the Transactions to be withdrawn or
terminated or to otherwise cease to be effective, (b) require any additional
Authorization or any additional consent, approval or waiver of any other Person
to be made, filed, given or obtained in connection with the Transactions, or (c)
cause any financing sources contemplated by Section 5.10 to be unavailable or
cause the availability of the funding thereunder to be subject to any material
condition or contingency.
6.3 Cooperation. The Company and Option Acquisition each agree to
(and to cause their Affiliates to) cooperate with the other to consummate, as
promptly as possible, the Transactions.
Article 7. Restrictions on Transfer.
7.1 Permitted Transfers. Subject to Section 7.3, the New Options and
any shares issued upon exercise of the New Options (the "New Shares") may be
Transferred (a) pursuant to a broadly disseminated, underwritten secondary
registered offering, (b) if the proposed transfer (or series of related
proposed transfers) relates to New Options and/or New Shares representing less
than
CLCORP01 Doc: 229734_4 18
five million (5,000,000) shares of Common Stock (c) pursuant to a pledge of
the New Options or New Shares as collateral to a broker, bank, financial
institution or other entity that is principally engaged in the business of
providing financing provided, in each case, that the loan secured by such pledge
does not exceed five percent (5%) of the aggregate principal amount of the
outstanding loans made by the pledgee to Persons who are not Affiliates of such
pledgee, or (d) pursuant to the foreclosure of a pledge described in clause (c).
7.2 Consent Required for Other Transfers. Except as permitted by
Section 7.1, subject to the other Sections of this Article 7, Option
Acquisition must obtain the prior consent of the Company to any proposed
Transfer of the New Options or New Shares. Option Acquisition will give written
notice to the Company of any proposed Transfer that is subject to this Section
7.2, identifying the proposed transferee, describing any affiliation, and any
familial or business relationships between the proposed transferee and any other
Person who is known by either Option Acquisition or the proposed transferee to
hold or hold the right to acquire 5 million or more shares of Common Stock, and
setting forth in reasonable detail the terms and conditions of the proposed
Transfer. The Company's consent to a proposed Transfer will not be unreasonably
withheld or delayed, but may be conditioned on the Company's receipt of
representations and warranties to the Company from Option Acquisition or the
transferee confirming the facts set forth in the notice.
7.3 Transferee Bound by Restrictions. Any Person acquiring New
Options or New Shares with the consent of the Company under Section 7.2 must,
as a condition of such Transfer, agree to be bound by the restrictions of this
Article 7.
7.4 Interests in Option Acquisition Subject to Restrictions. No
Transfer of a membership interest in Option Acquisition that would result
in Option Acquisition no longer being controlled by Individual and/or Members of
the XxXxx Family will be made unless such Transfer is made with the prior
consent of the Company. Option Acquisition will give written notice to the
Company of any proposed Transfer that is subject to this Section 7.4,
identifying the proposed transferee, describing any affiliation, and any
familial or business relationships between the proposed transferee and any other
Person who is known by either Option Acquisition or the proposed transferee to
hold or
CLCORP01 Doc: 229734_4 19
hold the right to acquire 5 million or more shares of Common Stock, and
setting forth in reasonable detail the terms and conditions of the proposed
Transfer. The Company's consent to a proposed Transfer will not be unreasonably
withheld or delayed, but may be conditioned on the Company's receipt of any
necessary Authorizations of Governmental Authorities or consents, approvals or
waivers of any other Persons and the Company's receipt of representations and
warranties to the Company from Option Acquisition or the transferee confirming
the facts set forth in the notice. Solely for purposes of this Section 7.4, the
terms "control" and "controlled by" shall mean that Individual and/or Members of
the XxXxx Family have the sole possession of at least 2/3 of the voting and
investment power over management and policies of Option Acquisition including,
without limitation, the authority to make all decisions with respect to this
Agreement and the purchase, sale and voting of any securities of the Company
owned or available for purchase by Option Acquisition pursuant to this Agreement
and the New Options.
7.5 Compliance with Securities Laws. Option Acquisition will not
Transfer any securities of the Company in violation of any Law.
Article 8. Rights for Certain Holders of New Shares.
8.1 Right of Qualified Holder of New Shares to Propose Director
Nominee. Option Acquisition has the right to give one Qualified Holder who
acquires New Options or New Shares the right, so long as such Qualified Holder
has exercised the New Options and continues to hold at least ten million
(10,000,000) New Shares, to propose to the Nominating Committee of the Board an
individual to be nominated and elected to the Board (or, if there is then no
Nominating Committee, to propose to the Board in accordance with the Company's
applicable procedures for the selection of nominees to the Board). Such
designated nominee must meet the reasonable criteria established by the Company
for approval of Director nominees. Upon designation of such a nominee by a
Qualified Holder in accordance with this Section 7.1, the Company shall cause
such nominee to be included in the slate of nominees recommended by the Board to
the Company' stockholders for election at the first annual meeting of
stockholders of the Company following the date of such designation and, subject
to the Qualified Holders' continued right to designate such nominee pursuant to
this Section 8.1, at each succeeding meeting of stockholders of the Company and
shall
CLCORP01 Doc: 229734_4 20
use reasonable efforts to cause the election of such nominee, including
soliciting proxies in favor of the election of such nominees. "Qualified Holder"
means a Person who (a) is not Controlled, directly or indirectly, by Individual,
and (b) does not own or Control a 5% or greater equity ownership interest in any
Person that provides terrestrial-based wireless communications services in any
market in which the Company offers services, unless such Person is approved by
at least 2/3 of the Directors of the Company, excluding for purposes of this
clause 8.1(b), Directors who have been nominated or elected by Individual or by
a Person Controlled by Individual. If an individual proposed by a Qualified
Holder is elected to the Board, that individual shall resign, at the Company's
request, if the Qualified Holder ceases to hold 10 million New Shares. A
Qualified Holder has no right or power to assign or transfer the rights
described in this Section 8.1.
Article 9. Definitions.
9.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings:
"Action" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Affiliate" means, as to any Person, another Person that directly or
indirectly through one or more intermediaries, Controls, or is Controlled
by, or is under common Control with, such Person. For the purposes of this
definition, "Control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing;
provided, that the Company and Investor shall not be deemed to be direct or
indirect Affiliates of each other.
"Agreement" -- See Preamble.
"Audited Statements" has the meaning set forth in Section 3.5(c).
CLCORP01 Doc: 229734_4 21
"Authorization" means any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including
pursuant to the HSR Act) of, or filing, registration, qualification, declaration
or designation with or by, any Governmental Authority.
"Beneficial Owner" with respect to any securities means that a Person
has "beneficial ownership" of such securities as determined pursuant to
Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Business Condition" means the business, properties, operations and
financial condition of a specified corporation or division or area of
operations.
"Business Day" means any day on which there is trading on the New
York Stock Exchange.
"Closing" has the meaning set forth in Section 1.4.
"Closing Date" means the date on which the Closing occurs as provided
in Section 1.4.
"Comcast Options" have the meaning set forth in Recital A.
"Common Stock" means the Class A (Voting) Common Stock, par value
$.001 per share, of the Company.
"Company" means Nextel Communications, Inc.
"Company Disclosure Statement" means the disclosure statement dated
the date of this Agreement delivered by the Company to Option Acquisition.
"Company Financial Statements" has the meaning set forth in Section
3.5(c).
"Company SEC Reports" has the meaning set forth in Section 3.5(a).
"Consent Solicitation Materials" has the meaning set forth in
Section 2.2(c).
CLCORP01 Doc: 229734_4 22
"Directors" means any and all of the duly elected members of the
Board.
"Encumbrance" means any lien, claim, charge, security interest,
option, mortgage, pledge or other legal or equitable encumbrance, excluding any
such encumbrance arising under or pursuant to federal or state securities laws.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission.
"First New Option" has the meaning set forth in Section 1.3(a).
"Governmental Authority" means any governmental or political
subdivision or department thereof, any governmental or regulatory body,
commission, board, bureau, agency or instrumentality, or any court or arbitrator
or alternative dispute resolution body, in each case whether domestic or
foreign, federal, state or local.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended and the rules promulgated thereunder.
"Indentures" means the Indenture dated as of August 15, 1993, between
the Company and The Bank of New York, as Trustee (the "Trustee"), as
amended, relating to the Senior Redeemable Discount Notes due 2003 (the "Nextel
2003 Notes"); the Indenture dated as of February 15, 1994 between the Company
and the Trustee, as amended, relating to the Senior Redeemable Discount Notes
due 2004 (the "Nextel 2004 Notes"); the Indenture dated as of December 22, 1993
between the Company (as successor by merger to Dial Call Communications, Inc.),
and the Trustee, as amended, relating to the Senior Redeemable Discount Notes
due 2005 (the "Nextel/Dial Call 2005 Notes"); the Indenture dated as of
April 25, 1994 between the Company (as successor by merger to Dial Call
Communications, Inc.) and the Trustee, as amended, relating to the Senior
Redeemable Discount Notes due 2004 (the "Nextel/Dial Call 2004 Notes"); and the
Indenture dated as of January 13, 1994, between the Company (as successor by
merger to OneComm Corporation (f/k/a CenCall Communications Corp.)) and the
CLCORP01 Doc: 229734_4 23
Trustee, as amended, relating to the Senior Redeemable Discount Notes due 2004
(the "Nextel/CenCall Notes").
"Individual" has the meaning set forth in the Recital C.
"Investor" has the meaning set forth in Recital D.
"Investor's First Option" means the Option Agreement (First Tranche)
issued by the Company to Investor on July 28,1995 pursuant to which Investor
holds an option to purchase up to 15,000,000 shares of Common Stock.
"Law" means any domestic or foreign, federal, state or local, law,
statute, ordinance, rule or regulation.
"Members of the XxXxx Family" means Xxxxx X. XxXxx, Xxxx X. XxXxx,
Xxxxx X. XxXxx, Xxxxxx X. Xxxxxxxx, their respective lineal descendants,
any entity controlled by any such persons (including, without limitation, KMMK
Limited Partnership), and any trust or foundation established by any such
persons that holds all or any part of such persons' interests in Option
Acquisition either during the lifetime or upon the death of any such persons.
"Motorola" has the meaning set forth in Section 2.1(b).
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ-NM" means the Nasdaq Stock Market National Market.
"New Options" has the meaning set forth in Section 1.5.
"Noteholder Consents" has the meaning set forth in Section 2.2(c).
"Notes" means the Nextel 2003 Notes, the Nextel 2004 Notes, the
Nextel/Dial Call 2005 Notes, the Nextel/Dial Call 2004 Notes and the
Nextel/CenCall Notes.
"Option Acquisition" has the meaning set forth in the Preamble.
CLCORP01 Doc: 229734_4 24
"Option Acquisition Disclosure Statement" means the disclosure
statement dated the date of this Agreement delivered by Option Acquisition to
the Company.
"Order" means any judgment, order, injunction, decree, stipulation or
award entered or rendered by any Governmental Authority.
"Permitted Assumption" has the meaning set forth in Section 3.9.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature or a group, including without limitation any pension, profit sharing or
other benefit plan or trust.
"Qualified Holder" shall have the meaning set forth in Section 8.1.
"Requirement of Law" means as to any Person, any Law, rule,
regulation, order, judgment, decree or determination of any arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its properties or to which such Person or any of its
property is subject.
"SEC" means the Securities and Exchange Commission.
"Second New Option" has the meaning set forth in Section 1.3(b).
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means as to any Person, any other Person of which at
least 50% of the equity interests are owned, directly or indirectly by such
first Person.
"Transaction Agreements" means this Agreement, the New Options, the
Option Acquisition Registration Rights Agreement, and the First Amendment to
Registration Rights Agreement.
CLCORP01 Doc: 229734_4 25
"Transactions" means the transactions contemplated by the Transaction
Agreements.
"Transfer" means (i) to sell, exchange, pledge or otherwise transfer
any interest in, and (ii) a sale, exchange, pledge or other transfer of any
interest in.
"USFC" has the meaning set forth in the Preamble.
9.2 Other Definitional Provisions.
(a) All terms defined in this Agreement have the defined meanings
when used in any certificate, report or other documents made or delivered
pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular have a comparable meaning when used
in the plural, and vice versa.
(c) As used herein, the neuter gender also denotes the masculine and
feminine, and the masculine gender also denotes the neuter and feminine, where
the context so permits.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular provision
of this Agreement.
(e) The words "include," "including" and "or" mean without limitation
by reason of enumeration.
Article 10. Miscellaneous.
10.1 Notices. All notices, demands, requests, certificates or other
communications under this Agreement shall be in writing and shall be deemed
to have been duly given when (i) hand delivered, (ii) sent by facsimile
transmission or by tested or otherwise authenticated telex or cable, (iii) one
day after sent by commercial courier guaranteeing next Business Day delivery or
(iv) five days after posting in the United States mail having been sent by
registered or certified mail return receipt requested, addressed as follows:
CLCORP01 Doc: 229734_4 26
(i) if to the Company:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
(ii) if to Individual or Investor:
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
C. Xxxxx Xxxxxx, Esq.
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
and
Xxx X. Xxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X. X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
CLCORP01 Doc: 229734_4 27
Any communication delivered after business hours or on a Saturday, Sunday or
legal holiday at the place designated in such delivery shall be deemed for
purposes of computing any time period hereunder to have been delivered on the
next Business Day.
10.2 Expenses. Each party shall bear its own expenses, including the
fees and expenses of any attorneys, accountants, investment bankers, brokers,
finders or other intermediaries or other Persons engaged by Option Acquisition
or the Company, incurred in connection with this Agreement or the other
agreements contemplated hereby.
10.3 Benefits; Assignment. The provisions of this Agreement are
binding upon, and inure to the benefit of, Option Acquisition and the
Company and their respective successors and Persons acquiring New Options or New
Shares by transfer under Section 7.3. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than Option Acquisition and
the Company any rights, remedies or obligations under or by reason of this
Agreement. Except as specifically stated in Article 7 or Section 8.1, none of
the rights or obligations of the Company or Option Acquisition hereunder may be
assigned to any other Person under any circumstances.
10.4 Entire Agreement; Amendment and Waiver. This Agreement (which
includes the Exhibits and Annexes hereto, the Company Disclosure Statement
and the Option Acquisition Disclosure Statement), and the other Transaction
Agreements to which either Option Acquisition or any of its Affiliates or the
Company is a party constitute the entire agreement between Option Acquisition
and the Company with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both written and oral,
between Option Acquisition and the Company with respect to the subject matter
hereof and thereof including, without limitation the Memorandum of Understanding
dated as of April 10, 1997. This Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by each of the
parties hereto, and none of the Transaction Agreements to which the Company is a
party may be amended, supplemented or otherwise modified except by an instrument
in writing signed by the Company and each other party thereto, provided that any
amendment, supplement or other modification of this Agreement or at any of such
other Transaction Agreements which would adversely affect the rights of the
Company or any benefit to the Company hereunder or thereunder
CLCORP01 Doc: 229734_4 28
shall require the approval of a majority of the Directors of the Company who
are not elected by the Investor. No waiver by either party hereto of any of
the provisions hereof shall be effective unless explicitly set forth in
writing and executed by such party. Any waiver by either party hereto of a
breach of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
10.5 Headings. The headings in this Agreement are for convenience
only and are not to affect its meaning.
10.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT
GIVING EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
10.7 Remedies. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at Law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party does not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
10.8 Severability. In the event that any provision of this Agreement
is deemed invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions are not to be in any way be affected
or impaired thereby.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and it is not
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
10.10 Communications Act. Nothing in this Agreement is intended or
is to be construed to diminish or affect the control of the Company or any of
its Subsidiaries over any FCC licenses held by the Company or such Subsidiary
in any manner prohibited by the Communications Act or the rules and regulations
issued by the FCC.
10.11 Survival. Any claim for losses or damages resulting from or
arising out of any inaccuracy or breach of any representation and warranty
herein must be asserted in writing before July 28, 1999. All covenants and
agreements, to the
CLCORP01 Doc: 229734_4 29
extent remaining to be performed after the Closing Date, survive the Closing
Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
UNRESTRICTED SUBSIDIARY FUNDING COMPANY
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
OPTION ACQUISITION, L.L.C.
By: /s/C. Xxxxx Xxxxxx
Name: C. Xxxxx Xxxxxx
Title: Vice President,
COM Management, Inc., It's Manager
CLCORP01 Doc: 229734_4 30
EXHIBITS
Exhibit A Option Agreement (First New Option)
Exhibit B Option Agreement (Second New Option)
Exhibit C Registration Rights Agreement (Option Acquisition)
Exhibit D First Amendment to Registration Rights Agreement
(Digital Radio)
Exhibit E Individual Representation Letter
Exhibit F Letter from Other Owners of Option Acquisition
CLCORP01 Doc: 229734_4 - i -
EXHIBIT A
OPTION AGREEMENT
(First New Option)
by and between
Option Acquisition, L.L.C.
and
Nextel Communications, Inc.
Dated as of , 1997
CLCORP01 Doc: 229672_4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AS SET FORTH
IN THE OPTION PURCHASE AGREEMENT, DATED AS OF JUNE 16, 1997, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY. ANY REGISTRATION OF TRANSFER OF SUCH SECURITIES ON THE BOOKS
OF THE COMPANY WILL BE SUBJECT TO COMPLIANCE WITH SUCH RESTRICTIONS.
OPTION AGREEMENT
(First New Option)
This OPTION AGREEMENT (First New Option) (the "Option") is dated
, 1997, by and between Nextel Communications, Inc., a Delaware
corporation (the "Company") and Option Acquisition, L.L.C., a Washington
limited liability company ("Buyer"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Option
Purchase Agreement (as defined below).
RECITALS
The Company, Buyer and Unrestricted Subsidiary Funding Company, a
Delaware corporation and a wholly owned subsidiary of the Company ("USFC"),
have entered into an Option Purchase
2
Agreement dated as of June 16, 1997 (the "Option Purchase Agreement") pursuant
to which, among other things, the Buyer agreed to purchase from USFC certain
options (the "Old Options") to acquire up to 25,000,000 shares of the Company's
Class A Common Stock, par value $.001 per share (the "Common Stock") and the
Buyer and the Company agreed to exchange the Old Options for two options to
purchase shares of Common Stock, on the terms set forth in the Option Purchase
Agreement, this Option, and the Second New Option.
An affiliate of Buyer, Digital Radio, L.L.C. ("Investor"), is a
stockholder of the Company and holds an Option Agreement (First Tranche) issued
by the Company to Investor on July 28, 1995 (the "Investor's First Option") to
purchase Common Stock of the Company.
AGREEMENT
NOW, THEREFORE, for the consideration set forth in the Option
Purchase Agreement and other good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, the Company agrees with Buyer as
follows:
1. GRANT OF OPTION.
1.1 Grant. The Company hereby grants to Buyer this Option,
exercisable as provided herein in whole or in part at any time and from
time to time during the period from (A) the date that Investor has paid the
exercise price and exercised, in full, the Investor's First Option, through
(B) 6:00 p.m., local time in New York, New York, on July 28, 1998 (the "Exercise
Period") to purchase an aggregate of up to Fifteen Million (15,000,000) shares
of Common Stock (as such number may be adjusted pursuant to Section 2 hereof,
the "Option Shares"), at an exercise price of $16.00 per share (as such price
may be adjusted pursuant to Section 2 hereof, the "Exercise Price"). Buyer and
its permitted successors and assigns are hereinafter referred to as "Holder."
1.2 Shares To Be Issued; Reservation of Shares. The Company
covenants and agrees that all Option Shares will, upon issuance, be duly
authorized, validly issued and outstanding, fully paid and non-assessable, and
free from all taxes, liens and charges with respect to the issuance thereof,
except as otherwise provided in the Option Purchase Agreement. The Company
further
CLCORP01 Doc: 229672_4
3
covenants and agrees that it will from time to time take all actions required
to assure that the par value per share of the Common Stock is at all times
equal to or less than the effective Exercise Price. The Company further
covenants and agrees that, during the Exercise Period, the Company will at all
times have authorized and reserved sufficient shares of Common Stock to provide
for the exercise of this Option in full.
2. ADJUSTMENTS TO OPTION RIGHTS.
2.1 Stock Combinations. If the Company combines all of the
outstanding Common Stock proportionately into a smaller number of shares,
the Exercise Price per Option Share hereunder in effect immediately prior to
such combination will be proportionately increased and the number of Option
Shares issuable to the Holder upon exercise of this Option will be
proportionately decreased, as of the effective date of such combination.
2.2 Reorganizations. If any of the following transactions (each, a
"Special Transaction") becomes effective: (i) a capital reorganization or
reclassification of the capital stock of the Company, (ii) a consolidation or
merger of the Company with another entity or (iii) a sale or conveyance of all
or substantially all of the Company's assets, then, as a condition of any such
Special Transaction, lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to purchase and receive, at any time
after the consummation of such transaction until the expiration of the Exercise
Period, upon the basis and upon the terms and conditions specified herein, and
in lieu of the Option Shares immediately theretofore issuable upon exercise of
this Option for the aggregate Exercise Price in effect immediately prior to such
consummation, such shares of stock, other securities, cash or other assets as
may be issued or payable in and pursuant to the terms of such Special
Transaction with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of Option Shares immediately theretofore
issuable upon exercise in full of this Option had such Special Transaction not
taken place (pro rated in the case of any partial exercises). In connection with
any Special Transaction, appropriate provision will be made with respect to the
rights and interests of the Holder to the end that the provisions of this Option
(including without limitation provisions for adjustment of the Exercise
CLCORP01 Doc: 229672_4
4
Price and the number of Option Shares issuable upon the exercise of the
Option), will thereafter be applicable, as nearly as may be, to any shares of
stock, other securities, cash or other assets thereafter deliverable upon the
exercise of this Option. The Company will not effect any Special Transaction
unless prior to or simultaneously with the closing the successor entity (if
other than the Company), if any, resulting from such consolidation or merger or
the entity acquiring such assets assumes by a written instrument executed and
mailed by certified mail or delivered to the Holder (which instrument shall be
in form and substance reasonably satisfactory to Holder) at the address of the
Holder appearing on the books of the Company, the obligation of the Company or
such successor corporation to deliver to such Holder such shares of stock,
securities, cash or other assets as, in accordance with the foregoing
provisions, such Holder has rights to purchase.
2.3 Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, stock splits,
recapitalizations, reclassifications or the like, the type and number of Option
Shares issuable upon exercise of this Option, and the Exercise Price, as the
case may be, will be adjusted appropriately, immediately upon such change. No
such adjustment will be made on account of any dividend payable other than in
stock of the Company.
2.4 Notice. Whenever this Option, the Option Shares or the Exercise
Price is to be adjusted as provided herein or a dividend or distribution
(in cash, stock or otherwise and including, without limitation, any liquidating
distributions) is to be declared by the Company, or a Special Transaction is
deemed by the Company to be substantially certain to occur (other than a Special
Transaction in which the Company is the surviving entity and which would not
require the execution of a written instrument pursuant to Section 2.2 above),
the Company will forthwith cause to be sent to the Holder at the last address of
the Holder shown on the books of the Company, by first-class mail, postage
prepaid, at least ten (10) days prior to the record date specified in (A) below
or at least twenty (20) days before the date specified in (B) below, a notice
stating in reasonable detail the facts requiring such adjustment and the
calculation thereof, if applicable, and stating (if applicable):
CLCORP01 Doc: 229672_4
5
(A) the record date of such dividend, distribution, subdivision or
combination, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
subdivision or combination are to be determined (provided, that in the event the
Company institutes a policy of declaring cash dividends on a periodic basis, the
Company need only provide the relevant information called for in this clause (A)
with respect to the first cash dividend payment to be made pursuant to such
policy and thereafter provide only notice of any changes in the amount or the
frequency of any subsequent dividend payments), or
(B) the date on which a Special Transaction is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record are entitled to exchange their shares of Common Stock for securities
or other property deliverable upon consummation of the Special Transaction.
2.5 Fractional Interests. This Option may be exercised only for a
whole number of shares of Common Stock, other than any fraction of a share
of Common Stock which would result upon this Option being exercised in full;
provided, however that the Company is not required to issue fractions of shares
of Common Stock on the exercise in full of this Option. If any fraction of a
share of Common Stock would, except for the provisions of this Section 2.5, be
issuable upon the exercise in full of this Option, the Company may (in lieu of
issuing such fractional share) either (A) purchase such fraction for an amount
in cash equal to the current value of such fraction, computed (i) if the Common
Stock is listed or admitted to unlisted trading privileges on the NASDAQ
National Market System or any securities exchange, on the basis of the last
reported sale price of the Common Stock on such exchange on the last business
day prior to the date of exercise upon which such a sale shall have been
effected (or, if the Common Stock shall be listed or admitted to unlisted
trading privileges on more than one such exchange, on the basis of such price on
the exchange designated from time to time for such purpose by the Board of
Directors of the Company) or (ii) if the Common Stock is not so listed or
admitted to unlisted trading privileges, on the basis of the last bid price, or
if there is no reported last bid, the average of the bid prices, for the Common
Stock on the last business day prior to the date of exercise, as reported by the
National Association of
CLCORP01 Doc: 229672_4
6
Securities Dealers Automated Quotation System or any successor thereto, or,
if such computations cannot be made as aforesaid, as the Board of Directors of
the Company may in good faith determine or (B) issue a number of whole shares
determined by rounding up to the nearest whole share.
3. EXERCISE.
3.1 Exercise of Option. Subject to compliance with federal and state
securities laws and to Section 1.1, the Holder may exercise this Option, in
whole or in part, at any time during the Exercise Period by (i) surrendering
this Option, with the form of exercise notice attached hereto as Exhibit "A"
duly executed by Holder, and (ii) either electing cashless exercise under
Section 3.2 or making payment to the Company of the aggregate Exercise Price for
the applicable Option Shares by wire transfer to an account designated by the
Company. Upon any partial exercise of this Option, the Company, at its expense,
will forthwith issue to the Holder for this option a replacement Option
identical in all respects to this Option, except that the number of Option
Shares shall be reduced accordingly.
3.2 Cashless Exercise. Instead of making payment under Section
3.1(ii) this Option may be exercised on a net basis, such that, without an
exchange of any funds, the Holder receives upon exercise the number of shares
designated on the exercise notice less that number of shares of Common Stock
having an aggregate value computed on the basis of the Average Market Price at
the time of exercise equal to Exercise Price for the shares so designated.
"Average Market Price" means the arithmetic average of the closing sales price
for a share of Common Stock on the NASDAQ-NM for the 20 trading days immediately
preceding the date on which the price is to be determined.
3.3 Issuance of Option Shares. The Option Shares purchased will
be issued to the Holder exercising this Option as of the close of business
on the date on which all actions and payments required to be taken or made by
Holder, pursuant to Section 3.1, have been taken or made. Certificates for the
Option Shares so purchased will be delivered to the Holder within a reasonable
time, not exceeding ten (10) days after this Option is surrendered.
CLCORP01 Doc: 229672_4
7
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or Bylaws or through reorganization,
reclassification, consolidation, merger, dissolution, sale of assets or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Option, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Option above the Exercise Price, and at all
times will take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares
of Common Stock upon the exercise of this Option. In the event of actions, other
than those specified herein, affecting adversely the rights of the Holder, the
Board of Directors of the Company will make such adjustments as shall be
equitable in the circumstances to preserve for Holder the benefits of this
Option.
5. RIGHTS OF HOLDER. Holder is not, solely by virtue of this Option
and prior to the issuance of the Option Shares upon due exercise thereof,
entitled to any rights of a stockholder in the Company.
6. TRANSFERABILITY. Holder may sell, assign, transfer or otherwise
dispose of this Option only in accordance with the terms of the Option
Purchase Agreement. Subject to compliance with federal and state securities laws
and with the Option Purchase Agreement, if applicable, the Holder may sell,
assign, transfer or otherwise dispose of any Option Shares acquired upon any
exercise hereof at any time and from time to time.
7. LEGEND ON OPTION SHARES. Certificates evidencing the Option
Shares will bear the following legend: "THE SECURITIES REPRESENTED BY THIS
CERTIFICATE OR INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH
CLCORP01 Doc: 229672_4
8
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER." Such certificates will also be legended as
appropriate to reflect any and all restrictions on transfer of such Option
Shares that are contained in the Option Purchase Agreement.
8. MISCELLANEOUS.
8.1 Amendments. The parties may, from time to time, enter into
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Option or changing in any manner the rights of
either of the parties hereunder. No amendment, supplement or modification will
be binding on either party unless made in writing and signed by a duly
authorized representative of each party and effected in compliance with Section
9.4 of the Option Purchase Agreement, if applicable.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective must be in writing and, unless
otherwise expressly provided herein, are deemed to have been duly given or made
when delivered by hand or by courier, or by certified mail, or, when transmitted
by facsimile and a confirmation of transmission printed by sender's facsimile
machine. A copy of any notice given by facsimile also must be mailed, postage
prepaid, to the addressee. Notices to the respective parties hereto must be
addressed as follows:
(i) If to the Company:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President and General Counsel
Telecopier: (000) 000-0000
with a copy to:
CLCORP01 Doc: 229672_4
9
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
(ii) If to the Buyer:
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
C. Xxxxx Xxxxxx, Esq.
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
and
Xxx X. Xxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X. X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Any party may alter the address to which communications or copies are to be
sent by giving notice of the change of address under this Section 8.2.
8.3 Waiver By Consent. The Holder may execute and deliver to the
Company a written instrument waiving, on such terms and conditions as the
Holder may specify in such instrument, any of the requirements of this Option
otherwise imposed on the Company.
CLCORP01 Doc: 229672_4
10
8.4 No Implied Waiver; Rights Are Cumulative. The failure to
exercise or the delay in exercising by either party of any right, remedy, power
or privilege under this Option, will not operate as a waiver thereof. The
single or partial exercise of any right, remedy, power or privilege under this
Option will not preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
8.5 Governing Law. This Option and rights and obligations of the
parties hereunder are governed by, construed and interpreted in accordance with
the laws of the State of Delaware applicable to agreements executed by
residents of that state, and fully to be performed, in that state.
8.6 Severability. If any provision of this Option is found to be
unenforceable for any reason whatsoever, such provision shall be deemed null
and void to the extent of such unenforceability but is to be deemed separable
from and is not to invalidate any other provision of this Option.
8.7 Captions. Captions to the various paragraphs of this Agreement
are provided for convenience only and are not to be used to construe the
provisions of this Option.
8.8 Entire Agreement. This Option, the Second New Option, and the
Option Purchase Agreement constitute the entire understanding of the parties
with respect to the subject matter of the Option and supersedes all prior
discussions, agreements and representations, whether oral or written,
concerning the subject matter hereof and whether or not executed by Buyer and
the Company.
CLCORP01 Doc: 229672_4
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
OPTION ACQUISITION, L.L.C.
By:
Name:
Title:
NEXTEL COMMUNICATIONS, INC.
By:
Name:
Title:
CLCORP01 Doc: 229672_4
12
EXHIBIT "A"
[To be signed only upon exercise of Option]
To Nextel Communications, Inc.:
The undersigned, the Holder of the within Option, hereby
irrevocably elects to exercise the purchase right represented by such Option
for, and to purchase thereunder, shares of the Class A
Common Stock of Nextel Communications, Inc. and herewith makes payment of
$ thereof or, and requests that the certificates for such
shares be issued in the name of, and be delivered to, whose
address is .
Dated:
(Signature must conform in all
respects to name of Holder as specified on
the face of the Option)
Address
CLCORP0 Doc: 229672_4
EXHIBIT B
OPTION AGREEMENT
(Second New Option)
by and between
Option Acquisition, L.L.C.
and
Nextel Communications, Inc.
Dated as of , 1997
CLCORP01 Doc: 229875_4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AS SET FORTH
IN THE OPTION PURCHASE AGREEMENT, DATED AS OF JUNE 16, 1997, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY. ANY REGISTRATION OF TRANSFER OF SUCH SECURITIES ON THE BOOKS
OF THE COMPANY WILL BE SUBJECT TO COMPLIANCE WITH SUCH RESTRICTIONS.
OPRION AGREEMENT
(Second New Option)
This OPTION AGREEMENT (Second New Option) (the "Option") is dated
, 1997, by and between Nextel Communications, Inc., a Delaware
corporation (the "Company") and Option Acquisition, L.L.C., a Washington
limited liability company ("Buyer"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Option
Purchase Agreement (as defined below).
RECITALS
The Company, Buyer and Unrestricted Subsidiary Funding Company, a
Delaware corporation and a wholly owned subsidiary of the Company ("USFC"),
have entered into an Option Purchase Agreement dated as of June 16, 1997 (the
"Option Purchase Agreement") pursuant to which, among other things, the Buyer
agreed to purchase from USFC certain options (the "Old Options")
CLCORP01 Doc: 229875_4
2
to acquire up to 25,000,000 shares of the Company's Class A Common Stock,
par value $.001 per share (the "Common Stock") and the Buyer and the Company
agreed to exchange the Old Options for two options to purchase shares of Common
Stock, on the terms set forth in the Option Purchase Agreement, this Option, and
the First New Option.
An affiliate of Buyer, Digital Radio, L.L.C. ("Investor"), is a
stockholder of the Company and holds an Option Agreement (First Tranche) issued
by the Company to Investor on July 28, 1995 (the "Investor's First Option") to
purchase Common Stock of the Company.
AGREEMENT
NOW, THEREFORE, for the consideration set forth in the Option
Purchase Agreement and other good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, the Company agrees with Buyer as
follows:
1. GRANT OF OPTION.
1.1 Grant. The Company hereby grants to Buyer this Option,
exercisable as provided herein in whole or in part at any time and from
time to time during the period from (A) the date that Investor has paid the
exercise price and exercised in full the Investor's First Option, through
(B) 6:00 p.m., local time in New York, New York, on July 28, 1998 (the "Exercise
Period") to purchase an aggregate of up to Ten Million (10,000,000) shares of
Common Stock (as such number may be adjusted pursuant to Section 2 hereof, the
"Option Shares"), at an exercise price of $18.00 per share (as such price may be
adjusted pursuant to Section 2 hereof, the "Exercise Price"). Buyer and its
permitted successors and assigns are hereinafter referred to as "Holder."
1.2 Shares To Be Issued; Reservation of Shares. The Company
covenants and agrees that all Option Shares will, upon issuance, be duly
authorized, validly issued and outstanding, fully paid and non-assessable, and
free from all taxes, liens and charges with respect to the issuance thereof,
except as otherwise
CLCORP01 Doc:229875_4
3
provided in the Option Purchase Agreement. The Company further covenants
and agrees that it will from time to time take all actions required to assure
that the par value per share of the Common Stock is at all times equal to or
less than the effective Exercise Price. The Company further covenants and agrees
that, during the Exercise Period, the Company will at all times have authorized
and reserved sufficient shares of Common Stock to provide for the exercise of
this Option in full.
2. ADJUSTMENTS TO OPTION RIGHTS.
2.1 Stock Combinations. If the Company combines all of the
outstanding Common Stock proportionately into a smaller number of shares, the
Exercise Price per Option Share hereunder in effect immediately prior to such
combination will be proportionately increased and the number of Option Shares
issuable to the Holder upon exercise of this Option will be proportionately
decreased, as of the effective date of such combination.
2.2 Reorganizations. If any of the following transactions (each, a
"Special Transaction") becomes effective: (i) a capital reorganization or
reclassification of the capital stock of the Company, (ii) a consolidation or
merger of the Company with another entity or (iii) a sale or conveyance of all
or substantially all of the Company's assets, then, as a condition of any such
Special Transaction, lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to purchase and receive, at any time
after the consummation of such transaction until the expiration of the Exercise
Period, upon the basis and upon the terms and conditions specified herein, and
in lieu of the Option Shares immediately theretofore issuable upon exercise of
this Option for the aggregate Exercise Price in effect immediately prior to such
consummation, such shares of stock, other securities, cash or other assets as
may be issued or payable in and pursuant to the terms of such Special
Transaction with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of Option Shares immediately theretofore
issuable upon exercise in full of this Option had such Special Transaction not
CLCORP01 Doc:229875_4
4
taken place (pro rated in the case of any partial exercises). In connection
with any Special Transaction, appropriate provision will be made with respect to
the rights and interests of the Holder to the end that the provisions of this
Option (including without limitation provisions for adjustment of the Exercise
Price and the number of Option Shares issuable upon the exercise of the Option),
will thereafter be applicable, as nearly as may be, to any shares of stock,
other securities, cash or other assets thereafter deliverable upon the exercise
of this Option. The Company will not effect any Special Transaction unless prior
to or simultaneously with the closing the successor entity (if other than the
Company), if any, resulting from such consolidation or merger or the entity
acquiring such assets assumes by a written instrument executed and mailed by
certified mail or delivered to the Holder (which instrument shall be in form and
substance reasonably satisfactory to Holder) at the address of the Holder
appearing on the books of the Company, the obligation of the Company or such
successor corporation to deliver to such Holder such shares of stock,
securities, cash or other assets as, in accordance with the foregoing
provisions, such Holder has rights to purchase.
2.3 Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, stock splits,
recapitalizations, reclassifications or the like, the type and number of Option
Shares issuable upon exercise of this Option, and the Exercise Price, as the
case may be, will be adjusted appropriately, immediately upon such change. No
such adjustment will be made on account of any dividend payable other than in
stock of the Company.
2.4 Notice. Whenever this Option, the Option Shares or the Exercise
Price is to be adjusted as provided herein or a dividend or distribution
(in cash, stock or otherwise and including, without limitation, any liquidating
distributions) is to be declared by the Company, or a Special Transaction is
deemed by the Company to be substantially certain to occur (other than a Special
Transaction in which the Company is the surviving entity and which would not
require the execution of a written instrument pursuant to Section 2.2 above),
the Company will forthwith cause to be sent to the Holder at the last address of
the Holder shown on the books of the Company, by first-class mail, postage
CLCORP01 Doc:229875_4
5
prepaid, at least ten (10) days prior to the record date specified in (A)
below or at least twenty (20) days before the date specified in (B) below, a
notice stating in reasonable detail the facts requiring such adjustment and the
calculation thereof, if applicable, and stating (if applicable):
(A) the record date of such dividend, distribution, subdivision or
combination, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
subdivision or combination are to be determined (provided, that in the event the
Company institutes a policy of declaring cash dividends on a periodic basis, the
Company need only provide the relevant information called for in this clause (A)
with respect to the first cash dividend payment to be made pursuant to such
policy and thereafter provide only notice of any changes in the amount or the
frequency of any subsequent dividend payments), or
(B) the date on which a Special Transaction is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record are entitled to exchange their shares of Common Stock for
securities or other property deliverable upon consummation of the Special
Transaction.
2.5 Fractional Interests. This Option may be exercised only for a
whole number of shares of Common Stock, other than any fraction of a share
of Common Stock which would result upon this Option being exercised in full;
provided, however that the Company is not required to issue fractions of shares
of Common Stock on the exercise in full of this Option. If any fraction of a
share of Common Stock would, except for the provisions of this Section 2.5, be
issuable upon the exercise in full of this Option, the Company may (in lieu of
issuing such fractional share) either (A) purchase such fraction for an amount
in cash equal to the current value of such fraction, computed (i) if the Common
Stock is listed or admitted to unlisted trading privileges on the NASDAQ
National Market System or any securities exchange, on the basis of the last
reported sale price of the Common Stock on such exchange on the last business
day prior to the date of exercise upon which such a sale shall have been
effected (or, if the Common Stock shall be listed or admitted to
CLCORP01 Doc:229875_4
6
unlisted trading privileges on more than one such exchange, on the basis of
such price on the exchange designated from time to time for such purpose by the
Board of Directors of the Company) or (ii) if the Common Stock is not so listed
or admitted to unlisted trading privileges, on the basis of the last bid price,
or if there is no reported last bid, the average of the bid prices, for the
Common Stock on the last business day prior to the date of exercise, as reported
by the National Association of Securities Dealers Automated Quotation System or
any successor thereto, or, if such computations cannot be made as aforesaid, as
the Board of Directors of the Company may in good faith determine or (B) issue a
number of whole shares determined by rounding up to the nearest whole share.
3. EXERCISE.
3.1 Exercise of Option. Subject to compliance with federal and state
securities laws and to Section 1.1, the Holder may exercise this Option, in
whole or in part, at any time during the Exercise Period by (i) surrendering
this Option, with the form of exercise notice attached hereto as Exhibit "A"
duly executed by Holder, and (ii) either electing cashless exercise under
Section 3.2 or making payment to the Company of the aggregate Exercise Price for
the applicable Option Shares by wire transfer to an account designated by the
Company. Upon any partial exercise of this Option, the Company, at its expense,
will forthwith issue to the Holder for this option a replacement Option
identical in all respects to this Option, except that the number of Option
Shares shall be reduced accordingly.
3.2 Cashless Exercise. Instead of making payment under Section
3.1(ii) this Option may be exercised on a net basis, such that, without an
exchange of any funds, the Holder receives upon exercise the number of shares
designated on the exercise notice less that number of shares of Common Stock
having an aggregate value computed on the basis of the Average Market Price at
the time of exercise equal to the Exercise Price for the shares so designated.
"Average Market Price" means the arithmetic average of the closing sales price
for a share of Common Stock on the NASDAQ-NM for the 20 trading days immediately
preceding the date on which the price is to be determined.
CLCORP01 Doc:229875_4
7
3.3 Issuance of Option Shares. The Option Shares purchased will
be issued to the Holder exercising this Option as of the close of business
on the date on which all actions and payments required to be taken or made by
Holder, pursuant to Section 3.1, have been taken or made. Certificates for the
Option Shares so purchased will be delivered to the Holder within a reasonable
time, not exceeding ten (10) days after this Option is surrendered.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its Certificate of Incorporation or Bylaws or through
reorganization, reclassification, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Option, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder against dilution or other impairment. Without limiting the generality of
the foregoing, the Company will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Option above the Exercise
Price, and at all times will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of this Option. In
the event of actions, other than those specified herein, affecting adversely the
rights of the Holder, the Board of Directors of the Company will make such
adjustments as shall be equitable in the circumstances to preserve for Holder
the benefits of this Option.
5. RIGHTS OF HOLDER. Holder is not, solely by virtue of this Option
and prior to the issuance of the Option Shares upon due exercise thereof,
entitled to any rights of a stockholder in the Company.
6. TRANSFERABILITY. Holder may sell, assign, transfer or otherwise
dispose of this Option only in accordance with the terms of the Option
Purchase Agreement. Subject to compliance with federal and state securities laws
and with the Option Purchase Agreement, if applicable, the Holder may sell,
assign, transfer or otherwise dispose of any Option Shares acquired upon any
exercise hereof at any time and from time to time.
CLCORP01 Doc:229875_4
8
7. LEGEND ON OPTION SHARES. Certificates evidencing the Option
Shares will bear the following legend: "THE SECURITIES REPRESENTED BY THIS
CERTIFICATE OR INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT OR SUCH LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR SUCH LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER." Such
certificates will also be legended as appropriate to reflect any and all
restrictions on transfer of such Option Shares that are contained in the Option
Purchase Agreement.
8. MISCELLANEOUS.
8.1 Amendments. The parties may, from time to time, enter into
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Option or changing in any manner the rights of
either of the parties hereunder. No amendment, supplement or modification will
be binding on either party unless made in writing and signed by a duly
authorized representative of each party and effected in compliance with
Section 9.4 of the Option Purchase Agreement, if applicable.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective must be in writing and, unless
otherwise expressly provided herein, are deemed to have been duly given or
made when delivered by hand or by courier, or by certified mail, or, when
transmitted by facsimile and a confirmation of transmission printed by sender's
facsimile machine. A copy of any notice given by facsimile also must be
mailed, postage prepaid, to the addressee. Notices to the respective parties
hereto must be addressed as follows:
CLCORP01 Doc:229875_4
9
(i) If to the Company:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President and General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
(ii) If to the Buyer:
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
C. Xxxxx Xxxxxx, Esq.
Option Acquisition, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
and
Xxx X. Xxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X. X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
CLCORP01 Doc:229875_4
10
Any party may alter the address to which communications or copies are to be
sent by giving notice of the change of address under this Section 8.2.
8.3 Waiver By Consent. The Holder may execute and deliver to the
Company a written instrument waiving, on such terms and conditions as the
Holder may specify in such instrument, any of the requirements of this Option
otherwise imposed on the Company.
8.4 No Implied Waiver; Rights Are Cumulative. The failure to
exercise or the delay in exercising by either party of any right, remedy,
power or privilege under this Option, will not operate as a waiver thereof. The
single or partial exercise of any right, remedy, power or privilege under this
Option will not preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
8.5 Governing Law. This Option and rights and obligations of the
parties hereunder are governed by, construed and interpreted in accordance
with the laws of the State of Delaware applicable to agreements executed by
residents of that state, and fully to be performed, in that state.
8.6 Severability. If any provision of this Option is found to be
unenforceable for any reason whatsoever, such provision shall be deemed null
and void to the extent of such unenforceability but is to be deemed separable
from and is not to invalidate any other provision of this Option.
8.7 Captions. Captions to the various paragraphs of this Agreement
are provided for convenience only and are not to be used to construe the
provisions of this Option.
8.8 Entire Agreement. This Option, the First New Option, and the
Option Purchase Agreement constitute the entire understanding of the
parties with respect to the subject matter of the Option and supersedes all
prior discussions, agreements and representations, whether oral or written,
concerning the subject matter hereof and whether or not executed by Buyer and
the Company.
CLCORP01 Doc:229875_4
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
OPTION ACQUISITION, L.L.C.
By:
Name:
Title:
NEXTEL COMMUNICATIONS, INC.
By:
Name:
Title:
CLCORP01 Doc:229875_4
12
EXHIBIT "A"
[To be signed only upon exercise of Option]
To Nextel Communications, Inc.:
The undersigned, the Holder of the within Option, hereby irrevocably
elects to exercise the purchase right represented by such Option for, and to
purchase thereunder, shares of the Class A Common Stock of
Nextel Communications, Inc. and herewith makes payment of $ thereof
or, and requests that the certificates for such shares be issued in the name
of, and be delivered to, whose address is
.
Dated:
(Signature must conform in all respects to
name of Holder as specified on the face of
the Option)
Address
Exhibit C
REGISTRATION RIGHTS AGREEMENT
(Option Acquisition)
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
, 1997 by and among Nextel Communications, Inc., a Delaware
corporation (the "Issuer"), and Option Acquisition, L.L.C., a Washington
limited liability company ("Option Acquisition"). Capitalized terms that are
used but not otherwise defined herein are defined in Section 1.1.
RECITALS
A. Pursuant to an Option Purchase Agreement dated June 16, 1997,
Option Acquisition is acquiring from Issuer two options (the "New Options")
that entitle the holder to acquire shares of Class A Common Stock, par value
$.001 per share, of the Issuer (the "New Shares").
B. The Issuer has agreed to provide certain registration rights to
Option Acquisition and to not more than two assignees of Option Acquisition
holding at least 3 million New Shares.
C. The Issuer and Option Acquisition are entering into this Agreement
to set forth the terms and conditions applicable to the grant and exercise of
such registration rights.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged by the parties hereto, the parties hereby agree as
follows:
Article 1
DEFINITIONS
As used in this Agreement, the following terms have the following
meanings:
(i) "Affiliate" means, as to any Person, another Person that directly
or indirectly through one or more intermediaries, Controls, is Controlled by or
is under common Control with, such Person. For the purposes of this
definition, "Control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing;
provided, that the Issuer and Option Acquisition shall not be deemed to be
direct or indirect Affiliates of each other.
(ii) "Cutback Registration" means any registration in which the
managing underwriter advises the Issuer that marketing
CLCORP01 Doc: 230115_4 2
factors require a limitation of the number of Issuer Common Shares to be
underwritten in such registration.
(iii) "Electing Holder" means any holder of Issuer Common Shares
other than holders of Registrable New Shares (in their respective
capacities as such), who has the right to request inclusion of Issuer Common
Shares held by such holder in a registration.
(iv) "Issuer Common Shares" means shares of Issuer's Class A Common
Stock, par value $.001 per share.
(v) "Person" means a corporation, association, joint venture,
partnership, limited liability company, trust, business, individual, government
or political subdivision thereof, or any governmental agency.
(vi) "Piggyback Registration" means any registration which is not a
Requested Registration (other than a registration on Form S-4 or Form S-8).
(vii) "Qualified Holder" means Option Acquisition and not more than
two assignees of Option Acquisition each of whom (1) at some point in time held
(or then holds) or, upon the exercise of all New Options held by such holder,
would hold, at least 3 million New Shares, (2) is not an Affiliate of Option
Acquisition, (3) was designated as a qualified holder by Option Acquisition,
and (4) agreed in writing to be bound by this
CLCORP01 Doc: 230115_4 3
Agreement; provided that a person ceases to be a Qualified Holder (and all its
rights hereunder will automatically terminate) if (i) such person has held its
New Shares so that the holding period under Rule 144 of the Securities Act
applicable to such holder has been satisfied; and (ii) the number of New Shares
held by such person is less than 1% of the outstanding Issuer Common Shares.
(viii) "Register", "registered" and "registration" refer to a
registration of Issuer Common Shares effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as
amended ("the Securities Act") and the declaration or ordering of the
effectiveness of such registration statement.
(ix) "Registrable Securities" means New Shares held by a Qualified
Holder, but does not include (1) any other Issuer Common Shares or other
securities of the Issuer which may now or hereafter be held or acquired by any
Qualified Holder, (2) New Shares that have been registered or sold pursuant to
Rule 144 promulgated by the Securities and Exchange Commission (or any similar
rule then in force), or (3) New Shares that have been exchanged, substituted or
replaced by securities which have been registered under the Securities Act.
If the number of
CLCORP01 Doc: 230115_4 4
Registrable Securities held by a Qualified Holder, or the Registrable
Securities that a Qualified Holder seeks to include in a registration could be
sold by such Holder over a period of 90 days under Rule 144 (or any similar
rule then in force) such New Shares shall not be Registrable Securities.
(x) "Requested Registration" means a registration requested by
Qualified Holders pursuant ction 2.2.
Article 2
REGISTRATION PROVISIONS
2.1 Piggyback Registration. If at any time, and from time to time,
the Issuer proposes to effect a Piggyback Registration for its account or for
the account of a security holder or holders, the Issuer shall:
(a) promptly give to each Qualified Holder written notice thereof;
and
(b) include in such registration, and in any underwriting involved
therein, all the Registrable Securities specified in a written request,
made within 15 days after receipt of such written notice from the Issuer, by any
Qualified Holder; provided that if such registration is a Cutback Registration,
then (i) if such registration is a primary registration on behalf of the Issuer,
the Issuer shall register in such registration
CLCORP01 Doc: 230115_4 5
(A) first, the Issuer Common Shares the Issuer proposes to sell in such
registration, and (B) second, the Registrable Securities held by each
Qualified Holder and the Issuer Common Shares held by the Electing Holders,
(1) if such Registrable Securities and/or Issuer Common Shares
are sought to be included in such registration pursuant to
contractual registration rights in existence on July 28, 1995,
in accordance with the respective contractual rights of the
holders of such Registrable Securities and/or Issuer Common
Shares, and
(2) in all other cases, on a pro rata basis, based upon the
number of Issuer Common Shares the Qualified Holder and any
Electing Holders originally sought to include in such
registration, and
(ii) if such registration is a Piggyback Registration which is solely a
secondary registration on behalf of holders of Issuer Common Shares, the Issuer
shall register in such registration (A) first, the Issuer Common Shares
proposed to be sold by the holders of Issuer Common Shares requesting such
registration (the "Demanding Holders"), and (B) second, the Registrable
Securities
CLCORP01 Doc: 230115_4 6
held by each Qualified Holder and the Issuer Common Shares held by the Electing
Holders, other than the Demanding Holders,
(1) if such Registrable Securities and/or Issuer Common Shares
are sought to be included in such registration pursuant to
contractual registration rights in existence on July 28, 1995,
in accordance with the respective contractual rights of the
holders of such Registrable Securities and/or Issuer Common
Shares, and
(2) in all other cases, on a pro rata basis, based upon the
number of Issuer Common Shares each Qualified Holder and such
Electing Holders originally sought to include in such
registration.
2.2 Requested Registration.
(a) Request for Registration. If after January 1, 1999, the Issuer
shall receive a written request from any Qualified Holder(s) that the
Issuer effect any registration with respect to all or a part of the Registrable
Securities owned by such holder(s), the Issuer shall promptly give notice of
such request to each other Qualified Holder. Subject to Section 2.9, the Issuer
shall thereupon promptly use its best efforts diligently to effect such
Requested Registration and related
CLCORP01 Doc: 230115_4 7
qualifications and compliances (including, without limitation, the
execution of an undertaking to file post-effective amendments) as may be
requested by the Qualified Holder who made the original request and by the
Qualified Holders who make written request to the Issuer within 20 days after
the giving of the aforesaid notice by the Issuer ("Requesting Holders") and as
would permit or facilitate the sale and distribution of the Registrable
Securities as are specified in any such request; provided that the Issuer is not
obligated to take any action to effect a Requested Registration or any related
qualification or compliance pursuant to this Section 2.2:
(i) if, within 60 days after receipt of the initial request
pursuant to this Section 2.2, the Issuer elects to include in
such registration Issuer Common Shares for its own account,
whereupon the Issuer shall notify each Requesting Holder that it
has elected to effect a Piggyback Registration and shall
thereafter diligently proceed to do so, including therein the
Registrable Securities as to which notice was given by the
Requesting Holders pursuant to this Section 2.2 but subject to
the limitations set forth in Section 2.1;
CLCORP01 Doc: 230115_4 8
(ii) if the Requesting Holders do not request to include in such
registration, in the aggregate, at least 3 million Registrable
Securities; or
(iii) if the Issuer has effected two Requested Registrations on
behalf of Qualified Holder(s), which Requested Registrations
have been declared or ordered effective and which effectiveness
has not been suspended or stopped by any governmental or
judicial authority.
If the Requested Registration is a Cutback Registration, the Issuer
shall register in such registration (1) first, the Registrable Securities
which any Requesting Holder seeks to include in such registration, on a pro rata
basis based upon the number of such Issuer Common Shares each Requesting Holder
seeks to include in such registration and (2) second, the Issuer Common Shares
held by each Electing Holder, (i) if such Issuer Common Shares are sought to be
included in such registration pursuant to contractual obligations of the Issuer
in existence on July 28, 1995, in accordance with the respective contractual
rights of the holder of such Issuer Common Shares, and (ii) in all other cases,
on a pro rata basis based upon the number of shares each Electing Holder seeks
to include in such registration.
CLCORP01 Doc: 230115_4 9
(b) Underwriting. If the Requesting Holders intend to distribute the
Registrable Securities covered by such request by means of an underwriting,
such Requesting Holders shall so advise the Issuer as a part of the request made
pursuant to this Section 2.2 and, in such event, the Requesting Holders shall
select an underwriter of their choice, which choice shall be subject to the
approval of the Board of Directors of the Issuer, and which approval shall not
be unreasonably withheld. The Issuer and such Requesting Holders shall negotiate
in good faith and enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting. If a Requesting
Holder disapproves of the terms of the underwriting, such Requesting Holder may
elect to withdraw therefrom by written notice to the Issuer and the managing
underwriter, and each of the remaining Requesting Holders shall be entitled to
increase the number of shares being registered, to the extent permitted by the
managing underwriter, in the proportion which the number of shares of
Registrable Securities being registered by such Requesting Holder bears to the
total number of shares being registered by all such remaining Requesting
Holders.
CLCORP01 Doc: 230115_4 10
2.3 Expenses of Registration. Except as otherwise provided herein,
all expenses incurred by the Issuer in connection with any registration ,
qualification, or compliance pursuant to this Agreement, including, without
limitation, all registration, filing and qualification fees, printing expenses,
fees and disbursements of counsel for the Issuer and the holders of Registrable
Securities, and the expenses of any audits required by such registration, shall
be borne by the Issuer. However, (a) the Issuer shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable Securities
and (b) the Issuer shall not be obligated to pay the fees and disbursements of
more than one legal counsel to the Requesting Holders.
2.4 Registration Procedures. (a) In the case of each registration
effected by the Issuer pursuant to this Article 2, the Issuer shall keep
each holder of Registrable Securities included in such registration advised in
writing as to the initiation, progress, and effective date of each registration,
qualification and compliance, and, at its expense to the extent provided in
Section 2.3, the Issuer will:
(i) subject to Section 2.4(b) below, keep each registration effective
for a period of 90 days (plus any number of
CLCORP01 Doc: 230115_4 11
days that the Qualified Holders are unable to use a prospectus pursuant to
Section 2.4(b) below) or until each such holder shall have completed the
distribution described in the registration statement relating thereto,
whichever first occurs (the "Registration Period"); and
(ii) furnish such number of prospectuses (including preliminary
prospectuses) and other documents filed with the Securities and Exchange
Commission (the "Commission") as part of the registration statement as
such holders from time to time may request.
(b) If, within the Registration Period, there occurs any development
or any event which makes any statement in the registration statement or any
post-effective amendment thereto, or any document incorporated therein by
reference, untrue in any material respect or which requires the making of any
changes in the registration statement or post-effective amendment thereto or
prospectus or amendment or supplement thereto, so that they will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein (in the case of
any prospectus, in the light of the circumstances under which they
CLCORP01 Doc: 230115_4 12
were made) not misleading, the Issuer shall immediately notify each
Qualified Holder included in such registration of the occurrence thereof and, as
soon as reasonably practicable, prepare and furnish to each such holder, a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to purchasers of Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Each Qualified Holder agrees that, upon receipt of any notice from
the Issuer pursuant to this Section 2.4(b), such holder shall forthwith
discontinue disposition of Registrable Securities until it shall have received
copies of such amended or supplemented prospectus, and, if so directed by the
Issuer, shall deliver to the Issuer all copies, other than permanent file
copies, then in its possession of the prospectus covering Registrable Securities
at the time of receipt of such notice.
(c) Each Qualified Holder participating in any Cutback Registration
shall, as among all holders of Registrable Securities, be entitled to exercise
its rights hereunder pro rata
CLCORP01 Doc: 230115_4 13
according to the number of shares of Registrable Securities held by such
Qualified Holder and any Electing Holders.
(d) If requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to a registration requested under this
Agreement, the Issuer will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Issuer and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 2.5 hereof and an opinion of
counsel for the Issuer dated the date of the closing under the underwriting
agreement, and providing that the Issuer shall use its best efforts to furnish a
"cold comfort" letter signed by the independent public accountants who have
audited the Issuer's financial statements included in such registration
statement, in each such case covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) as
are customarily covered in opinions of Issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of securities
and
CLCORP01 Doc: 230115_4 14
such other matters as the underwriters reasonably request and, in the case
of such accountants' letter, with respect to events subsequent to the date of
such financial statements. The holders of Registrable Securities on whose behalf
the Registrable Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement.
(e) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the
Securities Act, the Issuer will give the underwriters, if any, and their counsel
and accountants, such reasonable and customary access to its books and records
and such opportunities to discuss the business of the Issuer with its officers
and the independent public accountants who have certified the Issuer's financial
statements as shall be necessary, in the opinion of such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.5 Indemnification. (a) With respect to any registration which has
been effected pursuant to this Article 2, the Issuer shall indemnify each
Qualified Holder whose securities are included therein, each such holder's
directors and officers, each underwriter (as defined in the Securities Act) of
the securities
CLCORP01 Doc: 230115_4 15
sold by such a holder, each other Person who participates in the offering
of such holder's securities, and each Person who controls (within the meaning of
the Securities Act) any such holder, underwriter, or participating Person from
and against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or
other document (including any related registration statement)
incident to any such registration effected pursuant to this
Article 2,
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or
(iii) any violation by the Issuer of the Securities Act or any
rule or regulation promulgated thereunder applicable to the
Issuer, or any blue sky or state securities laws or any rule or
regulation promulgated thereunder applicable to the Issuer,
in each case relating to action or inaction required of the Issuer in
connection with any such registration, and will
CLCORP01 Doc: 230115_4 16
reimburse each such Person entitled to indemnity hereunder for any legal
and other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided that, the
foregoing indemnity and reimbursement obligation is not applicable to the extent
that any such claim, loss, damage or liability arises out of or is based on any
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in reliance upon and in conformity with written information furnished to
the Issuer by or on behalf of such a holder or by or on behalf of such an
underwriter specifically for use in such prospectus, offering circular or other
document; and further provided that, with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this Section 2.5(a) will not
inure to the benefit of any underwriter to the extent that any such losses,
claims, damages or liabilities of such underwriter result from the fact that
there was not sent or given to any person who purchased Registrable Securities
in connection with such registration, at or prior to the written confirmation of
the sale of Registrable Securities to such person, a copy of the prospectus
relating to such registration, as then amended or
CLCORP01 Doc: 230115_4 17
supplemented (exclusive of material incorporated by reference), if the
Issuer had previously furnished copies thereof to such underwriter.
(b) Each holder of Registrable Securities which are included in such
registration, qualification or compliance shall indemnify the Issuer, its
directors and officers, each underwriter (as defined in the Securities Act) of
the securities of such holder, each other person who participates in the
offering of such holder's securities and each Person who controls (within the
meaning of the Securities Act) the Issuer or any such underwriter or
participating Person from and against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or
other document (including any related registration statement)
incident to any such registration effected pursuant to this
Article 2,
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or
CLCORP01 Doc: 230115_4 18
(iii)any violation by such holder of the Securities Act or any
rule or regulation promulgated thereunder applicable to such
holder, or of any blue sky or other state securities law or any
rule or regulation promulgated thereunder applicable to such
holder,
in each case, relating to action or inaction required of such holder in
connection with any registration, qualification or compliance, and will
reimburse each such Person entitled to indemnity hereunder for any legal and
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, expense, liability or action, but in each case
only to the extent that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such prospectus, offering circular or
other document in reliance upon and in conformity with written information
furnished to the Issuer by or on behalf of such holder specifically for use
therein; and further provided that, with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this Section 2.5(b) will not
inure to the benefit of any underwriter to the extent that any such losses,
claims, damages or liabilities of such underwriter result from the fact
CLCORP01 Doc: 230115_4 19
that there was not sent or given to any person who purchased Registrable
Securities in connection with such registration, at or prior to the written
confirmation of the sale of Registrable Securities to such person, a copy of the
prospectus relating to such registration, as then amended or supplemented
(exclusive of material incorporated by reference), if the Issuer had previously
furnished copies thereof to such underwriter.
(c) Each party entitled to indemnification under this Section 2.5 (an
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after the Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that
(i) counsel for the Indemnifying Party who shall conduct the
defense of any such claim or any litigation shall be approved by the
Indemnified Party,
(ii) the Indemnified Party may participate in such defense at
the Indemnified Party's expense (provided that the Indemnified Party or
Indemnified Parties have the right to employ one counsel to represent it
or them if, in the reasonable judgment of the Indemnified Party or
CLCORP01 Doc: 230115_4 20
Indemnified Parties, it is advisable for it or them to be represented
by separate counsel by reason of having legal defenses which are different
from or in addition to those available to the Indemnifying Party, and in
that event the fees and expenses of such one counsel will be paid by
the Indemnifying Party), and
(iii) failure of any Indemnified Party to give notice as
provided herein will not relieve the Indemnifying Party of its obligations
under this Section 2.5.
No Indemnifying Party, in the defense of any such claim or litigation,
will, except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement (which judgment or settlement would be
adverse to and binding upon such Indemnified Party) of any claim for which such
Indemnified Party may seek indemnification hereunder; provided that, as to each
Indemnified Party withholding such consent, the maximum amount of the losses,
damages or liabilities in respect of which such Indemnified Party may seek
indemnification hereunder with respect to such claim is limited to the amount
which the Indemnifying Party would have paid to or on behalf of such Indemnified
Party had such Indemnified Party consented to such judgment or settlement.
CLCORP01 Doc: 230115_4 21
(d) If the indemnification provided for in this Section 2.5 is for
any reason unavailable to an Indemnified Party in respect to any loss,
claim, damage or liability, or any action in respect thereof, referred to
herein, then each Indemnifying Party will, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault will be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party on the one hand or the Indemnified Party on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission,
but not by reference to any Indemnified Party's stock ownership in the Issuer.
In no event, however, will a holder of Registrable
CLCORP01 Doc: 230115_4 22
Securities be required to contribute in excess of the amount of the net
proceeds received by such holder in connection with the sale of Registrable
Securities in the offering which is the subject of such loss, claim, damage or
liability. The amount paid or payable by an Indemnified Party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this paragraph includes, for purposes of this paragraph, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act)) is entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.
2.6 Information by Holders. If Registrable Securities owned by a
Qualified Holder are included in any registration, such holder will furnish to
the Issuer such information regarding itself and the distribution proposed by
such holder as the Issuer may reasonably request and as is required in
connection with any registration, qualification or compliance referred to in
this Article 2.
2.7 Rule 144 Reporting. With a view to making available to each
Qualified Holder the benefits of certain rules
CLCORP01 Doc: 230115_4 23
and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Issuer agrees
that so long as a holder owns any Registrable Securities, the Issuer shall, (a)
make and keep available public information, as those terms are contemplated by
Rule 144 under the Securities Act; (b) timely file with the Commission all
reports and other documents required to be filed under the Securities Act and
the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); and (c) furnish to
each holder forthwith upon request a written statement by the Issuer as to its
compliance with the reporting requirements of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Issuer, and such other information as such holder may reasonably request in
order to avail itself of any rule or regulation of the Commission allowing such
holder to sell any Registrable Securities without registration.
2.8 Future Registration Rights. (a) The Issuer will not hereafter
agree with the holders of any securities issued or to be issued by the Issuer
to register such securities under the Securities Act unless such agreement
specifically provides that (i) such holder of securities may not participate in
any Piggyback Registration except as provided in Section 2.1, (ii)
CLCORP01 Doc: 230115_4 24
the holder of such securities may not participate in any Requested
Registration except as provided in Section 2.2, (iii) unless in the opinion of
the managing underwriter or underwriters, if any, of any Piggyback Registration
or Requested Registration the public offering or sale of such other securities
would not interfere with the successful public offering and sale of Registrable
Securities requested to be included in such Piggyback Registration or Requested
Registration, such other securities will not be included in a registration
statement in which such shares of Registrable Securities are so included, and
(iv) such securities may not be publicly offered or sold for a period of at
least ninety (90) days after the date upon which such registration statement
becomes effective. This Section 2.8 is not violated by the future grants of
registration rights provided such rights are subject to the foregoing
restrictions and are exercisable on a pro rata basis with all other holders of
such rights, and the Issuer is not be required to obtain the consent of any
party hereto with respect to such future grants.
(b) From and after the date hereof, the Issuer shall not enter into
any agreement with any holder or prospective holder of any securities of the
Issuer providing for the granting to such holder of registration rights
(including demand
CLCORP01 Doc: 230115_4 25
registration rights which, by their terms, do not permit the inclusion of
shares of parties other than the holders of such demand registration rights)
that entitle such holder to priority over a Qualified Holder with respect to
registration of the securities of the Issuer.
2.9 Permitted Interruption. Notwithstanding any provision of this
Article 2, the Issuer shall not be required to prepare or file a
registration statement, amendment or post-effective amendment thereto or
prospectus supplement or to supplement or amend any registration statement or
otherwise facilitate the resale of Registrable Securities, and the Issuer shall
be free to take or omit to take any other action that would result in the
impracticality of any such filing, supplement or amendment, if such filing,
supplement or amendment (and any required disclosure therein), in the good faith
and reasonable judgment of the Issuer, would jeopardize the completion of a
material investment in the Issuer, or any acquisition, divestiture or other
similar transaction that the Issuer is at such time in negotiations therefor, so
long as the Issuer shall, as promptly as practicable after the conclusion of
such negotiations, make such filing, supplement or amendment and so long as the
Issuer shall, as promptly as practicable thereafter, comply with the
requirements
CLCORP01 Doc: 230115_4 26
of this Article 2, if applicable (any period described in this
Section 2.9 during which the Company is not required to make such filing,
amendment or supplement being herein a "Permitted Interruption"). If a Qualified
Holder has requested registration of New Shares in a Requested Registration,
Piggyback Registration or Cutback Registration and a Permitted Interruption
affects that registration, the Issuer agrees to notify each of the Holders so
affected by a Permitted Interruption upon each of the commencement and
termination of each Permitted Interruption. The Issuer shall not be required in
the notice of a Permitted Interruption to disclose the cause for such Permitted
Interruption. The Permitted Interruption terminates upon the termination of such
negotiations or the public disclosure thereof.
Article 3
MISCELLANEOUS
3.1 Notices. Except as otherwise specifically provided in this
Agreement, all communications hereunder shall be sent in the manner and to the
addresses set forth in Section 11.1 of the Option Purchase Agreement and, as to
any Qualified Holder, to an address provided to Issuer by such Holder for
purposes of notices hereunder.
CLCORP01 Doc: 230115_4 27
3.2 Non-Waiver of Remedies and Actions By Holders. No course of
dealing between the Issuer and any Qualified Holder or any delay on the part of
such holder in exercising any rights available to such holder operates as a
waiver of any right of such holder, except to the extent expressly waived in
writing by such holder.
3.3 Headings. The headings in this Agreement are for purposes of
reference only and are not to be considered in construing this Agreement.
3.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered constitutes an
original and all together shall constitute one Agreement.
3.5 Successors and Assigns. This Agreement binds and inures to the
benefit of the successors of any Qualified Holders and the Issuer. Except for
Option Acquisition's right to designate up to two other Qualified Holders as
expressly provided herein, no Qualified Holder may assign any of the rights
created by this Agreement.
3.6 Consent of Holders; Waiver. (a) Whenever, by the terms hereof,
anything is required to be done to the satisfaction of the Qualified Holders,
or such Holders are to appoint a
CLCORP01 Doc: 230115_4 28
representative, if such satisfaction, or appointment is necessary in connection
with a specific registration being effected hereunder, it will be effective
when done by the Qualified Holders holding a majority of the Registrable
Securities held by Qualified Holders that are being included in such
registration.
(b) Except as provided in Section 3.6(a), whenever, by the terms
hereof, the consent of the Qualified Holders is required, anything is
required to be done to the satisfaction of such holders, or if such holders are
to appoint a representative, such consent, satisfaction, or appointment is
effective when done by Qualified Holders holding a majority of the Registrable
Securities held by Qualified Holders.
(c) All rights and remedies hereunder for the benefit of the
Qualified Holders are intended to be for the benefit of each holder of
Registrable Securities and, unless otherwise specified to the contrary, may be
exercised by the Qualified Holders together or by each such holder separately.
3.7 Enforceability. If any term or provision of this Agreement, or
the application thereof to any Person or circumstance, is, to any extent,
invalid or unenforceable, the remaining terms and provisions of this
Agreement or application to other Persons and circumstances are not invalidated
thereby,
CLCORP01 Doc: 230115_4 29
and each term and provision hereof is to be construed with all other remaining
terms and provisions hereof to effect the intent of the parties hereto to the
fullest extent permitted by law.
3.8 Law Governing. This Agreement is to be construed and enforced in
accordance with and shall be governed by the laws of the State of Delaware
applicable to contracts executed in and to be fully performed in that state.
3.9 Effectiveness. The effectiveness of this Agreement is
conditioned upon, and the obligations and rights of the parties hereunder will
come into force and effect at, the Closing as contemplated in the Option
Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
Name:
Title:
OPTION ACQUISITION, L.L.C.
Name:
Title:
CLCORP01 Doc: 230115_4 30
Exhibit D
First Amendment
to
Registration Rights Agreement
This is First Amendment to Registration Rights Agreement, dated as of
June , 1997, (this "Amendment") by and among Nextel Communications, Inc., a
Delaware corporation (the "Issuer"), Digital Radio, L.L.C., a Washington
limited liability company (the "Investor"), and Option Acquisition, L.L.C., a
Washington limited liability company ("Option Acquisition"), amending the
Registration Rights Agreement, dated July 28, 1995 by and among the Issuer and
the Investor (the "Original Agreement"). Capitalized terms that are used but
not otherwise defined herein are used as defined in the Original Agreement.
Introductory Statement
Option Acquisition and the Investor are both "controlled" by Xxxxx X.
XxXxx ("Individual"). Issuer has agreed, in the Option Purchase Agreement,
dated as of June 16, 1997, by and among Issuer, its wholly owned subsidiary
Unrestricted Subsidiary Funding Company, and Option Acquisition (the "Option
Purchase Agreement"), that shares of its Class A
Nextel rrzdisc Doc: 232591#2
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Common Stock, par value $.001 per share ("Issuer Common Stock") acquired by
Option Acquisition upon the exercise of two options being issued to Option
Acquisition on the date of this Amendment (the "New Options") will be entitled
to the benefits of the Original Agreement under certain circumstances, as set
forth in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing, the covenants of
the Option Purchase Agreement and this Amendment, the parties agree as follows:
1. Expand Definition of Registrable Securities. Recital D of the
Original Agreement is hereby amended to delete the parentheses and
parenthetical text, and Section 1(ix) of the Original Agreement is hereby
amended to read in its entirety:
(x) "Registrable Securities" means, except as otherwise stated in
this Section (x), (A) Issuer Common Shares that the Investor and/or any of
the Qualified Controlled Affiliates may purchase from the Issuer or
receive upon conversion of any of its Issuer Preferred Shares or upon
exercise of any of the Options; (B) Secondary Common Shares that the
Investor and/or any of the Qualified Controlled Affiliates may purchase
form Supplier
Nextel rrzdisc Doc: 232591#2
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and Secondary Option Shares received upon exercise of the Supplier
Option; and (C) Qualified New Option Shares; but does not include any
other Issuer Common Shares or other securities of the Issuer which may
now or hereafter be held or acquired by any holder of Registrable
Securities. Securities will cease to be Registrable Securities upon the
first to occur of the following: (i) such securities have been sold
pursuant to a registration or pursuant to Rule 144 promulgated by the
Securities and Exchange Commission (or any similar rule then in force);
(ii) with respect to Issuer Common Shares issued upon exercise of the
Incentive Stock Options, to the extent such securities have been
previously registered if they may be resold by the holder thereof without
registration or limitation; and (iii) such securities have been exchanged,
substituted or replaced by securities which have been registered under the
Securities Act. For all purposes of this Agreement, a holder of
Registrable Securities shall be deemed to hold any Registrable Securities
issuable to such holder upon conversion or exercise of, or in exchange
for, Convertible Securities of the types described in clause (A) or (B) of
this Section (x), disregarding any legal, regulatory or
Nextel rrzdisc Doc: 232591#2
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contractual restrictions on such conversion, exercise or exchange.
2. Add Definition of Qualified New Option Shares. Section 1(xiii) of
the Original Agreement is hereby renumbered to be Section 1(ix), Section 1(x)
is hereby renumbered Section 1(xi). A new Section 1(viii) is added as follows:
(viii) "Qualified New Option Shares" means Issuer Common Shares, if
any, owned by Option Acquisition acquired as a result of the exercise of a
New Option, except that (A) no such shares are Qualified New Option Shares
until January 1, 1999, (B) any such shares shall cease being Qualified New
Option Shares from and after the first day that Individual and/or Members
of the XxXxx Family (as defined in Section 4 of the First Amendment to
Registration Rights Agreement dated as of June 16, 1997 among the Issuer,
Investor and Option Acquisition) no longer control Option Acquisition, (C)
no such shares are Qualified New Option Shares from and after the time
that the number of Issuer Common Shares held by Option Acquisition is less
than 1% of the outstanding Issuer Common Shares and the holding period
under Rule 144 of the Securities Act applicable to Option Acquisition has
been satisfied.
Nextel rrzdisc Doc: 232591#2
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3. Notices to Option Acquisition. From and after January 1, 1999,
the Issuer will send to Option Acquisition (at the address specified for
notices under the Option Purchase Agreement) a copy of any notice that the
Issuer sends to the Investor under the Original Agreement (as amended by this
Amendment, and as the same may be further amended, the "Investor Registration
Rights Agreement").
4. Change in Control of Option Acquisition. (a) If Option Acquisition
becomes aware that it is no longer controlled by Individual and/or Members of
the XxXxx Family (as defined below), Option Acquisition will notify Issuer of
that fact and this Amendment will be void and without further force or effect.
Solely for purposes of the Introductory Statement (as it relates to control of
Option Acquisition) and Section 4 of this Amendment, and for purposes of
Section 1 (viii) (B) of the Original Agreement (as amended by this Amendment),
the terms "controls" and "controlled by" shall mean that Individual and/or
Members of the XxXxx Family have the sole possession of at least 2/3 of the
voting and investment power over management and policies of Option Acquisition
including, without limitation, the sole authority to make all decisions with
respect to the Option Purchase Agreement and the purchase, sale and voting of
any
Nextel rrzdisc Doc: 232591#2
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securities of the Company owned or available for purchase by Option
Acquisition pursuant to the Option Purchase Agreement and the New Options. For
purposes of Section 4 of this Amendment and Section 1(viii) of the Original
Agreement (as amended by this Amendment), "Members of the XxXxx Family" means
Xxxxx X. XxXxx, Xxxx X. XxXxx, Xxxxx X. XxXxx, Xxxxxx X. Xxxxxxxx, their
respective lineal descendants, any entity controlled by any such persons
(including, without limitation, KMMK Limited Partnership), and any trust or
foundation established by any such persons that holds all or any part of
such persons' interests in Option Acquisition either during the lifetime or
upon the death of any such persons.
(b) At any time that Option acquisition is exercising any rights as a
holder of Registrable Securities pursuant to the Investor Registration Rights
Agreement, the Issuer may require Option Acquisition and Individual (or a
Member of the XxXxx Family if Individual is deceased on incapacitated at the
time) to certify that Individual and/or Members of the XxXxx Family control
Option Acquisition.
5. Reaffirmation of Original Agreement. Except as expressly stated
in this Amendment, the Original Agreement remains in full force and effect.
Nextel rrzdisc Doc: 232591#2
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed on their behalf, as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By:
DIGITAL RADIO, L.L.C.
By:
OPTION ACQUISITION, L.L.C.
By:
EXHIBIT E
June , 1997
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Re: Option Purchase Agreement
Gentlemen:
To induce Nextel Communications, Inc., Delaware corporation (the
"Company"), and its wholly owned subsidiary, Unrestricted Subsidiary Funding
Company ("USFC"), to consummate the transaction contemplated by the Option
Purchase Agreement dated June , 1997 (the "Option Purchase Agreement")
among the Company, USFC and Option Acquisition, L.L.C. ("Option Acquisition"),
and pursuant to Section 1.4(g) of the Option Purchase Agreement, the Individual
executes and delivers this letter. Terms used in this letter that are defined
in the Option Purchase Agreement are used herein as so defined.
Individual represents and warrants to the Company and USFC that:
(a) Individual is an "accredited investor" as defined in Regulation D
under the Securities Act.
(b) The execution, delivery and performance of the Option Purchase
Agreement and the other Transaction Agreements, and the consummation of
the Transactions contemplated thereby by Individual and by each Affiliate
of Individual who is a party thereto will not result in any violation of
or conflict with, constitute a default (with or with notice or lapse of
time) under, or give rise to a right of termination, cancellation or
acceleration of, or result in the imposition of any Encumbrance under, or
require any consent under, any term of any note, bond, debt instrument,
mortgage, indenture or other agreement or instrument, or any Law or Order,
by which Individual or any such Affiliate of Individual may be bound.
(c) Individual and each Affiliate of Individual who was a party to
the Option Purchase Agreement or any other Transaction Agreement has
received or obtained (i) all Authorizations that are required to be made,
filed, given or
Nextel rrzdisc Doc: 231458#2
Nextel Communications, Inc.
June , 1997
Page 2
obtained by Individual or its Affiliates with, to or from any Governmental
Authority in connection with the Transactions contemplated to occur at or
prior to the Closing and (ii) all consents, approvals and waivers required
to be given by, or obtained from, any other Persons to or by Individual or
its Affiliates in connection with the Transactions contemplated to occur
at or prior to the Closing by the Option Purchase Agreement and the other
Transaction Agreements.
(d) Individual, his mother and brothers, are the only Persons with
any legal or beneficial interest in Option Acquisition.
Individual understands that Section 6.4 of the Option Purchase
Agreement restricts his ability to transfer his membership interests in Option
Acquisition and that, after a transfer in compliance with the Option Purchase
Agreement, the transferee will continue to be bound by those restrictions.
Individual will cooperate with Option Acquisition to implement such procedures
as may be appropriate to assure that Option Acquisition and its members comply
with the provisions of Section 6.4 of Option Purchase Agreement.
Sincerely yours,
Xxxxx X. XxXxx
Nextel rrzdisc Doc: 231458#2
EXHIBIT F
June , 1997
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Re: Option Purchase Agreement
Gentlemen:
The undersigned is a member ("Member") of Option Acquisition, L.L.C.,
a Washington limited liability company ("Option Acquisition"), and delivers
this letter to induce Nextel Communications, Inc. (the "Company") to consummate
the transactions contemplated by the Option Purchase Agreement dated June ,
1997 (the "Option Purchase Agreement") among the Company, Unrestricted
Subsidiary Funding Company and Option Acquisition. Terms used in this letter
that are defined in the Option Purchase Agreement are used herein as so
defined.
The Member represents and warrants that he/she is an "accredited
investor" as defined in Regulation D under the Securities Act.
Member understands that Section 6.4 of the Option Purchase Agreement
restricts his/her ability to transfer his/her interests in Option Acquisition
and that, after a transfer in compliance with the Option Purchase Agreement,
the transferee will continue to be bound by those restrictions. Member will
cooperate with Option Acquisition to implement such procedures as may be
appropriate to assure that Option Acquisition and its members comply with the
provisions of Section 6.4 of the Option Purchase Agreement.
Sincerely yours,
[Will be a separate letter for each equity
owner in Option Acquisition]
a:oppuragmt.doc
