EXHIBIT 7
STOCK PURCHASE AGREEMENT
dated as of
June 14, 2000
by and between
NEXTLINK Communications, Inc.
and
The Purchasers Listed on the Signature Pages Hereto
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of June 14,
2000, by and between NEXTLINK Communications, Inc., a Delaware corporation
(including, if applicable, NM Acquisition Corp. as its successor in
accordance with Section 8.6, the "Company"), and the entities listed on the
signature page hereto under the caption "Purchasers" (each such entity, a
"Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H :
WHEREAS, on January 20, 2000, the Purchasers acquired shares of
the Company's Series C Preferred Stock, par value $.01 per share (the
"Series C Preferred Stock"), and shares of the Company's Series D Preferred
Stock, par value $.01 per share (the "Series D Preferred Stock"), pursuant
to the Stock Purchase Agreement, dated as of December 7, 1999, by and
between certain of the Purchasers and the Company (the "1999 Stock Purchase
Agreement"); and
WHEREAS, upon the terms and subject to the conditions set forth
in this Agreement, the Company wishes to sell to the Purchasers and the
Purchasers wish to purchase from the Company (i) an aggregate of 268,750
shares of the Company's Series G Preferred Stock, par value $.01 per share
(the "Series G Preferred Stock"), and (ii) an aggregate of 131,250 shares
of the Company's Series H Preferred Stock, par value $.01 per share (the
"Series H Preferred Stock" and, collectively with the Series G Preferred
Stock, the "Preferred Shares"); and
WHEREAS, the Purchasers and the Company desire to provide for the
purchase and sale of the Preferred Shares and to establish certain rights
and obligations in connection therewith.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND SALE OF PREFERRED SHARES
1.1. Issuance, Purchase and Sale. Upon the terms and subject to
the conditions set forth herein, at the Closing (as defined below) the
Company shall sell to the Purchasers and the Purchasers shall purchase from
the Company (a) an aggregate of 268,750 shares of Series G Preferred Stock
for an aggregate purchase price of $269,406,250 in cash and (b) an
aggregate of 131,250 shares of Series H Preferred Stock for an aggregate
purchase price of $132,343,750 in cash (the cash amounts set forth in (a)
and (b) being collectively referred to herein as, the "Purchase Price").
The number of shares of Series G Preferred Stock and Series H Preferred
Stock being acquired by each Purchaser, and the portion of the Purchase
Price payable therefor is set forth opposite such Purchaser's name on the
signature page hereto; provided, that the Purchasers shall have the right
at any time prior to the Closing by delivering written notice to the
Company to reallocate among the Purchasers the Preferred Shares to be
purchased by each Purchaser so long as such reallocation does not change
the total number of Preferred Shares being acquired hereunder or the
Purchase Price.
1.2. The Closing; Deliveries. (a) The closing of the purchase and
sale of the Preferred Shares hereunder (the "Closing") shall take place at
the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York
Plaza, New York, New York 10004 at 9:00 a.m. on the fifth business day
following the satisfaction or waiver of the conditions set forth in Article
V (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those
conditions), but no earlier than June 30, 2000, or at such other place,
time and/or date as shall be mutually agreed by the Company and the
Purchasers (the date of the Closing, the "Closing Date").
(b) At the Closing, the Company shall deliver to each Purchaser
certificates representing the Preferred Shares being purchased by such
Purchaser, each registered in the name of such Purchaser or its nominee or
designee in such amounts as such Purchaser shall specify to the Company
prior to the Closing. Delivery of such certificates shall be made against
receipt by the Company of the portion of the Purchase Price payable
therefor, which shall be paid by wire transfer to an account designated at
least three business days prior to the Closing Date by the Company.
1.3. Capitalized Terms. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in Section 8.1.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser, as
of the date hereof and, subject to Section 8.17, as of the Closing, as
follows:
2.1. Organization; Subsidiaries. (a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to
carry on its business as it is now being conducted. As of the date hereof
and prior to the Merger (as defined herein), the Company is duly qualified
and licensed as a foreign corporation to do business, and is in good
standing (and has paid all relevant franchise or analogous taxes), in each
jurisdiction where the character of its assets owned or held under lease or
the nature of its business makes such qualification necessary and where the
failure to so qualify or be licensed would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect. The
failure of the Company to be so qualified and licensed in any jurisdiction
following the Merger will not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(b) The Company's Annual Report on Form 10-K for the year ended
December 31, 1999 (the "1999 10-K") and Schedule 2.1(b) sets forth a
complete and correct list as of the date hereof of each corporation,
limited liability company, partnership, business association or other
Person with respect to which the Company has, directly or indirectly,
ownership of or rights with respect to securities or other interests having
the power to elect a majority of such Person's board of directors or
analogous or similar governing body, or otherwise having the power to
direct the management, business or policies of that corporation, limited
liability company, partnership, business association or other Person which
is a "Significant Subsidiary" as defined in Rule 1-02(w) of Regulation S-X
(each, a "Significant Subsidiary" and, collectively, the "Significant
Subsidiaries"). Except as set forth in the 1999 10-K or on Schedule 2.1(b),
as of the date hereof (i) the Company owns, either directly or indirectly
through one or more Subsidiaries, all of the capital stock or other equity
interests of the Significant Subsidiaries free and clear of all liens,
charges, claims, security interests, restrictions, options, proxies, voting
trusts or other encumbrances ("Encumbrances") and (ii) there are no
outstanding subscription rights, options, warrants, convertible or
exchangeable securities or other rights of any character whatsoever
relating to issued or unissued capital stock or other equity interests of
any Significant Subsidiary, or any Commitments of any character whatsoever
relating to issued or unissued capital stock or other equity interests of
any Significant Subsidiary or pursuant to which any Significant Subsidiary
is or may become bound to issue or grant additional shares of its capital
stock or other equity interests or related subscription rights, options,
warrants, convertible or exchangeable securities or other rights, or to
grant preemptive rights. Except for any Subsidiaries which are not
Significant Subsidiaries and except as set forth in the 1999 10-K or on
Schedule 2.1(b), as of the date hereof the Company does not own, directly
or indirectly, any interest in any corporation, limited liability company,
partnership, business association or other Person.
2.2. Due Authorization. The Company has all right, corporate
power and authority to enter into this Agreement and each of the other
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
the Company of this Agreement and each of the other Transaction Documents
to which it is a party, the issuance, sale and delivery of the Preferred
Shares by the Company and the compliance by the Company with each of the
provisions of this Agreement and each of the other Transaction Documents to
which it is a party (including the reservation and issuance of the Shares
upon conversion of the Preferred Stock and the consummation by the Company
of the transactions contemplated hereby and thereby) (a) are within the
corporate power and authority of the Company, and (b) have been duly
authorized by all requisite corporate action of the Company. This Agreement
has been, and each of the other Transaction Documents to which the Company
is a party when executed and delivered by the Company will be, duly and
validly executed and delivered by the Company, and this Agreement
constitutes, and each of such other Transaction Documents when executed and
delivered by the Company will constitute, a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally and
for limitations imposed by general principles of equity. The Shares have
been validly reserved for issuance, and upon issuance, will be duly
authorized and validly issued and outstanding, fully paid, and
nonassessable. The Company has taken all action necessary to waive, and by
its execution hereof does hereby waive, the provisions of Section 4.16 of
the 1999 Stock Purchase Agreement to the extent necessary to permit the
Purchasers to consummate the transactions contemplated by this Agreement
and the other Transaction Documents. The terms, designations, powers,
preferences and relative participation, optional and other special rights,
qualifications, limitations and restrictions of the Series G Preferred
Stock and the Series H Preferred Stock will be as set forth in the
Certificate of Designation for the Series G Preferred Stock and the
Certificate of Designation for the Series H Preferred Stock (the
"Certificates of Designation"), the forms of which are attached to this
Agreement as Exhibits 2.2A and 2.2B. The Preferred Shares issued to the
Purchasers in accordance with the terms of the Certificates of Designation,
when issued and delivered in accordance with the terms of this Agreement,
will be duly authorized and validly issued and outstanding, fully paid and
nonassessable free and clear of any Encumbrances and not subject to the
preemptive or other similar rights of any stockholders of the Company.
2.3. Capitalization. (a) As of the date hereof, and without
giving effect to the Stock Dividend, the authorized capital stock of the
Company consists of (i) 1,000,000,000 shares of Class A Common Stock, par
value $0.02 per share (the "Class A Common Stock"), of which, 89,308,534
shares were issued and outstanding as of June 5, 2000, with any increase
since that date being attributable solely to the exercise of outstanding
employee stock options listed on Schedule 2.3(a); (ii) 120,000,000 shares
of Class B Common Stock, par value $0.02 per share (the "Class B Common
Stock", and together with the Class A Common Stock, the "Common Stock"), of
which, 52,824,763 shares are issued and outstanding; and (iii) 25,000,000
shares of Preferred Stock, par value $0.01 per share, of which (A)
8,917,653 shares are issued and outstanding as 14% Senior Exchangeable
Redeemable Preferred Shares (to be redesignated Series A Exchangeable
Redeemable Preferred Stock after consummation of the Merger) (the "14%
Preferred Stock"), (B) 2,122,795 shares are issued and outstanding as
6-1/2% Cumulative Convertible Preferred Stock (to be redesignated Series B
Cumulative Convertible Preferred Stock after consummation of the Merger)
(the "6 1/2% Preferred Stock"), (C) 584,375 shares are issued and
outstanding as Series C Preferred Stock, and (D) 265,625 shares are issued
and outstanding as Series D Preferred Stock (the 6 1/2% Preferred Stock,
14% Preferred Stock, Series C Preferred Stock and Series D Preferred Stock,
collectively, the "Existing Preferred Stock"). As of June 5, 2000, the
Shares would constitute approximately 3.2% percent of the Company's fully
diluted common equity (determined on the basis of all outstanding equity
and equity equivalents without giving effect to the exercise price thereof)
as of the Closing Date. All of the issued and outstanding shares of Common
Stock and Existing Preferred Stock have been duly authorized and are
validly issued and outstanding, fully paid and nonassessable. Except as
provided in the 1999 Stock Purchase Agreement or hereunder, no shares of
capital stock of the Company are entitled to preemptive or similar rights.
Except as set forth on Schedule 2.3(a), as of the date hereof, there are no
outstanding subscription rights, options, warrants, convertible or
exchangeable securities or other rights of any character whatsoever
relating to issued or unissued capital stock of the Company, or any
Commitments of any character whatsoever relating to issued or unissued
capital stock of the Company or pursuant to which the Company or any of the
Subsidiaries is or may become bound to issue or grant additional shares of
its capital stock or related subscription rights, options, warrants,
convertible or exchangeable securities or other rights, or to grant
preemptive rights. Except as set forth on Schedule 2.3(a), as of the date
hereof, (i) the Company has not agreed to register any securities under the
Securities Act or under any state securities law or granted registration
rights to any Person or entity and (ii) there are no voting trusts,
stockholders agreements, proxies or other Commitments or understandings in
effect to which the Company is a party or of which it has Knowledge with
respect to the voting or transfer of any of the outstanding shares of
Common Stock or Existing Preferred Stock. To the extent that any options,
warrants or any of the other rights described above are outstanding,
neither the issuance and sale of the Preferred Shares nor any issuance of
Shares upon conversion thereof will result in an adjustment of the exercise
or conversion price or number of shares issuable upon the exercise or
conversion of any such options, warrants or other rights.
(b) As of June 5, 2000 (other than with respect to shares to be
issued pursuant to the Merger, for which information is given as of May 10,
2000), but after giving effect on a pro forma basis to the consummation of
the Merger and the LHP Share Exchange (as defined in the Merger Agreement)
but not to the Stock Dividend, the authorized capital stock of the Company
consists of (i) 1,000,000,000 shares of Class A Common Stock, of which
126,196,393 shares were issued and outstanding, including the shares of
Class A Common Stock referenced in clause (i) of Section 2.3(a) above; (ii)
120,000,000 shares of Class B Common Stock, of which 52,824,763 shares are
issued and outstanding; and (iii) 25,000,000 shares of Preferred Stock, of
which (A) 8,917,653 shares are issued and outstanding as 14% Preferred
Stock, (B) 2,122,795 shares are issued and outstanding as 6-1/2% Preferred
Stock, (C) 584,375 shares are issued and outstanding as Series C Preferred
Stock, (D) 265,625 shares are issued and outstanding as Series D Preferred
Stock, (E) 195,077 are issued and outstanding as Series E Redeemable
Exchangeable Preferred Stock, par value $.01 per share, and (F) 53,295
shares are issued and outstanding as Series F Convertible Redeemable
Preferred Stock, par value $.01 per share (such Series E and Series F
Preferred Stock, collectively, the "Concentric Preferred Stock"), in each
case without giving effect to any potential decrease in issued and
outstanding Preferred Stock resulting from the exercise of change of
control put rights or conversion rights, or any increase resulting from
payment-in-kind dividends on the 14% Preferred Stock or the Concentric
Preferred Stock.
2.4. SEC Reports. The Company has timely filed all proxy
statements, reports and other documents required to be filed by it under
the Exchange Act and made available to the Purchasers complete copies of
all annual reports, quarterly reports, proxy statements and other reports
filed by the Company under the Exchange Act, each as filed with the SEC
(collectively, the "SEC Reports"). Each SEC Report was on the date of its
filing, in compliance in all material respects with the requirements of its
respective report form and the Exchange Act and did not, on the date of
filing, contain any 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.
2.5. Financial Statements. The consolidated financial statements
of the Company (including any related schedules and/or notes) included in
the SEC Reports, have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") consistently followed
throughout the periods involved (except as may be indicated in the notes
thereto) and fairly present in accordance with GAAP the consolidated
financial condition, results of operations, cash flows and changes in
stockholders' equity of the Company and the Subsidiaries as of the
respective dates thereof and for the respective periods then ended (in each
case subject, as to interim statements, to the absence of footnotes and as
permitted by Form 10-Q and subject to changes resulting from year-end
adjustments, none of which are material in amount or effect). Except as set
forth on Schedule 2.5 or disclosed in the SEC Reports, neither the Company
nor any Subsidiary has any liability or obligation (whether accrued,
absolute, contingent, unliquidated or otherwise, whether known or unknown,
whether due or to become due and regardless of when asserted), except (i)
liabilities and obligations in the respective amounts reflected or reserved
against in the audited consolidated balance sheet of the Company and the
Subsidiaries as of December 31, 1999 (the "1999 Balance Sheet") or (ii)
liabilities and obligations incurred in the ordinary course of business
since December 31, 1999 which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
2.6. Absence of Certain Changes. Except as set forth on Schedule
2.6 or as disclosed in the SEC Reports, since December 31, 1999 neither the
Company nor any of the Subsidiaries has (a) suffered any change, event or
development or series of changes, events or developments which individually
or in the aggregate has had or would reasonably be expected to have a
Material Adverse Effect or an adverse effect on the ability of the Company
to perform its obligations under this Agreement or any of the Transaction
Documents to which it is a party or (b) been the subject of any Litigation
or threatened or commenced investigation by a Governmental Entity that
would reasonably be expected to have a Material Adverse Effect.
2.7. Litigation. (a) Except as set forth on Schedule 2.7(a) or as
disclosed in the SEC Reports, there is no claim, action, suit,
investigation or proceeding ("Litigation") pending or, to the Knowledge of
the Company, threatened against the Company or any of the Subsidiaries or
involving any of their respective properties or assets by or before any
court, arbitrator or other Governmental Entity which (i) in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement or (ii) if resolved adversely
to the Company or a Subsidiary would reasonably be expected to have a
Material Adverse Effect.
(b) Except as set forth on Schedule 2.7(b) or as disclosed in the
SEC Reports, neither the Company nor any of the Subsidiaries is in default
under or in breach of any order, judgment or decree of any court,
arbitrator or other Governmental Entity, and neither the Company nor any of
the Subsidiaries is a party or subject to any order, judgment or decree of
any court, arbitrator or other Governmental Entity which in either case
would reasonably be expected to have a Material Adverse Effect.
2.8. Consents, No Violations. Except as set forth on Schedule
2.8, neither the execution, delivery or performance by the Company of this
Agreement or any of the other Transaction Documents to which it is a party
nor the consummation of the transactions contemplated hereby or thereby
will (a) conflict with, or result in a breach or a violation of, any
provision of the certificate of incorporation or by-laws or other
organizational documents of the Company or any of the Subsidiaries
including, without limitation, any of the provisions of the Certificates of
Designation for the Existing Preferred Stock; (b) constitute, with or
without notice or the passage of time or both, a breach, violation or
default, create an Encumbrance, or give rise to any right of termination,
modification, cancellation, prepayment, suspension, limitation, revocation
or acceleration, under (i) any Law or (ii) any provision of any agreement
or other instrument to which the Company or any of the Subsidiaries is a
party or pursuant to which any of them or any of their assets or properties
is subject, except, with respect to the matters set forth in this clause
(ii), for breaches, violations, defaults, Encumbrances, or rights of
termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, which, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect or adversely affect the ability of the Company to perform its
obligations under this Agreement or any of the Transaction Documents to
which it is a party; or (c) except for the filings of the Certificates of
Designation with the Secretary of State of the State of Delaware or any
required filing under the HSR Act, the Exchange Act or the Securities Act,
require any consent, approval or authorization of, notification to, filing
with, or exemption or waiver by, any Governmental Entity or any other
Person on the part of the Company or any of the Subsidiaries. Without
limiting the generality of the foregoing (i) no consent or other approval
of the holders of the Existing Preferred Stock is required in connection
with the consummation of the transactions contemplated hereby or the
performance by the Company of any of its obligations under this Agreement
or any of the Transaction Documents to which it is a party, (ii) the
issuance of the Preferred Shares or any Shares upon conversion thereof will
not result in any anti-dilution or other adjustment to the conversion price
or the number of shares of Class A Common Stock issuable upon conversion of
the 6-1/2% Preferred Stock or Concentric Preferred Stock (iii) the holders
of the Existing Preferred Stock will not be entitled to exercise any voting
rights as a result of any of the provisions contained in this Agreement or
any other Transaction Documents. Neither the Company nor any of the
Subsidiaries is a party to any agreement or bound by the terms of any
instrument or security, or will be following the consummation of the
Merger, which would prevent the Company from paying cash dividends on the
Series G Preferred Stock on a current basis in its current or currently
anticipated financial position.
2.9. Compliance with Laws. Except as set forth on Schedule 2.9 or
as disclosed in the SEC Reports, the Company and the Subsidiaries are in
compliance in all material respects with all Laws, and neither the Company
nor any Subsidiary has received any notice of any alleged violation of Law
applicable to it that could reasonably be expected to have a Material
Adverse Effect. The Company holds all material licenses, franchise permits,
consents, registrations, certificates, and other governmental or regulatory
permits, authorizations or approvals required for the operation of the
business as presently conducted and for the ownership, lease or operation
of the Company's and its Subsidiaries' properties (collectively,
"Licenses"). Except as set forth on Schedule 2.9, the Company and the
Subsidiaries have all Licenses, and all of such Licenses are valid and in
full force and effect, and the Company and the Subsidiaries have duly
performed and are in compliance in all material respects with all of their
obligations under such Licenses.
2.10. Commitments. Schedule 2.10 sets forth a complete and
correct list as of the date hereof of each contract, agreement,
understanding, arrangement and commitment of any nature whatsoever, whether
written or oral, including all amendments thereof and supplements thereto
("Commitments") of the following types to which the Company or any
Subsidiary is a party or by or to which the Company or any Subsidiary or
any of their properties may be bound or subject: (i) Commitments containing
covenants purporting to limit the freedom of the Company or any Subsidiary
to compete in any line of business in any geographic area or to hire any
individual or group of individuals that could individually or in the
aggregate have a Material Adverse Effect; (ii) written Commitments relating
to planned or in process capital expenditures in excess of $20,000,000;
(iii) Commitments relating to indentures, mortgages, promissory notes, loan
agreements, guarantees, letters of credit or other agreements or
instruments of the Company or any Subsidiary involving amounts in excess of
$10,000,000; (iv) written Commitments relating to the acquisition or
disposition of any operating business or the capital stock of any Person in
each case having a purchase price in excess of $1 million that has not been
consummated or that has been consummated but contains representations,
warranties, covenants, guarantees, indemnities or other obligations that
remain in effect; (v) Commitments in respect of any joint venture,
partnership or other similar arrangement, but not including any
subsidiaries; (vi) except for performance bonds, Commitments with any
Governmental Entity involving payments by the Company or any subsidiaries
in excess of $1,000,000 and (vii) Commitments relating to interconnection
agreements with local carriers, Commitments with resellers and material
Commitments with customers in each case involving payments in 2000, or
reasonably expected to involve payments in 2001, in each case in excess of
$1,000,000.
2.11. Brokers or Finders. Except for Salomon Smith Barney Inc.,
whose fees will be paid by the Company, upon the consummation of the
transactions contemplated by this Agreement, no agent, broker, investment
banker or other Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee from the Company or any of the
Subsidiaries in connection with any of the transactions contemplated by
this Agreement or the other Transaction Documents.
2.12. Section 203 of the DGCL; Takeover Statute. The Board of
Directors has taken all actions necessary or advisable so that the
restrictions contained in Section 203 of the DGCL applicable to a "business
combination" (as defined in such Section) will not apply to the execution,
delivery or performance of this Agreement or any of the other Transaction
Documents or the consummation of the transactions contemplated hereby or
thereby. The execution, delivery and performance of this Agreement or any
of the other Transaction Documents and the consummation of the transactions
contemplated hereby or thereby will not cause to be applicable to the
Company any "fair price," "moratorium," "control share acquisition" or
other similar antitakeover statute or regulation enacted under state or
federal laws.
2.13. Offering of Preferred Shares. Neither the Company nor any
Person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require, under the Securities Act, the
integration of such offering with the offering and sale of the Preferred
Shares) which might reasonably be expected to subject the offering,
issuance or sale of the Preferred Shares to the registration requirements
of Section 5 of the Securities Act.
2.14. Network Assets. Schedule 2.14 sets forth a complete and
correct list, as of March 31, 2000, of the markets in which the Company
owns network assets and related equipment, a brief description of the
network in place in each such market (including the ownership thereof) and
the kind of switch (including the ownership thereof) in each such market.
2.15. Disclosure. Neither this Agreement nor any other
Transaction Document, nor any schedule or exhibit hereto or thereto, nor
any certificate furnished to the Purchasers by or on behalf of the Company
in connection with the transactions contemplated hereby and thereby, when
read in conjunction with the 1999 10-K and the SEC Reports filed at any
time after the 1999 10-K was filed with the SEC, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading
(for purposes of the preceding sentence, any preliminary document or
written information shall be disregarded if a final or updated version of
such document or written information was delivered to the Purchasers by the
Company prior to the date hereof). As of the date hereof there is no fact
or information relating to the Company and/or any of its Subsidiaries that,
to the Company's Knowledge, would reasonably be expected to be material to
the Company and its Subsidiaries and that has not been described in the SEC
Reports or otherwise disclosed to the Purchasers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to the Company,
severally and not jointly, as of the date hereof and as of the Closing, as
follows:
3.1. Acquisition for Investment. Such Purchaser is acquiring the
Preferred Shares, for its own account, for investment and not with a view
to the distribution thereof within the meaning of the Securities Act.
3.2. Restricted Securities. Such Purchaser understands that (i)
the Preferred Shares and the Shares have not been registered under the
Securities Act or any state securities laws by reason of their issuance by
the Company in a transaction exempt from the registration requirements
thereof and (ii) the Preferred Shares and any Shares issued upon conversion
thereof may not be sold or otherwise disposed of unless such sale or
disposition is registered under the Securities Act and applicable state
securities laws or such sale or other disposition is exempt from
registration thereunder.
3.3. No Brokers or Finders. No agent, broker, investment banker
or other Person is or will be entitled to any broker's or finder's fee or
any other commission or similar fee from the Purchasers in connection with
the transactions contemplated by this Agreement or the other Transaction
Documents.
3.4. Accredited Investor. Such Purchaser is an "accredited
investor" (as defined in Rule 501(a) under the Securities Act). Such
Purchaser has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its
investment in the Preferred Shares and is capable of bearing the economic
risks of such investment.
3.5 Organization. Such Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority to carry on its
business as it is now being conducted.
3.6. Due Authorization. Such Purchaser has all right, power and
authority to enter into this Agreement and the other Transaction Documents
to which it is a party and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by such Purchaser of this
Agreement and the other Transaction Documents to which it is a party and
the consummation by such Purchaser of the transactions contemplated hereby
and thereby (a) are within the power and authority of such Purchaser and
(b) have been duly authorized by all necessary action on the part of such
Purchaser. This Agreement constitutes, and each of the other Transaction
Documents to which it is a party will constitute upon execution and
delivery by such Purchaser, a valid and binding agreement of such Purchaser
enforceable against such Purchaser in accordance with their respective
terms, except as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally
and for limitations imposed by general principles of equity.
3.7. Consents, No Violations. Neither the execution, delivery or
performance by such Purchaser of this Agreement and the other Transaction
Documents to which it is a party nor the consummation of the transactions
contemplated hereby or thereby will (a) conflict with, or result in a
breach or a violation of, any provision of the organizational documents of
such Purchaser; (b) constitute, with or without notice or the passage of
time or both, a breach, violation or default, create an Encumbrance, or
give rise to any right of termination, modification, cancellation,
prepayment, suspension, limitation, revocation or acceleration, under (i)
any Law, or (ii) any Commitment of such Purchaser, or to which such
Purchaser or any of its assets or properties is subject, except, with
respect to the matters set forth in clause (ii), for breaches, violations,
defaults, Encumbrances, or rights of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration, which, individually or in the aggregate, would not have a
material adverse effect on the ability of such Purchaser to consummate the
transactions contemplated hereby; or (c) except for any required filing
under the HSR Act, require any consent, approval or authorization of,
notification to, filing with, or exemption or waiver by, any Governmental
Entity or any other Person on the part of the Purchaser.
3.8. Availability of Funds. Such Purchaser has available
sufficient funds to pay its portion of the Purchase Price.
3.9. Litigation. There is no Litigation pending or, to the
knowledge of such Purchaser, threatened against such Purchaser or any of
its Affiliates or involving any of its properties or assets by or before
any court, arbitrator or other Governmental Entity which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
ARTICLE IV
COVENANTS
4.1. Conduct of Business by the Company Pending the Closing. The
Company covenants and agrees that, except as set forth in Schedule 4.1,
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Closing, unless the
Purchasers otherwise agree in writing, the Company shall, and shall cause
each of the Subsidiaries to, (i) conduct its business only in the ordinary
course and consistent with past practice; (ii) use reasonable best efforts
to preserve and maintain its assets and properties and its relationships
with its customers, suppliers, advertisers, distributors, agents, officers
and employees and other Persons with which it has significant business
relationships; (iii) use reasonable best efforts to maintain all of the
material assets it owns or uses in the ordinary course of business
consistent with past practice; (iv) use reasonable best efforts to preserve
the goodwill and ongoing operations of its business; (v) maintain its books
and records in the usual, regular and ordinary manner, on a basis
consistent with past practice; and (vi) comply in all material respects
with applicable Laws. Except as expressly contemplated by this Agreement or
as set forth on Schedule 4.1, between the date of this Agreement and the
Closing, the Company shall not, and shall cause each of the Subsidiaries
not to, do any of the following without the prior written consent of the
Purchaser:
(a) (i) issue any debt securities, (ii) incur any additional
indebtedness, (iii) assume, grant, guarantee or endorse, or make any other
accommodation or arrangement making the Company or any Subsidiary
responsible for, any liabilities or other obligations of any other Person
or (iv) make any loans, advances or capital contributions to, or
investments in, any Person;
(b) change any method of accounting or accounting practice used
by the Company or any Subsidiary, other than such changes required by GAAP;
(c) repurchase, redeem or otherwise acquire or exchange any share
of Common Stock or other equity interests other than in accordance with the
terms of the Existing Preferred Stock and Class B Common Stock; except for
issuances of Class A Common Stock pursuant to the exercise of options to
purchase Class A Common Stock outstanding on the date hereof and listed on
Schedule 2.3(a) or options issued in compliance with this clause (c), issue
or sell any additional shares of the capital stock of, or other equity
interests in, the Company or any Subsidiary, or securities convertible into
or exchangeable for such shares or other equity interests, or issue or
grant any subscription rights, options, warrants or other rights of any
character relating to shares of such capital stock, such other equity
interests or such securities, other than options to purchase Class A Common
Stock granted after the date hereof in the ordinary course of business
under the Company's existing stock option plans; or, except for dividends
required to be paid on the Existing Preferred Stock, declare, set aside,
make or pay any dividend, or make any distribution, in respect of any
shares of capital stock of the Company;
(d) amend the Company's or any Subsidiary's charter or by-laws or
other organizational documents except with respect to the filing of the
Certificates of Designation and amendments contemplated by the transactions
under the Merger Agreement;
(e) take any action that is reasonably likely to result in (i)
any of the representations and warranties set forth in Article II becoming
false or inaccurate in any material respect as of the Closing Date or (ii)
any of the conditions to the obligations of the Purchasers set forth in
Section 5.2 not being satisfied; or
(f) agree to take any of the actions restricted by this Section
4.1.
4.2. Press Releases; Interim Public Filings. The Company shall,
and shall cause each Subsidiary to, deliver to the Purchasers complete and
correct copies of all press releases and public filings made between the
date hereof and the Closing Date, and, to the extent any such press
releases refer to the Purchasers or their Affiliates, shall give the
Purchasers the reasonable opportunity to review and comment on such
releases and filings (on a strictly confidential basis until such
information is released), in each case prior to release in the form in
which it will be issued.
4.3. HSR Act. If required, each of the Purchasers and the Company
shall cooperate in making filings under the HSR Act and shall use its
reasonable best efforts to take, or cause to be taken, all actions
necessary, proper or advisable to consummate and make effective as promptly
as practicable the transactions contemplated by this Agreement, including
using its reasonable best efforts to resolve such objections, if any, as
the Antitrust Division of the Department of Justice or the Federal Trade
Commission or state antitrust enforcement or other Governmental Entities
may assert under antitrust Laws with respect to the transactions
contemplated hereby.
4.4. Consents; Approvals. The Company shall use its reasonable
best efforts to obtain all consents, waivers, exemptions, approvals,
authorizations or orders (collectively, "Consents") required in connection
with the transactions contemplated by this Agreement or any of the other
Transaction Documents (including, without limitation (i) all Consents
required to avoid any breach, violation, default, encumbrance or right of
termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration of any material agreement or
instrument to which the Company or any Significant Subsidiary is a party or
by which any of their material assets are bound, (ii) all Consents pursuant
to the Company's or any Subsidiary's financing documents, including without
limitation, all indentures and credit agreements of the Company or any
Subsidiary, and (iii) all United States and foreign governmental and
regulatory rulings and approvals). The Company also shall use its
reasonable best efforts to obtain all necessary state securities laws or
blue sky permits and approvals required to carry out the transactions
contemplated hereby and shall furnish all information as may be reasonably
requested in connection with any such action.
4.5. Listing. The Company shall use its reasonable best efforts
to continue to have its Class A Common Stock listed on the NASDAQ National
Market System (the "NMS") or a national securities exchange for so long as
any Preferred Shares or any Shares are outstanding. Prior to the Closing,
the Company shall prepare and submit to the NMS a listing application
covering the shares of Class A Common Stock issuable upon conversion of the
Preferred Shares and shall obtain approval for the listing of such shares,
subject to official notice of issuance.
4.6. Board Representation; VCOC. (a) Section 9(b)(i) of the
Certificate of Designation for the Series G Preferred Stock and Section
9(b)(i) of the Certificate of Designation for the Series H Preferred Stock
provide that the holders of Preferred Shares shall have certain rights to
elect directors to the Board of Directors subject to the terms set forth
therein. In the event the holders of the Preferred Shares are entitled to
elect directors at any time (such directors, the "Purchasers' Directors"),
the Company shall furnish the Purchasers' Directors with such financial and
operating data and other information with respect to the business and
properties of the Company as the Purchasers' Directors may reasonably
request. The Company shall permit each of the Purchasers' Directors to
discuss the affairs, finances and accounts of the Company with, and to make
proposals and furnish advice with respect thereto, the principal officers
of the Company. Notwithstanding anything contained in this Section 4.6 to
the contrary, the provisions of the Certificates of Designation shall
govern the rights of holders of Preferred Shares to elect directors
(including any Purchasers' Directors) and the rights of holders of
Preferred Shares to designate non-voting board observers. If requested by
the Company, the Company, the Purchasers and each Purchaser Director shall
enter into a confidentiality agreement, in the form attached hereto as
Exhibit 4.6(a), prior to the time such Purchaser Director commences serving
on the Board of Directors.
(b) The rights set forth in Section 4.6(a), the Certificates of
Designation, the 1999 Stock Purchase Agreement and the certificates of
designation for the Series C Preferred Stock and the Series D Preferred
Stock are intended to satisfy the requirement of contractual management
rights for purposes of qualifying each of the Purchaser's ownership
interests in the Company as venture capital investments for purposes of the
Department of Labor's "plan assets" regulations, and in the event such
rights are not satisfactory for such purpose as to any such Purchaser, the
Company and such Purchaser shall reasonably cooperate in good faith to
agree upon mutually satisfactory management rights which satisfy such
regulations.
(c) The Company shall promptly reimburse the Purchasers'
Directors for all reasonable expenses incurred by them in connection with
their attendance at meetings and any other activities undertaken in their
capacity as directors consistent with the policies of the Company in effect
on the date hereof or as such policies may be modified and generally
applied to the Company's Board of Directors.
4.7. Certificates of Designation. The Company shall, prior to or
concurrently with the Closing, cause the Certificates of Designation to be
filed with the Secretary of State of the State of Delaware.
4.8. Cooperation. Each of the Purchasers and the Company agrees
to use its reasonable best efforts to take, or cause to be taken, all such
further actions as shall be necessary to make effective and consummate the
transactions contemplated by this Agreement.
4.9. Access to Property; Records. Between the date hereof and the
Closing the Company shall afford the Purchasers and their employees,
counsel, accountants, partners, members, investors, and other authorized
representatives reasonable access, upon notice, during normal business
hours, to the assets, properties, offices and other facilities, Commitments
and books and records of the Company and of the Subsidiaries, and to the
outside auditors of the Company and their work papers relating to the
Company and the Subsidiaries. All such information shall be held in
confidence in accordance with the terms of the Confidentiality Agreement.
The parties hereto agree that no investigation by the Purchasers or their
representatives shall affect or limit the scope of the representations and
warranties of the Company contained in this Agreement or in any other
Transaction Document delivered pursuant hereto or limit the liability for
breach of any such representation or warranty.
4.10. Reserve Shares. The Company will at all times reserve and
keep available, solely for issuance and delivery upon conversion of the
Preferred Shares, the number of shares of Class A Common Stock from time to
time issuable upon conversion of all shares of the Preferred Shares at the
time outstanding. All shares of Class A Common Stock issuable upon
conversion of the Preferred Shares shall be duly authorized and, when
issued upon such conversion or exercise, shall be validly issued, fully
paid and nonassessable.
4.11. Use of Proceeds. The proceeds received by the Company
hereunder shall be used by the Company as set forth on Schedule 4.11.
4.12. Incurrence of Debt. The Company agrees that at such time as
the Standard & Poor's rating of the Company's senior unsecured debt
obligations falls below CCC+ and for such period of time as such down-grade
continues, the Company will not, and will not permit any of its
Subsidiaries to, incur any Indebtedness not permitted by the Indenture,
dated as of November 17, 1999 between the Company and United States Trust
Company of New York, as Trustee (the "Indenture"), relating to its 10 1/2%
Senior Notes due 2009, and any successor Indenture relating to Exchange
Notes to be issued in exchange therefor (capitalized terms being used in
this Section 4.12 as defined in the Indenture).
4.13. Dividends. The Company agrees that it shall pay cash
dividends on the Series G Preferred Stock on a current basis so long as it
is not precluded from doing so under its debt instruments, the terms of its
Existing Preferred Stock, the Concentric Preferred Stock or other
Commitments or Law. In furtherance thereof, the Company agrees to use its
reasonable best efforts to pay such dividends, including, without
limitation, paying any payment-in-kind dividends under the terms any of its
Existing Preferred Stock or the Concentric Preferred Stock required to be
paid to permit the payments of such cash dividends, using its best efforts
to refrain from entering into any agreements which would preclude (based on
the Company's financial position and anticipated financial position at that
time) such payments, to seek a waiver under any agreements which would
prevent such payments at any time and to take whatever actions are
necessary, including revaluing assets, to create surplus for the purpose of
paying such dividends.
4.14 Right of First Purchase. (a) Subject to the terms and
conditions specified in this Section 4.14, the Company hereby grants to the
Purchasers a right of first purchase with respect to certain issuances by
the Company after the Closing of any Senior Capital Stock (as hereinafter
defined) as provided in this Section 4.14.
(b) For purposes of this Section 4, the term "Senior Capital Stock"
shall mean shares of any capital stock of the Company having a preference
relative to the Class A Common Stock with respect to dividends or upon
liquidation, distribution or winding up of the Company, whether now
authorized or not, and any rights, options or warrants to purchase such
capital stock, and securities of any type that are, or may become,
convertible into such capital stock; provided, however, that nothing
contained in this Section 4.14 shall be construed as permitting the Company
to authorize or issue any Senior Capital Stock in contravention of any of
the provisions of this Agreement or the other Transaction Documents,
including the Certificates of Designation.
(c) In the event the Company proposes to issue any Senior Capital
Stock (other than in a public offering registered under the Securities Act
or an offering pursuant to Rule 144A thereunder which contemplates a
subsequent registration, or other than a Strategic Senior Capital Stock
Issuance), the Company shall first make an offering of such Senior Capital
Stock to each of the Purchasers in accordance with the following
provisions:
(i) The Company shall deliver a notice by certified mail (the
"Notice") to each of the Purchasers stating (a) its bona fide intention to
issue such Senior Capital Stock, (b) the amount of such Senior Capital
Stock to be issued, (c) the price, if any, for which it proposes to issue
such Senior Capital Stock and the other terms of the proposed issuance
thereof, (d) the designation and all of the terms and provisions of the
Senior Capital Stock proposed to be issued and (e) a statement as to the
number of days from receipt of such Notice (which shall not be less than 5
calendar days) within which each Purchaser must respond to such Notice.
(ii) Within 5 calendar days after receipt of the Notice (or by
such later date as is specified in the Notice), each of the Purchasers may
elect to purchase, at the price and on the terms specified in the Notice,
all but not less than all of such Senior Capital Stock. Notwithstanding
anything to the contrary set forth in clause (c)(i) above, the conversion
price of any such Senior Capital Stock to which the Purchasers' right of
election applies and which is convertible into shares of Class A Common
Stock shall be an amount per share no more than 115% of the closing sales
price of the Class A Common Stock on the NASDAQ National Market System (or
on the principal securities exchange or market on which the Class A Common
Stock is then listed or traded) on the date the Purchasers elect to
purchase any such Senior Capital Stock unless the Purchasers shall have
waived such right. The closing of the purchases shall occur as promptly as
practicable after all elections to purchase shall have been made (or all
rights to make such elections shall have lapsed) and all consents or
governmental approvals or filings required to be obtained or made in
connection therewith (if any) shall have been obtained or made.
(d) If the Senior Capital Stock referred to in the Notice is not
elected to be purchased by the Purchasers as provided above, the Company
may, during the 180-day period following the expiration of the period
provided above, offer such Senior Capital Stock to any person or persons at
a price not less than, and upon terms no more favorable to the offeree
than, those specified in the Notice. If the Company does not enter into an
agreement for the sale of the Capital Stock within such period, or if such
agreement is not consummated within 180 days of the execution thereof, the
right of first purchase provided hereunder shall be deemed to be revived
with respect to such Senior Capital Stock and such Senior Capital Stock
shall not be issued unless first reoffered to the Purchasers in accordance
herewith. Any issuance of Senior Capital Stock by the Company without first
giving the Purchasers the rights described in this Section 4 shall be null
and void and of no force and effect.
(e) The rights of the holders of Preferred Shares under this Section
4.14 shall be exercisable pro rata with the rights of holders of the Series
C Preferred Stock and Series D Preferred Stock under Section 4.14 of the
1999 Stock Purchase Agreement based on the aggregate outstanding
liquidation preferences of such shares as of the end of the 5 calendar day
period referred to in paragraph (c)(ii) above, provided that, in the event
any such holder elects not to purchase its pro rata portion of any shares
of Senior Capital Stock it is permitted to purchase hereunder, the other
holders having such rights shall have the right to purchase all, but not
less than all, of such shares not so purchased by notifying the Company
within 5 calendar days of the expiration of the 5 calendar day period
referred to in paragraph (c)(ii) above. If such other holders fail to
exercise their right to purchase, in the aggregate, all of such shares,
then no holder shall have any right to purchase any portion of the Senior
Capital Stock, and the Company shall have the right to issue all the Senior
Capital Stock in accordance with Section 4.14(d).
4.15 Restrictions on Transfer and Conversion. The Purchasers will
not, prior to the earliest of (a) January 20, 2001, (b) the occurrence of a
Change of Control (as defined in the Certificates of Designation) or (c)
the breach by the Company in any material respect of any covenant or
agreement contained in this Agreement, any Transaction Document, the 1999
Stock Purchase Agreement or any transaction document thereunder (each of
the foregoing, a "Termination Event"), sell, transfer, assign, convey,
gift, mortgage, pledge, encumber, hypothecate, or otherwise dispose of,
directly or indirectly, ("Transfer") any of the Preferred Shares or the
Shares except for (i) Transfers between and among the Purchasers and their
Affiliates provided such Transfer is done in accordance with the transfer
restrictions applicable to the Preferred Shares or the Shares under federal
and state securities laws and the Affiliate transferee agrees to be bound
by the restrictions applicable to such Preferred Shares or the Shares,
including without limitation the agreements set forth in this Section 4.15,
and (ii) Transfers (w) required to comply with applicable Law, (x) pursuant
to a bona fide tender or exchange offer made pursuant to a merger or other
agreement approved by the Board of Directors to acquire securities of the
Company, (y) following any stock merger or other business combination
transaction to which the Company is a party if such stock merger or other
business combination results in a Change of Control and (z) pursuant to any
cash merger, or other business combination transaction to which the Company
is a party or in which the Company is involved in which the Class A Common
Stock of the Company's stockholders is exchanged for cash upon consummation
of such merger or other business combination. Notwithstanding any other
provision of this Section 4.15, no Purchaser shall avoid the provisions of
this Section 4.15 by making one or more transfers to one or more Affiliates
and then disposing of all or any portion of such Purchaser's interest in
any such Affiliate. Nothing contained herein shall be deemed to limit the
ability of the limited partners in the Purchasers from transferring,
directly or indirectly, their limited partnership interests in the
Purchasers or the general partners of the Purchasers from transferring,
directly or indirectly, up to 15% of the equity interests in the Purchasers
at any time or from time to time. Notwithstanding anything to the contrary
contained in the Certificates of Designation, each Purchaser agrees that it
may not exercise any conversion rights with respect to the Preferred Shares
until the occurrence of a Termination Event. The Company agrees that, in
connection with any proposed transaction that would, if consummated, result
in a Change of Control, the Purchasers may provide the Company with a
notice of their intention to exercise their conversion rights with respect
to the Preferred Shares the effectiveness of which is conditional upon the
consummation of the transaction resulting in such Change of Control. In
addition to the Transfer restrictions described above, the Purchasers will
not, prior to January 20, 2005, without the prior written consent of the
Company, Transfer any of the Preferred Shares to any Person (or any
controlled Affiliate of such Person) that is engaged in a business that
competes with any business conducted by the Company on the date of the
proposed Transfer.
4.16 Standstill Agreement. (a) During the period commencing on
the date hereof and ending on the earlier of (i) January 20, 2005 or (ii)
the date these provisions terminate as provided herein, except as (x)
specifically permitted by this Agreement or (y) specifically approved in
writing in advance by the Board of Directors of the Company, the Purchasers
shall not, and shall cause any Affiliates controlled by them to not, in any
manner, directly or indirectly:
(i) acquire, or offer or agree to acquire, or become the
beneficial owner of or obtain any rights in respect of any capital
stock of the Company, except, for any shares of Class A Common Stock
that may be issuable upon the conversion of the Preferred Shares, the
Series C Preferred Stock, the Series D Preferred Stock or otherwise as
permitted pursuant to this Agreement or the 1999 Stock Purchase
Agreement, provided, that the foregoing limitation shall not prohibit
the acquisition of securities of the Company or any of its successors
issued as dividends or as a result of stock splits and similar
reclassifications or received in a consolidation, merger or other
business combination in respect of, in exchange for or upon conversion
of Preferred Shares, Series C Preferred Stock, Series D Preferred
Stock or Shares held by the Purchasers or any of their Affiliates at
the time of such dividend, split or reclassification, consolidation or
merger or business combination;
(ii) solicit proxies or consents or become a "participant" in a
"solicitation" (as such terms are defined or used in Regulation 14A
under the Exchange Act) of proxies or consents with respect to any
voting securities of the Company or any of its successors or initiate
or become a participant in any stockholder proposal or "election
contest" (as such term is defined or used in Regulation 14A under the
Exchange Act) with respect to the Company or any of its successors or
induce others to initiate the same, or otherwise seek to advise or
influence any person with respect to the voting of any voting
securities of the Company or any of its successors (except for
activities undertaken by the Purchasers, any director elected by the
Purchasers under the certificates of designation for the Series C
Preferred Stock and Series D Preferred Stock or the Purchasers'
Directors in connection with solicitations by the Board of Directors);
(iii) publicly or privately propose, encourage, solicit or
participate in the solicitation of any person or entity to acquire,
offer to acquire or agree to acquire, by merger, tender offer,
purchase or otherwise, the Company or a substantial portion of its
assets or more than 5% of the outstanding capital stock (except in
connection with the registration of securities pursuant to the
Registration Rights Agreement); and
(iv) directly or indirectly join in or in any way participate in
a pooling agreement, syndicate, voting trust or other arrangement with
respect to the Company's voting securities or otherwise act in concert
with any other Person (other than Affiliates), for the purpose of
acquiring, holding, voting or disposing of the Company's securities.
(b) Nothing contained in this Section 4.16 shall be deemed to
restrict the manner in which any director elected by the Purchasers under
the certificates of designation for the Series C Preferred Stock and Series
D Preferred Stock or any of the Purchasers' Directors participate in
deliberations or discussions of the Board of Directors.
(c) The standstill provisions set forth herein shall terminate on
the earliest of (i) January 20, 2005, (ii) the occurrence of a Change of
Control, (iii) upon any breach by the Company in any material respect of
any covenant or agreement contained in this Agreement, any Transaction
Document, the 1999 Stock Purchase Agreement or any transaction document
thereunder, or (iv) upon the filing of a voluntary bankruptcy petition by
the Company or on the 60th day following the filing of an involuntary
bankruptcy petition against the Company if such petition is not discharged
with prejudice during such 60-day period.
4.17 Business Combinations with Affiliates. Except for the
pending transactions listed on Schedule 4.1, for so long as the Purchasers
are holders of any Preferred Shares and any director elected by the
Purchasers under the certificates of designation for the Series G Preferred
Stock and Series H Preferred Stock or a Purchaser Director is a member of
the Board of Directors, the Company shall not, authorize or engage in,
either in one or a series of related transactions, any purchase or sale of
stock, any purchase or sale of assets, any merger, consolidation or other
business combination transaction, in each case valued in excess of $50
million, with or involving Craig O. McCaw, Wendy P. McCaw or any of his or
her Affiliates other than the Company or the Subsidiaries ("Affiliated
Parties") unless any such transaction is approved and authorized by a
special committee of the Board of Directors, consisting of at least one
such director elected by the Purchasers and other disinterested directors
(within the meaning of Section 144 of the Delaware General Corporation Law)
constituted for the purpose of negotiating, evaluating, approving and
authorizing the Company to engage in any such transaction. The provisions
of this Section 4.17 shall also apply to transactions between Affiliated
Parties and the Company's Subsidiaries on the same basis as they apply to
transactions between Affiliated Parties and the Company.
ARTICLE V
CONDITIONS
5.1. Conditions to Obligations of the Purchasers and the Company.
The respective obligations of the Purchasers and the Company to consummate
the transactions contemplated hereby are subject to the satisfaction or
waiver at or prior to the Closing of each of the following conditions:
(a) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation
of the transactions contemplated hereby; and
(b) Any waiting period (and any extension thereof) under the HSR
Act applicable to this Agreement and the transactions contemplated hereby
shall have expired or been terminated.
5.2. Conditions to Obligations of the Purchasers. The obligations
of the Purchasers to consummate the transactions contemplated hereby shall
be subject to the satisfaction or waiver at or prior to the Closing of each
of the following conditions:
(a) Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct when made and as of
the Closing (except to the extent such representations and warranties are
affected by agreement to or consummation of any of the pending transactions
listed on Schedule 4.1 or made as of a particular date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such date), except for failures to be true and
correct which individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect;
(b) The Company shall have performed, satisfied and complied in
all material respects with all of its covenants and agreements set forth in
this Agreement to be performed, satisfied and complied with prior to or at
the Closing;
(c) The Company shall have delivered to the Purchasers an
officer's certificate certifying as to the Company's compliance with the
conditions set forth in clauses (a) and (b) of this Section 5.2;
(d) The Company shall have executed and delivered the Amended and
Restated Registration Rights Agreement in the form of Exhibit 5.2(d) hereto
(the "Registration Rights Agreement"), and the Registration Rights
Agreement shall be in full force and effect;
(e) The Certificates of Designation shall have been duly filed
with the Secretary of State of the State of Delaware in accordance with the
laws of the State of Delaware and the Certificates of Designation shall be
in full force and effect;
(f) The Shares issuable upon conversion of the Preferred Shares
shall have been duly authorized and reserved for issuance and such Shares
shall have been approved for listing on the NMS, subject to official notice
of issuance;
(g) The Company shall have acquired all of the outstanding equity
interests in Internext, LLC on the terms set forth in the Merger Agreement.
(h) The Purchasers shall have received an opinion of Willkie Farr
& Gallagher, outside counsel to the Company, with respect to the due
incorporation, due authorization, validity of the Preferred Shares,
securities act exemption and the valid and binding nature of this
Agreement, the Registration Rights Agreement and the Certificates of
Designation;
(i) The Company shall not have entered into any agreement or
become bound by the terms of any instrument or security which would prevent
the Company from paying cash dividends on the Series G Preferred Stock on a
current basis; and
(j) There shall not have occurred (i) any event, circumstances,
condition, fact, effect, or other matter which has had or would reasonably
be expected to have a material adverse effect (x) on the business, assets,
financial condition, prospects, or results of operations of the Company and
its Subsidiaries taken as a whole (including Concentric if the Merger is
consummated); provided, however, that no material adverse effect shall be
deemed to have occurred hereunder to the extent such occurrence arises
solely out of any event, circumstances, condition, fact, effect, or other
matter with respect to the consummation of the Merger or the failure of the
Merger to be consummated, the failure to obtain shareholder approval of the
Merger or the termination of the Merger Agreement, or (y) on the ability of
the Company and such Subsidiaries to perform on a timely basis any material
obligation under this Agreement or to consummate the transactions
contemplated hereby; or (ii) any material disruption of or material adverse
change in financial, banking or capital market conditions.
5.3. Conditions to Obligations of the Company. The obligations of
the Company to consummate the transactions contemplated hereby shall be
subject to the satisfaction or waiver at or prior to the Closing of each of
the following conditions:
(a) Each of the representations and warranties of each of the
Purchasers contained in this Agreement shall be true and correct when made
and as of the Closing (except to the extent such representations and
warranties are made as of a particular date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such date), except for failures to be true and
correct which individually or in the aggregate would not have a material
adverse effect on the ability of each of the Purchasers to consummate the
transactions contemplated hereby;
(b) Each of the Purchasers shall have performed, satisfied and
complied in all material respects with all of their covenants and
agreements set forth in this Agreement to be performed, satisfied and
complied with prior to or at the Closing Date;
(c) Each of the Purchasers shall have delivered to the Company an
officer's certificate certifying as to such Purchaser's compliance with the
conditions set forth in clauses (a) and (b) of this Section 5.3;
(d) The Company shall have received an opinion reasonably
acceptable to the Company from Fried, Frank, Harris, Shriver & Jacobson,
outside counsel to the Purchasers, with respect to non-contravention, due
formation, due authorization, and the valid and binding nature of this
Agreement and the Registration Rights Agreement; and
(e) Each of the Purchasers shall have executed and delivered the
Registration Rights Agreement.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written agreement of the Company and the
Purchasers; or
(b) by either the Purchasers or the Company if the Closing shall
not have been consummated on or before September 30, 2000 (provided that
the right to terminate this Agreement under this Section 6.1(b) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such date); or
(c) by either the Purchasers or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency
or commission shall have issued a nonappealable final order, decree or
ruling or taken any other action having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement.
6.2. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.1, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
(or any stockholder, director, officer, partner, employee, agent,
consultant or representative of such party) except as set forth in this
Section 6.2, provided that nothing contained in this Agreement shall
relieve any party from liability for any breach of this Agreement and
provided further that Sections 8.2, 8.3, 8.13, 8.14 and 8.15 shall survive
termination of this Agreement.
ARTICLE VII
INDEMNIFICATION
7.1. Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any of the other Transaction
Documents shall expire on the 18-month anniversary of the Closing Date,
except that the representations and warranties set forth in Sections
2.1(a), 2.2, 2.3, 3.5 and 3.6 shall survive indefinitely. After the
expiration of such periods, any claim by a party hereto based upon any such
representation or warranty shall be of no further force and effect, except
to the extent a party has asserted a claim in accordance with this Article
VII for breach of any such representation or warranty prior to the
expiration of such period, in which event any representation or warranty to
which such claim relates shall survive with respect to such claim until
such claim is resolved as provided in this Article VII. The covenants and
agreements of the parties hereto contained in this Agreement in any of the
other Transaction Documents shall survive the Closing until performed in
accordance with their terms.
7.2. Indemnification. (a) The Company shall indemnify, defend and
hold harmless the Purchasers, their Affiliates, and their respective
officers, directors, partners, members, employees, agents, representatives,
successors and assigns (each a "Purchasers Indemnified Person") from and
against all Losses incurred or suffered by a Purchaser Indemnified Person
(whether incurred or suffered directly or indirectly through ownership of
Preferred Shares or Shares or, subject to the last sentence of this
subsection (a), otherwise) arising from (i) the breach of any of the
representations or warranties made by the Company in this Agreement or any
other Transaction Document or (ii) the breach of any covenant or agreement
made by the Company in this Agreement or any other Transaction Document.
Notwithstanding the foregoing, (A) no claim may be made against the Company
for indemnification pursuant to Section 7.2(a)(i) unless the aggregate
liability of the Company exceeds $4 million, and the Company shall then
only be liable for Losses in excess of such amount and (B) the Company's
maximum liability for indemnification pursuant to Section 7.2(a)(i) shall
not exceed $100 million. For the avoidance of doubt, the Company and the
Purchasers agree that Losses under this Section 7(a) shall mean all Losses
suffered or incurred by a Purchasers Indemnified Person in connection with
the transactions contemplated by this Agreement and/or the other
Transaction Documents and shall not be deemed to include any Losses in
connection with any of the transactions contemplated by the 1999 Stock
Purchase Agreement and/or the transaction documents thereunder.
(b) The Purchasers shall indemnify, defend and hold harmless the
Company, its Affiliates, and their respective officers, directors,
partners, members, employees, agents, representatives, successors and
assigns (each a "Company Indemnified Person") from and against all Losses
incurred or suffered by a Company Indemnified Person arising from (i) the
breach of any of the representations or warranties made by the Purchasers
in this Agreement or any other Transaction Document or (ii) the breach of
any covenant or agreement made by the Purchasers in this Agreement or any
other Transaction Document. Notwithstanding the foregoing, (A) no claim may
be made against the Purchasers for indemnification pursuant to Section
7.2(b)(i) unless the aggregate liability of the Purchasers exceeds $4
million, and the Purchasers shall then only be liable for Losses in excess
of such amount and (B) the Purchasers' maximum liability for
indemnification pursuant to Section 7.2(b)(i) shall not exceed $100
million.
(c) A party seeking indemnification under this Section 7.2 shall,
promptly upon becoming aware of the facts indicating that a claim for
indemnification may be warranted and in any event prior to the end of the
applicable survival period under Section 7.1, give to the party from whom
indemnification is being sought a notice of claim relating to such Loss (a
"Claim Notice"). Each Claim Notice shall specify the nature of the claim,
the applicable provision(s) of this Agreement or other instrument under
which the claim for indemnity arises, and, if possible, the amount or the
estimated amount thereof. No failure or delay in giving a Claim Notice (so
long as the same is given prior to expiration of the representation or
warranty upon which the claim is based) and no failure to include any
specific information relating to the claim (such as the amount or estimated
amount thereof) or any reference to any provision of this Agreement or
other instrument under which the claim arises shall affect the obligation
of the party from whom indemnification is sought.
7.3. Inspections; No Other Representations. The Purchasers are
informed and sophisticated purchasers, and have undertaken such
investigation and have been provided with and have evaluated such documents
and information as they deem necessary to enable them to make an informed
decision with respect to the execution, delivery and performance of this
Agreement. Each Purchaser will undertake prior to the Closing such further
investigation and request such additional documents and information as it
deems necessary. Each Purchaser agrees to accept the Preferred Shares based
upon its own inspection, examination and determination with respect thereto
as to all matters, and without reliance upon any express or implied
representations or warranties of any nature made by or on behalf or imputed
to the Company, except as expressly set forth in this Agreement. Without
limiting the generality of the foregoing, each Purchaser acknowledges that
the Company makes no representation or warranty with respect to any
projections, estimates or budgets delivered to or made available to
Purchasers of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition (or any
component thereof) of the Company and its Subsidiaries or the future
business and operations of the Company and the Subsidiaries except as
expressly set forth in this Agreement.
7.4. Exclusivity. Except as specifically set forth in this
Agreement and except in the case of fraud, effective as of the Closing,
each party hereby waives any rights and claims such party may have against
the other party hereto, whether in law or in equity, relating to any breach
of any representation or warranty by any party hereunder. After the
Closing, Sections 7.1, 7.2(a) and 7.2(b) will provide the exclusive remedy
for any misrepresentation or breach of warranty, except in the case of
fraud.
ARTICLE VIII
MISCELLANEOUS
8.1. Defined Terms; Interpretations. The following terms, as used
herein, shall have the following meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" shall have the meaning ascribed thereto in the
preamble.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Certificates of Designation" shall have the meaning ascribed
thereto in Section 2.2.
"Claim Notice" shall have the meaning ascribed thereto in Section
7.2(c).
"Closing" shall have the meaning ascribed thereto in Section
1.2(a).
"Closing Date" shall have the meaning ascribed thereto in Section
1.2(a).
"Commitments" shall have the meaning ascribed thereto in Section
2.10.
"Common Stock" shall have the meaning ascribed thereto in Section
2.3 and shall include, as the context may require, Class A Common Stock,
Class B Common Stock and all Common Stock now or hereafter authorized to be
issued, and any and all securities of any kind whatsoever of the Company
which may be exchanged for or converted into Common Stock, and any and all
securities of any kind whatsoever of the Company which may be issued on or
after the date hereof in respect of in exchange for, or upon conversion of
shares of Common Stock pursuant to a merger, consolidation, stock split,
stock dividend, recapitalization of the Company or otherwise.
"Company" shall have the meaning ascribed thereto in the
preamble.
"Company Indemnified Person" shall have the meaning ascribed
thereto in Section 7.2(b).
"Concentric" shall have the meaning ascribed thereto in Section
8.6.
"Concentric Preferred Stock" shall have the meaning ascribed
thereto in Section 2.3(b).
"Confidentiality Agreement" shall have the meaning ascribed
thereto in Section 8.7.
"Consents" shall have the meaning ascribed thereto in Section
4.4.
"DGCL" shall mean the Delaware General Corporation Law.
"Encumbrances" shall have the meaning ascribed thereto in Section
2.1(b).
"ERISA" shall mean the Employee Retirement Income Securities Act
of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934,
as amended, shall include reference to the comparable section, if any, of
any such successor federal statute.
"Existing Preferred Stock" shall have the meaning ascribed
thereto in Section 2.3(a).
"14% Preferred Stock" shall have the meaning ascribed thereto in
Section 2.3(a).
"GAAP" shall have the meaning ascribed thereto in Section 2.5.
"Governmental Entity" shall mean any supernational, national,
foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory body or authority.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"Knowledge", with respect to the Company, shall mean the
knowledge of Daniel F. Akerson, Craig O. McCaw, Peter Campbell, Gary D.
Begeman, Douglas Carter, Noelle Beams, R. Gerard Salemme, Dennis O'Connell,
Dennis Weibling, Nate Davis, and Mark Gunning, and the knowledge that any
of the foregoing persons would have after due and reasonable inquiry and
investigation.
"Laws" shall include all foreign, federal, state, and local laws,
statutes, ordinances, rules, regulations, orders, judgments, decrees and
bodies of law.
"Licenses" shall have the meaning ascribed thereto in Section
2.9.
"Litigation" shall have the meaning ascribed thereto in Section
2.7.
"Losses" shall mean each and all of the following items: claims,
losses, (including, without limitation, losses of earnings) liabilities,
obligations, payments, damages (actual or punitive but not consequential),
charges, judgments, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith, costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts).
"Material Adverse Effect" shall mean a material adverse effect on
the properties, business, prospects, operations, results of operations,
earnings, assets, liabilities or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole (including Concentric if the
Merger is consummated); provided, however, that no material adverse effect
shall be deemed to have occurred hereunder to the extent such effect arises
solely out of any event, circumstance, condition, fact, effect, or other
matter with respect to the consummation of the Merger or the failure of the
Merger to be consummated, the failure to obtain shareholder approval of the
Merger or the termination of the Merger Agreement.
"Merger" shall have the meaning ascribed thereto in Section 8.6.
"Merger Agreement" shall have the meaning ascribed thereto in
Section 8.6.
"1999 Balance Sheet" shall have the meaning ascribed thereto in
Section 2.5.
"1999 Stock Purchase Agreement" shall have the meaning ascribed
thereto in the recitals.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall have the meaning ascribed thereto in the
recitals.
"Purchase Price" shall have the meaning ascribed thereto in
Section 1.1.
"Purchasers" shall have the meaning ascribed thereto in the
preamble.
"Purchasers Indemnified Person" shall have the meaning ascribed
thereto in Section 7.2(a).
"Registration Rights Agreement" shall have the meaning ascribed
thereto in Section 5.2(d).
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning ascribed thereto in Section
2.4.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act shall include
reference to the comparable section, if any, of such successor federal
statute.
"Series C Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Series D Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Series G Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Series H Preferred Stock" shall have the meanings ascribed
thereto in the recitals.
"6 1/2%" Preferred Stock" shall have the meaning ascribed thereto
in Section 2.3(a).
"Shares" shall mean the shares of Class A Common Stock initially
issuable upon conversion of Preferred Shares.
"Significant Subsidiaries" shall have the meaning ascribed
thereto in Section 2.1(b).
"Stock Dividend" shall mean (i) the one-for-one stock Class A
Common Stock dividend payable with respect to shares of Class A Common
Stock which are issued and outstanding on June 1, 2000, to be paid to
holders of record of Class A Common Stock as of the close of business on
June 15, 2000 and (ii) the one-for-one stock Class B Common Stock dividend
payable with respect to shares of Class B Common Stock which are issued and
outstanding on June 1, 2000, to be paid to holders of record of Class B
Common Stock as of the close of business on June 15, 2000.
"Strategic Investor" shall mean any Person directly engaged in a
related or complementary business to the business engaged in by the Company
and/or any of the Subsidiaries if, at the time such Strategic Investor
acquires Senior Capital Stock, a significant business or technological
relationship between the Company and such Person is contemplated pursuant
to a written agreement.
"Strategic Senior Capital Stock Issuance" shall mean the issuance
of any Senior Capital Stock to a Strategic Investor.
"Subsidiaries" shall mean the collective reference to the
Significant Subsidiaries and all other direct or indirect subsidiaries of
the Company.
"Transaction Documents" shall mean this Agreement, the
Certificates of Designation, the Registration Rights Agreement and all
other contracts, agreements, schedules, certificates and other documents
being delivered pursuant to or in connection with this Agreement or such
other documents or the transactions contemplated hereby or thereby.
8.2. Fees and Expenses. At the Closing, the Company shall pay, or
reimburse the Purchasers for, all reasonable costs and expenses incurred by
the Purchasers in connection with the negotiation, execution, delivery,
performance and consummation of this Agreement and the transactions
contemplated hereby; but in no event shall the Company pay or reimburse the
Purchasers for such costs and expenses in an amount in excess of
$2,000,000. The Company shall pay its own expenses incurred in connection
with the negotiation, execution, delivery, performance and consummation of
this Agreement and the transactions contemplated hereby.
8.3. Public Announcements. The Purchasers and the Company shall
consult with each other before issuing any press release with respect to
this Agreement or the transactions contemplated hereby and neither shall
issue any such press release or make any such public statement without the
prior consent of the other, which consent shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of
the other party, issue such press release or make such public statement as
may upon the advice of counsel be required by Law if it has used all
reasonable efforts to consult with the other party prior thereto.
8.4. Restrictive Legends. No Preferred Shares or Shares may be
transferred without registration under the Securities Act and applicable
state securities laws unless counsel to the Company shall advise the
Company that such transfer may be effected without such registration. Each
certificate representing any of the foregoing shall bear legends in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
THE SALE, PLEDGE, TRANSFER, ASSIGNMENT OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AND SUBJECT TO THE
PROVISIONS OF A STOCK PURCHASE AGREEMENT DATED AS OF
JUNE 14, 2000, A COPY OF WHICH IS AVAILABLE UPON
REQUEST FOR INSPECTION AT THE OFFICES OF THE
CORPORATION. ANY SUCH REQUEST SHOULD BE ADDRESSED TO
THE SECRETARY OF THE CORPORATION.
8.5. Further Assurances. At any time or from time to time after
the Closing, the Company, on the one hand, and the Purchasers, on the other
hand, agree to cooperate with each other, and at the request of the other
party, to execute and deliver any further instruments or documents and to
take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby or by the other Transaction Documents and to otherwise
carry out the intent of the parties hereunder or thereunder.
8.6. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the Company and the Purchasers and the respective
successors, permitted assigns, heirs and personal representatives of the
Company and the Purchasers, provided that, except as provided below, the
Company may not assign its rights or obligations under this Agreement to
any Person without the prior written consent of the Purchasers, and
provided further that the Purchasers may not assign their rights or
obligations under this Agreement to any Person (other than an Affiliate)
without the prior written consent of the Company, which consent shall not
be unreasonably withheld or delayed. In addition, and whether or not any
express assignment has been made, the provisions of this Agreement which
are for the Purchasers' benefit as purchasers or holders of Preferred Stock
or Shares are also for the benefit of, and enforceable by, any subsequent
holder of such Preferred Stock or Shares. Notwithstanding the foregoing,
the Purchasers and the Company agree that, prior to the Closing, the
Company may merge (the "Merger") with and into NM Acquisition Corp., a
Delaware corporation ("Acquisition"), pursuant to the Amended and Restated
Agreement and Plan of Merger and Share Exchange Agreement, dated as of May
10, 2000 (the "Merger Agreement"), by and among Concentric Network
Corporation ("Concentric"), the Company, Eagle River Investments, L.L.C.,
Craig O. McCaw and Acquisition. Upon consummation of the Merger, the
separate existence of the Company shall cease, Acquisition will be renamed
NEXTLINK Communications, Inc. and succeed to all the assets and liabilities
of the Company in accordance with the DGCL including, without limitation,
all rights and obligations of the Company under this Agreement and the
Transaction Documents. If the Merger is consummated prior to the Closing,
Acquisition shall execute a joinder and assumption agreement with the
Purchasers pursuant to which Acquisition agrees to join in this Agreement
and, subject to Section 8.17, to be bound by all the terms and conditions
of this Agreement applicable to the Company as if it was the original party
hereto.
8.7. Entire Agreement. This Agreement and the other Transaction
Documents contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous
arrangements or understandings with respect thereto; provided that the
Confidentiality Agreement between the parties (or their Affiliates) will
remain in full force and effect in accordance with its terms (the
"Confidentiality Agreement").
8.8. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by such party to the other parties:
(i) if to the Company, to:
NEXTLINK Communications, Inc.
1505 Farm Credit Drive
McLean, VA 22102
Attn: Gary D. Begeman, Esq.
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Attn: Bruce R. Kraus, Esq.
(ii) if to the Purchasers, to:
c/o Forstmann Little & Co.
767 Fifth Avenue
New York, NY 10153
Attention: Sandra J. Horbach
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Telecopy: (212) 859-8587
Attention: Robert C. Schwenkel, Esq.
All such notices, requests, consents and other communications
shall be deemed to have been given or made if and when delivered personally
or by overnight courier to the parties at the above addresses or sent by
electronic transmission, with confirmation received, to the telecopy
numbers specified above (or at such other address or telecopy number for a
party as shall be specified by like notice).
8.9. Amendments. The terms and provisions of this Agreement may
be modified or amended, or any of the provisions hereof waived, temporarily
or permanently, in a writing executed and delivered by the Company and the
Purchasers. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar). No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
8.10. Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement.
8.11. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
8.12. Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice versa.
8.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW.
8.14. Submission to Jurisdiction. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United
States of America, in each case located in the County of New York, for any
Litigation arising out of or relating to this Agreement or the other
Transaction Documents and the transactions contemplated hereby and thereby
(and agrees not to commence any Litigation relating hereto or thereto
except in such courts), and further agrees that service of any process,
summons, notice or document by U.S. registered mail to its respective
address set forth in this Agreement shall be effective service of process
for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection
to the laying of venue of any Litigation arising out of this Agreement or
the transactions contemplated hereby in the courts of the State of New York
or the United States of America, in each case located in the County of New
York, hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such Litigation brought in any
such court has been brought in an inconvenient forum.
8.15. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASERS HEREBY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION,
PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
8.16. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid,
but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
8.17. Representations and Warranties. Notwithstanding anything in
this Agreement to the contrary, all representations and warranties made by
the Company under this Agreement (except those in Sections 2.1, 2.2 and
2.3(b)) shall be deemed to be made without giving effect to the Merger and
the transactions contemplated thereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
Purchasers
----------
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP VI, L.P.
By: FLC XXXII Partnership, L.P.
its general partner
By: /s/ Sandra J. Horbach
----------------------------------
Sandra J. Horbach,
a general partner
Number of Series G Number of Series H
Preferred Shares Preferred Shares Purchase Price
---------------- ---------------- --------------
0 131,052 $132,143,750
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP VII, L.P.
By: FLC XXXIII Partnership
its general partner
By: /s/ Sandra J. Horbach
----------------------------------
Sandra J. Horbach,
a general partner
Number of Series G Number of Series H
Preferred Shares Preferred Shares Purchase Price
-------------------- -------------------- --------------
268,750 0 $269,406,250
FL FUND, L.P.
By: FLC XXXI Partnership, L.P.
its general partner
By: FLC XXIX Partnership, L.P.
a general partner
By: /s/ Sandra J. Horbach
-----------------------------
Sandra J. Horbach,
a general partner
Number of Series G Number of Series H
Preferred Shares Preferred Shares Purchase Price
-------------------- -------------------- ----------------
0 198 $200,000
<PAGE>
NEXTLINK COMMUNICATIONS, INC.
By: /s/ Daniel F. Akerson
---------------------------------
Name: Daniel F. Akerson
Title: Chairman and Chief Executive
Officer
