SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 12, 1999 (May 7, 1999)
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NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19656 36-3939651
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2001 Edmund Halley Drive, Reston, Virginia 20191
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 433-4000
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1505 Farm Credit Drive, McLean, Virginia 22102
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(Former name, former address and former
fiscal year, if changed since last report)
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Item 5. Other Events.
Microsoft Transaction: On May 7, 1999, Nextel Communications, Inc. ("Nextel")
and Microsoft Corporation ("Microsoft") entered into an investment agreement in
which Microsoft has committed to purchase, and Nextel has committed to sell,
about 16.7 million shares of Nextel's Class A Common Stock for an aggregate cash
investment of about $600 million, representing a per share price of $36.00. The
investment agreement and related agreements also establish certain transfer
restrictions that apply to the Nextel shares purchased by Microsoft, an investor
standstill provision and certain registration rights relating to the Nextel
shares. The transactions contemplated by the investment agreement are subject to
customary closing conditions including the expiration or termination of all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
In connection with this transaction, Nextel and Microsoft also entered into
agreements under which Microsoft is to provide certain portal services and
related assistance in connnection with Nextel's previously announced Nextel
OnlineSM service offering.
Nextel plans to use the proceeds from the investment to advance the deployment
of its wireless Internet services, to expand its domestic and international
digital mobile network service offerings and for other corporate purposes.
On May 10, 1999, Nextel and Microsoft issued a press release announcing this
transaction. A copy of the press release is filed as Exhibit 99.1 to this report
and is incorporated in this report by reference.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: A number of the matters and subject areas discussed in this report and in
the related exhibits that are not historical or current facts deal with
potential future circumstances and developments. The mobile computing and
wireless Internet access services discussed in the press release filed as
Exhibit 99.1 to this report (the "Release"), are all planned for commercial
introduction in the future. As such, they remain subject to risks and delays
that are typical of product and services offerings in pre-commercialization
stages including the successful completion of development, implementation and
system integration activities that must occur before commercial introduction of
these services. Other risk factors include the potential fluctuations in demand
for these products and services and potential rapid technological and market
change. These new product and service offerings, also may be subject to
coverage and capacity limitations in certain geographic areas. The discussion of
these matters and subject areas is qualified by the inherent risks and
uncertainties surrounding expectations concerning Nextel's digital mobile
network business generally. Customer acceptance and/or commercial viability of
such new product and service offerings will be dependent on a variety of
factors, including the development and availability of related products and
applications that are compatible with these new service offerings and that meet
customer needs and preferences, the quality and reliability of the applicable
services and products, and Nextel's ability to employ these new product and
service offerings either to reduce its own costs or to price such offerings to
obtain a satisfactory return on investments. Nextel
has attempted to identify, in context, certain of the factors that it currently
believes may cause actual future experience and results in its digital mobile
network business (including, if and when commercially introduced, the product
and service offerings discussed in the Release) to differ from Nextel's current
expectations regarding such relevant matters or subject areas, and such risks
and uncertainties are described from time to time in Nextel's reports filed with
the Securities and Exchange Commission, including Nextel's Annual Report on Form
10-K for the fiscal year ended December 31, 1998.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
Exhibit No. Exhibit Description
10.1 - Investment Agreement by and between Nextel Communications,
Inc. and Microsoft Corporation dated as of May 7, 1999
("Investment Agreement").
10.2 - Form of Registration Rights Agreement (attached as Exhibit A
to the Investment Agreement).
99.1 - Press Release dated May 10, 1999 issued by Microsoft and
Nextel.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: May 12, 1999 By:__________________________________
Thomas J. Sidman
Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Exhibit Description
10.1 - Investment Agreement by and between Nextel
Communications, Inc. and Microsoft Corporation
dated as of May 7, 1999 ("Investment Agreement").
10.2 - Form of Registration Rights Agreement (attached as
Exhibit A to the Investment Agreement).
99.1 - Press Release dated May 10, 1999 issued by
Microsoft and Nextel.
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Exhibit 10.1
INVESTMENT AGREEMENT
by and between
NEXTEL COMMUNICATIONS, INC.
and
MICROSOFT CORPORATION
Dated as of May 7, 1999
<PAGE>
INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (this "Agreement") is entered into as of May
7, 1999, by and between Nextel Communications, Inc., a Delaware corporation (the
"Company"), and Microsoft Corporation, a Washington corporation ("Investor").
Unless the context otherwise requires, terms capitalized and not
otherwise defined in context have the meanings set forth or cross-referenced in
Article 9 of this Agreement.
RECITALS:
WHEREAS, the Company is planning to institute a variety of mobile data and
wireless Internet access services in certain market areas currently covered by
its Digital Mobile Network, and will require funding for such purposes and for
the general conduct of its business activities and other corporate purposes;
WHEREAS, on or about the date of this Agreement, the Company and Investor
are entering into the Nextel Online Portal and Co-Marketing Agreement (the
"Portal Agreement") pursuant to which Investor will furnish to the Company
certain portal services and related assistance in connection with the Company's
planned conduct of such mobile data and wireless Internet access services; and
WHEREAS, to induce the Company to select Investor and its Affiliates over
other competing providers of such services and assistance, and to induce the
Company to enter into such Portal Services Agreement, the Investor is willing to
commit to make a significant equity investment in the Company, all on the terms
and conditions set forth herein.
AGREEMENT:
In consideration of the recitals and the mutual covenants of this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1. ISSUANCE AND PURCHASE OF COMMON STOCK.
1.1 Purchase of Securities and Closing Matters.
(a) Subject to the other terms and conditions set forth in this
Agreement (including, without limitation, those set forth in Section 1.5,
below), at the Closing, Investor will purchase from the Company, and the Company
will sell to Investor, 16,666,667 shares of Common Stock (the "Investor Shares")
for a purchase price of $600,000,012 (the "Purchase Price"). The number of
Investor Shares will be adjusted to reflect any stock split or combination,
stock dividend, or other adjustment to the Common Stock occurring between the
date of this Agreement and the Closing Date. The Investor Shares are being
purchased solely in reliance on the Company's representations and warranties set
forth in Article 3 and sold in reliance on
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Investor's representations and warranties set forth in Article 4. The Investor
Shares are subject to the Transfer restrictions set forth in Article 6.
(b) Unless this Agreement has been terminated in accordance with
Article 8, the closing of the Transaction (the "Closing") will, subject to the
provisions of Article 2, occur as soon as practicable after all of the
conditions set forth in Article 2 have either been fulfilled or waived. The
Closing will take place at the offices of the Company at 2001 Edmund Halley
Drive, Reston, Virginia, at 10:00 a.m., local time, or at such other time, place
or location as the parties may hereafter agree. At the Closing:
(i) Investor will pay, by wire transfer of immediately
available funds to an account designated in writing by the Company,
the Purchase Price;
(ii) The parties will execute and deliver the Registration
Rights Agreement;
(iii) the parties will execute and deliver such agreements or
other documents as may be necessary to evidence the satisfaction or,
if appropriate, the waiver of any conditions to Closing set forth in
Article 2;
(iv) the Company will deliver to Investor a copy of its
letter to the Transfer Agent, irrevocably instructing the Transfer
Agent to, within three Business Days from the Closing Date, issue a
certificate or certificates to Investor representing the Investor
Shares and deliver the same to Investor at the address designated by
Investor;
(v) each party will execute and deliver to the other:
(A) A certificate from its secretary, certifying as to
the incumbency of any officer(s) signing this Agreement, the
Registration Rights Agreement and any other agreements,
instruments or documents executed and delivered by such party at
the Closing, and attaching certified original copies of (x) such
party's charter documents and by-laws and (y) all corporate
resolutions or actions authorizing the execution, delivery or
performance of this Agreement, the Registration Rights Agreement
and any other agreements, instruments or documents executed and
delivered by such party at the Closing; and
(B) The officer's certificate described in Section 2.2
(a), in the case of Investor, or Section 2.3(a), in the case of
the Company.
1.3 Legend. Each certificate representing any of the Investor
Shares (including, without limitation, any shares issued in connection with any
subsequent adjustment thereof) will bear the following legend, together with any
and all other legends as may be required under applicable law (and the Company
may issue appropriate corresponding stop transfer instructions to the Transfer
Agent):
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The securities represented by this certificate or instrument have
not been registered under the Securities Act of 1933, as amended
(the "Act"), or under any applicable state law and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement under the Act or such laws or an
opinion of counsel reasonably satisfactory to the Company that
such a registration is not required under the Act or such laws
and the rules and regulations promulgated thereunder.
The securities represented by this certificate or instrument are
subject to certain restrictions on transfer as set forth in the
Investment Agreement, dated as of May 7, 1999, a copy of which is
on file at the principal executive offices of the Company. Any
registration of transfer of such securities on the books of the
Company will be subject to compliance with such restrictions.
The Company agrees (1) to remove the legend set forth in the second
preceding paragraph upon receipt of an opinion of counsel in form and substance
reasonably satisfactory to the Company that the Investor Shares are eligible for
transfer without registration under the Securities Act and (2) to remove the
legend set forth in the immediately preceding paragraph at such time as a
Transfer is permitted pursuant to Article 6 of this Agreement; Investor
acknowledges that the removal of any legend will not diminish or release
Investor from the Transfer restrictions and holding period obligations
applicable to the Investors Shares pursuant to Section 6 hereof.
1.4 Stamp Tax. The Company will pay all stamp and other taxes, if any,
that may be payable in respect to the issuance, sale and delivery to Investor of
the Investor Shares and will save Investor harmless against any loss or
liability resulting from nonpayment or delay in payment of any such taxes.
1.5 Designation of Selling Entity. Investor understands and agrees
that the Company may elect, in its sole and absolute discretion, to have any one
or more of its wholly owned subsidiaries sell and deliver to Investor shares of
Common Stock held by any such Subsidiary, in lieu of the Common Stock that
otherwise would be issued and sold to Investor at the Closing, and that all such
shares of Common Stock (whether issued and sold by the Company, or sold and
delivered by a Subsidiary of the Company, to Investor at the Closing) will
constitute the Investor Shares for all purposes of this Agreement. If the
Investor Shares are sold and delivered by any Subsidiary of the Company to
Investor at the Closing, Investor will (unless otherwise instructed in the
Pre-Closing Notice from the Company referred to below) make payment of the
appropriate portion of the Purchase Price therefor directly to the delivering
Subsidiary. The Company acknowledges and agrees that all shares of Common Stock
purchased by Investor at the Closing (whether issued and sold by the Company, or
sold and delivered by a Subsidiary of the Company, to Investor) will constitute
the Investor Shares for all purposes of this Agreement. At least five Business
Days prior to the Closing, the Company will deliver to Investor a written notice
(the "Pre-Closing Notice") indicating (i) the date on which the Closing is
proposed to occur (assuming satisfaction or waiver of all conditions to
Closing), which shall be at least five Business Days after the date on which
Investor receives such Pre-Closing Notice, (ii) if any adjustment has been made
to the Common Stock as contemplated by Section 1.1(a),
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above, the total number of the Investor Shares to be sold and purchased at the
Closing, (iii) the identity of any sellers of any such Investor Shares other
than the Company (and the number of the Investor Shares being sold by each of
such other sellers), (iv) the allocation of the Purchase Price by the Investor
among the Company and each other seller of any Investor Shares and (v) all
relevant wire transfer instructions or other payment information. If the Company
fails to indicate otherwise in the Pre-Closing Notice delivered to Investor, the
Company will be deemed to have delivered a Pre-Closing Notice proposing a
Closing Date that is five Business Days after the date on which Investor
receives such Pre-Closing Notice (or the first Business Day thereafter on which
all other conditions to Closing have been satisfied or waived) and indicating
that all of the Investor Shares to be purchased and sold at the Closing are
being issued and sold by the Company to Investor and that the Investor is to pay
the entire Purchase Price to the Company as contemplated in Section 1.1(a),
above.
ARTICLE 2. CONDITIONS TO CLOSING.
2.1 Conditions to Each Party's Obligations. The obligations of each
party to consummate the Transaction are subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, any or all of
which may be waived in whole or in part by the party benefitted thereby, to the
extent permitted by applicable Law:
(a) No Injunction. The absence of any pending or threatened injunction
or Order of any Governmental Authority prohibiting, enjoining or otherwise
restraining the consummation of the Transaction or the performance of any
party's obligations hereunder or under any other agreement to be entered
into by the parties in connection with the consummation of the Transaction.
(b) HSR Act; Approvals. All applicable waiting periods under the HSR
Act will have expired or been terminated and any other necessary
Authorizations will have been obtained from the appropriate Governmental
Authorities.
2.2 Conditions to Investor's Obligations. Investor's obligation to
consummate the Transaction is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, any or all of which may be
waived in whole or in part by Investor, to the extent permitted by applicable
Law:
(a) Representations and Warranties True. The representations and
warranties of the Company in this Agreement will have been true in all material
respects when made on the date hereof, and, as of the Closing, will be true in
all material respects, except for those representations and warranties that are
qualified by materiality or material adverse effect, which representations and
warranties will be true and correct, except for (i) changes resulting from the
consummation of the Transaction, or any one or more of the Currently Announced
Transactions, (ii) changes or events that do not, individually or in the
aggregate, have a material adverse effect on the Business Condition of the
Company and its Subsidiaries, taken as a whole, and (iii) representations and
warranties that speak as of a specific date other than the Closing Date (which
need be correct only as of such other date). The Company will deliver an
officer's certificate,
<PAGE>
dated the Closing Date, confirming that the conditions set forth in this Section
2.2(a) are, except as set provided for above, satisfied on the Closing Date.
(b) Performance. The Company has performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing.
(c) Opinion of Counsel. Investor shall have received an opinion dated
as of the Closing Date of Jones, Day, Reavis & Pogue, counsel to the Company,
substantially in the form attached as Exhibit B.
(d) Pre-Closing Notice. The Company shall have given the Pre-Closing
Notice to the Investor.
2.3 Conditions to the Company's Obligations. The Company's obligation
to consummate the Transaction is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, any or all of which may be
waived in whole or in part by the Company, to the extent permitted by applicable
Law:
(a) Representations and Warranties True. The representations and
warranties of Investor in this Agreement were true in all material respects
when made on the date hereof, and, as of the Closing, will be true in all
material respects, except for those representations and warranties that are
qualified by materiality or material adverse effect, which representations
and warranties will be true and correct, except for (i) changes resulting
from the consummation of the Transaction, and (ii) representations and
warranties that speak as of a specific date other than the Closing Date
(which need be correct only as of such other date). Investor shall deliver
a certificate of its officers or other authorized representatives dated the
Closing Date confirming that the conditions set forth in this Section
2.3(a) are satisfied on the Closing Date.
(b) Performance. Investor has performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Investor that:
3.1 Corporate Status.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite corporate or other power and authority to own or lease and
operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into and to carry out the provisions of
the Transaction Agreements and to consummate the Transaction.
<PAGE>
(b) The Company is duly qualified and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be in good standing or so qualified would not,
individually or in the aggregate, have a material adverse effect on the
Business Condition of the Company and its Subsidiaries taken as a whole.
3.2 Power and Authority. The Company has the corporate power and
authority to execute and deliver, and to perform its obligations under, the
Transaction Agreements. The Company has taken all necessary corporate action to
authorize the Transaction Agreements and their execution, delivery and
performance. This Agreement has been, and as of the Closing Date, the other
Transaction Agreements will have been, duly executed and delivered by the
Company and this Agreement constitutes, and each of the other Transaction
Agreements will constitute upon its execution and delivery, a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application that
may affect the enforcement of creditors' rights generally and by general
equitable principles.
3.3 Non-Contravention.
(a) On the date hereof, the Company is not in violation of any term of
its certificate of incorporation (as restated), by-laws or other
organizational documents.
(b) Except as set forth in Schedule 3.3(b), the execution, delivery
and performance of this Agreement and the consummation of the Transaction
in accordance with the terms hereof will not violate or contravene any
provision of applicable Law or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding on the Company,
except where such violation or contravention would not have a material
adverse effect on (i) the Business Condition of the Company and its
Subsidiaries taken as a whole or (ii) the ability of the Company to perform
its obligations under this Agreement.
3.4 Consents and Approvals.
(a) Schedule 3.4(a) lists, as of the date hereof (i) all
Authorizations that, to the knowledge of the Company, are required to be
made, filed, given or obtained by the Company and any of its Subsidiaries
or controlling persons with, to or from any Governmental Authority in
connection with the Transaction and (ii) all consents, approvals and
waivers required to be given by, or obtained from, any other Persons to or
by the Company and any of its Subsidiaries in connection with the
consummation of the Transaction, other than those Authorizations, consents,
approvals and waivers as to which the failure to make, file, give or
obtain, individually or in the aggregate, would not have a material adverse
effect on (i) the Business Condition of the Company and its Subsidiaries,
taken as a whole, or (ii) the ability of the Company to perform its
obligations under the Transaction Agreements.
(b) Except for the HSR Filing and the related Authorization under the
HSR Act pertaining to the Transaction, the Company and each of its
Subsidiaries has made, filed,
<PAGE>
given or obtained all Authorizations identified on Schedule 3.4(a) and has
been given or obtained all consents, approvals or waivers necessary as of
the date hereof for the Company to perform its obligations under the
Transaction Agreements at or prior to the Closing.
3.5 Reports and Information.
(a) The Company has filed all reports required to be filed with the
Securities and Exchange Commission (the "SEC") during the period from
January 1, 1996 to May 7, 1999 (excluding any such reports dealing with the
Transaction or the execution and delivery of this Agreement or any related
agreements) (collectively, the "Company SEC Reports"). None of the Company
SEC Reports, as of their respective dates (as amended through May 7, 1999),
contained any untrue statement of material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. All of the Company SEC Reports, as of their
respective dates (as amended through May 7, 1999), complied in all material
respects with the requirements of the Exchange Act and the applicable rules
and regulations thereunder.
(b) As of May 7, 1999, the Company has not received notice of any
pending investigation of the Company by the SEC.
(c) The consolidated financial statements of the Company included in
the Company's Form 10-K for the year ended December 31, 1998 (the "Company
Financial Statements") have been prepared in accordance with U.S. generally
accepted accounting principles ("GAAP") (except in the case of unaudited
statements as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or as described in writing to Investor prior to the date hereof)
and the balance sheet as of December 31, 1998 contained in the Company
Financial Statements presents fairly, in all material respects, the
consolidated financial position of the Company and its consolidated
subsidiaries as of the date thereof and the other relevant statements for
the period ending December 31, 1998 included in the Company Financial
Statements present fairly, in all material respects, the consolidated
results of operations and cash flows for the Company and its consolidated
subsidiaries for the periods then ending.
3.6 Capitalization.
(a) As of March 17, 1999, the authorized capital stock of the Company
consisted of shares of capital stock divided into nine classes or series as
follows: (i) 515,000,000 shares of Nextel Class A Common Stock, of which
274,369,629 shares were outstanding on such date (excluding treasury
shares), (ii) 35,000,000 shares of Nextel Class B (Non-Voting) Common
Stock, of which 17,830,000 shares were outstanding on such date,
(iii) 26,941,933 shares of Class A Convertible Redeemable Preferred Stock,
of which 7,905,981 shares were outstanding on such date, (iv) 82 shares of
Class B Convertible Redeemable Preferred Stock, all of which were
outstanding on such date, (v) 26,941,933 shares of Class C Convertible
Redeemable Preferred Stock, none of which were outstanding on such date,
(vi) 1,600,000 shares of Series D Exchangeable Preferred Stock, of which
585,473 shares were outstanding on such date, (vii) 2,200,000 shares of
Series E Exchangeable Preferred Stock, of which 815,314 shares were
outstanding on such date, (viii) 800,000 shares of Zero Coupon
<PAGE>
Convertible Preferred Stock, of which 591,308 shares were outstanding on
such date, and (ix) 5,400,000 shares of Preferred Stock, par value $.01 per
share none of which were outstanding on such date.
(b) All shares of Common Stock outstanding on the date hereof have
been duly authorized and are validly issued, fully paid and nonassessable,
free from any liens created by the Company with respect to the issuance and
delivery thereof.
(c) When issued or sold in accordance with the terms of this Agreement
against payment therefor in the amount of the Purchase Price, the Investor
Shares will be duly authorized, validly issued, fully paid and
nonassessable, and not subject to statutory preemptive rights or any
similar statutory or contractual rights.
3.7 Absence of Certain Changes or Events. As of May 7, 1999, except as
disclosed in the Company SEC Reports, since the date of the most recent audited
financial statements included in the Company SEC Reports, there has not been (i)
any declaration, setting aside or payment of any dividend or distribution
(whether in cash, stock or property) with respect to any of the Company's Common
Stock, and, with respect to other capital stock of the Company, except for
dividends or distributions made in accordance with the terms of such capital
stock, (ii) any split, combination or reclassification of any of its capital
stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock except in accordance with the terms of such capital stock, (iii)
as of the date hereof, any damage, destruction or loss of property, whether or
not covered by insurance, that has or is reasonably likely to have a material
adverse effect on the Company and its subsidiaries taken as a whole, or (iv) as
of the date hereof, any change in accounting methods, principles or practices by
the Company having a material adverse effect on the Business Condition of the
Company and its Subsidiaries, taken as a whole, except insofar as may have been
required by a change in GAAP.
3.8 Litigation. As of May 7, 1999, except as is disclosed in the
Company SEC Reports, there is no suit, action or proceeding pending against the
Company or any of its subsidiaries that, individually or in the aggregate, is
reasonably expected by the Company to be determined adverse to the Company and
if so determined would (i) have a material adverse effect on the Business
Condition of the Company and its Subsidiaries, taken as a whole, (ii) impair the
ability of the Company to perform any of its material obligations under this
Agreement and the Registration Rights Agreement, or (iii) prevent the
consummation of any of the transactions contemplated by said agreements.
<PAGE>
3.9 Material Facts. As of May 7, 199, except as and to the extent
reflected or reserved against in the Company Financial Statements, none of the
Company nor any Subsidiary of the Company has any material liabilities or
obligations (of the types that, in accordance with GAAP, are required to be
reflected or reserved against in the Company Financial Statements) of any
nature, whether absolute, accrued, contingent or otherwise, and whether due or
to become due, for the periods covered thereby.
3.10 Brokers and Finders. Neither the Company nor any of its
Subsidiaries or Affiliates has employed any investment banker, broker, finder,
consultant or intermediary in connection with this Agreement, or the Transaction
that would be entitled to any investment banking, brokerage, finder's or similar
fee or commission in any way relating thereto or in connection therewith, except
as previously disclosed to Investor.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF INVESTOR.
Investor represents and warrants to the Company that:
4.1 Corporate Status. Investor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Washington
and has all requisite corporate or other power and authority to enter into this
Agreement and the other Transaction Agreements and to carry out the provisions
hereof and thereof and to consummate the Transaction.
4.2 Power and Authority. Investor has taken all necessary corporate
action to authorize the Transaction Agreements and their execution, delivery and
performance. This Agreement has been, and as of the Closing Date, the other
Transaction Agreements will have been, duly executed and delivered by Investor
and this Agreement constitutes, and the other Transaction Agreements will
constitute upon its execution and delivery, a valid and binding agreement of
Investor enforceable against Investor in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws of general application that may affect the enforcement of
creditors' rights generally and by general equitable principles.
4.3 Non-Contravention.
(a) On the date hereof, Investor is not in violation of any term of
its articles of incorporation (as restated), bylaws or other organizational
documents.
(b) Except as set forth in Schedule 4.3(b), the execution, delivery
and performance of this Agreement and the consummation of the Transaction
in accordance with the terms hereof will not violate or contravene any
provision of applicable Law or the articles of incorporation (as restated)
or bylaws of Investor or any agreement or other instrument binding on
Investor, except where such violation or contravention would not have
a material adverse effect on (i) the Business Condition of Investor and its
Subsidiaries taken as a whole or (ii) the ability of Investor to perform
its obligations under this Agreement.
4.4 Consents and Approvals.
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(a) Schedule 4.4(a) lists as of the date hereof (i) all Authorizations
that, to the knowledge of Investor, are required to be made, filed, given
or obtained by Investor and any of its Subsidiaries or controlling persons
with, to or from any Governmental Authority in connection with the
Transaction and (ii) all consents, approvals and waivers required to be
given by, or obtained from, any other Persons to or by Investor and any of
its Subsidiaries in connection with the consummation of the Transaction,
other than those Authorizations, consents, approvals and waivers as to
which the failure to make, file, give or obtain, individually or in the
aggregate, would not have a material adverse effect on the ability of
Investor to perform its obligations under the Transaction Agreements.
(b) Except for the HSR Filing and the related Authorization under the
HSR Act pertaining to the Transaction, Investor and each of its
Subsidiaries has made, filed, given or obtained all Authorizations and has
been given or obtained all consents, approvals or waivers necessary as of
the date hereof for Investor to perform its obligations under the
Transaction Agreements at or prior to the Closing.
4.5 Investment Intent. Investor is acquiring the Investor Shares for
its own account and with no present intention of distributing or selling the
Investor Shares in violation of the Securities Act or any applicable state
securities law. Investor will not sell or otherwise dispose of any of the
Investor Shares, unless such sale or other disposition has been registered or is
exempt from registration under the Securities Act and has been registered or
qualified or is exempt from registration or qualification under applicable state
securities laws. Investor understands that the Investor Shares to be acquired by
Investor hereunder have not been registered under the Securities Act by reason
of their contemplated issuance in transactions exempt from the registration and
prospectus delivery requirements of the Securities Act pursuant to Section 4(2)
thereof or Rule 506 of Regulation D promulgated under the Securities Act, and
that the reliance of the Company on this exemption is predicated in part on
these representations and warranties of Investor contained in this Article 4.
Investor acknowledges that a restrictive legend consistent with the foregoing
and with the provisions of Section 1.3 and Article 6 has been or will be placed
on each certificate representing any Investor Shares, and related stop transfer
instructions will be noted in the transfer records of the Company and the
Transfer Agent.
4.6 Accredited Investor Status. Investor is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act and, either alone or in connection with its financial advisors,
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment to be made by it
hereunder in the Investor Shares.
4.7 Brokers and Finders. Neither Investor nor any of its Subsidiaries
or Affiliates has employed any investment banker, broker, finder, consultant or
intermediary in connection with this Agreement or the Transaction that would be
entitled to any investment banking, brokerage, finder's or similar fee or
commission in any way relating thereto or in connection therewith, other than
those (if any) that shall be the sole responsibility of and shall be paid in
full by the Investor or its Subsidiaries.
<PAGE>
4.8 Acquisition of Voting Securities. Except for Excepted Shares,
neither Investor nor any of its Subsidiaries or Affiliates has any "beneficial
ownership" (as that term is defined under Rule 13d-3 under the Exchange Act) of
any securities of the Company that are entitled to vote for the election of
directors, nor are any of them a party to any agreement or arrangement (a) that
gives any of them or entitles any of them to acquire "beneficial ownership"(as
that term is defined under Rule 13d-3 under the Exchange Act) of any securities
of the Company that are entitled to vote for the election of directors, or (b)
with respect to corporate governance matters concerning the Company or its
Subsidiaries (including, without limitation, the exercise or failure to exercise
voting rights with respect to any voting securities of the Company).
4.9 Access to Funds. Investor holds or has access to unrestricted
funds in amounts sufficient to permit Investor to perform its obligations under
this Agreement.
4.10 Reliance on Company SEC Reports. In making its investment
decision and related commitments relating to the acquisition of the Investor
Shares hereunder, the Investor hereby confirms that it has relied only on the
representations and warranties of the Company set forth herein and on the other
information contained or incorporated by reference in the Company SEC Reports
filed on or prior to the date hereof, and specifically disclaims reliance on any
other information, whether or not provided or otherwise made available by the
Company or any authorized representative thereof, and including without
limitation any published reports, news stories or analyses relating to the
Company and/or its Subsidiaries or their respective businesses, assets,
liabilities or prospects.
ARTICLE 5. CERTAIN COVENANTS.
5.1 HSR Act; Other Approvals.
(a) The Company and Investor agree to make all necessary HSR Act
filings relating to the Transaction as promptly as practicable after the
date of this Agreement and to use their commercially reasonable efforts to
furnish or cause to be furnished, as promptly as practicable, all
information and documents requested under such laws and will otherwise
cooperate in all reasonable respects with the applicable Governmental
Authorities to obtain all required regulatory approvals in as expeditious a
manner as possible. Each party will pay its own fees and expenses related
to or assessed in connection with any and all filings by it under the HSR
Act.
(b) Each of the Company and Investor will use its commercially
reasonable efforts to obtain all necessary Authorizations as are required
to be obtained under any federal or state law or regulations, including
applicable antitrust laws. Neither of the parties hereto or their
respective Subsidiaries or Affiliates will be required to agree to any
Adverse Condition or take any action that, in the reasonable opinion of
such party, would result in or produce an Adverse Condition.
<PAGE>
(c) The Company and Investor each agree to (and to cause their
respective appropriate Subsidiaries and Affiliates to) cooperate with the
other in the preparation and filing of all forms, notifications, reports
and information, if any, required or reasonably deemed advisable pursuant
to any Requirement of Law or the rules of the NASDAQ-NMS in connection with
the Transaction and to use their respective commercially reasonable efforts
jointly to agree on a method to overcome any objections by any Governmental
Authority to any such Transaction. None of the parties hereto nor any of
their respective Subsidiaries or Affiliates will be required to agree to
any Adverse Condition or take any action that in the reasonable opinion of
such party would result in or produce an Adverse Condition.
5.2 Public Announcements. Except pursuant to any Requirement of Law,
the exercise of fiduciary duty, or the policies or rules of any stock exchange
(or the NASDAQ-NMS) on which the Company's or Investor's securities are listed,
prior to the Closing Date, the form and content of all press releases or other
public communications of any sort relating to the subject matter of this
Agreement, the Transaction or any other transaction to be entered into by either
of the parties in connection herewith, and the method of their release, or
publication thereof by either of the parties hereto or their respective
Affiliates, will be subject to the prior approval of each of the parties hereto,
which approval will not be unreasonably withheld or delayed. To the extent
reasonably requested by a party hereto, on and following the Closing Date, the
other party and its Subsidiaries and Affiliates will consult with and provide
reasonable cooperation to the other in connection with the issuance of further
press releases or other public documents describing the Transaction.
5.3 Further Assurances. Each party will execute and deliver such
additional instruments and other documents and will take such further actions as
may be necessary or appropriate to effectuate, carry out and comply with all of
the terms of this Agreement and the other Transaction Agreements and the
transactions contemplated hereby and thereby. Without limiting the generality of
the preceding sentence, the Company and Investor will not (and will not permit
their Subsidiaries or Affiliates to) take any action or actions at or prior to
the Closing that would (a) cause any Authorization or any consent, approval or
waiver of any other Person that has been made, filed, given or obtained in
connection with the Transaction to be withdrawn or terminated or to otherwise
cease to be effective, or (b) require any additional Authorization or any
additional consent, approval or waiver of any other Person to be made, filed,
given or obtained in connection with the Transaction.
5.4 Cooperation. The Company and Investor each agree to (and agree to
cause their Subsidiaries and Affiliates to) cooperate with the other to
consummate, as promptly as possible, the Transaction.
ARTICLE 6. RESTRICTIONS ON TRANSFER.
6.1 Permitted Transfers. Until the Transfer Restriction End Date,
Investor shall not Transfer any or all of the Investor Shares, except (i)
Transfers made in accordance with Section 6.2 or (ii) Transfers made to its
Controlled Affiliates, provided, that any proposed transferee that is a
Controlled Affiliate of Investor (an "Affiliate Transferee") must, as a
condition to such Transfer, agree to by bound by the restrictions of this
Article 6, and, provided
<PAGE>
further, that if Investor ceases to own, directly or indirectly, securities
representing at least 80% of the aggregate voting power of all voting securities
issued by any such Affiliate Transferee or if Investor ceases to control,
directly or indirectly, the management or policies of any such Affiliate
Transferee (whether through ownership of securities, partnership or membership
interests, by contract or otherwise), then in either such case, any Transfers to
such Affiliate Transferee will automatically and without further action be
rescinded and nullified and the Affiliate Transferee will be stripped of any
ownership or voting rights relating to any Investor Shares and will be
irrevocably obligated promptly to Transfer any and all Investor Shares held by
it to Investor.
6.2 Consent Required for Certain Transfers. Except in the case of
Transfers to Affiliate Transferees as permitted by clause (ii) of Section 6.1,
and subject to the other sections of this Article 6, Investor must obtain the
prior written consent of the Company to any proposed Transfer of any Investor
Shares by Investor or any Affiliate Transferee until the Transfer Restriction
End Date. The Company may refuse to grant or may withhold its consent to any
such proposed Transfer of Investor Shares in its sole and absolute discretion,
and also in its sole and absolute discretion may condition its consent to any
such proposed Transfer of Investor Shares on agreements of either or both the
Investor and the proposed transferee, including (by way of example and not
limitation), an agreement of the proposed transferee to be bound by any or all
of the restrictions set forth in this Article 6 or of the Investor to be jointly
and severally liable with the proposed transferee for any breach or violation of
this Article 6 by such proposed transferee.
6.3 Notification of Future Transfers. After the Transfer Restriction
End Date, if Investor proposes to make a Transfer, other than a Transfer to an
Affiliate Transferee as permitted by clause (ii) of Section 6.1, that involves
either (a) a transfer (or series of transfers) to a single person, or a group
controlled by a single person, of more than three million Investor Shares, or
(b) a Transfer of any Investor Shares to any person who is known by Investor to
be the Beneficial Owner (or who has publicly disclosed that it is the Beneficial
Owner) of five million or more shares of Common Stock, Investor must notify the
Company in a writing (i) identifying the proposed transferee and (ii) providing
in reasonable detail the terms and conditions of the proposed Transfer, at least
three Business Days before such proposed Transfer is to be consummated. The
number of shares in this Section 6.3 shall be proportionately adjusted to
reflect any stock split or combination, stock dividend or other adjustment to
the Common Stock.
6.4 Compliance with Securities Laws. Investor will not (and will cause
each relevant Affiliate Transferee not to) Transfer any of the Investor Shares
in violation of any applicable federal or state securities Law.
6.5 Termination of Restrictions. The restrictions on Transfer set
forth in this Article 6 will terminate upon a "Change of Control" (as that term
is defined in the Company's certificate of incorporation (as restated)).
6.6. Hedging Activities.
(a) Except as provided in Section 6.6(b), below, nothing in this
Article 6 or Article 7 will be deemed to prohibit Investor from engaging in
hedging activities relating to its ownership of any Investor Shares.
<PAGE>
(b) Investor is prohibited from engaging in and may not undertake,
directly or indirectly, any hedging activities that are or would at the
relevant time be required to be reported to the SEC other than in an
initial filing pursuant to Section 13 of the Exchange Act.
ARTICLE 7. STANDSTILL
7.1 Investor Standstill. From the date hereof until the later of (i)
the Standstill End Date, (ii) the second anniversary of the Closing, or (iii)
August 31, 2001, except within the terms of a specific request in writing from
the Company or a specific agreement in writing with the Company, neither
Investor nor any of Investor's Controlled Affiliates (and, if relevant, none of
Investor's Affiliates who Control Investor), will, directly or indirectly:
(a) propose, publicly announce or otherwise disclose an intent to
propose, enter into or agree to enter into, singly or with any other person
directly or indirectly: (i) any form of business combination, acquisition
or other transaction relating to the Company or any majority owned
subsidiary or affiliate of the Company; (ii) any form of restructuring,
recapitalization or similar transaction with respect to the Company or any
such subsidiary or affiliate; or (iii) any demand, request or proposal to
amend, waive or terminate any provision of this letter agreement; or
(b) (i) acquire, offer, propose or agree to acquire, by purchase or
otherwise, beneficial ownership (determined pursuant to Rule 13d-3 under
the Exchange Act) of any Nextel Securities (other than Excepted Shares),
(ii) deposit any Nextel Securities in a voting trust or subject any such
securities to any arrangement or agreement with respect to the voting
thereof or having similar effect, (iii) propose, make or become a
"participant" in any "solicitation" (as those terms are defined in Schedule
14A under the Exchange Act) of proxies or consents with respect to any
Nextel Securities, (iv) engage in any course of conduct for the purpose of
causing stockholders of the Company to vote contrary to the recommendation
of a majority of the board of directors of the Company on any matter
presented to such stockholders for their vote, (v) demand a copy of the
Company's list of its stockholders or other books and records, or call or
seek to call any special meeting of the Company's stockholders for any
reason, (vi) participate in or encourage the formation of any partnership,
syndicate or other group (within the meaning of Section 13(d)(3) of the
Exchange Act) for the purpose of acquiring, holding, voting or disposing of
Beneficial Ownership of any Nextel Securities or affecting control of the
Company, or (vii) otherwise act, alone or in concert with others (including
by providing financing to or for any other person), to seek or to offer to
control or influence, in any manner, the management, board of directors or
policies of the Company.
(c) Investor will not be in breach of this Section 7.1 if it or its
Controlled Affiliates (i) seek permission to privately present a proposal
to the Company to take an action described in (a) or (b) above, but if the
Company refuses to grant permission to present the proposal, Investor and
its Controlled Affiliates shall take no further action in connection
therewith, or (ii) present or propose commercial relationships in the
ordinary course of business.
(d) Notwithstanding anything herein to the contrary, the Company, in
its sole and absolute discretion, may waive the provisions of this Article
7, (x) if necessary, advisable or
<PAGE>
appropriate to obtain pooling treatment in connection with any Change of
Control or (y) otherwise as it deems necessary, advisable or appropriate.
ARTICLE 8. TERMINATION
8.1 Termination. This Agreement may be terminated, and the Transaction
contemplated to occur at the Closing thereby abandoned, at any time prior to the
Closing as follows:
(a) By mutual written consent of Investor and the Company;
(b) By Investor, upon written notice to the Company, if any of the
conditions set forth in Section 2.2 have not been satisfied on or before
September 30, 1999, unless the satisfaction thereof has been frustrated or
made impossible by any act or failure to act by Investor; provided, that,
at the request of either party, such date may be extended for up to 90 days
if required to obtain any Authorization from any Governmental Authority, or
to remove any injunction or Order, necessary to consummate the Transaction;
(c) By the Company, upon written notice to Investor, if any of the
conditions set forth in Section 2.3 have not been satisfied on or before
September 30, 1999 (or such later date as Investor and the Company may
agree in writing), unless the satisfaction thereof has been frustrated or
made impossible by any act or failure to act by the Company; provided,
that, at the request of either party, such date may be extended for up to
90 days if required to obtain any Authorization from any Governmental
Authority or to remove any injunction or Order, necessary to consummate the
Transaction;
(d) By either Investor or the Company, upon written notice to the
other, if any of the conditions set forth in Section 2.1 have not been
satisfied on or before November 30, 1999, unless the satisfaction thereof
has been frustrated or made impossible by any act or failure to act by the
party seeking to terminate this Agreement; or
(e) By Investor or the Company if any Governmental Authority having
competent jurisdiction has issued an Order permanently restraining,
enjoining or otherwise prohibiting any of such Transaction and such Order
has become final and nonappealable.
8.2. Effect of Termination. In the event of termination of this
Agreement pursuant to Section 8.1, each party will pay its own costs and
expenses in connection with this Agreement and the Transaction, and neither
party (or any of its officers, directors, employees, agents, representatives or
stockholders) will be liable to the other party for any costs, expenses, damages
or losses of anticipated profits hereunder or relating to the Transaction. In
the event of any other termination, the parties will retain any and all rights
attendant to a breach of any covenant, representation or warranty made
hereunder.
ARTICLE 9. DEFINITIONS.
9.1 Defined Terms. As used in this Agreement, the following terms have
the following meanings:
<PAGE>
"Adverse Condition" means, in respect of the Company or Investor, any
condition or limitation that, in the reasonable opinion of such Person, would
(a) materially diminish, taken as a whole, such Person's rights under this
Agreement, or any other agreement entered into in connection with the
consummation of the Transaction, or (b) have a material adverse effect on (i)
the Business Condition of such Person and its Subsidiaries taken as a whole or
(ii) such Person's ability to perform its obligations and carry out its
agreement, this Agreement, or any other agreement entered into in connection
with the consummation of the Transaction. An "Adverse Condition" will also be
deemed to exist if, in order to obtain any Authorization, either the Company or
Investor would be required to divest or hold separate or otherwise take or be
obligated to take or commit to take any action that would limit its freedom with
respect to any of its existing businesses, assets or product lines.
"Affiliate" means, as to any Person, another Person that directly or
indirectly through one or more intermediaries, Controls, or is Controlled by, or
is under common Control with, such Person. For the purposes of this definition,
"Control" when used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or membership or partnership interests, by contract or otherwise; the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing;
provided, that the term "Controlled Affiliate" as used herein includes any
Affiliate of a Person that is, at the relevant time, Controlled by such Person;
and, provided further, that the Company and Investor will not be deemed to be
direct or indirect Affiliates of each other and that officers and directors of
Investor will not be deemed to be Affiliates of Investor to the extent that an
individual officer or director invests for his or her own account or otherwise
acts in his or her individual capacity and not in concert with, and is not a
participant in a group that includes, Investor.
"Affiliate Transferee" has the meaning set forth in Section 6.1.
"Agreement" has the meaning set forth in the preamble.
"Authorization" means any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including pursuant
to the HSR Act) of, or filing, registration, qualification, declaration or
designation with or by, any Governmental Authority.
"Beneficial Owner" with respect to any securities means that a Person
has "beneficial ownership" of such securities as determined pursuant to Rule
13d-3 and Rule 13d-5 promulgated under the Exchange Act.
"Business Condition" means the business, properties, operations and
financial condition of a specified corporation (or group of corporations, as
appropriate) or division or area of operations.
"Business Day" means any day on which there is trading on the New York
Stock Exchange and the NASDAQ-NMS.
"Closing" has the meaning set forth in Section 1.1(b).
<PAGE>
"Closing Date" means the actual date on which the Closing occurs as
provided in Section 1.3.
"Common Stock" means the Class A (Voting) Common Stock, par value
$.001 per share, of the Company.
"Communications Act" means the Communications Act of 1934, as amended,
or any successor thereto.
"Company" has the meaning set forth in the preamble.
"Company Financial Statements" has the meaning set forth in
Section 3.5(c).
"Company SEC Reports" has the meaning set forth in Section 3.5(a).
"Controlled Affiliate" has the meaning set forth in the definition of
Affiliate and, for purposes of Section 6.1 hereof, in the case of a "Controlled
Affiliate" of Investor, means any Person that is a Controlled Affiliate and in
which Investor owns, directly or indirectly, securities representing at least
80% of the aggregate voting power of all voting securities issued by such
Person.
"Currently Announced Transactions" means those transactions identified
on Schedule 9.1.
"Excepted Shares" means Nextel Securities that (x) are acquired as a
result of a dividend, stock split or similar event in which all holders of
Common Stock are treated equally (except with respect to fractional shares) or
(y) are acquired, directly or indirectly, in the course of normal, day-to-day
market or trading activity, are not acquired or held with a view or intent to
initiate, participate in or otherwise facilitate any of the actions or
activities described in Section 7.1 (a) or (b) (other than subclause (b)(i)
thereof) and do not, to the best of Investor's knowledge after due inquiry,
exceed in the aggregate 1% of the number of shares of the Company that are
outstanding as most recently reported by the Company in its Exchange Act
reports.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission.
"GAAP" has the meaning set forth in Section 3.5(c).
"Governmental Authority" means any governmental or political
subdivision or department thereof, any governmental or regulatory body,
commission, board, bureau, agency or instrumentality, or any court or arbitrator
or alternative dispute resolution body, in each case whether domestic or
foreign, federal, state or local.
"group" has the meaning comprehended by and interpreted under Section
13(d)(3) of the Exchange Act and the rules and regulations promulgated
thereunder.
<PAGE>
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended and the rules promulgated thereunder.
"HSR Filing" means the filing(s) to be made on or after the date
hereof by each of the parties under the HSR Act.
"Investor" has the meaning set forth in the preamble.
"Investor Shares" has the meaning set forth in Section 1.1(a).
"Law" means any domestic or foreign, federal, state or local, law,
statute, ordinance, rule or regulation.
"NASDAQ-NMS" means the Nasdaq Stock Market National Market.
"Nextel Securities" means Common Stock or other voting securities of
the Company or options or other rights to acquire any such securities, including
any securities that by their terms are convertible or exercisable, for, or
exchangeable into, directly or indirectly, Common Stock or any such securities.
"Order" means any judgment, order, injunction, decree, stipulation or
award entered or rendered by any Governmental Authority.
"Person" or "person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature or a group, including without limitation any pension,
profit sharing or other benefit plan or trust.
"Portal Agreement" has the meaning set forth in the second Recital.
"Portal Agreement Termination Date" means the date that Investor and
the Company mutually agree to terminate the Portal Agreement or the day not less
than 60 days after Investor has provided written notice to the Company that
because of the Company's material default under the Portal Agreement Investor is
terminating both that Agreement and its obligations under Section 6.1.
"Pre-Closing Notice" has the meaning set forth in Section 1.5.
"Purchase Price" has the meaning set forth in Section 1.1(a).
"Requirement of Law" means as to any Person, any Law, rule,
regulation, order, judgment, decree or determination of any arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its properties or to which such Person or any of its
property is subject.
"Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A, to be entered
into between Investor and the Company on the Closing Date.
<PAGE>
"SEC" has the meaning set forth in Section 3.5(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Standstill End Date" means the later of (1) the date on which
Investor and all of its Controlled Affiliates cease to have Beneficial Ownership
(whether alone or as a member of a group) of any Nextel Securities representing
1% or more of the outstanding Common Stock (other than Excepted Shares), or (2)
the second anniversary of the Closing.
"Subsidiary" means as to any Person, any other Person of which at
least 50% of the equity interests are owned, directly or indirectly by such
first Person.
"Transaction" means the purchase and sale of the Investor Shares under
this Agreement and the other transactions between the parties that are
contemplated to occur at the Closing.
"Transaction Agreements" means this Agreement and the Registration
Rights Agreement.
"Transfer" means (i) to sell, exchange, pledge or otherwise transfer
any interest in, and (ii) a sale, exchange, pledge or other transfer of any
interest in, the Investor Shares.
"Transfer Agent" means the transfer agent for the Common Stock.
"Transfer Restriction End Date" means the earlier of (1) the Portal
Agreement Termination Date or (2) the later of the second anniversary of the
Closing or August 31, 2001.
9.2 Other Definitional Provisions.
(a) All terms defined in this Agreement have the defined meanings when
used in any certificate, report or other documents made or delivered
pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular have a comparable meaning when used
in the plural, and vice versa.
(c) As used herein, the neuter gender also denotes the masculine and
feminine, and the masculine gender also denotes the neuter and feminine,
where the context so permits.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(e) The words "include," "including" and "or" mean without limitation
by reason of enumeration.
ARTICLE 10. MISCELLANEOUS.
<PAGE>
10.1 Notices. All notices, demands, requests, certificates or other
communications under this Agreement will be in writing and will be deemed to
have been duly given when (i) hand delivered, (ii) sent by facsimile
transmission confirmed by a return facsimile sent by the recipient, (iii) one
day after being sent by commercial courier guaranteeing next Business Day
delivery, or (iv) five days after posting in the United States mail, having been
sent by registered or certified mail return receipt requested, addressed as
follows:
If to the Company:
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, VA 22091
Attention: Thomas J. Sidman, General Counsel
Facsimile: (703) 433-4036
with a copy to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Jeanne M. Rickert, Esq.
Facsimile: (216) 579-0212
If to Investor:
Microsoft Corporation
1 Microsoft Way
Redmond, Washington 98052
Attention: Greg Maffei, Chief Financial Officer
Facsimile: (425)____________
with a copy to:
Preston Gates & Ellis llp
5000 Columbia Center
701 Fifth Avenue
Seattle, WA 98104-7078
<PAGE>
Attention: Richard B. Dodd
Facsimile: (206) 623-7022
or to such other address(es) or facsimile(s) numbers as either party may
hereafter indicate to the other party in writing. Any communication delivered
after business hours or on a Saturday, Sunday or legal holiday at the place
designated in such delivery, will be deemed for purposes of computing any time
period hereunder to have been delivered on the next Business Day.
10.2 Expenses. Each party will bear its own expenses, including the
fees and expenses of any attorneys, accountants, investment bankers, brokers,
finders or other intermediaries or other Persons engaged by Investor or the
Company, incurred in connection with this Agreement, the Transaction or any
other agreements provided for herein or entered into in connection herewith,
except as expressly provided otherwise in this Agreement or by any other written
agreement of the parties.
10.3 Benefits; Assignment. The provisions of this Agreement are
binding upon, and inure to the benefit of, Investor and the Company and their
respective successors and Persons acquiring any Investor Shares by Transfer in
accordance with Article 6, to the extent provided therein. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other than
Investor and the Company any rights, remedies or obligations under or by reason
of this Agreement. Except as specifically stated in Article 6 (and as provided
in Section 1.5), none of the rights or obligations of the Company or Investor
hereunder may be assigned to any other Person under any circumstances.
10.4 Entire Agreement; Amendment and Waiver. This Agreement (which
includes the Schedules and Exhibits hereto), and the Registration Rights
Agreement and any other agreements to which Investor (including any Persons
acquiring any Investor Shares by Transfer in accordance with Article 6, if
relevant) and the Company is a party concerning the Transaction or any of the
Investor Shares, constitute the entire agreement between Investor and the
Company with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, both written and oral, between Investor and
the Company with respect to the subject matter hereof and thereof. This
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by each of the parties hereto, and none of the
other agreements entered into between Investor (including any Persons acquiring
any Investor Shares by Transfer in accordance with Article 6, if relevant) and
the Company in connection with this Agreement, the Transaction or any of the
Investor Shares may be amended, supplemented or otherwise modified except by an
instrument in writing signed by the Company and each other party thereto. No
waiver by either party hereto of any of the provisions hereof will be effective
unless explicitly set forth in writing and executed by such party. Any waiver by
either party hereto of a breach of this Agreement will not operate or be
construed as a waiver of any subsequent breach.
10.5 Headings. The article, section and other headings in this
Agreement are for convenience of reference only and are not to affect its
meaning, interpretation or construction.
<PAGE>
10.6 Governing Law. This Agreement will be governed by and construed
in accordance with the internal, substantive laws of the State of Delaware,
without giving effect to any conflicts of law principles of such state.
10.7 Remedies. Money damages would not be a sufficient remedy for any
violation of the terms of Article 6 or Article 7 and, accordingly, the Company
is entitled to specific performance and injunctive relief as remedies for any
such violation, in addition to all other remedies available at law or in equity.
Investor consents to personal jurisdiction in any action brought in any federal
or state court within the Commonwealth of Virginia having subject matter
jurisdiction in the matter for purposes of any action arising out of this
Agreement. All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at Law or in equity will be cumulative and
not alternative, and the exercise or beginning of the exercise of any thereof by
any party does not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
10.8 Severability. In the event that any provision of this Agreement
is deemed invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions are not to be in any way be affected
or impaired thereby.
10.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original and all of which taken
together will constitute one and the same agreement, and it is not necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
10.10 Communications Act. Nothing in this Agreement is intended or is
to be construed to diminish or affect the control of the Company or any of its
Subsidiaries over any FCC licenses held by the Company or such Subsidiary in any
manner prohibited by the Communications Act or the rules and regulations issued
by the FCC.
10.11 Survival. Any claim for losses or damages resulting from or
arising out of any inaccuracy or breach of any representation or warranty herein
must be asserted in writing before March 31, 2000. All covenants and agreements,
to the extent remaining to be performed after the Closing Date, will survive the
Closing Date.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/THOMAS J. SIDMAN
Name: Thomas J. Sidman
Title: Vice President
MICROSOFT CORPORATION
By: /s/GREG MAFFIE
Name: Greg Maffie
Title: Chief Financial Officer
Exhibit 10.2
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of ______ __, 1999 by and among Nextel Communications, Inc., a Delaware
corporation (the "Issuer"), and Microsoft Corporation, a Washington corporation
("Buyer"). Capitalized terms that are used but not otherwise defined herein are
defined in Section 1.1.
RECITALS
I. Pursuant to an Investment Agreement dated as of May 7, 1999,
by and between Issuer and Buyer (the "Investment Agreement"), Buyer is acquiring
from Issuer shares of Class A Common Stock, par value $.001 per share, of the
Issuer (the "New Shares").
A. The Issuer has agreed to provide certain registration rights to
Buyer.
A. The Issuer and Buyer are entering into this Agreement to set
forth the terms and conditions applicable to the grant and exercise of such
registration rights.
NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged by the parties hereto, the parties hereby agree
as follows:
Article 1
DEFINITIONS
1.1 As used in this Agreement, the following terms have the following
meanings:
(a) "Affiliate" means, as to any Person, another Person that directly
or indirectly through one or more intermediaries, Controls, is Controlled by or
is under common Control with, such Person. For the purposes of this definition,
"Control" when used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise; the terms "Controlling" and "Controlled" have meanings
correlative to the foregoing; provided, that the term "Controlled Affiliate" as
used herein includes any Affiliate of a Person that is, at the relevant time,
Controlled by such Person; and, provided further, that the Company and Buyer
will not be deemed to be direct or indirect Affiliates of each other, and that
officers and directors of Buyer will not be deemed to be Affiliates of Buyer to
the extent that an individual officer or director invests for his or her own
account or otherwise acts in his or her individual capacity and not in concert
with, and is not a participant in a group that includes, Buyer.
<PAGE>
(b) "Cutback Registration" means any registration in which the
managing underwriter advises the Issuer that marketing factors require a
limitation of the number of Issuer Common Shares to be underwritten in such
registration.
(c) "Electing Holder" means any holder of Issuer Common Shares other
than holders of Registrable Securities (in their respective capacities as such),
who has the right to request inclusion of Issuer Common Shares held by such
holder in a registration.
(d) "Issuer Common Shares" means shares of Issuer's Class A Common
Stock, par value $.001 per share.
(e) "Person" means a corporation, association, joint venture,
partnership, limited liability company, trust, business, individual, government
or political subdivision thereof, or any governmental agency.
(f) "Piggyback Registration" means any registration of a sale or
resale of Issuer Common Shares which is not a Requested Registration (other than
a registration on Form S-4 or Form S-8).
(g) "Qualified Holder" means Buyer and permitted assignees hereunder;
provided that a person ceases to be a Qualified Holder (and all its rights
hereunder will automatically terminate) if (i) such person has held its New
Shares so that the holding period under Rule 144 of the Securities Act
applicable to such holder has been satisfied; and (ii) the number of New Shares
held by such person is less than 1% of the outstanding Issuer Common Shares.
(h) "Register", "registered" and "registration" refer to a
registration of Issuer Common Shares effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
("the Securities Act") and the declaration or ordering of the effectiveness of
such registration statement.
(i) "Registrable Securities" means New Shares held by a Qualified
Holder, but does not include (1) any other Issuer Common Shares or other
securities of the Issuer which may now or hereafter be held or acquired by any
Qualified Holder, (2) New Shares that have been sold pursuant to Rule 144
promulgated by the Securities and Exchange Commission (or any similar rule then
in force). If the New Shares have been exchanged, substituted or replaced by
other securities the new securities are not New Shares and are not Registrable
Securities.
(j) "Requested Registration" means a registration requested by a
Qualified Holder pursuant to Section 2.2.
Article 2
REGISTRATION PROVISIONS
<PAGE>
2.1 Piggyback Registration. If at any time, and from time to time, the
Issuer proposes to effect a Piggyback Registration for its account or for the
account of a security holder or holders, the Issuer shall:
(a) promptly give to each Qualified Holder written notice thereof; and
(b) include in such registration, and in any underwriting involved
therein, all the Registrable Securities specified in a written request, made
within 15 days after receipt of such written notice from the Issuer, by any
Qualified Holder; provided that if such registration is a Cutback Registration,
then (i) if such registration is a primary registration on behalf of the Issuer,
the Issuer shall register in such registration (A) first, the Issuer Common
Shares and all other securities of the Issuer that the Issuer proposes to sell
in such registration, and (B) second, the Registrable Securities held by each
Qualified Holder and the Issuer Common Shares held by the Electing Holders in
accordance with the respective contractual rights of the holders of such
Registrable Securities and/or Issuer Common Shares, and (ii) if such
registration is a Piggyback Registration which is solely a secondary
registration on behalf of holders of Issuer Common Shares, the Issuer shall
register in such registration (A) first, the Issuer Common Shares proposed to be
sold by the holders of Issuer Common Shares requesting such registration (the
"Demanding Holders"), and (B) second, the Registrable Securities held by each
Qualified Holder and the Issuer Common Shares held by the Electing Holders,
other than the Demanding Holders if such Registrable Securities and/or Issuer
Common Shares are sought to be included in such registration pursuant to
contractual registration rights, in accordance with the respective contractual
rights of the holders of such Registrable Securities and/or Issuer Common
Shares.
2.2 Requested Registration.
(a) Request for Registration. If the restrictions on transfer of
Article 6 of the Investment Agreement no longer apply and the Issuer shall
receive a written request from any Qualified Holder(s) that the Issuer effect
any registration with respect to all or a part of the Registrable Securities
owned by such holder(s), the Issuer shall promptly give notice of such request
to each other Qualified Holder. Subject to Section 2.8, the Issuer shall
thereupon promptly use its best efforts diligently to effect such Requested
Registration and related qualifications and compliances (including, without
limitation, the execution of an undertaking to file post-effective amendments)
as may be requested by the Qualified Holder who made the original request and by
the Qualified Holders who make written request to the Issuer within 20 days
after the giving of the aforesaid notice by the Issuer ("Requesting Holders")
and as would permit or facilitate the sale and distribution of the Registrable
Securities as are specified in any such request; provided that the Issuer is not
obligated to take any action to effect a Requested Registration or any related
qualification or compliance pursuant to this Section 2.2:
(i) if, within 20 days after receipt of the initial request pursuant to this
Section 2.2, the Issuer elects to include in such registration Issuer
Common Shares for its own account, whereupon the Issuer shall notify each
Requesting Holder that it has elected to effect a Piggyback Registration
and shall thereafter diligently proceed to do so, including therein the
Registrable Securities as to which notice was given
<PAGE>
by the Requesting Holders pursuant to this Section 2.2 but subject to the
limitations set forth in Section 2.1;
(ii) if the Requesting Holders do not request to include in such registration,
in the aggregate, at least $50 million Registrable Securities; or
(iii) if the Issuer has already effected five Requested Registrations on behalf
of Qualified Holder(s) (not more than one of which is to be on a Form S-1
or similar form), which Requested Registration has been declared or ordered
effective and which effectiveness has not been suspended or stopped by any
governmental or judicial authority.
If the Requested Registration is a Cutback Registration, the Issuer
shall register in such registration (1) first, the Registrable Securities which
any Requesting Holder seeks to include in such registration, on a pro rata basis
based upon the number of such Issuer Common Shares each Requesting Holder seeks
to include in such registration and (2) second, the Issuer Common Shares held by
each Electing Holder pursuant to contractual obligations of the Issuer in
accordance with the respective contractual rights of the holder of such Issuer
Common Shares.
(b) Underwriting. The distribution of Registrable Securities can be
effected once, but not more than once, by means of an underwriting. If the
Requesting Holders intend to distribute the Registrable Securities covered by
such request by means of an underwriting, such Requesting Holders shall so
advise the Issuer as a part of the request made pursuant to this Section 2.2
and, in such event, the Requesting Holders shall select an underwriter of their
choice, which choice shall be subject to the approval of the Board of Directors
of the Issuer, and which approval shall not be unreasonably withheld. The Issuer
and such Requesting Holders shall negotiate in good faith and enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. If a Requesting Holder disapproves of the terms
of the underwriting, such Requesting Holder may elect to withdraw therefrom by
written notice to the Issuer and the managing underwriter, and each of the
remaining Requesting Holders shall be entitled to increase the number of shares
being registered, to the extent permitted by the managing underwriter, in the
proportion which the number of shares of Registrable Securities being registered
by such Requesting Holder bears to the total number of shares being registered
by all such remaining Requesting Holders.
(c) Sales without an Underwriter. If the Requesting Holders intend to
distribute the Registrable Securities without an underwriter, sales of the New
Shares registered will, unless the Issuer otherwise agrees, be effected in
brokers transactions and the daily sales volume of all Registrable Securities
will not exceed the greater of (1) 30% of the average daily trading volume of
Issuer Common Shares on the NASDAQ/NMS during the 20 trading days immediately
preceding the effectiveness of the registration pursuant to which the
Registrable Securities are being sold, or (2) an aggregate sales price of
$36 million.
2.3 Expenses of Registration. Except as otherwise provided herein, all
expenses incurred by the Issuer in connection with any registration,
qualification, or compliance pursuant
<PAGE>
to this Agreement, including, without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel for the
Issuer, and the expenses of any audits required by such registration
(collectively, "Registration Expenses"), shall be borne by the Issuer. The
Issuer shall not be required to pay underwriters' fees, discounts or commissions
relating to Registrable Securities or to pay any fees and disbursements of
legal counsel to the Requesting Holders. After the Issuer
has borne the Registration Expenses for three Requested Registrations, all
Registration Expenses shall be borne by the Requesting Holders.
2.4 Registration Procedures. (a) In the case of each registration
effected by the Issuer pursuant to this Article 2, the Issuer shall keep each
holder of Registrable Securities included in such registration advised in
writing as to the initiation, progress, and effective date of each registration,
qualification and compliance, and, at its expense to the extent provided in
Section 2.3, the Issuer will:
(i) subject to Section 2.4(b) below, keep each registration effective for a
period of 180 days (plus any number of days that the Qualified Holders are
unable to use a prospectus pursuant to Section 2.4(b) below) or until each
such holder shall have completed the distribution described in the
registration statement relating thereto, whichever first occurs (the
"Registration Period"); and
(ii) furnish such number of prospectuses (including preliminary prospectuses)
and other documents filed with the Securities and Exchange Commission (the
"Commission") as part of the registration statement as such holders from
time to time may request.
(b) If, within the Registration Period, there occurs any development
or any event which makes any statement in the registration statement or any
post-effective amendment thereto, or any document incorporated therein by
reference, untrue in any material respect or which requires the making of any
changes in the registration statement or post-effective amendment thereto or
prospectus or amendment or supplement thereto, so that they will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein (in the case of
any prospectus, in the light of the circumstances under which they were made)
not misleading, the Issuer shall immediately notify each Qualified Holder
included in such registration of the occurrence thereof and, as soon as
reasonably practicable, prepare and furnish to each such holder, a reasonable
number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to purchasers of Registrable Securities, such prospectus shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Each
Qualified Holder agrees that, upon receipt of any notice from the Issuer
pursuant to this Section 2.4(b), such holder shall forthwith discontinue
disposition of Registrable Securities until it shall have received copies of
such amended or supplemented prospectus, and, if so directed by the Issuer,
shall deliver to the Issuer all copies, other than permanent file copies, then
in its possession of the prospectus covering Registrable Securities at the time
of receipt of such notice.
<PAGE>
(c) Each Qualified Holder participating in any Cutback Registration
shall, as among all holders of Registrable Securities, be entitled to exercise
its rights hereunder pro rata according to the number of shares of Registrable
Securities held by such Qualified Holder and any Electing Holders.
(d) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this
Agreement, the Issuer will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Issuer and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 2.5 hereof and an opinion of
counsel for the Issuer dated the date of the closing under the underwriting
agreement, and providing that the Issuer shall use its best efforts to furnish a
"cold comfort" letter signed by the independent public accountants who have
audited the Issuer's financial statements included in such registration
statement, in each such case covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) as
are customarily covered in opinions of Issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of securities
and such other matters as the underwriters reasonably request and, in the case
of such accountants' letter, with respect to events subsequent to the date of
such financial statements. The holders of Registrable Securities on whose behalf
the Registrable Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement.
(e) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Issuer will give the underwriters, if any, and their counsel and accountants,
such reasonable and customary access to its books and records and such
opportunities to discuss the business of the Issuer with its officers and the
independent public accountants who have certified the Issuer's financial
statements as shall be necessary, in the opinion of such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.5 Indemnification. (a) With respect to any registration which has
been effected pursuant to this Article 2, the Issuer shall indemnify each
Qualified Holder whose securities are included therein, each such holder's
directors and officers, each underwriter (as defined in the Securities Act) of
the securities sold by such a holder, each other Person who participates in the
offering of such holder's securities, and each Person who controls (within the
meaning of the Securities Act) any such holder, underwriter, or participating
Person from and against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on:
(i) any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including
any related registration statement) incident to any such registration
effected pursuant to this Article 2 furnished by such holder pursuant to
Section 2.6,
<PAGE>
(ii) any omission (or alleged omission) to state therein a material fact
relating to such holder required to be stated therein or necessary to make
the statements therein not misleading, or
(iii) any violation by the Issuer of the Securities Act or any rule or
regulation promulgated thereunder applicable to the Issuer, or any blue sky
or state securities laws or any rule or regulation promulgated thereunder
applicable to the Issuer,
in each case relating to action or inaction required of the Issuer in connection
with any such registration, and will reimburse each such Person entitled to
indemnity hereunder for any legal and other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided that, the foregoing indemnity and reimbursement
obligation is not applicable to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
such a holder or by or on behalf of such an underwriter specifically for use in
such prospectus, offering circular or other document; and further provided that,
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this Section 2.5(a) will not inure to the benefit of any underwriter to the
extent that any such losses, claims, damages or liabilities of such underwriter
result from the fact that there was not sent or given to any person who
purchased Registrable Securities in connection with such registration, at or
prior to the written confirmation of the sale of Registrable Securities to such
person, a copy of the prospectus relating to such registration, as then amended
or supplemented (exclusive of material incorporated by reference), if the Issuer
had previously furnished copies thereof to such underwriter.
(b) Each holder of Registrable Securities which are included in such
registration, qualification or compliance shall indemnify the Issuer, its
directors and officers, each underwriter (as defined in the Securities Act) of
the securities of such holder, each other person who participates in the
offering of such holder's securities and each Person who controls (within the
meaning of the Securities Act) the Issuer or any such underwriter or
participating Person from and against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on:
(i) any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including
any related registration statement) incident to any such registration
effected pursuant to this Article 2,
(ii) any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or
(iii) any violation by such holder of the Securities Act or any rule or
regulation promulgated thereunder applicable to such holder, or of any blue
sky or other state
<PAGE>
securities law or any rule or regulation promulgated thereunder applicable
to such holder,
in each case, relating to action or inaction required of such holder in
connection with any registration, qualification or compliance, and will
reimburse each such Person entitled to indemnity hereunder for any legal and
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, expense, liability or action, but in each case
only to the extent that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such prospectus, offering circular or
other document in reliance upon and in conformity with written information
furnished to the Issuer by or on behalf of such holder specifically for use
therein; and further provided that, with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this Section 2.5(b) will not
inure to the benefit of any underwriter to the extent that any such losses,
claims, damages or liabilities of such underwriter result from the fact that
there was not sent or given to any person who purchased Registrable Securities
in connection with such registration, at or prior to the written confirmation of
the sale of Registrable Securities to such person, a copy of the prospectus
relating to such registration, as then amended or supplemented (exclusive of
material incorporated by reference), if the Issuer had previously furnished
copies thereof to such underwriter.
(c) Each party entitled to indemnification under this Section 2.5 (an
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after the Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that:
(i) counsel for the Indemnifying Party who shall conduct the defense of any
such claim or any litigation shall be approved by the Indemnified Party,
(ii) the Indemnified Party may participate in such defense at the Indemnified
Party's expense (provided that the Indemnified Party or Indemnified Parties
have the right to employ one counsel to represent it or them if, in the
reasonable judgment of the Indemnified Party or Indemnified Parties, it is
advisable for it or them to be represented by separate counsel by reason of
having legal defenses which are different from or in addition to those
available to the Indemnifying Party, and in that event the fees and
expenses of such one counsel will be paid by the Indemnifying Party), and
(iii) failure of any Indemnified Party to give notice as provided herein will
not relieve the Indemnifying Party of its obligations under this Section
2.5.
No Indemnifying Party, in the defense of any such claim or litigation, will,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement (which judgment or settlement would be
adverse to and binding upon such Indemnified Party) of any claim for which such
Indemnified Party may seek indemnification hereunder; provided that,
<PAGE>
as to each Indemnified Party withholding such consent, the maximum amount of the
losses, damages or liabilities in respect of which such Indemnified Party may
seek indemnification hereunder with respect to such claim is limited to the
amount which the Indemnifying Party would have paid to or on behalf of such
Indemnified Party had such Indemnified Party consented to such judgment or
settlement.
(d) If the indemnification provided for in this Section 2.5 is for any
reason unavailable to an Indemnified Party in respect to any loss, claim, damage
or liability, or any action in respect thereof, referred to herein, then each
Indemnifying Party will, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault will be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Indemnifying Party on the one hand or the Indemnified Party on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but not by
reference to any Indemnified Party's stock ownership in the Issuer. In no event,
however, will a holder of Registrable Securities be required to contribute in
excess of the amount of the net proceeds received by such holder in connection
with the sale of Registrable Securities in the offering which is the subject of
such loss, claim, damage or liability. The amount paid or payable by an
Indemnified Party as a result of the loss, claim, damage or liability, or action
in respect thereof, referred to above in this paragraph includes, for purposes
of this paragraph, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act)) is entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
2.6 Information by Holders. If Registrable Securities owned by a
Qualified Holder are included in any registration, such holder will furnish to
the Issuer in writing such information regarding itself and the distribution
proposed by such holder as the Issuer may reasonably request and as is required
in connection with any registration, qualification or compliance referred to in
this Article 2.
2.7 Rule 144. (a) With a view to making available to each Qualified
Holder the benefits of certain rules and regulations of the Commission which may
permit the sale of the Registrable Securities to the public without
registration, the Issuer agrees that so long as a holder owns any Registrable
Securities, the Issuer shall, (a) make and keep available public information, as
those terms are contemplated by Rule 144 under the Securities Act; (b) timely
file with the Commission all reports and other documents required to be filed
under the Securities Act and the Securities Exchange Act of 1934 (the "Exchange
Act"); and (c) furnish to each holder forthwith upon request a written statement
by the Issuer as to its compliance with the reporting requirements of the
Securities Act and the Exchange Act, a copy of the most recent annual or
<PAGE>
quarterly report of the Issuer, and such other information as such holder may
reasonably request in order to avail itself of any rule or regulation of the
Commission allowing such holder to sell any Registrable Securities without
registration.
(b) When Qualified Holders are selling New Shares under Rule 144,
unless the Issuer otherwise agrees, the aggregate daily sales volume of all
Registrable Securities will not exceed the greater of (1) 30% of the average
daily trading volume of Issuer Common Shares on the NASDAQ/NMS during the 20
trading days preceding the date of sale (but excluding from such average daily
trading volume any Registrable Securities that were sold in such period), or (2)
an aggregate sales price of $36 million.
2.8 Permitted Interruption. Notwithstanding any provision of this
Article 2, the Issuer shall not be required to prepare or file a registration
statement, amendment or post-effective amendment thereto or prospectus
supplement or to supplement or amend any registration statement or otherwise
facilitate the resale of Registrable Securities, and the Issuer shall be free to
take or omit to take any other action that would result in the impracticality of
any such filing, supplement or amendment, if such filing, supplement or
amendment (and any required disclosure therein), in the good faith and
reasonable judgment of the Issuer, would jeopardize the completion of a material
investment in the Issuer, or any acquisition, divestiture or other similar
transaction that the Issuer is at such time in negotiations therefor, so long as
the Issuer shall, as promptly as practicable after the conclusion of such
negotiations, make such filing, supplement or amendment and so long as the
Issuer shall, as promptly as practicable thereafter, comply with the
requirements of this Article 2, if applicable (any period described in this
Section 2.8 during which the Company is not required to make such filing,
amendment or supplement being herein a "Permitted Interruption"). If a Qualified
Holder has requested registration of New Shares in a Requested Registration,
Piggyback Registration or Cutback Registration and a Permitted Interruption
affects that registration, the Issuer agrees to notify each of the Holders so
affected by a Permitted Interruption upon each of the commencement and
termination of each Permitted Interruption. The Issuer shall not be required in
the notice of a Permitted Interruption to disclose the cause for such Permitted
Interruption. The Permitted Interruption terminates upon the termination of such
negotiations or the public disclosure thereof. The Issuer is not entitled to
give notice of a Permitted Interruption more than two times in any twelve-month
period and the period over which a Permitted Interruption extends can be no
longer than 120 days.
Article 3
MISCELLANEOUS
3.1 Notices. Except as otherwise specifically provided in this
Agreement, all communications hereunder shall be sent in the manner and to the
addresses set forth in Section 10.1 of the Investment Agreement and, as to any
Qualified Holder, to an address provided to Issuer by such holder for purposes
of notices hereunder.
<PAGE>
3.2 Non-Waiver of Remedies and Actions By Holders. No course of
dealing between the Issuer and any Qualified Holder or any delay on the part of
such holder in exercising any rights available to such holder operates as a
waiver of any right of such holder, except to the extent expressly waived in
writing by such holder.
3.3 Headings. The headings in this Agreement are for purposes of
reference only and are not to be considered in construing this Agreement.
3.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered constitutes an
original and all together shall constitute one Agreement.
3.5 Successors and Assigns. This Agreement binds and inures to the
benefit of the successors of any Qualified Holders and the Issuer. No Qualified
Holder may assign any of the rights created by this Agreement; provided, that, a
Qualified Holder may assign its rights hereunder, in whole or in part, to a
Controlled Affiliate of such Qualified Holder, which assignment shall be valid
only so long as such Affiliate remains a Controlled Affiliate. The Qualified
Holder shall promptly notify the Issuer in writing of any assignment pursuant to
this Section 3.5.
3.6 Consent of Holders; Waiver. (a) Whenever, by the terms hereof,
anything is required to be done to the satisfaction of the Qualified Holders, or
such Holders are to appoint a representative, if such satisfaction, or
appointment is necessary in connection with a specific registration being
effected hereunder, it will be effective when done by the Qualified Holders
holding a majority of the Registrable Securities held by Qualified Holders that
are being included in such registration.
(b) Except as provided in Section 3.6(a), whenever, by the terms
hereof, the consent of the Qualified Holders is required, anything is required
to be done to the satisfaction of such holders, or if such holders are to
appoint a representative, such consent, satisfaction, or appointment is
effective when done by Qualified Holders holding a majority of the Registrable
Securities held by Qualified Holders.
(c) All rights and remedies hereunder for the benefit of the Qualified
Holders are intended to be for the benefit of each holder of Registrable
Securities and, unless otherwise specified to the contrary, may be exercised by
the Qualified Holders together or by each such holder separately.
3.7 Enforceability. If any term or provision of this Agreement, or the
application thereof to any Person or circumstance, is, to any extent, invalid or
unenforceable, the remaining terms and provisions of this Agreement or
application to other Persons and circumstances are not invalidated thereby, and
each term and provision hereof is to be construed with all other remaining terms
and provisions hereof to effect the intent of the parties hereto to the fullest
extent permitted by law.
<PAGE>
3.8 Law Governing. This Agreement is to be construed and enforced in
accordance with and shall be governed by the laws of the State of Delaware
applicable to contracts executed in and to be fully performed in that state.
3.9 Effectiveness. The effectiveness of this Agreement is conditioned
upon, and the obligations and rights of the parties hereunder will come into
force and effect at, the Closing as contemplated in the Investment Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
__________________________
Name:
Title:
MICROSOFT CORPORATION
___________________________
Name:
Title:
EXHIBIT 99.1
[LOGO] Nextel Communications, Inc.
2001 Edmund Halley Drive
For Immediate Release Reston, VA 20191
(703)433-4000
Contacts:
Media:
Ben Banta (703)433-4587
Investor Relations:
(703)433-4300
Nextel and Microsoft Team to Deliver Wireless Access to MSN Portal Microsoft to
Invest $600 Million in Nextel RESTON, Va., and REDMOND, Wash. - May 10, 1999 -
Nextel Communications Inc. (Nasdaq "NXTL"), a leading provider of fully
integrated wireless communications, and Microsoft Corp. (Nasdaq "MSFT") today
announced an agreement that will enable Nextel customers to access a customized
set of Internet services offered through a co-branded version of the MSN(tm)
portal. With this agreement, Microsoft has committed to invest $600 million in
Nextel common stock in support of Nextel's leading position in the development
and deployment of these wireless Internet services. This investment is expected
to be used by Nextel to advance the deployment of these services, develop
additional digital services, expand the Nextel National Network in the United
States, and fund system development and expansion in other countries in which
Nextel operates. The price of the stock was fixed at $36, and it will be subject
to certain transfer and standstill restrictions.
The wireless offerings will provide Nextel customers access to the MSN network
of Internet services, which will keep them in touch with their information while
on the go. When fully operational, as part of the Nextel Onlinesm offering, the
co-marketed services are expected to include e-mail, calendar functionality,
address book contacts and access to Web-based content. "The combination of
Nextel's integrated data network and Internet-ready phones will provide our
customers with the ability to access information and applications that are
important to them, wherever they are. This is the ultimate last mile, and we are
delivering it wirelessly," said Dan Akerson, chairman and CEO of Nextel
Communications. "We are very excited about this strategic relationship with
Microsoft and look forward to being able to extend the power of its applications
and services to customers throughout the Nextel National Network."
"Microsoft and Nextel will deliver the next generation of wireless services to
enable people everywhere to stay in touch with the information they need,
regardless of location," said Bill Gates, chairman and CEO of Microsoft. "The
combination of Microsoft(r) platforms, including Windows(r) CE-based devices,
with MSN services and Nextel's highly functional network and service
infrastructure will enable these powerful new services to be delivered
efficiently and effectively to benefit the widest range of customers."
Nextel expects that later this year Nextel Online customers will be able to use
their Nextel phones to access the new services mentioned above. These services
are being designed and deployed so that Nextel customers also will be able to
access them in combination with a range of other devices, including personal
digital assistants (PDAs), palmtop computers, PCs and Windows CE operating
system-based devices. Nextel will also work with Microsoft to help define the
requirements for Microsoft's microbrowser technology for wireless devices.
Utilizing the MSN portal, Nextel will provide a "Web-computing platform" for its
customers via the company's Nextel Online offering. It is planned that Nextel
Online will include three fundamental sets of services for Nextel customers. The
first set of services will enable Nextel customers to use Nextel Online as an
efficient and user-friendly way to interact with Nextel and other members of the
Nextel Business Networkssm. In doing so, customers will be able to utilize
Nextel's online customer care capabilities to find out information on Nextel
services, phones, coverage and special offerings. Customers will also be able to
purchase additional accessories or telephones online and will soon be able to
view and pay their bills online. In addition, Nextel customers will be able to
take advantage of the Nextel Online Messaging Center to send short message
service (SMS) messages to other Nextel users. Nextel recently announced that it
is now sending more than 1 million SMS messages a month by virtue of this
efficient integrated offering.
The second set of services will include a multitude of applications, content and
<PAGE>
services that Nextel will make available via the co-branded MSN portal. Nextel
Online customers will be able to select from these applications and services and
personalize them to both their PC and to their Nextel phone. These offerings,
available to Nextel phone users and their nonmobile associates, are expected to
provide Nextel's customer base of more than 3 million with the most robust set
of integrated offerings available from the Internet over a wireless network.
E-mail, calendar, address book and Web-based content services will be introduced
with the launch of Nextel Online with additional functionality integrated over
time. The features associated with these services will include the following:
* E-mail. Customers will be able to use a variety of devices to access their
e-mail inbox and to send and receive e-mail. Nextel customers will be able to
dial a number or use Nextel Direct Connectsm to access a private ID number that
appears within the e-mail message. They will also be able to fax e-mail messages
or attachments to a local fax machine when they need a printed copy.
* Calendar. This function will enable Nextel customers to manage their
personal and group calendar information both online and from their Nextel phone
* Address book. Customers may view, create, edit and delete contact records,
including contact names, company names, telephone numbers, Nextel numbers,
postal addresses and e-mail addresses. Customers also will be able to initiate
calls at the touch of a button to any number displayed on the telephone screen
from the address book.
* Web-based content services. Customers will be able to receive timed and
triggered notifications for a variety of services such as stock quotes, weather,
news services and sports results. Access to these services will be available
through the Nextel National Network and can be utilized with all new Nextel
Internet-ready phones and in conjunction with a variety of devices that include
PDAs, palmtop computers and laptop computers.
The third set of offerings enabled by the co-branded MSN portal will include
Web-based applications developed by third parties specifically for business
users of the rapidly growing Nextel Business Networks. Today, more than 90
organizations have joined Nextel's Developers Program
(http://developer.nextel.com/), and will offer a variety of applications
developed specially for individual customer segments. These applications will be
accessible from Nextel's Internet-ready phones over the wireless Internet
network.
In a separate announcement today, Microsoft announced plans to deliver a
wireless portal designed to work with handheld devices, cellular phones and
interactive pagers via the MSN network of Internet services. Internet users will
be able to access most popular services on MSN, including e-mail and address
books from the MSN Hotmail(tm) Web-based e-mail service; news, sports and
weather from MSNBC; stock updates from the MSN MoneyCentral(tm) personal finance
online service; forthcoming calendar features from recently acquired Jump!
Networks; and other Web-based content such as door-to-door directions and
weather. The wireless portal will be available later this year in conjunction
with the next major upgrade to MSN.
Nextel Communications Inc., based in Reston, Va., is the leading provider of
fully integrated wireless communications and has built the largest guaranteed
all-digital wireless network in the United States that covers thousands of
communities across the United States. Nextel and Nextel Partners Inc. currently
serve 92 of the top 100 U.S markets. The Nextel National Network offers a fully
integrated wireless communications tool with digital cellular, text and numeric
paging and Nextel Direct Connect, a digital two-way radio feature. In addition,
through Nextel International Inc., Nextel has wireless operations and
investments in Canada; Mexico; Argentina; Brazil; the Philippines; Peru; Japan;
and Shanghai, China. Please visit the company's Web page at
http://www.nextel.com/.
Founded in 1975, Microsoft is the worldwide leader in software for personal
computers. The company offers a wide range of products and services for business
and personal use, each designed with the mission of making it easier and more
enjoyable for people to take advantage of the full power of personal computing
every day.
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This release contains forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future events
or results. Readers are referred to the documents filed by Nextel and Microsoft
with the SEC, specifically the most recent reports, which identify important
risk factors that could cause actual results to differ from those assumed or
anticipated in the forward-looking statements, including potential fluctuations
in demands for products and services and/or in quarterly results, dependence on
new product development, rapid technological and market change, financial risk
management and future growth risks. Other risk factors include satisfactory
negotiation of certain licensing arrangements and satisfactory resolution of
software delivery and systems integration deliverables. These cautionary
statements should be considered in connection with any subsequent written or
oral forward-looking statements issued by Nextel or persons acting on its
behalf. Nextel undertakes no obligation to review or confirm analysts'
expectations or estimates or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Nextel, the Nextel logo, Nextel Online, Nextel Business Networks and Nextel
Direct Connect are trademarks and/or service marks of Nextel Communications Inc.
Microsoft, MSN, Windows, Hotmail and MoneyCentral are either registered
trademarks or trademarks of Microsoft Corp. in the United States and/or other
countries.
