Exhibit 10.2
SHAREHOLDERS' AGREEMENT
dated as of
January 29, 1999
among
NEXTEL PARTNERS, INC.
AND
THE SHAREHOLDERS NAMED HEREIN
Page
TABLE OF CONTENTS
ARTICLE 1
Definitions
Section 1.01. Definitions 1
ARTICLE 2
Corporate Governance and Management
Section 2.01. Composition of the Board 13
Section 2.02. Removal 14
Section 2.03. Vacancies 14
Section 2.04. Quorum and Action by the Board 14
Section 2.05. Notice of Meeting; Participation 15
Section 2.06. Actions Requiring Board, NWIP or DLJMB Approval 15
Section 2.07. Actions Requiring Shareholder Approval 19
Section 2.08. Subsidiary Governance 19
Section 2.09. Conflicting Charter or Bylaw Provisions 19
Section 2.10. Initial Capitalization 19
Section 2.11. Stock Options 20
ARTICLE 3
Restrictions on Transfer
Section 3.01. General 20
Section 3.02. Legends 21
Section 3.03. Permitted Transferees 22
Section 3.04. General Restrictions on Transfers 22
Section 3.05. Rights of First Offer 24
Section 3.06. Right of First Refusal 26
Section 3.07. Major Investor Call Right 28
Section 3.08. Special Nextel Sale Right 30
ARTICLE 4
Put and Call Rights
Section 4.01. Non-Nextel Shareholder Put Rights 33
Section 4.02. Nextel Shareholder Call Right 40
Section 4.03. Fair Market Value Calculation 44
Section 4.04. Management Stockholder Tag Along Right 48
Section 4.05. Company Repurchase Rights 49
ARTICLE 5
Anti-Dilution Rights
Section 5.01. Anti-Dilution Rights 51
Section 5.02. Special NWIP Anti-Dilution Rights 53
Section 5.03. Special NWIP Preemption of Registration Rights 54
ARTICLE 6
Registration Rights
Section 6.01. Demand Registration 56
Section 6.02. Company Registration; Incidental Registration 59
Section 6.03. Holdback Agreements 61
Section 6.04. Registration Procedures 62
Section 6.05. Indemnification by the Company 65
Section 6.06. Indemnification by Participating Shareholders 66
Section 6.07. Conduct of Indemnification Proceedings 67
Section 6.08. Contribution 68
Section 6.09. Participation in Public Offering 69
Section 6.10. Cooperation by the Company 69
Section 6.11. No Transfer of Registration Rights 70
Section 6.12. Limitations on Subsequent Registration Rights 70
Section 6.13. Obligation to Register Nextel and NWIP Securities 70
ARTICLE 7
Certain Covenants and Agreements
Section 7.01. Confidentiality 71
Section 7.02. Reports 72
Section 7.03. Subsequent Deployment of Alternative Digital Transmission
Technology 72
Section 7.04. Limitations on Subsequent Changes to Company's Operations 73
Section 7.05. Delivery of Nextel Stock 76
Section 7.06. Senior Management Resignation 77
ARTICLE 8
Miscellaneous
Section 8.01. Entire Agreement 78
Section 8.02. Binding Effect; Benefit 78
Section 8.03. Assignability 78
Section 8.04. Amendment; Waiver; Termination 79
Section 8.05. Notices 79
Section 8.06. Fees and Expenses 80
Section 8.07. Headings 81
Section 8.08. Counterparts 81
Section 8.09. Applicable Law 81
Section 8.10. Specific Enforcement 82
Section 8.11. Limitations on Damages 82
Section 8.12. Consent to Jurisdiction; Expenses 82
Section 8.13. Severability 83
Section 8.14. Amendments to Laws 83
Section 8.15. Acknowledgment of Limits on Nextel's Liability 83
SHAREHOLDERS' AGREEMENT
AGREEMENT dated as of January 29, 1999 among Nextel Partners, Inc.,
(the "Company"), Nextel WIP Corp. ("NWIP"), DLJ Merchant Banking Partners II,
L.P. ("DLJMB"), Madison Dearborn Capital Partners II, L.P. ("MDP"), Eagle River
Investments, LLC ("Eagle River"), Motorola, Inc. ("Motorola") and the
shareholders listed on the signature pages hereto.
W I T N E S S E T H :
WHEREAS, pursuant to the Subscription Agreement (as defined below)
certain parties hereto are acquiring securities of the Company; and
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of the
transactions contemplated by such Subscription Agreement;
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01 Definitions. The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no security holder of the Company shall be deemed an
Affiliate of any other security holder solely by reason of any investment in the
Company nor shall any Person be deemed an Affiliate of the Company solely by
reason of veto, approval or similar rights granted to such Person pursuant to
any of the Transaction Documents. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean 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 by contract or otherwise.
"Asset Transfer Agreement" shall have the meaning set forth in the
Subscription Agreement.
"beneficially own" shall have the meaning set forth in Rules 13d-3 or
16a-1 of the Exchange Act.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are required or authorized by law to
close.
"Closing" means the Closing Date (as defined in the Subscription
Agreement).
"Co-Investor" means each Shareholder other than the Strategic
Investors, the DLJ Entities and the Management Shareholders.
"Company Capital Stock" means the Company Common Stock, the Convertible
Preferred Stock, the Series B Preferred (as defined in the Subscription
Agreement), the Warrants (as defined in the Subscription Agreement) and any
other equity security issued by the Company.
"Company Common Stock" shall mean authorized Common Stock, par value
$.001 per share, of the Company.
"Convertible Preferred Stock" means the Series A Preferred, Series C
Preferred and Series D Preferred, each as defined in the Subscription Agreement.
"DLJ" means Donaldson, Lufkin & Jenrette, Inc.
"DLJ Funds" means DLJMB, DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ Merchant Banking
Partners II - A, L.P., DLJ Diversified Partners - A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners - A, L.P., UK Investment Plan 1997
Partners, DLJ EAB Partners, L.P., DLJ ESC II L.P., DLJ First ESC L.P., DLJ Fund
Investment Partners II, L.P., DLJ Private Equity Partners Fund, L.P., and DLJ
Private Equity Employee Partners Fund, L.P.
"DLJ Entities" means the DLJ Funds and MDP. The term "DLJ Entities",
to the extent such entities shall have transferred any of their Shares to
Permitted Transferees, shall mean the DLJ Entities and the Permitted Transferees
of the DLJ Entities, taken together, and any right or action that may be
exercised
or taken at the election of the DLJ Entities may be exercised or taken at the
election of the DLJ Entities and such Permitted Transferees.
"DLJMB Trigger Event" means the transfer of Equity Securities by one or
more of the DLJ Entities so that the Equity Securities beneficially owned by the
DLJ Entities, in the aggregate, is less than 80% of the Initial Ownership of the
DLJ Entities.
"Equity Securities" means the Company Common Stock, the Warrants (on a
Fully Diluted basis) and the Convertible Preferred Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission or similar regulatory
authority established in replacement thereof.
"FCC Change of Control" means the granting or withholding of any
rights, powers or obligations, that either individually or in combination, would
require the approval of the FCC pursuant to Section 310(d) of the Communications
Act of 1934, as amended, or any of the FCC Rules or policies implementing
Section 310(d).
"FCC Rules" means the statutes, rules and regulations administered by
the FCC.
"Fully Diluted" means, with respect to any class of Company Capital
Stock and without duplication, all outstanding shares and all shares issuable in
respect of outstanding securities convertible into or exchangeable for Company
Common Stock, stock appreciation rights or options, warrants and other
irrevocable rights to purchase or subscribe for Company Common Stock or
securities convertible into or exchangeable for Company Common Stock; provided
that no Person shall be deemed to own such number of Fully Diluted shares of
such class as such Person has the right to acquire from any Person other than
the Company.
"Initial Ownership" means, with respect to any Shareholder, the number
of shares of Equity Securities beneficially owned (and (without duplication)
which such Persons have the right to acquire from the Company) as of the date
hereof, taking into account any stock split, stock dividend, reverse stock split
or similar event, provided that with respect to the Initial Ownership of the DLJ
Entities, in the event that either the DLJ Funds or MDP elect to transfer Shares
to a Third Party and MDP or the DLJ Funds, as the case may be, elects to
exercise its rights under Section 3.05, 3.06 or 3.07 and purchase its Pro Rata
Portion, and,
in addition, offers irrevocably to purchase all of those Shares proposed to be
transferred to the Third Party that are not purchased by the other Major
Investors, the Initial Ownership of the DLJ Entities, in the aggregate, will be
reduced by the number of Shares sold by the DLJ Funds or MDP, as the case may
be, and purchased by the other Major Investors (excluding the DLJ Funds and MDP)
pursuant to Section 3.05, 3.06 or 3.07.
"Initial Public Offering" means the initial Public Offering.
"Initial Required Build" means the completion of the Build Out of all
Initial Sections (as defined in the Joint Venture Agreement) assigned to the
first or second Build Year (as defined in the Joint Venture Agreement), and of
any Option Sections (as defined in the Joint Venture Agreement) assigned to the
first or second Build Year that are included in the Territory (as defined in the
Joint Venture Agreement) through the Company's election under Section 6.2B of
the Joint Venture Agreement, but excluding any such Option Sections that are
included in the Territory as a result of the Company's response to a notice
given pursuant to Section 6.2C of the Joint Venture Agreement.
"Joint Venture Agreement" means that certain Joint Venture Agreement,
dated as of the date hereof, by and among the Company, Opco and NWIP, as it may
be amended from time to time.
"License Co." means Nextel WIP License Co., a Delaware corporation,
which on the date hereof is a wholly-owned Subsidiary of NWIP and which, upon
receipt of the requisite FCC approval, will automatically become a wholly-owned
Subsidiary of the Company.
"Management Agreement" means that certain interim Management Agreement,
dated as of the date hereof, by and among the Company, Opco, License Co. and
NWIP, as it may be amended from time to time.
"Management Shareholders" means John Chapple, John Thompson, David
Thaler, David Aas, Perry Satterlee, and Mark Fanning and their Permitted
Transferees.
"NDS" means, individually, a Nextel Subsidiary operating all or any
portion of an ESMR Network (as defined in the Joint Venture Agreement) in the
United States and "the NDS" means, collectively, all of Nextel's Subsidiaries
operating all or any portion of an ESMR Network in the United States.
"Nextel" means Nextel Communications, Inc. and its successors and
assigns, including any surviving or transferee Person of a transaction described
in clause (iii) of the definition of Nextel Sale.
"Nextel Agreement" means that certain Agreement Specifying Obligations
of, and Limiting Liability and Recourse to Nextel, dated as of the date hereof,
by and among Nextel, the Company, and Opco.
"Nextel Shareholders" means (i) NWIP and its Permitted Transferees,
(ii) Nextel and its Subsidiaries and (iii) any person or group described in
clause (i) of the definition of Nextel Sale and any controlled Affiliate
thereof.
"1999 Stock Option Plan" means the Nextel Partners, Inc. 1999
Nonqualified Stock Option Plan as in effect on the date hereof.
"Non-Nextel Shareholders" means any Shareholder other than a Nextel
Shareholder.
"Opco" means Nextel Partners Operating Corp., a wholly owned subsidiary
of the Company.
"Percentage Ownership" means, with respect to any Shareholder or any
group of Shareholders at any time, (i) the number of shares of Fully Diluted
Company Common Stock that such Shareholder or group of Shareholders beneficially
owns (and (without duplication) has the right to acquire from the Company) at
such time, divided by (ii) the total number of shares of Fully Diluted Company
Common Stock at such time.
"Permitted Transferee" means (i) in the case of a Shareholder other
than a Management Shareholder, NWIP, Motorola, Eagle River or a DLJ Entity (a)
any Affiliate of such Shareholder (collectively, "Shareholder Affiliates"), (b)
any general partner, limited partner, member, or shareholder of such Shareholder
or a Shareholder Affiliate that receives Shares in a bona fide distribution
pursuant to the terms of the transferor's organizational documents (so long as
such documents are not amended for the purpose of permitting such a transfer),
and any employee, officer or director of such Shareholder or a Shareholder
Affiliate, or any spouse, lineal descendant (whether natural or adopted),
sibling, parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing Persons described in this clause (b)
(collectively, "Shareholder Associates") and (c) any trust, the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general or limited partner of which include only such
Shareholder, such Shareholder Affiliates or Shareholder Associates;
(ii) in the case of a Management Shareholder (a) a spouse or lineal
descendant (whether natural or adopted), sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of such
Management Shareholder, (b) any trust, the primary beneficiaries of which, or
any corporation, limited liability company or partnership, the stockholders,
members or general or limited partners of which include only the Persons named
in clause (a) or (c) any charitable remainder trust;
(iii) in the case of any DLJ Entity (a) any other DLJ Entity (except
that MDP and the DLJ Funds and their respective Permitted Transferees shall not
be Permitted Transferees of each other), (b) any general or limited partner of
any such entity (a "DLJ Partner"), and any corporation, partnership, Affiliated
Employee Benefit Trust or other entity which is an Affiliate of any DLJ Partner
(collectively, the "DLJ Affiliates"), (c) any managing director, general
partner, director, limited partner, officer or employee of such DLJ Entity or a
DLJ Affiliate, or the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any of the foregoing Persons referred to in this
clause (c) (collectively, "DLJ Associates"), (d) any trust, the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which, include only such
DLJ Entity, DLJ Affiliates, DLJ Associates, their spouses or their lineal
descendants (whether natural or adopted) and (e) Reed Hundt, in an amount not to
exceed $100,000 of Convertible Preferred Stock, provided that any DLJ Partner,
DLJ Affiliate, DLJ Associate, or any Person described in clause (d) shall be
deemed a Permitted Transferee only if (x) a DLJ Entity is required to transfer
Shares to such Person pursuant to the terms of such DLJ Entity's organizational
documents and (y) since the date hereof, such organizational documents have not
been amended specifically to permit a transfer of Shares to such Person under
this Agreement. For purposes of this definition, "Affiliated Employee Benefit
Trust" means any trust that is a successor to the assets held by a trust
established under an employee benefit plan subject to ERISA or any other trust
established directly or indirectly under such plan or any other such plan having
the same sponsor;
(iv) in the case of NWIP, any wholly-owned Subsidiary of Nextel for
so long as it remains a wholly-owned Subsidiary of Nextel;
(v) in the case of Motorola, any controlled Affiliate who is not a
Competitor for so long as it remains a controlled Affiliate of Motorola; or
(vi) in the case of Eagle River, (a) Craig O. McCaw, (b) any Person
or Persons (i) that is controlled directly or indirectly by Craig O. McCaw or
the estate of Craig O. McCaw and (ii) a majority of the equity interests of
which are owned, directly or indirectly, by Craig O. McCaw and his family, his
brothers and
their families, officers and employees of such entities, ex-spouses of such
persons and estates of, and trusts for the primary benefit of, the foregoing
persons (collectively, the "McCaw Group"), (c) any Affiliate of Craig O. McCaw,
(d) any current or former member or shareholder of a Person that is controlled
by Craig O. McCaw, provided that any such member or shareholder of a Person
described in this clause (d) shall be deemed a Permitted Transferee only if
Eagle River is required or expressly permitted pursuant to the organizational
documents of Eagle River to transfer Shares to such member or shareholder and,
since the date hereof, such organizational documents have not been amended
specifically to permit a transfer of Shares to such Person under this Agreement
and (e) any group of entities, each controlled by Craig O. McCaw or the estate
of Craig O. McCaw and through which the McCaw Group collectively owns, directly
or indirectly, a majority of the equity interests of Nextel (it being understood
that if the McCaw Group collectively owns 50% of a Person that owns 20% of
Nextel's equity interests, the McCaw Group will be deemed to indirectly own 10%
of Nextel's equity interest through such entity).
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Public Offering" means any primary or secondary public offering of
Company Common Stock of the Company pursuant to an effective registration
statement under the Securities Act other than pursuant to a registration
statement filed in connection with a transaction of the type described in Rule
145 of the Securities Act or for the purpose of issuing securities pursuant to
an employee benefit plan.
"Qualified DLJ Entities" means (i) the DLJ Entities (other than MDP
and its Permitted Transferees), to the extent that DLJ has the power to vote or
control the vote of the Voting Stock held by such DLJ Entities and (ii) MDP and
its Permitted Transferees, to the extent that MDP (or DLJ) has the power to vote
or control the vote of the Voting Stock held by such Persons.
"Qualified Eagle River Entities" means Eagle River and its Permitted
Transferees to the extent that Eagle River or its Affiliates has the power to
vote or control the vote of the Voting Stock held by such Persons.
"Qualifying DLJ Demand" means a Demand Registration involving a sale of
Company Common Stock issued to the DLJ Entities upon conversion of the Series A
Preferred Stock acquired by them at the Closing that will result in either: (i)
the receipt by the DLJ Entities of gross proceeds of at least $50 million
or (ii) the sale of Company Common Stock by the DLJ Entities representing more
than 20% of the DLJ Entities' aggregate Initial Ownership.
"Registrable Securities" means, at any time, with respect to any
Shareholder, any shares of Company Common Stock then owned by such Shareholder
until (i) a registration statement covering such Company Common Stock has been
declared effective by the SEC and such securities have been disposed of pursuant
to such effective registration statement, (ii) such securities are sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or such
securities may be sold pursuant to Rule 144(k) or (iii) such securities are
otherwise transferred, the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing the legend required
pursuant to this Agreement and such securities may be resold without subsequent
registration under the Securities Act.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 6.04(h)),
(vi) the reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, (vii) reasonable fees and expenses
of up to one counsel to represent collectively all of the Shareholders
participating in the offering, (viii) fees and expenses in connection with any
review of underwriting arrangements by the National Association of Shares
Dealers, Inc. (the "NASD") including fees and expenses of any "qualified
independent underwriter" and (ix) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses (except as set forth in
clause (vii) above) of the Shareholders or any fees and expenses of
underwriter's counsel or any other fees and expenses of underwriters.
"Restricted Stock Purchase Agreements" means the Restricted Stock
Purchase Agreements, dated as of November 20, 1998, as amended, between the
Company and each of the Management Shareholders, as in effect on the date
hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder" means each Person (other than the Company) who agrees in
writing to be bound by the terms of this Agreement, whether in connection with
its execution and delivery as of the date hereof, pursuant to Sections 3.03,
3.05, 3.06, 3.07 and 8.03 or otherwise, so long as such Person beneficially owns
any Shares.
"Shares" means shares of Company Capital Stock held by the
Shareholders.
"Strategic Investor" means any of NWIP, Eagle River, Motorola and their
respective Permitted Transferees.
"Subscription Agreement" means the Subscription and Contribution
Agreement dated of even date herewith among the Company and the buyers named
therein relating to the purchase and sale of Company Capital Stock.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TCW" means TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent
Mezzanine Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust
II, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB,
LLC and TCW Shared Opportunity Fund III, L.P.
"Third Party" means a prospective purchaser of Shares from a
Shareholder in an arm's-length transaction where such purchaser is not a
Permitted Transferee of such Shareholder.
"Transaction Documents" has the meaning set forth in the Subscription
Agreement.
"Underwritten Public Offering" means an underwritten Public Offering of
Company Common Stock consummated pursuant to an effective registration statement
under the Securities Act.
"Voting Stock" means any Company Capital Stock or Capital Stock, as the
case may be, which ordinarily has voting power for the election of directors
(or persons performing similar functions), whether at all times or only so long
as no senior class of securities has such voting power by reason of any
contingency.
Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Adverse Impact Notice 7.04(a)
Applicable Default 7.04(f)
Approved Purchaser 3.05(a)
Average Share Price 4.02(d)
Beneficial Owner 4.01(h)
Build Out 4.05(e)
Business Objectives 2.06(b)
Call Notice 3.07(b)
Call Right 3.07(a)
Called Interest 3.07(a)
Capital Stock 4.01(h)
Cause 2.02
Challenge Ceiling Price 4.03(h)
Challenge Floor Price 4.03(h)
Challenger's Representative 4.03(d)
Closing Price 4.01(h)
Common Stock 4.01(h)
Company EBITDA 4.02(d)
Company Equity Value 4.02(d)
Company IPO 5.02(a)
Competitor 3.04(e)
Confidential Information 7.01(b)
control 4.01(h)
Default Outcome 7.04(f)
Demand Registration 6.01(a)
Disqualified Provision 7.04(f)
DLJMB Designee 2.01(a)
Eagle River Designee 2.01(a)
Election Period 4.05(e)
Event of Default 7.04(f)
Fair Market Value 4.03(a)
First Appraiser 4.03(b)
General Repurchase Date 4.05(e)
High Offering Price 5.02(a)
High Value 4.03(c)
Holders 6.01(a)
Improvements 7.04(h)
Indemnified Party 6.07
Indemnifying Party 6.07
Individual Repurchase Date 4.05(e)
Initial Offer Period 3.05(b)
Inspectors 6.04(g)
Investment Formula Price 4.03(h)
Lockup Termination Date 3.04(e)
Low Offering Price 5.02(a)
Low Value 4.03(c)
Major Investors 3.05(a)
Maximum Offering Size 6.01(f)
Mid-Range 4.03(c)
Nextel Determination 7.04(b)
Nextel Multiple 4.02(d)
Nextel Required Upgrade 7.04(a)
Nextel Required Upgrade Analysis 7.04(a)
Nextel Sale 4.01(h)
Nextel Securities 6.13
Nextel Shares 7.05(a)
Nextel Voting Stock 4.01(h)
Nominee 2.03(a)
Notice of Challenge 4.03(d)
NWIP Call Notice 4.02(b)
NWIP Call Right 4.02(a)
NWIP Designee 2.01(a)
NWIP Preemption Put 4.01(a)
Offering Party 5.03(b)
Offering Price 5.02(b)
Option A 7.04(b)
Option B 7.04(b)
Option C 7.04(b)
Option D 7.04(c)
Option Sections 4.05(e)
Option Section Percentage 4.05(e)
Permitted Holders 4.01(h)
POPs 4.05(e)
Pre-Closing Expenditure 8.06(c)
Preemption Election Notice 5.03(b)
Preemption Notice 5.03(a)
Preemption Right 5.03(a)
Pro Rata Portion 3.05(b)
Purchase Date 7.05(a)
Put Event 4.01(a)
Put Notice 4.01(c)
Put Right 4.01(a)
Records 6.04(g)
Representatives 7.01(b)
Required Services 7.04(h)
Reselling Shareholder 4.05(e)
Second Appraiser 4.03(b)
Section 3.05 Offer 3.05(b)
Section 3.05 Offer Notice 3.05(a)
Section 3.05 Purchaser 3.05(d)
Section 3.05 Sale 3.05(a)
Section 3.05 Sale Price 3.05(a)
Section 3.05 Shares 3.05(a)
Section 3.06 Offer 3.06(a)
Section 3.06 Offer Notice 3.06(a)
Section 3.06 Offer Period 3.06(b)
Section 3.06 Offer Price 3.06(a)
Section 3.08 Notice 3.08(a)
Section 3.08 Purchaser 3.08(a)
Section 3.08 Sale 3.08(a)
Section 3.08 Sale Price 3.08(a)
Section 5.01 Notice 5.01(a)
Section 5.02 Notice 5.02(a)
Selling Party 3.05(a)
Selling Shareholder 6.01(a)
Service Pricing Structure 7.04(h)
Shareholder 8.03
Special Nextel Sale 4.01(h)
Special Securities 4.05(e)
Start Date 4.03(b)
Superseding IPO 6.01(h)
Technology Change 7.03
Technology Change Notice 7.03
Telecommunications Company 3.04(e)
Telecommunications Revenue 3.04(e)
Third Appraiser 4.03(c)
Third Party Sale 3.07(a)
Third Value 4.03(c)
Total Common Equity 4.01(h)
Total Enterprise Value 4.02(d)
Trading Day 4.01(h)
transfer 3.01(a)
Underwriters' Range 5.02(a)
ARTICLE
Corporate Governance and Management
Section 2.01. Composition of the Board. The Board shall consist of
five members, of whom two shall be designated by DLJMB (each such director, a
"DLJMB Designee"), one shall be designated by NWIP (such director, a "NWIP
Designee"), one shall be designated by Eagle River (such director, an "Eagle
River Designee") and one shall be the chief executive officer of the Company.
(b) Each Shareholder entitled to vote for the election of directors
to the Board agrees that it will vote its shares of Equity Securities or execute
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of shareholders) in order to
ensure that the composition of the Board is as set forth in this Section . The
parties to this Agreement hereby agree that as of the date hereof the Board
shall consist of the following persons: John Chapple, Timothy M. Donahue, Andrew
H. Rush, Andrew E. Sinwell, Dennis M. Weibling and that such agreement shall
constitute shareholder consent to the foregoing for purposes of the Delaware
General Corporation Law.
(c) The right of NWIP, Eagle River or DLJMB, as the case may be, to
designate one member of the Board pursuant to this Article shall terminate at
such time as the number of shares of Equity Securities held by the Nextel
Shareholders, the Qualified Eagle River Entities or the Qualified DLJ Entities,
as the case may be, is less than 50% of the Nextel Shareholders', Eagle River's
or the DLJ Entities' Initial Ownership, as the case may be. The right of DLJMB
to designate a second member of the Board pursuant to this Article shall
terminate at such time as the number of shares of Equity Securities held by the
Qualified DLJ Entities, in the aggregate, is less than 12% of the DLJ Entities'
Initial Ownership. So long as the Strategic Investors, in the aggregate,
beneficially own less than a majority of the Voting Stock, such Strategic
Investors' designees will constitute less than a majority of the Board.
Individuals affiliated with a particular Shareholder or group of Shareholders
shall not constitute a majority of the Board unless, at the time such
individuals are elected, such Shareholder or group of Shareholders owns a
majority of the outstanding Voting Stock, and at no time shall more than one
DLJMB Designee be designated by MDP. Subject to (and to the extent not
inconsistent with) the foregoing, in the event that the right
of any Shareholder pursuant to this Section to designate a member of the Board
terminates, the Board shall nevertheless continue to consist of five members,
and the member or members no longer designated by such Shareholder shall instead
be designated by the other members of the Board or (if such members cannot reach
agreement thereon within 30 days) by the holders of a majority of the Voting
Stock then outstanding. No member of the Board designated as described in the
preceding sentence will be deemed an NWIP Designee or a DLJMB Designee for any
purpose.
Section 2.02. Removal. Each Shareholder agrees that it will not vote
any of its shares of Voting Stock in favor of the removal of any director who
shall have been designated or nominated pursuant to Section 2.01 unless such
removal shall be for Cause or the Person(s) entitled to designate or nominate
such director shall have consented to such removal in writing, provided that if
the Persons entitled to designate or nominate any director pursuant to Section
2.01 shall request the removal, with or without Cause, of such director in
writing, such Shareholder shall vote its shares of Voting Stock in favor of such
removal. Removal for "Cause" shall mean removal of a director because of such
director's (a) willful and continued failure substantially to perform his duties
with the Company in his established position, (b) willful conduct which is
injurious to the Company or any of its Subsidiaries, monetarily or otherwise,
(c) conviction for, or guilty plea to, a felony or a crime involving moral
turpitude or (d) abuse of illegal drugs or other controlled substances or
habitual intoxication.
Section 2.03. Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without Cause) or otherwise, there
shall exist or occur any vacancy on the Board with respect to a DLJMB Designee,
an Eagle River Designee or a NWIP Designee:
(a) the Person(s) entitled under Section to designate or nominate
such director whose death, disability, retirement, resignation or removal
resulted in such vacancy, may, subject to the provisions of Section , designate
another individual (the "Nominee") to fill such vacancy and serve as a director
of the Company; and
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its shares of
Voting Stock, or execute a written consent, as the case may be, in order to
ensure that the Nominee be elected to the Board.
Section 2.04. Quorum and Action by the Board. (a) A quorum of the
Board shall consist of three directors.
(b) All actions of the Board shall require the affirmative vote of at
least a majority of the directors at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be to
fill such vacancy.
Section 2.05. Notice of Meeting; Participation. (a) Unless waived by
all the directors with respect to a specific meeting, each director will receive
notice and the agenda of each meeting of the Board or any committee thereof at
least 10 days prior to such meeting, provided that if timely notice was not
provided to a director and such director attends a meeting without objection,
then such director shall be deemed to have waived this notice requirement.
(b) The DLJMB Designee(s) will be permitted to invite two observers
to participate in any meeting of the Board, provided such observers will not be
permitted to vote at such meeting. DLJMB shall cause any such observers to
comply with the provisions of Section 7.01.
Section 2.06. Actions Requiring Board, NWIP or DLJMB Approval. (a)
No action by the Company, License Co., Opco or any other Subsidiary (including
but not limited to any action by the Board or any committee thereof or the board
of directors or any committee thereof of License Co., Opco or any other
Subsidiary) shall be taken after the date hereof with respect to any of the
following matters without the affirmative approval of the Board or the relevant
board of directors, any issuance of any Company Capital Stock at a per share
price lower than the per share price paid by DLJMB for the Series A Preferred
(other than an issuance described in Section 5.01(b)), without the affirmative
approval of a NWIP Designee and a DLJMB Designee, and the matters referred to in
paragraphs (iv), (viii), (xi), (xvi) and (xvii) below and any transaction (or
series of related transactions) covered by paragraph (ix) below that has a value
in excess of $5,000,000 and is not contemplated by the Transaction Documents,
without the affirmative approval (which shall be given or withheld within 30
days of the Company's written request therefor) of at least one DLJMB Designee
(other than an increase in the percentage of the Company's shares of Company
Common Stock available for grant under the Company's option plans from 5.6% to
9.16%, which will require only approval of the Board), provided that approval by
a DLJMB Designee under clauses (B) and (C) above shall no longer be required
after the earlier of the Initial Public Offering or the transfer of Equity
Securities by one or more of the DLJ Entities so that the shares of Equity
Securities beneficially owned by the Qualified DLJ Entities is, in the
aggregate, less than 80% of the Initial Ownership of the DLJ Entities, and
provided further that approval of a NWIP Designee under clause (B) above shall
no longer be required after the earlier of the Initial Public Offering and a
Section 3.08 Sale:
(i) any issuance of any Company Capital Stock, except pursuant to the
express terms of the Transaction Documents;
(ii) (x) any merger or consolidation of the Company with or into any
Person, other than a wholly owned Subsidiary, or of any Subsidiary with or
into any Person other than the Company or any other wholly-owned
Subsidiary; or (y) any sale of any Subsidiary or any significant operations
of the Company or any Subsidiary or any acquisition or disposition of
assets, business, operations or securities by the Company or any Subsidiary
(in a single transaction or a series of related transactions) having a
value in each case in this clause (y) in excess of $25,000,000;
(iii) the declaration of any dividend on or the making of any
distribution with respect to, or the redemption, repurchase or other
acquisition of, any securities of the Company or any Subsidiary, except as
expressly permitted by this Agreement, the terms of the Series B Preferred,
or the Restricted Stock Purchase Agreements;
(iv) any liquidation, dissolution, commencement of bankruptcy, or
similar proceedings with respect to the Company or any material Subsidiary;
(v) any incurrence, refinancing or alteration of material terms by the
Company or any Subsidiary of indebtedness for borrowed money in excess of
$25,000,000 in the aggregate (or the guaranty by the Company or any
Subsidiary of any such indebtedness), or the issuance of any security by
the Company or any Subsidiary (not including issuances of such securities
in connection with employee or stock option plans previously approved by
the Board pursuant to clause (viii) below), in each case other than as
specifically contemplated by this Agreement or the Restricted Stock
Purchase Agreements;
(vi) any capital expenditure in excess of $5,000,000 individually or
in the aggregate in an amount in excess of $25,000,000 per annum, in either
case, which is not specifically contemplated by the annual budget or
business plan of the Company or any Subsidiary;
(vii) any entering into, amending or modifying in any material respect
any agreements of the Company or any Subsidiary providing for payments by
or to the Company or such Subsidiary in excess of $5,000,000 per annum or
$25,000,000 in the aggregate;
(viii) any determination of compensation, benefits, perquisites and
other incentives for senior management of the Company or its Subsidiaries
and the approval or amendment of any plans or contracts in connection
therewith;
(ix) the entrance into any transaction between the Company or any
Subsidiary, on the one hand, and any stockholder, director, officer,
employee or Affiliate of the Company, any Subsidiary or any of the
foregoing, on the other hand, other than (X) transactions pursuant to the
express terms of the Transaction Documents, (Y) a loan from the Company to
John Thompson in an amount not to exceed $2.2 million or (Z) transactions
involving an amount less than $500,000 in the aggregate;
(x) any appointment of any of the Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer or Chief Operating
Officer or any other executive officer in any similar capacity of the
Company or any material Subsidiary;
(xi) any change in the Company's tax status;
(xii) any change in accounting or tax principles or policies with
respect to the financial statements, records or affairs of the Company or
any Subsidiary, except as required by generally accepted accounting
principles or by law or any other matters which could affect any regulatory
status or tax liability of the Company or any Subsidiary, or any
Shareholder with respect to the investment by such Shareholder in the
Company;
(xiii) any appointment or removal of the auditors, primary outside
legal counsel, financial advisors, underwriters (except underwriters
selected as provided in the first sentence of Section unless such Demand
Registration constitutes an Initial Public Offering), investment bankers or
company-wide insurance providers of the Company or any Subsidiary;
(xiv) any amendment to the certificate of incorporation or bylaws of
the Company or any adoption of or amendment to the certificate of
incorporation or bylaws of any Subsidiary, or any change in the composition
of the board of directors of such Subsidiary from the initial composition
thereof approved by the Board, any formation of any direct, first-tier
Subsidiary of the Company other than Opco or any formation of or
acquisition of any Subsidiary that is not or will not be a wholly-owned
direct or indirect Subsidiary of the Company;
(xv) any approval of the annual business plan, budget and long term
strategic plan of the Company or any Subsidiary;
(xvi) any material modification or renewal (other than in the
ordinary course) or termination of the Management Agreement or the Analog
Management Agreement (as such term is defined in the Joint Venture
Agreement), or any other management agreement as contemplated by the Joint
Venture Agreement; or
(xvii) any modification of the long-term business strategy or scope of
the business of the Company or any material Subsidiary or any material
modification of any material customer relationships thereof.
(b) Notwithstanding anything in Section 2.06(a) to the contrary, no
action by the Company, License Co., Opco or any other material Subsidiary
(including but not limited to any action by the Board or any committee thereof
or the board of directors or any committee thereof of the relevant Subsidiary)
shall be taken after the date hereof with respect to any of the following
matters without the prior written approval (which shall be given or withheld
within 30 days of the Company's written request therefor) of the NWIP Designee,
provided that approval by the NWIP Designee of the matters referred to in
paragraph (ii) below will no longer be required on the earlier of the date on
which (x) NWIP transfers any Shares owned by NWIP as of the date hereof to a
Person (other than the Company) that is not a Permitted Transferee and (y) the
NWIP Call Right expires and approval of the NWIP Designee of any of the matters
referred to in this Section 2.06(b) will no longer be required if the Nextel
Shareholders transfer their Shares to a Third Party pursuant to Section 3.08:
(i) any material change in the technology used by the Company;
(ii) any decision to expand or broaden the scope of the Company's
business beyond building and operating an ESMR digital mobile
communications network in the Territory (as defined in the Joint Venture
Agreement) (the "Business Objectives"), including any decision to make any
acquisitions other than 800 MHZ or 900 MHZ SMR acquisitions;
(iii) any modification or change in the Business Objectives that is
inconsistent with the Company's duties and obligations under the
Transaction Documents;
(iv) any sale, exchange or other disposition of all or substantially
all the assets of the Company;
(v) the entering into any agreement or series of agreements the terms
of which would be materially altered if Nextel or NWIP either exercised or
elected not to exercise its right to acquire the relevant Company Capital
Stock under Sections 3.05, 3.07, 4.01, 4.02, 5.02, 5.03, 7.03 or 7.04 or
otherwise acquired beneficial ownership of a majority of the outstanding or
Fully Diluted shares of Company Capital Stock.
Section 2.07. Actions Requiring Shareholder Approval. In addition to
any approvals required under Sections 2.06(a) and 2.06(b) and any approvals
required under applicable law, (x) any merger or consolidation of the Company
with or into any Person, other than a wholly-owned Subsidiary, or of any other
Subsidiary with or into any Person other than the Company or any other
wholly-owned Subsidiary, or (y) any sale of any Subsidiary or any significant
operations of the Company or any Subsidiary or any acquisition or disposition of
assets, business, operations or securities by the Company or any Subsidiary (in
a single transaction or a series of related transactions) having a value in each
case in this clause (y) in excess of $25,000,000, will require the affirmative
approval of at least 50% of the Voting Stock held by the Non-Nextel
Shareholders.
Section 2.08. Subsidiary Governance. Each of the Company and each
Shareholder agrees that the board of directors of Opco and, upon transfer of the
stock of License Co. to the Company, License Co. shall be comprised of the
individuals who are serving on the Board in accordance with Section 2.01 and the
board of directors of each other Subsidiary of the Company shall be comprised of
the president of each of the Company and Nextel or, if so determined by the
Board from time to time with respect to any such Subsidiary, by the same number
of individuals then serving on the Board, which individuals shall be designated
and subject to removal, and shall otherwise act, in the manner specified with
respect to the Board in Section 2.01 through 2.06. Each Shareholder agrees to
vote its shares of Voting Stock and to cause its representatives on the Board,
subject to his or her fiduciary duties, to vote and take other appropriate
action to effectuate the agreements in this Section 2.08 in respect of each such
Subsidiary.
Section 2.09 Conflicting Charter or Bylaw Provisions. Each
Shareholder shall vote its shares of Voting Stock, and shall take all other
actions necessary, to ensure that the Company's certificate of incorporation and
bylaws facilitate and do not at any time conflict with any provision of this
Agreement.
Section 2.10. Initial Capitalization. (a) The equity capitalization
of the Company as of the date hereof is as set forth in Exhibit A hereto.
(b) Each Shareholder agrees that immediately preceding the closing for
the Initial Public Offering, all Company Capital Stock that is convertible into
or exchangeable for Company Common Stock shall be so converted or exchanged in
accordance with the provisions of the Company's certificate of incorporation.
Section 2.11. Stock Options. Once the shares available for issuance
under the 1999 Stock Option Plan are exhausted, if, at such time, the fair
market value of the Series A Preferred (or if such Series A Preferred has been
converted into Common Stock, the Common Stock) (determined by the Board in its
reasonable discretion) represents a compound annual rate of return to the DLJ
Entities of 30% or more (calculated using the same methodology used to calculate
the Investment Formula Price), the Company shall adopt a second option plan;
provided, that if the DLJ Entities have not then achieved a compound annual rate
of return of 30% or more (using the same methodology used to calculate the
Investment Formula Price), the Board, in its reasonable discretion, may elect to
authorize a second option plan, provided, further, that until there has occurred
both an Initial Public Offering and a DLJMB Trigger Event, the maximum number of
shares of Company Common Stock issuable upon exercise of options available under
such second option plan shall in no event exceed 3.56% of the number of shares
of Fully Diluted Common Stock outstanding at the Closing (after giving effect to
the grant and exercise of all such additional options) without the approval of
DLJMB.
ARTICLE 3
Restrictions on Transfer
Section 3.01. General. (a) Each Shareholder understands and agrees
that the Shares purchased pursuant to the Subscription Agreement and/or the
Restricted Stock Purchase Agreement, as the case may be, have not been
registered under the Securities Act and are restricted securities. Each
Shareholder agrees that it will not, directly or indirectly, sell, assign,
transfer, grant a participation or derivative interest in, pledge or otherwise
dispose of ("transfer") any Shares (or solicit any offers to buy or otherwise
acquire, or take a pledge of any Shares) except in compliance with applicable
federal or state securities laws and statutes, FCC Rules and the terms and
conditions of this Agreement.
(b) Any attempt to transfer any Shares not in compliance with this
Agreement shall be null and void and the Company shall not, and shall cause any
transfer agent not to, give any effect in the Company's stock records to such
attempted transfer.
(c) No (i) transfer of Shares (other than in a transaction involving
a Public Offering or, after a Public Offering, a sale pursuant to Rule 144 of
the Securities Act) or after the date hereof, issuance of Company Capital Stock
(other than mandatorily redeemable pay-in-kind non-convertible securities) will
be effective until the recipient of such securities has executed and delivered a
counterpart of this Agreement and the Custodial Agreement agreeing to be bound
hereby and thereby.
Section 3.02. Legends. (a) In addition to any other legend that may
be required, each certificate for the Shares that is issued to any Shareholder
shall bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET
FORTH IN THE SHAREHOLDERS' AGREEMENT DATED AS OF
JANUARY 29, 1999 AND THE CUSTODIAL AGREEMENT DATED AS OF
JANUARY 29, 1999, A COPY OF EACH OF WHICH THE COMPANY
WILL MAIL TO THE HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF REQUEST THEREFOR
ADDRESSED TO THE SECRETARY OF THE COMPANY, AT THE ADDRESS
OF THE COMPANY."
(b) If any Shares shall cease to be Registrable Securities under
clause (i) or clause (ii) of the definition thereof, the Company shall, upon the
written request of the holder thereof, issue to such holder a new certificate
evidencing such Shares without the first sentence of the legend required by
Section 3.02(a) endorsed thereon. If any Shares cease to be subject to any and
all restrictions on transfer set forth in this Agreement, the Company shall,
upon the written request of the holder thereof, issue to such holder a new
certificate evidencing such Shares without the second sentence of the legend
required by Section 3.02(a) endorsed thereon.
Section 3.03. Permitted Transferees. Notwithstanding anything in
this Agreement to the contrary, any Shareholder may at any time transfer any or
all of its Shares to one or more of its Permitted Transferees without the
consent of the Board or any other Shareholder or group of Shareholders and
without compliance with Sections 3.04 through 3.07 so long as (a) such Permitted
Transferee shall have agreed in writing to be bound by the terms of this
Agreement and shall have assumed in writing and agreed to discharge any and all
obligations of such Permitted Transferee that relate to such Shares and (b) the
transfer to such Permitted Transferee is not in violation of applicable federal
or state securities laws or FCC Rules.
Section 3.04. General Restrictions on Transfers. (a) Except as
provided in Section 3.03, each of Eagle River, Motorola and each Management
Shareholder and their respective Permitted Transferees may transfer their Shares
only after the Lockup Termination Date, subject to Sections 3.05, 3.06 and 3.07,
in a transfer to any Third Party other than a Competitor, provided that (i) if
there is an Initial Public Offering prior to the Lockup Termination Date, each
such Shareholder shall be permitted to transfer Shares, subject to Sections
3.05, 3.06 and 3.07, in an amount up to 30% of the lesser of such Shareholder's
(x) Initial Ownership (or, in the case of a Shareholder who transferred Shares
after the date hereof and the Person who became a Shareholder pursuant to such
transfer, such Shareholder's and transferee's respective ownership interest as
of the date such transfer occurred) or (y) ownership interest as of the day
after the Initial Public Offering, (ii) if there is a Put Event under Section
4.01 or Section 12.9 of the Joint Venture Agreement or an NWIP Call Right under
Section 4.02 or 7.03, each Shareholder shall be permitted to sell its Shares to
NWIP and (iii) if there is a Section 3.08 Sale, each Shareholder shall be
permitted to sell its Shares to the relevant Third Party.
(b) Except as provided in Section 3.03 or pursuant to a transfer to
the Company in connection with NWIP's repurchase of frequencies from the Company
pursuant to Section 4.14B of the Joint Venture Agreement, a Nextel Shareholder
may not transfer any Shares at any time prior to the exercise or expiration of
the NWIP Call Right and thereafter may transfer such Shares at any time only
pursuant to a Section 3.08 Sale and subject to Section 3.04(d).
(c) The DLJ Entities and each Co-Investor may transfer their Shares
at any time, subject to Sections 3.04(d), 3.05, 3.06 and 3.07. Notwithstanding
anything in this Agreement to the contrary, if any DLJ Entity proposes to sell
shares to a Third Party (x) in a transaction not involving a Public Offering or
(y) pursuant to a Demand Registration or Section 6.02, each of Ares Leveraged
Investment Fund, L.P., Ares Leveraged Investment Fund II, L.P., The Huff
Alternative Income Fund L.P., and TCW (each a "High-Yield Investor") shall
have the nonassignable right, at its option (but following the same procedures
and subject to the same terms as those applicable to the DLJ Entities seeking to
consummate such proposed transfer), to elect to participate in such transfer on
a pro rata basis (determined based on the number of Shares that each DLJ Entity
and each High Yield Investor owns at the time of the proposed transfer). NWIP
acknowledges that any High Yield Investor that voted to sell its Company Capital
Stock to NWIP pursuant to Section 4.01(a) will be deemed to be a DLJ Entity for
purposes of the special put right for DLJ Entities under Section 4.01(b).
(d) In no event shall any Shareholder transfer Shares (i) to a
Competitor without the prior approval of the Board and NWIP or (ii) in violation
of applicable federal or state securities laws.
(e) The following terms shall have the following meanings:
"Competitor" means (i) a Telecommunications Company, or (ii) any
Person beneficially owning more than 50% of the total common equity or Voting
Stock of or otherwise controlling a Telecommunications Company, or (iii) any
Person the total common equity or Voting Stock of which is more than 50%
beneficially owned or otherwise controlled by an entity described in clause (i)
or (ii).
"Lockup Termination Date" means the earliest date after the Company
has completed the Initial Required Build and achieved positive Company EBITDA
for the two consecutive fiscal quarters most recently ended for which financial
statements are available, excluding the effect on Company EBITDA of the
financial performance of any Option Sections that are included in the Territory
as a result of the Company's response to a notice given pursuant to Section 6.2C
of the Joint Venture Agreement.
"Telecommunications Company" means any Person whose total
Telecommunications Revenue is at least 10% of its revenues (calculated on a
consolidated basis).
"Telecommunications Revenue" of any Person means all revenue derived
from the transmission or exchange of non-video data or voice information by any
form of wire, cable, fiber optic or wireless transmission in geographic markets
where Nextel or the Company is either (1) doing business, or (2) holds a
telecommunications license and has publicly stated its intention to do business,
and includes the revenue that such Person derives by engaging in the business of
transmitting or exchanging video information to the extent that Nextel or the
Company offers services to transmit or exchange video information in the
relevant geographic area. For purposes of this definition, (A) Nextel includes
any entity in
which Nextel holds a 10% or greater direct or indirect ownership interest that
uses an iDEN or similar technology platform compatible with that used by Nextel
and (B) the Company includes the Company and all of its Subsidiaries.
Section 3.05. Rights of First Offer. (a) If any Shareholder desires
to transfer any Shares to any Third Party in a transaction not involving a
Public Offering or, after a Public Offering, a sale pursuant to Rule 144 of the
Securities Act, such Shareholder (the "Selling Party") shall give written notice
(a "Section 3.05 Offer Notice") to the Company and each Strategic Investor, DLJ
Entity and Management Shareholder (each a "Major Investor" and collectively, the
"Major Investors") that such Selling Party desires to effect such a transfer (a
"Section 3.05 Sale") and setting forth the name of the purchaser, the number of
Shares proposed to be transferred by the Selling Party (the "Section 3.05
Shares"), and the consideration per Share (which must be payable in cash) that
such Selling Party proposes to be paid for such Shares (the "Section 3.05 Sale
Price"). In addition, if any of the DLJ Entities is the Selling Party, DLJMB may
also deliver to NWIP a list of up to five potential purchasers to whom it
proposes to sell its Shares if the Section 3.05 Shares are not purchased by the
Major Investors pursuant to this Section 3.05. Upon receipt of any such list,
NWIP will have 15 Business Days to approve each such potential purchaser, which
approval may not be unreasonably withheld. In the event NWIP approves a
potential purchaser or fails to provide a reason for withholding approval of any
such potential purchaser, prior to the expiration of the 15-day period, such
potential purchaser will be considered an "Approved Purchaser" for such Section
Sale.
(b) The giving of a Section 3.05 Offer Notice to the Company and each
Major Investor shall constitute an irrevocable offer (the "Section 3.05 Offer")
by such Selling Party to sell to such Major Investor for cash on the terms set
forth in the Section 3.05 Offer Notice the Section 3.05 Shares at the Section
3.05 Sale Price. Each Major Investor receiving a Section 3.05 Offer shall have a
10 Business Day period (the "Initial Offer Period") in which to accept such
offer as to all (but not less than all) of such Major Investor's Pro Rata
Portion plus, to the extent available, any additional Shares such Major Investor
is willing to purchase, by giving a written notice of acceptance of the Section
3.05 Offer (which notice shall include the maximum number of Shares such Major
Investor is willing to purchase) to such Selling Party (together with a copy
thereof to the other Major Investors and the Company) prior to the expiration of
such Initial Offer Period. If any Major Investor fails to so notify the Selling
Party or the Company prior to the expiration of the Initial Offer Period, it
will be deemed to have declined the Section 3.05 Offer.
If the Major Investors do not elect, in the aggregate, to purchase all
the Shares subject to such Section 3.05 Offer, the Selling Party shall not be
required
to sell any Shares accepted pursuant to the Section 3.05 Offer and the
provisions of Section 3.06 or Section 3.07 shall apply. If two or more Major
Investors elect, in the aggregate, to purchase all of the Section 3.05 Shares,
then each Major Investor that elected to purchase no more than its Pro Rata
Portion of the Section 3.05 Shares shall purchase its Pro Rata Portion of the
Section 3.05 Shares and each Major Investor (if any) that elected to purchase
more than its Pro Rata Portion of the Section 3.05 Shares shall purchase its
proportionate share (based on the number of shares of Fully Diluted Company
Common Stock owned by such Major Investor divided by the number of shares of
Fully Diluted Company Common Stock owned by all Major Investors who have elected
to purchase more than their Pro Rata Portion) of the Section 3.05 Shares
remaining to be purchased (but not to exceed the maximum number of Shares that
such Major Investor is willing to purchase) after giving effect to the purchases
pursuant to clause (i) above.
"Pro Rata Portion" means, with respect to any Major Investor that
elects to acquire Section 3.05 Shares from a Selling Party under Section 3.05 or
3.06, or from a Third Party under Section 3.07, that fraction that would result
from dividing (i) the number of shares of Fully Diluted Company Common Stock
that such Major Investor beneficially owns (or, without duplication, has the
right to acquire from the Company) by (ii) that number of shares of Fully
Diluted Company Common Stock beneficially owned by all Major Investors (or
which, without duplication, they have the right to acquire from the Company)
other than the Shares, if any, beneficially owned by the Selling Party.
(c) If the Major Investors elect to purchase all the Shares subject
to the Section 3.05 Offer, each Major Investor that accepts the Section 3.05
Offer shall have an unconditional obligation to purchase and pay, by certified
check or wire transfer, for all Section 3.05 Shares allocated to such Major
Investor within 30 days of the expiration of the Initial Offer Period; provided
that if the purchase and sale of such Shares is subject to any prior regulatory
approval, the Selling Party and the relevant Major Investors shall use their
reasonable best efforts to obtain the necessary regulatory approvals and the
time period during which such purchase and sale may be consummated shall be
extended until the later of (i) 60 days after the expiration of the Initial
Offer Period and (ii) if applicable, five Business Days after receipt of FCC
approval. The Company will cooperate with the Selling Party and the Major
Investors in obtaining any such regulatory approval, provided that its
reasonable out-of-pocket costs are reimbursed by the Selling Party as and when
incurred.
(d) Upon the earlier to occur of (i) full rejection of the Section
3.05 Offer by all recipients thereof, (ii) the expiration of the Initial Offer
Period without the Major Investors electing to purchase all the Section 3.05
Shares,
(iii) the deemed rejection of the Section 3.05 Offer pursuant to Section 3.05(b)
or (iv) the failure of any Major Investor to obtain any required consent or
regulatory approval applicable specifically to it (and not the other Major
Investors) for the purchase of the Shares subject thereto within the time
periods set forth in Section 3.05(c) and the failure of the other Major
Investors to agree to purchase such Shares, the Selling Party shall have a
30-day period during which to enter into a definitive agreement to transfer all
of the Section 3.05 Shares on substantially the same or more favorable (as to
the Selling Party) terms and conditions as were set forth in the Section 3.05
Offer Notice at a price not less than 95% of the Section 3.05 Sale Price;
provided that if such sale is not by DLJMB to one or more Approved Purchasers,
the Selling Party must, prior to effecting a transfer pursuant to this Section
3.05, comply with the provisions of Section 3.06 or 3.07. If the Selling Party
enters into a definitive agreement to sell the Section Shares, the Selling Party
and the purchaser of such Section 3.05 Shares (the "Section 3.05 Purchaser")
shall, subject to Section 3.06 or 3.07, use all reasonable efforts to consummate
the Section 3.05 Sale as promptly as practicable (but in no event later than 270
days) thereafter and upon consummation of the purchase and sale of such Section
3.05 Shares the Section 3.05 Purchaser shall agree in writing to be bound by the
terms of this Agreement and to assume and agree to discharge any and all
obligations of the Selling Party that relate to such Section 3.05 Shares and
arise under any of the relevant Transaction Documents. If the Selling Party does
not enter into a definitive agreement to sell the Section 3.05 Shares within the
30-day period, or, subject to Section 3.06 or 3.07, fails to close such
transaction within 270 days after the execution of the definitive agreement,
such Shareholder may not sell any Shares without repeating the foregoing
procedures.
(e) A Major Investor's rights (but not its obligations) pursuant to
this Section 3.05 shall terminate when the number of shares of Equity Securities
held by such Major Investor is less than 25% of its Initial Ownership.
Section 3.06. Right of First Refusal. (a) If after the Initial Offer
Period the Selling Party receives from or otherwise negotiates with the Section
3.05 Purchaser an offer to purchase for cash the Section 3.05 Shares (a "Section
3.06 Offer") and such Selling Party intends to pursue such sale of such Shares
to such Third Party, such Selling Party (other than DLJMB in a sale to an
Approved Purchaser) shall either (i) provide the Company and each other Major
Investor written notice of such Section 3.06 Offer (a "Section 3.06 Offer
Notice") or (ii) sell the Section 3.05 Shares to the Section 3.05 Purchaser, but
subject to the provisions of Section 3.07. The Section 3.06 Offer Notice shall
identify the Section 3.05 Shares, the Section 3.05 Purchaser, the cash price per
Share at which a sale is proposed to be made (the "Section 3.06 Offer Price")
and all other material terms and conditions of the Section 3.06 Offer.
(b) The receipt of a Section 3.6 Offer Notice by the Company and each
Major Investor stating that such Major Investor has the right to purchase the
Section 3.05 Shares pursuant to this Section 3.06 shall constitute an
irrevocable offer by the Selling Party to sell all the Section 3.05 Shares to
the other Major Investors for cash at the Section 3.06 Offer Price on the terms
set forth in the Section 3.06 Offer Notice. Each Major Investor receiving a
Section 3.06 Offer shall have a 10 Business Day period (the "Section 3.06 Offer
Period") in which to accept such offer as to all (but not less than all) of such
Major Investor's Pro Rata Portion, plus, to the extent available, any additional
Shares such Major Investor is willing to purchase, by giving a written notice of
acceptance of the Section 3.06 Offer to each other Major Investor, the Company
and the Selling Party (which notice shall include the maximum number of Shares
such Major Investor is willing to purchase) prior to the expiration of the
Section 3.06 Offer Period. If any Major Investor fails to so notify the Selling
Party or the Company prior to the expiration of the Section 3.06 Offer Period,
it will be deemed to have declined the Section 3.06 Offer.
If the Major Investors do not elect, in the aggregate, to purchase all
the Shares subject to such Section 3.06 Offer, the Selling Party shall not be
required to sell any Shares accepted pursuant to the Section 3.06 Offer. If two
or more Major Investors elect, in the aggregate, to purchase all of the Section
3.05 Shares, then (i) each Major Investor that elected to purchase no more than
its Pro Rata Portion of the Section 3.05 Shares shall purchase its Pro Rata
Portion of the Section 3.05 Shares and (ii) each Major Investor (if any) that
elected to purchase more than its Pro Rata Portion of the Section 3.05 Shares
shall purchase its proportionate share (based on the number of shares of Fully
Diluted Company Common Stock owned by such Major Investor divided by the number
of shares of Fully Diluted Company Common Stock owned by all Major Investors who
have elected to purchase more than their Pro Rata Portion) of the Section 3.05
Shares remaining to be purchased (but not to exceed the maximum number of Shares
that such Major Investor is willing to purchase) after giving effect to the
purchases pursuant to clause (i) above.
(c) If the Major Investors elect to purchase all the Shares subject
to the Section 3.06 Offer, each Major Investor that elects to purchase Shares
pursuant to this Section 3.06 shall have an unconditional obligation to purchase
and pay, by certified check or wire transfer, for all Section Shares allocated
to such Major Investor within 30 days of the expiration of the Section 3.06
Offer Period; provided that if the purchase and sale of such Shares is subject
to any prior regulatory approval, the Selling Party and the relevant Major
Investors shall use their reasonable best efforts to obtain the necessary
regulatory approvals and the time period during which such purchase and sale may
be consummated shall be extended until the later of (i) 60 days after the
expiration of the Section 3.06 Offer
Period and (ii) if applicable, five Business Days after receipt of FCC approval.
The Company will cooperate with the Selling Party and the Major Investors in
obtaining any such regulatory approval, provided that its reasonable
out-of-pocket costs are reimbursed by the Selling Party as and when incurred.
(d) Upon the earlier of (i) the rejection or deemed rejection of the
Section 3.06 Offer by the Major Investors or (ii) the failure of any Major
Investor to obtain any necessary regulatory approval applicable specifically to
it (and not the other Major Investors) for the purchase of the Shares subject
thereto within the time periods set forth in Section 3.06(c) and the failure of
the other Major Investors to purchase such Shares, there shall commence a
270-day period during which the Selling Party shall have the right to close the
sale to the Section 3.05 Purchaser of any or all of the Shares subject to the
Section 3.06 Offer at a price not less than the Section 3.6 Offer Price,
provided that, upon consummation of the purchase of such Section 3.05 Shares,
the Section Purchaser shall have agreed in writing to be bound by the terms of
this Agreement and to assume and agree to discharge any and all obligations of
the Selling Party that relate to such Section 3.05 Shares and arise under any of
the relevant Transaction Documents. If such Selling Party does not consummate
the sale of any Shares subject to the Section 3.06 Offer in accordance with the
foregoing time limitations, such Selling Party may not sell any Shares without
repeating the foregoing procedures in Section 3.05 and 3.06.
(e) A Major Investor's rights (but not its obligations) pursuant to
this Section 3.06 shall terminate when the number of shares of Equity Securities
held by such Major Investor is less than 25% of its Initial Ownership.
Section 3.07. Major Investor Call Right. (a) If the Selling Party
sells Shares to the Section 3.05 Purchaser (other than a sale by DLJMB to an
Approved Purchaser) without complying with the procedures set forth in Section
3.06, then upon consummation of such sale to the Section 3.05 Purchaser (a
"Third Party Sale"), the Selling Party shall notify the Major Investors within
five days of such Third Party Sale and such Major Investors shall have the right
(the "Call Right") to purchase from the Section 3.05 Purchaser all Shares
purchased by the Section Purchaser pursuant to the Third Party Sale (the "Called
Interest"), in each case based on such Major Investor's Pro Rata Portion (or
such other allocation as may be agreed among such Major Investors exercising the
Call Right).
(b) To exercise the Call Right, the Major Investors must agree to
exercise the Call Right in respect of the entire Called Interest and must give
written notice (the "Call Notice") to the Section 3.05 Purchaser no later than
the 30th day following the Third Party Sale. Upon receipt of the Call Notice,
the
Section 3.05 Purchaser shall be obligated to sell the Called Interest in
accordance with the provisions of this Section 3.07.
(c) The purchase price payable per Share of Company Capital Stoc
shall be an amount in cash equal to 110% of the per Share price paid by the
Third Party in the Third Party Sale.
(d) The closing for the purchase of any Called Interest pursuant to
this Section 3.07 shall occur as promptly as practicable (but in no event later
than 30 days) after receipt by the Section 3.05 Purchaser of the Call Notice,
provided that if the purchase of any Called Interest is subject to prior
regulatory approval, the Section 3.05 Purchaser and the relevant Major Investors
shall use their reasonable best efforts to obtain the necessary regulatory
approvals and the 30-day period in which the purchase may be consummated shall
be extended until the earlier of (i) the expiration of five Business Days after
all such regulatory approvals shall have been received and (ii) 270 days after
receipt by the Section 3.05 Purchaser of the Call Notice. If the sale of the
Called Interest by the Section 3.05 Purchaser to the Major Investors is not
consummated within the time periods set forth in the immediately preceding
sentence, the Section 3.05 Purchaser will have no further obligation to sell the
Called Interest provided that, upon consummation of the purchase of such Section
3.05 Shares, the Section 3.05 Purchaser shall have agreed in writing to be bound
by the terms of this Agreement and to assume and agree to discharge any and all
obligations of the Selling Party that relate to such Section 3.05 Shares and
arise under any of the Transaction Documents. On or prior to the closing, the
Section 3.05 Purchaser shall deliver to the representative of the Major
Investors designated in the Call Notice certificates representing all the Shares
comprising the Called Interest, duly endorsed, together with all other
documents, required to be executed in connection with the sale of such Shares
(it being understood that in no event shall the Section 3.05 Purchaser be
obligated to make any representations and warranties, or to provide any
indemnities, with respect to the Called Interest other than indemnities
concerning the Section 3.05 Purchaser's title to the Called Interest, such title
being free and clear of all liens and encumbrances, and the Section 3.05
Purchaser's authority, power and right to enter into and consummate the sale
without contravention of any law or agreement, and without the need for any
governmental or other approval). At any such closing, the relevant Major
Investors shall deliver to the Section 3.05Purchaser the aggregate purchase
price for the Called Interest sold by the Section Purchaser, by wire transfer of
immediately available funds to such bank account as the Section 3.05 Purchaser
shall have specified in writing no later than two Business Days prior to the
closing.
(c) A Major Investor's rights (but not its obligations) pursuant to
this Section shall terminate when the number of shares of Equity Securities held
by such Major Investor is less than 25% of its Initial Ownership.
Section 3.08. Special Nextel Sale Right. (a) The Nextel
Shareholders may collectively transfer all, but not less than all, of their
Shares to a Third Party after the twelfth anniversary of the date of this
Agreement (a "Section 3.08 Sale"), by complying with this Section 3.08. If the
Nextel Shareholders wish to consummate a Section 3.08 Sale, the Nextel
Shareholders shall provide written notice (a "Section 3.08 Notice") of such
Section 3.08 Sale to the Non-Nextel Shareholders and the Company not later than
the 45th day prior to the proposed Section 3.08 Sale. The Section 3.08 Notice
shall (i) identify the Third Party transferee (the "Section 3.08 Purchaser"),
the number of Shares owned by the Nextel Shareholders subject to the Section
3.08 Sale and the form and amount of consideration per Share for which a
transfer is proposed to be made (the "Section 3.08 Sale Price"), (ii) enclose
true and complete copies of the documentation in Nextel's possession relating to
all transactions, relationships, agreements, arrangements and understandings
(together with written summaries of any such oral transactions, relationships,
agreements, arrangements or understandings) between Nextel and its Affiliates
(but only to Nextel's knowledge in the case of non-controlled Affiliates) on the
one hand and the Section 3.08 Purchaser and its Affiliates on the other hand and
(iii) disclose all other material terms and conditions of the Section 3.08 Sale.
Within five Business Days of the receipt of such Section 3.08 Notice, the
Company shall notify all Non-Nextel Shareholders of the date and time of a
special meeting of such Shareholders, which date will not be more than 25 days
after receipt of the Section 3.08 Notice (or such later date as required by
applicable law). At such meeting all Non-Nextel Shareholders shall be entitled
to vote whether to sell their Shares to the Section 3.08 Purchaser on the same
terms and conditions as the Nextel Shareholders. If such Non-Nextel Shareholders
elect to sell their Shares to the Section 3.08 Purchaser by the affirmative vote
of at least 50% of the then outstanding Voting Stock held by such Non-Nextel
Shareholders, all Non-Nextel Shareholders shall be required to participate in
the Section Sale on the terms and conditions set forth in the Section Notice and
to tender all of their Shares as set forth below. Within five days following
such vote, a representative of the Non-Nextel Shareholders shall deliver to a
representative of the Nextel Shareholders designated in the Section 3.08 Notice
a notice indicating whether the Non-Nextel Shareholders will participate in the
Section 3.08 Sale. If the Non-Nextel Shareholders elect to participate in the
Section 3.08 Sale, then, on or prior to the date of such sale, they shall
deliver to the Nextel Shareholders certificates representing all Shares held by
the Non-Nextel Shareholders, duly endorsed, together with all other documents
required to be executed in connection with such Section 3.08 Sale or, if such
delivery is not permitted by applicable law, an unconditional agreement to
deliver
such Shares pursuant to this Section 3.08(a) at the closing for such Section
3.08 Sale against delivery to the Non-Nextel Shareholders of the consideration
therefor. If any Non-Nextel Shareholder should fail to deliver such certificates
or, in lieu thereof (as provided above) an unconditional agreement to deliver
such Shares at the closing for such Section 3.08 Sale, to the Nextel
Shareholders, such Non-Nextel Shareholder shall have irrevocably agreed that,
upon the closing of the Section 3.08 Sale, such Shares shall no longer be deemed
to be outstanding and all rights of a Shareholder with respect to such Shares
will terminate except the right to receive the Section 3.08 Sale Price and the
Company shall (subject to reversal under Section 3.08(b)) cause the books and
records of the Company to show that such Shares are bound by the provisions of
this Section 3.08(a) and that such Shares shall be transferred to the Section
3.08 Purchaser immediately upon surrender for transfer by the holder thereof.
(b) If, within 270 days after the Non-Nextel Shareholders give notice
of their election to sell their Shares pursuant to this Section 3.08, the Nextel
Shareholders have not consummated the Section 3.08 Sale, the Non-Nextel
Shareholders shall not be required to sell their Shares to the Section 3.08
Purchaser, the Nextel Shareholders shall return to each of the Non-Nextel
Shareholders all certificates representing Shares that such Non-Nextel
Shareholder delivered for transfer pursuant hereto, together with any documents
in the possession of the Nextel Shareholders executed by the Non-Nextel
Shareholder in connection with such proposed transfer, and all the restrictions
on transfer contained in this Agreement or otherwise applicable at such time
with respect to Shares owned by the Non-Nextel Shareholders shall again be in
effect. No Nextel Shareholder (nor any member of the Nextel Group) shall have
any liability or responsibility to the Company or any Non-Nextel Shareholder
upon or by reason of any termination or failure to consummate a Section 3.08
Sale except as expressly set forth above in this Section 3.08(b).
(c) Promptly after the consummation of the Section 3.08 Sale by the
Section 3.08 Purchaser, the Section 3.08 Purchaser shall give notice thereof to
the Shareholders, shall remit to each of the Shareholders who have surrendered
their certificates the total consideration for the shares of Company Capital
Stock transferred pursuant hereto and shall furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as may
be reasonably requested by such Shareholders, including without limitation true
and complete copies of the closing documentation relating to the Section 3.08
Sale.
(d) The sale obligations of the Non-Nextel Shareholders under this
Section shall be subject to the following conditions:
(i) upon the consummation of such sale, all of the Non-Nextel
Shareholders participating therein will receive the same form and amount of
consideration per Share, or if any Non-Nextel Shareholders are given an
option as to the form and amount of consideration to be received, all
Non-Nextel Shareholders participating therein will be given the same
option;
(ii) no Non-Nextel Shareholder shall be obligated to pay more than its
pro rata share (based on the number of Shares sold) of expenses incurred in
connection with a consummated sale to the extent such costs are incurred
for the benefit of all Non-Nextel Shareholders and are not otherwise paid
by the Company or the acquiring party; and
(iii) no Non-Nextel Shareholder shall be required to provide any
representations, indemnities or other agreements in connection with such
sale (other than representations and indemnities concerning each
Shareholder's title to the Shares, such title being free and clear of all
liens and encumbrances and such Shareholder's authority, power and right to
enter into and consummate the sale without contravention of any law or
agreement and without the need of such Shareholder to obtain any third
party (not including any governmental or regulatory) consent or approval).
(e) If Non-Nextel Shareholders holding more than 33% of the Voting
Stock (not including any Voting Stock held by the Nextel Shareholders)
reasonably believe that, as a result of transactions, relationships, and
understandings between Nextel and the Section 3.08 Purchaser, the Section 3.08
Sale Price does not reflect the fair market value of the Shares to be sold to
the Section 3.08 Purchaser, the Non-Nextel Shareholders shall have the right,
upon consummation of the Section 3.08 Sale, through the Non-Nextel Shareholder
representative identified in this Section 3.08, to submit the Section 3.08 Sale
Price to arbitration and, if on behalf of the Non-Nextel Shareholders, the
Non-Nextel Shareholder representative so elects (which election will be binding
on all the Non-Nextel Shareholders), to receive from the Section 3.08 Purchaser
the price per share as determined by arbitration in lieu of the Section 3.08
Sale Price. If the arbitrator(s) determines that the Section 3.08 Sale Price is
greater than or equal to the fair market value of the Shares, the Non-Nextel
Shareholders shall pay the fees and expenses of the arbitrator(s), otherwise
NWIP shall pay such fees and expenses.
(f) The provisions of this Section 3.08 shall be superseded by the
provisions of Section 5.5 of the Restated Certificate of Incorporation when the
latter become effective.
(g) The Nextel Shareholders shall not be permitted to transfer their
Shares to the Section 3.08 Purchaser unless NWIP shall have assigned (or shall
have caused the assignment) to the Company for $1.00, not later than the closing
day of the Section 3.08 Sale any FCC licenses acquired by Nextel (or its
Subsidiaries) pursuant to Section 4.16 of the Joint Venture Agreement.
ARTICLE
Put and Call Rights
Section 4.01. Non-Nextel Shareholder Put Rights. (a) Upon the
occurrence of a Put Event (other than a Nextel Sale), the Company shall, within
five days of such Put Event, notify all Non-Nextel Shareholders of the date and
time of a special meeting of such Shareholders, which date will not be more than
20 days after the date of the Put Event (or such later date as required by
applicable law, including any requirement to provide such Shareholders with an
effective registration statement relating to the Nextel Shares). Upon the
occurrence of a Nextel Sale, the Company shall, within 5 days of such Nextel
Sale, notify all Non-Nextel Shareholders of the occurrence of a Nextel Sale, and
at any time thereafter Non-Nextel Shareholders holding 20% or more of the
outstanding Voting Stock of such Shareholders shall have the right to require
that the Company notify all Non-Nextel Shareholders of the date and time of a
special meeting of such Shareholders, which date will not be more than 20 days
after the date the Company receives such request (or such later date as required
by applicable law, including any requirement to provide such shareholders with
an effective registration statement relating to Nextel Shares). At such meeting
the Non-Nextel Shareholders, by the affirmative vote of more than 50% of the
then outstanding Voting Stock held by such Shareholders, will have the right
(the "Put Right") to require NWIP to purchase all the Company Capital Stock
(other than the Series B Preferred) at a price determined in accordance with
Section 4.01(d). "Put Event" means any of the following events:
(i) a Nextel Sale;
(ii) the purchase by NWIP of Shares in accordance with its Preemption
Right with respect to a Qualifying DLJ Demand under Section 5.03 (a "NWIP
Preemption Put"); or
(iii) the exercise of a put right granted by the Board to the
Non-Nextel Shareholders pursuant to Section 7.04.
(b) In the event of a Special Nextel Sale, if there has not been a
DLJMB Trigger Event and the DLJ Entities voted to sell their Company Capital
Stock to NWIP pursuant to paragraph (a) above, but less than 50% of the then
outstanding Voting Stock held by the Non-Nextel Shareholders has voted to
exercise the Put Right, the DLJ Entities shall have the right to require NWIP to
purchase all of the Company Capital Stock held by the DLJ Entities for a
proportionate share of the purchase price (as determined in accordance with
Section 4.01(d)) and otherwise on generally the same terms and conditions as set
forth in this Section 4.01.
(c) To exercise the Put Right, the Non-Nextel Shareholders, acting as
a group, or, in the case of a Special Nextel Sale, DLJMB, on behalf of itself
and the other DLJ Entities, must give written notice (the "Put Notice") to NWIP
no later than (i) in the case of a Nextel Sale, 545 days after the Put Event or
(ii) in the case of a Put Event other than a Nextel Sale, the 30th day after the
Put Event (or such later date if the Shareholder vote is delayed pursuant to
Section 4.01(a)). Upon receipt of the Put Notice, the Non-Nextel Shareholders or
the DLJ Entities, as the case may be, shall be obligated to sell the relevant
Company Capital Stock to NWIP and NWIP shall be obligated to purchase such
Company Capital Stock in accordance with the provisions of this Section 4.01.
(d) The purchase price paid by NWIP for the Company Capital Stock
purchased pursuant to this Section 4.01 shall be determined as follows:
(i) If the Put Event is a Nextel Sale which occurs prior to the
Initial Public Offering, the purchase price paid by NWIP for all
outstanding Company Capital Stock (other than the Series B Preferred) will
be the greater of (A) the Investment Formula Price (as defined in Section
4.03(h)) and (B) the Fair Market Value of the Company as determined in
accordance with Section 4.03;
(ii) If the Put Event is a Nextel Sale which occurs after the Initial
Public Offering, the purchase price paid by NWIP for all outstanding
Company Capital Stock (other than the Series B Preferred) will be the Fair
Market Value of the Company at the time of the purchase as determined in
accordance with Section 4.03;
(iii) If the Put Event is a NWIP Preemption Put, the purchase price
paid by NWIP will be the same per share price that was paid by NWIP to
purchase the Shares subject to the Qualifying DLJ Demand; and
(iv) If the Put Event is the exercise of put rights under Section
7.04, the purchase price paid by NWIP for all outstanding Company
Capital Stock (other than the Series B Preferred) will be the
Investment Formula Price.
(e) The closing for the purchase of any Company Capital Stock
pursuant to this Section 4.01 shall occur as promptly as practicable (but in no
event later than 30 days) after receipt by NWIP of the Put Notice, provided that
if the purchase is subject to prior regulatory approval or requires the
determination of Fair Market Value in accordance with Section 4.03, NWIP and the
Shareholders shall use their reasonable best efforts to obtain the necessary
regulatory approvals and the 30 day period shall be extended until the later of
(i) the expiration of five Business Days after all such regulatory approvals
shall have been received and (ii) the determination of Fair Market Value. On or
prior to the closing, the Non-Nextel Shareholders shall deliver to the
representative of NWIP designated in the Put Notice certificates representing
all the shares of the relevant Company Capital Stock, duly endorsed, together
with all other documents, required to be executed in connection with the sale of
such Company Capital Stock (it being understood that in no event shall any
Non-Nextel Shareholder be obligated to make any representations and warranties,
or to provide any indemnities, with respect to any matters other than title to
the Company Capital Stock held by such Person, such title being free and clear
of all liens and encumbrances, and such Person's authority, authorization and
right to enter into and consummate the sale without contravention of any law or
agreement, and without the need for any governmental or other approval). At any
such closing or as otherwise permitted under Section 7.05, NWIP shall deliver to
each selling Shareholder such selling Shareholder's proportionate share (based
on the number of shares of Fully Diluted Common Stock that such Shareholder is
deemed to be selling pursuant to the Put Right divided by all outstanding Fully
Diluted Common Stock and taking into account Section 4.01(g)) of the purchase
price for all the outstanding Company Capital Stock as determined pursuant to
Section 4.01(d), by (i) wire transfer of immediately available funds to such
bank account as such selling Shareholder shall have specified in writing no
later than two Business Days prior to the closing or (ii) delivery of Nextel
common stock as permitted by Section 7.05. Any warrants, options or other
securities exercisable or exchangeable for, or convertible into, shares of
Company Capital Stock that are not exercised, exchanged or converted at or prior
to such closing or otherwise in accordance with Section 4.01(f) or 4.01(g) shall
be canceled effective upon such closing, and the Company's books and records
shall reflect such cancellation. If any Non-Nextel Shareholder should fail to
deliver such certificates to the NWIP representative and NWIP has placed such
selling Shareholder's proportionate share of the purchase price for the Company
Capital Stock represented by such certificates in escrow with the custodian
under the Custodial Agreement (or another escrow agent reasonably satisfactory
to the representative of the Non-Nextel Shareholders) on terms reasonably
satisfactory to the representative of the Non-Nextel
Shareholders, such Shares shall no longer be deemed to be outstanding and all
rights of such Shareholder with respect to such Shares will terminate except the
right to receive the purchase price. The Company shall cause the books and
records of the Company to show that such Shares are bound by the provisions of
this Section 4.01 and that such Shares shall be transferred to NWIP immediately
upon surrender for transfer by the holder thereof.
(f) If NWIP is required to purchase all outstanding Company Capital
Stock as set forth in this Section 4.01, vested in-the-money options and
warrants (all of which either will be exercised for cash prior to the closing of
such purchase or will be exchanged at the time of purchase for an amount equal
to the purchase price per share minus the exercise price of such option or
warrant multiplied by the number of Shares subject to such options or which can
be purchased pursuant to such warrants).
(g) If NWIP is required to purchase all outstanding Company Capital
Stock as set forth in this Section 4.01, unvested or out-of-the-money derivative
securities of the Company shall be treated as follows: (i) in the case of a Put
Event described in Section 4.01(a)(ii), all unvested or out-of-the-money options
and warrants issued by the Company that (A) are granted at any time during the
period from 30 days before the Company's announcement of its intention to
proceed with DLJ's delivery of its demand until the date on which the
pre-emptive purchase by NWIP is closed, and (B) are not granted consistently
with ordinary past practice of the Company's employee compensation programs or
policies, shall be terminated; (ii) all other unvested or out of the money
options or warrants (as appropriate) will be converted to substantially
identical options or warrants to acquire shares of common stock of Nextel on the
same substantive economic terms (based on the per common share price of the
Company in the pre-emptive purchase and the per common share price of Nextel on
the pre-emptive purchase date) and other terms as applied to the Company options
or warrants and (iii) all shares of Company Common Stock subject to vesting
under the Restricted Stock Purchase Agreements, and all shares of Company Common
Stock issuable upon exercise of options granted under the 1999 Stock Option
Plan, in each case that are beneficially owned by the Management Shareholders,
shall be purchased by NWIP pursuant to Section 4.01 (it being understood that
NWIP's acquisition of all of the outstanding Company Capital Stock pursuant to
this Section 4.01 shall constitute a Change in Control of the Company for
purposes of the Restricted Stock Purchase Agreements and the 1999 Stock Option
Plan).
(h) The following terms shall have the following meanings:
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3,
13d-5 or 16a-1 under the Exchange Act (or any successor rules), including the
provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right to acquire within 60
days, but such provision of the Rules will apply only if (i) all conditions
(other than payment of the purchase or acquisition price of such securities) to
such Person's exercise of such rights have been satisfied and (ii) such
securities (if options, warrants, or similar derivatives) are "in-the-money",
provided that in all cases a Person shall not be deemed a Beneficial Owner of,
or to own beneficially, any securities if such beneficial ownership (1) arises
solely as a result of a revocable proxy delivered in response to a proxy or
consent solicitation made pursuant to, and in accordance with, the Exchange Act
and the applicable rules and regulations thereunder, and (2) is not also then
reportable on Schedule 13D under the Exchange Act.
"Capital Stock" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of stock of, or other
ownership interests in, such Person.
"Closing Price" on any Trading Day with respect to the per share price
of any shares of Capital Stock of any Person means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange or if such shares of Capital Stock are not listed
or admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the NASDAQ
Stock Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on the NASDAQ Stock Market and the issuer
and principal securities exchange do not meet such requirements, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm of national standing that is selected
from time to time by such Person for that purpose.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"control" of a Person means the power, direct or indirect, (i) to vote
or direct the voting of more than 50% of the outstanding shares of Voting Stock
of such Person, or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Nextel Sale" means the occurrence of any of the following events:
(i) any person or group (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act and the rules and regulations thereunder) other
than a Permitted Holder as hereinafter defined (A) is or becomes the
Beneficial Owner of more than 50% of the total Voting Stock of Nextel
("Nextel Voting Stock") or Total Common Equity of Nextel, or (B) otherwise
has the power to direct the management and policies of Nextel, directly or
through one or more intermediaries, whether through the ownership of voting
securities, by contract or otherwise (without limiting the generality of
this clause (B), any person or group that succeeds to the rights currently
held by Craig O. McCaw and his Affiliates in respect of Nextel, or
otherwise has powers and rights comparable thereto, shall be deemed for
purposes of this definition to have the power to direct the management and
policies of Nextel), except that no change of control will be deemed to
have occurred under this clause (B) as a result of customary rights granted
(x) in any indenture, credit agreement or other agreement for borrowed
money unless and until there has been a default under the terms of that
agreement and the trustee or lender exercises the rights granted therein or
(y) to holders of non-convertible, mandatorily redeemable, preferred stock
unless and until action occurs that would otherwise cause a Nextel Sale as
herein defined, provided that such rights were granted pursuant to a
transaction in the financial markets and not as part of a strategic
alliance or similar transaction;
(ii) Nextel sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person (other
than a Permitted Holder);
(iii) Nextel, directly or indirectly, consolidates with, or merges
with or into, another Person (other than a Permitted Holder), or any Person
(other than a Permitted Holder), directly or indirectly, consolidates with,
or merges with or into, Nextel, and pursuant to such transaction (or series
of transactions) either: (A) the outstanding Nextel Voting Stock is
converted into or exchanged for cash, securities or other property, but
excluding a transaction (or series of transactions) where (i) the
outstanding Nextel Voting Stock is converted into or exchanged for Voting
Stock of the surviving or transferee Person and (ii) the holders of Nextel
Voting Stock immediately preceding such transaction receive more than 50%
of the total Voting Stock and Total Common Equity of the surviving or
transferee Person (in substantially the same proportion as such holders had
prior to such transaction), or (B) new shares of Nextel Voting Stock are
issued so that immediately following such transaction the holders of Nextel
Voting Stock immediately preceding such transaction own less
than 50% of the Voting Stock and Total Common Equity of the surviving
Person; or
(iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of Nextel
(together with any directors who are members of the board of directors of
Nextel on the closing date, and any new directors whose election by such
board of directors or whose nomination for election by the stockholders of
Nextel was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the board of directors of Nextel
then in office;
provided that it is expressly understood and agreed that (A) the transfer of
Nextel Voting Stock and or Capital Stock in Nextel by a Permitted Holder to an
Affiliate of Craig O. McCaw or the estate of Craig O. McCaw, or any successive
transfer by such or another Affiliate to another Affiliate of Craig O. McCaw or
the estate of Craig O. McCaw shall not by itself be a Nextel Sale (provided
that, for this purpose, any such Affiliate shall not be controlled by any Person
or group other than Craig O. McCaw or the estate of Craig O. McCaw) and (B) the
direct or indirect sale or other disposition of all or any portion of the Nextel
Voting Stock and/or the Capital Stock in Nextel held now or in the future by any
Permitted Holder to any Person other than another Permitted Holder shall not by
itself be a Nextel Sale, unless such sale or disposition, alone or in
conjunction with other transactions, results in the occurrence of an event of
the type described in any of clauses (i), (ii), (iii) or (iv) above.
"Permitted Holders" means, collectively, Craig O. McCaw and any Person
or Persons (i) that is controlled directly or indirectly by Craig O. McCaw or
the estate of Craig O. McCaw and (ii) a majority of the equity interests of
which are owned, directly or indirectly, by Craig O. McCaw and his family, his
brothers and their families, officers and employees of such entities, ex-spouses
of such persons and estates of, or trusts for the primary benefit of, the
foregoing persons (collectively, the "McCaw Group"), provided that "Permitted
Holders" also includes a group of entities that is each controlled by Craig O.
McCaw or the estate of Craig O. McCaw and through which the McCaw Group
collectively own, directly or indirectly, a majority of the equity interests of
Nextel (it being understood that if the McCaw Group collectively owns 50% of a
Person that owns 20% of Nextel's equity interests, the McCaw Group will be
deemed to indirectly own 10% of Nextel's equity interest through such entity).
"Special Nextel Sale" means a Nextel Sale either (i) prior to an
Initial Public Offering where, as a result of any post-closing equity issuances
by the Company, the Qualified DLJ Entities no longer hold at least 50% of the
votes to be cast under Section 4.02, or (ii) after an Initial Public Offering,
where a majority of the Non-Nextel Shareholders do not vote to sell their
Company Capital Stock to NWIP.
"Total Common Equity" of any Person means, as of any day of
determination, the product of (i) the aggregate number of outstanding primary
shares of Common Stock of such Person on such day (which shall not include any
options or warrants on, or securities convertible or exchangeable into, shares
of Common Stock of such Person) and (ii) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day. If no such Closing Price exists with respect to shares of any such class,
the value of such shares for purposes of clause (ii) of the preceding sentence
shall be determined by the board of directors of such Person in good faith and
evidenced by a resolution of such board of directors.
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
(i) Upon the consummation of an Initial Public Offering, the Put
Rights exercisable by the Non-Nextel Shareholders shall be superseded by the
provisions in the Company's restated certificate of incorporation, which shall
control. Notwithstanding the preceding sentence, the special Put Right set forth
in Section 4.01(b) exercisable by the DLJ Entities shall not be superseded by
the Company's restated certificate of incorporation.
(j) Upon the consummation of a Section 3.08 Sale, all the Non-Nextel
Shareholders' Put Rights shall terminate except for the Put Right with respect
to a Nextel Sale described in Section 4.01, which right shall not terminate
until the one year anniversary of the date of the consummation of the Section
3.08 Sale.
Section 4.02. Nextel Shareholder Call Right. (a) Upon (i) the
seventh anniversary of the date of this Agreement, if as of the date of such
anniversary there has not been an Initial Public Offering and NWIP has not
exercised any of its Preemption Rights under Section 5.03, (ii) the eighth
anniversary of the date of this Agreement, if as of the date of such anniversary
there has not been an Initial Public Offering or (iii) the ninth anniversary of
the date of this Agreement, NWIP shall have the right (the "NWIP Call Right") to
purchase all the outstanding Shares held by all other Shareholders, provided
that if there has been an Initial Public Offering prior to the exercise of the
NWIP Call Right, the Board (by
majority vote with the NWIP Designee abstaining) will have the right to postpone
the exercise of the NWIP Call Right for 365 days on each of two occasions and
for 180 days on one additional occasion by giving written notice of such
election to NWIP within five Business Days after delivery of the applicable NWIP
Call Notice (or after the one-year or six-month anniversary of the postponement
of the NWIP Call Notice, as the case may be, in the event that the NWIP Call
Right is postponed); provided, that NWIP shall not be obligated to consummate
the transaction contemplated by the NWIP Call Right that has been so postponed,
unless NWIP so notifies the Shareholders and the Company not later than 90 days
following the expiration of the relevant postponement period.
(b) To exercise the NWIP Call Right, NWIP must give written notice
(the "NWIP Call Notice") to the Shareholders and the Company no later than the
90th day following the later of (i) the relevant anniversary and (ii) if
applicable, the relevant postponement period. The NWIP Call Right will expire on
the later of (x) the 91st day following the ninth anniversary of the date of
this Agreement and (y) if applicable, the 91st day following the relevant
postponement period, if NWIP has not delivered a NWIP Call Notice by such time.
Upon receipt of the Call Notice, the Shareholders shall be obligated to sell
their Shares in accordance with the provisions of this Section 4.02.
(c) The purchase price payable for all outstanding Equity Securities
shall be (i) in the event that the purchase pursuant to the exercise of the NWIP
Call Right is consummated before an Initial Public Offering, the greatest of (A)
the Company Equity Value, (B) the Company's Fair Market Value determined in
accordance with Section 4.03, and (C) the Investment Formula Price; provided
that in no event will the purchase price payable for all outstanding Company
Capital Stock (other than the Series B Preferred) be greater than an amount that
for each tranche of capital actually invested would represent a 40% internal
rate of return (calculated using the same methodology used to calculate the
Investment Formula Price) or (ii) in the event that the purchase pursuant to the
exercise of the NWIP Call Right is consummated after an Initial Public Offering,
the Company's Fair Market Value determined in accordance with Section 4.03.
(d) The purchase price payable pursuant to Section 4.02(c) shall be
allocated to each Non-Nextel Shareholder based on such Non-Nextel Shareholder's
Percentage Ownership. For purposes of this Section 4.02(d), vested in-the-money
options, together with any shares of Common Stock or options then beneficially
owned by the Management Shareholders that vest upon the consummation of the NWIP
Call Right in accordance with the Restricted Stock Purchase Agreements or the
1999 Stock Option Plan, as the case may be (it being understood that NWIP's
acquisition of all of the outstanding Company Capital Stock pursuant to this
Section 4.02 shall constitute a Change in Control of the
Company for purposes of the Restricted Stock Purchase Agreements and the 1999
Stock Option Plan), will be included both in the determination of Percentage
Ownership of the Company and in the allocation of the purchase price among the
Shareholders.
The following terms shall have the following meanings:
"Company EBITDA" means earnings before interest, taxes, depreciation
and amortization. For purposes of calculating Company EBITDA, the Company's
accounting and other elections, the accounting treatment or presentation of
various relevant items, and the period of measurement used for the EBITDA
calculation will be the same as those made or used by Nextel in preparing its
financial reports, and the corresponding items, elections or periods of or
affecting the Company will be adjusted as necessary, so that, as nearly as
possible, they are identical, or are calculated, derived or stated identically
to those of Nextel. In addition, if prior to the expiration of the Nextel Call
Right, the Company has entered into an agreement that artificially accelerates
or defers income or expense during the earlier part of the term of such
agreement, the calculation of EBITDA will be adjusted, as necessary, to reflect
the terms which would have existed in the absence of such artificial
acceleration or deferral.
"Company Equity Value" means an amount equal to the sum of (i) the
product of (A) the Company EBITDA for the two most recent quarters for which
financial statements are available, annualized, multiplied by (B) the Nextel
Multiple, minus (ii) the Company's long term debt (including the current portion
thereof and including all amounts that would be required to be paid to redeem in
full all outstanding shares of Series B Preferred (as defined in the
Subscription Agreement) and any other equity securities issued by the Company
(other than the Equity Securities) that are redeemable, whether mandatorily or
at the option of either the Company (other than pursuant to Article XI of the
Certificate of Incorporation) or the holders thereof), plus (iii) the Company's
cash and cash equivalents.
"Nextel Multiple" means the Total Enterprise Value of Nextel divided
by Nextel's EBITDA for the most recent two quarters for which financial
statements are available, annualized, rounded to four decimal points. For
purposes of this definition "EBITDA" means earnings before interest, taxes,
depreciation and amortization.
"Total Enterprise Value" means the sum of (i) the number of shares of
fully diluted common stock of Nextel multiplied by the Average Share Price, plus
(ii) Nextel's long term debt (including the current portion thereof), minus
(iii) Nextel's cash and cash equivalents. For purposes of this definition
"Average
Share Price" shall be the average Closing Price of Nextel's common stock for the
20 consecutive Trading Days prior to the relevant anniversary.
(e) The closing for the purchase of the Shares pursuant to this
Section shall occur as promptly as practicable (but in no event later than 30
days) after receipt by the Shareholders of the NWIP Call Notice, provided that
if the purchase of any Shareholder's Shares is subject to prior regulatory
approval or requires the determination of Fair Market Value in accordance with
Section 4.03, the parties will use their reasonable best efforts to obtain the
necessary regulatory approvals and the 30 day period shall be extended until the
later of (i) the expiration of five Business Days after all such regulatory
approvals shall have been received and (ii) the determination of Fair Market
Value. At the closing, each Shareholder shall deliver to NWIP certificates
representing such Shareholder's Shares, duly endorsed, together with all other
documents required to be executed in connection with the sale of such Shares (it
being understood that in no event shall a Shareholder be obligated to make any
representations and warranties, or to provide any indemnities, with respect to
any matters other than title to the Shares held by such Person, such title being
free and clear of all liens and encumbrances, and such Person's authority,
authorization and right to enter into and consummate the sale without
contravention of any law or agreement, and without the need for any third party
(not including any governmental or regulatory) consent or approval). At any such
closing or as otherwise permitted by Section 7.05, NWIP shall deliver to each
selling Shareholder such selling Shareholder's purchase price as allocated
pursuant to Section 4.02(d), by (i) wire transfer of immediately available funds
to such bank account as such selling Shareholder shall have specified in writing
no later than two Business Days prior to the closing or(ii) delivery of Nextel
common stock as permitted by Section 7.05. Any warrants, options or other
securities exercisable or exchangeable for, or convertible into, shares of
Company Capital Stock that are not exercised, exchanged or converted by such
Shareholders at or prior to such closing, subject to Section 4.02(d), shall be
canceled effective upon such closing, and the Company's books and records shall
reflect such cancellation. If any Non-Nextel Shareholder should fail to deliver
such certificates to NWIP and NWIP has placed such selling Shareholder's
proportionate share of the purchase price for such certificates in escrow, such
Shares shall no longer be deemed to be outstanding and all rights of such
Shareholder with respect to such Shares will terminate except the right to
receive the purchase price. The Company shall cause the books and records of the
Company to show that such Shares are bound by the provisions of this Section
4.02 and that such Shares shall be transferred to the NWIP representative
immediately upon surrender for transfer by the holder thereof.
(f) Upon the consummation of an Initial Public Offering, the NWIP
Call Right shall be superseded by the provisions in the Company's restated
certificate of incorporation, which shall control.
Section 4.03. Fair Market Value Calculation. For purpose of this
Agreement, Fair Market Value will be determined as follows:
(a) "Fair Market Value" of the Company means the price that would be
paid for all of the Company Capital Stock (excluding the Series B Preferred and
any mandatorily redeemable pay-in-kind non-convertible securities) by a willing
buyer to a willing seller, in an arm's-length transaction, as if the Company
were a publicly traded and non-controlled corporation and the buyer was
acquiring all of such Company Capital Stock, and assuming that the Company was
being sold in a manner designed to attract all possible participants to the
sales process (including Nextel and its Competitors, subject to the provisions
below) and to maximize stockholder value (including, if necessary, through a
public or private market sale or other disposition (including tax-free
spin-offs, if possible) of businesses prohibited by legal restrictions to be
owned by a particular buyer or class of buyer), with both buyer and seller in
possession of all material facts concerning the Company and its business. In all
cases, Fair Market Value for the Company will include a control premium and
there will be no minority or illiquidity discount. Fair Market Value of the
Company shall be determined on the assumption that in a competitive acquisition
market with Nextel and prospective buyers other than Nextel, the Company would
be at least as valuable to other prospective buyers as to Nextel. Fair Market
Value shall be determined on the assumption that the Company is at least as
valuable as if it were a part (although separable) of Nextel, with the valuation
of the Company for purposes of this sentence being derived from a valuation of
Nextel consistent with the first sentence of this paragraph but without taking
into account a control premium for Nextel (it being understood that a control
premium, however, will be applied to the Company). Fair Market Value of the
Company will not include any premium solely due to the fact that a competitor of
Nextel might be willing to pay a premium for the Company in order to hamper or
impede Nextel's growth or strategy. If the Company's stock is publicly traded,
Fair Market Value will take into consideration (i) the trading activity and
history of the Company's stock and (ii) the Company's most recent "unaffected"
public market stock price. In making the determination of Fair Market Value of
the Company, the Company will be given the benefit of the fact that it uses the
Nextel brand name, business and technology pursuant to the Joint Venture
Agreement and the other Transaction Documents, but there will be no discount or
premium included in any valuation of the Company relative to its business as
conducted or reasonably expected to be conducted due to the facts that (v) the
Company will not own but Nextel will directly or indirectly lease or otherwise
make available to the Company certain of
its rights, assets and services pursuant to the Joint Venture Agreement and the
other Collateral Agreements, or pursuant to any other agreements or arrangements
entered into from time to time between Nextel and/or its Subsidiaries, on the
one hand, and the Company and/or its Subsidiaries, on the other hand, (w) in
certain circumstances Nextel will have the right to acquire the Company's FCC
licenses, and in such a case, the Company will not own, but Nextel and/or its
Subsidiaries will directly or indirectly make available to the Company, the
right to manage the use of the frequencies subject to such licenses, (x) Nextel
directly or indirectly has, and may exercise, certain aspects of control over
the Company's business and the Company, (y) Nextel directly or indirectly
provides certain services and other benefits to the Company on a cost or
subsidized basis and (z) there may be few potential buyers for the Company due
to any real or perceived control of the Company exercised by Nextel or due to
the fact that only Nextel has an identical technology platform.
(b) Within 20 days after notice is given of the exercise of a Put
Right or a NWIP Call Right the Non-Nextel Shareholders by the affirmative vote
of more than 50% of the Voting Common Stock held by such Shareholders (at a
special meeting of such Shareholders called by the Company and held within such
20 day period) or, after an Initial Public Offering, the Board (by majority vote
with the NWIP Designee abstaining) will select and identify to NWIP a nationally
recognized investment banker or appraiser (the "First Appraiser") and NWIP will
select and identify to the Non-Nextel Shareholders a nationally recognized
investment banker or appraiser (the "Second Appraiser"). The date when both
appraisers have been identified, is the "Start Date". NWIP, the Company and the
other Shareholders will (and NWIP will cause Nextel to) cooperate with any
appraisers appointed under this Section 4.03 and share with each such appraiser
all information relevant to a valuation of the Company. Within 30 days of the
Start Date, the First Appraiser and the Second Appraiser will each determine its
preliminary view of the Fair Market Value of the Company in accordance with the
criteria set forth in Section 4.03(a), and will consult with each other with
respect to their respective preliminary values. On or prior to the 45th day
after the Start Date, the First Appraiser and the Second Appraiser will each
render to the Shareholders its written report on the Fair Market Value of the
Company.
(c) If the higher Fair Market Value determined under 4.03(b) (the
"High Value") is not more than 110% of the lower Fair Market Value determined
under (the "Low Value"), then the Fair Market Value will be the average of the
High Value and the Low Value. If the High Value is more than 110% of the Low
Value, then, not more than 60 days after the Start Date, the First Appraiser and
the Second Appraiser will together designate another nationally recognized
investment banker or appraiser (the "Third Appraiser"), who will not be informed
of the values determined by the First and Second Appraisers. The Third
Appraiser will make a determination of the Fair Market Value of the Company in
accordance with the criteria set forth in Section 4.03(a) and deliver its
written report to the Shareholders (the "Third Value") not more than 30 days
after the Third Appraiser is designated. If the Third Value is within the middle
one third of the range of values between the High Value and the Low Value (the
"Mid-Range"), Fair Market Value will be the Third Value. If the Third Value does
not fall within the Mid-Range, the Fair Market Value will be the average of (x)
the Third Value and (y) either (i) the High Value or (ii) the Low Value,
whichever is closest to the Third Value, provided that the Fair Market Value
shall not be less than the Low Value nor greater than the High Value.
(d) The determination of Fair Market Value under Section 4.03(c) will
be final and binding on all Non-Nextel Shareholders unless a challenge by any
such Shareholder (each, a "Notice of Challenge") is filed with NWIP pursuant to
this Section 4.03(d) within 20 days of the receipt by such challenging
Shareholder of the final determination under Section 4.03(c). As soon as
practicable after the end of the 20-day period for giving a Notice of Challenge,
NWIP will notify the Company and all challengers of the names and addresses of
all challengers. Not more than 10 days after receiving such notice, the
challengers will, in a writing executed by all of them, notify the Company and
NWIP of the challenger that has been selected as their representative and who
has been given irrevocable authority to represent the challengers for all
proceedings under this Section 4.03(d) (the "Challenger's Representative"). If
the Company and NWIP do not receive the executed writing from the challengers in
the 10-day period, the Company will select a challenger by lot to act as the
Challenger's Representative, and will notify NWIP and all the challengers of the
party selected. If the Challenger's Representative is selected by lot, each
challenger will have 5 days to notify the Company and NWIP that it elects to
irrevocably abandon the challenge, and to accept its share of the Fair Market
Value as determined under Section 4.03(c). Any challenger that does not abandon
the challenge as described in the preceding sentence, will be deemed to have
irrevocably designated the Challenger's Representative selected by lot as its
agent for purposes of proceedings under this Section 4.03(d). No challenger can
participate in the challenge proceeding except through the Challenger's
Representative. Any Shareholder that does not give notice and join the
challengers will be paid its appropriate share of Fair Market Value (as
determined under Section 4.03(c)), but will be forever barred from asserting any
objection to Fair Market Value as so determined. The procedures provided for in
this Section 4.03(d), including the Challenge Floor Price and Challenge Ceiling
Price, each as hereinafter defined, shall not be considered by any appraiser in
determining Fair Market Value.
(e) The determination of Fair Market Value under Section 4.03(c) will
be final and binding on NWIP unless NWIP believes that the Fair Market Value
determined under Section 4.03(c) does not reflect the true Fair Market Value or
was improperly determined and gives notice to each Non-Nextel Shareholder and to
the Company within 20 days of receiving the final determination under Section
4.03(c) that it is initiating a proceeding under this Section 4.03(e). Not more
than 10 days after receiving a notice under the preceding sentence, the
Non-Nextel Shareholders will designate, by majority vote, a representative and
notify NWIP and the Company in writing of the identity of such representative
(or, if such designation by majority vote does not occur for any reason, then
the Company will select a representative by lot and shall notify NWIP and the
other Non-Nextel Shareholders in writing of such selection), who will be
irrevocably authorized to be the "Challenger's Representative" to act as the
agent of all Non-Nextel Shareholders in the defense of the challenge by NWIP. No
Non-Nextel Shareholder will have the right to participate in the defense except
through the Challenger's Representative.
(f) The party or parties bringing the challenge will be required to
demonstrate to a tribunal composed of three persons with expertise in valuing
companies similar to the Company, one selected by each of NWIP and the
Challenger's Representative and the third member of the tribunal selected by the
first two members (i) that the Fair Market Value determined under Section
4.03(c) (or the underlying values determined by the Appraisers on which it was
based) was grossly incorrect or fraudulently obtained; and (ii) what the correct
Fair Market Value should be. The tribunal determining the challenge is to
determine Fair Market Value and no party will seek to have that determination
referred to an investment banker or appraiser (although they may testify or
offer evidence to the tribunal).
(g) If there is a challenge by NWIP pursuant to Section 4.03(e),
regardless of the outcome of the proceeding, the amount to be paid to the
Non-Nextel Shareholders may be higher than their proportionate share of the
amount that they would have received if the Fair Market Value were equal to the
Challenge Ceiling Price but will not be less than their proportionate share of
the amount that they would have received if the Fair Market Value were equal to
the Challenge Floor Price. If there is a challenge by the Non-Nextel
Shareholders pursuant to 4.03(d), regardless of the outcome of the proceeding,
the amount to be paid to the Non-Nextel Shareholders who participate in such
challenge may be less than their proportionate share of the amount that they
would have received if the Fair Market Value were equal to the Challenge Floor
Price but will not be more than their proportionate share of the amount that
they would have received if the Fair Market Value were equal to the Challenge
Ceiling Price.
(h) The following terms have the following meaning:
"Challenge Ceiling Price" means an amount equal to the sum of those
amounts that for each tranche of capital actually invested in the Company
(whether contributed in cash or in kind and, if in kind, valued as set forth in
Section 4.03(i)), would return to investors in each tranche (regardless of
whether there are any investors from that tranche who continue as equity
holders, and without regard to any purchase or sale transactions or the price of
such transfers among equity holders) an amount that would represent a 30%
internal rate of return on the amount of capital invested in connection with
such tranche, compounded annually from the date that such capital relating to
such tranche was contributed to the date of the determination.
"Challenge Floor Price" means an amount equal to the sum of those
amounts that for each tranche of capital actually invested in the Company
(whether contributed in cash or in kind and, if in kind, valued as set forth in
the Section 4.03(i)), would return to investors in each tranche (regardless
whether there are any investors from that tranche who continue as equity
holders, and without regard to any purchase or sale transactions or the price of
such transfers among equity holders) an amount that would represent a 10%
internal rate of return on the amount of capital invested in connection with
such tranche, compounded annually from the date that such capital relating to
such tranche was contributed to the date of the determination.
"Investment Formula Price" means in respect of each tranche of capital
actually invested in the Company (whether contributed in cash or in kind, but
excluding the Series B Preferred Stock), an amount that would represent a 20%
internal rate of return on the amount of capital invested in connection with
such tranche (regardless of whether there are any investors from such tranche
who continue as equity holders, and without regard to any purchase or sale
transactions or the price of such transfers among equity holders), compounded
annually from the date that such capital relating to such tranche was
contributed to the date of the purchase.
(i) For purposes of calculating the Investment Formula Price,
Challenge Ceiling Price and Challenge Floor Price, except for the frequencies or
frequency rights which will be valued as provided in Exhibit 4.1 to the Joint
Venture Agreement, the Board shall place a cash equivalent value on each
non-cash capital investment made in the Company at the time such investment is
made, and such cash equivalent value shall be used in all calculations of
Investment Formula Price, Challenge Ceiling Price, and Challenge Floor Price
under this Agreement and the other relevant Transaction Documents.
Section 4.04. Management Stockholder Tag Along Right.
Notwithstanding anything herein to the contrary, if, prior to the Initial Public
Offering, NWIP or its Affiliates acquire (in one or a series of transactions)
more than 20% of the Initial Ownership of the DLJ Entities (other than in
accordance with the provisions of this Article in connection with a purchase by
NWIP or its Affiliates of all of the Company's outstanding Company Capital Stock
held by the Non-Nextel Shareholders), the Management Shareholders will have the
right, if they so elect, to require that NWIP purchase from them, pro rata in
accordance with their ownership of Vested Shares (as defined in the Restricted
Stock Purchase Agreements), the same proportion of their aggregate Vested Shares
as the proportion of the aggregate Initial Ownership of the DLJ Entities being
acquired by NWIP or its Affiliates, at the same per share price as that being
paid to the DLJ Entities; provided, that NWIP's obligation to purchase Vested
Shares pursuant to this Section 4.04 will not exceed $20 million in the
aggregate. NWIP shall notify the Management Shareholders in advance of any such
acquisition, and the Management Shareholders shall have five days from receipt
of any such notice to elect (by notice to NWIP) to exercise their rights
pursuant to the preceding sentence. The closing of such purchase and sale shall
occur at the same time and place as the closing of the acquisition between NWIP
or its Affiliates and the DLJ Entities and at any such closing, NWIP shall
deliver to each selling Management Shareholder the purchase price by providing
the same per share consideration that it is providing to the DLJ Entities.
Section 4.05. Company Repurchase Rights. (a) The Company repurchase
rights with respect to the Special Securities are as follows:
(i) Within 30 days after the General Repurchase Date, the Company
shall repurchase from each Reselling Shareholder, and each Reselling
Shareholder shall be obligated to sell, at a repurchase price of $.01 per
share, a number of shares of Class A Common Stock (or, in the case of the
DLJ Entities, Warrants) equal to the product of (A) the number of such
Reselling Shareholder's Special Securities multiplied by (B) the Option
Section Percentage.
(ii) Notwithstanding anything in the Restricted Stock Purchase
Agreements to the contrary, if an Individual Repurchase Date occurs prior
to the General Repurchase Date, within 30 days after such Individual
Repurchase Date, the Company shall repurchase from the applicable Reselling
Shareholder, and such Reselling Shareholder shall be obligated to sell, at
a repurchase price of $.01 per share, a number of shares of Class A Common
Stock equal to the product of (A) the number of such Reselling
Shareholder's Special Securities multiplied by (B) the Option Section
Percentage.
(b) Promptly after an applicable Repurchase Date the Company will
deliver written notice to a Reselling Shareholder. Such notice shall specify the
applicable Repurchase Date and shall set forth the number of Shares to be
repurchased from each Reselling Shareholder and the aggregate repurchase price
thereof. Within five days after delivery of such notice, upon delivery to the
Company of the Shares being repurchased, together with one or more related stock
powers executed in blank by the Reselling Shareholders, the Company shall pay to
each Reselling Shareholder, in immediately available funds, an amount equal to
the aggregate repurchase price of the Shares being repurchased therefrom. Each
Reselling Shareholder shall represent that he or it owns the Shares being
repurchased free and clear of liens other than liens created by the Transaction
Documents.
(c) Each of the Reselling Shareholders agrees and acknowledges that
the Special Securities shall not be transferred (other than to the Company)
until 30 days after the General Repurchase Date and until such time shall be
voted in the same proportion as all other Shares are voted by the Shareholders
at any meeting of the shareholders of the Company.
(d) Notwithstanding anything in this Section 4.05 to the contrary,
in the event that the Option Section Percentage is zero or a negative number,
the Company shall not repurchase from the Reselling Shareholders any Special
Securities.
(e) As used in this Section 4.05, the following terms have the
following meanings:
"Build Out" shall have the meaning set forth in the Joint Venture
Agreement.
"Election Period" shall have the meaning set forth in the Joint
Venture Agreement.
"General Repurchase Date" means the earliest of the date of (i) the
expiration of the Election Period (as defined in the Joint Venture Agreement),
(ii) the occurrence of any of the events specified in clauses (b) or (c) of the
definition of Change in Control of the Company (as defined in the Restricted
Stock Purchase Agreements) and (iii) the purchase of the Company Capital Stock
(other than the Series B Preferred) by NWIP pursuant to Section 4.01 or 4.02.
"Individual Repurchase Date" means, with respect to any Management
Stockholder, the date on which the Company has a right to repurchase any Class A
Common Stock from such Management Stockholder
pursuant to the Restricted Stock Purchase Agreement between such Management
Stockholder and the Company.
"Option Sections" shall have the meaning set forth in the Joint
Venture Agreement.
"Option Section Percentage" means the product of (A) 3,162,000 minus
the number of POPs represented in the Option Sections the Company has elected to
Build-Out prior to the relevant Repurchase Date divided by (B) 3,162,000.
"POPs" means population equivalents as set forth in Exhibit 6 to the
Joint Venture Agreement.
"Reselling Shareholder" means each of Eagle River, the DLJ Entities
and the Management Stockholders.
"Special Securities" means: (i) 61,880 shares of Class A Common Stock
for John Chapple, (ii) 42,770 shares of Class A Common Stock for John Thompson,
(iii) 24,570 shares of Class A Common Stock for David Thaler, (iv) 20,475 shares
of Class A Common Stock for David Aas, (v) 17,290 shares of Class A Common Stock
for Perry Satterlee, (vi) 17,290 shares of Class A Common Stock for Mark
Fanning, (vii) 15,295 shares of Class A Common Stock for Eagle River, (viii)
warrants to purchase 24,957 shares of Class A Common Stock for Madison Dearborn
and (ix) warrants to purchase 26,162 shares of Class A Common Stock for the DLJ
Funds.
ARTICLE
Anti-dilution and Preemption Rights
Section 5.01. Anti-Dilution Rights. (a) Prior to the Initial Public
Offering, the Company shall provide each Shareholder with a written notice (a
"Section 5.01 Notice") of any proposed issuance by the Company of Company
Capital Stock at least 30 days prior to the proposed issuance date. The Section
5.01 Notice shall specify the price per share at which the Company Capital Stock
is proposed to be issued and the other proposed material terms of the issuance.
Each Shareholder shall be entitled to purchase, at the price and on the terms
specified in such Section 5.01 Notice, a pro rata portion of the Company Capital
Stock proposed to be issued, based upon such Shareholder's Percentage Ownership.
A Shareholder may exercise its rights under this Section 5.01 by
delivering written notice to the Company (which will make such information
available to all Shareholders) of its election to purchase Company Capital Stock
within 15 days of receipt of the Section 5.01 Notice. A delivery of such a
written notice (which notice shall specify the number of shares (or amount) of
Company Capital Stock to be purchased by the Shareholder submitting such notice)
by a Shareholder shall constitute a binding agreement of such Shareholder to
purchase, at the price and on the terms specified in the Section 5.01 Notice,
the number of shares (or amount) of Company Capital Stock specified in such
Shareholder's written notice, provided that if the actual purchase price per
share of Company Capital Stock is more than the purchase price set forth in the
Section 5.01 Notice, the Company shall notify such Shareholders prior to the
issuance of such shares and each such Shareholder may revoke its election at or
prior to the time of the relevant issuance and be released from its obligation
to purchase shares pursuant to this Section 5.01. In the case of any issuance of
Company Capital Stock, the Company shall have 120 days from the date of the
Section 5.01 Notice to consummate the proposed issuance of any or all of such
Company Capital Stock which the Shareholders have not elected to purchase at the
price and upon terms that are not materially less favorable to the Company than
those specified in the Section 5.01 Notice. At the consummation of such
issuance, the Company shall issue certificates representing the Company Capital
Stock to be purchased by each Shareholder exercising anti-dilutive rights
pursuant to this Section 5.01 registered in the name of such Shareholder,
against payment in cash by such Shareholder of the purchase price for such
Company Capital Stock. If the Company proposes to issue Company Capital Stock
after such 120-day period, it shall again comply with the procedures set forth
in this Section.
(b) Notwithstanding Section 5.01(a), if the Company elects to Build
Out any Option Sections prior to the expiration of the Election Period, and
pursuant thereto, issues additional equity to NWIP in exchange for frequencies,
the Company and the Shareholders will comply with the Notice provisions of
Section 5.01(a) and each Non-Nextel Shareholder (other than the Management
Shareholders) that is a Shareholder as of the date hereof shall have the right,
but not the obligation, to purchase, at a purchase price of $10 per share, as
adjusted for stock splits and combinations, stock dividends and the like (which
represents the initial purchase price for Shares on the date hereof), a number
of shares of Series A Preferred (or, if the Series A Preferred has been
converted into Common Stock, Common Stock) that results in such Shareholder
maintaining the same Percentage Ownership it has on either the date immediately
prior to the date the Company issues additional equity to NWIP in exchange for
frequencies or the date hereof, whichever date results in a lower Percentage
Ownership.
(c) Notwithstanding Section 5.01(a), no Shareholder (except as
provided for NWIP in Section 5.02 solely in connection with the purchase of
Company
Capital Stock issued in connection with an Initial Public Offering) shall be
entitled to purchase Company Capital Stock as contemplated by this Section 5.01
in connection with issuances of Company Capital Stock (i) to employees of the
Company or any Subsidiary pursuant to employee benefit plans or arrangements
approved by the Board (including upon the exercise of employee stock options),
(ii) in connection with a Public Offering initiated by the Company, (iii) in
connection with any bona fide, arm's-length restructuring of outstanding debt of
the Company or any Subsidiary, (iv) in connection with any bona fide,
arm's-length direct or indirect merger, acquisition or similar transaction, (v)
in connection with the issuance of equity securities pursuant to Article 4 of
the Joint Venture Agreement, (vi) in connection with the conversion of the
Convertible Preferred into Company Common Stock or (vii) in connection with any
pro rata stock splits, combinations or reclassifications. The Company shall not
be under any obligation to consummate any proposed issuance of Company Capital
Stock, regardless of whether it shall have delivered a Section 5.01 Notice in
respect of such proposed issuance.
Section 5.02. Special NWIP Anti-Dilution Rights. (a) In connection
with an Initial Public Offering initiated by the Company pursuant to which the
Company will offer newly issued shares of Company Common Stock (a "Company
IPO"), the Company shall provide NWIP with a written notice (a "Section 5.02
Notice") of such Initial Public Offering at least 45 days prior to the proposed
offering date. The Section 5.02 Notice shall specify (i) a range of prices (the
"Underwriters' Range") for the Company Common Stock as determined by the
underwriters, of which the high per share price (the "High Offering Price") will
be no more than $3.00 greater than the low per share price (the "Low Offering
Price") and (ii) the other material terms of the offering. NWIP shall be
entitled to purchase, at the Offering Price (as defined below) and otherwise on
the terms specified in such Section 5.02 Notice, NWIP's Percentage Ownership of
the Company Common Stock proposed to be issued pursuant to the Company IPO. NWIP
may exercise its rights under this Section 5.02 by delivering written notice of
its election to purchase the Company Common Stock to the Company within 20 days
of receipt of the Section 5.02 Notice. A delivery of such a written notice
(which notice shall specify the number of shares (or amount) of Company Common
Stock to be purchased by NWIP) by NWIP shall constitute a binding agreement of
NWIP to purchase, at the Offering Price (adjusted to reflect elimination of the
underwriters' discount) and otherwise on the terms specified in the Section 5.02
Notice, the number of shares (or amount) of Company Common Stock specified in
NWIP's written notice, provided that if the Offering Price is more than $1.00
greater than the High Offering Price, the Company shall immediately notify NWIP
and NWIP shall have 24 hours from receipt of such notice to revoke its election
and be released from its obligation to purchase shares pursuant to this Section
5.02. The Company shall have 180 days from the date of
the Section 5.02 Notice to consummate the proposed Company IPO, provided that if
NWIP elected to purchase less than NWIP's Percentage Ownership of the proposed
Company Common Stock issuance and if the Offering Price is more than $1.00 below
the Low Offering Price, the Company shall immediately notify NWIP and NWIP will
have 24 hours from receipt of such notice to elect whether to purchase its
Percentage Ownership of the Company Common Stock proposed to be issued pursuant
to the Company IPO at the lower Offering Price (adjusted to reflect elimination
of the underwriters' discount). At the consummation of such issuance, which will
be simultaneous with the closing of the Company IPO, the Company shall issue
certificates representing the Company Common Stock to be purchased by NWIP
registered in the name of NWIP, against payment by NWIP of the Offering Price
(adjusted to reflect elimination of the underwriters' discount) for such Company
Common Stock.
(b) "Offering Price" means the per share price for the Company Common
Stock to be sold in the Public Offering.
(c) If the Company proposes to offer Company Common Stock after such
180-day period, the Company shall comply with the procedures set forth in this
Section 5.02 before proceeding with the Company IPO.
Section 5.03. Speical NWIP Preemption of Registration Rights. (a)
If, prior to the later of (i) the completion of the Initial Required Build and
(ii) the fourth anniversary of the date of this Agreement, DLJMB requests a
Demand Registration pursuant to Section 6.01 or the Company authorizes a Company
IPO, the Company will notify NWIP at the same time that it notifies the other
Shareholders pursuant to Section 6.01 or 5.02, as the case may be, which notice
(the "Preemption Notice") will contain the Underwriters' Range and the other
material terms of the proposed offering, including but not limited to the number
of shares of Company Common Stock to be offered and the proposed offering date.
Upon receipt of the Preemption Notice, NWIP, in addition to its rights under
Section 5.02, will have the right (the "Preemption Right"), subject to Section
5.03(c), to purchase all (but not less than all) of the Company Common Stock
that (i) the Company proposes to offer in the case of a Company IPO or (ii) the
DLJ Entities and the High Yield Investors own as of the date hereof (assuming
conversion of the Series A Preferred) and propose to offer in the case of a
DLJMB Demand Registration pursuant to Section 6.01. Except as provided in this
Section 5.03, NWIP will not have any right, nor any obligation, to purchase any
shares of Company Common Stock that any other Shareholder proposes to register
in connection with the relevant Public Offering.
(b) If NWIP elects to exercise its Preemption Right and purchase the
relevant shares of Company Common Stock, it will notify the Company and
DLJMB, as the case may be (the "Offering Party") in writing (the "Preemption
Election Notice") within 15 days of receipt of the Preemption Notice. The
Preemption Election Notice will state, among other things, (i) the purchase
price to be paid by NWIP for the relevant shares of Company Common Stock, which
purchase price shall be the mid-point of the Underwriters Range and (ii) the
date such purchase will take place, such date not to be later than the proposed
offering date set forth in the Preemption Notice. If the Offering Party does not
receive a timely Preemption Election Notice, it may proceed with the relevant
offering, provided that if the Offering Price is more than $1.00 below the Low
Offering Price, the Company shall immediately notify NWIP and NWIP will have 24
hours from receipt of such notice to elect (by notifying the Company and the
relevant Offering Party) whether to exercise its Preemption Right at the Lower
Offering Price and provided further that if the Offering Party proposes to offer
Company Common Stock more than 90 days after receipt of the Preemption Election
Notice the Offering Party shall, subject to the first sentence of Section
5.03(a), comply again with the procedures set forth in this Section 5.03 (at the
lower Offering Price, if applicable) before proceeding with the offering.
(c) The first time that NWIP elects to exercise its Preemption Right
in connection with a proposed Company IPO, the Company shall have the right to
elect, by notice given to NWIP within 10 days after receipt of the applicable
Preemption Election Notice, to reduce the number of shares included in such
offering by up to 50% of the number of shares originally proposed to be offered.
For each subsequent Company IPO with respect to which NWIP elects to exercise
its Preemption Right, the Company may elect, by notice given to NWIP within 10
days after receipt of the applicable Preemption Election Notice, to reduce the
number of shares included in such offering by up to 75% of the number of shares
originally proposed to be offered, provided that the Company may elect, for one
(and only one) such subsequent Company IPO, to withdraw the Company IPO in its
entirety. If NWIP elects to exercise its Preemption Right in connection with a
proposed DLJMB Demand Registration, DLJMB shall have the right to elect, by
notice given to NWIP and the Company within 10 days after receipt of the
applicable Preemption Election Notice, to withdraw the demand in its entirety -
provided that DLJMB reimburses the Company for any out of pocket fees and
expenses incurred in connection with such proposed registration.
(d) A delivery of the Preemption Election Notice by NWIP shall
constitute a binding agreement of NWIP to purchase all the relevant shares of
Company Common Stock that the Offering Party proposes to offer. At any closing
of NWIP's purchase of all the relevant shares of Company Common Stock that the
Offering Party proposes to offer, NWIP shall deliver to the Offering Party the
purchase price (i) by wire transfer of immediately available funds to such bank
account as the Offering Party shall have specified in writing no later
than two Business Days prior to the closing or (ii) by delivery of Nextel Shares
as permitted by Section 7.05.
(e) If NWIP purchases Shares in accordance with its Preemption Right
with respect to a Qualifying DLJ Demand, the Non-Nextel Shareholders shall have
the rights set forth in Section 4.01.
ARTICLE
Registration Rights
Section 6.01. Demand Registration. (a) Subject to the provisions set
forth in Section 5.03 and this Section 6.01, if the Company shall receive a
written request by DLJMB (acting on behalf of the DLJ Entities collectively, the
"Selling Shareholder"), following the earlier to occur of (x) the 42 month
anniversary of the date hereof and (y) an Initial Public Offering, that the
Company effect the registration under the Securities Act of all or a portion of
such Selling Shareholder's shares of Company Common Stock (after conversion of
Preferred Stock into Company Common Stock) and specifying the intended method of
disposition thereof, then the Company shall promptly give written notice of such
requested registration (a "Demand Registration") at least 30 days prior to the
anticipated filing date of the registration statement relating to such Demand
Registration to the other Shareholders and thereupon will use its reasonable
best efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:
(i) the Registrable Securities which the Company has been so requested
to register by the Selling Shareholder, then held by the Selling
Shareholder; and
(ii) subject to the restrictions set forth in Section 6.02(b), all
other Registrable Securities which any other Shareholder entitled to
request the Company to effect an Incidental Registration (as such term is
defined in Section 6.02) pursuant to Section 6.02 (all such Shareholders,
together with the Selling Shareholder, the "Holders") has requested the
Company to register by written request received by the Company within 15
days after the receipt by such Holders of such written notice given by the
Company,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered.
Promptly after the expiration of the 15-day period referred to in
Section 6.01(a)(ii) hereof, the Company will notify all the Holders who have
requested that their Registrable Securities be included in the Demand
Registration of the other Holders and the number of Registrable Securities
requested to be included therein. The Selling Shareholder requesting a
registration under this Section 6.01 may, at any time prior to the effective
date of the registration statement relating to such registration, revoke such
request, without liability to any of the other Holders, by providing a written
notice to the Company revoking such request, in which case such request, so
revoked, shall be considered a Demand Registration unless such revocation arose
out of the fault of the Company or unless the Selling Shareholder reimburses the
Company for all costs incurred by the Company in connection with such
registration, in which case such request shall not be considered a Demand
Registration.
(b) In no event will the Company be required to effect more than one
Demand Registration within any six-month period. If a Company IPO or a Demand
Registration is preempted by NWIP pursuant to Section 5.03 or if the Company or
DLJMB elects to withdraw a registration pursuant to Section 5.03, neither DLJMB
nor the Company may initiate another Public Offering until 180 days after the
date NWIP elected to preempt the registration (or the date such Public Offering
is withdrawn by the Company or DLJMB under Section 5.03(c), if applicable).
(c) Subject to Section 6.01(e), the Company shall be obligated to
effect one Demand Registration for the Selling Shareholder prior to an Initial
Public Offering. After the Initial Public Offering, DLJMB shall be entitled to
(i) one Demand Registration, at the Company's expense, if the Registrable
Securities then owned by the Qualified DLJ Entities and initially issued to a
DLJ Entity by the Company represent at least 10% of the Fully Diluted Company
Common Stock, (ii) a second Demand Registration (at DLJMB's expense) if the
Registrable Securities then owned by the DLJ Entities (and issued to a DLJ
Entity by the Company) represent at least 5% of the Fully Diluted Company Common
Stock and (iii) a third Demand Registration (at DLJMB's expense) if the
Registrable Securities then owned by the DLJ Entities (and issued to a DLJ
Entity by the Company) represent at least 5% of the Fully Diluted Company Common
Stock; provided that the Company shall not be obligated to effect any Demand
Registration unless the aggregate proceeds expected to be received from the sale
of the Company Common Stock requested to be included in such Demand Registration
equal at least (x) $75,000,000, if such Demand Registration would
constitute an Initial Public Offering, or (y) $50,000,000 in any other Public
Offering.
(d) Except as set forth in 5.03(c) and 6.01(c), the Company will pay
all Registration Expenses in connection with any Demand Registration.
(e) A Demand Registration requested pursuant to this Section 6.01
shall not be deemed to have been effected (i) unless the registration statement
relating thereto (A) has become effective under the Securities Act and (B) has
remained effective for a period of at least 90 days (or such shorter period in
which all Registrable Securities of the Holders included in such registration
have actually been sold thereunder); provided that if after any registration
statement requested pursuant to this Section 6.01 becomes effective (x) such
registration statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court and (y)
less than 75% of the Registrable Securities included in such registration
statement have been sold thereunder (provided that the Holders shall have
exercised all commercially reasonable efforts to effect the sale thereof during
the period of effectiveness of such registration statement), such registration
statement shall not be considered a Demand Registration or (ii) if the Maximum
Offering Size (as defined below) is reduced in accordance with Section 6.01(f)
such that less than 66 2/3% of the Registrable Securities of the Selling
Shareholders sought to be included in such registration are included unless such
Selling Shareholder elects to proceed with registration and sale of such reduced
quantity of Registrable Securities.
(f) If a Demand Registration involves an Underwritten Public Offering
and the managing underwriter shall advise the Company and the Selling
Shareholders that, in its view, (i) the number of shares of Company Common Stock
requested to be included in such registration (including Company Common Stock
which the Company proposes to be included which are not Registrable Securities)
or (ii) the inclusion of some or all of the shares of Company Common Stock owned
by the Holders, in any such case, exceeds the largest number of shares which can
be sold without having an adverse effect on such offering, including the price
at which such shares can be sold (the "Maximum Offering Size"), the Company will
include in such registration, in the priority listed below, up to the Maximum
Offering Size:
(A) first, all Registrable Securities requested to be registered by
the Selling Shareholder (including any Registrable Securities requested to
be registered by the High Yield Investors) (allocated, if necessary for the
offering not to exceed the Maximum Offering Size pro rata among the DLJ
Entities and the High Yield
Investors on the basis of the relative number of Registrable Securities so
requested to be included in such registration);
(B) second, all Registrable Securities requested to be included in
such registration by any other Holder (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such other
Holders on the basis of the relative number of Registrable Securities so
requested to be included in such registration); and
(C) third, any Company Common Stock proposed to be registered by the
Company.
(g) Upon written notice to DLJMB, the Company may, as a matter of
right, postpone effecting a registration pursuant to this Section 6.01 on one
occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed except that it may be extended for an additional 30 days if
the request for registration is made during the first quarter of any fiscal
year).
(h) Notwithstanding anything in this Section to the contrary, upon
written notice to DLJMB, the Company may supersede a DLJMB Demand Registration
at any time prior to an Initial Public Offering by notifying DLJMB within 30
days of the Company's receipt of DLJMB's request for a Demand Registration that
the Company is initiating a Company IPO (a "Superseding IPO"). If the Company
initiates a Superseding IPO then, subject to the provisions of Sections 5.02 and
5.03, it must file its registration statement with the SEC not more than 90 days
after notifying DLJMB of its intent to initiate the Superseding IPO and use its
reasonable best efforts to have the registration statement declared effective as
soon as practicable thereafter. If the Superseding IPO is not declared effective
within 90 days of filing the registration statement with the SEC, DLJMB may
proceed with its Demand Registration.
(i) DLJMB's right to have the Company effect a Demand Registration
for DLJMB prior to the Initial Public Offering will terminate when the Qualified
DLJ Entities cease to own 80% of the Initial Ownership of the Qualified DLJ
Entities.
Section 6.02. Company Registration; Incidental Registration. (a)
Subject to the provisions of Sections 5.02 and 5.03, at such time as the Company
has (i) either completed the Initial Required Build or, if such condition has
not been satisfied, received the prior approval of NWIP (which approval will not
be unreasonably withheld, it being understood that withholding approval because
the
proceeds from the Company IPO will either be insufficient to allow the Company
to complete the Initial Required Build or will not be committed to completing
the Initial Required Build are among the reasonable bases for withholding
approval) or (ii) elected to supersede a Demand Registration pursuant to Section
6.01(h), the Company may initiate a Company IPO and register an offering of its
Company Common Stock under the Securities Act, provided that the Company IPO
will generate gross proceeds of no less than $75,000,000.
(b) If the Company proposes to register any of its Company Common
Stock under the Securities Act (other than a registration (x) on Form S-8 or S-4
or any successor or similar forms, (y) relating to securities issuable upon
exercise of employee stock options or in connection with any employee benefit or
similar plan of the Company or (z) in connection with a direct or indirect
merger, acquisition or other similar transaction), whether or not for sale for
its own account, it will each such time, subject to the provisions of Sections
6.02(c), give prompt written notice to each Shareholder at least 20 days prior
to the anticipated filing date of the registration statement relating to such
registration, which notice shall set forth such Shareholders' rights under this
Section 6.02 and shall offer all Shareholders the opportunity to include in such
registration statement such number of Registrable Securities as each such
Shareholder may request. Upon the written request of any such Shareholder made
within 10 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Shareholder), the Company will use all reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by such Shareholders, to the extent
requisite to permit the disposition of the Registrable Securities so to be
registered; provided that (i) if such registration involves an Underwritten
Public Offering, all such Shareholders requesting to be included in the
Company's registration must sell their Registrable Securities to the
underwriters selected as provided in Section 6.04(f) on the same terms and
conditions as apply to the Company or the Selling Shareholder, as applicable,
and (ii) if, at any time after giving written notice of its intention to
register any Company Common Stock pursuant to this Section 6.02(b) and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
Company Common Stock, the Company shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration. No registration
effected under this Section 6.02 shall relieve the Company of its obligations to
effect a Demand Registration to the extent required by Section 6.01. The Company
will pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 6.02.
(c) If a registration pursuant to this Section 6.02 involves an
Underwritten Public Offering (other than in the case of an Underwritten Public
Offering requested by any Shareholder in a Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 6.02(f) shall apply) and either (A) the Board (with good reason
relating to the success of the Offering) elects to preclude the DLJ Entities,
the Strategic Investors and/or the Management Shareholders from including shares
in the Company IPO or (B) the managing underwriter advises the Company in
writing that, in its view, the number of shares of Company Common Stock which
the Company and the selling Shareholders intend to include in such registration
exceeds the Maximum Offering Size, the Company will include in such
registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the Company Common Stock proposed to be
registered for the account of the Company as would not cause the offering
to exceed the Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be included in
such registration by any Shareholder pursuant to Section 6.02 (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such Shareholders on the basis of the relative number of shares
of Registrable Securities so requested to be included in such
registration).
Section 6.03. Holdback Agreements. With respect to each and every
Underwritten Public Offering: (a) each Shareholder agrees not to effect any
public sale or distribution, including any sale pursuant to Rule 144, or any
successor provision, under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other security of
the Company (in each case, other than as part of such Underwritten Public
Offering) during the 14 days prior to the effective date of the applicable
registration statement (except as part of such registration) or during the
period after such effective date that such managing underwriter and the Company
shall agree (but not to exceed 180 days or any such shorter period (but not less
than 90 days) as the managing underwriter may suggest).
(B) Each Shareholder agrees that, so long as the DLJ Entities have
the right to request one or more Demand Registrations under Section 6.01, such
Shareholder will not effect any public sale or distribution, including any sale
pursuant to Rule 144, or any successor provision, under the Securities Act, of
any Registrable Securities, or any such public sale or distribution of any other
security of the Company, from the date that the Shareholder is first notified of
the Company's intention to make a Public Offering (it being understood that, for
so long as DLJMB has the right to designate one or more members of the Board
pursuant to Section 2.01(a), a resolution of the Board authorizing the Company
to initiate a Public Offering shall constitute notice to the DLJ Entities of
such intention) through the date that is 90 days following completion of such
Public Offering, unless the underwriting group, not including Donaldson, Lufkin
& Jenrette, Inc. or any of its controlled Affiliates, permits such sales or
distributions to be made by the Shareholders during such 90 day period.
Section 6.04. Registration Procedures. Whenever Shareholders request
that any Registrable Securities be registered pursuant to Section 6.01 or 6.02
hereof, the Company will, subject to the provisions of such Sections, use all
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form selected by counsel for the
Company and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method of
distribution thereof, and use all reasonable efforts to cause such filed
registration statement to become and remain effective for a period of not less
than 90 days (or such shorter period in which all of the Registrable Securities
of the Shareholders included in such registration statement shall have actually
been sold thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Shareholder and each underwriter, if any, of the Registrable Securities covered
by such registration statement copies of such registration statement as proposed
to be filed, and thereafter the Company will furnish to such Shareholder and
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such Shareholder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Shareholder. Each Shareholder shall have the right to request that the Company
modify any information contained in such registration statement, amendment and
supplement thereto pertaining to such Shareholder and the Company shall use all
reasonable efforts to comply with such request, provided, however, that the
Company shall not have any obligation to so modify any information if so doing
would cause the prospectus to contain an 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 light of the circumstances under which they were
made) not misleading.
(c) After the filing of the registration statement, the Company will
promptly notify each Shareholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC or any
state securities commission under state blue sky laws and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use all reasonable efforts to (i) register or
qualify the Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions in the United
States as any Shareholder holding such Registrable Securities reasonably (in
light of such Shareholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(e) The Company will immediately notify each Shareholder holding such
Registrable Securities covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an 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 light of the
circumstances under which they were made) not misleading and promptly prepare
and make available to each such Shareholder and file with the SEC any such
supplement or amendment.
(f) The Board will pick the underwriter(s) of any and all registered
offerings of Company Common Stock, except that in connection with (i) any Demand
Registration requested by DLJMB or their Permitted Transferees, DLJMB and the
Company will agree on the lead underwriter or (ii) any registration for the
account of the Company, DLJMB has the right to veto one lead underwriter. Any
Affiliate of Donaldson, Lufkin & Jenrette, Inc. may be considered for selection
as underwriter for an Underwritten Public Offering. The Company will enter into
customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities, including the engagement of a "qualified independent underwriter" in
connection with the qualification of the underwriting arrangements with the
NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Company, the Company will make
available for inspection by any Shareholder and any underwriter participating in
any offering pursuant to a registration statement being filed by the Company
pursuant to this Section 6.04 and any attorney, accountant or other professional
retained by any such Shareholder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably requested by any such Person, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(h) The Company will furnish to each such Shareholder and to each
such underwriter, if any, a signed counterpart, addressed to such underwriter
and the participating Shareholders, of (i) an opinion or opinions of counsel to
the Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions or comfort letters, as the case may
be, as a majority in interest of such Shareholders or the managing underwriter
therefor reasonably requests.
(i) The Company will otherwise use all reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(j) The Company may require each such Shareholder (i) to promptly
furnish in writing to the Company information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request,
(ii) to provide such other information as may be legally required in connection
with such registration and (iii) to take such other acts as are reasonably
necessary under the circumstances.
(k) Each such Shareholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
6.04(e), such Shareholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Shareholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.04(e), and, if so directed by the
Company, such Shareholder will deliver to the Company all copies, other than any
permanent file copies then in such Shareholder's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective (including the period referred to in Section 6.04(a)), by the number
of days during the period from and including the date of the giving of notice
pursuant to Section 6.04(e) to the date when the Company shall make available to
such Shareholder a prospectus supplemented or amended to conform with the
requirements of Section 6.04(e).
Section 6.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Registrable Securities
covered by a registration statement, its officers, directors, employees,
partners and agents, and each Person, if any, who controls such Shareholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement, prospectus, offering
circular or other offering document relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or (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 (in the case of any
prospectus, in light of the circumstances under which they were made), except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission so made in
strict conformity with information furnished in writing to the Company by such
Shareholder or on such Shareholder's behalf expressly for use therein or (iii)
any violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company, or any blue sky or state
securities laws or any rule or regulation thereunder applicable to the Company;
provided that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, or in any prospectus,
as the case may be, the indemnity agreement contained in this paragraph shall
not apply to the extent that any such loss, claim, damage, liability or expense
results from the fact that a current copy of the prospectus (or, in the case of
a prospectus, the prospectus as amended or supplemented) was not sent or given
to the Person asserting any such loss, claim, damage, liability or expense at or
prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that the Company has provided such prospectus to such
Shareholder in a timely manner prior to such sale and it was the responsibility
of such Shareholder under the Securities Act to provide such Person with a
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The Company also agrees
to indemnify any underwriters of the Registrable Securities and each accountant,
attorney and other Person who participates in the offering of the Registrable
Securities on behalf of the Company or any selling shareholder, their officers
and directors and each person who controls such underwriters and other Persons
on substantially the same basis as that of the indemnification of the
Shareholders provided in this Section 6.05.
Section 6.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Shareholder, but only (i) with respect to
information furnished in writing by such Shareholder or on such Shareholder's
behalf expressly for use in any registration statement, prospectus, offering
circular or other document relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus or (ii) to the
extent that any loss, claim, damage, liability or expense described in Section
6.05 results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Shareholder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. Each such Shareholder shall be
prepared, if required by the underwriting agreement, to indemnify and hold
harmless any underwriters of the Registrable Securities and each accountant,
attorney and other Person who participates in the offering of the Registrable
Securities on behalf of the Company or any selling shareholder, their officers
and directors and each person who controls such underwriters and other Persons
on substantially the same basis as that of the indemnification of the Company
provided in this Section 6.06. As a condition to including Registrable
Securities
in any registration statement filed in accordance with Article 6, the Company
may require that it shall have received an undertaking reasonably satisfactory
to it from any underwriter to indemnify and hold it harmless to the extent
customarily provided by underwriters with respect to similar securities.
Section 6.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 6, such Person (an "Indemnified Party"), after the Indemnified
Party has actual notice of any proceeding as to which indemnity may be sought,
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party, and shall assume the payment of all fees and expenses;
provided that the failure of any Indemnified Party so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of its obligations hereunder
except to the extent that the Indemnifying Party is materially prejudiced by
such failure to notify. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any and all losses, claims, damages, liabilities and
expenses or liability (to the extent stated above) by reason of such settlement
or judgment. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such proceeding.
Section 6.08. Contribution. If the indemnification provided for in
this Article 6 is held by a court of competent jurisdiction to be unavailable to
the Indemnified Parties in respect of any losses, claims, damages, liabilities
or expenses referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses (i) as between the Company and the Shareholders holding
Registrable Securities covered by a registration statement and their related
Indemnified Parties on the one hand and the underwriters, other participating
Persons and their related Indemnified Parties on the other, in such proportion
as is appropriate to reflect the relative benefits received by the Company and
such Shareholders on the one hand and the underwriters and other participating
Persons on the other, from the offering of the Shareholders' Registrable
Securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and such Shareholders on the one hand and of
such underwriters and other participating Persons on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations
and (ii) as between the Company and their related Indemnified Parties on the one
hand and each such Shareholder and their related Indemnified Parties on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of each such Shareholder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Company and such Shareholders on the one hand and such
underwriters and other participating Persons on the other shall be deemed to be
in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and such Shareholders bear to the total underwriting discounts
and commissions received by such underwriters and fees received by other
participating Persons, in each case as set forth in the table on the cover page
of the prospectus. The relative fault of the Company and such Shareholders on
the one hand and of such underwriters and other participating Persons on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
and such Shareholders or by such underwriters and other participating Persons.
The relative fault of the Company on the one hand and of each such Shareholder
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 6.08 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6.08, no underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to Securities purchased by such underwriter in such offering, less
the aggregate amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Shareholder shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities of such Shareholder were offered to the public exceeds the amount of
any damages which such Shareholder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Each Shareholder's
obligation to contribute pursuant to this Section is several in the proportion
that the proceeds of the offering received by such Shareholder bears to the
total proceeds of the offering received by all such Shareholders and not joint.
Section 6.09. Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.
Section 6.10. Cooperation by the Company. In the event any
Shareholder shall transfer any Registrable Securities pursuant to Rule 144A
under the Securities Act, the Company shall cooperate, to the extent
commercially reasonable, with such Shareholder and shall provide to such
Shareholder such information as such Shareholder shall reasonably request,
provided such Shareholder shall pay any material expenses incurred by the
Company in connection with its cooperation.
Section 6.11. No Transfer of Registration Rights. None of the rights
of Shareholders under this Article 6 shall be assignable by any Shareholder to
any Person acquiring Securities in any Public Offering or pursuant to Rule 144A
of the Securities Act.
Section 6.12. Limitations on Subsequent Registration Rights. The
Company shall not enter into any agreement with any holder or prospective holder
of any securities of the Company that would allow such holder or prospective
holder to include such securities in any registration filed pursuant to Section
6.01 or 6.02, (a) unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of such securities would not reduce the amount of
the Registrable Securities of the Shareholders included therein or (b) on terms
otherwise more favorable to such holder or prospective holder than the
registration rights provided in this Agreement.
Section 6.13. Obligation to Register Nextel and NWIP Securities. In
connection with (i) any shareholder action required to be taken in connection
with the exercise of a Put Right under Section 4.01, (ii) any shareholder action
required to be taken in connection with Option B under Section 7.04(b), or (iii)
any Public Offering, if required by applicable law, NWIP will cause Nextel to
register the Put Rights, NWIP Call Right and/or Nextel Shares, as the case may
be (the "Nextel Securities"), on the appropriate registration form under the
Securities Act, and each of NWIP and Nextel will use its reasonable best efforts
to (A) comply with the Securities Act and the Securities Exchange Act of 1934
and all applicable rules and regulations thereunder, (B) register or qualify the
relevant securities under applicable blue sky laws and (C) comply with all other
laws applicable to the Nextel Securities. NWIP and Nextel will complete any such
registration of the Nextel Securities in a timely manner that permits the
Shareholders and/or the Company to comply with the relevant time periods set
forth in this Agreement and the Company will use its reasonable best efforts to
assist NWIP and Nextel in the completion of any such registration and, to the
extent any Shareholder has agreed to take any action or refrain from taking any
action hereunder in connection with a registration of the Company's Shares, such
Shareholder shall take such action or refrain from taking such action in
connection with a registration of Nextel Securities, provided that in no event
will such Shareholder be obligated to refrain from selling Nextel Shares upon
receipt of such Nextel Shares pursuant to this Agreement or the Joint Venture
Agreement. NWIP and Nextel will be responsible for paying promptly any
additional costs and expenses incurred by either of them or the Company in
connection with the registration of the Nextel Securities.
ARTICLE
Certain Covenants and Agreements
Section 7.01. Confidentiality. (a) Each Shareholder hereby agrees
that Confidential Information (as defined below) furnished and to be furnished
to it was and will be made available in connection with such Shareholder's
investment in the Company. Each Shareholder agrees that it will use the
Confidential Information only in connection with its investment in the Company
and not for any other purpose. Each Shareholder further acknowledges and agrees
that it will not disclose any Confidential Information to any Person; provided
that Confidential Information may be disclosed (i) to such Shareholder's
Representatives (as defined below) in the normal course of the performance of
their duties or to any financial institution providing credit to such
Shareholder, (ii) to the extent required by applicable law, rule or regulation
(including complying with any oral or written questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process to which a Shareholder is subject; provided that such
Shareholder gives the Company prompt notice of such request(s), to the extent
practicable, so that the Company may seek an appropriate protective order or
similar relief (and the Shareholder shall cooperate with such efforts by the
Company, and shall in any event make only the minimum disclosure required by
such law, rule or regulation)), (iii) to any Person to whom such Shareholder is
contemplating a transfer of its Shares (provided that such transfer would not be
in violation of the provisions of this Agreement and as long as such Third Party
is advised of the confidential nature of such information and agrees to be bound
by a confidentiality agreement in form and substance satisfactory to the Company
and consistent with the provisions hereof) or (iv) if the prior written consent
of the Board shall have been obtained. Nothing contained herein shall prevent
the use (subject, to the extent possible, to a protective order) of Confidential
Information in connection with the assertion or defense of any claim by or
against the Company or any Shareholder.
(b) "Confidential Information" means any information concerning the
Company and Persons which are or become its Subsidiaries or the financial
condition, business, operations or prospects of the Company and Persons which
are or become its Subsidiaries in the possession of or furnished to any
Shareholder (including, without limitation, by virtue of its present or former
right to designate a director of the Company); provided that the term
Confidential Information does not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by a
Shareholder or its partners, directors, officers, employees, agents, counsel,
investment advisers or representatives (all such persons being collectively
referred to as "Representatives") in violation of the Subscription Agreement or
this Agreement, (ii) is or was available to such
Shareholder on a nonconfidential basis prior to its disclosure to such
Shareholder or its Representatives by the Company or (iii) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Company, provided that such source is or was (at the time of receipt of
the relevant information) not, to the best of such Shareholder's knowledge,
bound by a confidentiality agreement with (or other confidentiality obligation
to) the Company or another Person.
Section 7.02. Reports. The Company will furnish each Shareholder
with the quarterly and annual financial reports that the Company is required to
file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act.
Section 7.03. Subsequent Deployment of Alternative Digital
Transmission Technology. If the NDS elect to deploy an alternative digital
transmission technology on its 800 MHZ SMR frequencies on a nationwide basis (a
"Technology Change") NWIP must notify the Company (a "Technology Change
Notice"). If such Technology Change results in the Company being unable to
provide its customers with nationwide service comparable to the service
available to such customers immediately prior to the Technology Change and the
Company notifies NWIP within 60 days of receipt of the Technology Change Notice
that the Technology Change is materially adverse to the Company, then NWIP will
have the option to either (i) provide the Company at no charge with replacement
equipment that is compatible with the Technology Change together with the
resources necessary to install such equipment so that the Company remains in the
same operational position that it was in prior to the Technology Change or
(ii) purchase all of the Company Capital Stock at a purchase price equal to (A)
if the Technology Change is implemented prior to the Initial Public Offering,
the greater of Fair Market Value (determined as if neither the Company nor the
NDS needed to implement the Technology Change and without diminishing the value
of the Company due to the fact that the Technology Change had not been
implemented) or Investment Formula Price or (B) if the Technology Change is
implemented after the Initial Public Offering, the Fair Market Value (determined
as if neither the Company nor the NDS needed to implement the Technology Change
and without diminishing the value of the Company due to the fact that the
Technology Change had not been implemented). NWIP must notify the Company of its
election within 60 days of receipt of notice from the Company and, if NWIP
elects to purchase all the Company Capital Stock, such purchase must be
consummated within 90 days of its election or as otherwise permitted by Section
7.05, subject to all third party consents and the receipt of customary
representations and warranties (it being understood that in no event shall a
Shareholder be obligated to make any representations and warranties, or to
provide any indemnities, other than title to the Company Capital Stock held by
such Person, such title being free and clear of all liens and encumbrances, and
such Person's authority, authorization and right to enter into and consummate
the sale without contravention of any law or agreement, and without the need for
any governmental or other approval with respect to its Shares).
Section 7.04. Limitations on Subsequent Changes to Company's
Operations. (a) If at any time, and from time to time, after the date hereof,
NWIP requires the Company to implement a change in the Company's business,
operations or systems (including, without limitation, changes to the Service
Pricing Structure or the Required Services or changes relating to Improvements)
under the Joint Venture Agreement (each such change, a "Nextel Required
Upgrade") and the Company determines that it can not implement it without
causing either (i) the offering of wireless communications services in the
Territory by the Company and its Affiliates to be materially more costly or
difficult to manage than the NDS's offering of wireless communication services
in Comparable Service Areas (as defined in the Joint Venture Agreement), or (ii)
a payment or other material default under the Company's material debt
instruments or any other material adverse financial effect on the Company and
its Subsidiaries, taken as a whole, the Company may elect not to implement the
Nextel Required Upgrade by notifying NWIP of its determination prior to the date
the Company is required to implement such Nextel Required Upgrade (the "Adverse
Impact Notice"). The Adverse Impact Notice shall provide (x) a brief summary of
the problems and/or costs the Company would expect to encounter in implementing
the Nextel Required Upgrade and (y) a dollar estimate of the adverse financial
impact to the Company of such implementation. Within 30 days of providing NWIP
with the Adverse Impact Notice, the Company shall prepare and deliver to NWIP a
profit and loss analysis of the Nextel Required Upgrade (the "Nextel Required
Upgrade Analysis") which analysis shall provide a summary of (A) the benefits
and burdens of implementing the Nextel Required Upgrade and any Nextel Required
Upgrade previously implemented, (B) the expected profits and losses to the
Company if the Nextel Required Upgrade is implemented, (C) any prior changes
implemented by the Company at the Nextel Group's request and (D) reasonable
supporting detail for all of the foregoing. The Company will supplement such
analysis and provide additional detail as NWIP shall reasonably request.
(b) Within 30 days of receipt of the Nextel Required Upgrade
Analysis, NWIP will notify the Company that the Company (i) will not have to
implement the Nextel Required Upgrade, (ii) will be required to implement some
or all of the Nextel Required Upgrade and will be subsidized by NWIP in
accordance with paragraph 7.04(g), or (iii) will be required to implement some
or all of the Nextel Required Upgrade and will not be subsidized by NWIP (the
"Nextel Determination"). The Nextel Determination shall be final and binding on
the Company unless NWIP elects alternative (iii), in which case the Board may
choose to (A) implement the Nextel Required Upgrade without a subsidy ("Option
A"), (B) allow the Non-Nextel Shareholders to elect whether to (x) sell all
their Company Capital Stock to Nextel at the Investment Formula Price in
accordance with Section 4.01 or (y) cause the Company to implement the Nextel
Required Upgrade without a subsidy ("Option B"), or (C) request arbitration to
determine the subsidy NWIP shall be required to pay in connection with the
implementation of the Nextel Required Upgrade ("Option C").
(c) In the event that the Board, by written notice to NWIP within 10
days of receipt of the Nextel Determination, causes the Company to elect Option
C, then the provisions of Section 12.7 of the Joint Venture Agreement shall
apply and after the arbitrators present their findings, the Company, by written
notice to NWIP within 10 days of receipt of the arbitrators determination shall
choose either Option A or Option B or elect to implement the Nextel Required
Upgrade and receive the subsidy as determined by the arbitrators ("Option D").
(d) In the event that the Board elects Option D, NWIP by written
notice to the Company within 10 days of receipt of the Company's election under
Section 7.04(c), shall: (i) inform the Company that it does not need to
implement the Nextel Required Upgrade; (ii) abide by the arbitration and pay the
subsidy; or (iii) determine the Fair Market Value of the Company generally in
accordance with Section 4.03, in which case, after such determination, it may
elect to proceed with option (d)(i) or (d)(ii) above or it may elect to purchase
all of the Company Capital Stock (other than the Series B Preferred) at a
purchase price equal to the higher of (A) the Investment Formula Price or (B)
the Fair Market Value and otherwise generally in accordance with Section 4.01.
(e) If NWIP elects to exercise its call option under Section 7.04(d)
(iii) then the Company, by written notice to NWIP within 10 days of receipt of
NWIP's election, may elect to cancel such call by electing to implement the
change without the receipt of any subsidy from NWIP.
(f) In the event that any expenditure of funds and/or incurrence of
debt by the Company is required to implement a Nextel Required Upgrade, and such
expenditure or incurrence would result in an Applicable Default or Event of
Default under any material debt document to which the Company is a party (a
"Default Outcome"), then the Company and NWIP shall negotiate in good faith to
develop or identify alternative measures or procedures to (i) implement such
Nextel Required Upgrade, (ii) fund such expenditure, or (iii) substitute for the
incurrence of such debt such that the outcome would not result in such a Default
Outcome, and shall (assuming alternative measures or procedures are identified
that are reasonably acceptable to each of the Company and NWIP) cooperate to
implement the Nextel Required Upgrade as promptly as practicable. Without
limiting the generality of the foregoing, the Company shall be required
to implement a Required Service through any alternative measure or procedure
suggested by NWIP so long as such measures or procedures do not involve actions
or conditions that are reasonably likely to result in a Default Outcome and
either (A) will not result in net losses to the Company, or (B) NWIP agrees to
subsidize any such net losses. Except as provided above, if implementation of a
Nextel Required Upgrade would result in a Default Outcome, the Company shall not
be required to implement such Nextel Required Upgrade. As used herein with
respect to a Nextel Required Upgrade, an "Applicable Default or Event of
Default" means any material default or event of default under any material debt
document to which the Company is a party, other than any default or event of
default under a Disqualified Provision of any such debt document. As used herein
with respect to a Nextel Required Upgrade, "Disqualified Provision" means any
provision (i) entered into by the Company within the 12-month period preceding
the date that NWIP notifies the Company that it is required to implement a
Nextel Required Upgrade (except a provision that the Company had become legally
obligated to enter into prior to such 12-month period) and (ii) if the Company
has notified NWIP of such provision, as to which NWIP has within 15 days
thereafter advised the Company in reasonable detail of the nature of such
pending or potential Nextel Required Upgrade and that NWIP believes in good
faith such provision could result in a payment or other material default or
event of default thereunder if such operational changes or upgrades occur,
provided that a provision shall not be a Disqualified Provision if a payment or
other material default or event of default under such debt document would have
resulted even if such provision had not been entered into.
(g) If NWIP is required to pay a subsidy pursuant to this Section
7.04, then the Company and NWIP shall negotiate in good faith to determine when
NWIP shall make such subsidy payments to the Company, with the first such
payment to be made no later than the date on which the Company has implemented
the Nextel Required Upgrade. The Company and NWIP agree that any subsidy paid by
NWIP to the Company will be subject to adjustment such that the subsidy will not
exceed the least of (i) the Company's anticipated aggregate net losses set forth
in the Nextel Required Upgrade Analysis, (ii) the Company's actual net losses
associated with such Nextel Required Upgrade through the date of the subsidy
payment, (iii) the anticipated cumulative losses for all Nextel Required
Upgrades net of all cumulative anticipated profits for all Nextel Required
Upgrades since the date hereof as set forth in the most recent Nextel Required
Upgrade Analysis, or (iv) the actual cumulative losses for all Nextel Required
Upgrades net of all actual cumulative profits for all Nextel Required Upgrades
from the date hereof through the date of the subsidy payment.
(h) For purposes of this Section 7.04, the following terms shall have
the following meanings:
"Improvements" means any changes, modifications, upgrades or
enhancements to the iDEN technology or any other Nextel or NDS network
components.
"Required Services" means the Nextel and/or NDS products, services and
capabilities identified on Exhibit 6.1 to the Joint Venture Agreement.
"Service Pricing Structure" means the Nextel pricing structure
described in Exhibit 9.1A to the Joint Venture Agreement.
Section 7.05. Delivery of Nextel Stock. (a) Any payment for Company
Capital Stock purchased by NWIP from the Company or the Shareholders pursuant to
Section 4.01, 4.02, 4.04, 5.01, 5.02, 5.03, 7.03 or 7.04 may be made at NWIP's
election, by delivery of listed Nextel common stock (the "Nextel Shares"),
provided that (i) NWIP delivers such Nextel Shares within 180 days of the date
of closing for the purchase of such Company Capital Stock (the "Purchase Date"),
and (ii) NWIP (and Nextel with respect to Section 7.05(d) only) agree to comply
with the requirements set forth in this Section 7.05. Notwithstanding the
immediately preceding sentence, if NWIP is (i) preempting a Company IPO pursuant
to Section 5.03, the consideration paid by NWIP for the relevant securities
shall be cash unless provisions in Nextel's agreements for borrowed money
restrict Nextel's or NWIP's ability to pay cash, in which case NWIP shall pay
the applicable purchase price in cash to the extent permitted under such
agreements and deliver (within 90 days of the date of the proposed Company IPO)
an amount of Nextel Shares equivalent (in value) to the difference between the
amount of cash Nextel is permitted to pay under such agreements and the purchase
price of the securities or (ii) exercising its rights under Section 5.01 or
5.02, the consideration paid by NWIP for the relevant securities shall be cash
or an amount of Nextel Shares equivalent (in value) to the purchase price, which
shares shall be delivered on the Purchase Date. Notwithstanding the two
preceding sentences, if NWIP elects to deliver Nextel Shares, which election
NWIP may change at any time prior to the delivery of such shares, NWIP will use
its reasonable best efforts to deliver Nextel Shares to the Company or the
Shareholders as promptly as practicable, provided that (x) if NWIP fails to
deliver the Nextel Shares or cash within 60 days of the Purchase Date, it shall
pay interest on the purchase price at a rate of 10% per annum from the Purchase
Date and (y) if NWIP fails to deliver Nextel Shares in accordance with this
Section 7.05, NWIP shall deliver cash no later than the last day of such
relevant time period.
(b) If NWIP delivers Nextel Shares, in lieu of cash, pursuant to
Section 7.05(a), NWIP shall use its reasonable best efforts to assist each
Person receiving such Nextel Shares in converting such Nextel Shares to cash
within 30 days of delivery of the Nextel Shares. In the event that Nextel Shares
are delivered to the Company in connection with NWIP's preemption of a Company
IPO, NWIP and the Company shall each use their reasonable best efforts to
convert promptly such Nextel Shares into cash. If such Nextel Shares are not
converted into cash within 30 days of their delivery to the Company, NWIP shall
immediately pay the required amount in cash.
(c) NWIP shall not be deemed to have delivered Nextel Shares or to
have discharged its payment obligations under this Agreement unless, at the time
of delivery of such Nextel Shares, (i) NWIP delivers to the Board and the
selling Shareholders a SEC "no action" letter or an opinion of counsel
reasonably acceptable to the Board (excluding the NWIP Designee) that provides
that, assuming that the Shareholder receiving the Nextel Shares is not an
Affiliate of Nextel, the shares to be received by that Shareholder can be freely
sold without complying with the registration requirements of the Securities Act
or (ii) the SEC has declared effective a registration statement on the
appropriate form, Nextel has caused such shares to be quoted on the NASDAQ
National Market and the recipients shall have a continuous period of 60 days
from the date of delivery to sell such shares under such registration statement.
(d) In connection with a registration pursuant to the immediately
preceding clause (c)(ii), (A) Nextel will (x) be responsible for promptly paying
all registration expenses that are substantially similar to the Registration
Expenses that will be paid by the Company pursuant to the terms of this
Agreement, (y) indemnify the relevant Shareholders on terms substantially
similar to those set forth in Sections 6.05, 6.07 and 6.08 and (z) comply with
registration procedures substantially similar to those set forth in Sections
6.04, 6.09 and 6.10 and (B) the Shareholders will indemnify Nextel on terms
substantially similar to those set forth in Sections 6.06, 6.07 and 6.08 and, if
applicable, cooperate to effect the registration on terms substantially similar
to those applicable to Shareholders as set forth in Section 6.04.
(e) For purposes of any payment by NWIP in Nextel Shares, the value
of Nextel common stock will be based on the average Closing Price of Nextel
common stock for the ten Trading Days immediately preceding the date of delivery
of the Nextel Shares. If NWIP elects to consummate a transaction with Nextel
Shares instead of cash, NWIP will take all reasonable steps requested by the
Board (with any NWIP Designee abstaining) to permit the purchase to be tax
deferred to the relevant Shareholders.
Section 7.06 Senior Management Resignation. If either John Chapple
or John Thompson provides notice that he is resigning for Good Reason pursuant
to clause (v) of the definition of "Good Reason" as defined in their employment
agreements with the Company, within 45 days of such notice, prior to the closing
of a Section 3.08 Sale NWIP will have an obligation to replace such executive
with an executive approved by DLJMB (which approval will not be unreasonably
withheld). If NWIP is unable to complete such replacement within such 45-day
period, the Board will be responsible for replacing such executives. In any such
event, NWIP will be responsible for cash compensation (including, without
limitation, any bonus payments other than "signing" bonus consideration) and any
benefit programs for such replacement executives and NWIP will be responsible
for the cost of equity incentives (or "signing" bonus consideration) needed to
attract such replacement executives.
ARTICLE
Miscellaneous
Section 8.01. Entire Agreement. This Agreement and the Transaction
Documents constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede all prior and contemporaneous
agreements and understandings, both oral and written (including without
limitation the Memorandum of Agreement, dated as of May 1, 1998, among Wireless
Investment Partners, L.L.C., NWIP and Nextel, the letter agreement, dated August
13, 1998, among DLJMB, DLJ Capital Corp., Nextel, the Company and Eagle River
and the letter agreement dated December 4, 1998, among DLJMB, DLJ Capital Corp.,
Nextel, the Company, Eagle River, MDP and Motorola) between the parties with
respect to the subject matter hereof and thereof.
Section 8.02. Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto and the Indemnified Parties, and their respective heirs,
successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 8.03. Assignability. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Shareholder, except in connection with a
transfer of shares of Company Common Stock pursuant to the terms hereof. Any
Person acquiring shares of Company Capital Stock who is required by the terms of
this Agreement to agree in writing to be bound by the terms of this Agreement
shall execute and deliver to the Company an agreement to be bound by this
Agreement and shall thenceforth be a "Shareholder".
Section 8.04. Amendment; Waiver; Termination. (a) No provision of
this Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this Agreement
may be amended or otherwise modified except by an instrument in writing executed
by the Company with approval of the Board and holders of at least 75% of the
shares of Voting Stock held by the Shareholders at the time of such proposed
amendment or modification.
(b) In addition, any amendment or modification of any provision of
this Agreement that would have a materially disproportionate adverse effect on
one Shareholder as opposed to another Shareholder may be effected only with the
consent of such effected Shareholder. Without limiting the generality of the
foregoing, neither clause (ii) of the definition of Permitted Transferee nor
Sections 4.01(g), 4.02(d), 4.04 or 8.12(b) shall be amended or otherwise
modified without the consent of holders of at least 50% of the Fully Diluted
Common Stock then held by the Management Shareholders.
(c) This Agreement shall terminate on the fifteenth anniversary of
the date hereof unless earlier terminated. Notwithstanding the preceding
sentence, Sections 7.01, 7.03, 7.04 and 7.05 shall survive until the Joint
Venture Agreement is terminated.
Section 8.05. Notices. All notices and other communications given or
made pursuant hereto or pursuant to any other agreement among the parties,
unless otherwise specified, shall be in writing and shall be deemed to have been
duly given and received when sent by fax (with confirmation in writing via first
class U.S. mail) or delivered personally or on the third Business Day after
being sent by registered or certified U.S. mail (postage prepaid, return receipt
requested) to the parties at the fax number or address set forth below or at
such other addresses as shall be furnished by the parties by like notice:
if to the Company, to:
Nextel Partners, Inc.
4500 Carillon Point
Kirkland, WA 98033
Fax: (425) 828-8098
Attention: General Counsel
with a copy to:
Friedman Kaplan & Seiler LLP
875 Third Avenue, 8th Floor
New York, NY 10022
Fax: (212) 355-6401
Attention: Gary D. Friedman
and to DLJ Entities as set forth below and each other Shareholder
at its address set forth on the signature pages attached hereto
if to DLJ Entities, to:
DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
with a copy to:
Madison Dearborn Capital
Partners II, L.P.
3 First National Plaza
Suite 3800
Chicago, Illinois 60602
Fax: 312-895-1226
and to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
Attention: John Buttrick
Any Person (other than a DLJ Entity) who becomes a Shareholder shall provide its
address and fax number to the Company, which shall promptly provide such
information to each other Shareholder.
Section 8.06. Fees and Expenses. (a) The Company shall pay the
following out-of-pocket costs and expenses of Nextel, Eagle River and DLJMB; (i)
Pre-Closing Expenditures incurred by Eagle River, the amount of which will be
estimated and provided to the Company, DLJMB and Eagle River at least ten days
prior to Closing and will be subject to post-closing adjustment and
reconciliation as set forth in Section 8.06(c), and (ii) the reasonable fees and
expenses of counsel for Nextel, Eagle River and DLJMB, incurred through the
Closing Date in connection with the preparation of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby.
(b) Except for the Company's obligation to pay the fees and expenses
set forth in Section 8.06(a) and Registration Expenses as provided herein, and
except as otherwise expressly provided in any of the other Transaction
Documents, all other attorneys' fees and expenses incurred by any Shareholder(s)
in connection with this Agreement and the other Transaction Documents shall be
paid by such Shareholder(s).
(c) The Company shall reimburse NWIP and Eagle River for Pre-Closing
Expenditures set forth in detailed written estimate provided to the Company,
DLJMB and each other Shareholder at least ten days prior to Closing. Within 60
days after the date hereof, representatives of the Company shall meet with
representatives of NWIP and Eagle River to adjust such estimates and to agree on
the amount of any additional reimbursement by (or refund to) the Company. Any
dispute that arises as a result of such discussions shall be submitted to
arbitration in accordance with the dispute resolution procedures set forth in
Section 12.7 of the Joint Venture Agreement. "Pre-Closing Expenditures" means
capital expenditures and operating expenses made and incurred by Nextel (and its
Affiliates) and Eagle River prior to the date hereof for assets, properties,
rights or services (other than the capital expenditures and operating expenses
paid for or reimbursed pursuant to the Asset Transfer Agreement) in order to
facilitate the construction of the Company's ESMR Network (as defined in the
Joint Venture Agreement) in the Territory.
Section 8.07. Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
Section 8.08. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
Section 8.09. Applicable Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to the conflicts of laws rules of such state.
Section 8.10. Specific Enforcement. Each party hereto acknowledges
that the remedies at law of the other parties for a breach or threatened breach
of this Agreement would be inadequate and, in recognition of this fact, any
party to this Agreement, without posting any bond, and in addition to all other
remedies which may be available, shall be entitled to obtain equitable relief in
the form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.
Section 8.11. Limitations on Damages. Each party hereto acknowledges
that no party is entitled to seek or recover consequential, punitive or
exemplary damages in respect of this Agreement under any circumstances or for
any reason. Consequential damages are, without limitation, lost profits, lost
revenue and the like but do not include the actual costs incurred in obtaining
substitute performance where there has been a failure to perform an obligation
under an agreement.
Section 8.12. Consent to Jurisdiction; Expenses. (a) Any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby (other than any matter arising under Section 7.03 or 7.04,
which shall be conducted in accordance with the dispute resolution procedures
set forth in Section 12.7 of the Joint Venture Agreement) shall be brought in
any Federal Court sitting in New York, New York, or any New York State court
sitting in New York, New York, and each of the parties hereby consents to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding which is brought in any
such court has been brought in an inconvenient form. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party by any method
provided in Section 8.05 shall be deemed effective service of process on such
party and consents to the personal
jurisdiction of any Federal Court sitting in New York, New York, or any New York
State court sitting in New York, New York.
(b) In any dispute arising under this Agreement (other than any
matter arising under Section 7.03 or 7.04, which shall be conducted in
accordance with the dispute resolution procedures set forth in Section 12.7 of
the Joint Venture Agreement) among any of the parties hereto, the costs and
expenses (including, without limitation, the reasonable fees and expenses of
counsel) incurred by the prevailing party shall be paid by the party that does
not prevail. In the event of any conflict between the provisions of the
preceding sentence and the corresponding provisions of the Restricted Stock
Purchase Agreements or the employment agreements between the Company and each of
the Management Shareholders and the provisions of those agreements, with respect
to any dispute involving one or more of the Management Shareholders, the
provisions of the Restricted Stock Purchase Agreements or the employment
agreements, as the case may be, shall prevail.
Section 8.13. Severability. If one or more provisions of this
Agreement are held to be unenforceable to any extent under applicable law, such
provision shall be interpreted as if it were written so as to be enforceable to
the maximum possible extent so as to effectuate the parties' intent to the
maximum possible extent, and the balance of the Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in accordance
with its terms to the maximum extent permitted by law.
Section 8.14. Amendments to Laws. Any reference to a section, form,
rule or regulation of the Securities Act or Exchange Act, any reference to a law
promulgated by any state or pursuant to which the FCC may exercise rule making
authority, and any reference to any rule or regulation promulgated by the FCC,
includes any successor section, form, rule, regulation or law.
Section 8.15. Acknowledgment of Limits on Nextel's Liability. Each
party hereto acknowledges that the maximum cumulative, aggregate monetary
liability of Nextel for any and all actual or alleged claims or causes of action
that arise, result from or are in any way connected with the matters provided
for or contemplated in this Agreement is limited as provided in the Nextel
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
NEXTEL PARTNERS, INC., a Delaware
corporation
By: s/John Chapple
Name: John Chapple
Title: President and Chief
Executive Officer
NEXTEL WIP CORP., a Delaware
corporation
By: s/Thomas J. Sidman
Name: Thomas J. Sidman
Title: President
Address: 1505 Farm Credit Drive
McLean, VA 22102
Attn: General Counsel
Fax: 703-394-3496
With a copy of notice to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn: Jeanne Rickert
Fax: 216-579-0212
DLJ MERCHANT BANKING PARTNERS
II, L.P., a Delaware Limited
Partnership
By: DLJ Merchant Banking II, Inc., as
managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
with a copy of notice to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attn: John Buttrick
Fax: 212-450-5426
DLJ MERCHANT BANKING PARTNERS II-A,
L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc., as
managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ OFFSHORE PARTNERS II, C.V., a
Netherlands Antilles Limited Partnership
By: DLJ Merchant Banking II, Inc., as
advisory general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ DIVERSIFIED PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc., as
managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ DIVERSIFIED PARTNERS-A, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc.,
as managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ MILLENNIUM PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc., as
managing general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJMB FUNDING II, INC., a Delaware
corporation
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ FIRST ESC, L.P.,
By: DLJ LBO Plans Management
Corporation, as manager
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management
Corporation, as managing general
partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation, as manager
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
UK INVESTMENT PLAN 1997 PARTNERS, a
Delaware Limited Partnership
By: UK Investment Plan 1997 Partners,
Inc. as general partner
By: s/Ivy Dodes
Name: Ivy Dodes
Title: Vice President
Address: c/o DLJ Merchant Banking
II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
MADISON DEARBORN CAPITAL PARTNERS II,
L.P.
By: Madison Dearborn Partners II, L.P.,
its General Partner
By: Madison Dearborn Partners, Inc.,
its General Partner
By: s/David F. Mosher
Name: David F. Mosher
Title: Managing Director
Address: 3 First National Plaza
Suite 3800
Chicago, Illinois 60602
Fax: 312-895-1226
EAGLE RIVER INVESTMENTS, LLC,
a Washington limited liability
company
By: s/C. James Judson
Name: C. James Judson
Title: Vice President
Address: 2300 Carillon Point
Kirkland, WA 98033-7353
Fax: 425-828-8061
MOTOROLA, INC., a Delaware corporation
By: s/Dan Coombes
Name: Dan Coombes
Title: Senior Vice President and
General Manager Network
Systems Group
Address: 1303 E. Algonquin Road
Schaumberg, Illinois 60196
Attn.: General Counsel
Fax: (847) 576-3628
CASCADE INVESTMENTS, L.L.C.
By: s/Michael Larson
Name: Michael Larson
Title: Business Manager
Address: 2365 Carillon Point
Kirkland, Washington 98033
Attention: Michael Larson
Fax: 425-889-0288
MADRONA INVESTMENT GROUP, L.L.C.
By: s/Tom A. Alberg
Name: Tom A. Alberg
Title: Principal
Address: 1000 Second Avenue
Suite 3700
Seattle, Washington 98014
Attention: Tom Alberg
Fax: 206-674-3010
AMPERSAND HOLDINGS, L.L.C.
By: s/Gregory J. Parker
Name: Gregory J. Parker
Title: President
Address: 1301 Santa Barbara Street
Santa Barbara, California
93101
Attention: Gregory Parker
Fax: 805-963-7801
STEVE HOOPER
s/Steve Hooper
Address: 4001 Hunts Point Road
Bellevue, Washington 98004
Fax: 425-462-9891
ARTHUR HARRIGAN
s/Arthur Harrigan
Address: 2300 Carillon Point
Kirkland, Washington
Fax: 425-828-8061
JOHN CHAPPLE
s/John Chapple
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
PERRY SATTERLEE
s/Perry Satterlee
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
MARK FANNING
s/Mark Fanning
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
JOHN THOMPSON
s/John Thompson
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
DAVID THALER
s/David Thaler
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
DAVID AAS
s/David Aas
Address: 4500 Carillon Point
Kirkland, Washington 98033
Fax: 425-828-8098
GENERAL ELECTRIC CAPITAL CORPORATION
By: s/Molly S. Ferguson
Name: Molly S. Ferguson
Title: Manager, Operations
Address: c/o GE Capital Services
Structured Finance
Group, Inc.
120 Long Ridge Road
Stamford, CT 06927
Attention: Portfolio-
Operations
Fax: 203-961-2017
NMS CAPITAL, L.P.
By: NMS Capital Management, LLC,
the sole General Partner
By: s/Paul S. Lattanzio
Name: Paul S. Lattanzio
Title: Member
Address: 9 West 57th Street
48th Floor
New York, NY 10019
Attn: Paul S. Lattanzio
Fax: 212-583-8273
ARES LEVERAGED INVESTMENT FUND, L.P.
By: ARES Management, L.P.
By: ARES Operating Member, LLC,
its General Partner
By: s/Jeffrey Serot
Name: Jeffrey Serot
Title: Vice President
Address: 1999 Avenue of the Stars
Suite 1900
Los Angeles, CA 90067
Fax: 310-201-4170
ARES LEVERAGED INVESTMENT FUND II, L.P.
By: ARES Management II, L.P.
By: ARES Operating Member II, LLC,
its General Partner
By: s/Jeffrey Serot
Name: Jeffrey Serot
Title: Vice President
Address: 1999 Avenue of the Stars
Suite 1900
Los Angeles, CA 90067
Fax: 310-201-4170
THE HUFF ALTERNATIVE INCOME FUND, L.P.
By: s/Donna B. Charlton
Name: Donna B. Charlton
Title: President of General
Manager
Address: 1776 On the Green
67 Park Place
Morristown, NJ 07960
Fax: 973-984-5818
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/CRESCENT MEZZANINE II, L.P.,
its general partner or managing
owner
By: TCW/CRESCENT MEZZANINE, L.L.C.,
its general partner
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as Investment Advisor
By: s/Robert D. Beyer
Name: Robert D. Beyer
Title: Group Managing Director
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967
SHARED OPPORTUNITY FUND IIB, LLC
By: TCW ASSET MANAGEMENT COMPANY,
as Investment Advisor
By: s/Robert D. Beyer
Name: Robert D. Beyer
Title: Group Managing Director
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: s/Robert D. Beyer
Name: Robert D. Beyer
Title: Group Managing Director
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (LINC II), L.P., as General
Partner
By: TCW ADVISORS (BERMUDA), LTD.,
as General Partner
By: s/Robert D. Beyer
Name: Robert D. Beyer
Title: Group Managing Director
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW (BERMUDA), LIMITED, as General
Partner
By: s/Robert D. Beyer
Name: Robert D. Beyer
Title: Group Managing Director
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By: s/John C. Rocchio
Name: John C. Rocchio
Title: Managing Director
Address: 11100 Santa Monica Blvd.,
Suite 2000
Los Angeles, CA 90025
Fax: 310-235-5967