EXHIBIT 10.1
NEXTBAND INTERESTS PURCHASE AGREEMENT
This NEXTBAND Interests Purchase Agreement (this "Agreement") is made and
entered into as of March 31, 1999 between Nextel Spectrum Acquisition Corp., a
Delaware corporation ("NSAC") and NEXTLINK Communications, Inc., a Delaware
corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, NSAC wishes to sell, and Purchaser wishes to purchase, subject to
the terms and conditions set forth herein, NSAC's interests in NEXTBAND
Communications, L.L.C.;
WHEREAS, the NSAC and Purchaser intend to enter into a Registration Rights
Agreement in the form attached hereto as Exhibit A (the "Registration Rights
Agreement", and together with this Agreement, the "Agreements"); and
WHEREAS, NSAC and Purchaser desire to make certain agreements in connection
with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I.
PURCHASE AND SALE OF INTERESTS
1.1. AUTHORIZATION OF SALE. NSAC has authorized the sale to Purchaser, and
Purchaser has authorized the purchase from NSAC, of all of NSAC's membership
interest (the "Interests") in NEXTBAND Communications, L.L.C, a Washington
limited liability company ("NEXTBAND"), which constitute 50% of the
outstanding membership interests.
1.2. PURCHASE AND SALE OF INTERESTS. Subject to the terms and conditions
set forth in this Agreement and in reliance upon NSAC's and Purchaser's
representations set forth below, on the Closing Date (as defined below) NSAC
shall sell to Purchaser, and Purchaser shall purchase from NSAC, the Interests
for (i) $68,850,000 in cash plus an amount equal to 25% of the net proceeds (the
"25% Offering Proceeds"), if any, received by Purchaser in the initial
underwritten offering conducted pursuant to the terms of that certain
Registration Rights Agreement (the "WNP RRA") between Purchaser and certain
stockholders of WNP Communications, Inc., dated January 14, 1999 (the "WNP
Initial Offering") (the "Monetary Purchase Price") plus (ii) an additional
$68,850,000 less the 25% Offering Proceeds, if any, to be payable, at
Purchaser's election, either in (A) cash, (B) shares of Purchaser's Class A
Common Stock, par value $.02 per share ("Purchaser Common Stock") or (C) any
combination of cash and shares of Purchaser Common Stock (the "Remaining
Purchase Price"). Such sale and purchase
shall be effected on the Closing Date by NSAC executing and delivering to
Purchaser an Assignment of Interests in the form attached hereto as Exhibit B
against payment or delivery as appropriate, by Purchaser to NSAC of the Monetary
Purchase Price and the Remaining Purchase Price. Purchaser shall pay the
Monetary Purchase Price and such portion of the Remaining Purchase Price that
Purchaser elects to pay in cash by wire transfer of immediately available funds
to such account as NSAC shall designate, with such designation to occur not less
than three (3) Business Days prior to the Closing Date. Purchaser shall deliver
shares of Purchaser Common Stock to NSAC having a value (determined as provided
in the next sentence) equal to the balance, if any, of the Remaining Purchase
Price not paid in cash. Each share of Purchaser Common Stock so delivered shall
be deemed to have a value equal to its Volume-Weighted Average Trading Price (as
defined below) for the twenty trading days preceding (but not including) the
Closing Date hereunder (with appropriate adjustments for any stock splits, stock
dividends or the like that may occur during such period).
1.3. CLOSING. The closing of the purchase and sale of the Interests (the
"Closing") shall be scheduled for a date no later than the fifth Business Day
following the date on which all the conditions contained in Sections 5.1, 5.2(d)
and 5.3(e) shall have been satisfied or waived. The date on which the Closing
occurs is herein referred to as the "Closing Date" On the day prior to the
Closing Date, unless Purchaser has delivered to NSAC an irrevocable written
election to pay the entire Remaining Purchase Price in cash, Purchaser and NSAC
shall execute the Registration Rights Agreement. If on the Closing Date any
other condition to the Closing has not been satisfied or waived by the party or
parties entitled to the benefit of the same, any party (other than a party whose
failure to perform its obligations under this Agreement is responsible for the
failure of such conditions) shall have the right to terminate this Agreement.
1.4. DEFINITION. "Volume-Weighted Average Trading Price" means, for any
period, (i) the average of the daily prices for each trading day during such
period, with each daily price computed as the product of (x) the sale price
times (y) the number of shares of Purchaser Common Stock sold at such price,
divided by (ii) the total number of shares of Purchaser Common Stock so traded
during such trading day, all as reported by Bloomberg, L.P.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF NSAC
NSAC represents and warrants to Purchaser as follows:
2.1. ORGANIZATION AND GOOD STANDING. NSAC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. NSAC is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the character of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure so to be duly qualified or licensed and in
good standing
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would not be reasonably likely to have a material adverse effect
on (i) the business, assets, condition (financial or other), prospects or
results of operations of NEXTBAND or (ii) the Interests (an "NSAC Material
Adverse Effect"). NSAC has heretofore made available to Purchaser accurate and
complete copies of the Certificate of Incorporation and Bylaws, as currently in
effect, of NSAC. Unrestricted Subsidiary Funding Company, a Delaware corporation
and a wholly-owned subsidiary of Nextel Communications, Inc., is the sole
stockholder of NSAC.
2.2. AUTHORIZATION; BINDING AGREEMENT. NSAC has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, including, without limitation, the due
authorization and approval for sale of the Interests to Purchaser. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of NSAC, and no other corporate proceedings on the part of NSAC are
necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by NSAC and constitutes the legal, valid and
binding agreement of NSAC enforceable against NASC in accordance with its terms,
except to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies ("Enforceability Exceptions").
2.3. GOVERNMENTAL APPROVALS. To the best of NSAC's knowledge, no consent,
approval, waiver or authorization of, Consent"), any government, any political
subdivision, any governmental or regulatory authority, agency, department,
board, commission, administration or instrumentality or any court, tribunal,
arbitrator or self-regulatory organization ("Governmental Authority") on the
part of NSAC is required in connection with the execution or delivery by NSAC of
this Agreement or the consummation by NSAC of the transactions contemplated
hereby other than (i) FCC approval of the LMDS license transfer application
contemplated hereby and (ii) expiration or early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"H-S-R Act").
2.4. NO VIOLATIONS. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by NSAC with
any of the provisions hereof will not (i) conflict with or result in any breach
of any provision of its Certificate of Incorporation or Bylaws or other
governing instruments, (ii) require any Consent under or result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or permit the acceleration of rights under or termination of, any
indenture, mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness, or other material agreement of NSAC, (iii) result in the creation
or imposition of any lien or encumbrance of any kind upon any of NSAC's assets
or (iv) subject to obtaining the consents from Governmental Authorities referred
to in Section 2.3 hereof, contravene any Law to which NSAC or any of its assets
or properties are
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subject, except in the case of clauses (ii), (iii) and (iv), above, for any
deviations from the foregoing which would not be reasonably likely to have an
NSAC Material Adverse Effect.
2.5. CONDUCT OF NSAC. NSAC has taken no actions which (i) to its knowledge,
have adversely affected or (ii) reasonably could be expected to adversely affect
NEXTBAND, the LMDS licenses owned by NEXTBAND, or the Interests. NSAC owns and
will convey valid title to the Interests free and clear of all liens and rights
of others (excluding those of or arising under or through any other member of
NEXTBAND) and has not, in its capacity as a member of NEXTBAND, caused NEXTBAND
to enter into any binding agreements or arrangements with third parties without
the knowledge of the Purchaser.
2.6. LITIGATION. There is no suit, action or proceeding pending or, to
NSAC's knowledge, threatened against NSAC, nor is there any judgment, decree,
injunction, rule or order of any Governmental Authority outstanding against
NSAC.
2.7. FINDERS AND INVESTMENT BANKERS. Neither NSAC nor any of its officers
or directors has employed any broker or finder or otherwise incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby for which the Purchaser or any of its
stockholders would be liable.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1. ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Purchaser is duly qualified or licensed and in good standing to do business in
each jurisdiction in which the character of the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure so to be duly
qualified or licensed and in good standing would not be reasonably likely to
have a material adverse effect on the business, assets, condition (financial or
other), prospects or results of operations of Purchaser and its subsidiaries
taken as a whole (a "Purchaser Material Adverse Effect"). Purchaser has
heretofore made available to NSAC accurate and complete copies of the
Certificate of Incorporation and Bylaws, as currently in effect, of Purchaser.
3.2. AUTHORIZATION; BINDING AGREEMENT. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, including, without limitation,
the due authorization and approval for issuance of Purchaser Common Stock
issuable at the Closing, if any. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, including, but not
limited to, the purchase of the Interests, have been duly and validly authorized
by the Board of Directors of Purchaser and no other corporate proceedings on the
part of Purchaser are
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necessary to authorize the execution and delivery of this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Purchaser and constitutes
the legal, valid and binding agreements of Purchaser, enforceable against it in
accordance with its terms, subject to the Enforceability Exceptions.
3.3. GOVERNMENTAL APPROVALS. No Consent from or with any Governmental
Authority on the part of Purchaser is required in connection with the execution
or delivery by Purchaser of this Agreement or the consummation by Purchaser of
the transactions contemplated hereby other than as set forth in Section 2.3.
Purchaser or a wholly-owned subsidiary of Purchaser holds a 50% membership
interest in NEXTBAND and Purchaser has no reason to believe that it is not
qualified to hold the Interests. Purchaser (i) is not a foreign person or under
the control of a foreign person, (ii) is not, is not controlled by and does not
control any incumbent local exchange carrier, and (iii) is not, is not
controlled by and does not control any CATV system in any market covered by the
LMDS Licenses (as all such terms are used in the Communications Act of 1996 and
the LMDS Rules) and as of the date hereof is not aware of any reason why it is
not qualified to hold the Interests under the LMDS Rules.
3.4. NO VIOLATIONS. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by Purchaser
with any of the provisions hereof will not (i) conflict with or result in any
breach of any provision of the Certificate of Incorporation or Bylaws or other
governing instruments of Purchaser, (ii) require any Consent under or result in
a violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or permit the acceleration of rights under or termination
of, any indenture, mortgage, deed of trust, credit agreement, note or other
evidence of indebtedness, or other material agreement of Purchaser, (iii) result
in the creation or imposition of any lien or encumbrance of any kind upon any of
the assets of Purchaser or (iv) subject to obtaining the Consents from
Governmental Authorities referred to in Section 2.3 hereof, contravene any Law
to which Purchaser or any of its assets or properties are subject, except, in
the case of clauses (ii), (iii) and (iv) above, for any deviations from the
foregoing which would not be reasonably likely to have a Purchaser Material
Adverse Effect.
3.5. SECURITIES FILINGS. Purchaser has made available to NSAC true and
complete copies of (i) its Annual Report on Form 10-K for the year ended
December 31, 1998, as filed with the SEC, together with all Exhibits and
Schedules thereto, (ii) its proxy statement relating to the meeting of its
stockholders held on May 20, 1998, as filed with the SEC, and (iii) all other
reports, statements and registration statements and amendments thereto
(including, without limitation, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as amended) filed by Purchaser with the SEC since January
1, 1998, together with all Exhibits and Schedules thereto. The reports and
statements specified in clauses (i) through (iii) above are referred to
collectively herein as the "Purchaser Securities Filings" As of their respective
dates, or as of the date of the last amendment thereof, if amended after filing,
none of the Purchaser Securities Filings contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
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3.6. PURCHASER FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited interim financial statements of Purchaser included in
the Purchaser Securities Filings (the "Purchaser Financial Statements") have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and present fairly, in all material respects, the financial
position of Purchaser and its subsidiaries as at the dates thereof and the
results of their operations and cash flows for the periods then ended subject,
in the case of the unaudited interim financial statements, to normal year-end
audit adjustments, any other adjustments described therein and the fact that
certain information and notes have been condensed or omitted in accordance with
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
3.7. CAPITALIZATION. As of the date hereof, the authorized capital stock of
Purchaser consists of 110,334,000 shares of Purchaser Common Stock, 44,133,600
shares of Class B Common Stock, par value $.02 per share and 25,000,000 shares
of preferred stock, par value $.01 per share ("Purchaser Preferred Stock"). As
of December 31, 1998, (a) 24,154,938 shares of Purchaser Common Stock were
issued and outstanding, (b) 30,523,242 shares of Class B Common Stock were
issued and outstanding, (c) 11,254,623 shares of Purchaser Preferred Stock were
issued and outstanding and (d) no shares of Purchaser Common Stock were issued
and held in the treasury of Purchaser. As of the date hereof, no other capital
stock of Purchaser is authorized or issued. All issued and outstanding shares of
Purchaser Common Stock are duly authorized, validly issued, fully paid and
non-assessable.
3.8. VALID ISSUANCE. Purchaser Common Stock, if and when issued in
accordance with the provisions of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable.
3.9. FINDERS AND INVESTMENT BANKERS. None of Purchaser or any of its
officers or directors has employed any broker or finder or otherwise incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby to which NSAC or any of its
stockholders would be liable.
3.10. EXISTING REGISTRATION RIGHTS. Exhibit 3.10 attached hereto sets forth
a list of all agreements in effect on the date hereof pursuant to which
Purchaser has granted registration rights with respect to any of its equity
securities, together with a designation of the number and type of securities
covered thereby. Purchaser has delivered to NSAC true and correct copies of all
provisions of such agreements relating to such rights.
ARTICLE IV.
ADDITIONAL COVENANTS
4.1. FURTHER ASSURANCES. Each of the parties shall, from time to time,
whether before or after the Closing, execute such documents and other papers and
take such further
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actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
4.2. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, neither
party will issue any press release or make any other announcement with respect
to the transactions contemplated in this Agreement, other than disclosures
required by law to be made in any report, statement or registration statement
filed by a party or its affiliates with the SEC. Without limiting the generality
of the foregoing, no press release or other voluntary announcement shall be made
unless the content and wording of same has been approved in advance and in
writing by both parties.
4.3. AGREEMENTS PRIOR TO CLOSING. NSAC and the Purchaser each agree (i) to
conduct its affairs in respect of NEXTBAND in the ordinary course, (ii) to take
no action that would result in the incurrence of any liability by NEXTBAND, and
(iii) to take no action that would have any material adverse effect on the
assets of NEXTBAND or the ability of either of them to consummate the
transactions contemplated hereby. During the period from the date of this
Agreement to the Closing Date, (i) NSAC will use its reasonable best efforts to
preserve the Interests and the LMDS Licenses intact, free and clear of all
restrictions and encumbrances created by or through NSAC and (ii) each of NSAC
and the Purchaser will not sell, lease, license, mortgage or otherwise encumber
or subject to any lien the Interests or the LMDS Licenses.
4.4. NOTIFICATION OF CERTAIN MATTERS. Each party shall give prompt notice
to the other if any of the following occur after the date of this Agreement:
(i) receipt of any notice or other communication in writing from any third party
alleging that the Consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement, provided that
such Consent would have been required to have been disclosed in this Agreement;
(ii) receipt of any material notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement; or
(iii) the commencement of any litigation involving or affecting NEXTBAND or the
notifying party or any of its subsidiaries, or any of its properties or assets,
or, to its knowledge, any employee, agent, director or officer, in his or her
capacity as such, of such notifying party or any of its subsidiaries which, if
pending on the date hereof, would have been required to have been disclosed in
this Agreement or which relates to the consummation of the transactions
contemplated hereby. In addition, Purchaser shall give prompt written notice to
NSAC of the occurrence of any event which would be reasonably likely to have a
Purchaser Material Adverse Effect and NSAC shall give prompt written notice to
Purchaser of the occurrence of any event which would be reasonably likely to
have a NSAC Material Adverse Effect.
4.5. REASONABLE BEST EFFORTS. Subject to the terms and conditions herein
provided, Purchaser and NSAC agree to use all reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, but not
limited to:
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(a) making all necessary applications and/or filings with the FCC as soon
as practicable but in no event later than 7 days from the date hereof, and
thereafter obtaining FCC approval of the license assignment contemplated hereby
and any other Consents from Governmental Authorities and other third parties
required for the consummation of the transactions contemplated hereby; and
(b) making all necessary filings under the H-S-R Act within 30 days of the
date hereof.
Upon the terms and subject to the conditions hereof, each of Purchaser and
NSAC shall use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary to satisfy the
other conditions of the Closing set forth herein, provided that nothing
contained in this Agreement shall be construed to require Purchaser or NSAC to
accept any term or condition or restriction required or imposed by any
Government Authority in connection with the governmental approvals being sought
for the transactions contemplated hereby, except for any terms, conditions or
restrictions that are of an administrative or ministerial nature. In addition,
each of Purchaser and NSAC will notify the other promptly upon the receipt of
any comments from any government officials and of any request by government
officials for amendments or supplements to any regulatory filing or for
additional information and will promptly supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the government officials, on the other hand, with respect to the
regulatory filing. Purchaser will not take any action that would cause the last
sentence of Section 3.3 to be untrue at any time prior to the Closing, unless
such action would not (i) result in an adverse effect on Purchaser's
qualifications to be a holder of the LMDS Licenses or (ii) otherwise adversely
affect the consummation of the transactions contemplated hereby.
ARTICLE V.
CONDITIONS TO CLOSING
5.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective obligations of
each party to effect the Closing shall be subject to the fulfillment or waiver
at or prior to the Closing Date of the following conditions:
(a) NO INJUNCTION OR ACTION. No order, statute, rule, regulation, stay,
decree, judgment or injunction shall have been enacted, entered, promulgated or
enforced by any court or other Governmental Authority which prohibits or
prevents the consummation of the transactions contemplated hereby which has not
been vacated, dismissed or withdrawn prior to the Closing Date. Purchaser and
NSAC shall use their reasonable best efforts to have any of the foregoing
vacated, dismissed or withdrawn by the Closing Date.
(b) H-S-R ACT. Any waiting period (and any extension thereof) under the
H-S-R Act applicable to the transactions contemplated by the Agreements shall
have expired or been terminated.
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(c) FCC APPROVAL. The FCC shall have issued an order (the "FCC Order")
approving the transfer of control of the Interests contemplated by this
Agreement, such approval shall be in full force and effect and shall have become
Final (as hereinafter defined). The FCC Order shall have become Final when it
has been issued by the FCC, when the time for filing any protest, request for
stay, petition or request for reconsideration, petition for rehearing or appeal
or review thereof (or of any subsequent decision by any court or governmental
entity) by or to the FCC or any court or governmental entity having jurisdiction
thereof or the over the premises, or for the FCC to review or reconsider such
Order on its own motion, shall have expired, and when no protest, request for
stay, petition or request for reconsideration, petition for rehearing or appeal
or review of such Order is pending.
(d) CONSUMMATION OF WNP INITIAL OFFERING. The Closing shall not be effected
before the earlier of (i) the date on which the WNP Initial Offering is
consummated and (ii) July 1, 1999, provided, however, that (A) upon receipt by
NSAC of written notice from Purchaser stating that in the judgment of Purchaser
the WNP Initial Offering is not likely to occur on or before July 1, 1999, this
condition shall no longer be applicable and (B) if the WNP Initial Offering has
not been consummated by June 30, 1999, the Closing shall occur on July 1, 1999
(or such later date on which all other conditions to Closing are satisfied).
5.2. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser
to purchase and pay for the Interests on the Closing Date shall be subject to
the fulfillment prior thereto of the following additional conditions, any one or
more of which may be waived by Purchaser:
(a) PERFORMANCE BY NSAC. NSAC shall have performed and complied with all
the covenants and agreements and satisfied all the conditions required by this
Agreement to be performed or complied with or satisfied by it at or prior to the
Closing Date, except for such failures to perform as have not had or would not,
individually or in the aggregate, have a material adverse affect on NEXTBAND or
materially adversely affect the transactions contemplated hereby.
(b) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of NSAC contained herein shall be true and correct when made and
shall be true and correct as of the Closing Date as though made on and as of the
Closing Date except to the extent that any such representation and warranty had
by its terms been made as of the date hereof or another specific date, in which
case such representation and warranty shall have been true and correct as of the
date hereof or such specific date, as the case may be), except, in all
instances, where the failure to be so true and correct shall not result,
individually or in the aggregate, in a NSAC Material Adverse Effect; and
Purchaser shall have received a certificate signed on behalf of NSAC by an
authorized officer of NSAC to that effect.
(c) CERTIFICATES AND OTHER DELIVERIES. NSAC shall have delivered, or caused
to be delivered, to Purchaser (i) a certificate executed on its behalf by an
authorized officer of NSAC to the effect that the conditions set forth in
Section 5.2(a) have been satisfied; and (ii) duly adopted resolutions of the
Board of Directors of NSAC approving the execution, delivery
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and performance of this Agreement and the instruments contemplated hereby,
certified by its Secretary.
(d) NO CONDITIONS. No Governmental Authority having jurisdiction over the
approval of the transactions contemplated hereby shall have imposed or required
any condition to such approval, except for any conditions that are of an
administrative or ministerial nature, except for conditions resulting from any
action taken by Purchaser or Eagle River Investments L.L.C. or their respective
controlled or controlling affiliates.
(e) No Material Adverse Change. There shall not have occurred after the
date hereof any event that has had or would reasonably be expected to have a
NSAC Material Adverse Effect (other than by reason of any action or inaction by
Purchaser or any of its controlled or controlling affiliates).
5.3. CONDITIONS TO OBLIGATIONS OF NSAC. The obligations of NSAC to sell the
Interests on the Closing Date shall be subject to the fulfillment prior thereto
of the following additional conditions, any one or more of which may be waived
by NSAC:
(a) PERFORMANCE BY PURCHASER. Purchaser shall have performed and complied
with all the covenants and agreements and satisfied all the conditions required
by this Agreement to be performed or complied with or satisfied by Purchaser at
or prior to the Closing Date, except for such failures to perform as have not
had or would not, individually or in the aggregate, have a material adverse
effect on the transactions contemplated hereby.
(b) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in Sections 3.1 through 3.4 and in Section 3.9
and if, but only if, Purchaser shall not have delivered to NSAC an irrevocable
written election to pay the entire Remaining Purchase Price in cash, in the
remaining Sections of Article III (without giving effect to any materiality or
knowledge qualifications contained therein) shall be true and correct when made
and shall be true and correct as of the Closing Date as though made on and as of
the Closing Date (except to the extent that any such representation and warranty
had by its terms been made as of the date hereof or another specific date, in
which case such representation and warranty shall have been true and correct as
of the date hereof or such specific date, as the case may be, except, in all
instances other than Section 3.8, where the failure to be so true and correct
shall not result, individually or in the aggregate, in a Purchaser Material
Adverse Effect; and NSAC shall have received a certificate signed on behalf of
Purchaser by an authorized officer of Purchaser to such effect.
(c) CERTIFICATES, LEGAL OPINIONS AND OTHER DELIVERIES. Purchaser shall have
delivered, or caused to be delivered, to NSAC (i) a certificate executed on its
behalf by an authorized officer of Purchaser to the effect that the conditions
set forth in Section 5.3(a) have have been satisfied; (ii) duly adopted
resolutions of the Board of Directors of Purchaser approving the execution,
delivery and performance of this Agreement and the instruments contemplated
hereby, each certified by its Secretary; and (iii) if shares of Purchaser
Common Stock are to be delivered to NSAC at the Closing, an opinion of counsel
to Purchaser, dated the Closing Date, in form and
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substance reasonably acceptable to NSAC, as to the matters covered by the first
sentence of Section 3.1, Section 3.2, the first sentence of Section 3.3,
Section 3.4 and Section 3.8.
(d) REGISTRATION RIGHTS AGREEMENT. If shares of Purchaser Common Stock are
to be delivered to NSAC at the Closing, Purchaser shall have executed and
delivered to NSAC a Registration Rights Agreement in the form attached hereto as
Exhibit A.
(e) NO CONDITIONS. No Governmental Authority having jurisdiction over the
approval of the transactions contemplated hereby shall have imposed or required
any condition to such approval that materially and adversely affects NSAC or, if
shares of Purchaser Common Stock are to be delivered to NSAC at the Closing, the
value of Purchaser Common Stock, except for any conditions that are of an
administrative or ministerial nature or are fully compensated by an assumption
of cost by Purchaser, and except for conditions resulting from any action taken
by NSAC or any of its controlling or controlled affiliates.
(f) NO MATERIAL ADVERSE CHANGE. If shares of Purchaser Common Stock are to
be delivered to NSAC at the Closing, no event shall have occurred on any date
during the period beginning at the commencement of the twenty trading day period
referred to in Section 1.2 and ending on the day before the Closing Date
(whether or not a Purchaser Blackout has occurred) that has had a Purchaser
Material Adverse Effect.
(g) EAGLE RIVER WAIVER OF PIGGYBACK RIGHTS. Eagle River Investments
L.L.C.'s waiver of its piggyback registration rights and holdback agreement in
connection with the Initial Offering (as that term is defined in the WNP RRA)
shall remain in full force and effect and such waiver shall have been amended
and supplemented to apply in connection with the initial demand registration
requested by NSAC pursuant to the NSAC Registration Rights Agreement.
ARTICLE VI.
INDEMNIFICATION AND REIMBUREMENT
6.1. INDEMNIFICATION BY THE PARTIES.
(a) In order to induce each of the parties to enter into this Agreement and
to consummate the transactions contemplated hereby, each of NSAC and the
Purchaser (each, in its capacity as indemnitor hereunder, the "Indemnifying
Party") shall, subject to the further provisions of this Article VI, indemnify
the other party and, without duplication, its stockholders, directors, officers
and employees (collectively, the "Indemnified Parties") and shall hold the
Indemnified Parties harmless against and with respect to any "Loss" which for
purposes of this Agreement shall include any and all actual liabilities, costs,
losses, damages and expenses (whether or not arising out of third party claims),
including without limitation reasonable attorneys' fees (after giving effect to
any offsetting benefit actually received or receivable), incurred by the
Indemnified Parties and arising out of or resulting from:
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(i) any misrepresentation or breach of warranty by the Indemnifying
Party of any of its representations or warranties set forth in the
Agreements or any Exhibit thereto; and
(ii) any breach or nonfulfillment by the Indemnifying Party of any
of its covenants, agreements or other obligations set forth in the
Agreements or any Annex, Schedule or Exhibit thereto.
(b) Entitlement to indemnification pursuant to this Section 6.1 shall be
conditioned upon claims in respect thereof being submitted in writing with
detailed specification showing the basis of such claim, including the provision
of this Agreement breached, and a reasonably detailed calculation of the amount
of such claim, if at all, by the relevant Indemnified Parties to the relevant
Indemnifying Party no later than twelve (12) months after the Closing Date.
(c) Notwithstanding anything to the contrary in this Section 6.1, the right
to indemnity in respect of matters provided for in paragraphs (a)(i) and (ii) of
this Section 6.1 shall not be barred on the basis that the amount of the claim
has not been ascertained, liquidated or reduced to final judgment on or before
the expiration of the aforesaid period, provided that such claim is identified
in writing with detailed specification showing the basis of such claim,
including the provision of this Agreement breached, and a reasonable estimate of
the amount of such claim.
(d) The remedies provided in this Article VI and in Section 7.12 shall be
the relevant Indemnified Parties' sole remedies hereunder for breach of this
Agreement, except in the case of fraud.
6.2. Claims for Reimbursement. In the event that any Indemnified Party
suffers any Loss (as hereinabove defined) with respect to any liability or claim
to which the foregoing indemnities relate, such Person shall give the relevant
Indemnifying Party prompt written notice of the nature and amount of such Loss
and the Indemnified Party's claim for reimbursement therefor and if such Loss is
with respect to a third party claim, accompanied by a copy of the written notice
from the third party claimant. The Indemnified Party shall have 30 days from the
date of said notice to investigate and dispute the nature, validity or amount of
any such claim. During said 30-day period, representatives of one law firm and
one accounting firm designated by the relevant Indemnified Party shall have
reasonable access, during normal business hours, to the books and records of the
Indemnified Party for the purpose of such investigation. In the event that the
relevant Indemnifying Party disputes the nature, validity or amount of said
claim, such relevant Indemnifying Party shall give the Indemnified Party written
notice of such dispute within said 30-day period, and the parties shall attempt
in good faith to resolve such dispute. If such dispute is not resolved within 10
days following receipt of said notice of dispute by the Indemnified Party, the
provisions of Section 6.5 hereof shall apply to such dispute.
In the absence of a dispute, the relevant Indemnifying Party shall promptly
(but not later than the expiration of said 30-day period) reimburse the
Indemnifying Party for such Loss. In the event that the relevant Indemnified
Party disputes only the amount of the claim, the relevant Indemnifying Party
shall, concurrently with the delivery of its notice of dispute, pay to
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the Indemnified Party the undisputed portion of such claim and the
provisions of Section 6.5 hereof shall apply to the disputed portion of such
claim.
All payments by the Purchaser under this Article VI shall be in cash. All
payments by NSAC hereunder may, at NSAC's discretion, be paid either in cash or
in shares of Purchaser Common Stock, to the extent NSAC received such shares of
Purchaser Common Stock at the Closing hereunder. If NSAC wishes to satisfy all
or any portion of an acknowledged liability hereunder in shares of Purchaser
Common Stock, such shares shall be valued at their Volume-Weighted Average
Trading Price for the twenty trading day period ending on the date prior to the
Closing Date hereunder.
6.3. LIMITATIONS ON INDEMNIFICATION. (a) Notwithstanding anything to the
contrary in this Article VI, no Indemnifying Party will be obligated to make any
payment in connection with its indemnity obligation under this Article VI until
Losses suffered or incurred by any one or more Indemnified Parties to whom that
Indemnifying Party has an indemnity obligation under this Article VI exceed, in
the aggregate, $50,000. But once such Losses exceed $50,000, then such
Indemnified Parties will be entitled to recover all Losses from that
Indemnifying Party up to a maximum account of $137,700,000 (including the value
of shares of Purchaser Common Stock as calculated above, in the event such
shares are used by NSAC as permitted above to pay any indemnification obligation
hereunder).
6.4. DEFENSE OF THIRD-PARTY CLAIMS. If any lawsuit or enforcement action is
filed, or claim asserted against an Indemnified Party by a third party and the
Indemnified Party is entitled to indemnification pursuant to this Agreement,
written notice thereof shall be given to the relevant Indemnifying Party as
promptly as practicable (and in any event no later than 30 days after the
service of the citation or summons or receipt of other written notice of such
claim); the failure of any Indemnified Party to give timely notice shall limit
the rights to indemnification hereunder only if and to the extent that (i) such
failure to give timely notice materially affects the ability or right of the
relevant Indemnifying Party to participate in the defense of such lawsuit or
enforcement action or claim, (ii) actual notice is not given to the relevant
Indemnifying Party within a reasonable time, or (iii) to the extent that such
failure to give timely notice causes the relevant Indemnifying Party to incur
additional expense with respect to such lawsuit or enforcement action, the
Indemnified Party fails to promptly reimburse the relevant Indemnifying Party
for such additional expense.
The relevant Indemnifying Party shall be entitled, if it so elects, to take
control of the defense and investigation of such lawsuit, action or claim, and
to employ and engage attorneys of its own choice to handle and defend the same,
at the relevant Indemnifying Party's cost, risk and expense; and such
Indemnified Party shall cooperate in all reasonable respects, at its cost, risk
and expense, with the relevant Indemnifying Party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the Indemnified Party may, at its own
cost, participate in (but not control) such investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom.
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If the relevant Indemnifying Party does not elect to take control of the
defense and investigation of said lawsuit or action, then the Indemnified Party
shall remain in control thereof in such manner as it deems appropriate.
Neither party shall enter into any settlement, adjustment or compromise of
any lawsuit or action without the prior written consent of the other party which
consent will not be unreasonably withheld.
6.5. RESOLUTION OF DISPUTES.
(a) In the event of any dispute between Purchaser and NSAC over any claim
for reimbursement with respect to any matter to which the foregoing indemnities
relate, such dispute will be finally determined by the Accounting Firm (as
defined below) in the manner set forth in Section 6.5(b), and any Loss so
determined will be promptly reimbursed to the appropriate Indemnified Parties by
the appropriate Indemnifying Party.
(b) Any dispute pursuant to Section 6.5(a) will be resolved by a member of
the Washington, D.C. office of an accounting firm jointly selected by NSAC and
Purchaser (the "Accounting Firm"). The Accounting Firm shall be instructed to
use all reasonable efforts to resolve such disputes within thirty (30) days. The
resolution of disputes by the Accounting Firm so selected will be set forth in
writing and will be conclusive and binding upon all parties to such dispute and
the amount of the reimbursement payable as so resolved will become final and
binding upon the date of such resolution. The fees and expenses of the
Accounting Firm shall be paid by the unsuccessful party, if all the disputes are
resolved against such party, and in other cases shall be pro rated among the
parties as the Accounting Firm sees fit based on the relative success of the
parties in indicating their respective positions.
ARTICLE VII.
MISCELLANEOUS
7.1. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified or
supplemented only by a written agreement among each of the parties hereto.
7.2. TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of Purchaser and NSAC; or
(b) by Purchaser or NSAC if on the Closing Date any condition to the
transactions contemplated hereby has not been satisfied or waived by the party
or parties entitled to the benefit of the same; provided, however, that the
right to terminate this Agreement pursuant to this Section 7.2(b) shall not be
available to any party whose failure to perform any of its obligations under
this Agreement results in the failure of any such other condition to be
satisfied; or
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(c) by Purchaser or NSAC if the Closing shall not have occurred on or
before January 14, 2000; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.2(c) shall not be available to any party
whose failure to perform any of its obligations under this Agreement results in
the failure of the Closing to occur by such date; or
(d) by Purchaser or NSAC if any court of competent jurisdiction or other
Governmental Authority has issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order, decree, ruling or other action shall have
become final and nonappealable; or
(e) by either Purchaser or NSAC upon written notice to the other if the
terminating party is not in material breach of its obligations under this
Agreement and if the other party or its subsidiary shall have materially
breached this Agreement and such breach shall not have been cured in all
material respects or waived prior to the earlier to occur of the Closing Date or
thirty (30) days following the date the terminating party shall have given the
other party written notice of such breach setting forth the nature thereof in
reasonable detail.
7.3. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 7.2, this Agreement shall forthwith become void
and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, except for the provisions of this Section
7.3, which shall survive any such termination. Nothing contained in this Section
7.3 shall relieve any party from liability for any breach of this Agreement.
7.4. SURVIVAL. All representations, warranties and covenants in this
Agreement or in any certificate delivered pursuant to this Agreement shall be
considered to have been relied upon by the Parties and shall survive the
Closing.
7.5. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person, by
facsimile, receipt confirmed, or on the next business day when sent by overnight
courier or on the third succeeding business day when sent by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(i) if to NSAC, to:
Nextel Spectrum Acquisition Corp.
c/o Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22101
Attention: General Counsel
Fax: (703) 394-3896
with a copy to:
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Jones, Day, Reavis & Pogue
41 S. High Street, Suite 1900
Columbus, Ohio 43215
Attention: Gregory A. Gorospe, Esq.
Fax: (614) 461-4198
and
(ii) if to Purchaser, to:
NEXTLINK Communications, Inc.
500 108th Avenue, NE, Suite 2200
Bellevue, Washington 98004
Attention: R. Bruce Easter, Jr., Esq.
Fax: (425) 519-8997
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: Bruce R. Kraus, Esq.
Fax: (212) 728-8111
7.6. BINDING EFFECT; ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
either of the parties hereto without the prior written consent of the other.
7.7. EXPENSES.
(a) The parties to this Agreement shall, except as otherwise specifically
provided herein, bear their respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the transactions
contemplated hereby, whether or not the transactions are consummated, including,
without limitation, all fees and expenses of their respective agents.
(b) The prevailing party in any legal action undertaken to enforce this
Agreement or any provision hereof shall be entitled to recover from the other
party the costs and expenses (including attorneys' and expert witness fees)
incurred in connection with such action.
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7.8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
7.9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.10. INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement. As used in this Agreement, (i) the term "Person" shall mean and
include an individual, a partnership, a joint venture, a corporation, a limited
liability company, a trust, an association, an unincorporated organization, a
Governmental Authority and any other entity, (ii) unless otherwise specified
herein, the term "affiliate," with respect to any person, shall mean and include
any person controlling, controlled by or under common control with such person
and (iii) the term "subsidiary" of any specified person shall mean any
corporation 50 percent or more of the outstanding voting power of which, or any
partnership, joint venture, limited liability company or other entity 50 percent
or more of the total equity interest of which, is directly or indirectly owned
by such specified person.
7.11. ENTIRE AGREEMENT. This Agreement and the documents or instruments
referred to herein including, but not limited to, the Exhibits attached hereto,
which are incorporated herein by reference, embody the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and the understandings
between the parties with respect to such subject matter.
7.12. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
7.13. THIRD PARTIES. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been
executed for the benefit of, any person that is not a party hereto or thereto or
a successor or permitted assign of such a party; provided, that any Indemnified
Party shall be entitled to the rights and benefits accorded to Indemnified
Parties pursuant to the terms of Article VI hereof.
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IN WITNESS WHEREOF, Purchaser and NSAC have caused this Agreement to be
signed and delivered by their respective duly authorized officers, as
applicable, as of the date first above written.
NEXTLINK COMMUNICATIONS, INC.
By: /s/ R. Bruce Easter
----------------------
Name: R. Bruce Easter, Jr.
Title: Vice President
NEXTEL SPECTRUM ACQUISITION CORP.
By: /s/ Thomas J. Sidman
------------------------
Name: Thomas J. Sidman
Title: Vice President
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