\n SECTION 9.5. Access to Information…………………………………………………… 68
\n SECTION 9.6. Notices of Certain Events……………………………………………….. 69
\n SECTION 9.7. Tax-free Reorganization…………………………………………………. 69
\n SECTION 9.8. Affiliates…………………………………………………………….. 70
\n SECTION 9.9. Certain Other Agreements and Acknowledgments of Navy and Army Relating to the LHP
\n Share Exchange………………………………………………………… 71<\/p>\nARTICLE 10. CONDITIONS TO THE MERGERS……………………………………………………….. 73<\/p>\n
SECTION 10.1. Conditions to the Obligations of Marine and Navy to Consummate the Mergers……. 73
\n SECTION 10.2. Conditions to the Obligations of Navy…………………………………….. 73
\n SECTION 10.3. Conditions to the Obligations of Marine…………………………………… 76
\n SECTION 10.4. Conditions to the Obligations of Army…………………………………….. 77
\n SECTION 10.5. Waiver of NEXTLINK and Eagle River Conditions……………………………… 78<\/p>\n
ARTICLE 11. TERMINATION……………………………………………………………………. 78<\/p>\n
SECTION 11.1. Termination……………………………………………………………. 78
\n SECTION 11.2. Effect of Termination…………………………………………………… 80
\n SECTION 11.3. Fees and Expenses………………………………………………………. 80
\n SECTION 11.4. Termination of LHP Share Exchange………………………………………… 81
\n SECTION 11.5. Survival of Navy and Army Representations and Warranties Relating to the LHP Share
\n Exchange; Indemnification………………………………………………. 83<\/p>\n
ARTICLE 12. MISCELLANEOUS………………………………………………………………….. 83<\/p>\n
SECTION 12.1. Notices……………………………………………………………….. 83
\n SECTION 12.2. Survival of Representations and Warranties………………………………… 84
\n SECTION 12.3. Amendments; No Waivers………………………………………………….. 84
\n SECTION 12.4. Successors and Assigns………………………………………………….. 85
\n SECTION 12.5. Governing Law………………………………………………………….. 85
\n SECTION 12.6. Jurisdiction…………………………………………………………… 85
\n SECTION 12.7. WAIVER OF JURY TRIAL……………………………………………………. 85
\n SECTION 12.8. Counterparts; Effectiveness……………………………………………… 86
\n SECTION 12.9. Entire Agreement……………………………………………………….. 86
\n SECTION 12.10. Captions………………………………………………………………. 86
\n SECTION 12.11. Severability…………………………………………………………… 86
\n SECTION 12.12. Specific Performance……………………………………………………. 86
\n SECTION 12.13. Schedules……………………………………………………………… 87
\n<\/c><\/s><\/table>\n
EXHIBITS<\/p>\n
Exhibit A — Form of NEXTLINK Voting Agreement
\nExhibit B — Form of Concentric Voting Agreement
\nExhibit C — Form of Concentric Rule 145 Affiliate Letter
\nExhibit D — Form of Eagle River Registration Rights Agreement<\/p>\n
-iii-<\/p>\n
AGREEMENT AND PLAN OF MERGER AND SHARE EXCHANGE AGREEMENT<\/p>\n
AGREEMENT AND PLAN OF MERGER AND SHARE EXCHANGE AGREEMENT dated as of
\nJanuary 9, 2000 by and among Concentric Network Corporation, a Delaware
\ncorporation (“CONCENTRIC”), NEXTLINK Communications, Inc., Inc. a Delaware
\ncorporation (“NEXTLINK”), Eagle River Investments, L.L.C, a Washington limited
\nliability company (“EAGLE RIVER”) and NM Acquisition Corp., a Delaware
\ncorporation (“NEWCO”).<\/p>\n
WHEREAS, the respective Boards of Directors of NEXTLINK and Concentric
\nhave approved this Agreement, and deem it advisable and in the best interests of
\ntheir respective stockholders to consummate the Mergers (as defined herein) of
\neach of Concentric and NEXTLINK into Newco on the terms and conditions set forth
\nherein;<\/p>\n
WHEREAS, as a condition and inducement to Concentric’s entering into
\nthis Agreement, concurrently with the execution and delivery of this Agreement,
\nConcentric and Eagle River are entering into a Voting Agreement in the form
\nattached as Exhibit A hereto (the “NEXTLINK VOTING AGREEMENT”), pursuant to
\nwhich Eagle River has agreed to deliver its consent as majority stockholder
\napproving the Mergers (the “EAGLE RIVER CONSENT”);<\/p>\n
WHEREAS, as a condition and inducement to NEXTLINK’s entering into this
\nAgreement, concurrently with the execution and delivery of this Agreement,
\nNEXTLINK, Concentric and the Concentric stockholders parties thereto are
\nentering into the Voting Agreements in the form attached hereto as Exhibit B
\n(the “CONCENTRIC VOTING AGREEMENT”);<\/p>\n
WHEREAS, Eagle River and NEXTLINK together own 100% of the limited
\nliability company interests in LHP, L.L.C., a Washington limited liability
\ncompany (“LHP”) and LHP owns 100% of the limited liability company interests in
\nINTERNEXT, L.L.C., a Delaware limited liability company (“INTERNEXT”);<\/p>\n
WHEREAS, immediately after the closing of the Mergers, Eagle River will
\ncontribute to Newco all of the LHP limited liability company interests (or
\ncapital stock of LHP in the event that LHP is converted into a corporation)
\nowned by Eagle River (the “CONTRIBUTED INTEREST”) in consideration of the
\nissuance by Newco of shares of Newco Common Stock (as hereinafter defined) to
\nEagle River as set forth herein (the “LHP SHARE EXCHANGE”); and<\/p>\n
WHEREAS, it is intended that, for federal income tax purposes, the
\nMergers shall qualify as reorganizations within the meaning of the provisions of
\nSection 368(a) of the Internal Revenue Code of 1986 (the “CODE”) and the LHP
\nShare Exchange in conjunction with the Mergers shall qualify as a tax-free
\nexchange under Section 351 of the Code;<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the respective
\nrepresentations, warranties, covenants and agreements set forth below, the
\nparties agree as follows:<\/p>\n
ARTICLE 1.
\n DEFINITIONS<\/p>\n
SECTION 1.1. Definitions. (a) The following terms, as used herein,
\n ———–
\nhave the following meanings:<\/p>\n
“ACQUISITION PROPOSAL” means any bona fide offer or proposal made,
\nrenewed or continued after the date hereof for (i) a merger, consolidation,
\nshare exchange, business combination, reorganization, recapitalization or other
\nsimilar transaction involving Concentric or any Concentric Significant
\nSubsidiary or (ii) the acquisition, directly or indirectly, of (A) an equity
\ninterest representing more than 25% of the voting securities of Concentric or
\nany Concentric Significant Subsidiary or (B) assets, securities or ownership
\ninterests representing an amount equal to or greater than 25% of the
\nconsolidated assets or earning power of the Concentric Group, other than the
\ntransactions contemplated by this Agreement or permitted pursuant to Section 7.1
\nhereof.<\/p>\n
“AFFILIATE” means, with respect to any Person, any other Person
\ndirectly or indirectly controlling, controlled by, or under common control with
\nsuch Person.<\/p>\n
“BENEFIT ARRANGEMENT” means, with respect to any Person, any
\nemployment, severance or similar contract or arrangement (whether or not
\nwritten) providing for compensation, bonus, profit-sharing, stock option, or
\nother stock-related rights or other forms of incentive or deferred compensation,
\nvacation benefits, insurance coverage (including any self-insured arrangements),
\nhealth or medical benefits, disability benefits, workers’ compensation,
\nsupplemental unemployment benefits, severance benefits and post-employment or
\nretirement benefits (including compensation, pension, health, medical or life
\ninsurance or other benefits) that (i) is not an Employee Plan, (ii) is entered
\ninto, maintained, administered, or contributed to or obligated to contribute to,
\nas the case may be, by such Person or any of its Subsidiaries and (iii) covers
\nany employee or former employee of such Person or any of its Subsidiaries.
\n“CONCENTRIC BENEFIT ARRANGEMENTS” means the Benefit Arrangements of Concentric
\nor the Concentric Subsidiaries and “NEXTLINK BENEFIT ARRANGEMENTS” means the
\nBenefit Arrangements of NEXTLINK or the NEXTLINK Subsidiaries.<\/p>\n
“BUSINESS DAY” means a day other than a Saturday, Sunday or other day
\non which commercial banks in New York City are authorized or required by law to
\nclose.<\/p>\n
“COMMON STOCK RATIO” means the quotient (rounded to the nearest
\n1\/10,000) determined by dividing $45.00 by the Weighted<\/p>\n
-2-<\/p>\n
Average Sale Price; provided that the Common Stock Ratio shall not be less than
\n ——–
\n.495 or greater than .650.<\/p>\n
“CONCENTRIC BALANCE SHEET” means the Consolidated Balance Sheets of
\nConcentric and its consolidated subsidiaries as of September 30, 1999 and the
\nfootnotes thereto set forth in the Concentric 10-Q.<\/p>\n
“CONCENTRIC BALANCE SHEET DATE” means September 30, 1999.<\/p>\n
“CONCENTRIC COMMON STOCK” means Common Stock, par value $0.001 per
\nshare, of Concentric.<\/p>\n
“CONCENTRIC DEBENTURES” means Concentric’s 13 1\/2% Subordinated
\nDebentures due 2010 issuable in exchange for Concentric Series B Preferred Stock
\nat the option of Concentric.<\/p>\n
“CONCENTRIC GROUP” means Concentric and the Concentric Subsidiaries.<\/p>\n
“CONCENTRIC MATERIAL ADVERSE EFFECT” means a material adverse effect on
\nfinancial condition, assets or results of operations of the Concentric Group
\ntaken as a whole, excluding any such effect resulting from or arising in
\nconnection with (i) this Agreement, the transactions contemplated hereby or the
\npendancy or announcement thereof including, but not limited to the Concentric
\nBoard of Directors’ decision to enter into this Agreement or the failure to
\nreceive the consent of the holders of Concentric Senior Notes, Concentric
\nDebentures, Concentric Series B Preferred Stock and Concentric Series C
\nPreferred Stock described in Section 7.4 hereof or any default under or any
\nobligation of Concentric to offer to repurchase the subject securities under the
\nrespective indentures for the Concentric Senior Notes or the Concentric
\nDebentures or under the certificate of designations for the Concentric Series B
\nPreferred Stock or Concentric Series C Preferred Stock or any appraisal
\nliability in respect of the Concentric Series B Preferred Stock or Concentric
\nSeries C Preferred Stock under Section 262 of the Delaware General Corporation
\nLaw resulting from the consummation of the Mergers, (ii) changes or conditions
\ngenerally affecting the industries in which the Concentric Group operates or
\n(iii) changes in general economic, regulatory or political conditions.<\/p>\n
“CONCENTRIC SENIOR NOTES” means the 12-3\/4% Senior Notes due 2007 of
\nConcentric.<\/p>\n
“CONCENTRIC PREFERRED STOCK” means Concentric Series B Preferred Stock
\nand CONCENTRIC Series C Preferred Stock, collectively.<\/p>\n
“Concentric RIGHTS AGREEMENT” means the Preferred Shares Rights
\nAgreement, dated as of November 10, 1999.<\/p>\n
-3-<\/p>\n
“CONCENTRIC SERIES A JUNIOR PREFERRED STOCK” means the Series A Junior
\nParticipating Preferred Stock of Concentric.<\/p>\n
“CONCENTRIC SERIES B PREFERRED STOCK” means the 13 1\/2% Series B
\nRedeemable Exchangeable Preferred Stock, par value $1.00 per share, of
\nConcentric.<\/p>\n
“CONCENTRIC SERIES C PREFERRED STOCK” means the 7% Series C Convertible
\nRedeemable Preferred Stock, par value $1.00 per share, of Concentric.<\/p>\n
“CONCENTRIC SIGNIFICANT SUBSIDIARY” means any Concentric Subsidiary
\nthat would constitute a “significant subsidiary” within the meaning of Rule 1-02
\nof Regulation S-X of the SEC as of September 30, 1999.<\/p>\n
“CONCENTRIC SUBSIDIARY” means any entity of which securities or other
\nownership interests having ordinary voting power to elect a majority of the
\nboard of directors or other persons performing similar functions are at any
\ntime, directly or indirectly, owned by Concentric, including any Concentric
\nsubsidiary included in the Concentric consolidated financial statements in
\naccordance with GAAP.<\/p>\n
“CONCENTRIC 10-K” means Concentric’s annual report on Form 10-K for the
\nfiscal year ended December 31, 1998.<\/p>\n
“CONCENTRIC 10-Q” means Concentric’s quarterly report on Form 10-Q for
\nthe quarter ended September 30, 1999.<\/p>\n
“DEFERRED COMPENSATION PLAN” means, with respect to any Person, any
\nplan, agreement or arrangement that (i) is described under Sections 4(b)(5) or
\n401(a)(1) of ERISA (or similar plan covering one or more non-employee directors
\nof a Person), (ii) is maintained, administered or contributed to or required to
\nbe contributed to by such Person or any of its Affiliates and (iii) covers any
\ncurrent or former employee or director of such Person or any of its
\nSubsidiaries. “CONCENTRIC DEFERRED COMPENSATION PLAN” means a Deferred
\nCompensation Plan of Concentric or any Concentric Affiliate for the benefit of
\nany current or former employee or director of Concentric or any Concentric
\nSubsidiary.<\/p>\n
“DELAWARE LAW” means the General Corporation Law of the State of
\nDelaware.<\/p>\n
“EMPLOYEE PLAN” means, with respect to any Person, any “employee
\nbenefit plan,” as defined in Section 3(3) of ERISA, that (i) is subject to any
\nprovision of ERISA, (ii) is maintained, administered, contributed to or
\nobligated to contribute to by such Person or any of its Affiliates and (iii)
\ncovers any employee or former employee of such Person or any of its
\nSubsidiaries. “CONCENTRIC EMPLOYEE PLAN” means an Employee Plan of Concentric or
\nany of the Concentric Subsidiaries.<\/p>\n
-4-<\/p>\n
“NEXTLINK EMPLOYEE PLAN” means an Employee Plan of NEXTLINK or any of the
\nNEXTLINK Subsidiaries.<\/p>\n
“ENVIRONMENTAL LAWS” means any federal, state, local or foreign law
\n(including, without limitation, common law), treaty, judicial decision,
\nregulation, rule, judgment, order, decree, injunction, permit or governmental
\nrestriction or requirement or any agreement with any Governmental Authority or
\nother third party, relating to human health and safety, the environment or to
\npollutants, contaminants, wastes or chemicals or any toxic, radioactive,
\nignitable, corrosive, reactive or otherwise hazardous substances, wastes or
\nmaterials.<\/p>\n
“ENVIRONMENTAL PERMITS” means, with respect to any Person, all permits,
\nlicenses, franchises, certificates, approvals and other similar authorizations
\nof any Governmental Authority relating to or required by Environmental Laws and
\naffecting, or relating in any way to, the business of such Person or any of its
\nSubsidiaries as currently conducted.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of 1974.<\/p>\n
“ERISA AFFILIATE” of any entity means any other entity that, together
\nwith such entity, would be treated as a single employer under Section 414 of the
\nCode.<\/p>\n
“FCC” means the Federal Communications Commission.<\/p>\n
“FORSTMANN LITTLE AGREEMENT” means the Stock Purchase Agreement, dated
\nas of December 7, 1999, by and between NEXTLINK and the purchasers named therein
\nand all agreements contemplated thereby.<\/p>\n
“HSR ACT” means the Hart-Scott-Rodino Antitrust Improvements Act of
\n1976.<\/p>\n
“KNOWLEDGE” means, with respect to any fact, the conscious awareness of
\nsuch fact by an executive officer (as defined under the 1933 Act) of the
\nrelevant Person.<\/p>\n
“LEVEL 3” means Level 3 Communications, L.L.C., a Delaware limited
\nliability company.<\/p>\n
“LEVEL 3 AGREEMENT” means the Cost Sharing and IRU Agreement, dated
\nJuly 18, 1998, between Level 3 and INTERNEXT.<\/p>\n
“LIEN” means, with respect to any property or asset, any mortgage,
\nlien, pledge, charge, security interest, encumbrance or other adverse claim of
\nany kind in respect of such property or asset. For purposes of this Agreement, a
\nPerson shall be deemed to own subject to a Lien any property or asset that it
\nhas acquired or holds subject to the interest of a vendor or lessor<\/p>\n
-5-<\/p>\n
under any conditional sale agreement, capital lease or other title retention
\nagreement relating to such property or asset.<\/p>\n
“MULTIEMPLOYER PLAN” means each Employee Plan that is a multiemployer
\nplan, as defined in Section 3(37) of ERISA.<\/p>\n
“NASDAQ” means The Nasdaq National Market.<\/p>\n
“NEWCO CLASS B COMMON STOCK” means the Class B Common Stock, par value
\n$0.02, of Newco.<\/p>\n
“NEWCO COMMON STOCK” means the Class A Common Stock, par value $0.02
\nper share, of Newco.<\/p>\n
“NEWCO PREFERRED STOCK” means the Newco Series A Preferred Stock, Newco
\nSeries B Preferred Stock, Newco Series C Preferred Stock, Newco Series E
\nPreferred Stock and Newco Series F Preferred Stock, collectively.<\/p>\n
“NEWCO SERIES A PREFERRED STOCK” means the series of Newco 14%
\nredeemable preferred stock, par value $0.01 per share, to be designated by Newco
\nas Series A Preferred Stock in accordance with Section 8.6 hereof.<\/p>\n
“NEWCO SERIES B PREFERRED STOCK” means the series of Newco 6 1\/2%
\nconvertible preferred stock, par value $0.01 per share, to be designated by
\nNewco as Series B Preferred Stock in accordance with Section 8.6 hereof.<\/p>\n
“NEWCO SERIES C PREFERRED STOCK” means the series of cumulative
\nparticipating preferred stock, par value $0.01 per share, to be designated by
\nNewco as Series C Preferred Stock in accordance with Section 8.6 hereof.<\/p>\n
“NEWCO SERIES D PREFERRED STOCK” means the series of cumulative
\nparticipating preferred stock, par value $0.01 per share, to be designated by
\nNewco as Series D Preferred Stock in accordance with Section 8.6 hereof.<\/p>\n
“NEWCO SERIES E PREFERRED STOCK” means the series of Newco 13 1\/2%
\nredeemable exchangeable preferred stock, par value $1.00 per share, to be
\ndesignated as by Newco as Series E Preferred Stock in accordance with Section
\n8.6 hereof.<\/p>\n
“NEWCO SERIES F PREFERRED STOCK” means the series of Newco 7%
\nconvertible redeemable preferred stock, par value $1.00 per share, to be
\ndesignated as by Newco as Series F Preferred Stock in accordance with Section
\n8.6 hereof.<\/p>\n
“NEXTLINK BALANCE SHEET” means the Consolidated Balance Sheet of
\nNEXTLINK and its consolidated subsidiaries as of September 30, 1999 and the
\nfootnotes thereto, as set forth in the NEXTLINK 10-Q.<\/p>\n
-6-<\/p>\n
“NEXTLINK BALANCE SHEET DATE” means September 30, 1999.<\/p>\n
“NEXTLINK CLASS B COMMON STOCK” means the Class B Common Stock, par
\nvalue $.02 per share, of NEXTLINK.<\/p>\n
“NEXTLINK COMMON STOCK” means the Class A Common Stock, par value $.02
\nper share, of NEXTLINK.<\/p>\n
“NEXTLINK 14% PREFERRED STOCK” means the series of NEXTLINK redeemable
\npreferred stock, par value $0.01 per share, currently designated as NEXTLINK 14%
\nRedeemable Preferred Stock.<\/p>\n
“NEXTLINK GROUP” means NEXTLINK and the NEXTLINK Subsidiaries.<\/p>\n
“NEXTLINK MATERIAL ADVERSE EFFECT” means a material adverse effect on
\nthe financial condition, assets or results of operations of NEXTLINK Group,
\ntaken as a whole, excluding any such effect resulting from or arising in
\nconnection with (i) this Agreement, the transactions contemplated hereby or
\npendancy or the announcement thereof including, but not limited to the NEXTLINK
\nBoard of Director’s decision to enter into this Agreement, (ii) changes or
\nconditions generally affecting the industries in which NEXTLINK and the NEXTLINK
\nSubsidiaries operate or (iii) changes in general economic, regulatory or
\npolitical conditions.<\/p>\n
“NEXTLINK PREFERRED STOCK” means the NEXTLINK 14% Preferred Stock,
\nNEXTLINK Series C Preferred Stock, NEXTLINK Series D Preferred Stock and
\nNEXTLINK 6 1\/2% Preferred Stock, collectively.<\/p>\n
“NEXTLINK SERIES C PREFERRED STOCK” means the Series C Cumulative
\nConvertible Participating Preferred Stock of NEXTLINK.<\/p>\n
“NEXTLINK SERIES D PREFERRED STOCK” means the Series D Cumulative
\nConvertible Participating Preferred Stock of NEXTLINK.<\/p>\n
“NEXTLINK SIGNIFICANT SUBSIDIARY” means any NEXTLINK Subsidiary that
\nwould constitute a “significant subsidiary” within the meaning of Rule 1-02 of
\nRegulation S-X of the SEC as of September 30, 1999.<\/p>\n
“NEXTLINK 6 1\/2% PREFERRED STOCK” means the series of NEXTLINK
\npreferred stock, par value $0.01 per share, currently designated as NEXTLINK 6
\n1\/2% Convertible Preferred Stock.<\/p>\n
“NEXTLINK SUBSIDIARY” means any entity of which securities or other
\nownership interests having ordinary voting power to elect a majority of the
\nboard of directors or other persons performing similar functions are at any
\ntime, directly or indirectly, owned by NEXTLINK, including any NEXTLINK
\nsubsidiary included in the NEXTLINK consolidated financial statements in
\naccordance with GAAP.<\/p>\n
-7-<\/p>\n
“NEXTLINK 10-K” means NEXTLINK’s annual report on Form 10-K for the
\nfiscal year ended December 31, 1998.<\/p>\n
“NEXTLINK 10-Q” means NEXTLINK’s quarterly report on Form 10-Q for the
\nquarter ended September 30, 1999.<\/p>\n
“1933 ACT” means the Securities Act of 1933.<\/p>\n
“1934 ACT” means the Securities Exchange Act of 1934.<\/p>\n
“PENSION PLAN” means any plan (other than a Multiemployer Plan) that is
\nsubject to Title IV of ERISA.<\/p>\n
“PERSON” means an individual, corporation, partnership, limited
\nliability company, association, trust or other entity or organization, including
\na government or political subdivision or an agency or instrumentality thereof.<\/p>\n
“PRIME RATE” means, at any time, the rate of interest per annum equal
\nto the rate of interest per annum quoted, published and commonly known as the
\n“prime rate” of the Bank of America, which the Bank of America establishes at
\nits main office in New York, New York, as the reference rate of interest in
\norder to determine interest rates for loans in U.S. dollars to its U.S.
\nborrowers, adjusted automatically with each quoted or published change in such
\nrate.<\/p>\n
“REGISTRATION RIGHTS AGREEMENT” means the registration rights agreement
\nto be entered into between Eagle River and NEXTLINK or Eagle River and Newco, as
\nthe case may be, for the registration of NEXTLINK Common Stock or Newco Common
\nStock, as the case may be, received by Eagle River in the LHP Share Exchange,
\nwhich Registration Rights Agreement shall be substantially in the form set forth
\nas Exhibit D hereto.<\/p>\n
“RIGHTS” means the rights to purchase one one-thousandth share of
\nConcentric Series A Junior Preferred Stock issued pursuant to the Rights
\nAgreement.<\/p>\n
“SEC” means the Securities and Exchange Commission.<\/p>\n
“SPECIAL COMMITTEE” means the special committee of the independent
\ndirectors of NEXTLINK formed to pass upon the LHP Share Exchange.<\/p>\n
“SUBSEQUENT TRANSACTION” means any transaction whereby (i) any member
\nof the NEXTLINK Group would acquire or divest (by merger, consolidation,
\npurchase or sale of stock or assets or otherwise) any corporation, limited
\nliability company, partnership, other business organization or assets or
\ndivision thereof, (ii) any member of the NEXTLINK Group would acquire or divest
\nan investment interest in any of the foregoing, (iii) any member of the NEXTLINK
\nGroup would issue or retire any equity interest or incur or repay any
\nindebtedness whether in connection <\/p>\n
-8-<\/p>\n
with any item described in (i) or (ii) or otherwise, (iv) any member of the
\nNEXTLINK Group enters into or engages in a strategic alliance or other
\ncommercial relationship or (v) any member of the NEXTLINK Group is acting in the
\nordinary course consistent with past practice; provided, however, in connection
\n ——–
\nwith a Subsequent Transaction described in items (i), (ii), (iii) or (iv) of
\nthis definition, (other than (A) the pending acquisition through Wispra, a
\nCanadian entity in which NEXTLINK owns 65% of the equity and 35% of the voting
\nrights, of fixed wireless spectrum from Industry Canada, (B) the issuance of
\nNEXTLINK Series C Preferred Stock and NEXTLINK Series D Preferred Stock pursuant
\nto the Forstmann Little Agreement and (C) the implementation by NEXTLINK of a
\nsecured bank credit facility in an amount up to $2,000,000,000) which is
\nmaterial to the business or financial condition of NEXTLINK Group taken as a
\nwhole, NEXTLINK shall have received an opinion from a nationally recognized
\ninvestment bank, acting as financial advisor to NEXTLINK, to the effect that,
\nfrom a financial point of view, such Subsequent Transaction is fair to the
\nholders of NEXTLINK Common Stock and, if applicable, NEXTLINK, and such
\ntransaction would not cause (x) the Mergers or the Alternative Merger, as
\napplicable, to be treated as other than 368 Reorganizations, (y) the LHP Share
\nExchange in conjunction with the Mergers or the Alternative Merger, as
\napplicable, to be treated as other than a 351 Transaction or (z) any of the
\nconditions set forth in Article 10 hereof not to be satisfied.<\/p>\n
“SUBSIDIARY” means, with respect to any Person, any entity of which
\nsecurities or other ownership interests having ordinary voting power to elect a
\nmajority of the board of directors or other persons performing similar functions
\nare at any time directly or indirectly owned by such Person, including any
\nsubsidiary included in consolidated financial statements in accordance with
\nGAAP.<\/p>\n
“SUPERIOR PROPOSAL” means any bona fide, unsolicited written
\nAcquisition Proposal that the Board of Directors of Concentric determines in
\ngood faith by a majority vote, after consultation with its financial advisor of,
\nand taking into account all the terms and conditions of the Acquisition
\nProposal, is more favorable to Concentric’s stockholders than the Mergers and
\nfor which financing, to the extent required, is then fully committed or
\nreasonably determined to be available by the Board of Directors of Concentric.<\/p>\n
“TEN DAY AVERAGE CLOSING PRICE” means the average closing price of one
\nshare of NEXTLINK Common Stock as quoted by the National Association of
\nSecurities Dealers Automated Quotation System for the ten trading days
\nimmediately preceding January 15, 2000.<\/p>\n
“WEIGHTED AVERAGE SALES PRICE” means, for the twenty trading day period
\nending on third trading day prior to the Effective Times, the average (rounded
\nto the nearest 1\/10,000) of the<\/p>\n
-9-<\/p>\n
volume weighted averages (rounded to the nearest 1\/10,000) of the trading prices
\nof NEXTLINK Common Stock on Nasdaq for each day during such period, as reported
\nby Bloomberg, L.P.<\/p>\n
Any reference in this Agreement to a statute shall be to such statute,
\nas amended from time to time, and to the rules and regulations promulgated
\nthereunder.<\/p>\n
(b) Each of the following terms is defined in the Section
\nset forth opposite such term:<\/p>\n
TERM SECTION
\n—- ——-<\/p>\n
Adjusted Option…………………………………….. 3.3(a)
\nAlternative Merger………………………………….. 2.5
\nCertificates……………………………………….. 3.2(b)
\nCertificates of Merger………………………………. 2.1(b)
\nClosing……………………………………………. 2.6
\nClosing Date……………………………………….. 2.6
\nCode………………………………………………. Preamble
\nCommon Stock Consideration…………………………… 3.1(c)
\nConcentric…………………………………………. Preamble
\nConcentric Benefit Arrangements………………………. 1.1(a)
\nConcentric Employee Plan…………………………….. 1.1(a)
\nConcentric Intellectual Property……………………… 4.20
\nConcentric Rule 145 Affiliate………………………… 9.8
\nConcentric SEC Documents…………………………….. 4.7(a)
\nConcentric Series B Consideration…………………….. 3.1(h)
\nConcentric Series C Consideration…………………….. 3.1(i)
\nConcentric Stockholders’ Meeting……………………… 4.9
\nConcentric Stockholders’ Approval…………………….. 4.22
\nConcentric Stock Option……………………………… 3.3(a)
\nConcentric Voting Agreement………………………….. Preamble
\nConfidentiality Agreement……………………………. 7.3(a)
\nContributed Interest………………………………… Preamble
\nEagle River………………………………………… Preamble
\nEffective Times…………………………………….. 2.1(b)
\nEnd Date…………………………………………… 11.1(b)
\nExchange Agent……………………………………… 3.2(a)
\nExchange Consideration………………………………. 7.5(a)
\nExchange Fund………………………………………. 3.2(a)
\nExchange Offer……………………………………… 7.5(a)
\nExchange Offer Conditions……………………………. 7.5(a)
\nExchange Offer Documents…………………………….. 7.5(b)
\nExchange Offer Merger……………………………….. 7.5(g)
\nExchange Offer Transactions………………………….. 9.7(a)
\nExchange Registration Statement………………………. 7.5(b)
\nGAAP………………………………………………. 4.8
\nGovernmental Authority………………………………. 4.3
\nIndemnified Person………………………………….. 8.2(a)
\nINTERNEXT………………………………………….. Preamble
\nINTERNEXT Guarantee…………………………………. 9.1(c)
\nIRS……………………………………………….. 4.16
\nLHP……………………………………………….. Preamble<\/p>\n
-10-<\/p>\n
TERM SECTION
\n—- ——-
\nLHP Consideration…………………………………… 2.2(a)
\nLHP Share Exchange………………………………….. Preamble
\nMerger Consideration………………………………… 3.1(i)
\nMergers……………………………………………. 2.1(a)
\nNewco……………………………………………… Preamble
\nNew Directors………………………………………. 8.4
\nNew Directors Committee……………………………… 8.4
\nNEXTLINK…………………………………………… Preamble
\nNEXTLINK 6 1\/2% Preferred Consideration……………….. 3.1(e)
\nNEXTLINK 14% Preferred
\n Consideration…………………………………….. 3.1(d)
\nNEXTLINK Benefit Arrangements………………………… 1.1(a)
\nNEXTLINK Employee Plan………………………………. 1.1(a)
\nNEXTLINK Intellectual Property……………………….. 5.18
\nNEXTLINK SEC Documents………………………………. 5.7(a)
\nNEXTLINK Securities…………………………………. 5.5(c)
\nNEXTLINK Series C Preferred
\n Consideration…………………………………….. 3.1(f)
\nNEXTLINK Series D Preferred
\n Consideration…………………………………….. 3.1(g)
\nNEXTLINK Stock Options………………………………. 3.3(b)
\nNEXTLINK Subsidiary…………………………………. 1.1(a)
\nOffer to Exchange…………………………………… 7.5(c)
\nProxy Statement…………………………………….. 4.9
\nRegistration Statement………………………………. 4.9
\nSchedule 14D-1……………………………………… 7.5(b)
\nSchedule 14D-9……………………………………… 7.5(d)
\nStandstill Agreement………………………………… 7.3(a)
\nStockholders’ Meetings………………………………. 4.9
\nSuccessor Plan……………………………………… 8.5(b)
\nSurviving Corporation……………………………….. 2.1(a)
\nTaxes……………………………………………… 4.16
\nTax Return…………………………………………. 4.16
\nTermination Fee…………………………………….. 11.3(b)
\nThird Party………………………………………… 7.3(a)
\nTransferred Employees……………………………….. 8.5(a)
\n351 Transaction…………………………………….. 9.7(a)
\n368 Reorganization………………………………….. 9.7(a)<\/p>\n
ARTICLE 2.
\n THE MERGERS<\/p>\n
SECTION 2.1. The Mergers. (a) At the applicable Effective Time,
\n ————
\nNEXTLINK shall be merged with and into Newco, and Concentric shall immediately
\nthereafter be merged with and into Newco (collectively, the “MERGERS”) in
\naccordance with Delaware Law and upon the terms set forth in this Agreement,
\nwhereupon the separate existence of Concentric and NEXTLINK shall cease and
\nNewco shall be the surviving corporation (the “SURVIVING CORPORATION”).<\/p>\n
-11-<\/p>\n
(b) As soon as practicable (and, in any event, within 5 Business
\nDays) after satisfaction or, to the extent permitted hereunder, waiver of all
\nconditions to the Mergers set forth in Article 10, other than conditions that by
\ntheir nature are to be satisfied at the Effective Times and will in fact be
\nsatisfied at the Effective Times, certificates of merger shall be duly prepared,
\nexecuted and acknowledged by Concentric and Newco and by NEXTLINK and Newco,
\nrespectively and thereafter delivered to the Secretary of State of Delaware for
\nfiling pursuant to Delaware Law. Such certificate of merger shall be referred to
\nherein as the “CERTIFICATES OF MERGER.” The Mergers shall become effective at
\nsuch time (their respective “EFFECTIVE TIMES”) as the relevant Certificates of
\nMerger are duly filed with the Secretary of State of Delaware (or at such later
\ntime as may be agreed by Concentric and NEXTLINK and specified in the
\nCertificates of Merger).<\/p>\n
(c) From and after the Effective Times, the Surviving Corporation
\nshall possess all the rights, powers, privileges and franchises and be subject
\nto all of the obligations, liabilities, restrictions and disabilities of
\nNEXTLINK and Concentric, all as provided under Delaware Law.<\/p>\n
SECTION 2.2. LHP Share Exchange. (a) At the Closing immediately after the
\n ——————
\nEffective Times, Eagle River shall contribute to Newco, and Newco shall accept
\nfrom Eagle River all of Eagle River’s right, title and interest in and to the
\nContributed Interest, free and clear of any Liens other than Liens created by
\nNEXTLINK or Newco, for the consideration described and payable as provided in
\nSection 2.2(d) (the “LHP CONSIDERATION”).<\/p>\n
(b) Immediately after the Effective Times, Newco shall assume, and
\nshall thereafter perform and be bound by, and indemnify Eagle River against, any
\nand all of the conditions, covenants and obligations of Eagle River solely as a
\nmember of LHP arising after the Effective Times, and effective as of the
\nEffective Times, Newco shall become the sole member of LHP and Eagle River shall
\ncease to be a member of LHP.<\/p>\n
(c) At the Closing, immediately after the Effective Times, Eagle
\nRiver shall deliver to Newco, free and clear of any Liens other than Liens
\ncreated by NEXTLINK or Newco, the Contributed Interest.<\/p>\n
(d) At the Closing, Newco shall pay the LHP Consideration in full by
\nissuing a certificate registered in the name of Eagle River representing:<\/p>\n
(i) if the Ten Day Average Closing Price is greater than or
\n equal to $42.80, but less than or equal to $64.20, 4,112,150 shares of
\n Newco Common Stock;<\/p>\n
-12-<\/p>\n
(ii) if the Ten Day Average Closing Price is greater than
\n $64.20, 3,426,791 shares of Newco Common Stock; or<\/p>\n
(iii) if the Ten Day Average Closing Price is less than $42.80,
\n 5,140,187 shares of Newco Common Stock.<\/p>\n
(e) Newco shall reimburse Eagle River in cash all amounts advanced or
\nloaned by Eagle River to LHP after December 6, 1999 to enable INTERNEXT to
\nsatisfy payments due to Level 3 under the Level 3 Agreement, together with
\ninterest on such amounts from the transfer date or dates to the Closing, at the
\nrate per annum equal to the Prime Rate.<\/p>\n
SECTION 2.3. Certificate of Incorporation and Bylaws of the Surviving
\n ——————————————————–
\nCorporation. Upon the filing of the Certificate of Merger relating to the merger
\n———–
\nof NEXTLINK with and into Newco, the Surviving Corporation’s certificate of
\nincorporation shall be amended changing the name of Newco to NEXTLINK
\nCommunications, Inc. and further amended so as to contain the substantive
\nprovisions of the NEXTLINK certificate of incorporation in effect immediately
\nprior to the Effective Time of such Merger, provided, that the number of
\n ——–
\nauthorized shares of Newco Common Stock and Newco Class B Common Stock shall be
\ntwo times the number of authorized shares of NEXTLINK Common Stock and NEXTLINK
\nClass B Common Stock, respectively, and the NEXTLINK Preferred Stock shall be
\nredesignated as provided herein. Upon the filing of the Certificate of Merger
\nrelating to the merger of Concentric with and into Newco, the Surviving
\nCorporation’s certificate of incorporation shall be further amended to provide
\nfor the designation of series of Newco Preferred Stock issuable upon the
\nconversion of Concentric Preferred Stock as provided herein. The bylaws of
\nNEXTLINK in effect at the Effective Time shall be the bylaws of the Surviving
\nCorporation until amended in accordance with applicable law.<\/p>\n
SECTION 2.4. Directors and Officers of the Surviving Corporation. From and
\n —————————————————
\nafter the Effective Times, until successors are duly elected or appointed and
\nqualified in accordance with applicable law, (i) the directors of NEXTLINK at
\nthe Effective Time of the NEXTLINK Merger, together with the New Directors as
\nspecified in Section 8.4, shall be the directors of the Surviving Corporation
\nand (ii) the officers of NEXTLINK at the Effective Time of the NEXTLINK Merger
\nshall be the officers of the Surviving Corporation.<\/p>\n
SECTION 2.5. Alternative Transaction Structure. (a) The parties anticipate
\n ———————————
\nand intend that immediately following the Effective Times (i) Newco will be
\ndeemed to be a successor issuer to NEXTLINK and Concentric for purposes of Rule
\n12g-3 under the 1934 Act, (ii) Newco will be entitled to include the prior
\nactivities and status of NEXTLINK and Concentric in determining whether Newco
\nmeets the eligibility requirements for the use of Form S-3 (iii) Newco will be
\nentitled to include the prior<\/p>\n
-13-<\/p>\n
reporting history of NEXTLINK and Concentric in determining whether it has
\ncomplied with the public information requirements of Rule 144(c)(1) and (iv)
\nNewco will not be required to comply with the prospectus or delivery
\nrequirements of Section 4(3) of the 1933 Act by virtue of Rule 174(b)
\npromulgated thereunder. If, prior to the Effective Time, the parties shall not
\nhave received a no-action letter or other similar assurance from the Securities
\nand Exchange Commission reasonably satisfactory to NEXTLINK and Concentric to
\nthe foregoing effect, the parties will restructure the transaction to provide
\nfor the merger of Concentric with and into NEXTLINK in the manner contemplated
\nby this Section 2.5. In such event, all references to the term “Mergers” shall
\nbe deemed references to the transactions contemplated by this Section 2.5; all
\nreferences to the term “Surviving Corporation” shall be deemed references to
\nNEXTLINK as the Surviving Corporation in the merger of Concentric into NEXTLINK;
\nall references to the term “Effective Time” in this Agreement shall be deemed
\nreferences to the time at which the certificate of merger is duly filed with the
\nSecretary of State of the State of Delaware (or at such later time as is
\nspecified in the certificate of merger) with respect to the merger as
\nrestructured in the manner contemplated by this Section 2.5; Section 2.1 shall
\nno longer be of any force or effect; and the provisions of this Section 2.5
\nshall govern the terms of the Merger. The Merger, restructured as contemplated
\nby this Section 2.5 is sometimes referred to as the “ALTERNATIVE MERGER.” The
\nAlternative Merger shall not affect the consummation of the LHP Share Exchange,
\nwhich shall take place between Eagle River and NEXTLINK, whether or not it
\nqualifies as a 351 Transaction.<\/p>\n
(b) The following terms shall apply to the Alternative Merger: At
\nthe Effective Time of the Alternative Merger, Concentric shall be merged with
\nand into NEXTLINK in accordance with Delaware Law and upon the terms set forth
\nin this Agreement, whereupon the separate existence of Concentric shall cease;
\nthe representations, warranties and other provisions of this Agreement shall be
\nappropriately amended to account for the change while otherwise effecting the
\nintent of the parties as expressed in this Agreement; for the avoidance of doubt
\nat the effective time of the Alternative Merger, (i) each issued and outstanding
\nshare of Concentric Common Stock shall be converted into the right to receive a
\nnumber of fully paid and nonassessable shares of NEXTLINK Common Stock equal to
\nthe Common Stock Ratio (together with cash in lieu of fractional shares of
\nNEXTLINK Common Stock as specified below), (ii) each issued and outstanding
\nshare of Concentric Series B Preferred Stock shall be converted into the right
\nto receive one share of a series of preferred stock to be designated by
\nNEXTLINK, which series shall have terms that are identical to those of
\nConcentric Series B Preferred Stock (giving effect to any amendments thereto as
\ncontemplated by Section 7.4 and except that such series shall rank pari passu
\nwith the NEXTLINK 14% Preferred Stock), (iii) each issued and outstanding share
\nof Concentric Series C<\/p>\n
-14-<\/p>\n
Preferred Stock shall be converted into the right to receive one share of a
\nseries of preferred stock to be designated by NEXTLINK, which series shall have
\nterms that are identical to those of Concentric Series C Preferred Stock (except
\nthat such series shall rank pari passu with the NEXTLINK 6 1\/2% Preferred
\nStock), (iv) each outstanding option to acquire Concentric Common Stock then
\noutstanding shall be assumed by NEXTLINK, (v) each outstanding warrant to
\npurchase Concentric Common Stock will become exercisable for NEXTLINK Common
\nStock in accordance with its terms, (vi) the Alternative Merger shall not
\notherwise affect the provisions of Article 3 hereof; provided, that the
\n ——–
\nprovisions of Sections 3.1(a), 3.1(b), 3.1(d), 3.1(e), 3.1(f), 3.1(g) and 3.1(h)
\nshall be of no force or effect and the current references to Newco Common Stock
\nand Newco Preferred Stock in Article 3 shall be deemed to be references to
\nNEXTLINK Common Stock and NEXTLINK Preferred Stock, respectively, and the
\ncurrent references to NEXTLINK Common Stock shall be disregarded, (vii) all
\nobligations of NEXTLINK set forth herein shall not be affected or limited by the
\nAlternative Merger, (viii) all obligations of Newco hereunder shall cease, and,
\nas applicable, shall become obligations of NEXTLINK, (ix) the LHP Share Exchange
\nshall be consummated, except that the LHP Consideration shall be in the form of
\nNEXTLINK Common Stock rather than Newco Common Stock and (xi) NEXTLINK shall be
\nresponsible for the obligations of the Surviving Corporation under Section 8.2
\nhereof. The parties shall execute and deliver an amendment and restatement of
\nthis Agreement giving effect to the intentions of the parties to implement the
\nAlternative Merger as described in this Section 2.5.<\/p>\n
SECTION 2.6. Closing. The closing of the Mergers and the LHP Share
\n ——-
\nExchange (the “CLOSING”) will take place on a date and time to be specified by
\nthe parties (the “CLOSING DATE”), which shall be no later than the fifth
\nBusiness Day after satisfaction or waiver of the conditions set forth in Article
\n9 (other than those conditions that by their nature are to be satisfied at the
\nClosing, but subject to the satisfaction or waiver of those conditions), unless
\nanother time or date is agreed to by the parties hereto. The Closing will be
\nheld at the offices of Willkie Farr & Gallagher, 787 Seventh Avenue, New York,
\nNew York 10019, or at such other location as may be agreed to by the parties
\nhereto.<\/p>\n
ARTICLE 3.
\n CONVERSION OF SECURITIES<\/p>\n
SECTION 3.1. Effect on Capital Stock. As of the Effective Time, by virtue
\n ———————–
\nof the Mergers and without any action on the part of the holder of any shares of
\ncapital stock of Concentric, NEXTLINK or Newco:<\/p>\n
(a) NEXTLINK Common Stock. Each share of NEXTLINK Common Stock issued
\n ———————
\nand outstanding immediately prior to the<\/p>\n
-15-<\/p>\n
Effective Time (other than shares to be canceled in accordance with Section
\n3.1(j)) shall, by operation of the merger of NEXTLINK with and into Newco, be
\nconverted into one share of Newco Common Stock and each certificate representing
\nshares of NEXTLINK Common Stock immediately prior to the Effective Time shall be
\ndeemed to represent the same number of shares of Newco Common Stock.<\/p>\n
(b) NEXTLINK Class B Common Stock. Each share of NEXTLINK Class B
\n —————————–
\nCommon Stock issued and outstanding immediately prior to the Effective Time
\n(other than shares to be canceled in accordance with Section 3.1(j)) shall, by
\noperation of the merger of NEXTLINK with and into Newco, be converted into one
\nshare of Newco Class B Common Stock and each certificate representing shares of
\nNEXTLINK Class B Common Stock immediately prior to the Effective Time shall be
\ndeemed to represent the same number of shares of Newco Class B Common Stock.<\/p>\n
(c) Conversion of Concentric Common Stock. Subject to Section
\n ————————————-
\n3.1(m), each issued and outstanding share (other than shares to be canceled in
\naccordance with Section 3.1(j)) of Concentric Common Stock shall be converted
\ninto the right to receive a number of fully paid and nonassessable shares of
\nNewco Common Stock equal to the Common Stock Ratio (together with the cash in
\nlieu of fractional shares of Newco Common Stock as specified below, the “COMMON
\nSTOCK CONSIDERATION”) and the associated Rights shall be terminated immediately
\nprior thereto. As of the Effective Time, all such shares of Concentric Common
\nStock shall no longer be outstanding and shall automatically be canceled and
\nretired and shall cease to exist, and each holder of a certificate representing
\nany such shares shall cease to have any rights with respect thereto, except the
\nright to receive the Concentric Common Stock Consideration upon surrender of
\nsuch certificate in accordance with Section 3.2. Holders of fractional shares of
\nConcentric Common Stock as a result of the Mergers shall, in lieu of such
\nfractional shares, receive cash in the amount of the fair market value thereof,
\nas provided in Section 3.2(e).<\/p>\n
(d) Conversion of NEXTLINK 14% Preferred Stock. Subject to Section
\n ——————————————
\n3.1(m), each issued and outstanding share (other than shares to be canceled in
\naccordance with Section 3.1(j)) of NEXTLINK 14% Preferred Stock outstanding
\nimmediately prior to the Effective Time shall be converted into the right to
\nreceive one share of Newco Series A Preferred Stock (the “NEXTLINK 14% PREFERRED
\nCONSIDERATION”) that shall have terms that are identical to those of NEXTLINK
\n14% Preferred Stock, provided that (A) the Newco Series A Preferred Stock shall
\nrank on parity with the Newco Series E Preferred Stock and senior to all other
\nshares of Newco Preferred Stock with respect to the payment of dividends and the
\ndistribution of assets upon liquidation, dissolution or winding up, (B) as a
\nresult of the Mergers, the issuer thereof shall be Newco rather than NEXTLINK;
\nand (C) Newco’s obligations with respect to quarterly dividends<\/p>\n
-16-<\/p>\n
on Newco Series A Preferred Stock shall accrue from the date of the last
\ndividend paid on NEXTLINK 14% Preferred Stock.<\/p>\n
(e) Conversion of NEXTLINK 6 1\/2% Preferred Stock. Subject to
\n ———————————————
\nSection 3.1(m), each issued and outstanding share (other than shares to be
\ncanceled in accordance with Section 3.1(j)) of NEXTLINK 6 1\/2% Preferred Stock
\noutstanding immediately prior to the Effective Time shall be converted into the
\nright to receive one share of Newco Series B Preferred Stock (the “NEXTLINK 6
\n1\/2% PREFERRED CONSIDERATION”) that shall have terms that are identical to those
\nof NEXTLINK 6 1\/2% Preferred Stock, provided that (A) the Newco Series B
\nPreferred Stock shall rank on parity with the Newco Series F Preferred Stock and
\njunior to all other series of Newco Preferred Stock with respect to the payment
\nof dividends and the distribution of assets upon liquidation, dissolution or
\nwinding up, (B) as a result of the Mergers, the issuer thereof shall be Newco
\nrather than NEXTLINK; and (C) Newco’s obligations with respect to quarterly
\ndividends on Newco Series B Preferred Stock shall accrue from the date of the
\nlast dividend paid on NEXTLINK 6 1\/2% Preferred Stock.<\/p>\n
(f) Conversion of NEXTLINK Series C Preferred Stock. Subject to
\n ———————————————–
\nSection 3.1(m), each issued and outstanding share (other than shares to be
\ncanceled in accordance with Section 3.1(j)) of NEXTLINK Series C Preferred Stock
\noutstanding immediately prior to the Effective Time shall be converted into the
\nright to receive one share of Newco Series C Preferred Stock (the “NEXTLINK
\nSERIES C PREFERRED CONSIDERATION”) that shall have terms that are identical to
\nthose of NEXTLINK Series C Preferred Stock, provided that (A) the Newco Series C
\nPreferred Stock shall rank on parity with the Newco Series D Preferred Stock,
\nsenior to the Newco Series B Preferred Stock and Newco Series F Preferred Stock,
\nand junior to the Newco Series A Preferred Stock and Newco Series E Preferred
\nStock with respect to the payment of dividends and the distribution of assets
\nupon liquidation, dissolution or winding up, (B) as a result of the Mergers, the
\nissuer thereof shall be Newco rather than NEXTLINK; and (C) Newco’s obligations
\nwith respect to quarterly dividends on Newco Series C Preferred Stock shall
\naccrue from the date of the last dividend paid on NEXTLINK Series C Preferred
\nStock, or the date of issuance, if no such dividends have been paid.<\/p>\n
(g) Conversion of NEXTLINK Series D Preferred Stock. Subject to
\n ———————————————–
\nSection 3.1(m), each issued and outstanding share (other than shares to be
\ncanceled in accordance with Section 3.1(j)) of NEXTLINK Series D Preferred Stock
\noutstanding immediately prior to the Effective Time shall be converted into the
\nright to receive one share of Newco Series D Preferred Stock (the “NEXTLINK
\nSERIES D PREFERRED CONSIDERATION”) that shall have terms that are identical to
\nthose of NEXTLINK Series D Preferred Stock, provided that (A) the Newco Series D
\nPreferred Stock shall rank on parity with the Newco Series C Preferred Stock,
\nsenior to the Newco Series B Preferred Stock and Newco Series F Preferred Stock,
\nand junior to the Newco Series A Preferred Stock and Newco<\/p>\n
-17-<\/p>\n
Series E Preferred Stock with respect to the payment of dividends and the
\ndistribution of assets upon liquidation, dissolution or winding up, (B) as a
\nresult of the Mergers, the issuer thereof shall be Newco rather than NEXTLINK;
\nand (C) Newco’s obligations with respect to quarterly dividends on Newco Series
\nD Preferred Stock shall accrue from the date of the last dividend paid on
\nNEXTLINK Series D Preferred Stock, or the date of issuance, if no such dividends
\nhave been paid.<\/p>\n
(h) Conversion of Concentric Series B Preferred Stock. Each issued
\n ————————————————-
\nand outstanding share (other than shares to be canceled in accordance with
\nSection 3.1(j)) of Concentric Series B Preferred Stock outstanding immediately
\nprior to the Effective Time shall be converted into the right to receive one
\nshare of Newco Series E Preferred Stock (the “CONCENTRIC SERIES B
\nCONSIDERATION”) that shall have terms that are identical to those of Concentric
\nSeries B Preferred Stock (giving effect to any amendments thereto contemplated
\nby Section 7.4), provided that (A) the Newco Series E Preferred Stock shall rank
\non parity with the Newco Series A Preferred Stock and senior to all other Newco
\nPreferred Stock with respect to the payment of dividends and the distribution of
\nassets upon liquidation, dissolution or winding up, (B) as a result of the
\nMergers, the issuer thereof shall be Newco rather than Concentric; and (C)
\nNewco’s obligations with respect to quarterly dividends on Newco Series E
\nPreferred Stock shall accrue from the date of the last dividend paid on
\nConcentric Series B Preferred Stock.<\/p>\n
(i) Conversion of Concentric Series C Preferred Stock. Each issued
\n ————————————————-
\nand outstanding share (other than shares to be canceled in accordance with
\nSection 3.1(m)) of Concentric Series C Preferred Stock outstanding immediately
\nprior to the Effective Time shall be converted into the right to receive one
\nshare of Newco Series F Preferred Stock (the “CONCENTRIC SERIES C CONSIDERATION”
\nand, together with the Common Stock Consideration, the NEXTLINK 14% Preferred
\nConsideration, the NEXTLINK 6 1\/2% Preferred Consideration, the NEXTLINK Series
\nC Preferred Consideration, the NEXTLINK Series D Preferred Consideration and the
\nConcentric Series B Consideration, the “MERGER CONSIDERATION”) that shall have
\nterms that are identical to those of Concentric Series C Preferred Stock,
\nprovided that (A) the Newco Series F Preferred Stock shall rank on a parity with
\nthe Newco Series B Preferred Stock and junior to all other Newco Preferred Stock
\nwith respect to the payment of dividends and the distribution of assets upon
\nliquidation, dissolution or winding up, (B) as a result of the Mergers, the
\nissuer thereof shall be Newco rather than Concentric; (C) Newco’s obligations
\nwith respect to quarterly dividends on Newco Series F Preferred Stock shall
\naccrue from the date of the last dividend paid on Concentric Series C Preferred
\nStock; (D) the last sentence of Section 3 of the Amended Certificate of
\nDesignation relating thereto shall be omitted; and (E) the Newco Series F
\nPreferred Stock shall initially be convertible into a number of shares of Newco
\nCommon Stock equal to (x) the “Conversion Rate” of<\/p>\n
-18-<\/p>\n
Concentric Series C Preferred Stock in effect immediately prior to the Effective
\nTime multiplied by (y) the Common Stock Ratio.<\/p>\n
(j) Cancellation of Stock. All shares of Concentric Common Stock,
\n ———————
\nNEXTLINK Common Stock, Concentric Preferred Stock and NEXTLINK Preferred Stock
\nthat are directly owned by Concentric or NEXTLINK shall automatically be
\ncanceled and retired and shall cease to exist, and no consideration shall be
\ndelivered in exchange therefor. The Concentric Series A Junior Preferred Stock
\nshall cease to exist as a class, and any outstanding shares thereof shall be
\ncanceled.<\/p>\n
(k) Options. At the Effective Time, all stock options to purchase
\n ——-
\nConcentric Common Stock and NEXTLINK Common Stock then outstanding shall be
\nassumed by Newco in accordance with Section 3.3.<\/p>\n
(l) Warrants. Outstanding warrants to purchase Concentric Common
\n ——–
\nStock and NEXTLINK Common Stock will become exercisable for Newco Common Stock
\nin accordance with their terms.<\/p>\n
(m) Anti-Dilution Provisions. In the event NEXTLINK changes (or
\n ————————-
\nestablishes a record date for changing) the number of shares of its common stock
\nissued and outstanding prior to the Effective Date as a result of a stock split,
\nstock dividend, recapitalization, subdivision, reclassification, combination,
\nexchange of shares or similar transaction with respect to its outstanding common
\nstock and the record date therefor shall be prior to the Effective Date, the
\nCommon Stock Ratio shall be proportionately adjusted to reflect such stock
\nsplit, stock dividend, recapitalization, subdivision, reclassification,
\ncombination, exchange of shares of similar transaction.<\/p>\n
(n) Treatment of NEXTLINK Common Certificates. Each certificate
\n —————————————–
\nrepresenting shares of NEXTLINK Common Stock and NEXTLINK Class B Common Stock
\nimmediately prior to the Effective Time shall from and after the Effective Time
\nbe deemed to evidence the ownership of shares of Newco Common Stock and Newco
\nClass B Common Stock, respectively, into which such shares were converted in
\naccordance with Sections 3.1(a) and 3.1(b) hereof, and each holder of such a
\ncertificate shall have and be entitled to exercise any voting and other rights
\nwith respect to, and to receive any dividend and other distribution upon, the
\nshares of Newco Common Stock and Newco Class B Common Stock evidenced by such
\noutstanding certificates.<\/p>\n
SECTION 3.2. Exchange of Certificates.
\n ————————<\/p>\n
(a) Exchange Agent. Prior to the Effective Time, Newco shall appoint
\n ————–
\na bank or trust company to act as exchange agent hereunder for the purpose of
\nexchanging Certificates, as defined below, for the Merger Consideration (the
\n“EXCHANGE AGENT”). At or prior to the Effective Time, NEXTLINK shall cause Newco
\nto<\/p>\n
-19-<\/p>\n
deposit with the Exchange Agent, in trust for the benefit of the holders of
\nConcentric Common Stock, Concentric Preferred Stock and NEXTLINK Preferred
\nStock, certificates representing the Newco Common Stock and Newco Preferred
\nStock issuable pursuant to Section 3.1 in exchange for the outstanding shares of
\nConcentric Common Stock, Concentric Preferred Stock and NEXTLINK Preferred
\nStock, respectively, and such cash as it deems likely to be sufficient to pay
\ncash in lieu of fractional shares pursuant to Section 3.2(e) and any dividends
\nand other distributions pursuant to Section 3.2(c). The cash and certificates of
\nNewco Common Stock, and Newco Preferred Stock deposited with the Exchange Agent
\nshall hereinafter be referred to as the “EXCHANGE FUND.”<\/p>\n
(b) Exchange Procedures. As soon as is practicable after the
\n ——————–
\nEffective Time, the Exchange Agent shall mail to each holder of record of a
\ncertificate or certificates which immediately prior to the Effective Time
\nrepresented outstanding shares of Concentric Common Stock, Concentric Preferred
\nStock, and NEXTLINK Preferred Stock (the “CERTIFICATES”) whose shares were
\nconverted into the right to receive the Merger Consideration pursuant to Section
\n3.1: (i) a letter of transmittal (which shall specify that delivery shall be
\neffected, and risk of loss and title to the Certificates shall pass, only upon
\ndelivery of the Certificates to the Exchange Agent and shall be in such form and
\nhave such other provisions as NEXTLINK may reasonably specify) and (ii)
\ninstructions for use in surrendering the Certificates in exchange for
\ncertificates representing the Merger Consideration. Upon surrender of a
\nCertificate for cancellation to the Exchange Agent, together with such letter of
\ntransmittal, duly executed, and such other documents as may reasonably be
\nrequired by the Exchange Agent, the holder of such Certificate shall be entitled
\nto receive in exchange therefor a certificate representing that number of whole
\nshares of Newco Common Stock or Newco Preferred Stock that such holder has the
\nright to receive pursuant to the provisions of this Article 3, certain dividends
\nor other distributions in accordance with Section 3.2(c), and cash in lieu of
\nany fractional share of Newco Common Stock in accordance with Section 3.2(e),
\nand the Certificate so surrendered shall forthwith be canceled. In the event of
\na transfer of ownership of Concentric Common Stock, Concentric Preferred Stock,
\nor NEXTLINK Preferred Stock that is not registered in the transfer records of
\nConcentric or NEXTLINK, respectively, a certificate representing the proper
\nnumber of shares of Newco Common Stock, or Newco Preferred Stock may be issued
\nto a Person other than the Person in whose name the Certificate so surrendered
\nis registered if such Certificate has been properly endorsed or otherwise is in
\nproper form for transfer, and if the Person requesting such issuance shall pay
\nany transfer or other taxes required by reason of the issuance of shares of
\nNewco Common Stock or Newco Preferred Stock to a Person other than the
\nregistered holder of such Certificate (or shall establish to the satisfaction of
\nNEXTLINK that such tax has been paid or is not applicable). Until surrender as
\ncontemplated by this Section 3.2(b), each Certificate shall be deemed at any
\ntime after the Effective Time<\/p>\n
-20-<\/p>\n
to represent only the right to receive upon such surrender the Merger
\nConsideration and any cash in lieu of fractional shares to be issued or paid in
\nconsideration therefor upon surrender of such certificate in accordance with
\nthis Section 3.2. No interest shall be paid or will accrue on any cash payable
\nto holders of Certificates pursuant to the provisions of this Article 3.<\/p>\n
(c) Distributions with Respect to Unexchanged Shares. No dividends or
\n ————————————————
\nother distributions with respect to Newco Common Stock or Newco Preferred Stock
\nwith a record date after the Effective Time shall be paid to the holder of any
\nunsurrendered Certificate with respect to the shares of Newco Common Stock or
\nNewco Preferred Stock represented thereby, and no cash payment in lieu of
\nfractional shares shall be paid to any such holder pursuant to Section 3.2(e),
\nuntil the holder of record of such Certificate shall surrender such Certificate
\nin accordance with this Article 3. Subject to the effect of applicable escheat
\nor similar laws, following surrender of any such Certificate there shall be paid
\nto the holder of the certificate representing whole shares of Newco Common Stock
\nor Newco Preferred Stock issued in exchange therefor, without interest: (i) at
\nthe time of such surrender, the amount of dividends or other distributions with
\na record date after the Effective Time theretofore paid with respect to such
\nwhole shares of Newco Common Stock or Newco Preferred Stock and the amount of
\nany cash payable in lieu of a fractional share of Newco Common Stock to which
\nsuch holder is entitled pursuant to Section 3.2(e); and (ii) at the appropriate
\npayment date, the amount of dividends or other distributions with a record date
\nafter the Effective Time but prior to such surrender and with a payment date
\nsubsequent to such surrender payable with respect to such whole shares of Newco
\nCommon Stock or Newco Preferred Stock.<\/p>\n
(d) No Further Ownership Rights in Concentric and NEXTLINK Stock. All
\n ————————————————————
\nshares of Newco Common Stock and Newco Preferred Stock issued upon the exchange
\nof Certificates in accordance with the terms of this Article 3 (including any
\ncash paid pursuant to this Article 3) shall be deemed to have been issued (and
\npaid) in full satisfaction of all rights pertaining to the shares of Concentric
\nCommon Stock, Concentric Preferred Stock, and NEXTLINK Preferred Stock
\npreviously represented by such Certificates, subject, however, to the Surviving
\nCorporation’s obligation to pay any dividends or make any other distributions
\nwith a record date prior to the Effective Time which may have been declared or
\nmade by Concentric or NEXTLINK on shares of Concentric Common Stock, Concentric
\nPreferred Stock, and NEXTLINK Preferred Stock which remain unpaid at the
\nEffective Time, and there shall be no further registration of transfers on the
\nstock transfer books of the Surviving Corporation of the shares of Concentric
\nCommon Stock, Concentric Preferred Stock and NEXTLINK Preferred Stock which were
\noutstanding immediately prior to the Effective Time. The stock transfer books of
\nNEXTLINK relating to the NEXTLINK Common Stock and NEXTLINK Class B Common Stock
\nimmediately prior to the Effective Time shall be the stock <\/p>\n
-21-<\/p>\n
transfer books of Newco at the Effective Time with respect to Newco Common Stock
\nand Newco Class B Common Stock. If, after the Effective Time, Certificates are
\npresented to the Surviving Corporation or the Exchange Agent for any reason,
\nthey shall be canceled and exchanged as provided in this Article 3.<\/p>\n
(e) No Fractional Shares. No certificates or scrip representing
\n ——————–
\nfractional shares of Newco Common Stock shall be issued upon the surrender for
\nexchange of Certificates, no dividend or distribution by Newco shall relate to
\nsuch fractional share interests and such fractional share interests shall not
\nentitle the owner thereof to vote or to any rights of a stockholder of Newco.
\nAll fractional shares of Newco Common Stock that a holder of shares of
\nConcentric Common Stock is entitled to as a result of the Mergers shall be
\naggregated and if a fractional share results from such aggregation, such holder
\nshall be entitled to receive, in lieu thereof, cash (without interest) in an
\namount, less the amount of any withholding taxes that may be required thereon,
\nequal to such fractional part of a share of NEXTLINK Common Stock multiplied by
\nthe volume-weighted average per share closing price of NEXTLINK Common Stock on
\nthe Closing Date as reported by Bloomberg, L.P.<\/p>\n
(f) Termination. Any holders of the Certificates who have not complied
\n ———–
\nwith this Article 3 shall thereafter look only to Newco for payment of their
\nclaim for Merger Consideration, any dividends or distributions with respect to
\nNewco Common Stock and Newco Preferred Stock and any cash in lieu of fractional
\nshares of Newco Common Stock.<\/p>\n
(g) No Liability. None of NEXTLINK, Concentric, Newco or the Exchange
\n ————
\nAgent shall be liable to any Person in respect of any shares of Newco Common
\nStock and Newco Preferred Stock, any dividends or distributions with respect
\nthereto, any cash in lieu of fractional shares of Newco Common Stock or any cash
\nfrom the Exchange Fund, in each case delivered to a public official pursuant to
\nany applicable abandoned property, escheat or similar law. If any Certificate
\nshall not have been surrendered prior to the earlier date on which any Merger
\nConsideration, any dividends or distributions payable to the holder of such
\nCertificate or any cash payable to the holder of such Certificate pursuant to
\nthis Article 3, would otherwise escheat to or become the property of any
\nGovernmental Authority, any such Merger Consideration, dividends or
\ndistributions in respect of such Certificate or such cash shall, to the extent
\npermitted by applicable law, become the property of the Surviving Corporation,
\nfree and clear of all claims or interest of any Person previously entitled
\nthereto.<\/p>\n
(h) Investment. The Exchange Agent shall invest any cash provided to
\n ———-
\nit pursuant to this Article 3, as directed by NEXTLINK, and any interest and
\nother income resulting from such investments shall be paid to NEXTLINK.<\/p>\n
-22-<\/p>\n
(i) Lost Certificates. If any Certificate shall have been lost, stolen
\n —————–
\nor destroyed, upon the making of an affidavit of that fact by the Person
\nclaiming such Certificate to be lost, stolen or destroyed and, if required by
\nNewco, and subject to the posting by such Person of a bond in such reasonable
\namount as Newco may direct as indemnity against any claim that may be made
\nagainst it with respect to such Certificate, the Exchange Agent shall issue in
\nexchange for such lost, stolen or destroyed Certificate the Merger Consideration
\nand, if applicable, any unpaid dividends and distributions on shares of Newco
\nCommon Stock or Newco Preferred Stock deliverable in respect thereof and any
\ncash in lieu of fractional shares, in each case pursuant to this Agreement.<\/p>\n
(j) Return of Consideration. Any portion of the Concentric Series B
\n ———————–
\nConsideration or Concentric Series C Consideration made available to the
\nExchange Agent pursuant to Section 3.2(a) to pay for shares of Concentric Series
\nB Preferred Stock or Concentric Series C Preferred Stock for which appraisal
\nrights have been perfected shall be returned to Newco upon demand.<\/p>\n
SECTION 3.3. Stock Options. (a) After the Effective Time, each
\n ————-
\noutstanding option to purchase shares of Concentric Common Stock granted under
\nany Concentric stock option or compensation plans or arrangements (a “CONCENTRIC
\nSTOCK OPTION”), whether or not exercisable or vested, shall be adjusted as
\nnecessary to provide that, at the Effective Time, each Concentric Stock Option
\noutstanding immediately prior to the Effective Time shall be deemed to
\nconstitute an option to acquire, on the same terms and conditions as were
\napplicable under such Concentric Stock Option (including terms regarding
\nvesting), the same number of shares of Newco Common Stock as the holder of such
\nConcentric Stock Option would have been entitled to receive pursuant to the
\nMergers had such holder exercised such Concentric Stock Option in full
\nimmediately prior to the Effective Time, at a price per share of Newco Common
\nStock equal to (A) the aggregate exercise price for the shares of Concentric
\nCommon Stock otherwise purchasable pursuant to such Concentric Stock Option
\ndivided by (B) the aggregate number of shares of Newco Common Stock deemed
\npurchasable pursuant to such Concentric Stock Option (each, as so adjusted, an
\n“ADJUSTED OPTION”) rounded up to the nearest cent; provided that any fractional
\nshare of Newco Common Stock resulting from an aggregation of all the shares of a
\nholder subject to Concentric Stock Option shall be rounded down to the nearest
\nwhole share, and provided further that, for any Concentric Stock Option to which
\nSection 421 of the Code applies by reason of its qualification under any of
\nSections 422 through 424 of the Code, the option price, the number of shares
\npurchasable pursuant to such option and the terms and conditions of exercise of
\nsuch option shall be determined in order to comply with Section 424 of the Code.<\/p>\n
-23-<\/p>\n
(b) After the Effective Time, each outstanding option to purchase
\nshares of NEXTLINK Common Stock granted under any NEXTLINK stock option or
\ncompensation plans or arrangements (a “NEXTLINK STOCK OPTION”), whether or not
\nexercisable or vested, shall be deemed to constitute an option to acquire the
\nsame number of shares of Newco Common Stock, on the same terms and conditions as
\nwere applicable under such NEXTLINK Stock Option (including terms regarding
\nvesting), as the number of shares of NEXTLINK Common Stock which could be
\nacquired on exercise of such NEXTLINK Stock Option prior to the Effective Time.
\nNewco shall take such actions as are necessary for the assumption of the
\nNEXTLINK Stock Options pursuant to this Section 3.3 and any obligations to issue
\nNEXTLINK Common Stock under the existing terms of any other plans, agreements or
\narrangements of NEXTLINK covering any current or former employee or director of
\nNEXTLINK or any NEXTLINK Subsidiary, including the reservation, issuance and
\nlisting of Newco Common Stock as is necessary to effectuate the transactions
\ncontemplated by this Section 3.3(b). Each NEXTLINK Benefit Arrangement and
\nNEXTLINK Employee Plan shall be assumed by Newco and continue in full force and
\neffect after the Effective Time. Newco shall take such actions as are necessary
\nfor the assumption of any obligations to issue NEXTLINK Common Stock under the
\nexisting terms of any other plans, agreements or arrangements of NEXTLINK
\ncovering any current or former employee or director of NEXTLINK or any NEXTLINK
\nSubsidiary, including the reservation, issuance and listing of Newco Common
\nStock as is necessary to effectuate the transactions contemplated by this
\nSection 3.3.<\/p>\n
(c) Newco shall take such actions as are necessary for the assumption
\nof the Concentric Stock Options pursuant to this Section 3.3 and any obligations
\nto issue Concentric Common Stock under the existing terms of any other plans,
\nagreements or arrangements of Concentric covering any current or former employee
\nor director of Concentric or any Concentric Subsidiary, including the
\nreservation, issuance and listing of Newco Common Stock as is necessary to
\neffectuate the transactions contemplated by this Section 3.3.<\/p>\n
(d) On or before the next Business Day following the Effective Time,
\nNewco shall prepare and file with the SEC a registration statement on Form S-8
\n(or any other appropriate form) or a post-effective amendment to a registration
\nstatement previously filed under the 1933 Act, with respect to the shares of
\nNewco Common Stock subject to the Adjusted Options and the assumed NEXTLINK
\nStock Options and, where applicable, shall use its reasonable best efforts to
\nhave such registration statement declared effective as soon as practicable
\nfollowing the Effective Time and to maintain the effectiveness of such
\nregistration statement covering such Adjusted Options and the assumed NEXTLINK
\nStock Options (and to maintain the current status of the prospectus contained
\ntherein) for so long as such Adjusted Options and the assumed NEXTLINK Stock
\nOptions remain outstanding. With respect to those individuals, if any, who,<\/p>\n
-24-<\/p>\n
subsequent to the Effective Time, will be subject to the reporting requirements
\nunder Section 16(a) of the 1934 Act, where applicable, Newco shall use all
\nreasonable efforts to administer any Adjusted Options and assumed NEXTLINK Stock
\nOptions assumed pursuant to Section 3.3 in a manner that complies with Rule 16b-
\n3 promulgated under the 1934 Act to the extent that the Concentric Stock Option
\nin respect of which such Adjusted Option has been issued complied with such rule
\nprior to the Mergers.<\/p>\n
(e) Neither the execution and delivery of this Agreement nor the
\nconsummation of the transactions contemplated hereby will result in the
\nacceleration of the vesting of any Concentric Stock Option.<\/p>\n
SECTION 3.4. Withholding Rights. Newco shall be entitled to deduct and
\n ——————
\nwithhold from the consideration otherwise payable to any Person pursuant to this
\nArticle 3 such amounts as it is required to deduct and withhold with respect to
\nthe making of such payment under any provision of federal, state, local or
\nforeign tax law. If Newco so withholds amounts, such amounts shall be treated
\nfor all purposes of this Agreement as having been paid to the holders of
\nConcentric Common Stock, Concentric Preferred Stock, NEXTLINK Common Stock,
\nNEXTLINK Class B Common Stock or NEXTLINK Preferred Stock as the case may be, in
\nrespect of which NEXTLINK made such deduction and withholding.<\/p>\n
ARTICLE 4.
\n REPRESENTATIONS AND WARRANTIES OF CONCENTRIC<\/p>\n
Except as set forth in the Concentric Disclosure Schedule or as
\ndisclosed in the Concentric SEC Documents filed prior to the date hereof and
\nafter December 31, 1998, Concentric represents and warrants to NEXTLINK as
\nfollows:<\/p>\n
SECTION 4.1. Corporate Existence and Power. Concentric is a
\n —————————–
\ncorporation duly incorporated, validly existing and in good standing under the
\nlaws of the State of Delaware and has all corporate powers required to carry on
\nits business as now conducted. Concentric is duly qualified to do business as a
\nforeign corporation and is in good standing in each jurisdiction where such
\nqualification is necessary, except for those jurisdictions where failure to be
\nso qualified, individually or in the aggregate, has not had and would not be
\nreasonably expected to have a Concentric Material Adverse Effect. Concentric has
\nheretofore delivered or made available to NEXTLINK true and complete copies of
\nthe certificate of incorporation and bylaws of Concentric as currently in
\neffect.<\/p>\n
SECTION 4.2. Corporate Authorization. The execution, delivery and
\n ———————–
\nperformance by Concentric of this Agreement and the consummation by Concentric
\nof the transactions contemplated hereby are within Concentric’s corporate powers
\nand, except for the required approval of Concentric’s stockholders of this
\nAgreement and except as contemplated by Section 7.2(b), have been <\/p>\n
-25-<\/p>\n
duly authorized by all necessary corporate action on the part of Concentric. At
\na meeting duly called and held prior to the execution of this Agreement,
\nConcentric’s Board of Directors: (i) determined that this Agreement and the
\ntransactions contemplated hereby are advisable and fair to and in the best
\ninterests of Concentric’s stockholders; (ii) approved and adopted this Agreement
\nand the transactions contemplated hereby; and (iii) resolved to recommend
\napproval and adoption of this Agreement by its stockholders, subject to the
\nprovisions of Section 7.2(b). This Agreement constitutes a valid and binding
\nagreement of Concentric, enforceable against Concentric in accordance with its
\nterms, except (i) as the same may be limited by applicable bankruptcy,
\ninsolvency, moratorium or similar laws of general application relating to or
\naffecting creditors’ rights, and (ii) for the limitations imposed by general
\nprinciples of equity.<\/p>\n
SECTION 4.3. Governmental Authorization. The execution, delivery and
\n ————————–
\nperformance by Concentric of this Agreement and the consummation by Concentric
\nof the transactions contemplated hereby require no action by or in respect of,
\nor filing with, any governmental body, agency, official or authority, domestic
\nor foreign (a “GOVERNMENTAL AUTHORITY”), other than: (i) the filing of a
\ncertificate of Merger with respect to the Mergers with the Delaware Secretary of
\nState and appropriate documents with the relevant authorities of other states in
\nwhich Concentric is qualified to do business; (ii) compliance with the
\napplicable requirements of the HSR Act; (iii) compliance with any applicable
\nrequirements of the 1933 Act, 1934 Act, and any other applicable securities
\nlaws, whether state or foreign; and (iv) any actions or filings the absence of
\nwhich, individually or in the aggregate, would not be reasonably expected to
\nhave a Concentric Material Adverse Effect or materially impair or delay the
\nability of Concentric to consummate the transactions contemplated by this
\nAgreement.<\/p>\n
SECTION 4.4. Non-contravention. The execution, delivery and
\n —————–
\nperformance by Concentric of this Agreement and the consummation by Concentric
\nof the transactions contemplated hereby do not and will not (i) contravene,
\nconflict with, or result in any violation or breach of any provision of the
\ncertificate of incorporation or bylaws of Concentric; (ii) assuming compliance
\nwith the matters referred to in Section 4.3, contravene, conflict with or result
\nin a violation or breach of any provision of any applicable law, statute,
\nordinance, rule, regulation, judgment, injunction, order, or decree; (iii)
\nrequire any consent or other action by any Person under, constitute a default
\n(or an event that, with or without notice or lapse of time or both, would
\nconstitute a default) under, or cause or permit the termination, cancellation,
\nacceleration, triggering or other change of any right or obligation or the loss
\nof any benefit to which any member of the Concentric Group is entitled under (A)
\nany provision of any agreement or other instrument binding upon any member of
\nthe Concentric Group or (B) any <\/p>\n
-26-<\/p>\n
license, franchise, permit, certificate, approval or other similar authorization
\nheld by, or affecting, or relating in any way to, the assets or business of, any
\nmember of the Concentric Group; or (iv) result in the creation or imposition of
\nany Lien on any asset of any member of the Concentric Group, other than such
\nexceptions in the case of clauses (ii), (iii) and (iv) as would not be,
\nindividually or in the aggregate, reasonably expected to have a Concentric
\nMaterial Adverse Effect or materially impair or delay the ability of Concentric
\nto consummate the transactions contemplated by this Agreement.<\/p>\n
SECTION 4.5. Capitalization. (a) As of December 31, 1999, the
\n ————–
\nauthorized capital stock of Concentric consists of 100,000,000 shares of
\nConcentric Common Stock and 10,000,000 shares of Preferred Stock, par value
\n$.001 per share, of which 500,000 shares have been designated as Concentric
\nSeries A Junior Preferred Stock and reserved for issuance upon the exercise of
\nRights, (ii) 295,000 shares have been designated as Concentric Series B
\nPreferred Stock; and (iii) 110,000 shares have been designated as Concentric
\nSeries C Preferred Stock. As of December 30, 1999, there were outstanding (i)
\n45,556,564 shares of Concentric Common Stock (inclusive of all shares of
\nrestricted stock granted under any compensatory plans or arrangements), (ii)
\nConcentric Stock Options to purchase an aggregate of not more than 8,939,367
\nshares of Concentric Common Stock (of which options to purchase an aggregate of
\nnot more than 1,509,332 shares of Concentric Common Stock were vested and
\nexercisable), (iii) phantom shares or stock units issued under any stock option,
\ncompensation or deferred compensation plan or arrangement with respect to an
\naggregate of no shares of Concentric Common Stock (except in respect of share
\npurchase rights under Concentric’s 1997 employee stock purchase plan), (iv) no
\nshares of Concentric Series A Preferred Stock, (v) 176,589.4 shares of
\nConcentric Series B Preferred Stock, and (vi) 51,478 shares of Concentric Series
\nC Preferred Stock, and there has been no change to the foregoing capitalization
\nsince December 31, 1999 (other than option exercises in the ordinary course).
\nAll outstanding shares of capital stock of Concentric have been, and all shares
\nthat may be issued pursuant to any compensatory plan or arrangement will be,
\nwhen issued in accordance with the respective terms thereof, duly authorized,
\nvalidly issued, fully paid and nonassessable. Concentric has also reserved for
\nissuance 4,244,510 shares of Concentric Common Stock for issuance upon exercise
\nof outstanding warrants.<\/p>\n
(b) Except as set forth in this Section 4.5 and for changes since
\nDecember 30, 1999 resulting from the exercise of employee stock options
\noutstanding on such date or granted thereafter in the ordinary course of
\nbusiness within the limitations described in the Concentric Disclosure Schedule
\nand the conversion of Concentric Series C Preferred Stock outstanding on such
\ndate, there are no outstanding (i) shares of capital stock or voting securities
\nof Concentric, (ii) securities of Concentric convertible into or exchangeable
\nfor shares of capital <\/p>\n
-27-<\/p>\n
stock or voting securities of Concentric or (iii) options, warrants or other
\nrights to acquire from Concentric, or other obligation of Concentric to issue
\nany capital stock, voting securities or securities convertible into or
\nexchangeable for capital stock or voting securities of Concentric. There are no
\noutstanding obligations of Concentric or any Concentric Subsidiary to
\nrepurchase, redeem or otherwise acquire any of the securities referred to in
\nclauses (i), (ii) and (iii) above.<\/p>\n
SECTION 4.6. Subsidiaries. (a) Each Concentric Subsidiary is a
\n ————
\ncorporation or other legal entity duly organized, validly existing and in good
\nstanding (where applicable) under the laws of its jurisdiction of organization
\nand has all corporate, LLC, partnership or other similar powers required to
\ncarry on its business as now conducted, other than such exceptions as,
\nindividually or in the aggregate, have not had and would not be reasonably
\nexpected to have a Concentric Material Adverse Effect. Each Concentric
\nSubsidiary is duly qualified to do business as a foreign corporation or other
\nforeign legal entity and is in good standing in each jurisdiction where such
\nqualification is necessary, with such exceptions, individually or in the
\naggregate, as have not had and would not be reasonably expected to have a
\nConcentric Material Adverse Effect. The Concentric Disclosure Schedule sets
\nforth a list of all Concentric Subsidiaries and their respective jurisdictions
\nof organization and identifies Concentric’s (direct or indirect) percentage
\nownership interest therein.<\/p>\n
(b) All of the outstanding capital stock of, or other voting
\nsecurities or ownership interests in, each Concentric Subsidiary, is owned by
\nConcentric, directly or indirectly, free and clear of any Lien and free of any
\nother limitation or restriction (including any restriction on the right to vote,
\nsell or otherwise dispose of such capital stock or other voting securities or
\nownership interests) other than transfer restrictions under the 1933 Act and the
\nRules promulgated thereunder. There are no outstanding (i) securities of any
\nmember of the Concentric Group convertible into or exchangeable for shares of
\ncapital stock or other voting securities or ownership interests in any
\nConcentric Subsidiary or (ii) options or other rights to acquire from any member
\nof the Concentric Group, or other obligation of any member of the Concentric
\nGroup to issue any capital stock, or other voting securities or ownership
\ninterests in, or any securities convertible into or exchangeable for any capital
\nstock or other voting securities or ownership interests in, any Concentric
\nSubsidiary. There are no outstanding obligations of Concentric or any Concentric
\nSignificant Subsidiary to repurchase, redeem or otherwise acquire any of the
\nitems referred to in clauses (i) and (ii) above. Except as set forth in the
\nConcentric Disclosure Schedule or provided hereunder, no member of the
\nConcentric Group is obligated to make any investment in any other Person.<\/p>\n
-28-<\/p>\n
SECTION 4.7. SEC Filings. (a) Concentric has timely filed all reports
\n ———–
\nrequired to be filed by it with the SEC since July 31, 1997 pursuant to the 1934
\nAct. Concentric has delivered or made available to NEXTLINK: (i) Concentric’s
\nannual report on Form 10-K for its fiscal year ended December 31, 1998 and the
\nConcentric 10-K; (ii) its proxy or information statements relating to meetings
\nof, or actions taken without a meeting by, the stockholders of Concentric held
\nsince December 31, 1998; and (iii) all of its other reports, statements,
\nschedules and registration statements filed with the SEC since December 31, 1998
\n(the documents referred to in this Section 4.7(a), including any exhibits
\nthereto or documents incorporated therein by reference, collectively, the
\n“CONCENTRIC SEC DOCUMENTS”).<\/p>\n
(b) As of its filing date, each Concentric SEC Document complied as to
\nform in all material respects with the applicable requirements of the 1933 Act
\nand the 1934 Act, as the case may be.<\/p>\n
(c) As of its filing date, each Concentric SEC Document filed pursuant
\nto the 1934 Act did not contain any untrue statement of a material fact or omit
\nto state any material fact necessary in order to make the statements made
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
(d) Each Concentric SEC Document that is a registration statement, as
\namended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
\nthe date such registration statement or amendment became effective, did not
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary to make the statements therein
\nnot misleading.<\/p>\n
SECTION 4.8. Financial Statements. The audited consolidated financial
\n ——————–
\nstatements and unaudited consolidated interim financial statements of Concentric
\nincluded in the Concentric SEC Documents fairly present, in all material
\nrespects, in conformity with generally accepted accounting principles (“GAAP”)
\napplied on a consistent basis (except as may be indicated in the notes thereto),
\nthe consolidated financial position of Concentric and its consolidated
\nSubsidiaries as of the respective dates thereof and their consolidated results
\nof operations and cash flows for the periods then ended (subject to normal year-
\nend adjustments in the case of any unaudited interim financial statements) and
\nexcept that unaudited financial statements may not contain all notes required
\nunder GAAP with respect to audited financial statements.<\/p>\n
SECTION 4.9. Information Supplied. The information supplied by
\n ——————–
\nConcentric for inclusion or incorporation in the registration statement on Form
\nS-4 or any amendment or supplement thereto pursuant to which shares of Newco
\nCommon Stock (or NEXTLINK Common Stock, as applicable) issuable in the Mergers<\/p>\n
-29-<\/p>\n
will be registered with the SEC (the “REGISTRATION STATEMENT”) shall not at the
\ntime the Registration Statement is declared effective by the SEC contain any
\nuntrue statement of a material fact or omit to state any material fact required
\nto be stated therein or necessary in order to make the statements therein, in
\nlight of the circumstances under which they were made, not misleading. The
\ninformation supplied by Concentric for inclusion in the joint proxy
\nstatement\/information statement\/prospectus (the “PROXY STATEMENT”) to be sent to
\nthe stockholders of Concentric in connection with their meeting to consider this
\nAgreement and the Mergers (the “CONCENTRIC STOCKHOLDERS’ MEETING”) and to the
\nstockholders of NEXTLINK in connection with the Mergers shall not, on the date
\nthe Proxy Statement is first mailed to the stockholders of Concentric and
\nNEXTLINK or at the time of either of the Stockholders’ Meetings or at the
\nEffective Time, contain any untrue statement of a material fact or omit to state
\nany material fact required to be stated therein or necessary in order to make
\nthe statements therein, in light of the circumstances under which they were
\nmade, not misleading.<\/p>\n
SECTION 4.10. Absence of Certain Changes. Since the Concentric Balance
\n ————————–
\nSheet Date, the business of Concentric and the Concentric Subsidiaries has been
\nconducted in the ordinary course consistent with past practices and there has
\nnot been:<\/p>\n
(a) any event, occurrence or development of a state of circumstances
\nor facts which, individually or in the aggregate, has had or would be reasonably
\nexpected to have a Concentric Material Adverse Effect; or<\/p>\n
(b) any action, event, occurrence or transaction that would have been
\nprohibited by clause (a), (b), (c), (d), (f), (g) or (i) of the second sentence
\nof Section 7.1 (or committed to do any of the foregoing) if this Agreement had
\nbeen in effect as of the time thereof.<\/p>\n
SECTION 4.11. No Undisclosed Material Liabilities. There are no liabilities
\n ———————————–
\nor obligations of Concentric or any Concentric Subsidiary of any kind
\nwhatsoever, whether accrued, contingent, absolute, determined, determinable or
\notherwise, and there is no existing condition, situation or set of circumstances
\nthat could be reasonably expected to result in such a liability or obligation,
\nother than:<\/p>\n
(a) liabilities or obligations disclosed and provided for in the
\nConcentric Balance Sheet or in the notes thereto or in Concentric SEC Documents
\nfiled prior to the date hereof or in the Concentric 10-K;<\/p>\n
(b) liabilities or obligations incurred in the ordinary course of
\nbusiness consistent with past practice since the Concentric Balance Sheet; and<\/p>\n
-30-<\/p>\n
(c) liabilities or obligations that, individually or in the
\naggregate have not had and would not be reasonably expected to have a Concentric
\nMaterial Adverse Effect.<\/p>\n
SECTION 4.12. Compliance with Laws and Court Orders. Each member of the
\n ————————————-
\nConcentric Group holds all licenses, franchises, certificates, consents,
\npermits, qualifications and authorizations from all Governmental Authorities
\nnecessary for the lawful conduct of their business, except where the failure to
\nhold any of the foregoing, individually or in the aggregate, has not had and
\nwould not be reasonably expected to have a Concentric Material Adverse Effect.
\nEach member of the Concentric Group is and has been in compliance with, and to
\nthe Knowledge of Concentric, is not under investigation with respect to and has
\nnot been threatened to be charged with or given notice of any violation of, any
\nsuch license, franchise, certificate, consent, permit, qualification or
\nauthorization, applicable law, statute, ordinance, rule, regulation, judgment,
\ninjunction, order or decree, except for failures to comply or violations that,
\nindividually or in the aggregate, have not had and would not be reasonably
\nexpected to have a Concentric Material Adverse Effect.<\/p>\n
SECTION 4.13. Litigation. There is no action, suit, investigation or
\n ———-
\nproceeding (or, to the Knowledge of Concentric, any reasonable basis therefor)
\npending against, or, to the Knowledge of Concentric, threatened against or
\naffecting, Concentric or any Concentric Subsidiary or any of their respective
\nproperties before any court or arbitrator or before or by any other Governmental
\nAuthority, that, individually or in the aggregate, would be reasonably expected
\nto have a Concentric Material Adverse Effect.<\/p>\n
SECTION 4.14. Finders’ Fees. Except for Bear, Stearns & Co., Inc. there
\n ————-
\nis no investment banker, broker, finder or other intermediary that has been
\nretained by or is authorized to act on behalf of Concentric or any Concentric
\nSubsidiary who might be entitled to any fee or commission from NEXTLINK, any of
\nthe NEXTLINK Subsidiaries, Concentric or any of the Concentric Subsidiaries in
\nconnection with the transactions contemplated by this Agreement. A copy of Bear,
\nStearns & Co., Inc.’s engagement agreement has been provided to NEXTLINK.<\/p>\n
SECTION 4.15. Opinion of Financial Advisor. The Board of Directors of
\n —————————-
\nConcentric has received an opinion of Bear Stearns & Co., Inc., financial
\nadvisor to Concentric, to the effect that the Common Stock Consideration is fair
\nto the holders of Concentric Common Stock from a financial point of view.<\/p>\n
SECTION 4.16. Taxes. Except as set forth in the Concentric Balance
\n —–
\nSheet (including the notes thereto) and except as would not be, individually or
\nin the aggregate, reasonably expected to have a Concentric Material Adverse
\nEffect, (i) all Concentric Tax Returns required to be filed with any taxing
\nauthority by, or with respect to, Concentric and the Concentric Subsidiaries
\nhave <\/p>\n
-31-<\/p>\n
been filed in accordance with all applicable laws; (ii) Concentric and the
\nConcentric Subsidiaries have timely paid all Taxes shown as due and payable on
\nthe Concentric Tax Returns that have been so filed (other than Taxes which are
\nbeing contested in good faith and for which adequate reserves are reflected on
\nthe Concentric Balance Sheet), and, as of the time of filing, the Concentric Tax
\nReturns were correct and complete; (iii) Concentric and the Concentric
\nSubsidiaries have made provision for all Taxes payable by Concentric and the
\nConcentric Subsidiaries for which no Concentric Tax Return has yet been filed
\n(other than Taxes which are being contested in good faith and for which adequate
\nreserves are reflected on the Concentric Balance Sheet and other than payroll
\nand similar taxes (excluding the income taxes of Concentric or a Concentric
\nSubsidiary) incurred in the ordinary course of business since the Concentric
\nBalance Sheet Date); (iv) the charges, accruals and reserves for Taxes with
\nrespect to Concentric and the Concentric Subsidiaries reflected on the
\nConcentric Balance Sheet are adequate under GAAP to cover the Tax liabilities
\naccruing through the date thereof; (v) there is no action, suit, proceeding,
\naudit or claim now proposed or pending against or with respect to Concentric or
\nany Concentric Subsidiary in respect of any Tax where there is a reasonable
\npossibility of an adverse determination; (vi) the federal income Tax Returns of
\nConcentric and the Concentric Subsidiaries have been examined and settled with
\nthe Internal Revenue Service (the “IRS”) (or the applicable statutes of
\nlimitation for the assessment of federal income Taxes for such periods have
\nexpired) for all years through 1995; and (vii) there are no material Liens or
\nencumbrances for Taxes on any of the assets of Concentric or any Concentric
\nSubsidiary except liens for current Taxes not yet due. For purposes of this
\nAgreement, “TAXES” shall mean any and all taxes, charges, fees, levies or other
\nassessments, including, without limitation, all net income, gross income, gross
\nreceipts, excise, stamp, real or personal property, ad valorem, withholding,
\nsocial security (or similar), unemployment, occupation, use, service, service
\nuse, license, net worth, payroll, franchise, severance, transfer, recording,
\nemployment, premium, windfall profits, environmental (including taxes under
\nSection 59A of the Code), customs duties, capital stock, profits, disability,
\nsales, registration, value added, alternative or add-on minimum, estimated or
\nother taxes, assessments or charges imposed by any federal, state, local or
\nforeign governmental entity and any interest, penalties, or additions to tax
\nattributable thereto. For purposes of this Agreement, “TAX RETURNS” shall mean
\nany return, report, form or similar statement required to be filed with respect
\nto any Tax (including any attached schedules), including, without limitation,
\nany information return, claim for refund, amended return or declaration of
\nestimated Tax.<\/p>\n
SECTION 4.17. Tax Opinions. There are no facts or circumstances
\n ————
\nrelating to Concentric or, to the Knowledge of Concentric, that would prevent
\nWilson Sonsini Goodrich & Rosati, <\/p>\n
-32-<\/p>\n
Professional Corporation from delivering the opinion referred to in Section
\n10.3(b) as of the date hereof.<\/p>\n
SECTION 4.18. Employee Benefit Plans and Labor Matters. Except as
\n —————————————-
\nhave not had and would not be reasonably expected to have, individually or in
\nthe aggregate, a Concentric Material Adverse Effect:<\/p>\n
(a) The Concentric Disclosure Schedule contains a true and
\ncomplete list, as of the date hereof, of all Concentric Employee Plans and all
\nConcentric Benefit Arrangements. Copies of each Concentric Employee Plan and
\neach Concentric Benefit Arrangement (and, if applicable, related trust
\nagreements) and all amendments thereto and formal, written interpretations
\nthereof have been made available to NEXTLINK as of the date hereof or will have
\nbeen made available to NEXTLINK within thirty days after the date hereof,
\ntogether with the three most recent annual reports (Form 5500 including, if
\napplicable, Schedule B thereto) and the most recent actuarial valuation report
\nprepared in connection with any Concentric Employee Plan.<\/p>\n
(b) None of the Concentric Employee Plans is a Multiemployer
\nPlan and neither the Concentric nor any Concentric ERISA Affiliate has withdrawn
\nin a complete or partial withdrawal from any Multiemployer Plan, nor has any of
\nthem incurred any liability due to the termination or reorganization of a
\nMultiemployer Plan.<\/p>\n
(c) None of the Concentric Employee Plans is a Pension Plan
\nand neither Concentric nor any Concentric ERISA Affiliate has any liability with
\nrespect to any Pension Plan.<\/p>\n
(d) Each Concentric Employee Plan that is intended to qualify
\nunder Section 401 of the Code has either received a favorable determination,
\nopinion, notification or advisory letter, as applicable, from the Internal
\nRevenue Service to the effect that it meets the requirements of Code Section
\n401(a) or has a remaining period of time under applicable Treasury Regulations
\nor IRS pronouncements in which to apply for such a letter and any trust
\nmaintained pursuant to any such Concentric Employee Plan is intended to be
\nexempt from federal income taxation under Section 501 of the Code, and to
\nConcentric’s Knowledge nothing has occurred with respect to the operation of any
\nsuch Concentric Employee Plan that could cause the loss of such qualification or
\nexemption or the imposition of any liability, penalty or tax under ERISA or the
\nCode.<\/p>\n
(e) There is no contract, plan or arrangement (written or
\notherwise) covering any employee or former employee of Concentric or any
\nConcentric Subsidiary that, individually or collectively, could give rise to the
\npayment of any amount that would not be deductible pursuant to the terms of
\nSections 162(m) or 280G of the Code.<\/p>\n
-33-<\/p>\n
(f) All contributions (including all employer contributions
\nand employee salary reduction contributions) required to have been made under
\nany of the Concentric Employee Plans and Concentric Benefit Arrangements or by
\nlaw to any funds or trusts established thereunder or in connection therewith
\nhave been made by the due date thereof (including any valid extension), and all
\ncontributions for any period ending on or before the Closing Date which are not
\nyet due will have been paid or accrued on or prior to the Closing Date.<\/p>\n
(g) There has been no material violation of ERISA or the Code
\nwith respect to the filing of applicable reports, documents and notices
\nregarding the Concentric Employee Plans and Concentric Benefit Arrangements with
\nthe Secretary of Labor or the Secretary of the Treasury or the furnishing of
\nrequired reports, documents or notices to the participants or beneficiaries of
\nthe Concentric Employee Plans and Concentric Benefit Arrangements.<\/p>\n
(h) Each Concentric Employee Plan and Concentric Benefit
\nArrangement has been maintained, in all material respects, in accordance with
\nits terms and with all provisions of ERISA and the Code (including rules and
\nregulations thereunder) and other applicable federal and state laws and
\nregulations, and neither Concentric, nor, to the Knowledge of Concentric, any
\n“party in interest” or “disqualified person” with respect to the Concentric
\nEmployee Plans has engaged in a “prohibited transaction” within the meaning of
\nSection 406 of ERISA or 4975 of the Code, and not otherwise exempt under Section
\n4975 of the Code or Section 408 of ERISA (or any administrative class exemption
\nissued thereunder). To the Knowledge of Concentric, no fiduciary has any
\nliability for breach of fiduciary duty or any other failure to act or comply in
\nconnection with the administration or investment of the assets of any Employee
\nBenefit Plan.<\/p>\n
(i) There are no actions, claims or lawsuits which are pending
\nor, to the Knowledge of Concentric, threatened against any Concentric Employee
\nPlan or Concentric Benefit Arrangement, the assets of any of the trusts under
\nsuch plans or arrangements or the sponsors or the administrators, or against any
\nfiduciary of such plans or arrangements with respect to their operation (other
\nthan routine benefit claims), nor does Concentric have Knowledge of facts which
\ncould form the basis for any such claim or lawsuit.<\/p>\n
(j) All amendments and actions required to bring the
\nConcentric Employee Plans into conformity in all material respects with all of
\nthe applicable provisions of ERISA, the Code and other applicable laws have been
\nmade or taken except to the extent that such amendments or actions are not
\nrequired by law to be made or taken until a date after the Closing Date.<\/p>\n
-34-<\/p>\n
(k) None of the Concentric Employee Plans or Concentric
\nBenefit Arrangements provide retiree health benefits except as may be required
\nunder Section 4980B of the Code, Section 601 of ERISA or any similar provision
\nof state law, or at the expense of the participant or the participant’s
\nbeneficiary. Concentric and the Concentric ERISA Affiliates have at all times
\ncomplied with the notice and health care continuation requirements of Section
\n4980B of the Code and Sections 601 through 608 of ERISA.<\/p>\n
(l) Except as set forth in the Concentric Disclosure Schedule
\nhereto, neither the execution and delivery of this Agreement nor the
\nconsummation of the transactions contemplated hereby will (i) result in any
\npayment becoming due to any employee (current, former or retired) of Concentric,
\n(ii) increase any benefits otherwise payable under any Concentric Employee Plan
\nor Concentric Benefit Arrangement, (iii) result in the acceleration of the time
\nof payment or vesting of any benefits under any Concentric Employee Plan or
\nConcentric Benefit Arrangement (except to the extent required by the Code and
\nERISA if NEXTLINK causes a partial or full termination to occur under any
\nConcentric Employee Plan), or (iv) qualify as a “change of control” or similar
\nevent under any Concentric Employee Plan or Concentric Benefit Arrangement.<\/p>\n
(m) Except as set forth in the Concentric Disclosure Schedule,
\nno stock or other security issued by Concentric or any Affiliate forms or has
\nformed a material part of the assets of any Concentric Employee Plan.<\/p>\n
(n) There has been no “mass layoff” or “plant closing” as
\ndefined by the Worker Adjustment and Retraining Notification Act or any similar
\nstate or local “plant closing” law in the four years prior to the Effective
\nTimes.<\/p>\n
(o) The Concentric Disclosure Schedule contains a complete and
\naccurate list of the following information for each key employee or officer of
\nthe Company, including such employee on leave of absence or layoff status:
\nemployer; name; and job title.<\/p>\n
(p) Except as set forth on the Concentric Disclosure Schedule,
\nno stock appreciation rights were granted that are currently outstanding under
\nthe Concentric 1995 Stock Incentive Plan for Employees and Consultants, the
\nConcentric Amended and Restated 1996 Stock Plan, the Concentric 1997 Stock Plan
\nor the Concentric 1999 Nonstatutory Stock Option Plan or any other equity-based
\ncompensation plan maintained by Concentric or any Concentric Subsidiary (the
\n“Concentric Equity Plans”). Set forth on the Concentric Disclosure Schedule is a
\ncomplete list of stock options granted and currently outstanding under all of
\nthe Concentric Equity Plans, separately identifying the optionholders and number
\nof options held, vesting status and exercise price for each stock option.<\/p>\n
-35-<\/p>\n
(q) To Concentric’s Knowledge, no employee or director of
\nConcentric or any Concentric Subsidiary is a party to, or is otherwise bound by,
\nany agreement or arrangement, including any confidentiality, noncompetition, or
\nproprietary rights agreement, between such employee or director and any other
\nperson or entity (“Proprietary Rights Agreement”) that in any way adversely
\naffects or will affect (i) the performance of his duties as an employee of Newco
\nor an employee or director of Concentric or any Concentric Subsidiary, or (ii)
\nthe ability of Concentric or any Concentric Subsidiary to conduct its business,
\nincluding any Proprietary Rights Agreement with Concentric or any Concentric
\nSubsidiary by any such employee or director. To Concentric’s Knowledge, no
\nemployees of Concentric or any Concentric Subsidiary intend to terminate their
\nemployment with Concentric.<\/p>\n
(r) Neither Concentric nor any Concentric Subsidiary has for
\nthe last two years been nor currently is a party to any collective bargaining or
\nother labor contract. For the last two years, there has not been, there is not
\npresently pending or existing, and to Concentric’s Knowledge there is not
\nthreatened, (a) any strike, slowdown, picketing, work stoppage, or employee
\ngrievance process, (b) any proceeding against or affecting Concentric or any
\nConcentric Subsidiary relating to the alleged violation of any legal requirement
\npertaining to labor relations or employment matters, including any charge or
\ncomplaint filed by an employee or union with the National Labor Relations Board,
\nthe Equal Employment Opportunity Commission, or any comparable governmental
\nbody, organizational activity, or other labor or employment dispute against or
\naffecting the Concentric or any Concentric Subsidiary or its premises, or (c)
\nany application for certification of a collective bargaining agent. To
\nConcentric’s Knowledge, no event has occurred or circumstance exists that could
\nprovide the basis for any such work stoppage or other labor dispute. There is no
\nlockout of any employees by Concentric or any Concentric Subsidiary, and no such
\naction is contemplated by Concentric or any Concentric Subsidiary. Concentric
\nand each Concentric Subsidiary has complied in all material respects with all
\nlegal requirements relating to employment, equal employment opportunity,
\nnondiscrimination, immigration, wages, hours, benefits, collective bargaining,
\nthe payment of social security and similar taxes, occupational safety and
\nhealth, and plant closing. Neither Concentric nor any Concentric Subsidiary is
\nliable for the payment of any compensation, damages, taxes, fines, penalties, or
\nother amounts, however designated, for failure to comply with any of the
\nforegoing legal requirements.<\/p>\n
SECTION 4.19. Environmental Matters. (a) Except as have not had and
\n ———————
\nwould not be reasonably expected to have, individually or in the aggregate, a
\nConcentric Material Adverse Effect:<\/p>\n
(i) no notice, notification, demand, request for
\n information, citation, summons or order has been received, no complaint
\n has been filed, no penalty has been assessed,<\/p>\n
-36-<\/p>\n
and no investigation, action, claim, suit, proceeding or review (or, to
\n the Knowledge of Concentric, any reasonable basis therefor) is pending
\n or, to the Knowledge of Concentric, is threatened by any Governmental
\n Authority or other Person relating to or arising out of any
\n Environmental Law;<\/p>\n
(ii) Each member of the Concentric Group is and has been in
\n compliance with all Environmental Laws and all Environmental Permits;
\n and<\/p>\n
(iii) there are no liabilities of or relating to any member
\n of the Concentric Group of any kind whatsoever, whether accrued,
\n contingent, absolute, determined, or arising under or relating to
\n Environmental Laws or any facts, conditions, situations or set of
\n circumstances that could reasonably be expected to result in or be the
\n basis for any such liability.<\/p>\n
(b) To the Knowledge of Concentric, there have been no
\nenvironmental investigations, studies, audits, tests, reviews or other analyses
\nconducted in relation to the current or prior business of any member of the
\nConcentric Group or any property or facility now or previously owned or leased
\nby any member of the Concentric Group that reveal matters that, individually or
\nin the aggregate, have had or would reasonably be expected to have a Concentric
\nMaterial Adverse Effect.<\/p>\n
(c) For purposes of this Section 4.19, the terms
\n“CONCENTRIC GROUP” shall include any entity that is, in whole or in part, a
\npredecessor of any member of the Concentric Group.<\/p>\n
SECTION 4.20. Intellectual Property. With such exceptions as,
\n ———————
\nindividually or in the aggregate, have not had and would not be reasonably
\nexpected to have a Concentric Material Adverse Effect, each member of the
\nConcentric Group owns or has a valid license to use each trademark, service
\nmark, trade name, invention, patent, trade secret, copyright, know-how
\n(including any registrations or applications for registration of any of the
\nforegoing) or any other similar type of proprietary intellectual property right
\n(collectively, the “CONCENTRIC INTELLECTUAL PROPERTY”) necessary to carry on its
\nbusiness substantially as currently conducted. No member of the Concentric Group
\nhas received any notice of infringement of or conflict with, and to Concentric’s
\nKnowledge, there are no infringements of or conflicts with, the rights of any
\nPerson with respect to the use of any Concentric Intellectual Property that, in
\neither such case, individually or in the aggregate, have had or would be
\nreasonably expected to have, a Concentric Material Adverse Effect.<\/p>\n
SECTION 4.21. Contracts. Except as disclosed in Concentric SEC
\n ———
\nDocuments, no member of the Concentric Group is a party to or bound by (i) any
\n“material contract” (as such term is defined in<\/p>\n
-37-<\/p>\n
Item 601(b)(10) of Regulation S-K of the SEC) or any agreement, contract or
\ncommitment that would be such a “material contract” but for the exception for
\ncontracts entered into in the ordinary course of business, (ii) any non-
\ncompetition agreement or any other agreement or obligation which materially
\nlimits or will materially limit any member of the Concentric Group (or after the
\nMergers, any member of the NEXTLINK Group) from engaging in any line of
\nbusiness, or (iii) any material agreement, contract or commitment to which SBC,
\nWilliams, Microsoft or any of their respective Affiliates is a party that is not
\nin the ordinary course of business of the Concentric Group. With such exceptions
\nas, individually or in the aggregate, have not had, and would not be reasonably
\nexpected to have, a Concentric Material Adverse Effect, (x) each of the
\ncontracts, agreements and commitments of the Concentric Group is valid and in
\nfull force and effect and (y) no member of the Concentric Group has violated any
\nprovision of, or committed or failed to perform any act which, with or without
\nnotice, lapse of time, or both, would constitute a default under the provisions
\nof any such contract, agreement or commitment. To the Knowledge of Concentric,
\nno counterparty to any such contract, agreement or commitment has violated any
\nprovision of, or committed or failed to perform any act which, with or without
\nnotice, lapse of time, or both would constitute a default or other breach under
\nthe provisions of, such contract, agreement or commitment, except for defaults
\nor breaches which, individually or in the aggregate, have not had, or would not
\nreasonably be expected to have, a Concentric Material Adverse Effect. Neither
\nConcentric nor any Concentric Subsidiary is a party to, or otherwise a guarantor
\nof or liable with respect to, any interest rate, currency or other swap or
\nderivative transaction, other than any such transactions which are not material
\nto the business of the Concentric Group. Concentric has provided or made
\navailable to NEXTLINK a copy of each agreement described in item (i), (ii) or
\n(iii) above (except for such agreements filed as exhibits to the Concentric SEC
\nDocuments).<\/p>\n
SECTION 4.22. Vote Required. The only vote of the holders of any class
\n ————-
\nor series of capital stock of Concentric necessary to approve this Agreement and
\nthe transactions contemplated hereby is the affirmative vote of the holders of a
\nmajority of the outstanding shares of Concentric Common Stock (the “CONCENTRIC
\nSTOCKHOLDERS’ APPROVAL”)<\/p>\n
SECTION 4.23. Antitakeover Statutes; Rights Agreement. (a) Concentric
\n —————————————
\nhas taken all action necessary to exempt the Mergers and this Agreement and the
\ntransactions contemplated hereby from the restrictions of Section 203 of
\nDelaware Law, and, accordingly, neither such Section nor any other antitakeover
\nor similar statute or regulation applies or purports to apply to any such
\ntransactions. No other “control share acquisition,” “fair price,” “moratorium”
\nor other antitakeover laws or regulations enacted under U.S. state or federal
\nlaws apply to this Agreement or any of the transactions contemplated hereby.<\/p>\n
-38-<\/p>\n
(b) Concentric and the Concentric Board have taken all
\nnecessary action to (i) render the Rights Agreement inapplicable to the Mergers
\nand the other transactions contemplated by this Agreement, (ii) provide that (A)
\nnone of NEXTLINK, any NEXTLINK Subsidiary or Newco shall be deemed an Acquiring
\nPerson (as defined in the Rights Agreement) as a result of this Agreement or any
\nof the transactions contemplated hereby, (B) no Distribution Date (as defined in
\nthe Rights Agreement) shall be deemed to have occurred as a result of this
\nAgreement or the consummation of any of the transactions contemplated hereby and
\n(C) the rights issuable pursuant to the Rights Agreement will not separate from
\nthe shares of Concentric Common Stock, as a result of the approval, execution or
\ndelivery of this Agreement or the consummation of the transactions contemplated
\nhereby.<\/p>\n
ARTICLE 5.
\n REPRESENTATIONS AND WARRANTIES OF NEXTLINK<\/p>\n
Except as set forth in the NEXTLINK Disclosure Schedule or as disclosed
\nin the NEXTLINK SEC Documents filed prior to the date hereof, NEXTLINK
\nrepresents and warrants to Concentric (and to Eagle River to the extent provided
\nin Section 5.21) that:<\/p>\n
SECTION 5.1. Corporate Existence and Power. (a) NEXTLINK is a
\n —————————–
\ncorporation duly incorporated, validly existing and in good standing under the
\nlaws of the State of Delaware and has all corporate powers required to carry on
\nits business as now conducted. NEXTLINK is duly qualified to do business as a
\nforeign corporation and is in good standing in each jurisdiction where such
\nqualification is necessary except for those jurisdictions where failure to be so
\nqualified, individually or in the aggregate, has not had and would not be
\nreasonably expected to have a NEXTLINK Material Adverse Effect. NEXTLINK has
\nheretofore delivered or made available to Concentric true and complete copies of
\nthe certificate of incorporation and bylaws of NEXTLINK, as currently in effect.<\/p>\n
(b) Newco is a corporation duly incorporated, validly existing
\nand in good standing under the laws of the State of Delaware and has all
\ncorporate powers required to carry on its business as now conducted.<\/p>\n
SECTION 5.2. Corporate Authorization. (a) The execution, delivery and
\n ———————–
\nperformance by NEXTLINK and the consummation by NEXTLINK of the transactions
\ncontemplated hereby are within the corporate powers of NEXTLINK and, except for
\nthe approval of Nextlink’s stockholders of this Agreement, have been duly
\nauthorized by all necessary corporate action including, without limitation,
\nNEXTLINK’s Board of Directors having: (i) determined that this Agreement and the
\ntransactions contemplated hereby are fair to and in the best interests of
\nNEXTLINK’s stockholders; (ii) approved this Agreement and the transactions
\ncontemplated hereby; and (iii) resolved to recommend approval and adoption of
\nthis Agreement by its stockholders. This Agreement constitutes a<\/p>\n
-39-<\/p>\n
valid and binding agreement of NEXTLINK enforceable against NEXTLINK in
\naccordance with its terms, except (i) as the same may be limited by applicable
\nbankruptcy, insolvency, moratorium or similar laws of general application
\nrelating to or affecting creditors’ rights, (ii) provisions providing for
\nindemnity for liability under the securities laws and (iii) for the limitations
\nimposed by general principles of equity.<\/p>\n
(b) The execution, delivery and performance by Newco and the
\nconsummation by Newco of the transactions contemplated hereby are within the
\ncorporate powers of Newco, and have been duly authorized by all necessary
\ncorporate action. This Agreement constitutes a valid and binding agreement of
\nNewco enforceable against Newco in accordance with its terms, except (i) as the
\nsame may be limited by applicable bankruptcy, insolvency, moratorium or similar
\nlaws of general application relating to or affecting creditors’ rights, (ii)
\nprovisions providing for indemnity for liability under the securities laws and
\n(iii) for the limitations imposed by general principles of equity.<\/p>\n
SECTION 5.3. Governmental Authorization. The execution, delivery and
\n ————————–
\nperformance by NEXTLINK and Newco of this Agreement and the consummation by
\nNEXTLINK and Newco of the transactions contemplated hereby require no action by
\nor in respect of, or filing with, any Governmental Authority, other than: (i)
\nthe filing of a certificate of Merger with respect to the Mergers with the
\nDelaware Secretary of State and appropriate documents with the relevant
\nauthorities of other states in which NEXTLINK is qualified to do business; (ii)
\ncompliance with any applicable requirements of the HSR Act; (v) compliance with
\nany applicable requirements of the 1933 Act, the 1934 Act and any other
\napplicable securities laws, whether state or foreign; (vi) as set forth in the
\nNEXTLINK Disclosure Schedule; and (vii) any actions or filings the absence of
\nwhich, individually or in the aggregate, would not be reasonably expected to
\nhave a NEXTLINK Material Adverse Effect or materially impair or delay the
\nability of NEXTLINK and Newco to consummate the transactions contemplated by
\nthis Agreement.<\/p>\n
SECTION 5.4. Non-contravention. The execution, delivery and performance
\n —————–
\nby NEXTLINK and Newco of this Agreement and the consummation by NEXTLINK and
\nNewco of the transactions contemplated hereby do not and will not (i)
\ncontravene, conflict with, or result in any violation or breach of any provision
\nof the certificate of incorporation or bylaws of NEXTLINK or Newco; (ii)
\nassuming compliance with the matters referred to in Section 5.3, contravene,
\nconflict with or result in a violation or breach of any provision of any law,
\nrule, regulation, judgment, injunction, order or decree; (iii) require any
\nconsent or other action by any Person under, constitute a default under (or an
\nevent that, with or without notice or lapse of time or both, would constitute a
\ndefault), or cause or permit the termination, cancellation, acceleration,
\ntriggering or other change of any<\/p>\n
-40-<\/p>\n
right or obligation or the loss of any benefit to which NEXTLINK, Newco or any
\nNEXTLINK Subsidiary is entitled under (A) any provision of any agreement or
\nother instrument binding upon NEXTLINK, Newco or any NEXTLINK Subsidiary or (B)
\nany license, franchise, permit, certificate, approval or other similar
\nauthorization held by, or affecting, or relating in any way to, the assets or
\nbusiness of NEXTLINK, Newco or any NEXTLINK Subsidiary; or (iv) result in the
\ncreation or imposition of any Lien on any asset of NEXTLINK, Newco or any
\nNEXTLINK Subsidiary, other than such exceptions in the case of clauses (ii),
\n(iii) and (iv) as would not be, individually or in the aggregate, reasonably
\nexpected to have a NEXTLINK Material Adverse Effect or materially impair the
\nability of NEXTLINK or Newco to consummate the transactions contemplated by this
\nAgreement.<\/p>\n
SECTION 5.5. Capitalization. (a) As of December 30, 1999, the authorized
\n ————–
\ncapital stock of NEXTLINK consists of (i) 400,000,000 shares of NEXTLINK Common
\nStock (ii) 60,000,000 shares of NEXTLINK Class B Common Stock, (iii) 25,000,000
\nshares of Preferred Stock, $0.01 par value per share of which (A) 11,700,000
\nshares have been designated 14% Redeemable Preferred Stock, (B) 4,600,000 have
\nbeen designated 6 1\/2% Convertible Preferred Stock, (C) 584,375 shares have been
\ndesignated as NEXTLINK Series C Preferred Stock and (D) 265,625 shares have been
\ndesignated as NEXTLINK Series D Preferred Stock. As of December 30, 1999, there
\nwere outstanding (i) 75,222,269 shares of NEXTLINK Common Stock, (ii) 58,902,550
\nshares of NEXTLINK Class B Common Stock, (iii) employee and non-employee
\ndirector and consultant stock options to purchase an aggregate of not more than
\n28,146,011 shares of NEXTLINK Common Stock (of which options to purchase an
\naggregate of not more than 4,446,178 shares of NEXTLINK Common Stock were
\nexercisable), (v) 8,324,796 shares of NEXTLINK 14% Preferred Stock, (vi)
\n4,000,000 shares of NEXTLINK 6 1\/2% Preferred Stock and (vii) no shares of
\nNEXTLINK Series C Preferred Stock or NEXTLINK Series D Preferred Stock. NEXTLINK
\nhas entered into an agreement to issue and sell all of the authorized shares of
\nNEXTLINK Series C Preferred Stock and NEXTLINK Series D Preferred Stock. All
\noutstanding shares of capital stock of NEXTLINK have been duly authorized and
\nvalidly issued and are fully paid and nonassessable.<\/p>\n
(b) Except as set forth in this Section 5.5 and for changes since
\nDecember 30, 1999 resulting from (x) the exercise of employee and non-employee
\ndirector and consultant stock options outstanding on such date (and the grant or
\naward of employee and non-employee director and consultant stock options in the
\nordinary course of business and the exercise thereof), (y) the conversion of
\nshares of NEXTLINK 6 1\/2% Preferred Stock outstanding on such date and (z)
\nissuance of NEXTLINK Series C Preferred Stock and NEXTLINK Series D Preferred
\nStock pursuant to the Forstmann Little Agreement, there are no outstanding (i)
\nshares of capital stock or voting securities of NEXTLINK, (ii) securities of
\nNEXTLINK convertible into or exchangeable for shares of capital stock or voting
\nsecurities of NEXTLINK or (iii)<\/p>\n
-41-<\/p>\n
options or other rights to acquire from NEXTLINK or other obligations of
\nNEXTLINK to issue, any capital stock, voting securities or securities
\nconvertible into or exchangeable for capital stock or voting securities of
\nNEXTLINK. There are no outstanding obligations of NEXTLINK or any NEXTLINK
\nSubsidiary to repurchase, redeem or otherwise acquire any of the securities
\nreferred to in clause (i), (ii) or (iii) above (collectively, the “NEXTLINK
\nSECURITIES”).<\/p>\n
(c) As of December 30, 1999, the authorized capital stock of Newco
\nconsisted of (i) 800,000,000 shares of Newco Common Stock (ii) 120,000,000 of
\nNewco Class B Common Stock, (iii) 25,000,000 shares of Preferred Stock, $0.01
\npar value per share and (iv) 10,000,000 shares of Preferred Stock, $0.001 par
\nvalue per share. As of December 30, 1999, there were no outstanding shares of
\nNewco capital stock. There will be no outstanding shares of Newco capital stock
\nprior to the Effective Time.<\/p>\n
(d) The Newco Common Stock and the Newco Preferred Stock or the
\nNEXTLINK Securities, as applicable, to be issued as part of the Merger
\nConsideration (or upon exercise of Adjusted Options) have been duly authorized
\nand, when issued and delivered in accordance with the terms of this Agreement
\n(or the Adjusted Options, as the case may be), will have been validly issued and
\nwill be fully paid and nonassessable and the issuance thereof is not subject to
\nany preemptive or similar right.<\/p>\n
SECTION 5.6. Subsidiaries. (a) Each NEXTLINK Subsidiary is a corporation or
\n ————
\nother legal entity duly organized, validly existing and in good standing (where
\napplicable) under the laws of its jurisdiction of organization, has all
\ncorporate, LLC, partnership or other similar powers required to carry on its
\nbusiness as now conducted other than such exceptions as, individually or in the
\naggregate, have not had and would not reasonably be expected to have a NEXTLINK
\nMaterial Adverse Effect. Each NEXTLINK Subsidiary is duly qualified to do
\nbusiness as a foreign corporation or other foreign legal entity and is in good
\nstanding in each jurisdiction where such qualification is necessary, with such
\nexceptions, individually or in the aggregate, as have not had and would not be
\nreasonably expected to have a NEXTLINK Material Adverse Effect. The NEXTLINK
\nDisclosure Schedule sets forth a list of all NEXTLINK Significant Subsidiaries
\nand their respective jurisdictions of incorporation and identifies NEXTLINK’s
\n(direct or indirect) percentage ownership interest therein.<\/p>\n
(b) All of the outstanding capital stock of, or other voting
\nsecurities or ownership interests in, each NEXTLINK Significant Subsidiary is
\nowned by NEXTLINK, directly or indirectly, free and clear of any Lien and free
\nof any other limitation or restriction (including any restriction on the right
\nto vote, sell or otherwise dispose of such capital stock or other voting
\nsecurities or ownership interests, other than transfer<\/p>\n
-42-<\/p>\n
restrictions under the 1933 Act and the rules promulgated thereunder). There are
\nno outstanding (i) securities of NEXTLINK or any NEXTLINK Subsidiary convertible
\ninto or exchangeable for shares of capital stock or other voting securities or
\nownership interests in any NEXTLINK Significant Subsidiary or (ii) options or
\nother rights to acquire from NEXTLINK or any NEXTLINK Subsidiary, or other
\nobligations of NEXTLINK or any NEXTLINK Subsidiary to issue, any capital stock
\nor other voting securities or ownership interests in, or any securities
\nconvertible into or exchangeable for any capital stock or other voting
\nsecurities or ownership interests in, any NEXTLINK Significant Subsidiary. There
\nare no outstanding obligations of NEXTLINK or any NEXTLINK Significant
\nSubsidiary to repurchase, redeem or otherwise acquire any of the securities
\nreferred to in clauses (i) or (ii) above.<\/p>\n
SECTION 5.7. SEC Filings. (a) NEXTLINK has delivered or made available to
\n ———–
\nConcentric (i) NEXTLINK’s annual reports on Form 10-K for its fiscal years ended
\nDecember 31, 1998 and 1997, (ii) its proxy or information statements relating to
\nmeetings of, or actions taken without a meeting by NEXTLINK’s stockholders held
\nsince December 31, 1998, and (iii) all of its other reports, statements,
\nschedules and registration statements filed with the SEC since December 31, 1998
\n(the documents referred to in this Section 5.7(a) including any exhibits thereto
\nor documents incorporated therein by reference, collectively, the “NEXTLINK SEC
\nDOCUMENTS”).<\/p>\n
(b) As of its filing date, each NEXTLINK SEC Document complied as to
\nform in all material respects with the applicable requirements of the 1933 Act
\nand 1934 Act, as the case may be.<\/p>\n
(c) As of its filing date, each NEXTLINK SEC Document filed pursuant
\nto the 1934 Act did not contain any untrue statement of a material fact or omit
\nto state any material fact necessary in order to make the statements made
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
(d) Each NEXTLINK SEC Document that is a registration statement, as
\namended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
\nthe date such registration statement or amendment became effective, did not
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary to make the statements therein
\nnot misleading.<\/p>\n
SECTION 5.8. Financial Statements. The audited consolidated financial
\n ——————–
\nstatements and unaudited consolidated interim financial statements of NEXTLINK
\nincluded in the NEXTLINK SEC Documents fairly present, in all material respects,
\nin conformity with GAAP applied on a consistent basis (except as may be
\nindicated in the notes thereto), the consolidated financial position of NEXTLINK
\nand its consolidated Subsidiaries as of the respective dates thereof and their
\nconsolidated results of<\/p>\n
-43-<\/p>\n
operations and cash flows for the periods then ended (subject to normal year-end
\nadjustments in the case of any unaudited interim financial statements) and
\nexcept that unaudited financial statements may not contain all notes required
\nunder GAAP with respect to audited Financial Statements.<\/p>\n
SECTION 5.9. Information Supplied. The information supplied by NEXTLINK for
\n ——————–
\ninclusion in the Registration Statement shall not at the time the Registration
\nStatement is declared effective by the SEC contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading. The information
\nsupplied by NEXTLINK for inclusion in the Proxy Statement to be sent to the
\nstockholders of Concentric in connection with the Concentric Stockholders’
\nMeeting and to the stockholders of NEXTLINK in connection with the Mergers shall
\nnot, on the date the Proxy Statement is first mailed to the stockholders of
\nConcentric and NEXTLINK or at the time either of the Stockholders’ Meetings or
\nat the Effective Time, contain any untrue statement of a material fact or omit
\nto state any material fact required to be stated therein or necessary in order
\nto make the statements therein, in light of the circumstances under which they
\nwere made, not misleading.<\/p>\n
SECTION 5.10. Absence of Certain Changes. Since the NEXTLINK Balance Sheet
\n ————————–
\nDate, the business of NEXTLINK and the NEXTLINK Subsidiaries has been conducted
\nin the ordinary course consistent with past practices. Since the NEXTLINK
\nBalance Sheet Date, there has not been any event, occurrence or development of a
\nstate of circumstances or facts which, individually or in the aggregate, has had
\nor would be reasonably expected to have a NEXTLINK Material Adverse Effect.<\/p>\n
SECTION 5.11. No Undisclosed Material Liabilities. There are no liabilities
\n ———————————–
\nor obligations of NEXTLINK or any NEXTLINK Subsidiary of any kind whatsoever,
\nwhether accrued, contingent, absolute, determined, determinable or otherwise,
\nand there is no existing condition, situation or set of circumstances that could
\nbe reasonably expected to result in such a liability or obligation, other than:<\/p>\n
(a) liabilities or obligations disclosed and provided for in the
\nNEXTLINK Balance Sheet or in the notes thereto or in the NEXTLINK SEC Documents
\nfiled prior to the date hereof;<\/p>\n
(b) liabilities or obligations incurred in the ordinary course of
\nbusiness consistent with past practice since the NEXTLINK Balance Sheet Date; or<\/p>\n
(c) liabilities or obligations that, individually or in the aggregate
\nhave not had and would not be reasonably expected to have a NEXTLINK Material
\nAdverse Effect.<\/p>\n
-44-<\/p>\n
SECTION 5.12. Compliance with Laws and Court Orders. NEXTLINK and the
\n ————————————-
\nNEXTLINK Subsidiaries hold all licenses, franchises, certificates, consents,
\npermits, qualifications and authorizations from all Governmental Authorities
\nnecessary for the lawful conduct of their business, except where the failure to
\nhold any of the foregoing, individually or in the aggregate, has not had and
\nwould not be reasonably expected to have a NEXTLINK Material Adverse Effect.
\nNEXTLINK and each of the NEXTLINK Subsidiaries are, and have been in compliance
\nwith, and to the Knowledge of NEXTLINK, are not under investigation with respect
\nto and have not been threatened to be charged with or given notice of any
\nviolation of, any such license, franchise, certificate, consent, permit,
\nqualification or authorization, applicable law, statute, ordinance, rule,
\nregulation, judgment, injunction, order or decree, except for failures to comply
\nor violations that, individually or in the aggregate, have not had and would not
\nbe reasonably expected to have a NEXTLINK Material Adverse Effect.<\/p>\n
SECTION 5.13. Litigation. There is no action, suit, investigation or
\n ———-
\nproceeding (or to the Knowledge of NEXTLINK, any reasonable basis therefor)
\npending against, or, to the Knowledge of NEXTLINK, threatened against or
\naffecting, NEXTLINK, any NEXTLINK Subsidiary, or any of their respective
\nproperties before any court or arbitrator or before or by any other Governmental
\nAuthority, that, individually or in the aggregate, would be reasonably expected
\nto have a NEXTLINK Material Adverse Effect.<\/p>\n
SECTION 5.14. Finders’ Fees. Except for Merrill Lynch & Co., a copy of
\n ————-
\nwhose engagement agreement has been provided to Concentric, whose fees will be
\npaid by NEXTLINK, there is no investment banker, broker, finder or other
\nintermediary that has been retained by or is authorized to act on behalf of
\nNEXTLINK, Newco or any NEXTLINK Subsidiary who might be entitled to any fee or
\ncommission from NEXTLINK or any of the NEXTLINK Subsidiaries upon consummation
\nof the transactions contemplated by this Agreement.<\/p>\n
SECTION 5.15. Taxes. Except as set forth in the NEXTLINK Balance Sheet
\n —–
\n(including the notes thereto) and except as would not be, individually or in the
\naggregate, reasonably expected to have a NEXTLINK Material Adverse Effect: (i)
\nall NEXTLINK Tax Returns required to be filed with any taxing authority by, or
\nwith respect to, NEXTLINK and the NEXTLINK Subsidiaries have been filed in
\naccordance with all applicable laws; (ii) NEXTLINK and the NEXTLINK Subsidiaries
\nhave timely paid all Taxes shown as due and payable on the NEXTLINK Tax Returns
\nthat have been so filed, and, as of the time of filing, the NEXTLINK Tax Returns
\nwere correct and complete (other than Taxes which are being contested in good
\nfaith and for which adequate reserves are reflected on the NEXTLINK Balance
\nSheet); (iii) NEXTLINK and the NEXTLINK Subsidiaries have made provision for all
\nTaxes payable by NEXTLINK and the NEXTLINK Subsidiaries for which no NEXTLINK
\nTax Return has yet been filed; (iv) the charges, accruals and <\/p>\n
-45-<\/p>\n
reserves for Taxes with respect to NEXTLINK and the NEXTLINK Subsidiaries
\nreflected on the NEXTLINK Balance Sheet are adequate under GAAP to cover the Tax
\nliabilities accruing through the date thereof; (v) there is no action, suit,
\nproceeding, audit or claim now proposed or pending against or with respect to
\nNEXTLINK or any NEXTLINK Subsidiary in respect of any Tax where there is a
\nreasonable possibility of an adverse determination; (vi) the federal income Tax
\nReturns of NEXTLINK and the NEXTLINK Subsidiaries have been examined and settled
\nwith the IRS (or the applicable statutes of limitation for the assessment of
\nfederal income Taxes for such periods have expired) for all years through 1991;
\nand (vii) there are no material Liens or encumbrances for Taxes on any of the
\nassets of NEXTLINK or any NEXTLINK Subsidiary except liens for current Taxes not
\nyet due.<\/p>\n
SECTION 5.16. Tax Opinions. There are no facts or circumstances relating to
\n ————
\nNEXTLINK or Newco that would prevent Willkie Farr & Gallagher from delivering
\nthe opinion referred to in Section 10.2(a)(ii) as of the date hereof.<\/p>\n
SECTION 5.17. Environmental Matters. (a) Except as have not had and would
\n ———————
\nnot be reasonably expected to have, individually or in the aggregate, a NEXTLINK
\nMaterial Adverse Effect:<\/p>\n
(i) no notice, notification, demand, request for information,
\n citation, summons or order has been received, no complaint has been
\n filed, no penalty has been assessed, and no investigation, action,
\n claim, suit, proceeding or review (or, to the Knowledge of NEXTLINK,
\n any reasonable basis therefor) is pending or, to the Knowledge of
\n NEXTLINK, is threatened by any Governmental Authority or other Person
\n relating to or arising out of any Environmental Law;<\/p>\n
(ii) NEXTLINK is and has been in compliance with all
\n Environmental Laws and all Environmental Permits; and<\/p>\n
(iii) there are no liabilities of or relating to NEXTLINK or any
\n NEXTLINK Subsidiary of any kind whatsoever, whether accrued, contingent,
\n absolute, determined, or arising under or relating to Environmental Laws or
\n any facts, conditions, situations or set of circumstances that could
\n reasonably be expected to result in or be the basis for any such liability.<\/p>\n
(b) To the Knowledge of NEXTLINK, there have been no
\nenvironmental investigations, studies, audits, tests, reviews or other analyses
\nconducted of which NEXTLINK has knowledge in relation to the current or prior
\nbusiness of NEXTLINK or any NEXTLINK Subsidiary or any property or facility now
\nor previously owned or leased by NEXTLINK or any NEXTLINK Subsidiary that reveal
\nmatters that, individually or in the aggregate, have had or would reasonably be
\nexpected to have a NEXTLINK Material Adverse Effect.<\/p>\n
-46-<\/p>\n
(c) For purposes of this Section 5.17, the terms “NEXTLINK” and
\n“NEXTLINK SUBSIDIARY” shall include any entity that is, in whole or in part, a
\npredecessor of NEXTLINK or any NEXTLINK Subsidiary.<\/p>\n
SECTION 5.18. Intellectual Property. With such exceptions as, individually
\n ———————
\nor in the aggregate, have not had and would not be reasonably expected to have a
\nNEXTLINK Material Adverse Effect, each of NEXTLINK and the NEXTLINK Subsidiaries
\nown or have a valid license to use each trademark, service mark, trade name,
\ninvention, patent, trade secret, copyright, know-how (including any
\nregistrations or applications for registration of any of the foregoing) or any
\nother similar type of proprietary intellectual property right (collectively, the
\n“NEXTLINK INTELLECTUAL PROPERTY”) necessary to carry on its business
\nsubstantially as currently conducted. Neither NEXTLINK nor any NEXTLINK
\nSubsidiary has received any notice of infringement of or conflict with, and to
\nNEXTLINK’s knowledge, there are no infringements of or conflicts with, the
\nrights of any Person with respect to the use of any NEXTLINK Intellectual
\nProperty that, in either such case, individually or in the aggregate, have had
\nor would be reasonably expected to have, a NEXTLINK Material Adverse Effect.<\/p>\n
SECTION 5.19. Contracts. Other than as disclosed in the SEC Documents, (a)
\n ———
\nneither NEXTLINK nor any of the NEXTLINK Subsidiaries is a party to or bound by
\n(i) any “material contract” (as such term is defined in Item 601(b)(10) of
\nRegulation S-K of the SEC) or any agreement, contract or commitment that would
\nbe such a “material contract” but for the exception for contracts entered into
\nin the ordinary course of business, (ii) any non-competition agreement or any
\nother agreement or obligation which materially limits or will materially limit
\nNEXTLINK or the NEXTLINK Subsidiaries (or after the Mergers, Concentric or the
\nConcentric Subsidiaries) from engaging in any line of business. With such
\nexceptions as, individually or in the aggregate, have not had, and would not
\nreasonably be expected to have, a NEXTLINK Material Adverse Effect, (x) each of
\nthe contracts, agreements and commitments of NEXTLINK and the NEXTLINK
\nSubsidiaries is valid and in full force and effect and (y) neither NEXTLINK nor
\nany of the NEXTLINK Subsidiaries has violated any provision of, or committed or
\nfailed to perform any act which, with or without notice, lapse of time, or both,
\nwould constitute a default under the provisions of, any such contract, agreement
\nor commitment. To the Knowledge of NEXTLINK, no counterparty to any such
\ncontract, agreement or commitment has violated any provision of, or committed or
\nfailed to perform any act which, with or without notice, lapse of time, or both
\nwould constitute a default or other breach under the provisions of such
\ncontract, agreement or commitment, except for defaults or breaches which,
\nindividually or in the aggregate, have not had, or would not reasonably be
\nexpected to have, a NEXTLINK Material Adverse Effect. Neither NEXTLINK nor any
\nNEXTLINK Subsidiary is a party to, or otherwise a guarantor of or<\/p>\n
-47-<\/p>\n
liable with respect to, any interest rate, currency or other swap or derivative
\ntransaction, other than any such transactions which are not material to the
\nbusiness of NEXTLINK and the NEXTLINK Subsidiaries, taken as a whole. NEXTLINK
\nhas provided or made available to Concentric a copy of each agreement of the
\ntype described in item (i) or (ii) above (except for such agreements filed as
\nexhibits to the NEXTLINK SEC Documents.)<\/p>\n
(b) Newco is a newly formed corporation with no operations or material
\nassets and is not a party to any contracts.<\/p>\n
SECTION 5.20. Vote Required. The only vote of the holders of any class or
\n ————-
\nseries of capital stock necessary to approve the issuance of NEXTLINK Common
\nStock in the Alternative Merger is the affirmative vote of a majority of the
\nvotes cast by holders of NEXTLINK Common Stock and NEXTLINK Class B Common Stock
\n(voting as a single class). The NEXTLINK Voting Agreement covers a number of
\nvotes sufficient for such approval. Pursuant to Section 251(f) of the Delaware
\nLaw, no vote of holders of Newco Capital Stock is required to approve the
\nMergers or the Alternative Merger.<\/p>\n
SECTION 5.21. Reliance of Eagle River on NEXTLINK Representations and
\n ——————————————————-
\nWarranties. Eagle River shall be entitled to rely on the representations of
\n———-
\nNEXTLINK contained in Sections 5.1, 5.2, 5.3, 5.4 and 5.14 of this Article 5 to
\nthe extent applicable to the LHP Share Exchange; provided that references to
\nthis Agreement in such representations shall be deemed to include references to
\nthe Registration Rights Agreement, except that the Registration Rights Agreement
\nis to be executed and delivered on the Closing Date. In addition to the
\nforegoing, NEXTLINK and Newco hereby represent and warrant to Eagle River as
\nfollows:<\/p>\n
(a) Newco is acquiring the Contributed Interest for investment and not
\nwith a view toward any resale or distribution of the Contributed Interest except
\nin compliance with the 1933 Act.<\/p>\n
(b) The shares of Newco Common Stock (or NEXTLINK Common Stock, as
\napplicable), when issued and delivered to Eagle River in payment of the LHP
\nConsideration in accordance with the terms of this Agreement, will have been
\nduly authorized and validly issued and will be fully-paid and non-assessable.<\/p>\n
(c) NEXTLINK has been leading and controlling the business of LHP and
\nINTERNEXT (assuming that the representation of Eagle River in the first sentence
\nof Section 6.6 to be true and correct) and, except as otherwise expressly
\nprovided in this Agreement, is not relying on any representation of Eagle River
\nwith respect to the respective business, operations or commercial prospects of
\nLHP or INTERNEXT.<\/p>\n
-48-<\/p>\n
ARTICLE 6.
\n REPRESENTATIONS AND WARRANTIES OF EAGLE RIVER<\/p>\n
Eagle River hereby represents and warrants to NEXTLINK that:<\/p>\n
SECTION 6.1. Organization and Authority. Eagle River and, to the Knowledge
\n ————————–
\nof Eagle River, LHP, is a limited liability company duly formed, validly
\nexisting and in good standing under the laws of the State of Washington. Eagle
\nRiver has all requisite power and authority to execute and deliver this
\nAgreement and the Registration Rights Agreement, to perform its obligations
\nunder this Agreement and the Registration Rights Agreement, and to consummate
\nthe transactions contemplated in this Agreement and the Registration Rights
\nAgreement.<\/p>\n
SECTION 6.2. Due Authorization etc. The execution, delivery and performance
\n ———————
\nby Eagle River of this Agreement and the Registration Rights Agreement have been
\nauthorized by all necessary action on Eagle River’s behalf. Eagle River has duly
\nexecuted and delivered this Agreement and Eagle River will, by the Closing Date,
\nhave duly executed and delivered the Registration Rights Agreement. This
\nAgreement constitutes and the Registration Rights Agreement will, by the Closing
\nDate, constitute legal, valid and binding obligations of Eagle River,
\nenforceable against Eagle River in accordance with their respective terms.<\/p>\n
SECTION 6.3. No Conflicts, etc. The execution, delivery and performance by
\n —————–
\nEagle River of this Agreement and the Registration Rights Agreement, and the
\nconsummation of the transactions contemplated by this Agreement and the
\nRegistration Rights Agreement do not: (a) conflict with, contravene, result in a
\nviolation or breach of or default under (with or without the giving of notice or
\nthe lapse of time, or both) (i) any applicable law statute, ordinance, rule,
\nregulation, judgment, injunction, order or decree; (ii) the certificate of
\nformation or other organizational documents of Eagle River; or (iii) any
\nmaterial contract, agreement or other instrument to which Eagle River is a party
\nor by which its properties or assets may be bound; or (b) create in any other
\nPerson a right or claim of termination, amendment, modification, acceleration or
\ncancellation of, or result in or require the creation of any Lien (or any
\nobligation to create any Lien) on, the Level 3 Agreement or the rights of
\nINTERNEXT therein.<\/p>\n
SECTION 6.4. Consents. Eagle River is not required to obtain any consent,
\n ——–
\napproval or authorization of any Governmental Authority or other consent in
\nconnection with the execution and delivery of this Agreement or the Registration
\nRights Agreement, or the consummation of the transactions contemplated by this
\nAgreement or the Registration Rights Agreement.<\/p>\n
SECTION 6.5. Title to Contributed Interest, etc. Eagle River owns,
\n ———————————-
\nbeneficially and of record, the Contributed Interest,<\/p>\n
-49-<\/p>\n
free and clear of any Liens other than Liens created by NEXTLINK or Newco. Upon
\nthe payment for the Contributed Interest at the Closing under this Agreement,
\nNewco will acquire good and valid title to the Contributed Interest free and
\nclear of any Liens other than Liens created by NEXTLINK or Newco.<\/p>\n
SECTION 6.6. No Actions. Except for this Agreement, Eagle River has not
\n ———-
\ntaken any action (i) binding, or purporting to bind, LHP or INTERNEXT or any of
\ntheir respective assets in any manner; or (ii) committing, or purporting to
\ncommit, LHP or INTERNEXT to issue any additional limited liability company
\ninterests or admit any Person as a member of LHP or INTERNEXT. To the best
\nknowledge of Eagle River, neither LHP nor INTERNEXT has any liabilities or
\nobligations of any nature except those arising hereunder, under the Level 3
\nAgreement and any that may have been created by NEXTLINK.<\/p>\n
SECTION 6.7. Brokers, Finders, etc. All negotiations relating to this
\n ———————
\nAgreement, and the transactions contemplated by this Agreement, have been
\ncarried on without the participation of any Person acting on behalf of Eagle
\nRiver or LHP in such a manner as to give rise to any valid claim against Newco,
\nLHP or INTERNEXT for any brokerage or finder’s commission, fee or similar
\ncompensation.<\/p>\n
SECTION 6.8. Acquisition for Investment. Eagle River is acquiring shares
\n ————————–
\nof Newco Common Stock or NEXTLINK Common Stock, as the case may be, for
\ninvestment and not with a view toward any resale or distribution of such shares
\nexcept in compliance with the 1933 Act.<\/p>\n
ARTICLE 7.
\n COVENANTS OF CONCENTRIC<\/p>\n
Concentric agrees that:<\/p>\n
SECTION 7.1. Concentric Interim Operations. Except as set forth in the
\n —————————–
\nConcentric Disclosure Schedule or otherwise contemplated by this Agreement and
\nthe other agreements by and between Concentric and its affiliates, on the one
\nhand, and NEXTLINK and its affiliates, on the other hand, and the several
\ntransactions contemplated hereby and thereby, during the period from the date of
\nthis Agreement and continuing until the earlier of the termination of this
\nAgreement or the Effective Time, Concentric agrees (except to the extent that
\nNEXTLINK shall otherwise have previously consented in writing) to carry on the
\nConcentric Group’s respective business in the usual, regular and ordinary course
\nin substantially the same manner as heretofore conducted, to pay the debts and
\nTaxes of Concentric Group when due (unless debts and Taxes are subject to a
\ndispute that Concentric is reasonably and actively seeking to resolve), to pay
\nor perform other obligations when due (unless such obligations are the subject
\nof a dispute that Concentric is actively seeking to resolve) and, to the extent
\nconsistent with such businesses, <\/p>\n
-50-<\/p>\n
use its reasonable efforts consistent with past practice and policies to
\npreserve intact Concentric Group’s present business organizations, keep
\navailable the services of its present officers and key employees, to maintain in
\neffect all material foreign, federal, state and local licenses, approvals and
\nauthorizations, including, without limitation, all material licenses and permits
\nthat are required for Concentric or any Concentric Subsidiary to carry on its
\nbusiness and preserve its relationships with customers, suppliers, distributors,
\nlicensors, licensees, and others having business dealings with it, all with the
\ngoal of preserving the Concentric Group’s goodwill and ongoing business at the
\nEffective Time, and to refrain from taking such action that would cause any of
\nthe conditions contained in Article IX hereof not to be satisfied; provided,
\nhowever, that Concentric shall not be deemed in breach of this Section 7.1
\nbecause of attrition, if any, among Concentric’s employees which may occur as a
\nresult of this Agreement, the transactions contemplated hereby or the
\nannouncement or pendancy thereof, so long as Concentric uses reasonable efforts
\nto retain such employees at Concentric. Without limiting the generality of the
\nforegoing, except as set forth in the Concentric Disclosure Schedule or as
\notherwise contemplated by this Agreement, from the date hereof until the
\nEffective Time, without the prior written consent of NEXTLINK, Concentric shall
\nnot, nor shall it permit any Concentric Subsidiary to:<\/p>\n
(a) amend its certificate of incorporation or by-laws or other
\napplicable governing instrument;<\/p>\n
(b) amend any material term of any of its outstanding securities;<\/p>\n
(c) split, combine, subdivide or reclassify any shares of its capital
\nstock or other equity interests or declare, set aside or pay any dividend or
\nother distribution (whether in cash, stock or property or any combination
\nthereof) in respect of its capital stock, or redeem, repurchase or otherwise
\nacquire or offer to redeem, repurchase, or otherwise acquire any of its
\nsecurities or any securities of Concentric or any Concentric Subsidiary, except
\nfor (i) regular dividends on outstanding preferred stock pursuant to the terms
\nof such securities, (ii) dividends paid by any Concentric Subsidiary that is,
\ndirectly or indirectly, wholly owned by Concentric;<\/p>\n
(d) adopt a plan or agreement of complete or partial
\nliquidation, dissolution, merger, consolidation, restructuring, recapitalization
\nor other material reorganization (other than a merger or consolidation between
\nwholly owned Concentric Subsidiaries and acquisitions or mergers of a Concentric
\nSubsidiary, in which the sole consideration consists of cash in an amount not to
\nexceed $5,000,000 in any one transaction or series of related transactions or
\n$25,000,000 in the aggregate);<\/p>\n
-51-<\/p>\n
(e) issue, deliver or sell, or authorize the issuance, delivery or
\nsale of, any shares of its capital stock of any class or other equity interests
\nor any securities convertible into or exercisable for, or any rights, warrants
\nor options to acquire, any such capital stock or other equity interests, other
\nthan (i) the issuance of shares of Concentric Common Stock upon the exercise of
\nstock options or warrants in accordance with their present terms, (ii) issuances
\npursuant to the conversion of convertible securities outstanding on the date
\nhereof in accordance with their present terms, (iii) the granting of options to
\nacquire shares of Concentric Common Stock in accordance with Section 6.1(n) of
\nthe Concentric Disclosure Schedule;<\/p>\n
(f) incur any capital expenditures exceeding by more than $5 million
\nthe amount currently budgeted therefor as set forth in the Concentric Disclosure
\nSchedule;<\/p>\n
(g) except for capital expenditures, which shall be governed by
\nclause (f), acquire (by merger, consolidation, acquisition of stock or assets or
\notherwise), directly or indirectly, any assets, other than (i) pursuant to
\nagreements in effect as of the date hereof and listed in the Concentric
\nDisclosure Schedule, (ii) assets used in the ordinary course of business of
\nConcentric and the Concentric Subsidiaries in a manner that is consistent with
\npast practice or (iii) assets having a fair market value not exceeding
\n$5,000,000 in individual cases or $25,000,000 in the aggregate;<\/p>\n
(h) other than pursuant to agreements in effect as of the date hereof
\nand listed in the Concentric Disclosure Schedule, sell, lease, license, encumber
\nor otherwise transfer any domestic assets having a fair market value exceeding
\n$5,000,000 in any one transaction or series of related transactions or
\n$25,000,000 in the aggregate;<\/p>\n
(i) incur, assume or guarantee any indebtedness for borrowed money
\nother than as expressly contemplated in the Concentric Disclosure Schedule or as
\notherwise agreed with NEXTLINK;<\/p>\n
(j) make any loan, advance or capital contributions to or investment
\nin any Person other than loans, advances or capital contributions to or
\ninvestments in its wholly owned Subsidiaries, except for advances to Internet
\nTechnology Group plc not to exceed $12 million in the aggregate;<\/p>\n
(k) engage in or enter into any transaction or commitment, enter into
\nany contract or agreement, or relinquish or amend in any respect any contract or
\nother right outside of the ordinary course of Concentric’s business consistent
\nwith past practice (except as otherwise specifically permitted by this Section
\n7.1);<\/p>\n
-52-<\/p>\n
(l) enter into any agreement or arrangement that materially limits or
\notherwise materially restricts Concentric, any Concentric Subsidiary or any of
\ntheir respective Affiliates or any successor thereto or that would, after the
\nEffective Time, materially limit or restrict NEXTLINK, any NEXTLINK Subsidiary,
\nthe Surviving Corporation or any of their Affiliates, from engaging in any line
\nof business;<\/p>\n
(m) except as required pursuant to existing written, binding
\nagreements listed in the Concentric Disclosure Schedule or as otherwise mandated
\nby law as of the date hereof (i) enter into any commitment to provide any
\nseverance or termination pay to (or amend any existing arrangement with) any
\ndirector, officer or employee of Concentric or any Concentric Subsidiary, (ii)
\nincrease the benefits payable under any existing severance or termination pay
\npolicy or employment agreement (other than as may be increased by function of
\nthe existing terms of any such policy or agreement), (iii) enter into any
\nemployment, deferred compensation or other similar agreement (or amend any such
\nexisting agreement) with any director, officer or employee of Concentric or any
\nConcentric Subsidiary, (iv) establish, adopt or amend (except as required by
\napplicable law) any collective bargaining, bonus, profit-sharing, thrift,
\npension, retirement, deferred compensation, compensation, stock option,
\nrestricted stock or other benefit plan or arrangement covering any director,
\nofficer or employee of Concentric or any Concentric Subsidiary, except that
\nConcentric and the Concentric Subsidiaries may amend any such existing agreement
\nor plan or adopt a successor plan or arrangement to the extent mandated by
\napplicable law or to the extent that such amendment would not result in a more
\nthan de minimis increase in the costs or liabilities under such agreement or
\nplan, (v) other as required by any agreement in effect as of the date hereof,
\nincrease the compensation, bonus or other benefits payable to any director,
\nofficer or employee of Concentric or any Concentric Subsidiary or (vi) amend the
\nterms of any outstanding option to purchase shares in Concentric Common Stock;
\nprovided, that nothing in this Section 7.1(m) shall prohibit raises and option
\n——–
\ngrants to employees (other than officers and directors) in the ordinary course;<\/p>\n
(n) change (i) its methods of accounting or accounting practices in
\nany material respect, except as required by concurrent changes in U.S. GAAP or
\nby law or (ii) its fiscal year;<\/p>\n
(o) enter into or amend in any material respect any agreement of
\ngeneral or limited partnership, limited liability company agreement or any other
\nagreement creating a “joint venture” (as defined in the HSR Act) involving
\nassets or liabilities in excess of $5 million;<\/p>\n
(p) settle, or propose to settle, any litigation, investigation,
\narbitration, proceeding or other claim in an aggregate amount for all such
\nmatters in excess of $1,500,000, <\/p>\n
-53-<\/p>\n
(excluding amounts for which Concentric is contractually entitled to
\nindemnification from a third party);<\/p>\n
(q) make any material tax election or enter into any settlement or
\ncompromise of any material tax liability;<\/p>\n
(r) take any action that would make any representation or warranty of
\nConcentric hereunder inaccurate in any material respect at the Effective Time;
\nor<\/p>\n
(s) agree or commit to do any of the foregoing;<\/p>\n
provided that the limitations set forth above shall not apply to any transaction
\n——–
\nbetween Concentric and any Concentric Subsidiary that is wholly owned by
\nConcentric or between any such wholly owned Concentric Subsidiaries.<\/p>\n
SECTION 7.2. Concentric Stockholders’ Meeting; Proxy Material. (a)
\n ————————————————
\nConcentric shall cause the Concentric Stockholders’ Meeting to be duly called
\nand held as soon as reasonably practicable following the receipt of an order of
\nthe SEC declaring the Registration Statement effective under the 1933 Act for
\nthe purpose of voting on the approval and adoption of this Agreement and the
\nMergers. In connection with such meeting, Concentric will (i) subject to Section
\n7.2(b), use its best efforts to obtain the necessary approvals by its
\nstockholders of this Agreement and the transactions contemplated hereby and (ii)
\notherwise comply with all legal requirements applicable to such meeting.<\/p>\n
(b) Except as provided below, the Board of Directors of Concentric
\nshall unanimously recommend approval and adoption of this Agreement and the
\nMergers or the Alternative Merger, as applicable, by Concentric’s stockholders
\nand shall take all lawful action to solicit such approval including calling a
\nspecial meeting of its stockholders and mail the Proxy Statement in connection
\ntherewith. The Board of Directors of Concentric shall be permitted to withdraw,
\nor modify in a manner adverse to NEXTLINK, its recommendation to its
\nstockholders, but only if: (i) Concentric has complied with the terms of Section
\n7.3, including, without limitation, the requirement in Section 7.3(b) that it
\nnotify NEXTLINK promptly after its receipt of any Acquisition Proposal, or has
\nmade good faith efforts to comply with such terms of Section 7.3 and has
\nsubstantially complied with them; (ii) a Superior Proposal is pending at the
\ntime the Board of Directors determines to take any such action; (iii) the Board
\nof Directors determines in good faith by a majority vote, after consultation
\nwith Concentric’s outside counsel, that it is required to take such action to
\nsatisfy its fiduciary duties under applicable law; and (iv) Concentric shall
\nhave delivered to NEXTLINK a prior written notice advising NEXTLINK that it
\nintends to take such action (such notice to be delivered not less than two days
\nprior to the time such action is taken). Unless this Agreement is previously
\nterminated in accordance with Article 11, <\/p>\n
-54-<\/p>\n
Concentric shall submit this Agreement to its stockholders at the Concentric
\nStockholders’ Meeting even if the Concentric Board of Directors determines at
\nany time after the date hereof that is no longer advisable or recommends that
\nthe Concentric stockholders reject it.<\/p>\n
SECTION 7.3. No Solicitation. (a) From the date hereof until the
\n —————
\ntermination hereof, Concentric will not, and will cause the Concentric
\nSubsidiaries and the officers, directors, employees, investment bankers,
\nattorneys, accountants, consultants or other agents or advisors of Concentric
\nand the Concentric Subsidiaries not to, directly or indirectly: (i) take any
\naction to solicit, initiate, or knowingly facilitate or encourage the submission
\nof any Acquisition Proposal; (ii) other than in the ordinary course of business
\nand not related to an Acquisition Proposal, engage in any discussions or
\nnegotiations with, or disclose any non-public information relating to Concentric
\nor any Concentric Subsidiary or afford access to the properties, books or
\nrecords of Concentric or any Concentric Subsidiary to, any Person who is known
\nby Concentric to be considering making, or has made, an Acquisition Proposal;
\n(iii) (A) amend or grant any waiver or release under any standstill or similar
\nagreement with respect to any class of equity securities of Concentric (a
\n“STANDSTILL AGREEMENT”), (B) approve any transaction under Section 203 of
\nDelaware Law, (C) to the fullest extent permitted by Delaware Law, amend or
\ngrant any waiver or release or approve any transaction or redeem any Rights or
\n(D) approve of any Person’s becoming an “interested stockholder” under Section
\n203 of Delaware Law or (iv) enter into any agreement with respect to an
\nAcquisition Proposal (other than a confidentiality agreement as described in
\nitem (C) below); provided that Concentric may negotiate or otherwise engage in
\n ——–
\nsubstantive discussions with, and furnish non-public information and provide a
\nwaiver or release of a Standstill Agreement to, any Person (a “THIRD PARTY”) who
\ndelivers an unsolicited Acquisition Proposal that the Concentric Board of
\nDirectors reasonably believes will lead to a Superior Proposal if: (A)
\nConcentric has complied with the terms of this Section 7.3, including without
\nlimitation, the requirement in Section 7.3(b) that it notify NEXTLINK promptly
\nafter its receipt of any Acquisition Proposal (or has made good faith efforts to
\ncomply with such terms and has substantially complied with them); (B) the Board
\nof Directors of Concentric determines in good faith by a majority vote, after
\nconsultation with Concentric’s outside legal counsel, that it must take such
\naction to comply with its fiduciary duties under applicable law; and (C) the
\nThird Party executes a confidentiality agreement with terms no less favorable in
\nthe aggregate to Concentric than those contained in the Confidentiality
\nAgreement dated as of November 18, 1999 between Concentric and NEXTLINK (the
\n“CONFIDENTIALITY AGREEMENT”). Nothing contained in this Agreement shall prevent
\nthe Board of Directors of Concentric from complying with applicable securities
\nlaws and regulations including, without limitation, the 1934 Act <\/p>\n
-55-<\/p>\n
and Rule 14e-2 and Rule 14d-9 thereunder with regard to an Acquisition Proposal.<\/p>\n
(b) Concentric will notify NEXTLINK promptly (but in no event later
\nthan 48 hours) after receipt by Concentric (or any of its advisors) of any
\nAcquisition Proposal, or of any request (other than in the ordinary course of
\nbusiness and not related to an Acquisition Proposal) for non-public information
\nrelating to Concentric or any of the Concentric Subsidiaries or for access to
\nthe properties, books or records of Concentric or any Concentric Subsidiary by
\nany Person who is known to be considering making, or has made, an Acquisition
\nProposal. Concentric shall provide such notice orally and in writing and shall
\nidentify the Person making, and the terms and conditions of, any such
\nAcquisition Proposal, indication or request. Concentric shall keep NEXTLINK
\nfully informed, on a prompt basis (but in any event no later than 48 hours), of
\nthe status and details of any such Acquisition Proposal, indication or request.
\nConcentric shall, and shall cause the Concentric Subsidiaries and the directors,
\nemployees and other agents of Concentric and the Concentric Subsidiaries to,
\ncease immediately and cause to be terminated all activities, discussions or
\nnegotiations, if any, with any Persons conducted prior to the date hereof with
\nrespect to any Acquisition Proposal.<\/p>\n
SECTION 7.4. Bondholder and Preferred Consent. (a) Each of Concentric and
\n ——————————–
\nNEXTLINK shall (i) solicit, and use its commercially reasonable efforts to
\nobtain, the consent of holders of the Concentric Senior Notes and the Concentric
\nSeries B Preferred Stock to the Mergers and, at NEXTLINK’s request, to the
\nreplacement, as of the Effective Time, of the covenants contained in the
\nindentures relating to the Concentric Senior Notes and the Concentric Debentures
\nand the Concentric Series B Preferred Stock covenants substantially identical,
\nmutatis mutandis, to those applicable to NEXTLINK’s 10 1\/2% Senior Notes due
\n2009 and the consent of the holder of the Concentric Series C Preferred Stock to
\nthe items contemplated by clauses (A) and (D) of Section 3.1(i), provided that
\n ——–
\nany fees or other inducements paid or provided for in connection therewith shall
\nbe paid by NEXTLINK in such amounts, at such times and subject to such
\ncontingencies as NEXTLINK shall determine in its sole discretion and\/or, if
\nNEXTLINK elects to do so, (ii) exchange the Concentric Series B Preferred Stock
\nfor Concentric Debentures in accordance with its terms and subject such
\nConcentric Notes and the Concentric Debentures to covenant defeasance in
\naccordance with Section 403 of the respective indentures related thereto,
\neffective immediately prior to the Mergers, in the case of the Concentric Senior
\nNotes, and effective immediately prior to the exchange of Concentric Series B
\nPreferred Stock for Concentric Debentures, in the case of the Concentric
\nDebentures, in each case with the funds therefor to be supplied by NEXTLINK,
\nprovided that nothing contained in this Agreement will require NEXTLINK to elect
\n——–
\nsuch covenant defeasance.<\/p>\n
-56-<\/p>\n
(b) If, within forty (40) days after the date Concentric distributes
\na consent solicitation contemplated in Section 7.4(a)(i) or such extension
\nthereof as NEXTLINK shall determine, with the consent of Concentric not to be
\nunreasonably withheld (the “SOLICITATION TERMINATION DATE”), Concentric has not
\nreceived the requisite consents of holders of the Concentric Senior Notes and
\nConcentric Series B Preferred Stock to the actions described in Section
\n7.4(a)(i), NEXTLINK may elect (the “NEXTLINK ELECTION”) to commence an exchange
\noffer as set forth in Section 7.5. NEXTLINK shall exercise the NEXTLINK
\nElection, if it determined, in its sole discretion, to do so, by delivering
\nwritten notice to Concentric within five (5) Business Days after the
\nSolicitation Termination Date. Concentric agrees to provide NEXTLINK with
\nwritten notice of the Solicitation Termination Date at least five (5) Business
\nDays prior to the occurrence of the Solicitation Termination Date.<\/p>\n
SECTION 7.5. The Exchange Offer.
\n ——————<\/p>\n
(a) Terms of the Exchange Offer. Upon the making of a NEXTLINK
\n —————————
\nElection, Newco shall announce as promptly as practicable in accordance with
\napplicable law the commencement (within the meaning of Rule 14d-2 under the 1934
\nAct) of an irrevocable exchange offer (the “EXCHANGE OFFER”) to acquire all of
\nthe issued and outstanding shares of Concentric Common Stock and Concentric
\nSeries C Preferred Stock in exchange for the Common Stock Consideration and the
\nConcentric Series C Consideration, respectively (the “EXCHANGE CONSIDERATION”),
\nand with such other terms and conditions which make the Exchange Offer at least
\nas favorable to the exchanging holders of such shares as the Mergers. Newco
\nshall conduct such Exchange Offer in accordance with this Section 7.5 and
\napplicable law. To the extent practicable in the context of the Exchange Offer,
\nthe parties hereto shall seek to provide to each other all of the benefits of
\nthe provisions of this Agreement. Newco hereby agrees that within two (2)
\nBusiness Days following the later to occur of the expiration of the minimum
\nstatutory period during which exchange offers must remain open and all Exchange
\nOffer Conditions (as defined below) having been satisfied or waived, Newco shall
\naccept for exchange all shares of Concentric Common Stock and Concentric Series
\nC Preferred Stock tendered and promptly issue the Exchange Consideration to the
\nholders of Concentric Common Stock and Concentric Series C Preferred Stock who
\nshall have tendered their shares in the Exchange Offer.<\/p>\n
The obligation of Newco to consummate the Exchange Offer once it is
\ncommenced and to accept for exchange the shares of Concentric Common Stock and
\nConcentric Series C Preferred Stock tendered pursuant to the Exchange Offer
\nshall be subject only to the following conditions (the “EXCHANGE OFFER
\nCONDITIONS”): (i) the holders of the outstanding Concentric Common Stock and
\nConcentric Series C Preferred Stock (on a fully converted basis) representing at
\nleast 50.1% of the voting power of the Concentric Common Stock (on a fully
\ndiluted basis) as of<\/p>\n
-57-<\/p>\n
the date the Exchange Offer is commenced (and all shares of Concentric Common
\nStock and Concentric Series C Preferred Stock (on a fully converted basis) held
\nby Newco, each NEXTLINK Subsidiary and each affiliate thereof shall be deemed to
\nbe included within such 50.1%) accepting the Exchange Offer, (ii) the
\nresignations of Concentric’s directors prior to consummation of the Exchange
\nOffer and (iii) the satisfaction of the following conditions precedent sections
\nof this Agreement (to the extent applicable to an exchange offer): 10.1(b),
\n10.1(c), 10.1(d), 10.1(e), 10.1(f), 10.1(g), 10.2(a)(i), 10.2(a)(ii), 10.3(a)
\nand 10.3(b). Newco expressly reserves the right to waive any such condition, to
\nincrease the consideration payable in the Exchange Offer and to make any other
\nchanges in the terms and conditions of the Exchange Offer which make the
\nExchange Offer more favorable to the holders of the issued and outstanding
\nshares of Concentric Common Stock and Concentric Series C Preferred Stock than
\nthe Mergers and than the requirements for the Exchange Offer set forth herein.
\nNotwithstanding the foregoing, no change may be made which (i) causes the
\nExchange Offer not to meet the requirements of this Section 7.5, (ii) decreases
\nor changes the Exchange Consideration to be paid in the Exchange Offer, (iii)
\nreduces the number of shares of Concentric Common Stock and Concentric Series C
\nPreferred Stock sought to be purchased in the Exchange Offer, (iv) imposes
\nconditions to the Exchange Offer other than those permitted by this Section 7.5,
\n(v) extends the expiration date of the Exchange Offer or (vi) otherwise alters
\nor amends any term of the Exchange Offer in any manner materially adverse to the
\nholders of shares of Concentric Common Stock and Concentric Series C Preferred
\nStock; provided, however, that subject to the right of the parties to terminate
\n ——–
\nthis Agreement pursuant to Section 10.1, the Exchange Offer may be extended for
\nany period to the extent required to satisfy any Exchange Offer Condition or to
\nthe extent required by law or by any rule, regulation, interpretation or
\nposition of the SEC or the staff thereof, so long as the Exchange Offer shall
\nnot extend beyond the End Date. Newco shall not acquire less than all of the
\nshares of Concentric Common Stock and Concentric Series C Preferred Stock or
\nother securities that are tendered pursuant to the Exchange Offer.<\/p>\n
(b) Exchange Offer Documents. As promptly as practicable after the
\n ————————
\nelection by the Newco to commence the Exchange Offer, Newco shall file with the
\nSEC a registration statement (together with the amendments thereof or
\nsupplements thereto, the “EXCHANGE REGISTRATION STATEMENT”) in connection with
\nthe registration under the 1933 Act of the Newco Common Stock and Newco Series F
\nPreferred Stock to be issued pursuant to the Exchange Offer. Newco shall use all
\nreasonable efforts to have or cause the Exchange Registration Statement to
\nbecome effective as promptly as practicable. As promptly as practicable (and in
\nany event within five (5) Business Days) after the Exchange Registration
\nStatement has become effective, Newco shall commence the Exchange Offer. As
\npromptly as practicable on the date of commencement of the Exchange Offer, Newco
\nshall file with <\/p>\n
-58-<\/p>\n
the SEC a Tender Exchange Offer Statement on Schedule 14D-1 promulgated under
\nthe 1934 Act (together with all amendments and supplements thereto, the
\n“SCHEDULE 14D-1”) with respect to the Exchange Offer, and take such steps as are
\nreasonably necessary to cause the Exchange Offer to be disseminated to the
\nholders of shares of Concentric Common Stock and Concentric Series C Preferred
\nStock as and to the extent required by applicable federal securities laws. The
\nSchedule 14D-1 shall contain an offer to exchange (the “OFFER TO EXCHANGE”) and
\nforms of the related letter of transmittal and any related summary advertisement
\n(the Schedule 14D-1, the Exchange Registration Statement, the Offer to Exchange
\nand such other documents as may be required by the 1934 Act, Nasdaq, the
\nNational Association of Securities Dealers or any other applicable laws, rules
\nor regulations, together with all amendments and supplements thereto, the
\n“EXCHANGE OFFER DOCUMENTS”). Newco shall use its best efforts to distribute such
\nExchange Offer Documents, and any other documents required by law or this
\nAgreement to all holders of shares of Concentric Common Stock and Concentric
\nSeries C Preferred Stock, in accordance with the requirements of this Section
\n7.5. Newco and Concentric shall correct promptly any information provided by any
\nof them for use in the Exchange Offer Documents if such information shall
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ncontained therein, in light of the circumstances under which they were made, not
\nmisleading, and Newco shall use all reasonable efforts to cause the Schedule 14
\nD-1 as so corrected to be filed with the SEC and the other Exchange Offer
\nDocuments as so corrected to be disseminated to holders of shares of Concentric
\nCommon Stock and Concentric Series C Preferred Stock, in each case as and to the
\nextent required by applicable federal securities laws and this Section 7.5.
\nConcentric and its counsel shall be given a reasonable opportunity to review and
\ncomment on the Exchange Offer Documents prior to their being filed with the SEC,
\nand Newco will provide Concentric and its counsel with copies of any written
\ncomments that Newco receives from the SEC or its staff with respect to the
\nExchange Offer Documents promptly after receipt of any such comments.<\/p>\n
(c) Stock Options. The Exchange Offer will extend to all shares of
\n ————-
\nConcentric Common Stock which may be issued as a result of the exercise of
\noutstanding options, warrants and other rights to purchase or acquire Concentric
\nCommon Stock, and will involve assumption of other options, warrants and rights,
\nto the same extent as required with respect to the Mergers under Sections 3.1(k)
\nand 3.1(l).<\/p>\n
(d) Concentric Recommendation. On the date the Schedule 14D-1 is
\n ————————-
\nfiled with the SEC, Concentric shall file with the SEC a
\nSolicitation\/Recommendation Statement on Schedule 14D-9 promulgated under the
\n1934 Act (together with all amendments and supplements thereto, the “SCHEDULE
\n14D-9”) containing the recommendation of the Board of Directors of Concentric
\nfor the<\/p>\n
-59-<\/p>\n
stockholders of Concentric to accept the Exchange Offer, except to the extent
\nthe Board of Directors would be permitted to alter its recommendation under
\nSection 7.2(b) with respect to the Mergers, and shall take such steps as are
\nnecessary to cause the Schedule 14D-9 to be disseminated to the holders of
\nshares of Concentric Common Stock and Concentric Series C Preferred Stock as and
\nto the extent required by the National Association of Securities Dealers or any
\nother applicable laws, rules and regulations, including, without limitation,
\napplicable federal securities laws. Newco, Concentric and NEXTLINK shall amend
\nor correct promptly any information provided by any of them for use in the
\nSchedule 14D-9 which shall have become false or misleading, and Concentric shall
\ntake all steps necessary to cause the Schedule 14D-9 as so amended or corrected
\nto be filed with the SEC and disseminated to holders of shares of Concentric
\nCommon Stock and Concentric Series C Preferred Stock, in each case as and to the
\nextent required by applicable federal securities laws. Newco and its counsel
\nshall be given a reasonable opportunity to review and comment on the Schedule
\n14D-9 prior to its being filed with the SEC, and Concentric will provide Newco
\nand its counsel with copies of any written comments that Concentric receives
\nfrom the SEC or its staff with respect to the Schedule 14D-9 promptly after
\nreceipt of any such comments.<\/p>\n
(e) Stockholder List. In connection with the Exchange Offer,
\n —————-
\nConcentric shall cause Concentric’s transfer agent to furnish Newco promptly
\nwith mailing labels containing the names and addresses of all record holders of
\nshares of Concentric Common Stock and Concentric Series C Preferred Stock and
\nwith security position listings of shares of Concentric Common Stock and
\nConcentric Series C Preferred Stock held in stock depositories, each as of a
\nrecent date, together with all other available listings and computer files
\ncontaining names, addresses and security position listings of record holders and
\nbeneficial owners of shares of Concentric Common Stock and Concentric Series C
\nPreferred Stock. Concentric shall furnish Newco with such additional
\ninformation, including, without limitation, updated listings and files of
\nstockholders, mailing labels and security position listings and such other
\nassistance as Newco or its representatives may reasonably request in
\ncommunicating the Exchange Offer to record and beneficial holders of shares of
\nConcentric Common Stock and Concentric Series C Preferred Stock. Subject to the
\nrequirements of the 1933 Act, the 1934 Act, Nasdaq, the National Association of
\nSecurities Dealers and any other applicable laws, rules or regulations, and
\nexcept for such steps as are necessary to disseminate the Exchange Offer
\nDocuments and any other documents necessary to consummate the transactions
\ncontemplated by this Agreement, Newco shall hold in confidence the information
\ncontained in such labels, listings and files, shall use such information only in
\nconnection with the transactions contemplated by this Agreement, and, if this
\nAgreement shall be terminated in accordance with Section 10, shall deliver to
\nConcentric all copies of, and any extracts or <\/p>\n
-60-<\/p>\n
summaries from, such information then in its possession or control.<\/p>\n
(f) Cooperation. In connection with the Exchange Offer, Concentric
\n ———–
\nshall furnish Newco with such information (which will be treated and held in
\nconfidence by Newco except to the extent required to be disclosed pursuant to
\nthe Exchange Offer or this Agreement) and assistance as Newco or its
\nrepresentatives may reasonably request in connection with the preparation of the
\nExchange Offer and communicating the Exchange Offer to the record and beneficial
\nholders of shares of Concentric Common Stock and Concentric Series C Preferred
\nStock.<\/p>\n
(g) Merger Following the Closing of the Exchange Offer. Prior to the
\n ————————————————–
\nclosing of the Exchange Offer, Newco shall create a wholly owned subsidiary
\n(“NEWCO MERGER SUB”) and, immediately following the closing of the Exchange
\nOffer, NEXTLINK shall merge with and into Newco Merger Sub (the “EXCHANGE OFFER
\nMERGER”) in accordance with Delaware Law, with NEXTLINK being the surviving
\ncorporation of such merger and the separate corporate existence of Newco Merger
\nSub shall cease. In the Exchange Offer Merger, each outstanding share of capital
\nstock of Newco Merger Sub will be converted into a share of capital stock of the
\nsurviving corporation of the Exchange Offer Merger, (i) each issued and
\noutstanding share of NEXTLINK capital stock will be converted into a share of
\ncapital stock of Newco as contemplated for each class and series thereof by
\nSection 3.1. Immediately following the consummation of the Exchange Offer Merger
\nand the Exchange Offer, the LHP Share Exchange shall be consummated as
\ncontemplated by Section 2.2.<\/p>\n
(h) Subsequent Merger. In the event that the requisite consents for
\n —————–
\nthe actions to be taken pursuant to Section 7.4(a)(i) are obtained following
\ncommencement of the Exchange Offer, Newco will continue with the Exchange Offer
\npursuant to this Section 7.5, and promptly following consummation of the
\nExchange Offer Newco, NEXTLINK and Concentric will cause the Mergers to occur,
\nwith the Common Stock Ratio equal to the exchange ratio applicable to the
\nExchange Offer. Newco, NEXTLINK and Concentric will make all requisite filings
\nin connection with the Mergers, including the preparation and distribution of a
\nregistration statement and any required information statement. If the requisite
\nconsents are obtained after the Solicitation Termination Date but prior to the
\ntime the Exchange Offer is commenced, Newco shall either proceed as set forth in
\nthis paragraph or abandon the Exchange Offer and (by written notice to
\nConcentric) restore the obligations of the parties with respect to the Mergers,
\nfully as though the requisite consents had been obtained prior to commencement
\nof the Exchange Offer.<\/p>\n
-61-<\/p>\n
ARTICLE 8.
\n COVENANTS OF NEXTLINK<\/p>\n
NEXTLINK agrees that:<\/p>\n
SECTION 8.1. Eagle River Consent. NEXTLINK will set a record date to
\n ——————-
\nobtain the written consent of Eagle River to this Agreement and the consummation
\nof the transactions contemplated hereunder no later that the date the
\nRegistration Statement is declared effective.<\/p>\n
SECTION 8.2. Director and Officer Liability. (a) From and after the
\n ——————————
\nEffective Time, Newco will indemnify each officer and director of the Concentric
\nGroup as of the Effective Time (each an “INDEMNIFIED PERSON”) to the fullest
\nextent permitted under applicable law, the Amended and Restated Certificate of
\nIncorporation and Bylaws of Concentric or any Concentric subsidiary, as
\napplicable, and any agreement between the Indemnified Person and Concentric or
\nany Concentric Subsidiary, as applicable, in each case as in effect as of the
\ndate hereof with respect to any claim, liability, loss, damage, judgment, fine,
\npenalty, amount paid in settlement or compromise, cost or expense based in whole
\nor in part on, or arising in whole or in part out of, the fact that the
\nIndemnified Person was a director or officer of the Concentric Group at or prior
\nto the Effective Time. The rights under this Section 8.2 are contingent upon the
\noccurrence of, and will survive consummation of, the transactions contemplated
\nhereby and are expressly intended to benefit each Indemnified Person.<\/p>\n
(b) Without limiting the provisions of paragraph (a), after the
\nEffective Time Newco will indemnify and hold harmless each Indemnified Person
\nagainst any costs or expenses (including reasonable attorneys’ fees), judgments,
\nfines, losses, claims, damages, liabilities and amounts paid in settlement in
\nconnection with any claim, action, suit, proceeding or investigation, whether
\ncivil, criminal, administrative or investigative, to the extent arising out of
\nor pertaining to any action or omission in his or her capacity as a director or
\nofficer of the Concentric Group arising out of or pertaining to this Agreement
\nor the transactions contemplated by this Agreement for a period of six years
\nafter the Effective Time; provided, however, that if, at any time prior to the
\nsixth anniversary of the Effective Time, any Indemnified Person delivers to
\nNewco a written notice asserting a claim for indemnification under this Section
\n8.2, then the claim asserted in such notice shall survive the sixth anniversary
\nof the Effective Time until such time as such claim is fully and finally
\nresolved. In the event of any such claim, action, suit, proceeding or
\ninvestigation Newco will pay the reasonable fees and expenses of counsel for the
\nIndemnified Person promptly after statements therefor are received (provided
\nthat in the event that any Indemnified Person is not entitled to indemnification
\nhereunder, any amounts advanced on his or her behalf shall be remitted to
\nNEXTLINK); <\/p>\n
-62-<\/p>\n
provided, however, that Newco will not be liable for any settlement effected
\n——–
\nwithout its express written consent which consent will not be unreasonably
\nwithheld. The Indemnified Persons as a group may retain only one law firm (in
\naddition to local counsel) to represent them with respect to any single action
\nunless there is, under applicable standards of professional conduct, a conflict
\non any significant issue between the positions of any two or more Indemnified
\nPersons.<\/p>\n
(a) For six years after the Effective Time, Newco shall provide
\nofficers’ and directors’ liability insurance in respect of acts or omissions
\noccurring prior to the Effective Time (including, without limitation, for acts
\nor omissions occurring in connection with this Agreement and the consummation of
\nthe transactions contemplated hereby) covering and for the benefit of each such
\nIndemnified Person currently covered by Concentric’s officers’ and directors’
\nliability insurance policy on terms with respect to coverage and amount
\n(including with respect to the payment of attorney’s fees) no less favorable
\nthan those of such policy in effect on the date hereof (which policy has been
\nprovided by Concentric to NEXTLINK); provided that if the aggregate annual
\npremiums for such insurance during such period shall exceed 200% of the per
\nannum rate of premium paid by Concentric as of the date hereof for such
\ninsurance, then the Surviving Corporation shall provide a policy with the best
\ncoverage as shall then be available at 200% of such rate.<\/p>\n
(d) The rights of each Indemnified Person and its heirs and legal
\nrepresentatives under this Section 8.2 shall be in addition to any rights such
\nPerson may have under the certificate of incorporation or bylaws of Concentric
\nor any Concentric Subsidiary, or under Delaware Law or any other applicable
\nlaws. These rights shall survive consummation of the Mergers and are intended to
\nbenefit, and shall be enforceable by, each Indemnified Person and shall be
\nbinding on all successors and assigns.<\/p>\n
SECTION 8.3. Quotation of Stock. (a) NEXTLINK shall use its best efforts
\n ——————
\nto cause (i) the shares of Newco Common Stock (or NEXTLINK Common Stock, as
\napplicable) to be issued in connection with the Mergers, (ii) shares of Newco
\nCommon Stock (or NEXTLINK Common Stock, as applicable) reserved for issuance
\nupon conversion of the Newco Series B Preferred Stock (or NEXTLINK Common Stock,
\nas applicable) (iii) shares of Newco Common Stock reserved for issuance in
\nconnection with the Adjusted Options to be approved for quotation on Nasdaq,
\nsubject to official notice of issuance.<\/p>\n
(b) NEXTLINK shall use its best efforts to cause the NEXTLINK 14%
\nPreferred Stock and NEXTLINK 6 1\/2% Preferred Stock to be approved for quotation
\non Nasdaq prior to the record date for the Eagle River consent.<\/p>\n
-63-<\/p>\n
(c) Concentric shall use its best efforts to cause the Concentric
\nSeries B Preferred Stock to be approved for quotation on Nasdaq prior to the
\nrecord date for the Concentric Stockholders Meeting.<\/p>\n
SECTION 8.4. NEXTLINK Board of Directors. Immediately prior to the
\n —————————
\nEffective Time, the Board of Directors of NEXTLINK will take all necessary
\naction to expand the size of its Board of Directors by two members and to
\nappoint Mr. Henry R. Nothhaft (or, in the event Mr. Nothhaft is unable to serve,
\nsuch other person as may be designated by Concentric and reasonably satisfactory
\nto NEXTLINK) and one other person who is currently serving as a Concentric
\nDirector and who is selected by Concentric and reasonably satisfactory to
\nNEXTLINK (Mr. Nothhaft and such person, the “NEW DIRECTORS”) to the NEXTLINK
\nBoard of Directors. From the Effective Time until and including the second
\nannual meeting of the stockholders of NEXTLINK taking place after the Effective
\nTime, (i) the Board of Directors of NEXTLINK will nominate the New Directors for
\nreelection to the NEXTLINK Board of Directors at each subsequent annual or
\nspecial meeting of the stockholders of NEXTLINK at which the New Directors’
\nterms expire and (ii) and for so long as Mr. Nothhaft is a New Director, he will
\nbe a Vice Chairman of the Board.<\/p>\n
SECTION 8.5. Employee Matters. (a) Newco shall:
\n —————-<\/p>\n
(i) honor the terms of all Concentric Employee Plans and Concentric
\n Benefit Arrangements in existence at the Effective Time, and pay the
\n benefits required under the terms of such plans and arrangements, in each
\n case subject to Section 8.5(c); and<\/p>\n
(ii) until December 31, 2000 with respect to employees of Concentric
\n or any of Concentric Subsidiaries at the Effective Time (“TRANSFERRED
\n EMPLOYEES”), provide a level of employee benefits and aggregate
\n compensation which is substantially comparable in the aggregate to the
\n level of employee benefits and aggregate compensation provided by
\n Concentric and Concentric Subsidiaries as of the Effective Time (other than
\n the benefits provided under any severance or termination benefit plans and
\n arrangements of Concentric or any Concentric Subsidiary).<\/p>\n
(b) If Transferred Employees are included in any benefit plan program
\nor arrangement of the Surviving Corporation, including without limitation, any
\nplan or arrangement providing vacation benefits, the Transferred Employees shall
\nreceive credit for service prior to the Effective Time with Concentric and the
\nConcentric Subsidiaries and their predecessors to the same extent such service
\nwas counted under similar Concentric Employee Plans, Concentric Benefit
\nArrangements and Concentric International Plans for purposes of determining
\neligibility to participate and vesting and benefit accrual (except that with
\nrespect to benefit accrual, such service shall not be counted to the extent that
\nit <\/p>\n
-64-<\/p>\n
would result in a duplication of benefits). If Transferred Employees or their
\ndependents are included in any medical, dental, vision or health plan other than
\nthe plan or plans they participated in at the Effective Time (a “SUCCESSOR
\nPLAN”), any such Successor Plan shall not include pre-existing condition
\nexclusions, except to the extent such exclusions were applicable under any
\nsimilar Concentric Employee Plan at the Effective Time.<\/p>\n
(c) Except as otherwise specifically set forth above, nothing
\ncontained herein shall be construed as requiring NEXTLINK or any NEXTLINK
\nSubsidiary to continue any specific Employee Plan or Benefit Arrangement
\nincluding any Concentric Employee Plan or Concentric Benefit Arrangement to
\ncontinue the employment of any specific person, provided however that any
\nchanges that Newco may make to any such Employee Plan or Benefit Arrangement are
\npermitted by the terms of the applicable Employee Plan or Benefit Arrangement
\nand under any applicable law.<\/p>\n
(d) Following the Effective Time, Newco will implement the
\nperformance incentives described in Section 8.5 of the NEXTLINK Disclosure
\nSchedule for the benefit of the Transferred Employees.<\/p>\n
SECTION 8.6. Assumption of Concentric Stock Option Plans; Form S-8
\n —————————————————–
\nEmployee Plans.
\n————–<\/p>\n
(a) At the Effective Time, Newco shall assume all outstanding
\nConcentric Stock Options under existing Concentric option plans and such
\nConcentric option plans shall be canceled with respect to future grants
\nthereunder, and shall file, no later than five days after the Closing, a
\nregistration statement on Form S-8 covering the shares of Newco Common Stock
\nissuable pursuant to outstanding Concentric Options granted under the Concentric
\nOption Plans. Concentric shall cooperate with and assist NEXTLINK in the
\npreparation of such registration statement prior to the Effective Time.<\/p>\n
(b) Immediately prior to the Effective Time, outstanding purchase
\nrights under Concentric’s 1997 Employee Stock Purchase Plan (the “ESPP”) shall
\nbe exercised in accordance with the terms of the ESPP and each share of
\nConcentric Common Stock purchased pursuant to such exercise shall, without any
\naction on the part of the holder thereof, be converted into the right to receive
\na number of shares of NEXTLINK Common Stock determined according to the Exchange
\nRatio, without the issuance of certificates representing issued and outstanding
\nshares of Concentric Common Stock to ESPP participants. Concentric agrees that
\nit shall terminate the ESPP immediately following the aforesaid purchase of
\nshares of Concentric Common Stock thereunder.<\/p>\n
-65-<\/p>\n
ARTICLE 9.
\n COVENANTS OF NEXTLINK, CONCENTRIC AND EAGLE RIVER<\/p>\n
The parties hereto agree that:<\/p>\n
SECTION 9.1. Reasonable Efforts. (a) Subject to the terms and conditions
\n ——————
\nprovided in this Agreement, each of the parties hereto shall use commercially
\nreasonable efforts to take promptly, or cause to be taken, all actions, and to
\ndo promptly, or cause to be done, all things necessary, proper or advisable
\nunder applicable laws and regulations to consummate and make effective the
\ntransactions contemplated hereby, to obtain all necessary waivers, consents, tax
\nopinions and approvals and to effect all necessary registrations and filings and
\nto remove any injunctions or other impediments or delays, legal or otherwise, in
\norder to consummate and make effective the transactions contemplated by this
\nAgreement for the purpose of securing to the parties hereto the benefits
\ncontemplated by this Agreement.<\/p>\n
(b) In furtherance and not in limitation of the foregoing, each of
\nNEXTLINK and Concentric agrees to (i) make an appropriate filing of a
\nNotification and Report Form pursuant to the HSR Act with respect to the
\ntransactions contemplated hereby as promptly as practicable, (ii) supply as
\npromptly as practicable any additional information and documentary material that
\nmay be requested pursuant to the HSR Act, (iii) use best efforts to complete the
\nreview process under the HSR Act to permit the consummation of the Mergers
\nincluding, but not limited to, causing the expiration or termination of the
\napplicable waiting periods under the HSR Act as soon as practicable and use
\ntheir best efforts to cooperate in presenting any applicable arguments,
\npresentations or materials to any governmental agency requesting such
\ninformation in connection with this transaction.<\/p>\n
(c) Eagle River and NEXTLINK hereby covenant for the benefit of each
\nother to use their commercially reasonable efforts to terminate Eagle River’s
\nguarantee (the “INTERNEXT GUARANTEE”), dated as of July 18, 1998, of the
\nobligations of INTERNEXT under the Level 3 Agreement.<\/p>\n
SECTION 9.2. Proxy Statement; Registration Statement. (a) As promptly
\n —————————————
\nas practicable after the execution of this Agreement, Newco and Concentric
\nshall prepare and file the Proxy Statement with the SEC, and Newco shall
\nprepare and file the Registration Statement (in which the Proxy Statement will
\nbe included) with the SEC. Newco, NEXTLINK and Concentric shall use their
\nreasonable best efforts to cause the Registration Statement (which
\nRegistration Statement shall also register such other securities issued or
\nassumed in the Mergers or the Alternative Merger, as applicable, as is
\nrequired by applicable law) to become effective under the 1933 Act as soon
\nafter such filing as practicable and to keep the Registration Statement
\neffective as long as is necessary to consummate the Mergers. The Proxy
\nStatement shall include the<\/p>\n
-66-<\/p>\n
recommendation of the Board of Directors of Concentric in favor of approval and
\nadoption of this Agreement and the Mergers, except to the extent the Board of
\nDirectors of Concentric shall have withdrawn or modified its approval or
\nrecommendation of this Agreement as permitted by Section 7.2(b). NEXTLINK shall
\ncause the Proxy Statement to be mailed to its stockholders, and Concentric shall
\ncause the Proxy Statement to be mailed to its stockholders, in each case as
\npromptly as practicable after the Registration Statement becomes effective. The
\nparties shall promptly provide copies, consult with each other and prepare
\nwritten responses with respect to any written comments received from the SEC
\nwith respect to the Proxy Statement and the Registration Statement and advise
\none another of any oral comments received from the SEC. The Registration
\nStatement and the Proxy Statement shall comply as to form in all material
\nrespects with the rules and regulations promulgated by the SEC under the 1933
\nAct and the 1934 Act, respectively.<\/p>\n
(b) Newco, NEXTLINK and Concentric shall make all necessary filings
\nwith respect to the Mergers and the transactions contemplated thereby under the
\n1933 Act and the 1934 Act and applicable state blue sky laws and the rules and
\nregulations thereunder. Each party will advise the other, promptly after it
\nreceives notice thereof, of the time when the Registration Statement has become
\neffective or any supplement or amendment has been filed, the issuance of any
\nstop order, the suspension of the qualification of the Newco Common Stock
\nissuable in connection with the Mergers for offering or sale in any
\njurisdiction, or any request by the SEC for amendment of the Proxy Statement or
\nthe Registration Statement or comments thereon and responses thereto or requests
\nby the SEC for additional information. No amendment or supplement to the Proxy
\nStatement or the Registration Statement, or correspondence with the SEC with
\nrespect thereto, shall be filed without the approval of Newco, NEXTLINK and
\nConcentric, which approval shall not be unreasonably withheld or delayed. If at
\nany time prior to the Effective Time, any information relating to Newco,
\nNEXTLINK or Concentric, or any of their respective Affiliates, officers or
\ndirectors, should be discovered by NEXTLINK or Concentric that should be set
\nforth in an amendment or supplement to the Registration Statement or the Proxy
\nStatement, so that such documents would not include any misstatement of a
\nmaterial fact or omit to state any material fact necessary to make the
\nstatements therein, in light of the circumstances under which they were made,
\nnot misleading, the party which discovers such information shall promptly notify
\nthe other parties hereto and an appropriate amendment or supplement describing
\nsuch information shall be promptly filed with the SEC and, to the extent
\nrequired by law, disseminated to the stockholders of NEXTLINK and Concentric.<\/p>\n
SECTION 9.3. Public Announcements. So long as this Agreement is in
\n ——————–
\neffect, (a) Concentric and NEXTLINK will consult with each other before issuing
\nany press release or making any public statement with respect to this Agreement
\nor the<\/p>\n
-67-<\/p>\n
transactions contemplated hereby and (b) Eagle River and NEXTLINK will consult
\nwith each other before issuing any press release or making any public statement
\nwith respect to the LHP Share Exchange and, except as may be required by
\napplicable law or any listing agreement with any national securities exchange or
\nNasdaq, such parties will not issue any such press release or make any such
\npublic statement without the prior consent of the other respective party, which
\nconsent shall not be unreasonably withheld. Notwithstanding the foregoing, any
\nsuch press release or public statement as may be required by applicable law or
\nany listing agreement with any national securities exchange or Nasdaq may be
\nissued without such consent, if the party making such release or statement has
\nused its reasonable efforts to consult with the other respective party.<\/p>\n
SECTION 9.4. Further Assurances. At and after the Effective Time, the
\n ——————
\nofficers and directors of the Surviving Corporation will be authorized to
\nexecute and deliver, in the name and on behalf of NEXTLINK and Concentric, any
\ndeeds, bills of sale, assignments or assurances and to take and do, in the name
\nand on behalf of NEXTLINK and Concentric, any other actions and things to vest,
\nperfect or confirm of record in the Surviving Corporation any and all right,
\ntitle and interest in, to and under any of the rights, properties or assets of
\nNEXTLINK and Concentric acquired or to be acquired by the Surviving Corporation
\nas a result of, or in connection with, the Mergers.<\/p>\n
SECTION 9.5. Access to Information. From the date hereof until the
\n ———————
\nEffective Time or earlier termination of this Agreement and subject to
\napplicable law, each of Concentric and NEXTLINK shall, and shall cause their
\nrespective subsidiaries to (i) give to the other party and the other party’s
\ncounsel, financial advisors, auditors and other authorized representatives
\nreasonable access during normal business hours to the offices, properties, books
\nand records of such party and its Subsidiaries, (ii) furnish to the other party
\nand the other party’s counsel, financial advisors, auditors and other authorized
\nrepresentatives such financial and operating data and other information as such
\nPersons may reasonably request and (iii) instruct its employees, counsel,
\nfinancial advisors, auditors and other authorized representatives to cooperate
\nwith the other party in such other party’s investigation. Any investigation
\npursuant to this Section 9.5 shall be conducted in such manner as not to
\ninterfere unreasonably with the conduct of the business of the other party. No
\ninformation or knowledge obtained in any investigation pursuant to this Section
\n9.5 shall affect or be deemed to modify any representation or warranty made by
\nany party hereunder. Each party will hold such information which is non-public
\nin confidence in accordance with the provisions of the Confidentiality
\nAgreement.<\/p>\n
-68-<\/p>\n
SECTION 9.6. Notices of Certain Events. Each of Concentric and NEXTLINK
\n ————————-
\nshall promptly notify the other of:<\/p>\n
(a) any notice or other communication from any Person alleging that
\nthe consent of such Person is or may be required in connection with the
\ntransactions contemplated by this Agreement;<\/p>\n
(b) any notice or other communication from any Governmental Authority
\nin connection with the transactions contemplated by this Agreement;<\/p>\n
(c) the occurrence, or non-occurrence, of any event the occurrence,
\nor non-occurrence, of which would be reasonably expected to cause any
\nrepresentation or warranty contained herein to be untrue or inaccurate in any
\nmaterial respect at any time during the period commencing on the date hereof and
\nending at the Effective Time in a manner such that the conditions set forth in
\nSection 10.2(a)(i) or Section 10.3(a)(i) would not be satisfied;<\/p>\n
(d) any actions or suits commenced, or to the Knowledge of Concentric
\nor NEXTLINK, threatened with respect to this Agreement or the transactions
\ncontemplated hereby; and<\/p>\n
(e) any failure of such party to comply with or satisfy any condition
\nset forth in Article X hereof;<\/p>\n
provided, however, that the delivery of any notice pursuant to this Section 9.6
\nshall not limit or otherwise affect the remedies available hereunder to the
\nparty receiving such notice.<\/p>\n
SECTION 9.7. Tax-free Reorganization; Tax-free Exchange. (a) Prior to the
\n ——————————————
\nEffective Time, NEXTLINK and Concentric shall use all commercially reasonable
\nefforts to cause either (i) the Mergers or the Alternative Merger, as
\napplicable, to qualify as reorganizations within the meaning of the provisions
\nof Section 368(a) of the Code (“368 REORGANIZATION”), or (ii) as the case may
\nbe, the Exchange Offer, the Exchange Offer Merger, and the LHP Share Exchange,
\nwhen taken as a whole (collectively, the “EXCHANGE OFFER TRANSACTIONS”), to
\nqualify as a transaction described in Section 351 of the Code (a “351
\nTRANSACTION”), and will not take any action reasonably likely to cause the
\nMergers or the Exchange Offer Transactions, as the case may be, not to so
\nqualify.<\/p>\n
(b) NEXTLINK and Concentric covenant and agree to (and to cause any
\naffiliate or successor to their assets or business to) vigorously and in good
\nfaith defend all challenges to the tax-free status of the Mergers or the
\nExchange Offer Transactions, as the case may be.<\/p>\n
(c) It is understood and agreed that both Willkie Farr & Gallagher
\nand Wilson Sonsini Goodrich & Rosati, Professional Corporation, shall issue to
\ntheir respective clients substantially identical opinions to the effect that
\neither (i)<\/p>\n
-69-<\/p>\n
the Mergers or the Alternative Merger, as applicable, will qualify as
\nreorganizations under Code Section 368(a) and related matters for description,
\nand inclusion as Exhibits, in the S-4 Registration Statement and the Proxy
\nStatement or (ii) the Exchange Offer and the Exchange Offer Merger will qualify
\nas 351 Transactions and related matters for description, and inclusion as
\nExhibits, in the Exchange Registration Statement and the Proxy Statement.<\/p>\n
(d) NEXTLINK and Concentric covenant to each other that none of
\nNEXTLINK, Concentric or any of their respective subsidiaries has taken (or will
\ntake) any action, including, without limitation, any such action inconsistent
\nwith any representation, warranty, or covenant made or to be made in connection
\nwith opinions to be delivered pursuant to Sections 10.2(a)(ii) or 10.3(b)
\nhereof. In addition, NEXTLINK and Concentric each agree that in the event such
\nparty becomes aware of any such fact or circumstance that is reasonably likely
\nto prevent the Mergers or the Alternative Merger, as applicable, from qualifying
\nas a 368 Reorganization or the Exchange Offer and the Exchange Offer Merger from
\nqualifying as a 351 Transaction, it will promptly notify the other party in
\nwriting.<\/p>\n
(e) Subject to Section 2.5, prior to the Effective Time, NEXTLINK and
\nConcentric shall take such actions as Eagle River may reasonably request
\n(without material cost or inconvenience to NEXTLINK or Concentric) to cause the
\nLHP Share Exchange in conjunction with the Mergers or the Alternative Merger, as
\napplicable, to qualify as a 351 Transaction. Newco or NEXTLINK, as applicable,
\nshall grant Eagle River registration rights as set forth in the Registration
\nRights Agreement, subject to the limitations set forth therein, with respect to
\nthe shares of NEXTLINK Common Stock or Newco Common Stock received by Eagle
\nRiver in exchange for the Contributed Interest. None of NEXTLINK, Concentric or
\nNewco has made any representation or warranty to Eagle River as to whether the
\nLHP Share Exchange will qualify as a 351 Transaction, and in no event will any
\nof them have any liability with respect to any failure to so qualify. Nothing
\ncontained in this Section 9.7(e) will limit NEXTLINK’s right to make an election
\nto proceed with an Exchange Offer or to proceed with the Alternative Merger.<\/p>\n
(f) Neither NEXTLINK or Concentric shall file any tax return or take
\nany position which would be inconsistent with the qualification of the LHP Share
\nExchange in conjunction with the Mergers as a 351 Transaction. NEXTLINK and
\nConcentric shall make customary representations and warranties to Ernst & Young
\nLLP for the purposes of their rendering to Eagle River a tax opinion as the
\nqualification of the LHP Share Exchange in conjunction with the Mergers (or the
\nAlternative Merger, as applicable,) as a tax-free contribution under Section 351
\nof the Code.<\/p>\n
SECTION 9.8. Affiliates. (a) Within 30 days following the date of this
\n ———-
\nAgreement, Concentric shall deliver to NEXTLINK a<\/p>\n
-70-<\/p>\n
letter identifying all known Persons who may be deemed affiliates of Concentric
\nunder Rule 145 of the 1933 Act (a “CONCENTRIC RULE 145 AFFILIATE”). Concentric
\nshall use its best efforts to obtain a written agreement from each Concentric
\nRule 145 Affiliate as soon as practicable and, in any event, at least 30 days
\nprior to the Effective Time, substantially in the form of Exhibit C hereto.<\/p>\n
SECTION 9.9. Certain Other Agreements and Acknowledgments of NEXTLINK
\n ——————————————————–
\nand Eagle River Relating to the LHP Share Exchange.
\n————————————————–<\/p>\n
Eagle River and NEXTLINK make the following covenants and
\nacknowledgments relating to the LHP Share Exchange, which shall only inure to
\nthe benefit of such parties.<\/p>\n
(a) Eagle River acknowledges to NEXTLINK that the shares of Newco
\nCommon Stock acquired in connection with the LHP Share Exchange will not be
\nregistered under the 1933 Act, and, therefore, until such time as such shares
\nare registered under the 1933 Act, such shares cannot be sold except pursuant to
\nan exemption from such registration.<\/p>\n
(b) Eagle River covenants to NEXTLINK that, for a period of three
\nyears commencing on the Closing of the LHP Share Exchange, it will not sell,
\nassign or otherwise transfer that number of shares of Newco Class B Common Stock
\n(including any Newco Common Stock issued upon conversion of such Newco Class B
\nCommon Stock) owned by either Eagle River as is equal to the number of the
\nshares of Newco Common Stock acquired in the LHP Share Exchange(but may sell
\nsuch shares of Newco Common Stock free and clear of this restriction), except:<\/p>\n
(i) in connection with a transaction in which all or
\n substantially all of the shares of the capital stock of Newco are sold,
\n assigned or otherwise transferred to a Person which is not an Affiliate of
\n Newco; and<\/p>\n
(ii) that such shares of Newco Class B Common Stock (or Newco Common
\n Stock, as the case may be) may be subject to a bona fide pledge, and any
\n pledgee of such shares will not be bound in any way by this restriction.<\/p>\n
(c) Newco will, within ten days of submission of such expenses to
\nNewco, reimburse Eagle River for all its expenses incident to preparing for,
\nentering into and carrying out the terms of this Agreement relating to the LHP
\nShare Exchange, and the consummation of the LHP Share Exchange (and any
\nregistration rights granted pursuant to Section 9.7(e), up to a maximum of
\n$200,000. Otherwise, each of NEXTLINK and Eagle River shall pay its own expenses
\narising from the LHP Share Exchange.<\/p>\n
(d) In the event that this Agreement terminates or is terminated
\nprior to the consummation of the Mergers, the Alternative Merger or the Exchange
\nOffer (other than as a result <\/p>\n
-71-<\/p>\n
of a breach by Eagle River of its representations, warranties, covenants or
\nobligations hereunder, unless waived by NEXTLINK) Eagle River and NEXTLINK shall
\nconsummate the LHP Share Exchange within 20 days of the date of such termination
\nas follows: Eagle River shall exchange LHP limited liability interests (or LHP
\nshares in the event that LHP is converted into a corporation) for a number of
\nshares of NEXTLINK Common Stock determined in accordance with the provisions of
\nSection 2.2(d) hereof; provided that the obligations of the parties under this
\nSection 9.9(d) shall be subject to the satisfaction or waiver of the conditions
\nin Sections 10.2(b) and 10.4 hereof, as the case may be.<\/p>\n
(e) During the period between the date of this Agreement and the date
\nof the Closing of the LHP Share Exchange, (i) NEXTLINK shall continue to control
\nthe management of LHP and Internext and (ii) Eagle River shall continue to
\nadvance its proportionate share of payments due to Level 3 pursuant to the Level
\n3 Agreement, which payments shall be reimbursed at the Closing of the LHP Share
\nExchange as provided in Section 2.2(e) hereof.<\/p>\n
(f) In the event that shares of NEXTLINK Common Stock, instead of
\nNewco Common Stock, are issued to Eagle River in the LHP Share Exchange,
\nreferences to Newco Common Stock, Newco Class B Stock and Newco in this Section
\n9.9 and in Sections 10.2(b) and 10.4 shall be deemed to be references to
\nNEXTLINK Common Stock, NEXTLINK Class B Stock or NEXTLINK, as the case may be.<\/p>\n
SECTION 9.10. Subsequent Transaction.
\n ———————- <\/p>\n
NEXTLINK shall promptly, and in any case within 48 hours after the
\nentry into any Subsequent Transaction that is material to the business and
\nfinancial condition of the NEXTLINK Group taken as a whole, inform Concentric in
\nwriting of the material terms and conditions of any such Subsequent Transaction
\n(other than with respect to the transactions noted in the parenthetical in the
\ndefinition of “Subsequent Transaction” entered into by NEXTLINK and shall
\nprovide to Concentric a copy of an opinion, which shall not be deemed to be
\naddressed to Concentric, from a nationally recognized investment bank, acting as
\nfinancial advisor to NEXTLINK, to the effect that, from a financial point of
\nview, such Subsequent Transaction is fair to NEXTLINK or to the holders of
\nNEXTLINK Common Stock, as applicable and, if applicable, NEXTLINK shall confirm
\nin writing to Concentric the reasonable belief of NEXTLINK that such Subsequent
\nTransaction would not cause: (x) the Mergers or the Alternative Merger, as
\napplicable, to be treated as other than a 368 Reorganization or a 351
\nTransaction and the Exchange Offer to be treated as other than a 351
\nTransaction, (y) any of the conditions set forth in Article 10 hereof not to be
\nsatisfied, and (z) any such Subsequent Transaction would not, or would
\nreasonably not be expected to, prevent, impair or materially delay the ability
\nof NEXTLINK or Concentric to consummate the <\/p>\n
-72-<\/p>\n
transactions contemplated hereunder or constitute or result in a NEXTLINK
\nMaterial Adverse Effect.<\/p>\n
NEXTLINK shall be entitled to update the representations and warranties
\nmade by NEXTLINK in this Agreement solely for informational purposes and solely
\nto the extent required as a result of the entering into of any such Subsequent
\nTransaction.<\/p>\n
ARTICLE 10.
\n CONDITIONS TO THE MERGERS<\/p>\n
SECTION 10.1. Conditions to the Obligations of Concentric and NEXTLINK
\n ——————————————————–
\nto Consummate the Mergers. The obligations of Concentric and NEXTLINK to
\n————————-
\nconsummate the Mergers or the Alternative Merger, as applicable, are subject to
\nthe satisfaction of the following conditions:<\/p>\n
(a) the Concentric Stockholders’ Approval shall have been obtained;<\/p>\n
(b) any applicable waiting period under the HSR Act relating
\nto the Mergers or the Alternative Merger, as applicable, shall have expired or
\nbeen terminated;<\/p>\n
(c) no provision of any applicable law or regulation and no judgment,
\ninjunction, order or decree shall prohibit the consummation of the Mergers or
\nthe Alternative Merger, as applicable; provided, however, that each of the
\n ——–
\nparties shall have used its reasonable efforts to prevent the entry of any such
\nrestraints and to appeal as promptly as possible any such restraints that may be
\nentered;<\/p>\n
(d) the Registration Statement shall have been declared effective and
\nno stop order suspending the effectiveness of the Registration Statement shall
\nbe in effect and no proceedings for such purpose shall be pending before or
\nthreatened by the SEC;<\/p>\n
(e) the shares of Newco Common Stock (or NEXTLINK Common Stock, as
\napplicable) to be issued in the Mergers shall have been approved for quotation
\non Nasdaq, subject to official notice of issuance;<\/p>\n
(f) Newco’s Certificate of Incorporation shall provide for the
\nissuance of Newco Common Stock and each series of Newco Preferred Stock.<\/p>\n
SECTION 10.2. Conditions to the Obligations of NEXTLINK. (a) The
\n —————————————–
\nobligations of NEXTLINK to consummate the Mergers or the Alternative Merger, as
\napplicable, are subject to the satisfaction of the following further conditions:<\/p>\n
(i) (A) Concentric shall have performed in all material respects all
\n of its obligations hereunder required<\/p>\n
-73-<\/p>\n
to be performed by it at or prior to the Effective Times; provided that a
\n ——–
\n breach of the covenant of Concentric under Section 6.1(r) shall not be
\n deemed to be a failure of a condition hereunder unless such breach is
\n reasonably likely to have a Concentric Material Adverse Effect, (B) the
\n representations and warranties of Concentric contained in this Agreement
\n (as modified or supplemented by the Concentric Disclosure Schedule),
\n disregarding all qualifications and exceptions contained therein relating
\n to materiality or a Concentric Material Adverse Effect or any similar
\n standard or qualification, shall be true and correct at and as of the
\n Effective Times, as if made at and as of such times (other than
\n representations or warranties that address matters only as of a certain
\n date which shall be true and correct as of such date), with only such
\n exceptions as, individually or in the aggregate, have not had and would not
\n be reasonably expected to have Concentric Material Adverse Effect, and (C)
\n NEXTLINK shall have received a certificate signed by an executive officer
\n of Concentric to the foregoing effect;<\/p>\n
(ii) NEXTLINK shall have received an opinion of Willkie Farr & Gallagher in form and substance reasonably satisfactory to NEXTLINK, on the
\n basis of certain facts, representations and assumptions set forth in such
\n opinion, dated the Effective Times, to the effect that either (x) the
\n Mergers or the Alternative Merger, as applicable, will be treated for
\n federal income tax purposes as a 368 Reorganization and that each of
\n NEXTLINK and Concentric will be a party to the reorganization within the
\n meaning of Section 368(b) of the Code or (y) the Exchange Offer
\n Transactions will be treated as a 351 Transaction, as the case may be. In
\n rendering such opinion, such counsel shall be entitled to rely upon certain
\n documentation including representations of officers of Concentric and
\n NEXTLINK.<\/p>\n
(b) The obligations of NEXTLINK and Newco to consummate the LHP Share
\nExchange are subject to the satisfaction of the following further conditions:<\/p>\n
(i) The representations, warranties and covenants of Eagle River
\n contained in Section 6 shall be true and correct in all material respects,
\n in each case, on the date of this Agreement and on and as of the date of
\n the Closing of the LHP Share Exchange with the same force and effect as
\n though such representations, warranties and covenants had been made on and
\n as of such date.<\/p>\n
(ii) Eagle River shall have duly performed and complied in all
\n material respects with all agreements or obligations of Eagle River
\n contained in this Agreement required to be performed or complied with by
\n them at or before the Closing.<\/p>\n
-74-<\/p>\n
(iii) Eagle River shall have delivered to Newco a certificate
\n dated the date of the Closing of the LHP Share Exchange and executed by an
\n authorized senior officer of Eagle River, in the capacity of such officer,
\n certifying the fulfillment of the conditions specified in Sections
\n 10.2(b)(i) and (ii).<\/p>\n
(iv) The Special Committee shall not have (i) determined in the
\n exercise of its fiduciary duties to withdraw its recommendation to the
\n board of directors of NEXTLINK that the acquisition of the Contributed
\n Interest by Newco upon the terms and conditions of this Agreement is in the
\n best interests of NEXTLINK and (ii) so withdrawn such recommendation.<\/p>\n
(v) The board of directors of NEXTLINK shall not have (i)
\n determined in the exercise of its fiduciary duties to revoke its
\n authorization and approval of the acquisition of the Contributed Interest
\n by Newco on the terms and conditions of this Agreement and (ii) so revoked
\n such authorization and approval.<\/p>\n
(vi) The board of directors of NEXTLINK shall have received the
\n opinion of Credit Suisse First Boston, in form and substance satisfactory
\n to the board of directors of NEXTLINK, attesting that the acquisition of
\n the Contributed Interest on the terms and subject to the conditions of this
\n Agreement is fair to NEXTLINK from a financial point of view, which opinion
\n shall not have been withdrawn or modified, except for modifications which
\n are in form and substance satisfactory to the Special Committee.<\/p>\n
(vii) NEXTLINK shall have received from a nationally recognized
\n expert, an opinion, in form and substance satisfactory to NEXTLINK, in
\n compliance with Section 1015 of the Indenture, dated as of April 25, 1996,
\n among NEXTLINK, NEXTLINK Capital, Inc., and United States Trust Company of
\n New York, which opinion shall not have been withdrawn or modified, except
\n for modifications which are in form and substance satisfactory to NEXTLINK.<\/p>\n
(viii) NEXTLINK shall have received from its counsel an opinion, in
\n form and substance reasonably satisfactory to NEXTLINK, dated as of the
\n date of the Closing of the LHP Share Exchange, as to the absence of
\n conflicts with NEXTLINK’s material agreements.<\/p>\n
(ix) NEXTLINK shall have received from the counsel to Eagle River,
\n an opinion, in form and substance reasonably satisfactory to NEXTLINK,
\n dated as of the date of the Closing of the LHP Share Exchange, as to
\n customary matters, including, but not limited to, the due authorization,
\n execution and delivery of this Agreement by Eagle River and the absence of
\n conflicts.<\/p>\n
-75-<\/p>\n
(x) NEXTLINK shall have received evidence, in form and substance
\n satisfactory to NEXTLINK, that the Level 3 Agreement is in full force and
\n effect in the form as originally executed and will not be subject to any
\n limitation or modifications as a result of the termination of the INTERNEXT
\n Guarantee.<\/p>\n
(xi) No action, suit, proceeding, litigation or investigation shall
\n have been commenced by any Governmental Authority that questions the
\n validity or legality of the LHP Share Exchange or any action taken or to be
\n taken in connection therewith. No injunction or other order issued by a
\n court of competent jurisdiction restraining or prohibiting the consummation
\n of the LHP Share Exchange shall be in effect.<\/p>\n
For avoidance of doubt, neither the conditions contained in this Section 10.2(b)
\nnor consummation of the LHP Share Exchange shall be conditions to the
\nobligations of NEXTLINK, Concentric or Newco to consummate the Mergers, the
\nAlternative Merger or the Exchange Offer.<\/p>\n
SECTION 10.3. Conditions to the Obligations of Concentric. The
\n ——————————————-
\nobligations of Concentric to consummate the Mergers or the Alternative Merger,
\nas applicable, are subject to the satisfaction of the following further
\nconditions:<\/p>\n
(a) (i) NEXTLINK shall have performed in all material respects all of
\nits obligations hereunder required to be performed by it at or prior to the
\nEffective Times, (ii) the representations and warranties of NEXTLINK contained
\nin this Agreement (as modified or supplemented by the NEXTLINK Disclosure
\nSchedule) disregarding all qualifications and exceptions contained therein
\nrelating to materiality or NEXTLINK Material Adverse Effect or any similar
\nstandard or qualification shall be true at and as of the Effective Times as if
\nmade at and as of such times (other than representations and warranties that
\naddress matters only as of a certain date, which shall be true as of such date),
\nwith only such exceptions as, individually or in the aggregate, have not had and
\nwould not be reasonably expected to have a NEXTLINK Material Adverse Effect and
\n(iii) Concentric shall have received a certificate signed by an executive
\nofficer of NEXTLINK to the foregoing effect;<\/p>\n
(b) Concentric shall have received an opinion of Wilson Sonsini
\nGoodrich & Rosati, Professional Corporation in form and substance reasonably
\nsatisfactory to Concentric, on the basis of certain facts, representations and
\nassumptions set forth in such opinion, dated the Effective Times, to the effect
\nthat either (x) the Mergers or the Alternative Merger, as applicable, will be
\ntreated for federal income tax purposes as a 368 Reorganization and that each of
\nNEXTLINK, Concentric and Newco will be a party to the reorganization within the
\nmeaning of Section 368(b) of the Code or (y) the Exchange Offer will be <\/p>\n
-76-<\/p>\n
treated as a 351 Transaction, as the case may be. In rendering such opinion,
\nsuch counsel shall be entitled to rely upon certain documentation including
\nrepresentations of officers of Concentric and NEXTLINK and each of Concentric
\nand NEXTLINK agree to make such reasonable representations as may be requested
\nby tax counsel in connection with rendering such opinions; and<\/p>\n
(c) Notwithstanding anything to the contrary contained in Section
\n10.3(a)(ii) or anywhere else in this Agreement, NEXTLINK may enter into a
\nSubsequent Transaction, and the state of facts resulting from any such
\nSubsequent Transaction shall not be deemed to be a breach of any representation
\nor warranty of NEXTLINK contained in this Agreement; provided, in each case,
\n ——–
\nthat any such Subsequent Transaction would not cause: (x) the Mergers or the
\nAlternative Merger, as applicable, to be treated as other than a 368
\nReorganization and the Exchange Offer Transactions to be treated as other than a
\n351 Transaction, (y) any of the conditions set forth in Article 10 hereof not to
\nbe satisfied, and (z) any such Subsequent Transaction would not, or would
\nreasonably not be expected to, prevent, impair or materially delay the ability
\nof NEXTLINK or Concentric to consummate the transactions contemplated hereunder
\nor constitute or result in a NEXTLINK Material Adverse Effect.<\/p>\n
(d) The failure of the LHP Share Exchange to be consummated or the
\nbreach by any of NEXTLINK or Eagle River of any representation, warrant,
\nagreement or obligation relating to the LHP Share Exchange shall not give rise
\nto any right or claim on the part of Concentric.<\/p>\n
SECTION 10.4. Conditions to the Obligations of Eagle River. The
\n ——————————————–
\nobligations of Eagle River to consummate the LHP Share Exchange are subject to
\nthe satisfaction of the following further conditions:<\/p>\n
(a) The representations, warranties and covenants of NEXTLINK
\ncontained in Section 5.21 shall be true and correct in all material respects, in
\neach case, on the date of this Agreement and on and as of the date of the
\nClosing of the LHP Share Exchange with the same force and effect as though such
\nrepresentations, warranties and covenants had been made on and as of such date.<\/p>\n
(b) NEXTLINK shall have duly performed and complied in all material
\nrespects with all agreements or obligations of NEXTLINK contained in this
\nAgreement relating to the LHP Share Exchange required to be performed or
\ncomplied with by it at or before the Closing; provided that Eagle River shall
\n ——–
\nnot be relieved of its obligations to consummate the LHP Share Exchange due to
\nthe termination of this Agreement by Concentric or the failure of Concentric and
\nNEXTLINK to consummate the Mergers.<\/p>\n
(c) NEXTLINK shall have delivered to Eagle River a certificate dated
\nthe date of the Closing of the LHP Share<\/p>\n
-77-<\/p>\n
Exchange and executed by an authorized senior officer of NEXTLINK, in the
\ncapacity of such officer, certifying the fulfillment of the conditions specified
\nin Sections 10.4 (a) and (b).<\/p>\n
(d) Eagle River shall have received evidence reasonably satisfactory
\nto Eagle River to the effect that the INTERNEXT Guarantee has been terminated,
\neffective as of the Closing.<\/p>\n
(e) Newco shall have delivered to Eagle River the certificate
\nrepresenting the shares of Newco Common Stock in payment of the LHP
\nConsideration.<\/p>\n
(f) Eagle River shall have received from the counsel to NEXTLINK, an
\nopinion, in form and substance reasonably satisfactory to Eagle River, dated as
\nof the date of the Closing of the LHP Share Exchange, as to customary matters,
\nincluding, but not limited to, the due authorization, execution and delivery of
\nthis Agreement by NEXTLINK and Newco and the absence of conflicts (it being
\nunderstood by the parties that such opinion shall not include any opinion
\nregarding tax treatment of the LHP Share Exchange).<\/p>\n
SECTION 10.5. Waiver of NEXTLINK and Eagle River Conditions. The conditions
\n ———————————————
\nto each of NEXTLINK’s and Eagle River’s obligations to consummate the LHP Share
\nExchange are for the sole benefit of such parties and may be waived by any such
\nparty in whole or in part to the extent permitted by applicable law; provided
\nthat the waiver of any such conditions by NEXTLINK requires the consent of the
\nSpecial Committee.<\/p>\n
ARTICLE 11.
\n TERMINATION<\/p>\n
SECTION 11.1. Termination. This Agreement may be terminated and the
\n ———–
\nMergers or the Alternative Merger, as applicable, may be abandoned at any time
\nprior to the Effective Times (notwithstanding any approval of this Agreement by
\nthe stockholders of Concentric):<\/p>\n
(a) by mutual written agreement of Concentric and NEXTLINK;<\/p>\n
(b) by either Concentric or NEXTLINK, if:<\/p>\n
(i) the Mergers or the Alternative Merger has not been consummated on
\n or before August 31, 2000 (the “END DATE”); provided that the right to
\n terminate this Agreement pursuant to this Section 10.1(b)(i) shall not be
\n available to any party whose breach of any provision of this Agreement
\n results in the failure of the Mergers or the Alternative Merger to be
\n consummated by the End Date;<\/p>\n
-78-<\/p>\n
(ii) (A) there shall be any law or regulation that makes
\n consummation of the Mergers or the Alternative Merger, as applicable,
\n illegal or otherwise prohibited or (B) any judgment, injunction, order or
\n decree of any court or other Governmental Authority having competent
\n jurisdiction enjoining Concentric and NEXTLINK from consummating the
\n Mergers is entered and such judgment, injunction, judgment or order shall
\n have become final and non-appealable; or<\/p>\n
(iii) Concentric Stockholders’ Approval shall not have been obtained
\n at the Concentric Stockholders’ Meeting (or any adjournment or postponement
\n thereof);<\/p>\n
(c) by NEXTLINK if:<\/p>\n
(i) the Board of Directors of Concentric shall have failed to
\n recommend or shall have withdrawn, or modified in a manner adverse to
\n NEXTLINK, its approval or recommendation of this Agreement and the Mergers,
\n or shall have materially breached its obligation to call the Concentric
\n Stockholders’ Meeting in accordance with Section 7.2(a) (or the Board of
\n Directors of Concentric resolves to do any of the foregoing);<\/p>\n
(ii) Concentric shall have willfully and materially breached any of
\n its obligations under Sections 7.2(b) or 7.3; or<\/p>\n
(iii) a breach of any representation, warranty, covenant or agreement
\n on the part of Concentric set forth in this Agreement shall have occurred
\n that would cause any of the conditions set forth in Section 10.2(a)(i) not
\n to be satisfied, and such condition shall be incapable of being satisfied
\n by the End Date.<\/p>\n
(d) by Concentric, if:<\/p>\n
(i) Eagle River shall have materially breached the Voting Agreement;<\/p>\n
(ii) a breach of any representation, warranty, covenant or agreement
\n on the part of NEXTLINK set forth in this Agreement shall have occurred
\n that would cause the condition set forth in Section 10.3(a) not to be
\n satisfied, and such condition shall be incapable of being satisfied by the
\n End Date; or<\/p>\n
(iii) (A) the Board of Directors of Concentric authorizes Concentric,
\n subject to complying with the terms of this Agreement, to enter into a
\n binding written agreement concerning a transaction that constitutes a
\n Superior Proposal and Concentric notifies NEXTLINK in writing that it
\n intends to enter into such an agreement, attaching the most current version
\n of such agreement to such notice (which <\/p>\n
-79-<\/p>\n
version shall be updated on a current basis as subsequent versions are
\n delivered by the proposed parties); (B) NEXTLINK does not make, within five
\n days of receipt of Concentric’s written notification of its intention to
\n enter into a binding agreement for a Superior Proposal, an offer that the
\n Board of Directors of Concentric determines, in good faith after
\n consultation with its financial advisors, is at least as favorable to the
\n stockholders of Concentric as the Superior Proposal; (C) Concentric, prior
\n to or contemporaneous with such termination pursuant to this clause (iii),
\n pays to NEXTLINK in immediately available funds the fees required to be
\n paid pursuant to Section 11.3(b); and (D) Concentric shall have complied
\n with Section 6.3. Concentric agrees to notify NEXTLINK promptly if its
\n intention to enter into a written agreement referred to in its notification
\n shall change at any time after giving such notification.<\/p>\n
The party desiring to terminate this Agreement pursuant to this Section 11.1
\n(other than pursuant to Section 11.1(a)) shall give notice of such termination
\nto the other party.<\/p>\n
SECTION 11.2. Effect of Termination. If this Agreement is terminated
\n ———————
\npursuant to Section 11.1, this Agreement shall become void and of no effect
\nwithout liability of any party (or any stockholder, director, officer, employee,
\nagent, consultant or representative of such party) to the other parties hereto,
\nexcept that (a) the agreements contained in this Section 11.2, in Section 11.3
\nand in the Confidentiality Agreement shall survive the termination hereof, (b)
\nthe LHP Share Exchange shall be consummated pursuant to Section 9.9(d) and (c)
\nno such termination shall relieve any party of any liability or damages
\nresulting from any willful breach by such party of this Agreement or the Voting
\nAgreement.<\/p>\n
SECTION 11.3. Fees and Expenses. (a) Except as otherwise provided in this
\n —————–
\nSection 11.3, Section 7.4 and in Section 9.9(c), all costs and expenses incurred
\nin connection with this Agreement shall be paid by the party incurring such cost
\nor expense whether or not the Mergers are consummated; provided that Concentric
\nand NEXTLINK shall share equally all fees and expenses, other than attorneys’
\nand accounting fees and expenses, incurred in relation to the printing and
\nfiling of the Registration Statement and the Proxy Statement other than those
\npaid by Eagle River pursuant to Section 9.9(c).<\/p>\n
(b) If this Agreement is terminated pursuant to Sections 11.1(c)(i)
\nand Section 11.1(c)(ii), Concentric shall pay to NEXTLINK a cash termination fee
\n(the “TERMINATION FEE”) equal to the sum of $110,000,000 and the amount of any
\nfees or other inducements theretofore paid by NEXTLINK pursuant to Section
\n7.4(a)(i).<\/p>\n
-80-<\/p>\n
(c) If (A) this Agreement is terminated pursuant to Section
\n11.1(b)(iii), (B) prior to the Concentric Stockholders’ Meeting, an Acquisition
\nProposal is made by any Person and not withdrawn prior to such meeting and (C)
\nwithin one year of the Concentric Stockholders’ Meeting, either (1) Concentric
\nor any Concentric Subsidiary enters into an agreement with any Person with
\nrespect to an Acquisition Proposal which provides for (x) transfer or issuance
\nof securities representing more than 50% of the equity or voting interests in
\nConcentric, (y) a Merger, consolidation, recapitalization or another transaction
\nresulting in the issuance of cash or securities of any Person (other than a
\nreincorporation or a holding company Merger that results in the Concentric
\nstockholders owning all of the equity interests in the surviving corporation) to
\nConcentric stockholders in exchange for more than 50% of the equity or voting
\ninterests in Concentric, or (z) transfer of assets, securities or ownership
\ninterests representing more than 50% of the consolidated assets or earning power
\nof the Concentric Group, or (2) any Person commences a tender offer that results
\nin the acquisition by the Person making the tender offer of a majority of the
\nConcentric Common Stock, then Concentric shall pay to NEXTLINK the Termination
\nFee.<\/p>\n
(d) Any payment of the Termination Fee pursuant to this Section 11.3
\nshall be made within one Business Day after termination of this Agreement except
\nthat (i) any payment of the Termination Fee pursuant to Section 11.3(c) shall be
\npaid within one Business Day after it becomes payable. Any payment of the
\nTermination Fee shall be made by wire transfer of immediately available funds.
\nIf one party fails to pay to the other promptly any fee or expense due hereunder
\n(including the Termination Fee), the defaulting party shall pay the costs and
\nexpenses (including legal fees and expenses) in connection with any action,
\nincluding the prosecution of any lawsuit or other legal action, taken to collect
\npayment, together with interest on the amount of any unpaid fee at the publicly
\nannounced prime rate of The Bank of New York in New York City from the date such
\nfee was required to be paid to the date it is paid.<\/p>\n
SECTION 11.4. Termination of LHP Share Exchange
\n ———————————<\/p>\n
(a) The LHP Share Exchange (and the provisions of this Agreement
\nrelating thereto) may be terminated at any time prior to the consummation of the
\nLHP Share Exchange by an agreement in writing signed by NEXTLINK and Eagle
\nRiver, with the concurrence of the Special Committee.<\/p>\n
(b) Either NEXTLINK or Eagle River (and in the case of NEXTLINK, with
\nthe concurrence of the Special Committee) may terminate this Agreement as it
\nrelates to the LHP Share Exchange (and the provisions of this Agreement relating
\nthereto) prior to the consummation of the LHP Share Exchange if:<\/p>\n
(i) any court of competent jurisdiction in the United States or other
\n Governmental Authority issues an order,<\/p>\n
-81-<\/p>\n
decree or ruling or taken any other action permanently restraining,
\n enjoining or otherwise prohibiting the transactions contemplated by this
\n Agreement with respect solely to the LHP Share Exchange obligations, and
\n such order, decree, ruling or other action is final and non-appealable; or<\/p>\n
(ii) the Closing of the LHP Share Exchange does not occur by the 21st
\n day after the End Date, provided that the right to terminate this Agreement
\n pursuant to this Section 11.4(b) will not be available to either NEXTLINK
\n or Eagle River if such party fails to fulfill any of its obligations under
\n this Agreement which failure results in the failure of the Closing of the
\n LHP Share Exchange to occur on or before such date.<\/p>\n
(c) NEXTLINK (with the concurrence of the Special Committee) may
\nterminate this Agreement with respect solely to the LHP Share Exchange
\nobligations if:<\/p>\n
(i) Eagle River fails to perform, in any material respect, any of its
\n material obligations under this Agreement, which failure to perform is not
\n cured by the Closing of the LHP Share Exchange, provided that notice of
\n such failure to perform shall have been given by NEXTLINK to Eagle River;
\n or<\/p>\n
(ii) there is a material breach of any of Eagle River’s
\n representations, warranties and covenants contained in this Agreement.<\/p>\n
(d) Eagle River may terminate this Agreement with respect solely to
\nthe LHP Share Exchange obligations if:<\/p>\n
(i) NEXTLINK fails to perform, in any material respect, any of its
\n material obligations under this Agreement, which failure to perform is not
\n cured by the Closing of the LHP Share Exchange, provided that notice of
\n such failure to perform shall have been given by Eagle River to NEXTLINK;
\n or<\/p>\n
(ii) there is a material breach of any of NEXTLINK’s representations,
\n warranties and covenants contained in this Agreement.<\/p>\n
(e) If the LHP Share Exchange is terminated pursuant to this Section
\n11.4, such termination will be without liability on the part of NEXTLINK or
\nEagle River, or any shareholder, partner, member, director, officer, employer,
\nagent, consultant or representative of any such party, or to the other parties,
\nother than the provisions of this Section 11.4, and Sections 9.9 and 11.5;
\nprovided that nothing in this Section 11.4 shall be deemed to release any such
\nparty from any liability for any breach by such party of the representations,
\nwarranties or<\/p>\n
-82-<\/p>\n
covenants of such party, or other terms, contained in this Agreement.<\/p>\n
SECTION 11.5. Survival of NEXTLINK and Eagle River Representations and
\n ——————————————————–
\nWarranties Relating to the LHP Share Exchange; Indemnification.
\n————————————————————–<\/p>\n
(a) All representations, warranties and covenants of NEXTLINK and
\nEagle River pertaining to the LHP Share Exchange contained in this Agreement
\nwill survive the execution and delivery of this Agreement and the Closing.<\/p>\n
(b) Eagle River agrees to indemnify NEXTLINK and hold NEXTLINK
\nharmless from and against, and pay and reimburse NEXTLINK for, any and all
\ndemands, claims, actions, losses, damages, liabilities, obligations, out-of-
\npocket costs and expenses (including reasonable consultants’ and attorneys’
\nfees), whether or not resulting from third-party claims, including interest and
\npenalties with respect thereto, asserted against or incurred or sustained by
\nNEXTLINK as a result of or arising out of any breach or inaccuracy of any
\nrepresentation or warranty of Eagle River contained in Section 6, or any
\ncovenant made by Eagle River in this Agreement.<\/p>\n
(c) NEXTLINK agrees to indemnify Eagle River and hold Eagle River
\nharmless from and against, and pay and reimburse Eagle River for, any and all
\ndemands, claims, actions, losses, damages, liabilities, obligations, out-of-
\npocket costs and expenses (including reasonable consultants’ and attorneys’
\nfees), whether or not resulting from third-party claims, including interest and
\npenalties with respect thereto, asserted against or incurred or sustained by
\nEagle River as a result of or arising out of any breach or inaccuracy of any
\nrepresentation or warranty of NEXTLINK made to Eagle River and contained in
\nSection 5.21, or any covenant made by NEXTLINK for the benefit of Eagle River in
\nthis Agreement.<\/p>\n
ARTICLE 12.
\n MISCELLANEOUS<\/p>\n
SECTION 12.1. Notices. All notices, requests and other communications to
\n ——-
\nany party hereunder shall be in writing (including facsimile transmission) and
\nshall be given,<\/p>\n
if to NEXTLINK, to:<\/p>\n
NEXTLINK Communications, Inc.,
\n 1505 Farm Credit Drive
\n McLean, VA 22102
\n Attention: General Counsel
\n Fax: (703) 547-2025<\/p>\n
-83-<\/p>\n
with a copy to:<\/p>\n
Willkie Farr & Gallagher
\n 787 Seventh Avenue
\n New York, New York 10019
\n Attention: Bruce R. Kraus, Esq.
\n Fax: (212) 728-8111<\/p>\n
if to Concentric, to:<\/p>\n
Concentric Network Corporation
\n 1400 Parkmoor Avenue
\n San Jose, CA 95126
\n Attention:
\n Fax: (408) 817-2876<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich, Rosati,
\n Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, CA 94304
\n Attention: David J. Segre, Esq.
\n Fax: 650-493-6811<\/p>\n
if to Eagle River, to:<\/p>\n
2300 Carillon Point
\n Kirkland, WA 98033
\n Attention: James Judson, Esq.
\n Fax: (425) 828-8061<\/p>\n
or such other address or facsimile number as such party may hereafter specify
\nfor the purpose by notice to the other parties hereto. All such notices,
\nrequests and other communications shall be deemed received on the date of
\nreceipt by the recipient thereof if received prior to 5 p.m. on a Business Day,
\nin the place of receipt. Otherwise, any such notice, request or communication
\nshall be deemed not to have been received until the next succeeding Business Day
\nin the place of receipt.<\/p>\n
SECTION 12.2. Survival of Representations and Warranties. The
\n ——————————————
\nrepresentations and warranties contained herein and in any certificate or other
\nwriting delivered pursuant hereto shall not survive the Effective Times or the
\ntermination of this Agreement, except as provided under Section 11.2 and 11.5.<\/p>\n
SECTION 12.3. Amendments; No Waivers. (a) Subject to applicable law, any
\n ———————-
\nprovision of this Agreement may be amended or waived prior to the Effective
\nTimes if, but only if, such amendment or waiver is in writing and is signed, in
\nthe case of an amendment, by each party to this Agreement or, in the case of a
\nwaiver, by each party against whom the waiver is to be effective; provided that,
\nafter the adoption of this Agreement by <\/p>\n
-84-<\/p>\n
the stockholders of Concentric, no such amendment or waiver shall be made or
\ngiven that requires the approval of the stockholders of Concentric unless the
\nrequired approval is obtained.<\/p>\n
(b) No failure or delay by any party in exercising any right, power
\nor privilege hereunder shall operate as a waiver thereof nor shall any single or
\npartial exercise thereof preclude any other or further exercise thereof or the
\nexercise of any other right, power or privilege. The rights and remedies herein
\nprovided shall be cumulative and not exclusive of any rights or remedies
\nprovided by law.<\/p>\n
(c) References to “party” in this Section 12.3 shall, with respect to
\nany amendment or waiver relating solely to the Mergers, the Alternative Merger
\nor the Exchange Offer, refer only to NEXTLINK, Concentric and Newco and shall,
\nwith respect to any amendment or waiver relating to solely to the LHP Share
\nExchange, refer only to NEXTLINK, Newco and Eagle River.<\/p>\n
SECTION 12.4. Successors and Assigns. The provisions of this Agreement
\n ———————-
\nshall be binding upon and inure to the benefit of the parties hereto and their
\nrespective successors and assigns; provided that no party may assign, delegate
\nor otherwise transfer any of its rights or obligations under this Agreement
\nwithout the consent of each other party hereto.<\/p>\n
SECTION 12.5. Governing Law. This Agreement shall be governed by and
\n ————-
\nconstrued in accordance with the laws of the State of Delaware, without regard
\nto the conflicts of law rules of such State.<\/p>\n
SECTION 12.6. Jurisdiction. Any suit, action or proceeding seeking to
\n ————
\nenforce any provision of, or based on any matter arising out of or in connection
\nwith, this Agreement or the transactions contemplated hereby shall be brought in
\nany federal court located in the State of Delaware or any Delaware state court,
\nand each of the parties hereby consents to the exclusive jurisdiction of such
\ncourts (and of the appropriate appellate courts therefrom) in any such suit,
\naction or proceeding and irrevocably waives, to the fullest extent permitted by
\nlaw, any objection that it may now or hereafter have to the laying of the venue
\nof any such suit, action or proceeding in any such court or that any such suit,
\naction or proceeding brought in any such court has been brought in an
\ninconvenient form. Process in any such suit, action or proceeding may be served
\non any party anywhere in the world, whether within or without the jurisdiction
\nof any such court. Without limiting the foregoing, each party agrees that
\nservice of process on such party as provided in Section 12.1 shall be deemed
\neffective service of process on such party.<\/p>\n
SECTION 12.7. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
\n ——————–
\nIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY<\/p>\n
-85-<\/p>\n
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
\nTRANSACTIONS CONTEMPLATED HEREBY.<\/p>\n
SECTION 12.8. Counterparts; Effectiveness. This Agreement may be signed
\n —————————
\nin any number of counterparts, each of which shall be an original, with the same
\neffect as if the signatures thereto and hereto were upon the same instrument.
\nThis Agreement shall become effective when each party hereto shall have received
\ncounterparts hereof signed by all of the other parties hereto. No provision of
\nthis Agreement is intended to confer any rights, benefits, remedies, obligations
\nor liabilities hereunder upon any Person other than the parties hereto and their
\nrespective successors and assigns except as provided in Sections 7.3, 7.5 and
\n7.6.<\/p>\n
SECTION 12.9. Entire Agreement. This Agreement, together with the Voting
\n —————-
\nAgreements, the Concentric Disclosure Schedule, the NEXTLINK Disclosure Schedule
\n(which Disclosure Schedules shall be deemed part of this Agreement) and the
\nConfidentiality Agreement, constitutes the entire agreement between the parties
\nwith respect to the subject matter of this Agreement and supersedes all prior
\nagreements and understandings, both oral and written, between the parties with
\nrespect to the subject matter of this Agreement.<\/p>\n
SECTION 12.10. Captions. The captions herein are included for convenience
\n ——–
\nof reference only and shall be ignored in the construction or interpretation
\nhereof.<\/p>\n
SECTION 12.11. Severability. If any term, provision, covenant or
\n ————
\nrestriction of this Agreement is held by a court of competent jurisdiction or
\nother authority to be invalid, void or unenforceable, the remainder of the
\nterms, provisions, covenants and restrictions of this Agreement shall remain in
\nfull force and effect and shall in no way be affected, impaired or invalidated
\nso long as the economic or legal substance of the transactions contemplated
\nhereby is not affected in any manner materially adverse to any party. Upon such
\na determination, the parties shall negotiate in good faith to modify this
\nAgreement so as to effect the original intent of the parties as closely as
\npossible in an acceptable manner so that the transactions contemplated hereby be
\nconsummated as originally contemplated to the fullest extent possible.<\/p>\n
SECTION 12.12. Specific Performance. The parties hereto agree that
\n ——————–
\nirreparable damage would occur if any provision of this Agreement were not
\nperformed in accordance with the terms hereof and that the parties shall be
\nentitled to an injunction or injunctions to prevent breaches of this Agreement
\nor to enforce specifically the performance of the terms and provisions hereof in
\nany federal court located in the State of Delaware or any Delaware state court,
\nin addition to any other remedy to which they are entitled at law or in equity.<\/p>\n
-86-<\/p>\n
SECTION 12.13. Schedules. Each of Concentric and NEXTLINK has set forth
\n ———
\ninformation in its respective Disclosure Schedule in a section thereof that
\ncorresponds to the section of this Agreement to which it relates. Such
\ninformation will qualify other sections hereof only to the extent that such
\napplicability is manifestly evident on the face of such disclosures. The fact
\nthat any item of information is disclosed in a Disclosure Schedule to this
\nAgreement shall not be construed to mean that such information is required to be
\ndisclosed by this Agreement.<\/p>\n
[Signature page follows]<\/p>\n
-87-<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
\nof Merger and Share Exchange Agreement to be duly executed by their respective
\nauthorized officers as of the day and year first above written.<\/p>\n
CONCENTRIC NETWORK CORPORATION<\/p>\n
By:___________________________
\n Name: Henry Nothhaft
\n Title: President and Chief
\n Executive Officer<\/p>\n
NEXTLINK COMMUNICATIONS, INC.<\/p>\n
By:___________________________
\n Name: Daniel F. Akerson
\n Title: Chairman and Chief
\n Executive Officer<\/p>\n
EAGLE RIVER INVESTMENTS, LLC<\/p>\n
By:___________________________
\n Name: James Judson
\n Title: Vice President<\/p>\n
NM ACQUISITION CORP. <\/p>\n
By:____________________________
\n Name: Gary Begeman
\n Title: Vice President and
\n Secretary<\/p>\n
-88-<\/p>\n
Certification
\n of
\n Secretary of Newco<\/p>\n
The undersigned Secretary of Newco, pursuant to Section 251(f) of the
\nDelaware General Corporation Law, hereby certifies that:<\/p>\n
1. This Agreement has been adopted by Newco by action of its board of
\ndirectors without any vote of stockholders, pursuant to Section 251(f) of the
\nDelaware General Corporation Law.<\/p>\n
2. No shares of stock of Newco were issued prior to the adoption by the
\nboard of directors of Newco of the resolution approving this Agreement.<\/p>\n
By:______________________________
\n Gary Begeman,
\n Secretary<\/p>\n
EXHIBIT A TO AGREEMENT
\n AND PLAN OF MERGER AND
\n SHARE EXCHANGE AGREEMENT<\/p>\n
VOTING AGREEMENT
\n VOTING AGREEMENT, dated as of January __, 2000, (this “Agreement”) among
\n ———
\nCONCENTRIC NETWORK CORPORATION, a Delaware corporation (“Concentric”), NM
\n ———-
\nAcquisition Corp., a Delaware corporation, “Newco”) and EAGLE RIVER INVESTMENTS,
\n —–
\nL.L.C., a limited liability company organized under the laws of the State of
\nWashington (“Stockholder”).
\n ———–<\/p>\n
WHEREAS, as of the date hereof, Stockholder owns (beneficially and of
\nrecord) 37,743,574 shares of Class B Common Stock, $0.02 par value per share
\n(“Class B Common Stock”) of NEXTLINK Communications, Inc., a Delaware
\n ——————–
\ncorporation (“NEXTLINK”), which Class B Common Stock is entitled to ten votes
\n ——–
\nper share and is convertible on a one-for-one basis into shares of Class A
\nCommon Stock, $0.02 par value per share of NEXTLINK (“Class A Common Stock,” and
\n ——————–
\ntogether with the Class B Common Stock, the “NEXTLINK Common Stock”);
\n ———————<\/p>\n
WHEREAS, the NEXTLINK Common Stock beneficially owned by Stockholder
\ncurrently represents more than 50% of the aggregate voting power of all issued
\nand outstanding shares of NEXTLINK Common Stock entitled to vote on the Merger
\n(as defined below);<\/p>\n
WHEREAS, Concentric, NEXTLINK, Newco and certain other parties have entered
\ninto an Agreement and Plan of Merger and Share Exchange Agreement dated as of
\nthe date hereof (the “Merger Agreement”) which provides, upon the terms and
\n —————-
\nsubject to the conditions set forth therein, for the merger of each of
\nConcentric and NEXTLINK with and into Newco or, at NEXTLINK’s election, the
\nmerger of Concentric with and into NEXTLINK (collectively, the “Merger”); and
\n ——<\/p>\n
WHEREAS, as a condition to the willingness of Concentric to enter into the
\nMerger Agreement, Concentric has required that Stockholder agree, and in order
\nto induce Concentric to enter into the Merger Agreement, Stockholder has agreed
\nto enter into this Agreement.<\/p>\n
Capitalized terms used but not otherwise defined in this Agreement have the
\nmeanings assigned to such terms in the Merger Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing premises and agreements
\ncontained herein, the parties hereto agree as follows:<\/p>\n
Article I.<\/p>\n
VOTING OF NAVY COMMON STOCK<\/p>\n
Section 1.1. Voting Agreement. On the record date set by NEXTLINK
\npursuant to Section 8.1 of the Merger Agreement, Stockholder shall duly execute
\nand cause to be filed with the corporate records of NEXTLINK its irrevocable
\nwritten consent (the “Consent”) with respect to all shares of NEXTLINK Common
\n ——-
\nStock owned by Stockholder or with respect to which Stockholder has voting
\ncontrol, approving the Merger, the Merger Agreement (as amended from time to
\ntime) and the transactions contemplated by the Merger Agreement.<\/p>\n
Section 1.2. No Inconsistent Actions by Stockholder; No Disposition or
\nEncumbrance of Shares.<\/p>\n
(a) Prior to the Expiration Date (as defined in Section 3.4), Stockholder
\nshall not take any action inconsistent with the provisions of Section 1.1 of
\nthis Agreement, provided, however, that nothing contained in this Agreement
\n ——–
\nshall be deemed to limit NEXTLINK’s right to terminate the Merger Agreement in
\naccordance with its terms.<\/p>\n
(b) Until the Consent has been executed and filed with the corporate
\nrecords of NEXTLINK in accordance with Section 1.1 of this Agreement,
\nStockholder shall not Transfer (as defined below) any shares of NEXTLINK Common
\nStock if the effect of such Transfer would be to reduce its beneficial ownership
\nof NEXTLINK Common Stock (taking into account shares of NEXTLINK Common Stock
\nwith respect to which Stockholder can exercise voting control by proxy or
\ncontract) to less than a majority of the voting power of the outstanding
\nNEXTLINK Common Stock.<\/p>\n
For purposes of this Agreement, Stockholder shall be deemed to have
\neffected a “Transfer” of a security if, after the date hereof, it directly or
\n ——–
\nindirectly: (i) sells, pledges, encumbers, grants an option with respect to,
\ntransfers or disposes of such security or any interest in such security; or (ii)
\nenters into an agreement or commitment providing for the sale of, pledge of,
\nencumbrance of, grant of an option with respect to, transfer of or disposition
\nof such a security or any interest therein.<\/p>\n
Section 1.3. Additional Documents. Stockholder (in its capacity as such)
\nhereby covenants and agrees to execute and deliver any additional documents
\nnecessary or desirable, in the reasonable opinion of Concentric, to carry out
\nthe intent of this Agreement.<\/p>\n
Article II.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER<\/p>\n
-2-<\/p>\n
Stockholder hereby represents and warrants to Concentric and Newco as
\nfollows:<\/p>\n
Section 2.1. Due Organization, Authorization, etc. Stockholder has all
\nrequisite power to execute and deliver this Agreement and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nand the consummation of the transactions contemplated hereby have been duly
\nauthorized by all necessary action on the part of Stockholder. This Agreement
\nhas been duly executed and delivered by or on behalf of Stockholder and,
\nassuming its due authorization, execution and delivery by Concentric,
\nconstitutes a legal, valid and binding obligation of Stockholder, enforceable
\nagainst Stockholder in accordance with its terms.<\/p>\n
Section 2.2 No Conflicts, Required Filings and Consents.<\/p>\n
(a) The execution and delivery of this Agreement by Stockholder do not,
\nand the performance of this Agreement by Stockholder will not, (i) conflict with
\nor violate any statute, law, ordinance, rule, regulation, order, decree or
\njudgment applicable to Stockholder or by which it or any of its properties is
\nbound or affected, or (ii) violate or conflict with any agreement to which
\nStockholder is a party or by which any of its properties is bound.<\/p>\n
(b) The execution and delivery of this Agreement by Stockholder do not,
\nand the performance of this Agreement by Stockholder will not, require any
\nconsent, approval, authorization or permit of, or filing with or notification
\nto, any governmental or regulatory authority, domestic or foreign.<\/p>\n
Section 2.3. Title to Shares. Stockholder is the record and beneficial
\nowner of 37, 743,574 shares of Class B Common Stock, which shares represent a
\nmajority of the aggregate voting power of the issued and outstanding NEXTLINK
\nCommon Stock, and Stockholder holds full voting right with respect thereto. In
\naddition, the shares of Class B Common Stock beneficially owned by Stockholder,
\nat the date hereof, are free and clear of any liens, claims, options, charges or
\nother encumbrances that would adversely affect the ability of Stockholder to
\ncarry out the terms of this Agreement.<\/p>\n
Article III.<\/p>\n
MISCELLANEOUS<\/p>\n
Section 3.1. Expenses. Except as otherwise provided herein, all costs and
\nexpenses incurred in connection with the transactions contemplated by this
\nAgreement shall be paid by the party incurring such costs and expenses.<\/p>\n
-3-<\/p>\n
Section 3.2. Notices. Any notice or other communication required or
\npermitted hereunder shall be in writing (including facsimile transmission) and
\nshall be given,<\/p>\n
(i) if to Concentric to:
\n ——————-<\/p>\n
Concentric Network Corporation
\n 1400 Parkmoor Avenue
\n San Jose, CA 95126
\n Attention: Mr. Michael Anthofer
\n Fax: (408) 817-2876<\/p>\n
with a concurrent copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, CA 94304-1050
\n Attention: David Segre, Esq.
\n Fax: (650) 493-6811<\/p>\n
(ii) if to Stockholder to:
\n ——————–<\/p>\n
Eagle River Investments, L.L.C.
\n 2300 Carillon Point
\n Kirkland, WA 98033
\n Attention: James Judson, Esq.
\n Fax: (425) 828-8061<\/p>\n
with a concurrent copy to:
\n ————————-<\/p>\n
Davis Wright Tremaine LLP
\n 1300 SW Fifth Avenue, Suite 2300
\n Portland, OR 97201
\n Attention: David Baca, Esq.
\n Fax: (503) 778-5229<\/p>\n
or such other address or facsimile number as such party may hereafter specify
\nfor the purpose by notice to the other parties hereto. All such notices,
\nrequests and other communications shall be deemed received on the date of
\nreceipt by the recipient thereof if received prior to 5 p.m. on a Business Day,
\nin the place of receipt. Otherwise, any such notice, request or communication
\nshall be deemed not to have been received until the next succeeding Business Day
\nin the place of receipt.<\/p>\n
Section 3.3. Incorporation of other Provisions. Sections 12.3, 12.4,
\n12.5, 12.6, 12.7, 12.8, 12.9, 12.10, 12.11, and 12.12 of the Merger Agreement
\nare hereby incorporated by reference and made a part of this Agreement as is
\nrestated in full herein.<\/p>\n
Section 3.4. Termination. This Agreement shall terminate (the
\n“Expiration Date”) and be of no further force and effect, automatically and
\n —————
\nwithout any required action of the parties <\/p>\n
-4-<\/p>\n
hereto, at the earlier to occur of (a) such date and time as the Merger
\nAgreement shall have been validly terminated pursuant to Article 11 thereof or
\n(b) such date and time as the Merger shall become effective in accordance with
\nthe terms and provisions of the Merger Agreement.<\/p>\n
[Signature Page follows]<\/p>\n
-5-<\/p>\n
IN WITNESS WHEREOF, Concentric and Newco have each caused this Agreement to
\nbe executed by an officer thereunto duly authorized and Stockholder has caused
\nthis Agreement to be duly executed by an authorized signatory, all as of the
\ndate first written above.<\/p>\n
CONCENTRIC NETWORK CORPORATION<\/p>\n
By _____________________________________
\n Name: Henry Nothhaft
\n Title: President and Chief Executive
\n Officer<\/p>\n
NM ACQUISITION CORP.<\/p>\n
By: ____________________________________
\n Name: Gary Begeman
\n Title: Vice President and Secretary<\/p>\n
EAGLE RIVER INVESTMENTS, L.L.C.<\/p>\n
By _____________________________________
\n Name: James Judson
\n Title: Vice President<\/p>\n
-6-<\/p>\n
EXHIBIT B TO AGREEMENT
\n AND PLAN OF MERGER AND
\n SHARE EXCHANGE AGREEMENT<\/p>\n
VOTING AGREEMENT<\/p>\n
VOTING AGREEMENT, dated as of January __, 2000, (this “Agreement”) among
\n ———
\nNEXTLINK COMMUNICATIONS, INC., a Delaware corporation (“Nextlink”), NM
\n ——–
\nACQUISITION CORP., a Delaware corporation (“Newco”) and the undersigned
\n —–
\nstockholder of CONCENTRIC NETWORK CORPORATION (“Stockholder”).
\n ———– <\/p>\n
WHEREAS, as of the date hereof, Stockholder owns (beneficially and of
\nrecord) the number of shares of Common Stock, $0.01 par value per share (“Common
\n ——
\nStock”) of Concentric Network Corporation, a Delaware corporation (“Concentric”)
\n—– ———-
\nset forth on the Stockholder signature page hereto;<\/p>\n
WHEREAS, the Common Stock owned by Stockholder currently represents the
\npercentage of the aggregate voting power of all issued and outstanding shares of
\nCommon Stock entitled to vote on the Merger (as hereinafter defined) set forth
\non the Stockholder signature page hereto;<\/p>\n
WHEREAS, Concentric, Nextlink, Newco and certain other parties have entered
\ninto an Agreement and Plan of Merger and Share Exchange Agreement dated as of
\nJanuary __, 2000 (the “Merger Agreement”) which provides, upon the terms and
\n —————-
\nsubject to the conditions set forth therein, for the mergers of each of
\nConcentric and Nextlink with and into Newco or, at Nextlink’s election, the
\nmerger of Concentric with and into Nextlink (the “Merger”); and
\n ——<\/p>\n
WHEREAS, as a condition to the willingness of Nextlink to enter into the
\nMerger Agreement, Nextlink has required that Stockholder agree, and in order to
\ninduce Nextlink to enter into the Merger Agreement, Stockholder has agreed to
\nenter into this Agreement.<\/p>\n
Capitalized terms used but not otherwise defined in this Agreement have the
\nmeanings assigned to such terms in the Merger Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing premises and agreements
\ncontained herein, the parties hereto agree as follows:<\/p>\n
Article I.<\/p>\n
VOTING OF COMMON STOCK<\/p>\n
Section 1.1. Voting Agreement. Until the Expiration Date (as defined in
\nSection 3.4 hereof), at every meeting of the<\/p>\n
stockholders of Concentric called, and at every adjournment thereof, and on
\nevery action or approval by written consent of the stockholders of Concentric,
\nStockholder (in its capacity as such) shall cause the Concentric Shares (as
\ndefined below) to be voted in favor of approval of the Merger Agreement and the
\nMerger, in favor of each of the other transactions contemplated by the Merger
\nAgreement, in favor of any matter that could reasonably be expected to
\nfacilitate the Merger and against any matter that is inconsistent with the
\nprompt consummation of the Merger and other transactions contemplated by the
\nMerger Agreement.<\/p>\n
Section 1.2. Irrevocable Proxy. Concurrently with the execution of this
\nAgreement, Stockholder agrees to deliver to Concentric a proxy in the form
\nattached hereto as Exhibit A (the “Proxy”), which shall be irrevocable to the
\n —–
\nfullest extent permissible by law, with respect to the Concentric Shares.<\/p>\n
Section 1.3. Transfer of Shares.<\/p>\n
(a) Transferee of Shares to be Bound by this Agreement. Stockholder
\n ————————————————–
\nagrees that, during the period from the date of this Agreement through its
\ntermination pursuant to Section 3.4, Stockholder shall not cause or permit any
\nTransfer (as defined below) of any of the Concentric Shares to be effected
\nunless such Transfer is in accordance with an agreement between Stockholder and
\nNextlink contemplated by the Merger Agreement and each Person to which any of
\nsuch Concentric Shares, or any interest in any of such Concentric Shares, is or
\nmay be transferred shall have: (a) executed a counterpart of this Agreement and
\na proxy in the form attached hereto as Exhibit A (with such modifications as
\n ———
\nNextlink may reasonably request); and (b) agreed in writing to hold such
\nConcentric Shares(or interest in such Concentric Shares) subject to all of the
\nterms and provisions of this Agreement.<\/p>\n
(b) Transfer of Voting Rights. Stockholder agrees that, during the period
\n ————————-
\nfrom the date of this Agreement through its termination pursuant to Section 3.4,
\nStockholder shall not deposit (or permit the deposit of) any Concentric Shares
\nin a voting trust or grant any proxy or enter into any voting agreement or
\nsimilar agreement in contravention of the obligations of Stockholder under this
\nAgreement with respect to any of the Concentric Shares.<\/p>\n
Section 1.4. No Inconsistent Actions by Stockholder. While this Agreement
\nis in effect, Stockholder shall not revoke or rescind, or purport to revoke or
\nrescind, the Proxy or take any action inconsistent with the provisions of
\nSection 1.1 of this Agreement, provided, however, that nothing contained in this
\n ——–
\nAgreement shall be deemed to limit Concentric’s right to terminate the Merger
\nAgreement in accordance with its terms.<\/p>\n
-2-<\/p>\n
Section 1.5. Additional Documents. Stockholder (in its capacity as such)
\nhereby covenants and agrees to execute and deliver any additional documents
\nnecessary or desirable, in the reasonable opinion of Nextlink, to carry out the
\nintent of this Agreement.<\/p>\n
Section 1.6. Consent and Waiver. Stockholder (in its capacity as such)
\nhereby gives any consents or waivers that are reasonably required for the
\nconsummation of the Merger under the terms of any agreements to which
\nStockholder is a party or pursuant to any rights Stockholder may have.<\/p>\n
Section 1.7. Legending of Shares. If so requested by Nextlink,
\nStockholder agrees that the Concentric Shares shall bear a legend stating that
\nthey are subject to this Agreement and to the Proxy. Subject to the terms of
\nSection 2 hereof, Stockholder agrees that it shall not Transfer the Shares
\nwithout first having the aforementioned legend affixed to the certificates
\nrepresenting the Shares.<\/p>\n
Section 1.8. Certain Defined Terms. For purposes of this Agreement, the
\nfollowing terms shall have the meanings indicated:<\/p>\n
(a) “Concentric Shares” shall mean: (i) all securities of Concentric
\n —————–
\n(including all shares of Common Stock or preferred stock and all options,
\nwarrants and other rights to acquire shares of Common Stock or preferred stock)
\nbeneficially owned by Stockholder as of the date of this Agreement, including
\nsuch shares of Common Stock over which Stockholder shares voting control; and
\n(ii) all additional securities of Concentric (including all additional shares of
\nCommon Stock and all additional options, warrants and other rights to acquire
\nshares of Common Stock or preferred stock whether or not such securities have a
\nright to vote on the merger) of which Stockholder acquires beneficial ownership
\nduring the period from the date of this Agreement through the Expiration Date.<\/p>\n
(b) Transfer. A Person shall be deemed to have effected a “Transfer” of a
\n ——– ——–
\nsecurity if such person directly or indirectly: (i) sells, pledges, encumbers,
\ngrants an option with respect to, transfers or disposes of such security or any
\ninterest in such security; or (ii) enters into an agreement or commitment
\nproviding for the sale of, pledge of, encumbrance of, grant of an option with
\nrespect to, transfer of or disposition of such security or any interest therein.<\/p>\n
Article II.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER<\/p>\n
Stockholder hereby represents and warrants to Nextlink and Newco as
\nfollows:<\/p>\n
-3-<\/p>\n
Section 2.1. Due Organization, Authorization, etc. Stockholder, if a
\ncorporation, has all requisite corporate power to execute and deliver this
\nAgreement and to consummate the transactions contemplated hereby. The execution
\nand delivery of this Agreement and the consummation of the transactions
\ncontemplated hereby have been duly authorized by all necessary action on the
\npart of Stockholder. This Agreement has been duly executed and delivered by or
\non behalf of Stockholder and, assuming its due authorization, execution and
\ndelivery by Nextlink and Newco, constitutes a legal, valid and binding
\nobligation of Stockholder, enforceable against Stockholder in accordance with
\nits terms.<\/p>\n
Section 2.2. No Conflicts, Required Filings and Consents.<\/p>\n
(a) The execution and delivery of this Agreement by Stockholder do not,
\nand the performance of this Agreement by Stockholder will not, (i) conflict with
\nor violate any statute, law, ordinance, rule, regulation, order, decree or
\njudgment applicable to Stockholder or by which Stockholder or any of
\nStockholder’s properties is bound or affected, or (ii) violate or conflict with
\nany agreement to which Stockholder is a party or by which any of its properties
\nis bound.<\/p>\n
(b) The execution and delivery of this Agreement by Stockholder do not,
\nand the performance of this Agreement by Stockholder will not, require any
\nconsent, approval, authorization or permit of, or filing with or notification
\nto, any governmental or regulatory authority, domestic or foreign.<\/p>\n
Section 2.3. Title to Shares. Stockholder is the record and beneficial
\nowner of the Concentric Shares set forth on Exhibit A hereto and holds full
\nvoting right with respect thereto. In addition, the Concentric Shares held by
\nStockholder, at the date hereof, are free and clear of any liens, claims,
\noptions, charges or other encumbrances that would adversely affect the ability
\nof Stockholder to carry out the terms of this Agreement.<\/p>\n
Article III.<\/p>\n
MISCELLANEOUS<\/p>\n
Section 3.1. Expenses. Except as otherwise provided herein, all costs and
\nexpenses incurred in connection with the transactions contemplated by this
\nAgreement shall be paid by the party incurring such costs and expenses.<\/p>\n
Section 3.2. Notices. Any notice or other communication required or
\npermitted hereunder shall be in writing (including facsimile transmission) and
\nshall be given,<\/p>\n
-4-<\/p>\n
(i) if to Nextlink or Newco to:
\n ————————–<\/p>\n
NEXTLINK Communications, Inc.,
\n 1505 Farm Credit Drive
\n McLean, VA 22102
\n Attention: General Counsel
\n Fax: (703) 547-2025<\/p>\n
with a concurrent copy to:
\n ————————-<\/p>\n
Willkie Farr & Gallagher
\n 787 Seventh Avenue
\n New York, NY 10019-6099
\n Attention: Bruce R. Kraus, Esq.
\n Fax: (212) 728-8911<\/p>\n
(ii) if to Stockholder to:
\n ——————–<\/p>\n
The address and fax number set forth on the
\n signature page hereto<\/p>\n
with a concurrent copy to:
\n ————————-<\/p>\n
Wilson Sonsini Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, CA 94304-1050
\n Attention: David Segre, Esq.
\n Fax: (650) 493-6811<\/p>\n
or such other address or facsimile number as such party may hereafter specify
\nfor the purpose by notice to the other parties hereto. All such notices,
\nrequests and other communications shall be deemed received on the date of
\nreceipt by the recipient thereof if received prior to 5 p.m. on a Business Day,
\nin the place of receipt. Otherwise, any such notice, request or communication
\nshall be deemed not to have been received until the next succeeding Business Day
\nin the place of receipt.<\/p>\n
Section 3.3. Incorporation of other Provisions. Sections 12.3, 12.4,
\n12.5, 12.6, 12.7, 12.8, 12.9, 12.10, 12.11, and 12.12 of the Merger Agreement
\nare hereby incorporated by reference and made a part of this Agreement as if
\nrestated in full herein.<\/p>\n
Section 3.4. Termination. This Agreement shall terminate (the
\n“Expiration Date”) and be of no further force and effect, automatically and
\n —————
\nwithout any required action of the parties hereto, at the earlier to occur of
\n(a) such date and time as the Merger Agreement shall have been validly
\nterminated pursuant to Article 11 thereof or (b) such date and time as the
\nMerger shall become effective in accordance with the terms and provisions of the
\nMerger Agreement.<\/p>\n
[Signature Pages Follow]<\/p>\n
-5-<\/p>\n
IN WITNESS WHEREOF, Nextlink and Newco have caused this Agreement to be
\nexecuted by their respective officers thereunto duly authorized and Stockholder
\nhas caused this Agreement to be duly executed by an authorized signatory, all as
\nof the date first written above.<\/p>\n
NEXTLINK COMMUNICATIONS, INC.<\/p>\n
By: _____________________________________
\n Name: Daniel F. Akerson
\n Title: Chairman and Chief Executive
\n Officer<\/p>\n
NM ACQUISITION CORP.<\/p>\n
By: _____________________________________
\n Name: Gary Begeman
\n Title: Vice President and Secretary<\/p>\n
[NEXTLINK and Newco Signature Page to Voting Agreement;
\n Stockholder Signature Page Follows]<\/p>\n
-6-<\/p>\n
STOCKHOLDER<\/p>\n
By: _________________________________
\n Name:<\/p>\n
Dated: January __, 2000<\/p>\n
Print Name of Stockholder: ______________________<\/p>\n
Address of Stockholder:<\/p>\n
__________________________<\/p>\n
__________________________<\/p>\n
fax: _____________________<\/p>\n
Concentric Shares beneficially owned:<\/p>\n
______________ shares of Common Stock<\/p>\n
______________ shares of Common Stock issuable upon
\n exercise of outstanding options or warrants<\/p>\n
______________ percent ( %) of shares of Common
\n Stock of Concentric outstanding<\/p>\n
[Stockholder Signature Page to Voting Agreement]<\/p>\n
-7-<\/p>\n
EXHIBIT A<\/p>\n
IRREVOCABLE PROXY<\/p>\n
The undersigned Stockholder of Concentric Network Corporation, a Delaware
\ncorporation (“Concentric”), hereby irrevocably (to the fullest extent permitted
\n ———-
\nby law) appoints (______________) and (_______________), and each of them, as
\nthe sole and exclusive attorneys and proxies of the undersigned, with full power
\nof substitution and re-substitution, to vote and exercise all voting and related
\nrights (to the full extent that the undersigned is entitled to do so) with
\nrespect to all of the shares of capital stock of Concentric that now are or
\nhereafter may be beneficially owned by the undersigned, and any and all other
\nshares or securities of Concentric issued or issuable in respect thereof on or
\nafter the date hereof (collectively, the “Concentric Shares”) in accordance with
\n —————–
\nthe terms of this Proxy. The Concentric Shares beneficially owned by the
\nundersigned Stockholder of Concentric as of the date of this Proxy are listed on
\nthe final page of this Proxy. Upon the undersigned’s execution of this Proxy,
\nany and all prior proxies given by the undersigned with respect to any
\nConcentric Shares are hereby revoked and the undersigned agrees not to grant any
\nsubsequent proxies with respect to the Concentric Shares until after the
\nExpiration Date (as defined below).<\/p>\n
This Proxy is irrevocable (to the fullest extent permitted by law), is
\ncoupled with an interest and is granted pursuant to that certain Voting
\nAgreement of even date herewith by and among Nextlink Communications, Inc., a
\nDelaware corporation (“Nextlink”), NM Acquisition Corp., a Delaware corporation
\n ——–
\n(“Newco”) and the undersigned Stockholder (the “Voting Agreement”), and is
\n —– —————-
\ngranted in consideration of Concentric entering into that certain Agreement and
\nPlan of Merger and Share Exchange Agreement (the “Merger Agreement”), among
\n —————-
\nConcentric, Nextlink, NM Acquisition Corp., a Delaware corporation (“Newco”) and
\n —–
\ncertain other parties. The Merger Agreement provides for the mergers of
\nConcentric and Nextlink into Newco, or at Nextlink’s election, the merger of
\nConcentric with and into Nextlink in accordance with its terms (the “Merger”).
\n ——
\nAs used herein, the term “Expiration Date” shall mean the earlier to occur of
\n —————
\n(i) such date and time as the Merger Agreement shall have been validly
\nterminated pursuant to Article 11 thereof or (ii) such date and time as the
\nMerger shall become effective in accordance with the terms and provisions of the
\nMerger Agreement.<\/p>\n
The attorneys and proxies named above, and each of them, are hereby
\nauthorized and empowered by the undersigned, at any time prior to the Expiration
\nDate, to act as the undersigned’s attorney and proxy to vote the Concentric
\nShares, and to exercise all voting, consent and similar rights of the
\nundersigned with respect to the Concentric Shares (including, without
\nlimitation,<\/p>\n
the power to execute and deliver written consents) at every annual, special or
\nadjourned meeting of Stockholders of Concentric and in every written consent in
\nlieu of such meeting in favor of approval of the Merger Agreement and the
\nMerger, in favor of each of the other transactions contemplated by the Merger
\nAgreement, in favor of any matter that could reasonably be expected to
\nfacilitate the Merger and against any matter that is inconsistent with the
\nprompt consummation of the Merger or other transactions contemplated by the
\nMerger Agreement.<\/p>\n
The attorneys and proxies named above may not exercise this Proxy on any
\nother matter except as provided above. The undersigned Stockholder may vote the
\nConcentric Shares on all other matters.<\/p>\n
Any obligation of the undersigned hereunder shall be binding upon the
\nsuccessors and assigns of the undersigned.<\/p>\n
This Proxy is irrevocable (to the fullest extent permitted by law). This
\nProxy shall terminate, and be of no further force and effect, automatically upon
\nthe Expiration Date.<\/p>\n
Dated: January __, 2000<\/p>\n
Signature of Stockholder: ________________________<\/p>\n
Print Name of Stockholder: _______________________<\/p>\n
Concentric Shares beneficially owned:<\/p>\n
_____________ shares of Common Stock<\/p>\n
_____________ shares of Common Stock issuable upon
\n exercise of outstanding options or warrants<\/p>\n
[Signature Page to Irrevocable Proxy]<\/p>\n
-2-<\/p>\n
EXHIBIT C TO AGREEMENT
\n AND PLAN OF MERGER AND
\n SHARE EXCHANGE AGREEMENT<\/p>\n
[DATE]<\/p>\n
NM Acquisition Corp.<\/p>\n
___________________
\n___________________<\/p>\n
Ladies and Gentlemen:<\/p>\n
The undersigned has been advised that as of the date of this letter
\nagreement the undersigned may be deemed to be an “affiliate” of Concentric
\nNetwork Corporation, a Delaware corporation (the “Company”), as such term is (i)
\ndefined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
\nregulations (the “Rules and Regulations”) of the Securities and Exchange
\nCommission (the “Commission”) under the Securities Act of 1933, as amended (the
\n“Act”), or (ii) used in and for purposes of Accounting Series Releases 130 and
\n135, as amended, of the Commission. Pursuant to the terms of the Agreement and
\nPlan of Merger and Share Exchange Agreement, dated as of January 9, 2000 (the
\n“Merger Agreement”), by and among NEXTLINK Communications, Inc., a Delaware
\ncorporation (“NEXTLINK”), Eagle River Investments, LLC, a Washington limited
\nliability company and NM Acquisition Corp. (“Newco”), a Delaware corporation,
\nthe Company and NEXTLINK will merge into Newco, or alternatively the Company
\nwill merge into NEXTLINK (collectively, the “Merger”).<\/p>\n
Pursuant to the Merger, the undersigned will receive shares of Class A
\nCommon Stock, par value $.02 per share, of Newco (“Newco Common Stock”) or
\nshares of Class A Common Stock, par value $.02 per share, of NEXTLINK (“NEXTLINK
\nCommon Stock” and, together with Newco Common Stock “Merger Stock”) in exchange
\nfor shares of Common Stock, par value $0.001 per share of Concentric.<\/p>\n
The undersigned represents, warrants and covenants to Newco and NEXTLINK
\nthat, with respect to all Merger Stock received by the undersigned as a result
\nof the Merger:<\/p>\n
1. Neither the undersigned nor its “affiliates,” as defined for purposes
\nof Rule 145 under the Act, shall knowingly make any sale, transfer or other
\ndisposition of Merger Stock in violation of the Act or the Rules and
\nRegulations.<\/p>\n
2. The undersigned has carefully read this letter and the Merger
\nAgreement and has had an opportunity to discuss the<\/p>\n
requirements of such documents and any other applicable limitations upon ability
\nof the undersigned to sell, transfer or otherwise dispose of Merger Stock with
\nits own counsel or counsel for the Company.<\/p>\n
3. The undersigned has been advised that the issuance of Merger Stock to
\nthe undersigned pursuant to the Merger has been registered with the Commission
\nunder the Act on a Registration Statement on Form S-4. However, the undersigned
\nhas also been advised that, since at the time the Merger was submitted for a
\nvote of the shareholders of the Company, the undersigned may be deemed to have
\nbeen an affiliate of the Company and the distribution by the undersigned of
\nMerger Stock has not been registered under the Act, the undersigned and its
\naffiliates may not offer to sell, sell, transfer or otherwise dispose of Merger
\nStock issued to the undersigned in the Merger unless (i) such offer, sale,
\ntransfer or other disposition has been registered under the Act or is made in
\nconformity with Rule 145 under the Act, or (ii) in the opinion of counsel
\nreasonably acceptable to Newco, or pursuant to a “no action” letter obtained by
\nthe undersigned from the staff of the Commission, such sale, transfer or other
\ndisposition is otherwise exempt from registration under the Act.<\/p>\n
4. The undersigned understands that neither Newco nor NEXTLINK is under
\nany obligation to register under the Act the sale, transfer or other disposition
\nof Merger Stock by or on behalf of the undersigned and its affiliates or to take
\nany other action necessary in order to make compliance with an exemption from
\nsuch registration available.<\/p>\n
5. The undersigned understands that Newco or NEXTLINK, as applicable,
\nwill give stop transfer instructions to Newco’s or NEXTLINK’s transfer agent, as
\napplicable, with respect to the undersigned’s Merger Stock, that the Merger
\nStock issued to the undersigned and its affiliates will all be in certificate
\nform and that the certificates therefor, or any substitutions therefor, will
\nbear a legend substantially to the following effect:<\/p>\n
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
\n REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
\n AND EITHER ARE HELD BY A PERSON TO WHICH RULE 145 UNDER THE ACT
\n APPLIES, OR WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH SECURITIES
\n IN A TRANSACTION TO WHICH RULE 145 UNDER THE ACT APPLIES. THE
\n SECURITIES HAVE NOT BEEN ACQUIRED BY THE HOLDER WITH A VIEW TO, OR FOR
\n RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING
\n OF THE ACT AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
\n EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN
\n ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
\n ACT.”<\/p>\n
-2-<\/p>\n
6. The undersigned also understands that unless the transfer by the
\nundersigned and its affiliates of its Merger Stock has been registered under the
\nAct or is a sale made in conformity with the Rules promulgated thereunder, Newco
\nand NEXTLINK reserve the right to place a legend substantially as set forth in
\nparagraph 5 above on the certificates issued to any transferee.<\/p>\n
It is understood and agreed that the legend set forth in paragraph 5 above
\nshall be removed by delivery of substitute certificates without such legend if
\nsuch legend is not required for the purposes of the Act. It is understood and
\nagreed that such legend and the stop orders referred to above will be removed if
\n(i) the securities evidenced by such certificates are registered under the Act,
\n(ii) one year shall have elapsed from the date the undersigned acquired Merger
\nStock received in the Merger and the provisions of Rule 145(d)(2) are then
\navailable to the undersigned, (iii) two years shall have elapsed from the date
\nthe undersigned acquired Merger Stock received in the Merger and the provisions
\nof Rule 145(d)(3) are then available to the undersigned, or (iv) Newco or
\nNEXTLINK, as applicable, received either an opinion of counsel, reasonably
\nsatisfactory to Newco or NEXTLINK, as applicable, or a “no action” letter
\nobtained by the undersigned from the staff of the Commission to the effect that
\nthe sale, transfer or disposition of the securities evidenced by such
\ncertificates is exempt from registration under the Act.<\/p>\n
[Signature page follows]<\/p>\n
-3-<\/p>\n
Execution of this letter should not be considered an admission on the part
\nof the undersigned that the undersigned or any of its affiliates is an
\n“affiliate” of the Company as described in the first paragraph of this letter.<\/p>\n
Sincerely,<\/p>\n
___________________________________<\/p>\n
Accepted this ___th day of<\/p>\n
_____________<\/p>\n
[NM ACQUISITION CORP.<\/p>\n
By:__________________________
\n Name:
\n Title: ]<\/p>\n
[NEXTLINK COMMUNICATIONS, INC.<\/p>\n
By:__________________________
\n Name:
\n Title: ]<\/p>\n
-4-<\/p>\n
EXHIBIT D TO AGREEMENT
\n AND PLAN OF MERGER
\n AND SHARE EXCHANGE AGREEMENT<\/p>\n
REGISTRATION RIGHTS AGREEMENT
\n —————————–<\/p>\n
REGISTRATION RIGHTS AGREEMENT, dated as of _____________, 2000,
\nbetween [NM Acquisition Corp.] [NEXTLINK Communications, Inc., a Delaware
\ncorporation] (the “Company”), and Eagle River Investments, L.L.C., a limited
\nliability company organized under the laws of the State of Washington (the
\n“Stockholder”).<\/p>\n
RECITALS
\n ——–<\/p>\n
A. The Company and the Stockholder each own fifty percent of the
\noutstanding limited liability company interests in LHP, L.L.C., a limited
\nliability company organized under the laws of the State of Washington (“LHP”);
\nand LHP owns one hundred percent of the outstanding limited liability company
\ninterests in INTERNEXT, L.L.C., a limited liability company organized under the
\nlaws of the State of Delaware.<\/p>\n
B. The Company has entered into an Agreement and Plan of Merger and
\nShare Exchange Agreement, dated January 9, 2000 (the “Transaction Agreement”),
\nby and among the Company, NM Acquisition Corp. (“Newco”), the Stockholder, and
\nConcentric Network Corporation (“Concentric”) providing for, among certain other
\ntransactions, the terms and conditions on which the Company (through Newco, as
\nits successor corporation) is to purchase from the Stockholder, and the
\nStockholder is to sell to the Company, all of the Stockholder’s right, title and
\ninterest in LHP in exchange for the issuance to the Stockholder of a certain
\nnumber of shares of Class A common stock of the Company, par value $.02 per
\nshare (the “Class A Common Stock” and , together with all other classes of
\ncommon stock of the Company, the “Common Stock”), and setting forth certain
\nalternative transaction structures through which the Stockholder’s right, title
\nand interest in LHP may be acquired by the Company or by Newco as a successor to
\nthe Company.<\/p>\n
C. In order to induce the Stockholder to enter into the Transaction
\nAgreement, the Company has agreed to grant the Stockholder certain registration
\nrights regarding the shares of Class A Common Stock to be received by the
\nStockholder pursuant to the Transaction Agreement, all upon the terms and
\nconditions set forth herein.<\/p>\n
D. Capitalized terms used in this Agreement have the meanings given
\nto them in Section 3.<\/p>\n
NOW THEREFORE, for good and valuable consideration, the receipt and
\nsufficiency of which is hereby acknowledged, the parties hereto agree as
\nfollows:<\/p>\n
Section 1.<\/p>\n
Registration under the Securities Act.<\/p>\n
Section 1.1. Required Registrations. (a) Request. Upon the terms and
\n ———————- ——-
\nsubject to the conditions of this Agreement, at any time during the period
\nbeginning on the date hereof and ending on the second anniversary of the date
\nhereof (the “Registration Period”), upon the written request of the Stockholder
\n(in such capacity, the “Requesting Holder”) requesting that the Company effect
\nregistration under the Securities Act of all or a specified number of
\nRegistrable Securities (which request shall, subject to Section 1.1(g), also
\nspecify the intended method or methods of disposition thereof), the Company
\nshall use its reasonable best efforts to effect the registration under the
\nSecurities Act of the Registrable Securities that the Company has been so
\nrequested to register by the Requesting Holder, for disposition, according to
\nthe intended method or methods of disposition specified by the Requesting
\nHolder; subject to Section 1.1(g), provided that the Company shall not be
\nrequired to (i) effect more than two registrations pursuant to this Section 1.1;
\n(ii) effect a registration pursuant to this Section 1.1 if, within the 90 days
\nimmediately preceding the effective date of such registration, a registration
\npursuant to this Section 1.1 or a registration in which the Requesting Holder
\nwas entitled to participate (or would have been entitled to participate but for
\nthe provisions of Section 1.2(b)) pursuant to Section 1.2 has been effected; or,
\n(iii) effect a registration pursuant to this Section 1.1 for Registrable
\nSecurities having an estimated aggregate public offering price of less than $50
\nmillion.<\/p>\n
(a) Effective Registration Statement. A registration requested
\n ——————————–
\npursuant to this Section 1.1 shall not be deemed to be effected unless a
\nregistration statement with respect thereto becomes effective under the
\nSecurities Act and remains effective for a period of at least 120 days (or such
\nshorter period when all the Registrable Securities covered by such registration
\nstatement have been sold pursuant thereto).<\/p>\n
(b) Registration Statement Form. Registration statements filed under
\n —————————
\nthis Section 1.1 shall be on such form of the Commission as shall be selected by
\nthe Company and approved by the Requesting Holder (which approval shall not be
\nunreasonably withheld), and as shall permit the disposition of the subject
\nRegistrable Securities according to the intended method or methods of
\ndisposition specified by the Requesting Holder.<\/p>\n
(c) Expenses. The Company shall pay all Registration Expenses
\n ——–
\nincurred in connection with any registration requested pursuant to this Section
\n1.1; provided that the Requesting Holder shall pay all of such Registration
\nExpenses described in clause (g) of the definition of such term contained
\nherein, and shall pay its pro rata share of such Registration Expenses described
\nin<\/p>\n
-2-<\/p>\n
clause (h) of such definition on the basis of the number of shares sold.<\/p>\n
(d) Selection of Underwriters. If a registration pursuant to this Section
\n ————————-
\n1.1 involves an underwritten offering, the managing or lead underwriter or
\nunderwriters shall be selected by the Requesting Holder with the approval of the
\nCompany, which approval shall not be unreasonably withheld.<\/p>\n
(e) Priority in Requested Registrations. If a registration pursuant to
\n ———————————–
\nthis Section 1.1 involves an underwritten offering and the managing underwriter
\nadvises that the aggregate number of securities proposed to be included in such
\noffering should be reduced due to market conditions or otherwise, (i) the number
\n –
\nof securities included in such registration shall be limited to that number of
\nsecurities that the managing underwriter has so advised may be included in such
\noffering (the “Maximum Number”), (ii) if no securities other than Registrable
\n —
\nSecurities are proposed to be included in such registration, the Registrable
\nSecurities requested to be registered shall be included in such registration up
\nto the Maximum Number, and (iii) if securities other than Registrable Securities
\n —
\n(“Other Securities”) are proposed to be included in such registration, such
\nOther Securities shall be included in, and Registrable Securities requested to
\nbe registered shall be excluded from, such registration to the extent required
\nby the terms of any Specified Agreements.<\/p>\n
(f) Manner of Sale. So long as the Stockholder owns in excess of 2.5% of
\n ————–
\nthe fully diluted Common Stock (after giving effect to the exercise of all
\noutstanding options, warrants and other rights to purchase Common Stock whether
\nor not such options, warrants or other rights are then exercisable (the
\n“Threshold Amount”)), the Stockholder agrees that, except as provided in the
\nfollowing sentence or except with the written consent of the Company (which
\nconsent shall not be unreasonably withheld), the Stockholder shall sell or
\notherwise effectuate a distribution of Registrable Securities included in a
\nregistration effected pursuant to this Section 1.1 only (i) pursuant to one or
\n –
\nmore firm commitment underwritten public offerings, (ii) in one or more block
\n —
\ntrades, or (iii) pursuant to a staged sale in which a block of registered
\n —
\nsecurities is transferred to an independent trustee who is directed pursuant to
\nirrevocable instructions to sell a specified number of such shares over a
\nspecified period of time at a specified rate, notwithstanding the market price
\nlevel of the Company’s securities, provided that the number of such shares sold
\n ——–
\non any trading day shall not exceed 25,000. Notwithstanding anything to the
\ncontrary set forth in the preceding sentence, at any time while the Stockholder
\nowns an amount of Common Stock in excess of the Threshold Amount, the
\nStockholder shall have the right to effectuate a distribution of Registrable
\nSecurities included in a registration effected pursuant to this Section 1.1 in
\nany other manner, including pursuant to a shelf registration statement, if in
\nthe opinion of a nationally recognized investment banker selected by the Company<\/p>\n
-3-<\/p>\n
and the Stockholder, distributions of Registrable Securities made in the manner
\nproposed by the Stockholder would not adversely affect the market for the Common
\nStock. Nothing contained herein shall be deemed to impose any restriction on the
\ntransfer of any Common Stock by the Stockholder other than a restriction on the
\nmanner of sale of Registrable Securities included in a registration effected
\npursuant to this Section 1.1.<\/p>\n
Section 1.2. “Piggy-Back” Registration Rights. (a) Right to Participate.
\n ——————————- ——————–
\nIf the Company at any time proposes to register any of its securities under the
\nSecurities Act (other than by a registration on Form S-4 or S-8 or any successor
\nor similar forms or filed in connection with an exchange offer or any offering
\nof securities solely to the Company’s existing stockholders, and other than
\npursuant to Section 1.1), whether or not for sale for its own account, the
\nCompany shall give prompt written notice to the Stockholder of its intention to
\ndo so. Upon the terms and subject to the conditions of this Agreement, upon the
\nwritten request of the Stockholder (in such capacity, the “Participating
\nHolder”) made within 10 days after the delivery of any such notice by the
\nCompany (which request shall specify the number of Registrable Securities
\nproposed to be included in such registration and to be disposed of by the
\nParticipating Holder and the intended method or methods of such disposition),
\nthe Company shall use its reasonable best efforts to effect the registration
\nunder the Securities Act of all Registrable Securities that the Company has been
\nso requested to register by such Participating Holder. If, at any time after
\ngiving written notice of its intention to register any such securities and prior
\nto the effective date of the registration statement filed in connection with
\nsuch registration, the Company determines for any reason not to register or to
\ndelay registration of such securities, the Company may, at its election, give
\nwritten notice of such determination to the Participating Holder and, thereupon,
\n(i) in the case of a determination not to register, the Company need not
\n –
\nregister any Registrable Securities in connection with such registration,
\nwithout prejudice, however, to any rights of the Participating Holder to request
\nthat such registration be effected as a registration under Section 1.1, and (ii)
\n —
\nin the case of a determination to delay registering, the Company may delay
\nregistering any Registrable Securities for the same period as the delay in
\nregistering such other securities. No registration effected under this Section
\n1.2 shall relieve the Company of its obligation to effect any registration upon
\nrequest under Section 1.1.<\/p>\n
(b) Priority in Piggy-Back Registration Rights. If a registration
\n ——————————————
\npursuant to this Section 1.2 involves an underwritten offering and the managing
\nunderwriter advises that the aggregate number of securities proposed to be
\nincluded in such offering should be reduced due to market conditions or
\notherwise, the Company shall include in such registration, to the extent
\npermitted by the terms of the Specified Agreements, up to the number of the
\nfollowing securities that the Company is so <\/p>\n
-4-<\/p>\n
advised can be sold, in the following order of priority: (i) securities proposed
\n –
\nto be included by the Company, (ii) on a pro rata basis in accordance with the
\n —
\nnumber of securities proposed by the relevant Persons to be included in such
\nregistration, securities proposed to be included by any stockholder triggering
\nsuch piggy-back registration and Registrable Securities requested by the
\nParticipating Holder to be included pursuant to Section 1.2(a) and (iii) on a
\n —
\npro rata basis in accordance with the number of securities proposed by the
\nrelevant Persons to be included in such registration, other securities of the
\nCompany requested to be included by any other holder having the right to include
\nsecurities in such registration.<\/p>\n
(c) Expenses. All Registration Expenses incurred in connection with any
\n ——–
\nregistration requested pursuant to this Section 1.2 shall be borne by the
\nCompany (or such other Persons, other than the Participating Stockholder,
\nparticipating in such registration, if the applicable contract so provides),
\nprovided that the Participating Stockholder shall pay all of such Registration
\n——–
\nExpenses described in clause (g) of the definition of such term contained
\nherein, and shall pay its pro rata share of such Registration Expenses described
\nin clause (h) of such definition on the basis of the number of shares sold.<\/p>\n
(d) Selection of Underwriters. If an incidental registration pursuant to
\n ————————-
\nthis Section 1.2 involves an underwritten offering, the managing or lead
\nunderwriter or underwriters shall be selected by the Company with the approval
\nof the Participating Holder, which approval shall not be unreasonably withheld.<\/p>\n
Section 1.3. Registration Procedures. If and whenever the Company is
\n ———————–
\nrequired to use its reasonable best efforts to effect the registration of any
\nRegistrable Securities as provided in Sections 1.1 and 1.2, the Company shall as
\nexpeditiously as possible:<\/p>\n
(a) prepare and as soon thereafter as possible file with the Commission
\nthe requisite registration statement to effect such registration and thereafter
\nuse its reasonable best efforts to cause such registration statement to become
\neffective;<\/p>\n
(b) prepare and file with the Commission such amendments and supplements
\nto such registration statement and the prospectus used in connection therewith
\nas may be necessary to keep such registration statement effective for a period
\nof either (i) not less than 120 days (subject to extension pursuant to the last
\n –
\nparagraph of this Section 1.3) or, if such registration statement relates to an
\nunderwritten offering, such longer period as in the opinion of counsel for the
\nunderwriters a prospectus is required by law to be delivered in connection with
\nsales of securities by an underwriter or dealer; or (ii) such shorter period as
\n —
\nis required for the disposition of all of the Registrable Securities<\/p>\n
-5-<\/p>\n
covered by such registration statement in accordance with the methods of
\ndisposition intended by the Selling Stockholder set forth in such registration
\nstatement (but in any event not before the expiration of any longer period of
\neffectiveness required under the Securities Act), and to comply with the
\nprovisions of the Securities Act with respect to the disposition of all
\nRegistrable Securities covered by such registration statement until such time as
\nall of such securities have been disposed of in accordance with the methods of
\ndisposition intended by the Selling Stockholder set forth in such registration
\nstatement;<\/p>\n
(c) furnish to the Selling Stockholder such number of conformed copies of
\nsuch registration statement and of each such amendment and supplement thereto
\n(in each case including all exhibits), such number of copies of the prospectus
\ncontained in such registration statement (including each preliminary prospectus
\nand any summary prospectus) and any other prospectus filed under Rule 424 under
\nthe Securities Act, in conformity with the requirements of the Securities Act,
\nand such other documents incorporated by reference in such registration
\nstatement or prospectus, as the Selling Stockholder may reasonably request to
\nfacilitate the disposition of the Registrable Securities in accordance with the
\nSelling Stockholder’s intended method of disposition, but only during such time
\nas the Company shall be required under the provisions hereof to cause such
\nregistration statement to remain current;<\/p>\n
(d) use its reasonable best efforts to register or qualify Registrable
\nSecurities covered by such registration statement under such other securities or
\nblue sky laws of such jurisdictions in the United States as the Selling
\nStockholder shall reasonably request, to keep such registration or qualification
\nin effect for so long as such registration statement remains in effect, and to
\ntake any other action which may be reasonably necessary to enable the Selling
\nStockholder to consummate the disposition in such jurisdictions in the United
\nStates of such Registrable Securities owned by such seller, provided that the
\n ——–
\nCompany shall not for any such purpose be required to (i) qualify generally to
\n –
\ndo business as a foreign corporation in any jurisdiction where it would not
\notherwise be required to qualify but for the requirements of this subsection
\n(d), (ii) consent to general service of process in any such jurisdiction, (iii)
\n — —
\nsubject itself to taxation in any such jurisdiction or (iv) conform its
\n —
\ncapitalization or the composition of its assets at the time to the securities or
\nblue sky laws of such jurisdiction;<\/p>\n
(e) furnish to the Selling Stockholder a signed counterpart, addressed to
\nthe Selling Stockholder (and the underwriters, if any), of:<\/p>\n
(i) if such registration includes an underwritten public offering, an
\n opinion of counsel for the Company<\/p>\n
-6-<\/p>\n
dated the date of the closing under the underwriting agreement, and<\/p>\n
(ii) a “comfort” letter, dated the effective date of such registration
\n statement (and, if such registration includes an underwritten public
\n offering, dated the date of the closing under the underwriting agreement),
\n signed by the independent public accountants who have certified the
\n Company’s financial statements included in such registration statement,<\/p>\n
covering substantially the same matters with respect to such registration
\n statement (and the prospectus included therein) and, in the case of the
\n accountants’ letter, with respect to events subsequent to the date of such
\n financial statements, as are customarily covered in opinions of issuer’s
\n counsel and in accountants’ letters delivered to the underwriters in
\n underwritten public offerings of securities;<\/p>\n
(a) notify the Selling Stockholder, at any time when a prospectus relating
\nto such Registrable Securities is required to be delivered under the Securities
\nAct, upon discovery that, or upon the discovery of the happening of any event as
\na result of which, the prospectus included in such registration statement, as
\nthen in effect, includes an untrue statement of a material fact or omits to
\nstate any material fact required to be stated therein or necessary to make the
\nstatements therein not misleading in the light of the circumstances under which
\nthey were made, and at the request of the Selling Stockholder promptly prepare
\nand furnish to the Selling Stockholder a reasonable number of copies of a
\nsupplement to or an amendment of such prospectus as may be necessary so that, as
\nthereafter delivered to the purchasers of such Registrable Securities, such
\nprospectus shall not include an untrue statement of a material fact or omit to
\nstate a material fact required to be stated therein or necessary to make the
\nstatements therein not misleading in the light of the circumstances under which
\nthey were made;<\/p>\n
(b) otherwise use its reasonable best efforts to comply with all
\napplicable rules and regulations of the Commission, and make available to its
\nsecurity holders, as soon as reasonably practicable, an earnings statement
\ncovering a period of at least twelve months beginning after the effective date
\nof such registration statement, which earnings statement shall satisfy the
\nprovisions of Section 11(a) of the Securities Act; and<\/p>\n
(c) use its reasonable best efforts to cause all such Registrable
\nSecurities covered by such registration statement to be listed on a national
\nsecurities exchange (if such Registrable Securities are not already so listed),
\nand on each other securities exchange on which similar securities issued by the
\nCompany are then listed, if the listing of such Registrable Securities is then
\npermitted under the rules of such exchange.<\/p>\n
-7-<\/p>\n
The Company may require the Selling Stockholder to furnish the Company
\nin writing for inclusion in any registration statement such information
\nregarding the Selling Stockholder and the distribution of such Registrable
\nSecurities being sold as the Company may from time to time reasonably request.<\/p>\n
The Selling Stockholder agrees that upon receipt of any notice from
\nthe Company of the happening of any event of the kind described in Section
\n1.3(f), such Selling Stockholder shall forthwith discontinue its disposition of
\nRegistrable Securities pursuant to the registration statement relating to such
\nRegistrable Securities until the Selling Stockholder’s receipt of the copies of
\nthe supplemented or amended prospectus contemplated by Section 1.3(f) and, if so
\ndirected by the Company, such Selling Stockholder shall use its reasonable best
\nefforts to deliver to the Company all copies, other than permanent file copies
\nthen in the Selling Stockholder’s possession, of the prospectus relating to such
\nRegistrable Securities current at the time of receipt of such notice. If the
\nCompany shall give any such notice, the applicable time period mentioned in
\nSection 1.3(b) during which a registration statement is to remain effective
\nshall be extended by the number of days during the period from and including the
\ndate of the giving of such notice pursuant to Section 1.3(f), to and including
\nthe date when such Selling Stockholder shall have received the copies of the
\nsupplemented or amended prospectus contemplated by Section 1.3(f).<\/p>\n
Section 1.4. Delay of Filing or Sales. (a) The Company shall have the
\n ————————
\nright, upon giving notice to the Selling Stockholder of the exercise of such
\nright, to delay filing a registration statement or to require such Selling
\nStockholder not to sell any Registrable Securities pursuant to a registration
\nstatement for a period of 180 days from the date on which such notice is given,
\nor such shorter period of time as may be specified in such notice or in a
\nsubsequent notice delivered by the Company to such effect prior to or during the
\neffectiveness of the registration statement, if (i) the Company is engaged in
\n –
\nnegotiations with respect to, or has taken a substantial step to commence, or
\nthere otherwise is pending, any merger, acquisition, other form of business
\ncombination, divestiture, tender offer, financing or other similar transaction,
\nor there is an event or state of facts relating to the Company, in each case
\nwhich is material to the Company (any of the foregoing, a “Material Activity”),
\n(ii) such Material Activity would, in the opinion of counsel for the Company,
\n —
\nrequire disclosure so as to permit the Registrable Securities to be sold in
\ncompliance with law, and (iii) such disclosure would, in the reasonable judgment
\n —
\nof the Company, be adverse to its interests; provided that the Company may not
\n ——–
\nutilize this right more than once in any six-month period.<\/p>\n
(b) Company shall have no obligation to include in any notice contemplated
\nby Section 1.4(a) any reference to or<\/p>\n
-8-<\/p>\n
description of the facts based upon which the Company is delivering such notice.<\/p>\n
Section 1.5. Underwritten Offerings. (a) Required Underwritten Offerings.
\n ———————- ——————————-
\nIf requested by the underwriters of any underwritten offering of Registrable
\nSecurities pursuant to a registration requested under Section 1.1, the Company
\nshall enter into an underwriting agreement with such underwriters for such
\noffering. Such agreement shall be reasonably satisfactory in substance and form
\nto the Selling Stockholder, the Company and the underwriters and shall contain
\nrepresentations, warranties, indemnities and agreements as are customarily
\nprovided or entered into by an issuer in underwriting agreements of this type,
\nincluding indemnities for the benefit of the underwriters to the effect and to
\nthe extent provided to the Selling Stockholder in Section 1.6. The Selling
\nStockholder shall be a party to such underwriting agreement.<\/p>\n
(a) Piggy-Back Underwritten Offerings. If the Company at any time
\n ———————————
\nproposes to register any of its securities under the Securities Act as
\ncontemplated by Section 1.2 and such securities are to be distributed by or
\nthrough one or more underwriters, the Company shall, if requested by the Selling
\nStockholder pursuant to Section 1.2 and subject to the provisions of Section
\n1.2(b), use its reasonable best efforts to arrange for such underwriters to
\ninclude those Registrable Securities designated by the Selling Stockholder among
\nthe securities to be distributed by such underwriters. The Selling Stockholder
\nshall be a party to the underwriting agreement between the Company and such
\nunderwriters.<\/p>\n
(b) Holdback Agreements. The Stockholder agrees by becoming a holder of
\n ——————-
\nRegistrable Securities not to effect any public sale or distribution of any
\nequity securities of the Company, or any securities convertible into or
\nexchangeable or exercisable for such securities, including a sale pursuant to
\nRule 144 under the Securities Act (or any similar provision then in force),
\nduring the ten days before and the 180 days after any underwritten registration
\npursuant to Section 1.1 or 1.2 has become effective, except as part of such
\nunderwritten registration.<\/p>\n
Section 1.6. Indemnification. (a) Indemnification by the Company. In the
\n ————— ——————————
\nevent of any registration of any Registrable Securities of the Company under the
\nSecurities Act pursuant to Section 1.1 or 1.2, the Company shall, and hereby
\ndoes, indemnify and hold harmless the Selling Stockholder, its directors,
\nofficers, employees, agents and advisors, each underwriter in the offer or sale
\nof such securities, and each other Person, if any, who controls the Selling
\nStockholder or any such underwriter within the meaning of the Securities Act,
\nagainst any losses, claims, damages or liabilities, joint or several, to which
\neach such Person may become subject under the Securities Act or otherwise,
\ninsofar as such losses, claims, damages or liabilities <\/p>\n
-9-<\/p>\n
(or actions or proceedings, whether commenced or threatened, in respect thereof)
\narise out of or are based upon<\/p>\n
(i) any untrue statement or alleged untrue statement of any material
\n fact contained in any registration statement under which such securities
\n were registered under the Securities Act, any preliminary prospectus, final
\n prospectus or summary prospectus contained therein or used in connection
\n with the offering of securities covered thereby, or any amendment or
\n supplement thereto;<\/p>\n
(ii) any omission or alleged omission to state therein a material
\n fact required to be stated therein or necessary to make the statements
\n therein not misleading; or<\/p>\n
(iii) any violation or alleged violation by the Company of any law or
\n regulation applicable to the Company and relating to action or inaction
\n required of the Company with respect to such registration or the offer or
\n sale of Registrable Securities;<\/p>\n
and the Company will reimburse each such Person for any legal or any other
\nexpenses reasonably incurred by it in connection with investigating or defending
\nany such loss, claim, liability, action or proceeding; provided that the Company
\n ——–
\nshall not be liable in any such case to the extent that any such loss, claim,
\ndamage, liability (or action or proceeding in respect thereof) or expense arises
\nout of or is based upon an untrue statement or alleged untrue statement, or
\nomission or alleged omission, made in such registration statement, any such
\npreliminary prospectus, final prospectus, summary prospectus, amendment or
\nsupplement, in reliance upon and in conformity with written information prepared
\nand furnished to the Company by or on behalf of the Selling Stockholder or any
\nunderwriter specifically for use in the preparation thereof; provided, further,
\n ——– ——-
\nthat the Company shall not be liable to an underwriter in any such registration
\nor to any other Person who controls such underwriter within the meaning of the
\nSecurities Act, to the extent that any such loss, claim, damage, liability (or
\naction or proceeding in respect thereof) or expense arises out of such Person’s
\nfailure to send or give a copy of the final prospectus, as the same may be then
\nsupplemented or amended, to the Person asserting an untrue statement or alleged
\nuntrue statement or omission or alleged omission at or prior to the written
\nconfirmation of the sale of the securities to such Person if such statement or
\nomission was timely corrected in such final prospectus. Such indemnity shall
\nremain in full force and effect regardless of any investigation made by or on
\nbehalf of any such Person and shall survive the transfer of such securities by
\nsuch Person. The Company shall not be obligated to pay the fees and expenses of
\nmore than one counsel or firm of counsel for all parties indemnified in respect
\nof a claim for each jurisdiction in which such counsel is required unless a
\nconflict of interest exists between such <\/p>\n
-10-<\/p>\n
indemnified party and any other indemnified party in respect of such claim.<\/p>\n
(b) Indemnification by the Selling Stockholder. As a condition to
\n ——————————————
\nincluding any Registrable Securities held by the Selling Stockholder in any
\nregistration statement filed pursuant to Sections 1.1 or 1.2, the Company shall
\nhave received an undertaking reasonably satisfactory to it from the Selling
\nStockholder, to indemnify and hold harmless (in the same manner and to the same
\nextent as set forth in Section 1.6(a)) the Company, each director, officer,
\nemployee, agent and advisor of the Company; each underwriter in the offering or
\nsale of such securities; each other Person, if any, who controls the Company or
\nany such underwriter within the meaning of the Securities Act (other than the
\nSelling Stockholder); and each other Person who participates as a seller of
\nsecurities in such registration and each of its directors, officers, employees,
\nagents and advisors, and each other Person controlling such seller of securities
\nwithin the meaning of the Securities Act, with respect to any untrue statement
\nor alleged untrue statement in or omission or alleged omission from such
\nregistration statement, any preliminary prospectus, final prospectus or summary
\nprospectus contained therein, or any amendment or supplement thereto, if such
\nuntrue statement or alleged untrue statement or omission or alleged omission was
\nmade in reliance upon and in conformity with written information prepared and
\nfurnished to the Company by or on behalf of the Selling Stockholder specifically
\nfor use therein. Such indemnity shall remain in full force and effect,
\nregardless of any investigation made by or on behalf of the Company or any such
\ndirector, officer, employee, agent, advisor or controlling Person and shall
\nsurvive the transfer of such securities by the Selling Stockholder. The
\nindemnity provided by the Selling Stockholder under this Section 1.6(b) shall be
\nonly with respect to its own misstatements and omissions and not with respect to
\nthose of any other seller or prospective seller of securities, and not jointly
\nand severally, and shall be limited in amount to the net amount of proceeds
\nreceived by such Selling Stockholder from the sale of Registrable Securities
\npursuant to such registration statement.<\/p>\n
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
\n ———————-
\nparty of notice of the commencement of any action or proceeding involving a
\nclaim referred to in the preceding subsections of this Section 1.6, such
\nindemnified party will, if a claim in respect thereof is to be made against an
\nindemnifying party, give written notice to the latter of the commencement of
\nsuch action; provided that the failure of any indemnified party to give notice
\n ——–
\nas provided herein shall not relieve the indemnifying party of its obligations
\nunder this Section 1.6, except to the extent that the indemnifying party is
\nactually prejudiced by such failure to give notice. In case any such action is
\nbrought against an indemnified party, unless a conflict of interest between such
\nindemnified and indemnifying parties exists in respect of such claim, the
\nindemnifying party shall be <\/p>\n
-11-<\/p>\n
entitled to participate in and to assume the defense thereof, jointly with any
\nother indemnifying party similarly notified to the extent that it may wish, with
\ncounsel reasonably satisfactory to such indemnified party, and after notice from
\nthe indemnifying party to such indemnified party of its election so to assume
\nthe defense thereof, if the indemnifying party is entitled to do so hereunder,
\nthe indemnifying party shall not be liable to such indemnified party for any
\nlegal or other expenses subsequently incurred by the latter in connection with
\nthe defense thereof other than reasonable costs of investigation. No
\nindemnifying party shall, without the consent of the indemnified party, consent
\nto entry of any judgment or enter into any settlement which does not include as
\nan unconditional term thereof the giving by the claimant or plaintiff to such
\nindemnified party of a release from all liability in respect to such claim or
\nlitigation.<\/p>\n
(d) Contribution. If for any reason the indemnity set forth in the
\n ————
\npreceding subsections of this Section 1.6 is unavailable, or is insufficient to
\nhold harmless an indemnified party, other than by reason of the exceptions
\nprovided therein, then the indemnifying party shall contribute to the amount
\npaid or payable by the indemnified party as a result of such losses, claims,
\ndamages or liabilities in such proportion as is appropriate to reflect the
\nrelative fault of the indemnifying party on the one hand and the indemnified
\nparty on the other hand in connection with the offering of securities and the
\nstatements or omissions or alleged statements or omissions that resulted in such
\nloss, claim, damage, or liability, as well as any other relevant equitable
\nconsiderations. The relative fault of the indemnifying party and of the
\nindemnified party shall be determined by reference to, among other things,
\nwhether the untrue statement of a material fact or the omission to state a
\nmaterial fact relates to information supplied by the indemnifying party or by
\nthe indemnified party. No party shall be liable for contribution under this
\nSection 1.6(d) except to the extent and under such circumstances as such party
\nwould have been liable to indemnify under this Section 1.6 if such
\nindemnification were enforceable under applicable law.<\/p>\n
(e) Other Indemnification. Indemnification and contributions similar to
\n ———————
\nthose specified in the preceding subsections of this Section 1.6 (with
\nappropriate modifications) shall be given by the Company and the Stockholder
\nwith respect to any required registration or other qualification of securities
\nunder any federal, state or blue sky law or regulation of any Governmental
\nAuthority other than the Securities Act. The indemnification agreements
\ncontained in this Section 1.6 shall be in addition to any other rights to
\nindemnification or contribution that any indemnified party may have pursuant to
\nlaw or contract and shall remain operative and in full force and effect
\nregardless of any investigation made by or on behalf of any indemnified party
\nand shall survive the transfer of any of the Registrable Securities by the
\nStockholder.<\/p>\n
-12-<\/p>\n
(f) Payments. The indemnification or contribution required by this
\n ——–
\nSection 1.6 shall be made by periodic payments of the amount thereof during the
\ncourse of the investigation or defense, as and when bills are received or
\nexpense, loss, damage or liability is incurred, subject to refund if the party
\nreceiving such payments is subsequently found not to have been entitled thereto
\nhereunder.<\/p>\n
Section 1.7. Restriction on Transfer of Registration Rights. This
\nAgreement and the rights provided herein are personal to and for the benefit of
\nthe Stockholder only, and the same may not be transferred or assigned without
\nthe prior written consent of the Company.<\/p>\n
Section 1.8. Definitions. Capitalized terms, as used in this Agreement,
\n ———–
\nhave the following meanings:<\/p>\n
Commission means the Securities and Exchange Commission.
\n ———-<\/p>\n
Company has the meaning given to it in the Introduction.
\n ——-<\/p>\n
Exchange Act means The Securities Exchange Act of 1934, and the rules
\n ————
\nand regulations promulgated thereunder, all as the same shall be in effect at
\nthe time.<\/p>\n
Governmental Authority means any government, any political
\n ———————-
\nsubdivision, any governmental agency, bureau, department, board or commission,
\nany court or tribunal or any other governmental instrumentality, whether
\nfederal, state or local, domestic or foreign.<\/p>\n
Material Activity has the meaning given to it in Section 1.4.
\n —————–<\/p>\n
Participating Holder has the meaning given to it in Section 1.2(a).
\n ——————–<\/p>\n
Person means an individual, corporation, trust, joint venture,
\n ——
\nassociation, partnership or other entity, or any governmental or political
\nsubdivision or an agency or instrumentality thereof.<\/p>\n
Registration Expenses means all expenses incident to the Company’s
\n ———————
\nperformance of or compliance with Section 1, including, (a) all registration,
\nfiling and National Association of Securities Dealers fees, (b) all fees and
\nexpenses of complying with securities or blue sky laws, (c) all word processing,
\nduplicating and printing expenses, (d) messenger and delivery expenses, (e) the
\nfees and disbursements of counsel for the Company and of its independent public
\naccountants, including the expenses of any “comfort” letters or any special
\naudits required by or incident to such performance and compliance, <\/p>\n
-13-<\/p>\n
(f) any fees and disbursements of underwriters customarily paid by issuers or
\nsellers of securities, but excluding items described in clause (h) below, (g)
\nfees and disbursements of counsel to the Selling Stockholder, and (h)
\nunderwriting discounts or commissions and brokerage fees for the sale of
\nRegistrable Securities.<\/p>\n
Registrable Securities means (a) the shares of Class A Common Stock
\n ———————- –
\nissued by the Company to the Stockholder pursuant to the Transaction Agreement
\nand (b) any shares of Class A Common Stock or other class of common stock of the
\nCompany issued in respect of the securities in the preceding clause by way of a
\nstock dividend, stock split or reverse stock split, or in connection with a
\ncombination of shares, recapitalization, merger, consolidation or otherwise. As
\nto any particular Registrable Securities, such securities shall cease to be
\nRegistrable Securities when (i) a registration statement with respect to the
\n –
\nsale of such securities shall have become effective under the Securities Act and
\nsuch securities shall have been disposed of in accordance with such registration
\nstatement, (ii) they shall have been sold to the public pursuant to Rule 144
\n —
\nunder the Securities Act, (iii) they shall have been otherwise transferred, or
\n —
\n(iv) they shall have ceased to be outstanding.
\n —<\/p>\n
Registration Period has the meaning given to it in Section 1.1(a).
\n ——————-<\/p>\n
Requesting Holder has the meaning given to it in Section 1.1(a).
\n —————–<\/p>\n
Securities Act means the Securities Act of 1933, and the rules and
\n ————–
\nregulations promulgated thereunder, all as the same shall be in effect at the
\ntime.<\/p>\n
Selling Stockholder means a Requesting Holder or Participating Holder.
\n ——————-<\/p>\n
Specified Agreements means these agreements listed on Schedule A
\n ——————–
\nhereto.<\/p>\n
Stockholder has the meaning given to it in the Introduction.
\n ———–<\/p>\n
Section 2.<\/p>\n
Miscellaneous.
\n ————- <\/p>\n
Section 2.1. Termination. This Agreement shall terminate, except for the
\n ———–
\nprovisions of Section 1.6, which shall survive any such termination, upon the
\ntermination of the Registration Period; provided that if the Selling Stockholder
\n ——–
\nhas made a request for registration pursuant to Section 1.1 or 1.2 prior to the
\ntermination of the Registration Period and all obligations with respect to such
\nregistration set forth in this Agreement <\/p>\n
-14-<\/p>\n
have not been fulfilled or satisfied (including for the payment of Registration
\nExpenses or pursuant to Section 1.3), this Agreement shall survive until the
\nsatisfaction or fulfillment of all such obligations with respect thereto.<\/p>\n
Section 2.2. Notices. All notices, consents, requests, instructions,
\napprovals and other communications provided for in, or in connection with, this
\nAgreement shall be in writing and shall be deemed validly given upon personal
\ndelivery or one day after being sent by overnight courier service or by telecopy
\n(so long as for notices or other communications sent by telecopy, the
\ntransmitting telecopy machine records electronic confirmation of the due
\ntransmission of the notice), at the following address or telecopy number, or at
\nsuch other address or telecopy number as a party may designate to the other
\nparties:<\/p>\n
If to the Company, to:<\/p>\n
NEXTLINK Communications, Inc.
\n 1505 Farm Credit Drive
\n McLean, Virginia 22102
\n Telecopy No. (703) 762-7581
\n Attn: Gary Begeman, Esq.<\/p>\n
With a copy to:<\/p>\n
Willkie Farr & Gallagher
\n 787 Seventh Avenue
\n New York, New York 10019-6099
\n Telecopy No. (212) 728-8111
\n Attention: Bruce R. Kraus, Esq.<\/p>\n
If to the Stockholder, to:<\/p>\n
Eagle River Investments, L.L.C.
\n 2300 Carillon Point
\n Kirkland, Washington 98033<\/p>\n
Telecopy: (425) 828-8061
\n Attention: C. James Judson, Esq.<\/p>\n
Section 2.3. Choice of Forum. Each of the parties hereby irrevocably
\n —————
\nsubmits to the exclusive jurisdiction of the courts of the State of New York and
\nthe Federal courts of the United States of America located in the State, City,
\nand County of New York solely in respect of the interpretation and enforcement
\nof the provisions of this Agreement and of the documents referred to in this
\nAgreement, and in respect of the transactions contemplated hereby and thereby,
\nand hereby waives, and agrees not to assert, as a defense in any action, suit,
\nor proceeding for the interpretation or enforcement hereof or of any such
\ndocument, that it is not subject thereto or that such action, suit, or
\nproceeding may not be brought or is not maintainable in said courts or that the
\nvenue thereof may not be appropriate or <\/p>\n
-15-<\/p>\n
that this Agreement or any such document may not be enforced in or by such
\ncourts, and the parties hereto irrevocably agree that all claims with respect to
\nsuch action or proceeding shall be heard and determined in such a court. Each of
\nthe parties hereby consents to and grants any such court jurisdiction over the
\nperson of such parties and over the subject matter of any such dispute and
\nagrees that mailing of process or other papers in connection with any such
\naction or proceeding in the manner provided in Section 4.2 in such other manner
\nas may be permitted by law, shall be valid and sufficient service thereof.<\/p>\n
Section 2.4. Amendments; Waivers, etc. (a) Neither this Agreement nor
\n ————————
\nany term hereof may be amended, waived, discharged or terminated other than by
\nan instrument in writing, signed by the party against which enforcement of such
\namendment, discharge, waiver or termination is sought.<\/p>\n
(b) No failure or delay by any party in exercising any right, power or
\nprivilege under this Agreement shall operate as a waiver thereof nor shall any
\nsingle or partial exercise thereof preclude any other or further exercise
\nthereof or the exercise of any other right, power or privilege. The rights and
\nremedies provided herein shall be cumulative and not exclusive of any rights or
\nremedies provided by law.<\/p>\n
Section 2.5. Severability. If any provision of this Agreement is held to
\n ————
\nbe invalid or unenforceable for any reason, it shall be adjusted rather than
\nvoided, if possible, in order to achieve the intent of the parties hereto to the
\nmaximum extent possible. In any event, the invalidity or unenforceability of any
\nprovision of this Agreement in any jurisdiction shall not affect the validity or
\nenforceability of the remainder of this Agreement in that jurisdiction or the
\nvalidity or enforceability of this Agreement, including that provision, in any
\nother jurisdiction.<\/p>\n
Section 2.6. Section Headings. The article and section headings of this
\n —————-
\nAgreement are for convenience of reference only and are not to be considered in
\nconstruing this Agreement.<\/p>\n
Section 2.7. Integration. This Agreement constitutes the full and entire
\n ———–
\nunderstanding and agreement of the parties and supersede any and all prior
\nagreements, arrangements and understandings relating to the subject matters
\nhereof and thereof.<\/p>\n
Section 2.8. Counterparts. This Agreement may be executed in any number
\n ————
\nof counterparts, each of which shall be deemed an original and all of which
\nshall together constitute one and the same instrument.<\/p>\n
Section 2.9. Specific Performance. In the event of a breach or a
\n ——————–
\nthreatened breach by any party to this Agreement of its obligations under this
\nAgreement, any party injured or to be <\/p>\n
-16-<\/p>\n
injured by such breach will be entitled to specific performance of its rights
\nunder this Agreement or to injunctive relief, in addition to being entitled to
\nexercise all rights provided in this Agreement and granted by law. The parties
\nagree that the provisions of this Agreement shall be specifically enforceable,
\nit being agreed by the parties that the remedy at law, including monetary
\ndamages, for objection in any action for specific performance or injunctive
\nrelief that a remedy at law would be adequate is waived.<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
\nof the date first above written.<\/p>\n
[NEXTLINK COMMUNICATIONS, INC.]<\/p>\n
By: ______________________________________
\n Name:
\n Title:<\/p>\n
[NM ACQUISITION CORP.]<\/p>\n
By: ______________________________________
\n Name:
\n Title:<\/p>\n
EAGLE RIVER INVESTMENTS, L.L.C.<\/p>\n
By: ______________________________________
\n Name:
\n Title:<\/p>\n
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