THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME
ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR AN EXEMPTION FROM SUCH REGISTRATION AND
QUALIFICATION IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
OFFERED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is entered into as of
February 20, 2002 between Motorola, Inc., a Delaware corporation (the
"PURCHASER"), and Next Level Communications, Inc., a Delaware corporation (the
"COMPANY").
Whereas the Company designs and markets broadband communications equipment
that enables telephone companies and other communications service providers to
cost-effectively deliver a full suite of voice, high-speed data and digital
video services over the existing copper telephone wire infrastructure, as
described in the Company's Annual Report on Form 10-K for the period ending
December 31, 2000 filed on March 19, 2001, and the other documents of the
Company on file with the United States Securities and Exchange Commission
(together, the "SEC DOCUMENTS"); and
Whereas the Company desires to sell to the Purchaser, and the Purchaser
desires to acquire: (i) shares of the Company's duly authorized Series A
Convertible Preferred Stock (the "SERIES A PREFERRED") and (ii) warrants to
purchase shares of common stock, par value $0.01 per share, of the Company (the
"COMMON STOCK"), pursuant to an exemption from registration under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), provided by
Rule 506 of Regulation D promulgated thereunder ("REGULATION D").
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree as follows:
SECTION 1.
ISSUANCE OF THE SHARES AND THE WARRANTS.
1.1 PURCHASE AND SALE OF SECURITIES; THE CLOSING. In reliance upon the
representations of the Company contained in SECTION 1.2 and the representations
of the Purchaser contained in SECTION 1.3, and subject to the terms and
conditions described herein, the Company shall sell to the Purchaser and the
Purchaser shall purchase from the Company: (i) 6,912,442 shares of Series A
Preferred (the "SHARES"), at a purchase price per share of $4.34; and (ii) (A) a
warrant to purchase 3,456,221 shares of Common Stock at an exercise price per
share equal to $2.17, and upon other terms as provided in the form attached
hereto as EXHIBIT A, and (B) a warrant to purchase 3,456,221 shares of Common
Stock at an exercise price per share equal to
$2.60, and upon other terms as provided in the form attached hereto as EXHIBIT A
(the warrants described in this clause (ii), the "WARRANTS"). (The Shares, the
Warrants and the Common Stock underlying the Shares and the Warrants are
referred to herein collectively as the "SECURITIES"). The Shares and the
Warrants shall be sold to the Purchaser in consideration of the payment by the
Purchaser to the Company of Thirty Million United States Dollars (US$30,000,000)
(the "PURCHASE PRICE"). The Shares shall be convertible into Common Stock at an
initial conversion ratio of two shares of Common Stock for each Share (as
further provided in the Certificate of Designation, Rights and Preferences of
the Series A Convertible Preferred Stock in the form attached hereto as EXHIBIT
B (the "CERTIFICATE")). The closing (the "CLOSING") of the purchase and sale of
the Securities shall be held as of 10:00 a.m., local time on February 20, 2002
(the "CLOSING DATE"), at the Los Angeles offices of Xxxxxx & Xxxxxx, counsel to
the Purchaser, or at such other time or place or on such other date as the
parties hereto may mutually agree.
On the Closing Date, the Purchaser will deliver to the Company immediately
available funds in the amount of the Purchase Price by wire transfer to such
Company account as is designated by the Company in writing. On the Closing Date,
the Company will deliver to the Purchaser executed Warrants, certificates
representing the Shares in proper legal form and a registration rights agreement
with respect to the Common Stock underlying the Shares and the Warrants in the
form attached hereto as EXHIBIT C (the "REGISTRATION RIGHTS AGREEMENT").
1.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Purchaser that on the date
hereof and as of the Closing Date:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is duly qualified
as a foreign corporation in each jurisdiction in which the character of the
properties owned or held under lease by it or the nature of the business
transacted by it requires such qualification and in which the failure so to
qualify would (x) adversely affect the legality, validity or enforceability of
this Agreement or the related transaction documents, (y) have or result in a
material adverse effect on the results of operations, assets or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole,
or (z) adversely impair the Company's ability to perform fully on a timely basis
its obligations under this Agreement or any of the related transaction documents
(any of (x), (y) or (z), a "MATERIAL ADVERSE EFFECT"). For purposes of this
Agreement, Material Adverse Effect will not include general economic and
industry conditions. The Company has all requisite power to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement and all other documents and agreements contemplated hereby and
thereby, and to perform the provisions hereof and thereof and to consummate the
transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of this Agreement and all
other documents and agreements contemplated hereby to be executed, delivered and
performed by the Company, and the consummation of the transactions contemplated
hereby or thereby, have been duly authorized and approved by the Company. This
Agreement and all other documents and agreements contemplated hereby to be
executed and delivered by the Company have each been duly authorized, executed
and delivered by, and each is the valid and binding obligation of, the
2
Company, enforceable against it in accordance with its terms, except as may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws or by legal or equitable principles relating to or limiting
creditors' rights generally.
(c) The authorized capital stock of the Company is 400,000,000 shares
of Common Stock, par value $.01 per share, of which approximately 86,000,000
shares are issued and outstanding as of the date hereof; 70,000,000 shares of
Class B Non-Voting Common Stock, par value $.01 per share, none of which are
issued and outstanding; and 10,000,000 shares of preferred stock, par value $.01
per share of which none will be issued and outstanding immediately prior to the
close and of which 9,000,000 shares have been designated as Series A Preferred.
The Shares will, when issued, be duly and validly issued, fully paid and
nonassessable; the Common Stock underlying the Shares will, when issued upon
conversion, be duly and validly issued, fully paid and nonassessable; and the
Common Stock underlying the Warrants will, when issued upon exercise, be duly
and validly issued, fully paid and nonassessable. As of the Closing Date, except
as disclosed in the SEC Documents and except, with respect to clause (i), the
stock options issued pursuant to existing stock option plans that have been
previously disclosed in writing to the Purchaser, (i) the Company will not have
outstanding any stock or securities convertible or exchangeable for any shares
of its capital stock other than the Warrants and will not have outstanding any
rights or options to subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its capital stock, other than
the Warrants; (ii) the Company will not be subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock, except with respect to the Series A Preferred Stock; (iii) there
are no statutory or contractual stockholders' preemptive rights or other similar
rights with respect to the issuance of the Warrants hereunder; and (iv) there
are no agreements among the Company's stockholders with respect to the voting or
transfer of the company's capital stock. The Company will use the proceeds from
the sale of the Securities to finance current operations and not to make any
payments or distributions to debt or equity holders, in their capacity as such,
other than to the Purchaser.
(d) The consummation of the transactions contemplated by this
Agreement and the performance of the terms and provisions of this Agreement and
the other documents and agreements contemplated hereby or thereby will not: (i)
contravene, result in any breach of, or constitute a default under any
indenture, mortgage, deed of trust, bank loan or credit agreement, corporate
charter, bylaws or other material agreement or instrument to which the Company
is a party or by which the Company or any of its properties is bound; (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order of any court, arbitrator or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (collectively, "GOVERNMENTAL PERSON")
applicable to the Company; (iii) violate any material provision of any statute
or other rule or regulation of any Governmental Person applicable to the
Company; (iv) violate or conflict with the terms of any "lockup" or similar
provision of any underwriting or similar agreement to which the Company or its
subsidiaries is a party; and (v) result in the creation or imposition of any
lien, claim or other encumbrance upon any of the assets of the Company.
(e) No consent, approval or authorization of, or registration, filing
or declaration with, any person or entity not obtained as of the Closing Date is
required for the
3
transfer, sale or issuance of the Securities or the valid delivery of the
Securities or for the performance by the Company of this Agreement and the other
documents and agreements contemplated hereby, other than the filings,
registrations or qualifications under securities laws or that may be required to
be made or obtained in connection with the offers, transfer, sale or delivery of
the Securities or any interest therein. Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf has offered or will
offer or sell the Securities in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act.
(f) Upon issuance (including payment of the purchase or exercise price
therefor), the Purchaser shall acquire good and marketable title to the
Securities free and clear of all covenants, conditions, restrictions, taxes,
security interests, liens, pledges, charges, encumbrances, rights of first
refusal, options and adverse claims or rights of any kind whatsoever arising
through the Company or pursuant to any agreement entered into by the Company.
(g) The Securities have been duly and validly authorized will not
subject the holders thereof to personal liability solely by reason of being such
holders.
(h) There is no pending or, to the actual knowledge of the Company,
threatened action, suit, proceeding or investigation before any Governmental
Person having jurisdiction over the Company that would or (i) adversely affect
the Company's execution or performance under this Agreement or the Warrants or
(ii) except as set forth in the SEC Documents, materially adversely affect the
results of the operations of the Company. Since the date of the latest audited
financial statements included in the SEC Documents, except as specifically
disclosed in the SEC Documents or public earnings announcements as of the date
of this Agreement, (a) there has been no event, occurrence or development that
has or that is reasonably likely to result in a Material Adverse Effect, (b) the
Company has not incurred any liabilities (contingent or otherwise) other than
(x) liabilities incurred in the ordinary course of business consistent with past
practice and (y) liabilities not required to be reflected in the Company's
financial statements pursuant to United States generally accepted accounting
principles or required to be disclosed in filings made with the Securities and
Exchange Commission, (c) the Company has not altered its method of accounting or
the identity of its auditors, (d) the Company has not declared or made any
payment or distribution of cash or other property to its stockholders or
officers or directors (other than in compliance with existing Company stock
option plans) with respect to its capital stock, or purchased, redeemed (or made
any agreements to purchase or redeem) any shares of its capital stock. The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any bankruptcy law nor does the Company
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.
(i) The SEC Documents consisting solely of the Company's Annual Report
on Form 10-K for the period ending December 31, 2000 and all filings of the
Company with the Securities and Exchange Commission made thereafter (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, as the case may be, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact
4
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(j) No broker's or finder's or placement fee or commission will be
payable to any broker or agent engaged by the Company or any of its officers,
directors or agents with respect to the issue of the Securities or the
transactions contemplated by this Agreement. The Company agrees to indemnify the
Purchaser and its agents and hold them harmless from and against any claim,
demand or liability for broker's or finder's or placement fees or similar
commissions, whether or not payable by the company, alleged to have been
incurred in connection with such transactions, other than any broker's or
finder's fees payable to persons engaged by the Purchaser without the knowledge
of the Company.
(k) All representations and warranties of the Company set forth in
this Agreement, the Warrants and the Registration Rights Agreement are true and
correct and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
1.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
The Purchaser represents, warrants and covenants to the Company that on the
date hereof, as of the Closing Date and as of the date of any conversion of the
Shares, exercise of the Warrants or any transfer of the Securities by it:
(a) The Purchaser has all requisite power to execute and deliver this
Agreement and any Securities exercised or converted, and all other documents and
agreements contemplated hereby and thereby, and to perform the provisions hereof
and thereof and to consummate the transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of this Agreement and any
Securities exercised or converted, and all other documents and agreements
contemplated hereby and thereby, and the consummation of the transactions
contemplated hereby or thereby, have been and will be prior to such exercise or
conversion duly authorized and approved by the Purchaser. This Agreement, and
all other documents and agreements contemplated hereby, including any Securities
exercised or converted, have each been, or will be upon exercise or conversion,
duly authorized, executed and delivered by, and each is the valid and binding
obligation of, the Purchaser enforceable against the Purchaser in accordance
with its terms, except as may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or by legal or
equitable principles relating to or limiting creditors' rights generally.
(c) The Purchaser is an "accredited investor" within the meaning of
Regulation D under the Securities Act, and is acquiring the Securities for
investment for its own account, and not with a view to distribution subject,
nevertheless, to any requirement of law that the disposition of its property
shall at all times be within its control. The Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of purchasing the Securities. The Purchaser is aware that
it may be required to
5
bear the economic risk of an investment in the Securities for an indefinite
period, and it is able to do so. The Purchaser acknowledges (i) that the
Securities being acquired by it are not being registered under the Securities
Act on the grounds that (A) the offer and sale of the Securities are exempt from
registration under Section 4(2) of the Securities Act as not involving any
public offering, or (B) such issuance is exempt from registration under Rule 506
of Regulation D and (ii) the Company's reliance on such exemptions is predicated
in part on the representations made to the Company by the Purchaser in this
SECTION 1.3.
(d) The Purchaser acknowledges and agrees that until one year after
the conclusion of the transactions contemplated hereby, an offer or sale of the
Securities within the United States may violate the registration requirements of
the Securities Act if such offer or sale is made otherwise than in accordance
with Rule 144 under the Securities Act or pursuant to an effective registration
statement under the Securities Act. The Purchaser acknowledges that the
exemption from registration provided by Rule 144 may not be available.
SECTION 2.
CONDITIONS TO OBLIGATIONS OF THE PURCHASER.
The Purchaser's obligation to purchase and pay for the Shares and the
Warrants on the Closing Date shall be subject to the satisfaction on or before
the Closing Date of the following conditions:
2.1 PROCEEDINGS SATISFACTORY. All proceedings taken on or prior to the
Closing Date in connection with the issuance of the Shares and the Warrants and
the consummation of the transactions contemplated hereby and all documents and
papers relating thereto shall be reasonably satisfactory in form and substance
to the Purchaser and its counsel. Without limiting the generality of the
foregoing, (i) all shareholder approvals required in connection with the Shares
and the Warrants shall have been obtained, (ii) all board of director approvals
required in connection with the Shares and the Warrants shall have been
obtained, including, without limitation, approval of an independent committee of
the Company's board of directors as advised by an independent financial advisor,
(iii) any required filings and approvals under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, shall have been made or obtained, as
applicable, (iv) any required filings and approvals under the NASD rule 4350, as
amended, shall have been made or obtained, as applicable, and (v) any required
filings and approvals with respect to any other third party shall have been made
or obtained, as applicable.
2.2 REPRESENTATIONS TRUE. All representations and warranties of the Company
contained herein shall be true and correct in all respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date and the Company shall have performed
in all respects all agreements on its part required to be performed under this
Agreement on or prior to the Closing Date.
2.3 THE PURCHASE BY THE PURCHASER PERMITTED BY APPLICABLE LAWS. The sale
and the payment for the Shares and the Warrants: (i) shall not be prohibited by
any applicable law or governmental regulation, release, interpretation or
opinion; (ii) shall not subject the Purchaser to
6
any penalty under or pursuant to any applicable law or governmental regulation;
and (iii) shall be permitted by the laws and regulations of the jurisdictions to
which the Purchaser is subject.
2.4 EXECUTION AND DELIVERY OF DOCUMENTS. The Purchaser shall have received,
duly executed and delivered and in form and substance reasonably satisfactory to
the Purchaser and its counsel: (i) certificates representing the Shares, (ii)
the Warrants, (iii) the Registration Rights Agreement, (iv) evidence that the
Certificate of Designation for the Series A Preferred has been filed on or prior
to the Closing Date with the Secretary of State of the State of Delaware, and
(v) such other documents and information as the Purchaser may reasonably
request.
2.5 NO MATERIAL ADVERSE EFFECT. Except as previously disclosed in the SEC
Documents or public earnings announcements as of the date of this Agreement,
since December 31, 2000, there has been no event, occurrence or development that
has or that is reasonably likely to result in a Material Adverse Effect. In
addition, no investigation, action, suit or proceeding shall have been
threatened or instituted against the Company or the Purchaser, which, in any
such case, in the judgment of the Purchaser, challenges, or might result in a
challenge to, the consummation of the transactions contemplated hereby, or which
claims, or might give rise to a claim for, damages against the Purchaser as a
result of the consummation of such transactions.
2.6 FEES AND EXPENSES. The Company shall have paid the fees and expenses of
the Purchaser described in Section 3.3 that have accrued as of the Closing Date.
SECTION 3.
COVENANTS.
The Company covenants and agrees that both before and after the issuance of
the Shares and the Warrants:
3.1 CORPORATE EXISTENCE. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect the Company's corporate
existence in accordance with the rights (charter and statutory), licenses and
franchises of the Company; PROVIDED, HOWEVER, that the foregoing shall not
restrict any merger involving the Company, whether or not it is the surviving
corporation.
3.2 COMPLIANCE WITH LAWS. The Company shall comply in all respects with all
applicable laws, statutes and regulations of any Governmental Person, a
violation of which would result in a Material Adverse Effect.
3.3 PAYMENT OF EXPENSES. In the event the transactions contemplated by this
Agreement are consummated, the Company shall promptly pay to the Purchaser all
reasonable costs and out-of-pocket expenses of the Purchaser, including without
limitation its reasonable attorneys' fees, incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement, the
Certificates representing the Shares, the Warrants and any other documents
related to the Purchaser's investment in the Company, and defense or enforcement
costs related thereto.
7
3.4 PUBLIC INFORMATION. The Company shall make available at all times
current public information with respect to the Company within the meaning of
Rule 144(c) under the Securities Act.
3.5 ENCUMBRANCES. The Company shall cause the Securities to be, upon
delivery, conversion or exercise, as the case may be, fully paid, nonassessable,
free of preemptive rights and free from all taxes, liens, charges, security
interests, rights of first refusal or other encumbrances arising through the
Company or pursuant to any agreement entered into by the Company.
3.6 AUTHORIZATION. The Company will have at all times authorized and
reserved for issuance, free from preemptive rights, a sufficient number of
shares of Common Stock to satisfy the conversion and exercise rights of the
Purchaser pursuant to the terms and conditions of the Certificate and the
Warrants and to satisfy the issuance of any other shares of Common Stock that
are reserved for issuance or that are issuable upon the exercise, conversion,
exchange or satisfaction of any outstanding securities or obligations or rights
of the Company. The Company shall not issue any of its Series A Preferred to any
person other than the Purchaser and shall not issue any other sub-Series of its
Series A Preferred to any other person if, after such issuance, the Purchaser
would not then hold a majority of the Series A Preferred.
SECTION 4.
TAXES.
The Company will pay all taxes (including interest and penalties), other
than taxes imposed on the income of the Purchaser, which may be payable in
respect of the execution and delivery of this Agreement or of the execution and
delivery (but not the subsequent transfer) of any of the Securities or of any
amendment of, or waiver or consent under or with respect to, this Agreement or
of any of the Securities and will save the Purchaser and all subsequent holders
of the Securities harmless against any loss or liability resulting from
nonpayment or delay in payment of any such tax.
SECTION 5.
MISCELLANEOUS.
5.1 PRIVATE PLACEMENT; LEGEND. The Purchaser acknowledges and agrees that
the Securities have not been registered under the Securities Act and, to the
extent they constitute securities subject to registration under Section 5 of the
Securities Act, may not be offered or sold unless registered under the
Securities Act, or an exemption from such registration requirements is
available. The certificates or instruments representing or evidencing the Shares
shall bear a legend in substantially the following form, unless counsel to the
Company shall have advised the Company that such legend is no longer needed:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO A SECURITIES PURCHASE AGREEMENT DATED
AS OF FEBRUARY 20, 2002, (THE "SECURITIES PURCHASE AGREEMENT") A COPY OF
WHICH IS ON FILE
8
AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED TO THE HOLDER
ON REQUEST TO THE SECRETARY OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE
SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAW.
The Warrants shall bear a legend in substantially the following form, unless
counsel to the Company shall have advised the Company that such legend is no
longer needed:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS. IN ADDITION TO THE OTHER RESTRICTIONS ON
TRANSFER SET FORTH HEREIN, NEITHER THIS WARRANT NOR THOSE SECURITIES, NOR
ANY INTEREST THEREIN, MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND SUCH LAWS THAT, IN THE OPINION OF COUNSEL FOR THE
WARRANTHOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO
COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
5.2 INDEMNIFICATION. The Company agrees to indemnify, defend and hold
harmless the Purchaser and its successors, assigns, subsidiaries, affiliates and
all of the officers, directors, employees, partners and agents (including
attorneys and accountants) of each of the aforementioned persons or entities,
and each of them, from and against any and all losses, claims, damages,
liabilities, expenses, demands, causes of action, suits, debts, obligations,
rights, promises, acts, agreements and damages of any kind or nature whatsoever,
whether at law or in equity, whether known or unknown, foreseen or unforeseen,
heretofore or hereafter arising out of, relating to, connected with or
incidental to the failure of any representation or warranty made by the Company
or in any other documents or agreements contemplated hereby or the failure of
the Company to comply in all material respects with the covenants contained in
this Agreement or in any other documents or agreements contemplated hereby.
5.3 RELIANCE ON REPRESENTATIONS. All representations, warranties, covenants
and agreements of the Company and the Purchaser herein shall be deemed to be
material and to have been relied upon by the Purchaser or the Company, as
applicable, and shall survive the execution and delivery of this Agreement and
of the Securities.
9
5.4 SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC. The respective
agreements, representations, warranties, indemnities and other statements made
by or on behalf of the Company and the Purchaser, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement and will
survive delivery of any payment for the Securities.
5.5 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of and be enforceable by the Company, the Purchaser and each of their
respective successors and assigns. The Purchaser shall be permitted to transfer
the Securities in accordance with their terms and the terms of this Agreement
and in accordance with applicable restrictions under applicable federal and
state securities laws.
5.6 NOTICES. All notices and other communications provided for in this
Agreement shall be in writing and delivered by registered or certified mail,
postage prepaid, or delivered by overnight courier (for next business day
delivery) or telecopied, addressed as set forth on the signature page hereof, or
at such other address as any of the parties hereto may hereafter designate by
notice to the other parties given in accordance with this Section. Any such
notice or communication shall be deemed to have been duly given on the seventh
day after being so mailed, the next business day after delivery by overnight
courier, when received when transmitted by telecopy with confirmation of
successful transmission or upon receipt when delivered personally.
5.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the parties
hereto agrees that it will be bound by its own telecopied signature and that it
accepts the telecopied signatures of the other parties to this Agreement. The
original signature pages shall be forwarded to the Company or its counsel and
the Company or its counsel will provide all of the parties hereto with a copy of
the entire Agreement.
5.8 AMENDMENTS. This Agreement may only be amended by a writing duly
executed by the parties hereto.
5.9 SEVERABILITY. If any term or provision of this Agreement or any other
document executed in connection herewith shall be determined to be illegal or
unenforceable, all other terms and provisions hereof and thereof shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.
5.10 GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER
JURISDICTION IS EXPRESSLY SELECTED IN A DOCUMENT OR PORTION THEREOF, THIS
AGREEMENT AND ALL AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO
OR THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
5.11 ENTIRE AGREEMENT. This Agreement (including its exhibits) contains the
entire Agreement of the parties hereto with respect to the transactions
contemplated hereby and
10
supersedes all previous oral and written, and all previous contemporaneous oral
negotiations, commitments and understandings.
5.12 FURTHER ASSURANCES. Each party agrees promptly to execute and deliver
such documents and to take such other acts as are reasonably necessary to
effectuate the purposes of this Agreement.
5.13 HEADINGS. The headings contained herein are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
5.14 WAIVER OF JURY TRIAL. EACH PARTY HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE SECURITIES OR ANY OTHER AGREEMENTS RELATING TO THE
SECURITIES OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, THE SECURITIES OR ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE SECURITIES.
5.15 THIRD-PARTY BENEFICIARY. Any permitted transferee of any part of the
Securities shall be a third party beneficiary of the Company's obligations under
this Agreement or the Warrants, as applicable. Such person shall have all the
rights of a third party beneficiary with respect to the enforcement against the
Company of any provision of this Agreement or the Warrants.
5.16 WAIVER OF CREDIT AGREEMENT SECTION 2.08. The Purchaser hereby waives
any requirement of Section 2.08 of the Credit Agreement between the Purchaser
and the Company dated as of May 16, 2001, as amended (the "Credit Agreement'),
that would require the Purchase Price or any portion thereof to be used
concurrently herewith or promptly thereafter to pay obligations as described in
such Section 2.08; provided, however, that the Purchaser reserves the right to
have the Purchase Price count toward the applicable limits of such Section 2.08
and be applied as provided therein upon any subsequent triggering event under
such Section 2.08. The preceding waiver shall be effective only in the specific
instance described herein and for the specific purpose for which it was given,
and nothing contained herein shall be construed to limit or bar any rights or
remedies of the Purchaser which it may have on any other occasion with respect
to the Credit Agreement, the terms and conditions of which shall remain in full
force and effect except as specifically set forth in this Section 5.16.
[SIGNATURE PAGE FOLLOWS]
11
In witness whereof, the parties hereto execute this Agreement as of the
date first set forth above.
THE PURCHASER:
MOTOROLA, INC.
By: ________________________________
Address for Notices:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Treasurer
Fax: (000) 000-0000
THE COMPANY:
NEXT LEVEL COMMUNICATIONS, INC.
By: ________________________________
Address for Notices:
Next Level Communications, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
12
EXHIBIT A
FORM OF WARRANTS
A-1
EXHIBIT B
CERTIFICATE OF DESIGNATION,
RIGHTS AND PREFERENCES
OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
OF
NEXT LEVEL COMMUNICATIONS, INC.
B-1
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
C-1
