Exhibit 10.1

EXECUTION VERSION

SPRINT NEXTEL CORPORATION

BOND PURCHASE AGREEMENT

October 15, 2012

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

             Page  

1.

 

THE BOND

     1     

1.1

 

Purchase and Sale

     1     

1.2

 

Maturity

     1     

1.3

 

Interest

     2     

1.4

 

Business Days

     2   

2.    

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     2     

2.1

 

Organization: Powers

     2     

2.2

 

Authorization; Enforceability

     3     

2.3

 

Governmental Approvals; No Conflicts

     3     

2.4

 

Financial Condition: No Material Adverse Change

     4     

2.5

 

Properties

     5     

2.6

 

Litigation and Environmental Matters

     7     

2.7

 

Compliance with Laws and Agreements

     8     

2.8

 

Investment Company Status

     9     

2.9

 

Taxes

     9     

2.10

 

ERISA

     9     

2.11

 

Subsidiaries

     9     

2.12

 

Capitalization

     9     

2.13

 

Valid Issuance of Securities

     10     

2.14

 

Rights of Registration and Voting Rights

     11     

2.15

 

Private Placement

     11     

2.16

 

[RESERVED]

     11     

2.17

 

Labor Matters

     11     

2.18

 

Insurance

     12     

2.19

 

Subsidiary Distributions

     12     

2.20

 

Government Authorizations

     12     

2.21

 

Brokerage Fees

     14     

2.22

 

Compliance with Kansas General Corporation Code

     14     

2.23

 

Solvency

     14   

3.

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     14   

 

-i-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

             Page    

3.1

 

Authorization

     14     

3.2

 

Governmental Approvals; No Conflicts

     15     

3.3

 

Purchase Entirely for Own Account

     15     

3.4

 

Restricted Securities

     15     

3.5

 

Restrictions and Legends

     16   

4.

  CONDITIONS OF THE PURCHASER’S OBLIGATIONS AT CLOSING      16     

4.1

 

Representations and Warranties

     16     

4.2

 

Performance

     17     

4.3

 

Qualifications

     17     

4.4

 

Counterparts of Agreement

     17     

4.5

 

Bond

     17     

4.6

 

Financial Officer Certificate

     17     

4.7

 

Proceedings and Documents

     18     

4.8

 

Corporate and Additional Matters

     18     

4.9

 

Supplemental Listing Application

     18     

4.10

 

Funding Instructions

     18   

5.

  CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING      18     

5.1

 

Representations and Warranties

     18     

5.2

 

Performance

     19     

5.3

 

Compliance Certificate

     19   

6.

  COVENANTS      19     

6.1

 

Covenants of the Company Applicable Until the Bond is Converted or Repaid

     19     

6.2

 

Covenants of the Company Applicable Until the Purchaser No Longer Holds in
Excess of 5% of the Common Stock

     21     

6.3

 

Covenants of the Purchaser

     22     

6.4

 

Covenants of the Company and the Purchaser

     23   

7.

  EVENTS OF DEFAULT      23   

8.

  REMEDIES ON DEFAULT      24     

8.1

 

Acceleration of Maturity

     24     

8.2

 

Rescission and Annulment

     24   

 

-ii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

             Page    

8.3

 

Other Remedies

     25   

9.

 

REGISTRATION RIGHTS

     25     

9.1

 

Demand Registrations

     25     

9.2

 

Piggyback Registrations

     27     

9.3

 

Underwritten Offerings

     28     

9.4

 

Holdback Agreements

     30     

9.5

 

Limitations on Subsequent Registration Rights

     30     

9.6

 

Expenses of Registration

     30     

9.7

 

Blackout Period

     30     

9.8

 

Registration Procedures

     31     

9.9

 

Shelf Take-Downs

     34     

9.10

 

Information by Registrable Securities Holder

     34     

9.11

 

Rule 144 Reporting

     34     

9.12

 

Transfer of Registration Rights

     35     

9.13

 

Termination of Registration Rights

     35     

9.14

 

Indemnification For Securities Offerings

     35   

10.

 

CONVERSION OF THE BOND

     38     

10.1

 

Right to Convert

     38     

10.2

 

Settlement Upon Conversion

     39     

10.3

 

Conversion Procedures

     39     

10.4

 

Conversion Rate Adjustments

     40     

10.5

 

Recapitalizations, Reclassifications and Changes to the Common Stock

     47     

10.6

 

Reserved Shares

     48   

11.

 

TRANSFER RESTRICTIONS

     49   

12.

 

BOARD REPRESENTATION

     49   

13.

 

TERMINATION

     50     

13.1

 

Termination

     50     

13.2

 

Effect of Termination

     50   

14.

 

MISCELLANEOUS

     51     

14.1

 

Survival

     51   

 

-iii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

             Page    

14.2

 

Indemnification

     51     

14.3

 

Amendment; Waiver of Certain Covenants

     52     

14.4

 

Entire Agreement; Counterparts

     52     

14.5

 

Applicable Law; Jurisdiction; Waiver of Jury Trial

     52     

14.6

 

Disclosure Schedule

     53     

14.7

 

Attorneys’ Fees

     53     

14.8

 

Assignability; Third-Party Beneficiaries

     53     

14.9

 

Notices

     53     

14.10

 

Cooperation

     55     

14.11

 

Severability

     55     

14.12

 

Definitions; Construction

     55   

 

-iv-

--------------------------------------------------------------------------------

SPRINT NEXTEL CORPORATION

BOND PURCHASE AGREEMENT

This Bond Purchase Agreement (this “Agreement”) is made and entered into as of
the 15th day of October, 2012 by and between Sprint Nextel Corporation, a Kansas
corporation (the “Company”), and Starburst II, Inc., a Delaware corporation (the
“Purchaser”).

RECITALS

The Company desires to issue and sell and the Purchaser desires to purchase a
convertible senior bond in substantially the form attached to this Agreement as
Exhibit A (the “Bond”), which will be convertible on the terms stated herein
into equity securities of the Company. The Bond is not contractually subordinate
in right of payment to any other indebtedness of the Company. The Bond and the
equity securities issuable upon conversion or exercise thereof are collectively
referred to herein as the “Securities.”

AGREEMENT

In consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties to this Agreement agree as follows:

1. The Bond.

1.1 Purchase and Sale.

(a) Sale and Issuance of the Bond. Subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase and the Company agrees to sell and
issue to the Purchaser the Bond in the principal amount of $3,100,000,000.00.
The purchase price of the Bond will be equal to 100% of the principal amount of
the Bond.

(b) Closing; Delivery. The purchase and sale of the Bond (the “Closing”) will
take place at the offices of Morrison & Foerster LLP, 425 Market Street, San
Francisco, California, at 10:00 a.m. (California time) on or before October 24,
2012 unless the conditions set forth in Sections 4 and 5 of this Agreement are
not satisfied or waived on such date, in which case the Closing will occur
promptly following the date that the conditions set forth in Sections 4 and 5 of
this Agreement are satisfied or waived or at such other time and place as the
Company and the Purchaser mutually agree.

1.2 Maturity. If not earlier converted, principal and any accrued but unpaid
interest under the Bond will be due and payable on October 15, 2019 (the
“Maturity Date”). Notwithstanding any other provision of this Agreement to the
contrary, the Bond may not be prepaid in whole or in part. If the Bond becomes
due and payable by reason of an Event of Default at a time when the Bond is not
convertible pursuant to Section 10.1, then the Purchaser may, in its sole
discretion, elect to defer repayment of the Bond (and interest will continue to

--------------------------------------------------------------------------------

accrue at the default rate for so long as the Event of Default is continuing)
until the Bond is convertible.

1.3 Interest.

(a) The outstanding principal balance of the Bond will bear interest at a rate
equal to 1.0% per annum from and after the Closing. Interest on the Bond will be
due and payable in cash semiannually in arrears on April 15 and October 15 of
each year, commencing on April 15, 2013; provided, however that all accrued and
unpaid interest on the Bond or portion thereof that is converted until, but not
including, the Conversion Date will be paid in cash simultaneously with the
delivery of shares of Common Stock upon settlement of the related conversion.

(b) Notwithstanding the foregoing, if any principal of or interest on the Bond
is not paid when due, whether at the Maturity Date, upon acceleration, or
otherwise, the obligations of the Company hereunder will bear interest, after as
well as before judgment, at a rate per annum equal to 2.0% per annum.

(c) All interest hereunder will be computed on the basis of a year of 360 days
composed of twelve 30-day months.

1.4 Business Days. If any date on which payment is scheduled to be made is not a
Business Day, payment will be made on the next succeeding Business Day, and no
additional interest will accrue in respect of the delay.

2. Representations and Warranties of the Company. Except as explicitly set forth
in any registration statement, proxy statement or other statement, report,
schedule, form or other document filed with the SEC by the Company on or after
January 1, 2012 and prior to the date of this Agreement, but excluding any “risk
factors” or similar statements in any such filings that are cautionary,
predictive or forward-looking in nature, other than any specific factual
information contained in such “risk factors” or similar statements, and except
as set forth in the Disclosure Schedule attached hereto as Exhibit C, whether or
not any particular representation or warranty refers to or excepts therefrom any
specific section of the Disclosure Schedule (it being understood that any
exception or disclosure set forth in any part or subpart of the Disclosure
Schedule will be deemed an exception or disclosure, as applicable, only with
respect to: (a) the corresponding Section or subsection of this Section 2;
(b) the Section or subsection of this Section 2 corresponding to any other part
or subpart of the Disclosure Schedule that is explicitly cross-referenced
therein; and (c) any other Section or subsection of this Section 2 with respect
to which the relevance of such exception or disclosure is reasonably apparent),
the Company represents and warrants to the Purchaser as follows:

2.1 Organization: Powers.

(a) Each of the Company and its Subsidiaries has been duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation (except, in the case of good standing, for entities organized
under the laws of any jurisdiction that does not recognize such concept) and has
all necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; and (ii)

 

2

--------------------------------------------------------------------------------

to own and use its assets in the manner in which its assets are currently owned
and used, except, with respect to the Subsidiaries of the Company, where the
failure to be so duly organized, validly existing or in good standing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

(b) Each of the Company and its Subsidiaries is qualified to do business as a
foreign Entity, and is in good standing (except for any jurisdiction that does
not recognize such concept), under the laws of all jurisdictions where the
nature of its business requires such qualification, except where the failure to
be so qualified or in good standing, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

(c) The Company has no Subsidiaries, and does not own, as of the date of this
Agreement, 5% or more of the capital stock of, or equity interests of any nature
(and which capital stock or equity interests have a value exceeding $1,000,000)
in, any other Entity, other than the Entities and interests identified in
Schedule 2.1(c) of the Disclosure Schedule. The Company has not agreed and is
not obligated to make, and is not bound by any Contract under which it may
become obligated to make, any future equity investment in or capital
contribution to any Entity in excess of $10 million.

2.2 Authorization; Enforceability. The transactions hereunder, including the
authorization, issuance and delivery of the Securities, are within the corporate
or other equivalent power of the Company and have been duly authorized by all
necessary corporate action. Each Bond Document to which the Company is a party
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

2.3 Governmental Approvals; No Conflicts.

(a) The transactions hereunder will not: (i) conflict with or result in any
breach of the certificate of incorporation and bylaws or similar organizational
documents of the Company; (ii) assuming that all consents, approvals and
authorizations contemplated by Section 2.3(b) have been obtained and all filings
and notifications described in such clauses have been made, conflict with or
result in a violation by the Company of any Legal Requirement or Order to which
the Company is subject; (iii) violate, conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default under any Contract
that is material to the Company or any of its Subsidiaries (each such Contract,
a “Material Contract”) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or to which
any of the Company’s or any of its Subsidiaries’ properties or assets is
subject; or (iv) result in the creation or imposition of any Lien upon any of
the Company’s or any of its Subsidiaries’ properties or assets pursuant to any
Material Contract, except with respect to clauses (iii) and (iv) for such
violations, conflicts, breaches, defaults or Liens as would not, individually or
in the aggregate, reasonably be expected to be material to the Company and its
Subsidiaries taken as a whole.

 

3

--------------------------------------------------------------------------------

(b) None of the Company or its Subsidiaries is required to make any filing with
or give any notice to, or to obtain any approval, consent, ratification,
permission, waiver or authorization from, any Governmental Body in connection
with the execution, delivery or performance of this Agreement, except for
(i) such filings, notices, approvals, consents, ratifications, permissions,
waivers or authorizations as are required under the Communications Act, and
(ii) such filings as are required by any State Commissions.

2.4 Financial Condition: No Material Adverse Change.

(a) Company SEC Documents.

(i) The Company has filed with the SEC all registration statements, proxy
statements and other statements, reports, schedules, forms and other documents
required to be filed by the Company with the SEC since January 1, 2009 through
the date of this Agreement, and all amendments thereto (the “Company SEC
Documents”). The Company has offered to make available to the Purchaser accurate
and complete copies of each Company SEC Document (including each exhibit
thereto) that is not publicly available through EDGAR. None of the Company’s
Subsidiaries is required to file any documents with the SEC. As of the time it
was filed with the SEC (or, if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing): (i) each of the
Company SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be) and
the applicable rules and regulations of the SEC thereunder; and (ii) none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact 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. Each of the certifications and statements
required by: (A) Rule 13a-14 or Rule 15d-14 under the Exchange Act; (B) 18
U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act); or (C) any other rule or
regulation promulgated by the SEC or applicable to the Company SEC Documents
(collectively, the “Certifications”) are accurate and complete, and comply as to
form and content with all applicable laws.

(ii) As of the date of this Agreement, there are no unresolved comments issued
by the staff of the SEC in comment letters with respect to any of the Company
SEC Documents.

(b) Financial Statements. The consolidated financial statements (including any
related notes) contained or incorporated by reference in the Company SEC
Documents (as amended prior to the date of this Agreement): (i) complied as to
form, as of their respective dates of filing with the SEC, in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such
financial statements or, in the case of unaudited financial statements, as
permitted by the SEC); and (iii) fairly presented, in all material respects, the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the respective dates thereof and the consolidated results of operations
and cash flows of the Company and its consolidated Subsidiaries for the periods
covered thereby (subject, in the case of unaudited financial statements, to
normal and recurring year-end adjustments). No financial statements of any
Person

 

4

--------------------------------------------------------------------------------

other than the Company and its Subsidiaries are required by GAAP to be included
in the consolidated financial statements of the Company.

(c) No Material Adverse Change. Since the date of the Unaudited Interim Balance
Sheet through the date hereof, except as contemplated or permitted by this
Agreement, the Company and its Subsidiaries have conducted their businesses, in
all material respects, in the ordinary course. Since the date of the Unaudited
Interim Balance Sheet, there has not been any event, condition, circumstance,
development, change or effect that has had, or that would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

(d) No Material Undisclosed Liabilities. None of the Company nor its
Subsidiaries has any accrued, contingent or other liabilities of any nature,
either matured or unmatured, that are, individually or in the aggregate,
material to the Company and its Subsidiaries taken as a whole, except for:
(a) liabilities reflected or reserved against on the Unaudited Interim Balance
Sheet; (b) liabilities that have been incurred by the Company and its
Subsidiaries since the date of the Unaudited Interim Balance Sheet in the
ordinary course of business; (c) liabilities for performance of obligations of
the Company and its Subsidiaries under Company Contracts (pursuant to the terms
of such Company Contracts), to the extent such liabilities are readily
ascertainable (in nature, scope and amount) from the written terms of such
Company Contracts; and (d) liabilities described in Schedule 2.4(d) of the
Disclosure Schedule.

2.5 Properties.

(a) Title Generally. The Company and its Subsidiaries either (i) own, and have
good and valid title to, all material assets purported to be owned by them,
including all material assets reflected on the Unaudited Interim Balance Sheet
(except for inventory sold or otherwise disposed of in the ordinary course of
business since the date of the Unaudited Interim Balance Sheet), or (ii) are the
lessees or sublessees of, and hold valid leasehold interests in, all material
assets purported to have been leased by them, including all material assets
reflected as leased on the Unaudited Interim Balance Sheet (except for leased
assets that have been returned or vacated pursuant to the terms of the leases).

(b) Real Property; Leasehold.

(i) There are no outstanding options or other Company Contracts to purchase,
lease or use, or rights of first refusal to purchase, any real property having a
value in excess of $200 million owned by any of the Company and its Subsidiaries
(the “Owned Real Property”).

(ii) All real property leased to the Company and its Subsidiaries pursuant to
any lease or sublease, including all buildings, structures, fixtures and other
improvements leased to the Company and its Subsidiaries, is referred to as the
“Leased Real Property.” The transactions hereunder will not affect the
enforceability against the Company or its applicable Subsidiaries or, to the
Company’s Knowledge, any other Person of any material lease or sublease or any
material rights of the Company or its Subsidiaries thereunder or otherwise with
respect to any material Company Real Property, including the right

 

5

--------------------------------------------------------------------------------

to the continued use and possession of the Company Real Property for the conduct
of business as presently conducted.

(iii) Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, all of the buildings, fixtures and other
improvements located on the Company Real Property are adequate and suitable in
all material respects for the purpose of conducting each of the Company’s and
its Subsidiaries’ business as presently conducted, and the operation thereof as
presently conducted is not in violation in any material respect of any
applicable law.

(c) Intellectual Property.

(i) Each of the Company and its Subsidiaries owns or possesses the right to use
all Intellectual Property employed by it in connection with the businesses it
operates, and no such ownership or right would be affected by the execution,
delivery or performance of this Agreement, except (in each case) as would not,
individually or in the aggregate, reasonably be expected to be material to the
Company and its Subsidiaries taken as a whole.

(ii) None of the Company and its Subsidiaries and none of any product or service
that any of the Company or its Subsidiaries has manufactured, marketed,
distributed, leased (as lessor), licensed (as licensor) or sold, is infringing
(directly, contributorily, by inducement or otherwise), misappropriating or
otherwise violating (or has infringed (directly, contributorily, by inducement
or otherwise), misappropriated or otherwise violated since January 1, 2009) any
Intellectual Property of any other Person, except as would not, individually or
in the aggregate, reasonably be expected to be material to the Company and its
Subsidiaries taken as a whole.

(iii) No infringement, misappropriation, or similar claim or Legal Proceeding is
pending or, to the Knowledge of the Company, threatened in writing against any
of the Company or its Subsidiaries, except (i) as would not, individually or in
the aggregate, reasonably be expected to be material to the Company and its
Subsidiaries taken as a whole, or (ii) as set forth in Schedule 2.5(c) of the
Disclosure Schedule.

(iv) Since January 1, 2009, none of the Company and its Subsidiaries has
received any notice or other communication (in writing or otherwise) relating to
any actual, alleged or suspected infringement, misappropriation, or violation of
any Intellectual Property of any third-party, or any invitation to take a
license under the Intellectual Property of any third-party, except (i) with
respect to Intellectual Property under which the Company and its Subsidiaries
are licensed pursuant to agreements with such third-party, (ii) as would not,
individually or in the aggregate, reasonably be expected to be material to the
Company and its Subsidiaries taken as a whole, or (iii) as set forth in Schedule
2.5(c) of the Disclosure Schedule.

(v) The execution, delivery or performance of this Agreement will not, with or
without notice or the lapse of time or both, (i) result in any third-party
having (or give any third-party) the right or option to modify or terminate any
license, covenant not to sue, immunity or other rights with respect to any
Intellectual Property granted to any of the

 

6

--------------------------------------------------------------------------------

Company and its Subsidiaries, or (ii) result in any third-party having (or give
any third-party) the right or option to receive, or to modify or accelerate the
right or option to receive, any payment with respect to Intellectual Property
licensed to any of the Company and its Subsidiaries, except (in each case) as
would not, individually or in the aggregate, reasonably be expected to be
material to the Company and its Subsidiaries taken as a whole.

(vi) To the Knowledge of the Company, the execution, delivery or performance of
this Agreement will not, with or without notice or the lapse of time or both,
(i) result in any third-party having (or give or purport to give any
third-party) the right or option to a license, immunity or other rights with
respect to the Intellectual Property of the Purchaser or any of its Affiliates
or (ii) impose a covenant not to sue on the Purchaser or any of its Affiliates
with respect to the Intellectual Property of the Purchaser or any of its
Affiliates.

(vii) None of the Company and its Subsidiaries is a party to or bound by any
decree, judgment, order or arbitration award that is reasonably expected to
require (i) any of the Company or its Subsidiaries to grant to any third-party
any license, immunity or other right with respect to any Intellectual Property,
except as would not, individually or in the aggregate, reasonably be expected to
be material to the Company and its Subsidiaries taken as a whole.

2.6 Litigation and Environmental Matters.

(a) Litigation Generally. As of the date hereof, there are no Legal Proceedings
pending or, to the Knowledge of the Company, threatened against any of the
Company or its Subsidiaries, (i) reasonably expected to result in a claim
involving an amount in dispute in excess of $100 million or (ii) that involve
any of the Bond Documents or the transactions hereunder or thereunder. As of the
date hereof, there is no Order to which any of the Company or its Subsidiaries
is subject that materially and adversely affects or could reasonably be expected
to materially and adversely affect the business, financial condition or results
of operations of the Company and its Subsidiaries taken as a whole.

(b) Environmental Matters.

(i) Each of the Company and its Subsidiaries: (i) is and since January 1, 2009
has been in compliance in all material respects with all applicable
Environmental Laws; and (ii) possesses all material permits and other
authorizations of Governmental Bodies required under applicable Environmental
Laws, and is in compliance with the terms and conditions thereof in all material
respects.

(ii) Except for matters which have been resolved to the satisfaction of the
issuing Governmental Body, (i) none of the Company nor its Subsidiaries has
received any written notice or, to the Knowledge of the Company, other
communication, from a Governmental Body that alleges that any of the Company or
its Subsidiaries has violated any Environmental Law, (ii) all Leased Real
Property and any other property that is owned or controlled by any of the
Company or its Subsidiaries, and all surface water, groundwater and soil
associated with such property, is free of any Materials of Environmental Concern
in all material respects and (iii) none of the Company nor its Subsidiaries has
released any Materials of

 

7

--------------------------------------------------------------------------------

Environmental Concern except in compliance with all applicable Environmental
Laws in all material respects.

2.7 Compliance with Laws and Agreements.

(a) Agreements. (i) None of the Company or its Subsidiaries is in material
violation, breach or default under any Material Contract; (ii) to the Knowledge
of the Company, no other Person is in material violation, breach or default
under, any Material Contract; and (iii) none of the Corporation or its
Subsidiaries have received any written notice or, to the Knowledge of the
Company, other overt communication regarding any actual or possible material
violation or breach of, or material default under, any Material Contract.

(b) Laws. The business of the Company and its Subsidiaries has been since
January 1, 2009 and is being conducted in compliance in all material respects
with all Legal Requirements, Orders and Licenses. As of the date hereof, no
material investigation by any Governmental Body with respect to any of the
Company or its Subsidiaries or any of their material assets is pending or, to
the Knowledge of the Company, threatened, nor has any Governmental Body
indicated to any of the Company or its Subsidiaries in writing an intention to
conduct the same. Each of the Company and its Subsidiaries has obtained and is
in compliance in all material respects with all Communications Licenses
necessary to conduct its business as conducted as of the date hereof.

(c) Disclosure Controls and Procedures. The Company maintains disclosure
controls and procedures as such terms are defined in, and required by, Rule
13a-15(e) and 15d-15(e) under the Exchange Act. Such disclosure controls and
procedures are reasonably designed to ensure that the information required to be
disclosed by the Company in the reports that it submits under the Exchange Act
is recorded and reported on a timely basis to the individuals responsible for
the preparation of the Company’s filings with the SEC under the Exchange Act.

(d) Internal Control over Financial Reporting. The Company maintains a system of
internal controls over financial reporting (as defined in, and required by,
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) sufficient to provide
reasonable assurances regarding the reliability of financial reporting and the
preparation of financial statements in accordance with GAAP for external
purposes. The Company’s management has completed an assessment of the
effectiveness of the Company’s system of internal controls over financial
reporting in compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act for the fiscal year ended December 31, 2011, and the
description of such assessment set forth in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2011 is accurate. Based solely upon
such assessment, (i) the Company had no significant deficiencies or material
weaknesses in the design or operation of its internal control over financial
reporting, and (ii) the Company does not have Knowledge of any fraud, whether or
not material, that involves the Company’s management or other employees who have
a significant role in the Company’s internal control over financial reporting.

(e) Compliance with Sarbanes-Oxley Act. To the Knowledge of the Company, the
Company’s auditor has at all times since January 1, 2009 been: (i) a registered

 

8

--------------------------------------------------------------------------------

public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley
Act); (ii) “independent” with respect to the Company within the meaning of
Regulation S-X under the Exchange Act; and (iii) in compliance with subsections
(g) through (l) of Section 10A of the Exchange Act and the rules and regulations
promulgated by the SEC and the Public Company Accounting Oversight Board
thereunder. Since January 1, 2009, all non-audit services performed by the
Company’s auditors for the Company and its Subsidiaries that were required to be
approved in accordance with Section 202 of the Sarbanes-Oxley Act have been so
approved.

2.8 Investment Company Status. The Company is not, and after giving effect to
the sale of the Bond and the application of the proceeds thereof, will not be,
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

2.9 Taxes. Each of the Company and its Subsidiaries has filed all material
foreign, federal, state and local tax returns that are required to be filed or
has requested extensions thereof and has paid all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such tax, assessment, fine
or penalty that is currently being contested in good faith or as could not be
expected individually or in the aggregate, to be materially adverse to the
Company and its Subsidiaries, taken as a whole.

2.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect.

2.11 Subsidiaries. As of the Closing, set forth in Exhibit 21 to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2011, is a complete
and correct list of all of the Subsidiaries of the Company together with, for
each such Subsidiary, (i) the full and correct legal name, and (ii) the
jurisdiction of incorporation.

2.12 Capitalization.

(a) The authorized capital stock of the Company consists of: (i) 6,000,000,000
shares of Common Stock, of which 3,004,205,406 shares have been issued and are
outstanding as of October 11, 2012; (ii) 500,000,000 shares of Series 2 Common
Stock, of which no shares are issued or are outstanding; (iii) 100,000,000
shares of Non-Voting Common Stock, of which no shares are issued or are
outstanding; and (iv) 20,000,000 shares of Preferred Stock, of which
(A) 3,000,000 shares have been designated as Preferred Stock-Sixth Series,
Junior Participating, of which no shares have been issued or are outstanding,
(B) 300,000 shares have been designated as Preferred Stock-Seventh Series,
Convertible, of which no shares have been issued or are outstanding, (C) 232,745
shares have been designated as Ninth Series Zero Coupon Convertible Preferred
Stock Due 2013, of which no shares have been issued or are outstanding, and
(D) 16,467,255 shares have not been designated, have not been issued and are not
outstanding. As of October 11, 2012, the Company held no shares of its capital
stock in its treasury. All of the outstanding shares of Common Stock have been
duly authorized and validly issued, and are fully paid and nonassessable and
free of preemptive rights or any purchase option, call, right of first refusal
or any similar right. The Company is not under (and will not as

 

9

--------------------------------------------------------------------------------

a result of the transactions contemplated hereunder become under) any
contractual obligation to repurchase, redeem or otherwise acquire any
outstanding shares of Common Stock or other voting securities, except for
obligations under Company Plans.

(b) As of October 11, 2012: (i) 66,866,935 shares of Common Stock are subject to
issuance pursuant to Company Options; (ii) 73,813,916 shares of Common Stock are
reserved for future issuance pursuant to the Company ESPP; (iii) 22,227,728
shares of Company Common Stock are reserved for future issuance pursuant to
Company Equity Awards; and (iv) 135,195,891 shares of Common Stock are reserved
for future issuance pursuant to equity awards not yet granted under the Company
Equity Plans. No vesting schedule or provision, whether time-based or
performance-based, of any Company Equity Award, will accelerate solely as a
consequence of the transactions hereunder. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation or similar
rights or equity based awards with respect to any of the Company or its
Subsidiaries other than as set forth in Schedule 2.12(b) of the Disclosure
Schedule.

(c) Except as set forth in Section 2.12(b), there is no: (i) outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other voting
securities of any of the Company or its Subsidiaries; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other voting securities of any of the
Company or its Subsidiaries; or (iii) stockholder rights plan (or similar plan
commonly referred to as a “poison pill”) or, other than any Company Plan,
Contract under which the Company is or may become obligated to sell or otherwise
issue any shares of its capital stock or any other voting securities.

(d) All outstanding shares of Common Stock, Company Equity Awards and other
securities of any of the Company or its Subsidiaries have been issued and
granted in compliance in all material respects with all applicable securities
laws and other applicable law.

(e) All of the outstanding shares of capital stock of each of the Company and
its material Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and free of preemptive rights and are owned
beneficially and of record by the Company or a Subsidiary of the Company, free
and clear of any material Liens.

2.13 Valid Issuance of Securities. The Securities that are being issued to the
Purchaser hereunder (and the Securities that may be issued hereunder), when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable and free of restrictions on transfer other than restrictions on
transfer under the Bond Documents, or under the Communications Act, the rules
and regulations of the FCC or applicable United States federal and state
securities laws. Based in part upon the representations of the Purchaser in this
Agreement, the Securities will be issued in compliance with all applicable
foreign, federal and state securities laws. The Common Stock issuable upon
conversion of the Bond has been duly and validly reserved for issuance, and upon
issuance, will be duly and validly issued, fully paid and nonassessable and free
of restrictions on transfer other than restrictions on transfer under the Bond
Documents or under the

 

10

--------------------------------------------------------------------------------

rules and regulations of the FCC, and will be issued in compliance with all
applicable foreign, federal and state securities laws.

2.14 Rights of Registration and Voting Rights. Except as provided herein or
disclosed in Schedule 2.14 of the Disclosure Schedule, the Company has not
granted or agreed to grant any registration rights, including demand or
piggyback rights, to any Entity. Except as contemplated herein, no stockholders
of the Company or any of its Subsidiaries have entered into any agreements with
respect to the voting of capital shares of the Company or any of its
Subsidiaries.

2.15 Private Placement.

(a) Subject in part to the truth and accuracy of the Purchaser’s representations
set forth in this Agreement, the offer, sale and issuance of the Securities,
including the conversion of the Securities into Common Stock, as contemplated by
this Agreement, is exempt from the registration requirements of the Securities
Act, and neither the Company, any of its Subsidiaries nor any authorized agent
acting on their behalf will take any action hereafter that would cause the loss
of such exemption.

(b) Neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act, an “Affiliate”) of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any “security” (as defined in the
Securities Act) which is or would be integrated with the sale of the Securities
in a manner that would require the registration under the Securities Act of the
Securities or (ii) offered, solicited offers to buy or sold the Securities by
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

(c) The Company is a “well-known seasoned issuer” (as defined in Rule 405 under
the Securities Act) (a “WKSI”).

2.16 [RESERVED]

2.17 Labor Matters. (i) None of the Company and its Subsidiaries is a party to
or bound by any collective bargaining agreement or union contract, and no
collective bargaining agreement is being negotiated by any of the Company or its
Subsidiaries and (ii) no employees covered by any Company Plan are represented
by any works council or other form of collective employee representation with
respect to employment with any of the Company or its Subsidiaries. To the
Knowledge of the Company, there are no activities or proceedings of any labor
union to organize any employees. There is no walkout, strike, union activity,
picketing, work stoppage or work slowdown or any other similar occurrence
pending against any of the Company or its Subsidiaries or, to the Knowledge of
the Company, threatened in writing. Each of the Company and its Subsidiaries is,
and since January 1, 2009 has been, in compliance, in all material respects,
with all applicable laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational safety and
health. There are no material actions, suits, claims, labor disputes or
grievances pending or, to the

 

11

--------------------------------------------------------------------------------

Knowledge of the Company, threatened in writing relating to any labor, safety or
discrimination matters involving any Company Associate, including charges of
unfair labor practices or discrimination complaints. There is no obligation to
inform, consult or obtain consent whether in advance or otherwise of any labor
union, works council, employee representatives or other representative bodies in
order to consummate transactions hereunder.

2.18 Insurance. Except for failures to maintain insurance or self-insurance that
would not reasonably be expected to be material to the Company, since January 1,
2009, each of the Company and its Subsidiaries has been continuously insured
with reputable insurers or has self-insured, in each case in such amounts and
with respect to such risks and losses as the Company reasonably believes are
adequate for the business and operations of the Company and its Subsidiaries
(taking into account the cost and availability of such insurance). As of the
date hereof, neither the Company nor any of its Subsidiaries has received any
written notice of any pending or threatened cancellation or termination with
respect to any material insurance policy of the Company or any of its
Subsidiaries.

2.19 Subsidiary Distributions. No Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such Subsidiary’s capital stock, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the
Company or any other Subsidiary of the Company, except as required by the terms
of the Company’s or any Subsidiary’s indebtedness.

2.20 Government Authorizations.

(a) Each of the Company and its Subsidiaries is in compliance in all material
respects with its obligations under each of the Communications Licenses and the
rules and regulations of the FCC, the State Commissions and foreign Governmental
Bodies. There is not pending from or, to the Knowledge of the Company,
threatened by the FCC, the Federal Aviation Administration (the “FAA”) or any
other Governmental Body any proceeding, notice of violation, order of forfeiture
or complaint or investigation against any of the Company and its Subsidiaries
relating to any of the Communications Licenses, that, if determined as requested
by the moving party or as indicated in any document initiating the proceeding,
could result in the revocation, modification, restriction, cancellation,
termination, suspension or non-renewal of any Communications License, other than
those that would not, individually or in the aggregate, reasonably be expected
to be material to the Company and its Subsidiaries taken as a whole. The FCC
actions granting all FCC Licenses, together with all underlying construction
permits, have not been reversed, stayed, enjoined, annulled or suspended, and
there is not pending or, to the Knowledge of the Company, threatened any
application, petition, objection or other pleading with the FCC, the FAA or any
other Governmental Body that challenges or questions the validity of or any
rights of the Purchaser under any such FCC License or State License, other than
those that would not, individually or in the aggregate, reasonably be expected
to be material to the Company and its Subsidiaries taken as a whole. To the
Company’s Knowledge, except as set forth on Schedule 2.20(a) of the Disclosure
Schedule, the FCC Licenses will be renewed in the ordinary course and there is
no event, condition or circumstance that could reasonably be expected to
preclude the FCC Licenses from being renewed in the ordinary course.

 

12

--------------------------------------------------------------------------------

(b) Each Spectrum Lease to which the Company or its Subsidiaries, as applicable,
is a party is (i) valid and binding, (ii) meets in all material respects all
applicable law, and (iii) is enforceable in accordance with its terms.

(c) To the Knowledge of the Company, other than (i) the terms of the applicable
Spectrum Lease, (ii) the FCC Rules limiting the duration of such Spectrum Lease,
(iii) the FCC’s renewal of the underlying License, and (iv) the FCC’s renewal of
its consent to any De Facto Transfer Lease, there are no facts or circumstances
that would reasonably be likely (whether with or without notice, lapse of time
or the occurrence of any other event) to preclude the renewal or extension of
any Spectrum Lease in the ordinary course of business.

(d) None of the Company nor its Subsidiaries has, nor, to the Knowledge of the
Company, has any other party to any material Spectrum Lease, claimed in writing
that a counterparty to such material Spectrum Lease is in material breach or
default under such Spectrum Lease, and any past material breach or default has
been waived, cured or otherwise settled.

(e) No party to any material Spectrum Lease has claimed in writing nor, to the
Knowledge of the Company, has any party threatened in writing that it has the
right to terminate the Spectrum Lease or to seek damages against any transferor
for the violation, breach or default by a transferor of any Spectrum Lease.

(f) To the Knowledge of the Company, all FCC Licenses underlying the Spectrum
Leases were validly issued and are in full force and effect, and are not subject
to proceedings or threatened proceedings that could reasonably be expected to
result in the revocation, modification, restriction, cancellation, termination,
suspension or non-renewal of any such FCC License.

(g) The Company and its Subsidiaries validly hold the Communications Licenses.
The Communications Licenses are free and clear of all Liens or any restrictions
which would reasonably be expected, individually or in the aggregate, to limit
the full operation of the Communications Licenses in any material respect.

(h) All of the currently operating cell sites, microwave paths, fiber routes,
and other network facilities of the Company and its Subsidiaries in respect of
which a filing with a Governmental Body was required have been constructed and,
to the Knowledge of the Company, are currently operated in all material respects
as represented to the Governmental Body in currently effective filings, and
modifications to such cell sites, microwave paths, fiber routes and other
network facilities have been preceded by the submission to the Governmental Body
of all required filings. Without limiting the foregoing, all such cell sites,
microwave paths, fiber routes and other network facilities were constructed and,
to the Knowledge of the Company, are operated in all material respects in
accordance with the applicable environmental processing requirements (including
environmental assessments for tower siting and radiofrequency radiation exposure
limitations as provided in FCC rules and regulations) and conform in all
material respects to all applicable law.

 

13

--------------------------------------------------------------------------------

(i) The Company and its Subsidiaries have filed all material reports required by
the FCC rules and in connection with any State Licenses, and have paid all
assessments required by federal or state regulations except where exempted or
waived or where such failure to file a report or pay an assessment would not,
individually or in the aggregate, reasonably be expected to be material to the
Company and its Subsidiaries taken as a whole.

(j) The Company and its Subsidiaries do not hold any Communications License to
offer, and do not offer, any services or features other than (i) wireless voice
and data services and features, (ii) landline long distance services,
(iii) landline local exchange services, (iv) Internet backbone or other high
speed transmission services, and (v) any other communications services or
features.

2.21 Brokerage Fees. There are no contracts, agreements or understandings
between the Company or any Subsidiary and any person that would give rise to a
valid claim against the Company or the Purchaser for a brokerage commission,
finder’s fee or other like payment in connection with the offering, issuance and
sale of the Securities.

2.22 Compliance with Kansas General Corporation Code. The board of directors of
the Company has taken all necessary actions to (a) approve, or otherwise exempt,
(i) all transactions contemplated by this Agreement and the other Bond
Documents, including the issuance of the Securities and the conversion of the
Securities into Common Stock, and (ii) the Purchaser (and its Affiliates) in
connection with its participation in all transactions contemplated by this
Agreement and the other Bond Documents, including the acquisition of the
Securities and the conversion of the Securities into Common Stock, under
Section 17-12, 100 et. seq. of the Kansas General Corporation Code, and
(b) otherwise ensure that the restrictions contained in Sections 17-12, 100 et.
seq. of the Kansas General Corporation Code are inapplicable to all such
transactions and participation as provided in this Section 2.22.

2.23 Solvency.

(a) The Company and its consolidated Subsidiaries, taken as a whole, are not
“insolvent” (as such term is defined in Section 101(32) of the United States
Bankruptcy Code (Title 11 of the United States Code)).

(b) No transfer of property is being made by the Company or any of its
Subsidiaries and no obligation is being incurred by the Company or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement
or the other Bond Documents with the intent to hinder, delay, or defraud either
present or future creditors of the Company or any of its Subsidiaries.

3. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that:

3.1 Authorization. This Agreement, when executed and delivered by the Purchaser,
will constitute a valid and legally binding obligation of the Purchaser,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
any other laws of general application

 

14

--------------------------------------------------------------------------------

affecting enforcement of creditors’ rights generally, and as limited by laws
relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.

3.2 Governmental Approvals; No Conflicts.

(a) The execution and delivery of this Agreement by the Purchaser will not:
(i) conflict with or result in any breach of the certificate of incorporation
and bylaws or similar organizational documents of the Purchaser; (ii) assuming
approvals and authorizations contemplated by of Section 3.2(b) have been
obtained and all filings and notifications have been made, conflict with or
result in a violation by the Purchaser of any Legal Requirement or Order to
which the Purchaser is subject, except for any violation that will not prevent
or materially impede or delay the consummation of the transactions hereunder by
the Purchaser.

(b) The Purchaser is not required to make any filing with or give any notice to,
or to obtain any approval, consent, ratification, permission, waiver or
authorization from any Governmental Body in connection with the execution,
delivery or performance of this Agreement, except for (i) such filings as are
required under the Communications Act and (ii) such filings as are required by
any State Commissions.

3.3 Purchase Entirely for Own Account. This Agreement is made with the Purchaser
in reliance upon the Purchaser’s representation to the Company, which by the
Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the
Securities to be acquired by the Purchaser will be acquired for investment for
the Purchaser’s own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Purchaser further
represents that, other than as contemplated by the terms of the Merger
Agreement, the Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Securities. The Purchaser represents that it has full power and authority to
enter into this Agreement. The Purchaser further represents and warrants that it
(a) will not sell, transfer or otherwise dispose of the Bond or any interest
therein except in a transaction exempt from or not subject to the registration
requirements of the Securities Act or pursuant to an effective registration
statement under the Securities Act and (b) was given the opportunity to ask
questions and receive answers concerning the terms and conditions of the
offering and to obtain any additional information which the Company possesses or
can acquire without unreasonable effort or expense.

3.4 Restricted Securities. The Purchaser understands that the Securities have
not been, and will not be, except to the extent contemplated hereby, registered
under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Purchaser’s representations as expressed herein. The Purchaser understands that
the Securities are “restricted securities” under applicable United States
federal and state securities laws and that, pursuant to these laws, the
Purchaser must hold the Securities indefinitely unless they are registered with
the SEC and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Purchaser

 

15

--------------------------------------------------------------------------------

acknowledges that the Company has no obligation to register or qualify the
Securities for resale except as set forth herein.

3.5 Restrictions and Legends. The Purchaser understands that the Securities, and
any securities issued in respect thereof or exchange therefor, may bear one or
all of the following legends:

(a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AS AMENDED OR ANY APPLICABLE STATE
SECURITIES LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO,
OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER, SALE OR
OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY
BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.”

(b) Any legend required by the blue sky laws of any state to the extent such
laws are applicable to the shares represented by the certificate so legended.

4. Conditions of the Purchaser’s Obligations at Closing. The obligations of the
Purchaser to the Company under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions, unless otherwise
waived:

4.1 Representations and Warranties.

(a) The representations and warranties of the Company contained in Section 2
(other than the Designated Representations) will, if specifically qualified by
materiality, Material Adverse Effect or other similar materiality qualifiers,
have been true and correct as of the date of this Agreement and will be true and
correct on and as of the Closing as if made on and as of the Closing (other than
those representations and warranties made as of a specific earlier date, which
will have been true and correct as of such earlier date, including, for the
avoidance of doubt, representations and warranties made as of the date hereof,
which shall be true and correct as of the date of this Agreement) and, if not so
qualified, will have been true and correct in all material respects, as of the
date of this Agreement, and will be true and correct in all material respects as
of the Closing as if made on and as of the Closing (other than those
representations and warranties made as of a specific earlier date, which will
have been true and correct in all material respects as of such earlier date,
including, for the avoidance of doubt, representations and warranties made as of
the date hereof, which shall be true and correct in all material respects as of
the date of this Agreement).

(b) Each of the Designated Representations will have been true and correct in
all respects as of the date of this Agreement and will be true and correct in
all respects

 

16

--------------------------------------------------------------------------------

as of the Closing as if made on and as of the Closing (other than any Designated
Representation made as of a specific earlier date, which will have been true and
correct in all respects as of such earlier date).

4.2 Performance. The Company will have performed and complied with all
covenants, agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with at or before the Closing and
after giving effect to the issue and sale of the Bond, and no Default or Event
of Default will have occurred and be continuing.

4.3 Qualifications. All authorizations, approvals or permits, if any, of any
Governmental Body or regulatory body of the United States or of any state that
are required in connection with and prior to the lawful issuance and sale of the
Securities will be obtained and effective as of the Closing (it being understood
that this condition shall not apply to the Communications Act, the rules and
regulations of the FCC, and applicable state and public utility law).

4.4 Counterparts of Agreement. The Purchaser (or its Counsel) will have received
from the Company, either (i) a counterpart of this Agreement signed on behalf of
the Company or (ii) written evidence satisfactory to the Purchaser (which may
include telecopy transmission of a signed signature page of this Agreement) that
the Company has signed a counterpart of this Agreement.

4.5 Bond. The Company will have executed and delivered the Bond.

4.6 Financial Officer Certificate. The Company will have furnished to the
Purchaser a certificate of the Company, signed by the Company’s Chief Financial
Officer, dated as of the Closing, to the effect that:

(a) the representations and warranties of the Company in this Agreement (other
than the Designated Representations), if specifically qualified by materiality,
Material Adverse Effect or other similar materiality qualifiers, were true and
correct as of the date of this Agreement, and are true and correct on and as of
the date of Closing as if made on and as of the Closing (other than those
representations and warranties made as of a specific earlier date, which are
true and correct as of such earlier date) and, if not so qualified, were true
and correct in all material respects as of the date of this Agreement, and are
true and correct in all material respects on and as of the date of Closing
(other than those representations and warranties made as of a specific earlier
date, which are true and correct as of such earlier date);

(b) each of the Designated Representations were true and correct in all respects
as of the date of this Agreement and are true and correct on and as of the date
of Closing as if made on and as of the Closing (other than any Designated
Representation made as of a specific earlier date, which is true and correct in
all respects as of such earlier date);

(c) the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing;
and

(d) since the date of the most recent financial statements filed by the Company
with the SEC (exclusive of any amendment or supplement thereto), there has been
no

 

17

--------------------------------------------------------------------------------

material adverse change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business.

4.7 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions hereunder will have been taken, and all documents and
instruments incident to such transactions will be satisfactory in substance and
form to the Purchaser, and the Purchaser will have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request.

4.8 Corporate and Additional Matters. The Purchaser (or its Counsel) will have
received such documents and certificates as the Purchaser (or its Counsel) may
reasonably request relating to the organization, existence and good standing of
the Company, the authorization of the transactions hereunder, and an officer’s
certificate or certificates covering such other matters as may be reasonably
requested by the Purchaser, all in form and substance reasonably satisfactory to
the Purchaser.

4.9 Supplemental Listing Application. The Company will have filed a
“Supplemental Listing Application of Additional Shares” and any required
supporting documentation relating to the Common Stock to be issued upon
conversion of the Securities with the New York Stock Exchange and will have used
its commercially reasonable best efforts to cause the Common Stock to be
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.

4.10 Funding Instructions. The Company will have provided the Purchaser with
written instructions setting forth wire instructions for payment of the purchase
price of the Bond, including (a) the name and address of the transferee bank,
(b) such transferee bank’s ABA number and (c) the account name and number into
which the purchase price for the applicable Bond is to be deposited.

5. Conditions of the Company’s Obligations at Closing. The obligations of the
Company to the Purchaser under this Agreement are subject to the fulfillment, at
or before the Closing, of each of the following conditions, unless otherwise
waived:

5.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Section 3 will, if specifically qualified by materiality,
Material Adverse Effect or other similar materiality qualifiers, have been true
and correct as of the date of this Agreement and will be true and correct on and
as of the Closing as if made on and as of the Closing (other than those
representations and warranties made as of a specific earlier date, which will
have been true and correct as of such earlier date, including, for the avoidance
of doubt, representations and warranties made as of the date hereof, which shall
be true and correct as of the date of this Agreement) and, if not so qualified,
will have been true and correct in all material respects, as of the date of this
Agreement, and will be true and correct in all material respects as of the
Closing as if made on and as of the Closing (other than those representations
and warranties made as of a specific earlier date, which will have been true and
correct in all material respects as of such earlier date, including, for the
avoidance of doubt, representations and

 

18

--------------------------------------------------------------------------------

warranties made as of the date hereof, which shall be true and correct in all
material respects as of the date of this Agreement).

5.2 Performance. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Closing will have
been performed or complied with in all material respects.

5.3 Compliance Certificate. An officer of the Purchaser will have delivered to
the Company at the Closing certificates certifying that the conditions specified
in Sections 5.1 and 5.2 have been fulfilled.

6. Covenants.

6.1 Covenants of the Company Applicable Until the Bond is Converted or Repaid.
Until all of the Bond has been converted or the principal of and interest on the
Bond and all fees payable hereunder have been paid in full, the Company
covenants and agrees with the Purchaser and for the benefit of the Purchaser
that:

(a) Payment of Principal, Premium and Interest. The Company will duly and
punctually pay the principal of and interest on the Bond in accordance with the
terms herein and in the Bond.

(b) Existence. The Company will, and will cause each of its Subsidiaries to, do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company and its Subsidiaries will not be required to preserve
any such right or franchise, and none of the Company’s Subsidiaries will be
required to preserve its existence if the Company’s or such Subsidiary’s, as
applicable, board of directors, or comparable managers, determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Subsidiary, as applicable, and that the loss thereof is not
disadvantageous in any material respect to the Purchaser.

(c) Maintenance of Properties. The Company will, and will cause each of its
Subsidiaries to, cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company or
of its Subsidiary, as applicable, may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section 6.1(c) will prevent the
Company or its Subsidiaries from discontinuing the operation or maintenance of
any of such properties if such discontinuance is, in the judgment of the Company
or of its Subsidiary, as applicable, desirable in the conduct of its business or
the business of any Subsidiary and would not otherwise materially adversely
affect the Company and its Subsidiaries, taken as a whole.

(d) Maintenance of Authorizations, Licenses and Leases. The Company will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve and renew, as required in the ordinary course, all
licenses, certificates,

 

19

--------------------------------------------------------------------------------

permits and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities to conduct its business or the business of any
Subsidiary; provided, however, that nothing in this Section 6.1(d) will prevent
the Company or its Subsidiaries from deciding not to preserve or renew such
licenses, certificates, permits or other authorizations if such decision is, in
the judgment of the Company or of its Subsidiary, as applicable, desirable in
the conduct of its business or the business of any Subsidiary and would not
otherwise materially adversely affect the Company and its Subsidiaries, taken as
a whole

(e) Payment of Taxes and Other Claims. The Company will, and will cause each of
its Subsidiaries to, pay or discharge or cause to be paid or discharged, before
the same will become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or Property of the Company or any Subsidiary, and
(b) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the Property of the Company or any Subsidiary;
provided, however, that the Company and its Subsidiaries will not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings. The Company will pay any transfer taxes
or other similar fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company or sale
by the Company of the Securities hereunder.

(f) Use of Proceeds. The proceeds of the sale of the Bond will be used for
general corporate purposes of the Company and its Subsidiaries.

(g) SEC Reports. Whether or not required by the SEC, so long as any portion of
the Bond remains outstanding, the Company will furnish to the Purchaser, within
fifteen (15) days after the applicable deadlines specified in the SEC’s rules
and regulations:

(i) all quarterly and annual reports, including financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such forms, including a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and,
with respect to the annual information only, a report on the annual financial
statements by the Company’s registered independent accountants; and

(ii) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports;

provided, however, that such information will be deemed to be delivered to the
Purchaser if it is filed with the SEC, or at the Company’s option, posted on a
secure website or delivered via email or regular mail to the Purchaser. All such
reports will be prepared in all material respects in accordance with the
information requirements applicable to such reports.

(h) Stay, Extension and Usury Laws. The Company covenants (to the extent that it
may lawfully do so) that it will not, nor will it permit any of its Subsidiaries
to, at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or

 

20

--------------------------------------------------------------------------------

advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or
interest on the Bond as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Agreement, and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Purchaser, but will suffer and permit the
execution of every such power as though no such law had been enacted.

(i) Insurance. At all times the Company will, and will cause each of its
Subsidiaries to, keep its insurable properties insured by financially sound and
reputable insurers in such amounts and against such risks that the Company
reasonably believes are adequate for the business in which it is engaged.

(j) Compliance with Laws. The Company will, and will cause each of its
Subsidiaries to, comply in all material respects with applicable laws, whether
now in effect or hereinafter enacted, except in each case where the failure to
so comply with law is not reasonably likely to result in a Material Adverse
Effect.

(k) Investment Company Act. The Company will not, nor will it permit any of its
Subsidiaries to, become an investment company subject to registration under the
Investment Company Act of 1940, as amended.

(l) Bank Approvals or Waivers. The Company will use its commercially reasonable
best efforts to obtain all requisite consents or waivers under the JPM
Agreement, the EDC Agreement and the EKN Agreement to the convertibility of the
Bond, and specifically, such waiver or consent will permit conversion of the
Bond and all payments and distributions otherwise payable with respect to the
Bond notwithstanding the restricted payments negative covenant that limits
distributions in cash, securities or other property with respect to any “Equity
Interest” (as defined in each such agreement). For the avoidance of doubt, the
use of commercially reasonable best efforts by the Company may require the
Company to pay a reasonable consent fee under each such agreement. In the event
of any refinancing, refunding, extension, renewal or replacement of any of the
JPM Agreement, the EDC Agreement or the EKN Agreement, any such refinancing,
refunding, extension, renewal or replacement facility will permit the conversion
of the Bond and will not otherwise limit or prohibit the Company from complying
with any of the terms or conditions of this Agreement or the Bond, without
giving effect to Section 10.1(e)(ii).

6.2 Covenants of the Company Applicable Until the Purchaser No Longer Holds in
Excess of 5% of the Common Stock. Until the Purchaser no longer holds in excess
of 5% of the Common Stock (or Securities convertible into more than 5% of the
Common Stock), the Company covenants and agrees with the Purchaser that:

(a) Block Transfers. In the event of an offering by the Purchaser or its
Affiliates involving a block of Common Stock of the Company equal to 3% or more
of the aggregate Common Stock of the Company that may initially be issued upon
conversion of the Securities, including in connection with a Synthetic Sale, the
Company will cooperate fully and

 

21

--------------------------------------------------------------------------------

in good faith with the Purchaser and its Affiliates to effect such an offering,
including, but not limited to, (i) participating in customary marketing and
selling efforts, (ii) making any customary representations, warranties,
agreements or indemnities to or in favor of any participating party that is
reasonably required in order to expedite or facilitate such an offering and
(iii) entering into and performing all obligations under any agreements
reasonably requested to be entered into in order to expedite or facilitate such
an offering.

6.3 Covenants of the Purchaser.

(a) Standstill and Non-Solicitation. Except with respect to the consummation of
the Merger, until this Agreement is terminated or the Purchaser no longer holds
in excess of 5% of the Common Stock (or Bonds convertible into more than 5% of
the Common Stock), the Purchaser, for itself and the Parent Entities and their
respective Affiliates, covenants and agrees with the Company that it will not in
any manner, directly or indirectly (unless requested by the Company) effect or
seek (including entering into any discussions, negotiations, agreements or
understandings with any third person whether publicly or otherwise) to effect,
or encourage any individual, corporation, partnership, limited liability
company, association, trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof
(any of the foregoing, with respect to this Section 6.3(a) only, a “Person”) to
participate in, effect or seek (whether publicly or otherwise) to effect:
(i) any acquisition of beneficial ownership by any Person of any securities,
rights or options to acquire any securities, or any assets or businesses, of the
Company or any of its subsidiaries; provided that the Parent Entities may
acquire beneficial ownership of Common Stock if upon such acquisition the
aggregate beneficial ownership of Common Stock by the Parent Entities would not
at any time be in excess of 19.95% of the number of shares of Common Stock that
is then outstanding; (ii) any tender offer, exchange offer, merger, acquisition
or other business combination involving the Company or any of its Subsidiaries,
or any similar extraordinary transaction involving the purchase of all or
substantially all of assets of the Company; or (iii) any recapitalization,
restructuring, liquidation or dissolution with respect to the Company or any of
its Subsidiaries or any similar extraordinary transaction involving a dividend
or distribution of assets of the Company. Notwithstanding anything in this
Agreement to the contrary, (A) from and after such time that the Purchaser first
receives a Change Notice, or otherwise learns that the Company Board is
considering effecting a Change in Company Board Recommendation, and continuing
until the Termination Event, this Section 6.3 shall have no force or effect and
shall not in any way restrict or otherwise apply to the Purchaser, the Parent
Entities or their Affiliates, provided that, notwithstanding the foregoing, none
of the Parent Entities nor any of their Affiliates shall be permitted to acquire
or agree to acquire, directly or indirectly, alone or as a part of a “group” (as
such term is used in Section 13(d) of the Exchange Act), any outstanding Common
Stock or rights or options to acquire outstanding Common Stock or any derivative
interests in outstanding Common Stock, in each case, in an amount that, when
taken together with the Common Stock into which the Purchaser’s Bond is
convertible, exceeds 19.95% of the number of shares of Common Stock that is then
outstanding; and (B) notwithstanding the proviso in clause (A) above, all of the
restrictions contained in this Section 6.3 will lapse with respect to the
Purchaser, the Parent Entities or their Affiliates, at such time as any person
or “group” (as defined in Section 13(d) of the Securities Exchange Act of 1934)
not affiliated with the Purchaser, the Parent Entities or their Affiliates, has
commenced a bona fide tender offer to acquire at least 50.1% of the Company’s
outstanding voting securities. However,

 

22

--------------------------------------------------------------------------------

from and after the Termination Event, this Section 6.3 shall again apply to the
Purchaser, the Parent Entities and their Affiliates pursuant to the terms
hereof, but only until this Agreement is terminated or the Purchaser no longer
holds in excess of 5% of the Common Stock (or Bonds convertible into more than
5% of the Common Stock).

6.4 Covenants of the Company and the Purchaser.

(a) Regulatory Approvals. Each party will use its commercially reasonable best
efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents as may be required to be filed by such
party with any Governmental Body with respect to this Agreement, the other Bond
Documents and the transactions contemplated hereby and thereby, including the
issuance of the Securities and the conversion of the Securities into Common
Stock, and to submit promptly any additional information requested by any such
Governmental Body. Without limiting the generality of the foregoing, the Company
and the Purchaser will promptly, and in any event within forty-five (45) days
after the date of this Agreement, prepare and file, in each case as may be
required with respect to this Agreement, the other Bond Documents and the
transactions contemplated hereby and thereby, including the issuance of the
Securities and the conversion of the Securities into Common Stock, all
applications and notices required for authorization by the FCC and in connection
with any State License. The Company and the Purchaser will respond as promptly
as practicable to any inquiries or requests received for additional information
or documentation, in each case as may be required in connection with this
Agreement, the other Bond Documents and the transactions contemplated hereby and
thereby, including the issuance of the Securities and the conversion of the
Securities into Common Stock from the FCC and any State Commission. If,
following any Termination Event, all required regulatory approvals to the
issuance of Common Stock upon conversion have not been obtained, within three
(3) Business Days after any notice of conversion is given by the Purchaser, the
Company will use its commercially reasonable best efforts to obtain, and
pursuant to this Section 6.4(a), cooperate with the Purchaser and its Affiliates
to obtain, such regulatory approvals.

7. Events of Default. “Event of Default,” wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it is voluntary or involuntary or effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):

7.1 failure to pay principal of the Bond on the Maturity Date; or

7.2 failure to pay any interest upon the Bond within thirty (30) days after it
becomes due and payable; or

7.3 failure to deliver the required shares of Common Stock upon conversion of
the Bond in the applicable time period set forth in Section 10.2 and such
failure continues for ten (10) days; or

7.4 failure to perform, or breach of, any covenant or warranty of the Company in
this Agreement (other than a covenant or warranty a default in whose performance
or whose breach is elsewhere in this section specifically dealt with), and
continuance of such default or

 

23

--------------------------------------------------------------------------------

breach for a period of sixty (60) days after there has been given, by registered
or certified mail, to the Company by the Purchaser or holders of at least 25% in
principal amount of the Bond a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or

7.5 the entry by a court having jurisdiction in the premises of (a) a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (b) a decree or order adjudging the Company bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its Property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of sixty (60) consecutive days; or

7.6 the commencement by the Company of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
Property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking by the Company of any action for the purpose of
effecting any of the foregoing; or

7.7 any Bond Document is held in any judicial proceeding to be unenforceable or
invalid or will cease for any reason to be in full force and effect (other than
pursuant to the terms of this Agreement).

8. Remedies on Default.

8.1 Acceleration of Maturity. If an Event of Default with respect to any Bond
occurs and is continuing, the Purchaser or the holders of at least 25% in
principal amount of the outstanding indebtedness under the Bond may declare the
principal amount of the Bond to be due and payable immediately by written notice
to the Company. Notwithstanding the foregoing, if an Event of Default specified
in Sections 7.5 or 7.6 occurs and is continuing, then the Bond will
automatically become immediately due and payable without further act by the
Purchaser or the holders.

8.2 Rescission and Annulment. At any time after such a declaration of
acceleration with respect to the Bond has been made and before a judgment or
decree for payment of the money due has been obtained, the Purchaser or the
holders of a majority in

 

24

--------------------------------------------------------------------------------

principal amount of the outstanding indebtedness under the Bond, by written
notice to the Company, may rescind and annul such declaration and its
consequences if the Company has cured or the Purchaser or the holders of a
majority in principal amount of the outstanding indebtedness under the Bond have
waived all Events of Default. No such rescission will affect any subsequent
default or impair any right consequent thereon.

8.3 Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether the Bonds will have become or have been
declared immediately due and payable under Section 8.1, the holder of any
portion of the indebtedness under the Bond at the time outstanding may proceed
to protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in the Bond, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.

9. Registration Rights.

9.1 Demand Registrations.

(a) Request for Registration. In case the Company receives from either (a) the
Purchaser or any of its Affiliates or (b) in the case of Registrable Securities
Holders that are not the Purchaser or any of its Affiliates, Registrable
Securities Holders who, in the aggregate, hold not less than 10% of the
Registrable Securities then outstanding, a written request (a “Demand Request”)
that the Company effect any registration, qualification or compliance with
respect to all or part of such Registrable Securities Holders’ Registrable
Securities (such Registrable Securities Holders, the “Initiating Holders”), the
reasonably anticipated aggregate offering price, before underwriting discounts
and commissions, of which would exceed $50,000,000, the Company will:

(i) promptly give written notice of the proposed registration, qualification or
compliance to all other Registrable Securities Holders; and

(ii) as soon as practicable, use its commercially reasonable best efforts to
effect such registration, qualification or compliance (including appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in the Demand
Request, together with all or such portion of the Registrable Securities of any
Registrable Securities Holder or Registrable Securities Holders joining in the
Demand Request as are specified in a written request received by the Company
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company will not be required to effect more than
four (4) registrations pursuant to this Section 9.1 in any twelve (12) month
period; provided, further, however, that any Synthetic Sales pursuant to
Section 10 will not be taken into account for purposes of the foregoing limit.
Notwithstanding the foregoing, the Company will not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 9.1 if, within two (2) Business Days of the date of the

 

25

--------------------------------------------------------------------------------

Demand Request, the Company delivers to such Registrable Securities Holder a
certificate signed by the President and Chief Executive Officer of the Company
stating that in the good faith judgment of the board of directors of the
Company, it would be seriously detrimental to the Company or its stockholders
for a registration statement to be filed in the near future, in which case the
Company’s obligation to use its commercially reasonable best efforts to
register, qualify or comply under this Section 9.1 will be deferred for a period
not to exceed forty-five (45) consecutive days from the date of receipt of the
Demand Request; provided, however, that the Company may not exercise this
deferral right more than twice per twelve (12) month period.

Subject to the foregoing, the Company will file a registration statement
covering the Registrable Securities so requested to be registered within thirty
(30) days after receipt of the Demand Request.

(b) Underwriting. In the event that the Demand Request requests a registration
pursuant to this Section 9.1 be for an Underwritten Offering, including solely
at the request of the Purchaser and any of its Affiliates, the Company will so
advise the Registrable Securities Holders as part of the notice given pursuant
to Section 9.1(a)(i), and the right of any Registrable Securities Holder to
registration pursuant to Section 9.1 will be conditioned upon such Registrable
Securities Holder’s participation in such underwriting arrangements, and the
inclusion of such Registrable Securities Holder’s Registrable Securities in the
Underwritten Offering to the extent requested will be subject to the limitations
provided herein.

Notwithstanding any other provision of this Section 9.1, if the managing
underwriter(s) advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company will so advise all Registrable Securities Holders of Registrable
Securities, and the number of shares of Registrable Securities that may be
included in the Underwritten Offering will be allocated as follows: (i) first,
to (a) all Registrable Securities requested to be included by the Purchaser and
its Affiliates and (b) newly issued shares of Common Stock to be offered by the
Company, on a pro rata basis (as between the Purchaser and its Affiliates on the
one hand, and the Company on the other hand), as nearly as practicable, and
(ii) second, and only if all the securities referred to in clause (i) have been
included, to Registrable Securities requested to be included by all Registrable
Securities Holders other than the Purchaser and its Affiliates, in proportion,
as nearly as practicable, to the respective amounts of Registrable Securities
held by such Registrable Securities Holders at the time of filing the
registration statement, if any; provided, however, that the number of (a) shares
of Registrable Securities of the Purchaser and its Affiliates and (b) the number
of newly issued shares of Common Stock to be offered by the Company to be
included in such Underwritten Offering will not be reduced unless all securities
of all Registrable Securities Holders other than the Purchaser and its
Affiliates are first entirely excluded from the underwriting and registration.
To the extent that marketing factors require further limitation of the numbers
of shares to be underwritten after such exclusion, the shares of Registrable
Securities to be offered by the Purchaser and its Affiliates, and the newly
issued shares of Common Stock offered by the Company will be reduced, on a pro
rata basis (as between the Purchaser and its Affiliates on the one hand, and the
Company on the other hand), from the Underwritten Offering. No Registrable
Securities excluded from the underwriting by reason of the underwriter’s
marketing limitation will be included in such registration. To facilitate the
allocation of shares in accordance with the

 

26

--------------------------------------------------------------------------------

above provisions, the underwriters may round the number of shares allocated to
the Company or any Registrable Securities Holder to the nearest 100 shares.

(c) Short Form Registrations. Requests for registration of Registrable
Securities pursuant to Section 9.1(a) will be on Form S-3 or any similar or
successor short form registration (“Short-Form Registrations”) whenever the
Company is permitted to use any applicable short-form. The Company will use its
commercially reasonable best efforts to continue to make Short-Form
Registrations available for the sale of Registrable Securities.

To the extent the Company is a WKSI, the Company will file an automatic shelf
registration statement (as defined in Rule 405 under the Securities Act
(“Automatic Shelf Registrations”)) on Form S-3, which covers those Registrable
Securities which are requested to be sold. The Company will use its commercially
reasonable best efforts to remain a WKSI and not become an ineligible issuer (as
defined in Rule 405 under the Securities Act) during the period during which
such Automatic Shelf Registration is required to remain effective. If the
Company does not pay the filing fee covering the Registrable Securities at the
time the Automatic Shelf Registration is filed, the Company agrees to pay such
fee at such time or times as the Registrable Securities are to be sold. If the
Automatic Shelf Registration has been outstanding for at least three (3) years,
at the end of the third year, the Company will refile a new Automatic Shelf
Registration covering the Registrable Securities. If at any time when the
Company is required to re-evaluate its WKSI status and the Company determines
that it is not a WKSI, the Company will promptly give written notice to all
Registrable Securities Holders and use its commercially reasonable best efforts
to refile the Shelf Registration on Form S-3 or, if such form is not available,
Form S-1, and use the Company’s commercially reasonable best efforts to have
such registration statement declared effective as promptly as practicable after
the date the Automatic Shelf Registration is no longer useable by the
Registrable Securities Holders to sell their Registrable Securities and to keep
such registration statement effective during the period during which such
registration statement is required to be kept effective. The Company will, at
the request of any Registrable Securities Holder, file any post-effective
amendments to such Automatic Shelf Registration and otherwise take any action
necessary to include therein all disclosure and language deemed necessary or
advisable by such Registrable Securities Holder.

(d) Effective Registration. No registration pursuant to this Section 9.1 will be
deemed to have been effected if (i) during such period, such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court, or (ii) the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such Underwritten Offering are not satisfied other than by reason of a
misrepresentation or breach of such applicable underwriting agreement by a
participating Registrable Securities Holder.

9.2 Piggyback Registrations.

(a) Notice of Registration. If at any time or from time to time the Company
determines to register any of its equity securities, either for its own account
or for the account of a security holder or holders, other than a registration
relating solely to employee benefit plans, the Company will:

 

27

--------------------------------------------------------------------------------

(i) promptly give to each Registrable Securities Holder written notice thereof
(but no later than fifteen (15) days before the anticipated filing date of any
such registration); and

(ii) include in such registration (and any related qualification under blue sky
laws or other compliance), and in any Underwritten Offering involved therein,
all the Registrable Securities specified in a written request or requests, made
within ten (10) days after receipt of such written notice from the Company, by
any Registrable Securities Holder.

(b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an Underwritten Offering, the Company will
so advise the Registrable Securities Holders as a part of the written notice
given pursuant to Section 9.2(a)(i). In such event the right of any Registrable
Securities Holder to registration pursuant to Section 9.2 will be conditioned
upon such Registrable Securities Holder’s participation in such underwriting
arrangements, and the inclusion of such Registrable Securities Holder’s
Registrable Securities in the Underwritten Offering will be limited to the
extent provided herein.

Notwithstanding any other provision of this Section 9.2, if the managing
underwriter(s) determines that marketing factors require a limitation of the
number of shares to be underwritten, the managing underwriter(s) may allocate
the Registrable Securities to be included in such Underwritten Offering, and the
number of shares of Common Stock or other securities to be offered by the
Company that may be included in the Underwritten Offering as follows: (i) first,
to (a) all Registrable Securities requested to be included by the Purchaser and
its Affiliates and (b) newly issued shares of Common Stock to be offered by the
Company, on a pro rata basis (as between the Purchaser and its Affiliates on the
one hand, and the Company on the other hand), as nearly as practicable and
(ii) second, and only if all the securities referred to in clause (i) have been
included, to Registrable Securities requested to be included by all Registrable
Securities Holders other than the Purchaser and its Affiliates, in proportion,
as nearly as practicable, to the respective amounts of Registrable Securities
held by such Registrable Securities Holders at the time of filing the
registration statement, if any; provided, however, that the number of (a) shares
of Registrable Securities of the Purchaser and its Affiliates and (b) the number
of newly issued shares of Common Stock to be offered by the Company to be
included in such Underwritten Offering will not be reduced unless all securities
of all Registrable Securities Holders other than the Purchaser and its
Affiliates are first entirely excluded from the underwriting and registration.
To the extent that marketing factors require further limitation of the numbers
of shares to be underwritten after such exclusion, the shares of Registrable
Securities to be offered by the Purchaser and its Affiliates, and the newly
issued shares of Common Stock offered by the Company will be reduced, on a pro
rata basis (as between the Purchaser and its Affiliates on the one hand, and the
Company on the other hand), from the Underwritten Offering. No Registrable
Securities excluded from the underwriting by reason of the underwriter’s
marketing limitation will be included in such registration. To facilitate the
allocation of shares in accordance with the above provisions, the underwriters
may round the number of shares allocated to the Company or any Registrable
Securities Holder to the nearest 100 shares.

9.3 Underwritten Offerings.

 

28

--------------------------------------------------------------------------------

(a) Demand Registrations. For any Underwritten Offering pursuant to Section 9.1
above, a majority in interest of the Initiating Holders will have the right to
select the managing underwriter(s) or underwriters to administer such offering
(but subject to the Company’s reasonable approval). If requested by the
underwriters, the Company and each Registrable Securities Holder participating
in such registration will enter into an underwriting agreement with the managing
underwriter(s), such agreement to be reasonably satisfactory in substance and
form to the Company, the Initiating Holders and the underwriters, and, unless
consented to by Initiating Holders, to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of that type, including indemnities no less favorable to the
recipient thereof than those provided in Section 9.14. The Company will
cooperate with the Registrable Securities Holders of the Registrable Securities
proposed to be distributed by such underwriters in any such Underwritten
Offering in the negotiation of the underwriting agreement, and the Purchaser
will give consideration to the reasonable suggestions of the Company regarding
the form thereof. Such Registrable Securities Holders of the Registrable
Securities to be distributed by such underwriters will be parties to such
underwriting agreement, which underwriting agreement will, unless consented to
by the Initiating Holders, (i) contain such representations and warranties by,
and the other agreements on the part of, the Company as are customarily made by
issuers in underwritten public offerings, (ii) provide that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also will be conditions precedent to the obligations of
such Registrable Securities Holders, and (iii) contain such representations and
warranties by, and the other agreements on the part of, the Registrable
Securities Holders as are customarily made by selling stockholders in
underwritten public offerings.

(b) Piggyback Registrations. For any Underwritten Offering pursuant to
Section 9.2 above, the Company will have the right to select the managing
underwriter(s) or underwriters to administer such offering. For such an
offering, the Registrable Securities Holders whose Registrable Securities are to
be distributed by such underwriters will be parties to the underwriting
agreement between the Company and such underwriters, which underwriting
agreement will (i) contain such representations and warranties by, and the other
agreements on the part of, the Company as are customarily made by issuers in
secondary underwritten public offerings, (ii) provide that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also will be conditions precedent to the obligations of
such Registrable Securities Holders, and (iii) contain such representations and
warranties by, and the other agreements on the part of, the Registrable
Securities Holders as are customarily made by selling stockholders in
underwritten public offerings.

(c) Participation in Underwritten Registrations. Subject to the provisions of
Sections 9.3(a) and 9.3(b) above, no Person may participate in any Underwritten
Offering hereunder unless such Person agrees to sell such Person’s securities on
the basis provided in any underwriting arrangements approved by: (i) the
Purchaser or one of its Affiliates, in the case of a Demand Request pursuant to
Section 9.1 above where the Purchaser or any of its Affiliates is participating
in such registration (regardless of whether the Purchaser or any of its
Affiliates initiated the Demand Request), (ii) the majority of Initiating
Holders, in the case of a Demand Request pursuant to Section 9.1 above where the
Purchaser and its Affiliates

 

29

--------------------------------------------------------------------------------

are not participating in such registration, or (iii) the Company, in the case of
a registration of which the Company gives notice pursuant to Section 9.2 above.

(d) Price and Underwriting Discounts. In the case of an Underwritten Offering
under Section 9.1, the price, underwriting discount and other financial terms
for the Registrable Securities will be determined by a representative selected
by majority in interest of the Initiating Holders. In the case of an
Underwritten Offering under Section 9.2, the price, underwriting discount and
other financial terms for the offering will be determined jointly by the Company
and the Purchaser, to the extent the Purchaser participates in such offering.

9.4 Holdback Agreements. If requested by the managing underwriter(s) of an
Underwritten Offering of the Company’s equity securities, any Registrable
Securities Holders participating in such offering will not sell or otherwise
transfer or dispose of any Registrable Securities (other than the Underwritten
Offering) during the period ten (10) days prior to and ninety (90) days
following the pricing date of the offering of the Company’s securities, subject
to extension as required by FINRA rules, and if requested by any such
underwriter(s), such Registrable Securities Holders will reconfirm such
agreement in writing prior to any such offering; provided, however, that no
participating Registrable Securities Holder will be relieved of such obligation
in any respect unless all participating Registrable Securities Holders are
relieved in the same respect.

9.5 Limitations on Subsequent Registration Rights. From and after the Closing,
the Company will not enter into any agreement granting any holder or prospective
holder of any securities of the Company, registration rights with respect to
such securities without the written consent of the holders of a majority of the
Registrable Securities then outstanding, unless such other registration rights
are subordinate to the registration rights granted to the Registrable Securities
Holders hereunder and the holders of such rights are subject to market standoff
obligations no more favorable to such persons than those contained herein.

9.6 Expenses of Registration. All Registration Expenses incurred in connection
with registrations pursuant to Sections 9.1 and 9.2 will be borne by the
Company. Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Registrable Securities Holders will be borne by the
Registrable Securities Holders of such securities pro rata on the basis of the
number of shares so registered.

9.7 Blackout Period. In the case of a registration of Registrable Securities
pursuant to Section 9.1 for an Underwritten Offering, the Company agrees, if
requested by the Purchaser and its Affiliates or the managing underwriter(s),
not to effect any public sale or distribution of any securities that are the
same as or similar to those being registered, or any securities convertible into
or exchangeable or exercisable for such securities, during the period beginning
seven (7) days before, and ending ninety (90) days (or such lesser period as may
be permitted by the Purchaser or any of its Affiliates, or such managing
underwriter(s)) after, the effective date of the registration statement filed in
connection with such registration (or, in the case of an offering under a Shelf
Registration, the date of the underwriting agreement in connection therewith).
Notwithstanding the foregoing, the Company may effect a public sale or
distribution of securities of the type described above, and during the periods
described above, if

 

30

--------------------------------------------------------------------------------

such sale or distribution is made pursuant to registrations on Form S-4 or S-8
or any successor or similar form to such forms or as part of any registration of
securities for offering and sale to employees or directors of the Company
pursuant to any employee stock plan or other employee benefit plan arrangement.
Subject to Section 9.4, if after the date hereof the Company grants any Person
(other than a Registrable Securities Holder of Registrable Securities) any
rights to demand or participate in a registration of equity securities, the
Company agrees that the agreement with respect thereto will include such
Person’s agreement to comply with any blackout period required by this
Section 9.7 as if it were the Company hereunder.

9.8 Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Section 9, the Company will
keep each Registrable Securities Holder advised in writing as to the initiation
of each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:

(a) prepare and file with the SEC a registration statement and such amendments
and supplements thereto as may be necessary or appropriate with respect to such
securities and use its commercially reasonable best efforts to cause such
registration statement to become effective (unless it is automatically effective
upon filing); and before filing such a registration statement or prospectus or
any amendments or supplements thereto (excluding documents incorporated by
reference), furnish to all Registrable Securities Holders and the underwriters
or other distributors, if any, copies of all such documents proposed to be
filed, including documents incorporated by reference in the prospectus and, if
requested by any Registrable Securities Holder, one set of the exhibits
incorporated by reference, and all Registrable Securities Holders and their
respective counsels will have a reasonable amount of time (but no less than five
(5) Business Days) to review and comment on such registration statement and each
such prospectus (and each amendment or supplement thereto) before it is filed
with the SEC;

(b) use its commercially reasonable best efforts to keep such registration
statement effective for (i) at least one hundred eighty (180) days or until the
distribution described in such registration statement has been completed,
whichever first occurs, or if such registration statement relates to an
Underwritten Offering, such longer period as, in the opinion of counsel for the
underwriter or underwriters, a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer, or
(ii) in the case of a Shelf Registration, for a period of two (2) years after
the effective date of such registration statement (or if (x) such registration
statement is not effective for any period within such years or (y) such
registration statement or any prospectus included in such registration statement
is unusable for any period within such years because such registration statement
or prospectus includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, then such two (2) year period will be extended by the number of days
during such period when such registration statement is not effective or such
registration statement or prospectus is unusable); provided, however, that in
the case of clause (ii), the Company will not be deemed to have used its
commercially reasonable best efforts to keep such registration statement
effective during the two (2) year period if the Company voluntarily takes any
action or omits to take any action that would result in the Registrable
Securities Holders of the Registrable Securities covered thereby not being able
to offer and sell

 

31

--------------------------------------------------------------------------------

any Registrable Securities pursuant to such registration statement during the
two (2) year period, unless such action or omission is required by applicable
law;

(c) furnish to the Registrable Securities Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such Registrable
Securities Holders and underwriters may reasonably request in order to
facilitate the public offering of such securities;

(d) use its commercially reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as will be reasonably requested by the
Registrable Securities Holders, provided that the Company will not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject;

(e) enter into and perform all obligations under such customary agreements
(including, in an Underwritten Offering, an underwriting agreement in form,
scope and substance as is customary in an underwritten public offering) and take
all such other actions as the Initiating Holders or the managing underwriter(s),
if any, reasonably request in order to expedite or facilitate the registration
and disposition of such Registrable Securities, including, but not limited to:

(i) making such representations, warranties, agreements and indemnities to or in
favor of the Registrable Securities Holders participating in such registration,
and the underwriters or agents, if any, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten public offerings;

(ii) obtaining for delivery to the Registrable Securities Holders participating
in such registration and to the underwriter(s), if any, an opinion or opinions
from counsel for the Company dated the effective date of the applicable
registration statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, in customary form, scope and
substance, which opinions will be reasonably satisfactory to such Registrable
Securities Holders or underwriter(s), as the case may be, and their respective
counsel;

(iii) in the case of an Underwritten Offering, obtaining for delivery to the
Company and the managing underwriter(s), with copies to the Registrable
Securities Holders participating in such registration, a cold comfort letter
from the Company’s independent registered public accountants in customary form
and covering such matters of the type customarily covered by cold comfort
letters as the managing underwriter(s) reasonably request, dated the date of
execution of the underwriting agreement and brought down to the closing under
the underwriting agreement; and

(iv) delivering such documents and certificates as may be reasonably requested
by the Initiating Holders and the managing underwriter(s), if any, to

 

32

--------------------------------------------------------------------------------

evidence the continued validity of the representations and warranties made
pursuant to Section 2 and to evidence compliance with any conditions contained
in the underwriting agreement or any other agreement entered in connection with
such registration;

(f) notify each Registrable Securities Holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing;

(g) use its commercially reasonable best efforts to prevent or obtain the
withdrawal of any stop order or other order suspending the use of any
preliminary or final prospectus;

(h) promptly incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter(s) and the Initiating Holders agree
should be included therein relating to the plan of distribution with respect to
such Registrable Securities; and make all required filings of such prospectus
supplement or post-effective amendment as soon as reasonably practicable after
being notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment;

(i) use its commercially reasonable best efforts to cause the Registrable
Securities covered by the applicable registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;

(j) cooperate with each seller of Registrable Securities and each underwriter,
if any, participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
FINRA;

(k) make available upon reasonable notice at reasonable times and for reasonable
periods for inspection by a representative appointed by a majority in interest
of the Initiating Holders, by any underwriter participating in any disposition
to be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by such Registrable Securities Holders or any
such underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company’s
officers, directors and employees and the independent public accountants who
have certified its financial statements to make themselves available to discuss
the business of the Company and to supply all information reasonably requested
by any such Person in connection with such registration statement as will be
necessary to enable them to exercise their due diligence responsibility;
provided, however, that any such Person gaining access to information regarding
the Company pursuant to this Section 9.8(k) will agree to hold such information
in strict confidence, will take such actions as are reasonably necessary to
protect the confidentiality of such action and will not make any disclosure or
use any information regarding the Company that the Company determines in good
faith to be confidential, and of which determination such

 

33

--------------------------------------------------------------------------------

Person is notified, unless (w) the release of such information is requested or
required (by deposition, interrogatory, requests for information or documents by
a governmental entity, subpoena or similar process), (x) such information is or
becomes publicly known other than through a breach of this or any other
agreement of which such Person has knowledge, (y) such information is or becomes
available to such Person on a non-confidential basis from a source other than
the Company, or (z) such information is independently developed by such Person;
and

(l) in the case of an Underwritten Offering, cause the senior executive officers
of the Company to participate in the customary “road show” presentations or
similar marketing efforts that may be reasonably requested by the managing
underwriter(s) and otherwise to facilitate, cooperate with, and participate in
each proposed offering contemplated herein and customary selling efforts related
thereto.

9.9 Shelf Take-Downs. At any time that a Shelf Registration is effective, if any
of the Registrable Securities Holders delivers a notice to the Company (a
“Take-Down Notice”) stating that it intends to effect an offering of all or part
of its Registrable Securities included by it on the Shelf Registration, whether
such offering is an Underwritten Offering or non-underwritten (a “Shelf
Offering”) and stating the number of the Registrable Securities to be included
in the Shelf Offering, then the Company will amend or supplement the Shelf
Registration as may be necessary in order to enable such Registrable Securities
to be distributed pursuant to the Shelf Offering (taking into account the
inclusion of Registrable Securities by any other Stockholders pursuant to this
Section 9.9). In connection with any Shelf Offering:

(a) the Company will deliver the Take-Down Notice to all other Registrable
Securities Holders included on such Shelf Registration and permit each such
Registrable Securities Holder to include its Registrable Securities included on
the Shelf Registration in the Shelf Offering if such Registrable Securities
Holder notifies the Company within three (3) days after delivery of the
Take-Down Notice to such Registrable Securities Holder; and

(b) in the event that the managing underwriter(s), if any, advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company will so advise all Registrable Securities
Holders of Registrable Securities, and the number of shares of Registrable
Securities that may be included in the Shelf Offering will be limited in the
same manner as is described in Section 9.1(b).

9.10 Information by Registrable Securities Holder. The Registrable Securities
Holder or Registrable Securities Holders of Registrable Securities included in
any registration will furnish to the Company such information regarding such
Registrable Securities Holder or Registrable Securities Holders, the Registrable
Securities held by them and the distribution proposed by such Registrable
Securities Holder or Registrable Securities Holders as the Company may request
in writing and as will be required by applicable law in connection with any
registration, qualification or compliance referred to in this Section 9.

9.11 Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the SEC which may at any time permit the sale of the
Registrable

 

34

--------------------------------------------------------------------------------

Securities to the public without registration, the Company agrees to use its
commercially reasonable best efforts to:

(a) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and

(c) so long as a Registrable Securities Holder owns any Registrable Securities,
furnish to such Registrable Securities Holder forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of
said Rule 144 and of the Securities Act and the Exchange Act and such other
reports and documents of the Company and other information in the possession of
or reasonably obtainable by the Company as the Registrable Securities Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing the Registrable Securities Holder to sell any such securities without
registration.

9.12 Transfer of Registration Rights. The rights to cause the Company to
register Registrable Securities granted Registrable Securities Holders under
Sections 9.1 and 9.2 may be assigned to any Person in connection with any
transfer or assignment of Registrable Securities by the Registrable Securities
Holder, provided that: (i) such transfer may be effected in accordance with
applicable securities laws, (ii) such assignee or transferee acquires at least
5% of the Registrable Securities, (iii) written notice is promptly given to the
Company and (iv) such transferee agrees in writing to be bound by the provisions
of this Agreement. Notwithstanding the foregoing, the rights to cause the
Company to register securities may be assigned to any Affiliate of a Registrable
Securities Holder; provided written notice thereof is promptly given to the
Company and the transferee agrees to be bound by the provisions of this
Agreement.

9.13 Termination of Registration Rights. The rights granted pursuant to this
Section 9 will terminate as to any Registrable Securities Holder when such
Registrable Securities Holder no longer holds any Registrable Securities.

9.14 Indemnification For Securities Offerings.

(a) The Company will indemnify each Registrable Securities Holder, each of such
Registrable Securities Holders’ officers and directors and partners, and each
person controlling such Registrable Securities Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to Sections 9 and 10.1
(solely to the extent to which registration, qualification or compliance is
related to a Synthetic Sale), and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement or prospectus (each as amended or supplemented),
including any documents incorporated by reference therein, or based on any
omission (or alleged omission) to state therein

 

35

--------------------------------------------------------------------------------

a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act, the Exchange Act, state securities law or any rule or regulation
promulgated under the such laws applicable to the Company in connection with any
such registration, qualification or compliance, and the Company will reimburse
each such Registrable Securities Holder, each of its officers, directors and
partners and each person controlling such Registrable Securities Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred, as such expenses are incurred,
in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by any
Registrable Securities Holder, controlling person or underwriter and stated to
be specifically for use in such prospectus.

(b) Each Registrable Securities Holder, severally and not jointly, will, if
Registrable Securities held by such Registrable Securities Holder are included
in the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company’s securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Registrable
Securities Holder, each of its officers, directors and partners and each person
controlling such Registrable Securities Holder within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement or prospectus (each as amended or supplemented),
including any documents incorporated by reference therein, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Registrable Securities Holders, such directors, officers,
partners, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus (each as amended or
supplemented), including any documents incorporated by reference therein, in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Registrable Securities Holder and
stated to be specifically for use therein. Notwithstanding the foregoing, the
liability of each Registrable Securities Holder under this Section 9.14(b) will
be limited in an amount equal to the net proceeds of the shares sold by such
Registrable Securities Holder; and provided further that the indemnity agreement
provided in this Section 9.14(b) will not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Registrable Securities Holder, which consent will not
be unreasonably withheld.

(c) Each party entitled to indemnification under this Section 9.14 (the
“Indemnified Party”) will give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim

 

36

--------------------------------------------------------------------------------

as to which indemnity may be sought, and will permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who will conduct the defense
of such claim or litigation, will be approved by the Indemnified Party (whose
approval will not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party’s expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein will not
relieve the Indemnifying Party of its obligations under this Section 9.14 unless
the failure to give such notice is materially prejudicial to an Indemnifying
Party’s ability to defend such action, in which case the Indemnifying Party will
be relieved of its obligations under this Section 9.14 to the extent of such
prejudice, and provided further, however, that if, in the reasonable judgment of
the Indemnified Party, a conflict of interest may exist between the Indemnified
Party and the Indemnifying Party with respect to any claims as to which
indemnity is sought and the Indemnified Party provides written notice to the
Indemnifying Party that the Indemnified Party is seeking separate counsel at the
expense of the Indemnifying Party, then the Indemnifying Party will not assume
the defense for matters as to which representation of both the Indemnifying
Party and the Indemnified Party by the same counsel would be inappropriate due
to actual or potential differing interests between them, but will instead in
such event pay the fees and costs of separate counsel for the Indemnified Party.
No Indemnifying Party, in the defense of any such claim or litigation, will,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.

(d) If the indemnification provided for, in, or pursuant to, this Section 9.14
is due in accordance with the terms hereof but is held by a court to be
unavailable or unenforceable in respect of any expenses, claims, losses, damages
or liabilities (or actions in respect thereof) (except, for purposes of clarity,
any exclusions to indemnification expressly provided for in Sections 9.14(a) or
9.14(b)), then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, will contribute to the amount paid or payable by such
Indemnified Party as a result of such expenses, claims, losses, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party, on the one hand, and of
the Indemnified Party, on the other, in connection with the statements or
omissions that result in such expenses, claims, losses, damages or liabilities
(or actions in respect thereof) as well as any other relevant equitable
considerations; provided, however, that no Registrable Securities Holder will be
required to contribute more than its pro rata share of any such contribution. No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The relative
fault of the Indemnifying Party, on the one hand, and of the Indemnified Party,
on the other, will be determined by reference to, among other things, whether
the untrue statement (or alleged untrue statement) of a material fact or any
omission (or alleged omission) to state therein a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party, and
by such party’s relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. In no event will
the liability of any selling Registrable Securities Holder be greater in amount
than the amount of net proceeds received by such Registrable Securities Holder
upon such sale or the amount for which such Indemnifying Party would have been
obligated to pay by way of indemnification if the indemnification provided for

 

37

--------------------------------------------------------------------------------

under Sections 9.14(a) or 9.14(b) had been available under the circumstances.
Notwithstanding anything in this Section 9.14(d), any Registrable Securities
Holder will be required to contribute under this Section 9.14(d) to the extent,
and only to the extent, that the expenses, claims, losses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information provided by such Registrable Securities Holder.

10. Conversion of the Bond.

10.1 Right to Convert.

(a) At any time after the Merger Agreement has been terminated without
consummation of the Merger (the “Termination Event”), upon not less than three
(3) Business Days’ prior written notice, the holder of the Bond may convert any
or all of the Bond into shares of Common Stock at the Conversion Rate (as
defined below). If, following the Termination Event, all required regulatory
approvals to the issuance of such Common Stock have not been obtained within
three (3) Business Days after any notice of conversion is given by the
Purchaser, the Company will use its commercially reasonable best efforts to
obtain, and pursuant to Section 6.4, cooperate with the Purchaser and its
Affiliates to obtain, such regulatory approvals, and the Purchaser may convert
any or all of the Bond at such time as may be designated by the Purchaser after
all such regulatory approvals have been obtained. All outstanding Bonds will
convert into shares of Common Stock automatically and without notice immediately
prior to the consummation of any Change of Control; provided, however, that
notwithstanding the foregoing, such provision providing for automatic conversion
will only be effective after the Purchaser has delivered a written notice
specifically electing that such provision become effective, and the Purchaser
may revoke such election by delivering a written revocation at any time. The
initial conversion rate for the Bond will be 190.476190322581 shares of Common
Stock for each $1,000 of principal (the “Conversion Rate”), subject to
adjustment as set forth in Section 10.4; provided, however, that the Conversion
Rate at the time of any conversion pursuant to Section 10.1(f) will be equal to
the number of shares of Common Stock that would be obtained by dividing $1,000
of principal by the Closing Sale Price of the Common Stock for the Trading Day
immediately prior to closing of the Merger; provided, further, however, that in
no event other than as adjusted pursuant to Section 10.4(a)(iii), will the
Conversion Rate be less than 190.476190322581 shares of Common Stock for each
$1,000 of principal.

(b) If, following the Termination Event, any required regulatory approvals to
the issuance of such Common Stock have not been obtained, the Purchaser may, at
any time, at its option in its sole discretion, effect a Synthetic Sale.

(c) The Company will pay any documentary, stamp or similar issue or transfer tax
due on the issuance of the shares of the Common Stock upon conversion of the
Bond, unless the tax is due because the holder of the Bond requests such shares
of Common Stock to be issued in a name other than the holder’s name, in which
case the holder will pay the tax.

(d) The Purchaser has the right to convert the Bond in whole or in part
immediately prior to any repayment of the Bond.

 

38

--------------------------------------------------------------------------------

(e) Notwithstanding anything herein to the contrary, no conversion of the Bond,
in whole or in part, shall be permitted until:

(i) All required regulatory approvals for the issuance of such Common Stock have
been applied for and obtained (including, in the case of conversions by the
Purchaser, approval by the FCC to exceed the foreign ownership restrictions of
Section 310(b)(4) of the Communications Act, which approval shall be required
before any conversion of the Bond will be permitted regardless of whether the
number of shares of Common Stock deliverable upon conversion of only a portion
of the Bond would cause the Purchaser’s ownership to exceed such restrictions);
and

(ii) Unless the Company has defaulted in its obligation pursuant to
Section 6.1(l), any required approvals or waivers shall have been received under
the JPM Agreement, the EDC Agreement and the EKN Agreement.

(f) Immediately prior to the Effective Time (as defined in the Merger
Agreement), the Bond shall convert in its entirety into shares of Common Stock
at the Conversion Rate set forth in Section 10.1(a), and upon consummation of
the Merger, this Agreement will terminate and will have no further force or
effect.

10.2 Settlement Upon Conversion.

(a) Upon conversion, the Company will deliver to the Purchaser in respect of
each $1,000 of principal of the Bond being converted a number of shares of
Common Stock equal to the Conversion Rate in effect immediately prior to the
Close of Business on the relevant Conversion Date. No fractional shares will be
issued upon conversion. Instead, the Company will pay cash in lieu of any
fractional share based on the Closing Sale Price of the Common Stock on the
relevant Conversion Date.

(b) Each conversion will be deemed to have been effected as to any portion of
the Bond surrendered for conversion on the Conversion Date, and with respect to
the shares of Common Stock that are issuable upon such conversion, the Person in
whose name the certificate or certificates for such shares will be registered
will be treated as the holder of record of such shares as of the Close of
Business on the Conversion Date.

(c) The Company will deliver the consideration due in respect of any conversion
on the third Business Day immediately following the relevant Conversion Date.

10.3 Conversion Procedures. To exercise its right of conversion, the Purchaser
must:

(a) deliver a completed Conversion Notice or facsimile thereof to the Company;
and

(b) pay all transfer or similar taxes if required to be paid by the Purchaser
pursuant to Section 10.1(c) and requested by the Company.

 

39

--------------------------------------------------------------------------------

10.4 Conversion Rate Adjustments. The Conversion Rate will be subject to
adjustments from time to time, without duplication, upon the occurrence of any
of the following events:

(a) If the Company (i) issues solely shares of Common Stock as a dividend or
distribution on its shares of Common Stock, (ii) subdivides Common Stock or
(iii) combines Common Stock, the Conversion Rate will be calculated based on the
following formula:

 

  CR = CR0 ×  

OS

      OS0  

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business
on the Record Date for such dividend or distribution, or immediately prior to
the Open of Business on the effective date of such subdivision or combination of
Common Stock, as the case may be;

CR = the Conversion Rate in effect immediately after the Close of Business on
the Record Date for such dividend or distribution, or immediately after the Open
of Business on the effective date of such subdivision or combination of Common
Stock, as the case may be;

OS0 = the number of shares of Common Stock outstanding immediately prior to the
Close of Business on the Record Date for such dividend or distribution, or
immediately prior to the Open of Business on the effective date of such
subdivision or combination of Common Stock, as the case may be; and

OS = the number of shares of Common Stock that would be outstanding immediately
after giving effect to such dividend or distribution, or immediately after the
effective date of such subdivision or combination of Common Stock, as the case
may be.

Any adjustment made under this Section 10.4(a) will become effective immediately
after the Close of Business on the Record Date for such dividend or
distribution, or immediately after the Open of Business on the effective date of
such subdivision or combination of Common Stock, as the case may be. If such
dividend, distribution, subdivision or combination described in this
Section 10.4(a) is declared but not so paid or made, the Conversion Rate will be
immediately readjusted, effective as of the date the Company’s board of
directors determines not to pay such dividend or distribution or to effect such
subdivision or combination, to the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared or such subdivision or
combination had not been announced.

(b) If an Ex-Dividend Date occurs for a distribution to all or substantially all
holders of Common Stock of any rights, options or warrants entitling such
holders for a period of not more than sixty (60) calendar days from the
announcement date for such distribution to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock), at a price per share
less than the average of the Closing Sale Prices of the

 

40

--------------------------------------------------------------------------------

Common Stock for the ten (10) consecutive Trading Day period ending on, and
including, the Trading Day immediately preceding the announcement date for such
distribution, the Conversion Rate will be calculated based on the following
formula:

 

  CR = CR0 ×  

OS0 + X

      OS0 + Y  

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business
on the Record Date for such distribution;

CR = the Conversion Rate in effect immediately after the Close of Business on
the Record Date for such distribution;

OS0 = the number of shares of Common Stock outstanding immediately prior to the
Close of Business on the Record Date for such distribution;

X = the total number of shares of Common Stock issuable pursuant to such rights,
options or warrants; and

Y = the number of shares of Common Stock equal to the aggregate price payable to
exercise such rights, options or warrants divided by the average of the Closing
Sale Prices of Common Stock over the ten (10) consecutive Trading Day period
ending on, and including, the Trading Day immediately preceding the announcement
date for such distribution.

Any adjustment made under this Section 10.4(b) will be made successively
whenever any such rights, options or warrants are issued and will become
effective immediately after the Close of Business on the Record Date for such
distribution. To the extent that shares of Common Stock are not delivered after
the expiration of such rights, options or warrants, including because the
distributed rights, options or warrants were not exercised, the Conversion Rate
will be decreased to the Conversion Rate that would then be in effect had the
increase with respect to the distribution of such rights, options or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights, options or warrants are not so distributed,
the Conversion Rate will be decreased to the Conversion Rate that would then be
in effect if the Ex-Dividend Date for such distribution had not occurred.

For purposes of this Section 10.4(b), in determining whether any rights, options
or warrants entitle the Purchaser to subscribe for or purchase shares of Common
Stock at a price that is less than the average of the Closing Sale Prices of the
Common Stock over the applicable ten (10) consecutive Trading Day period, there
will be taken into account any consideration the Company receives for such
rights, options or warrants and any amount payable on exercise thereof, with the
value of such consideration if other than cash to be determined in good faith by
the Company’s board of directors.

(c) (i) If an Ex-Dividend Date occurs for a distribution (a “Relevant
Distribution”) of shares of the Company’s capital stock, evidences of the
Company’s

 

41

--------------------------------------------------------------------------------

indebtedness or other assets or property of the Company or rights, options or
warrants to acquire the Company’s capital stock or other securities, evidences
of its indebtedness or other assets or property of the Company to all or
substantially all holders of the Common Stock (excluding (A) dividends or
distributions and rights, options or warrants as to which an adjustment was
effected under Sections 10.4(a) or 10.4(b); (B) dividends or distributions paid
exclusively in cash covered under Section 10.4(d); and (C) Spin-Offs), then the
Conversion Rate will be calculated based on the following formula:

 

  CR = CR0 ×  

SP0

      SP0 – FMV  

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business
on the Record Date for such distribution;

CR = the Conversion Rate in effect immediately after the Close of Business on
the Record Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Common Stock over the ten
(10) consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined in good faith by the Company’s board
of directors) of the shares of capital stock, evidences of indebtedness, assets
or property or rights, options or warrants distributed with respect to each
outstanding share of Common Stock as of the Open of Business on the Ex-Dividend
Date for such distribution.

Any adjustment made under the above portion of this Section 10.4(c) will become
effective immediately after the Close of Business on the Record Date for such
distribution. No adjustment pursuant to the above formula will result in a
decrease of the Conversion Rate. However, if such distribution is not so paid or
made, the Conversion Rate will be readjusted to be the Conversion Rate that
would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or
greater than “SP0” (as defined above), in lieu of the foregoing increase, the
Purchaser will receive, in respect of each $1,000 principal amount thereof, at
the same time and upon the same terms as holders of the Common Stock, without
having to convert its Bond, the amount and kind of the Relevant Distribution
that such holder would have received if such holder owned a number of shares of
Common Stock equal to the Conversion Rate on the Record Date for the
distribution.

For purposes of this Section 10.4(c)(i) (and subject in all respects to
Section 10.4(f)):

(1) Rights, options or warrants distributed by the Company to all or
substantially all holders of the Common Stock entitling them to subscribe for or
purchase shares of the Company’s capital stock, including Common Stock (either
initially or under certain

 

42

--------------------------------------------------------------------------------

circumstances), which rights, options or warrants, until the occurrence of a
specified event or events (a “Trigger Event”):

(a) are deemed to be transferred with such shares of the Common Stock;

(b) are not exercisable; and

(c) are also issued in respect of future issuances of the Common Stock, will be
deemed not to have been distributed for purposes of this Section 10.4(c) (and no
adjustment to the Conversion Rate under this Section 10.4(c) will be required)
until the occurrence of the earliest Trigger Event, whereupon such rights,
options or warrants will be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate will be made under this
Section 10.4(c).

(2) If any such right, option or warrant, including any such existing rights,
options or warrants distributed prior to the Closing, are subject to events,
upon the occurrence of which such rights, options or warrants become exercisable
to purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event will be deemed to be
the date of distribution and the Record Date with respect to new rights, options
or warrants with such rights (in which case the existing rights, options or
warrants will be deemed to terminate and expire on such date without exercise by
any of the holders thereof).

(3) In addition, in the event of any distribution (or deemed distribution) of
rights, options or warrants, or any Trigger Event or other event of the type
described in the immediately preceding clause (2) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this Section 10.4(c) was made:

(a) in the case of any such rights, options or warrants that will all have been
redeemed or repurchased without exercise by any holders thereof, upon such final
redemption or repurchase (x) the Conversion Rate will be readjusted as if such
rights, options or warrants had not been issued and (y) the Conversion Rate will
then again be readjusted to give effect to such distribution, deemed
distribution or Trigger Event, as the case may be, as though it were a cash
distribution pursuant to Section 10.4(d), equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect to
such rights, options or warrants (assuming such holder had retained such rights,
options or warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase; and

(b) in the case of such rights, options or warrants that have expired or been
terminated without exercise by any holders thereof, the Conversion Rate will be
readjusted as if such rights, options and warrants had not been issued.

(4) For purposes of Sections 10.4(a), 10.4(b) and 10.4(c), if any dividend or
distribution to which this Section 10.4(c) is applicable includes one or both
of:

(a) a dividend or distribution of shares of Common Stock to which
Section 10.4(a) is applicable (the “Clause A Distribution”); or

 

43

--------------------------------------------------------------------------------

(b) an issuance of rights, options or warrants to which Section 10.4(b) is
applicable (the “Clause B Distribution”),

then:

(1) such dividend or distribution, other than the Clause A Distribution and the
Clause B Distribution, will be deemed to be a dividend or distribution to which
this Section 10.4(c) is applicable (the “Clause C Distribution”) and any
Conversion Rate adjustment required by this Section 10.4(c) with respect to such
Clause C Distribution will then be made; and

(2) the Clause A Distribution and Clause B Distribution will be deemed to
immediately follow the Clause C Distribution and any Conversion Rate adjustment
required by Sections 10.4(a) and 10.4(b) with respect thereto will then be made,
except that, if determined by the Company (A) the “Record Date” of the Clause A
Distribution and the Clause B Distribution will be deemed to be the Record Date
of the Clause C Distribution and (B) any shares of Common Stock included in the
Clause A Distribution or Clause B Distribution will be deemed not to be
“outstanding immediately prior to the Close of Business on the Record Date or
immediately prior to the Open of Business on such effective date” within the
meaning of Section 10.4(a) or “outstanding immediately prior to the Close of
Business on the Record Date” within the meaning of Section 10.4(b).

(ii) With respect to an adjustment pursuant to this Section 10.4(c) where there
has been an Ex-Dividend Date for a dividend or other distribution on the Common
Stock of shares of capital stock of any class or series, or similar equity
interest, of or relating to a Subsidiary or other business unit, that are, or,
when issued, will be, listed or admitted for trading on a United States national
securities exchange (a “Spin-Off”), the Conversion Rate will be calculated based
on the following formula:

 

  CR = CR0 ×  

FMV + MP0

      MP0  

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business
on the Record Date for the Spin-Off;

CR = the Conversion Rate in effect immediately after the Close of Business on
the Record Date for the Spin-Off;

FMV = the average of the Closing Sale Prices of the capital stock or similar
equity interest distributed to holders of Common Stock applicable to one share
of Common Stock (determined by reference to the definition of “Closing Sale
Price” as if references therein to Common Stock were to such capital stock or
similar equity interest) over the first ten (10) consecutive Trading Day period
commencing on, and including, the effective date for the Spin-Off (such period,
the “Valuation Period”); and

 

44

--------------------------------------------------------------------------------

MP0 = the average of the Closing Sale Prices of the Common Stock over the
Valuation Period.

The adjustment to the Conversion Rate under the preceding paragraph of this
Section 10.4(c) will be determined on the last day of the Valuation Period but
will be given effect immediately after the Close of Business on the Record Date
for the Spin-Off. In respect of any conversion during the Valuation Period for
any Spin-Off, references within this Section 10.4(c)(ii) related to ten
(10) Trading Days will be deemed to be replaced with such lesser number of
Trading Days as have elapsed from, and including, the effective date for such
Spin-Off to, but excluding, the relevant Conversion Date.

(d) If an Ex-Dividend Date occurs for a cash dividend or distribution to all or
substantially all holders of the Common Stock (other than any dividend or
distribution in connection with the Company’s liquidation, dissolution or
winding up), the Conversion Rate will be recalculated based on the following
formula:

 

  CR = CR0 ×  

SP0

      SP0 – C  

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business
on the Record Date for such distribution;

CR = the Conversion Rate in effect immediately after the Close of Business on
the Record Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Common Stock over the ten
(10) consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the Ex-Dividend Date for such distribution; and

C = the amount in cash per share of Common Stock the Company pays, or
distributes, to all or substantially all holders of the Common Stock.

Any adjustment made under this Section 10.4(d) will become effective immediately
after the Close of Business on the Record Date for such dividend or
distribution. No adjustment pursuant to the above formula will result in a
decrease of the Conversion Rate. However, if any dividend or distribution
described in this Section 10.4(d) is declared but not so paid or made, the
Conversion Rate will be readjusted to the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater
than “SP0” (as defined above), in lieu of the foregoing increase, the Purchaser
will receive, for each $1,000 principal amount of the Bond, at the same time and
upon the same terms as holders of shares of Common Stock, without having to
convert its Bond, the amount of cash that the Purchaser would have received if
the Purchaser owned a number of shares of Common Stock equal to the Conversion
Rate on the Record Date for such cash dividend or distribution.

 

45

--------------------------------------------------------------------------------

For the avoidance of doubt, for purposes of this Section 10.4(d), in the event
of any reclassification of the Common Stock, as a result of which the Bond
becomes convertible into more than one class of Common Stock, if an adjustment
to the Conversion Rate is required pursuant to this Section 10.4(d), references
in this Section to one share of Common Stock or Closing Sale Price of one share
of Common Stock will be deemed to refer to a unit or to the price of a unit
consisting of the number of shares of each class of Common Stock into which the
Bond is then convertible equal to the numbers of shares of such class issued in
respect of one share of Common Stock in such reclassification. The above
provisions of this paragraph will similarly apply to successive
reclassifications.

(e) If the Company or any of its Subsidiaries makes a payment in respect of a
tender or exchange offer for the Common Stock and, if the cash and value of any
other consideration included in the payment per share of Common Stock exceeds
the average of the Closing Sale Prices of the Common Stock over the ten
(10) consecutive Trading Day period commencing on, and including, the Trading
Day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer (the “Expiration Date”), the
Conversion Rate will be calculated based on the following formula:

 

 

CR = CR0 ×

 

AC + (OS x SP)

       OS0 x SP   

where,

CR0 = the Conversion Rate in effect immediately prior to the Open of Business on
the Trading Day next succeeding the Expiration Date;

CR = the Conversion Rate in effect immediately after the Open of Business on the
Trading Day next succeeding the Expiration Date;

AC = the aggregate value of all cash and any other consideration (as determined
in good faith by the Company’s board of directors) paid or payable for shares of
Common Stock purchased in such tender or exchange offer;

OS0 = the number of shares of Common Stock outstanding immediately prior to the
time (the “Expiration Time”) such tender or exchange offer expires (prior to
giving effect to such tender or exchange offer);

OS = the number of shares of Common Stock outstanding immediately after the
Expiration Time (after giving effect to such tender or exchange offer); and

SP = the average of the Closing Sale Prices of the Common Stock over the ten
(10) consecutive Trading Day period commencing on, and including, the Trading
Day next succeeding the Expiration Date.

The adjustment to the Conversion Rate under this Section 10.4(e) will be
determined at the Close of Business on the tenth Trading Day immediately
following, but excluding, the Expiration Date but will be given effect at the
Open of Business on the Trading Day next

 

46

--------------------------------------------------------------------------------

succeeding the Expiration Date. In respect of any conversion during the ten
(10) Trading Days commencing on the Trading Day next succeeding the Expiration
Date, references within this Section 10.4(e) to ten (10) Trading Days will be
deemed to be replaced with such lesser number of Trading Days as have elapsed
from, and including, the Trading Day next succeeding the Expiration Date to, but
excluding, the relevant Conversion Date. No adjustment pursuant to the above
formula will result in a decrease of the Conversion Rate.

(f) To the extent that the Company has a rights plan in effect upon conversion
of the Bond, the Purchaser will receive, in addition to the Common Stock
received in connection with such conversion, the rights under the rights plan,
unless prior to any conversion, the rights have separated from the Common Stock,
in which case the Conversion Rate will be adjusted at the time of separation as
if the Company distributed to all holders of Common Stock, shares of the
Company’s capital stock, evidences of indebtedness or other assets or property
as described in Section 10.4(c), subject to readjustment in the event of the
expiration, termination or redemption of such rights.

(g) If the Company issues rights, options or warrants that are only exercisable
upon the occurrence of certain triggering events, then (i) the Company will not
adjust the Conversion Rate pursuant to the above provisions until the earliest
of these triggering events occurs; and (ii) the Company will readjust the
Conversion Rate to the extent any of these rights, options or warrants are not
exercised before they expire.

(h) If the Company adjusts the Conversion Rate pursuant to the above provisions,
the Company will deliver to the Purchaser a certificate setting forth the
Conversion Rate, detailing the calculation of the Conversion Rate and describing
the facts upon which the adjustment is based.

(i) Notwithstanding anything herein to the contrary, in no event will the
Purchaser be permitted to convert the Bond into a number of shares of Common
Stock that would result in a violation of Section 312.03(c) or (d) of the New
York Stock Exchange Listed Company Manual due to an increase to the Conversion
Rate (the “Conversion Cap”). In the event that the Conversion Rate has been
increased pursuant to the terms of this Agreement to an amount that would result
in the issuance of a number of shares of Common Stock upon conversion that
exceeds the Conversion Cap, then the Company will, at the Purchaser’s request
(the “Approval Request”), use its commercially reasonable best efforts to
promptly obtain any and all necessary approvals of the Company’s stockholders to
permit the Company to issue the full amount of Common Stock issuable upon
conversion of all of the Bond (the “Stockholder Conversion Approval”). If the
Stockholder Conversion Approval is not received, notwithstanding the Company’s
commercially reasonable best efforts, within five (5) months following the
occurrence of such event, then the interest rate on the Bond will automatically
increase by 2.5%, effective as of the date of the Approval Request.

10.5 Recapitalizations, Reclassifications and Changes to the Common Stock. Other
than in connection with the Merger, in the event of:

(a) any recapitalization, reclassification or change of the Common Stock (other
than changes resulting from a subdivision or combination);

 

47

--------------------------------------------------------------------------------

(b) a consolidation, merger, combination or binding share exchange involving the
Company; or

(c) a sale, assignment, conveyance, transfer, lease or other disposition to
another Person of the Company’s property and assets as an entirety or
substantially as an entirety,

in each case, in which holders of Common Stock are entitled to receive cash,
securities or other property for their shares of Common Stock (“Reference
Property”), the Company or the successor or purchasing company, as the case may
be, will execute an agreement, providing that, at and after the effective time
of such transaction, the Purchaser will be entitled to elect to convert the Bond
into the kind and amount of shares of stock, other securities or other property
or assets (including cash or any combination thereof) that a holder of a number
of shares of Common Stock equal to the Conversion Rate immediately prior to such
transaction would have owned or been entitled to receive upon such transaction.
Such agreement will also provide for antidilution and other adjustments that are
as nearly equivalent as possible to the adjustments described under Section 10.4
(it being understood that no such adjustments will be required with respect to
any portion of the Reference Property that does not consist of shares of capital
stock (however evidenced)). If the Reference Property in respect of any such
transaction includes shares of stock, securities or other property or assets of
a company other than the successor or purchasing corporation, as the case may
be, in such transaction, such other company will also execute such agreement,
and such agreement will contain such additional provisions to protect the
interests of the Purchaser as the Company’s board of directors thereof
reasonably considers necessary by reason of the foregoing. If the Bond becomes
convertible into Reference Property, the Company will notify the Purchaser.

For purposes of the foregoing, the type and amount of consideration that holders
of the Common Stock are entitled to in the case of recapitalizations,
reclassifications, changes of the Common Stock, consolidations, mergers,
combinations, binding share exchanges, sales, assignments, conveyances,
transfers, leases or other dispositions that cause the Common Stock to be
converted into or exchanged for the right to receive more than a single type of
consideration because the holders of Common Stock have the right to elect the
type of consideration they receive will be deemed to be the weighted average of
the types and amounts of consideration received by the holders of Common Stock
that affirmatively make such an election. The Company will notify the Purchaser
of the weighted average as soon as practicable after such determination is made.

10.6 Reserved Shares. The Company will at all times reserve out of its
authorized but unissued Common Stock a sufficient number of shares of Common
Stock to permit the conversion, in accordance herewith, of the Bond (assuming,
for such purposes, that at the time of computation of such number of shares, the
Bond would be converted by a single holder of the Bond).

All shares of Common Stock issued upon conversion of the Bond will be validly
issued, fully paid and non-assessable and will be free of preemptive or similar
rights and free of any lien or adverse claim that arises from the action or
inaction of the Company.

 

48

--------------------------------------------------------------------------------

The Company will comply with all securities laws regulating the offer and
delivery of shares of Common Stock upon conversion of the Bond and will list
such shares on each national securities exchange or automated quotation system
on which the shares of Common Stock are listed on the applicable Conversion
Date.

11. Transfer Restrictions. Other than (a) in connection with a Synthetic Sale or
(b) in connection with the exercise by any lenders of the Debt Financing (as
defined in the Merger Agreement) or any refinancing thereof of remedies with
respect to the Liens over the Securities that secures such indebtedness, the
Bond may not be transferred, in whole or in part, without the prior written
consent of the Company. Any shares of Common Stock issued upon conversion,
including in connection with a Synthetic Sale, in whole or in part, of the Bond,
may be transferred as provided herein and pursuant to applicable law; provided,
however, that other than sales of shares of Common Stock pursuant to Section 9,
no such transfer of shares of Common Stock issued upon conversion of the Bond
may be effected (and any such transfer will be invalid) to the extent that the
transferee would, immediately following such transfer, be the direct or indirect
“beneficial owner,” as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended, of more than 5% of the voting power of the Company’s
outstanding equity.

12. Board Representation.

12.1 Upon conversion of the Bond, in whole but not in part, into Common Stock
following the Termination Event, for so long as the Purchaser and its Affiliates
beneficially own (a) at least ten percent (10%) of the total number of shares of
Common Stock then outstanding, the Purchaser will have the right to designate
two (2) members to the Company’s board of directors, and (b) less than ten
percent (10%) but greater than or equal to five percent (5%) of the total number
of shares of Common Stock then outstanding, the Purchaser will have the right to
designate one (1) member to the Company’s board of directors. If the Purchase
and its Affiliates beneficially own less than five percent (5%) of the total
number of shares of Common Stock then outstanding, the Purchaser will have no
director designation rights. Notwithstanding anything herein to the contrary, in
the event the Purchaser sells or otherwise disposes of its economic interest in
any shares of the Common Stock received upon conversion of the Bond (including
through any derivative transaction referencing such shares of Common Stock or by
engaging in short sale transactions with respect to the Company’s Common Stock),
the Purchaser’s right to designate members to the Company’s board of directors
pursuant to this Section 12.1 will terminate. Any person who is to be appointed
to serve on the Company’s board of directors (or who is so appointed) by the
Purchaser pursuant to the rights under this Section 12.1 is a “Designated
Director.” The Company will use its commercially reasonable best efforts to
facilitate the appointment of each Designated Director pursuant to this
Section 12.1 to be elected as members of the Company’s board of directors,
including, but not limited to, ensuring that the approval of the appointees is
recommended by (i) the Company’s Nominating and Corporate Governance Committee
to the board of directors and (ii) the Company’s board of directors to the
Company’s stockholders, and to permit the Purchaser to remove, replace or change
any Designated Director from time to time and fill vacancies created by reason
of death, removal or resignation of such appointees, including by calling a
general meeting of stockholders of the Company for the purpose of voting on any
such appointment, removal, replacement or change, or, if required, to amend the
Company’s existing bylaws to provide for an increase in the number of directors
on the Company’s board of directors. For the avoidance of doubt, the rights

 

49

--------------------------------------------------------------------------------

of the Purchaser pursuant to this Section 12.1 are personal to the Purchaser and
may not be transferred, assigned or otherwise disposed of, to any Person, by
operation of law or otherwise. For the avoidance of doubt, the Company may add
additional members to its board of directors such that the number of members of
the Company’s board of directors that may be designated by the Purchaser is
proportionate to the Common Stock held by the Purchaser relative to the total
number of shares of Common Stock then outstanding.

12.2 The rights provided for in this Section 12 will survive the conversion of
all or any portion of the Bond and payment of any portion of the Bond not
converted. If all of the Bond is paid in full and no portion of the Bond is
converted into Common Stock, this Section 12.1 will expire.

13. Termination.

13.1 Termination. This Agreement may be terminated:

(a) by mutual written consent of the Purchaser and the Company at any time;

(b) automatically, without any further action by the Purchaser or the Company,
if the Closing has not occurred by 5:00 p.m. New York City time on the End Date;

(c) automatically, without any further action by the Purchaser or the Company,
on the date that the Merger Agreement is terminated pursuant to its terms (the
“Merger Agreement Termination Date”), if, but only if, the Merger Agreement
Termination Date occurs prior to the Closing under this Agreement; or

(d) by the Company, upon written notice to the Purchaser, if following
October 24, 2012 (i) all of the conditions set forth in Section 4 (other than
conditions that by their nature are to be satisfied at the Closing) have been
satisfied, (ii) the Company has irrevocably confirmed in such written notice to
the Purchaser that all of the conditions set forth in Section 5 have been
satisfied or that the Company has agreed to waive any unsatisfied conditions in
Section 5, and (iii) the Closing shall not have been consummated within two
(2) Business Days after the delivery of such notice by the Company to the
Purchaser; provided, however, that if the failure to close the transactions
hereunder was due to a Force Majeure Event frustrating the Purchaser’s ability
to deliver the purchase price for the Bonds to the Company, the Company will not
be permitted to terminate this Agreement pursuant to this Section 13.1(d)
unless, following written notice from the Company to the Purchaser two
(2) Business Days after such Force Majeure Event has elapsed, the Purchaser
still has not delivered the purchase price for the Bonds to the Company.

13.2 Effect of Termination. In the event of the termination of this Agreement as
provided in Section 13.1, this Agreement will be of no further force or effect;
provided, however, that (i) this Section 13.2 will survive the termination of
this Agreement and will remain in full force and effect, (ii) the termination of
this Agreement will not relieve any party from any liability for any intentional
or willful inaccuracy in or intentional or willful breach of any representation,
warranty, covenant, obligation or other provision contained in this Agreement,
and (iii) except as provided in Section 13.1(d), no termination of this
Agreement will in any way

 

50

--------------------------------------------------------------------------------

affect any of the parties’ rights or obligations under the Merger Agreement or
any agreement other than this Agreement.

14. Miscellaneous.

14.1 Survival. Unless otherwise set forth in this Agreement, the warranties,
representations, covenants, indemnities, and all other provisions contained in
(or made pursuant to) this Agreement will survive the execution and delivery of
this Agreement, the Closing and the conversion of the Bond into Common Stock.

14.2 Indemnification.

(a) Unless the Merger has been consummated or this Agreement has been
terminated, the Company agrees to indemnify, defend and hold the Purchaser, each
of its officers, directors and partners, and any Persons controlling the
Purchaser within the meaning of Section 15 of the Securities Act, harmless from
and against any expenses, claims, losses, damages or liabilities to the
Purchaser arising out of any breach of any representation or warranty of the
Company or any nonfulfillment of any covenant or agreement of the Company
contained herein and the Company will reimburse the Purchaser, each of its
officers, directors and partners and any Persons controlling the Purchaser for
any legal and any other expenses reasonably incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action. The Purchaser will not be entitled to indemnification with respect to
any claim under the foregoing provisions of this Section 14.2 (a) as to which
notice was not given by the Purchaser to the Company.

(b) Unless the Merger has been consummated or this Agreement has been
terminated, the Purchaser agrees to indemnify, defend and hold the Company, each
of its officers, directors and partners, and any Persons controlling the Company
within the meaning of Section 15 of the Securities Act, harmless from and
against any expenses, claims, losses, damages or liabilities to the Company
arising out of any breach of any representation or warranty of the Purchaser or
any nonfulfillment of any covenant or agreement of the Purchaser contained
herein and the Purchaser will reimburse the Company, each of its officers,
directors and partners and any Persons controlling the Company for any legal and
any other expenses reasonably incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action. The
Company will not be entitled to indemnification with respect to any claim under
the foregoing provisions of this Section 14.2 (b) as to which notice was not
given by the Company to the Purchaser.

(c) Unless the Merger has been consummated or this Agreement has been
terminated, if a party seeks indemnification hereunder for a matter that
involves a claim by a third-party, the party seeking indemnification (the
“Indemnitee”) will promptly notify the indemnifying party (the “Indemnitor”) of
and will provide reasonable information and details concerning the nature of
such claim. The Indemnitor will, to the extent applicable, have the right to
assume the defense at its expense of all third-party claims and will pay all
costs and damages finally awarded against the Indemnitor and the Indemnitee in
conjunction with such third-party claims, provided that: (i) the Indemnitee
provides prompt written notice to the Indemnitor of its receipt of service of
any such claim; (ii) the Indemnitor controls the defense of the third-party

 

51

--------------------------------------------------------------------------------

claim on behalf of all parties; (iii) the Indemnitee consents to representation
in such claims by counsel selected by and representing the Indemnitor; provided,
however, that if, in the reasonable judgment of the Indemnitee, a conflict of
interest may exist between the Indemnitee and the Indemnitor with respect to any
claims as to which indemnity is sought and the Indemnitee provides written
notice to the Indemnitor that the Indemnitee is seeking separate counsel at the
expense of the Indemnitor, then the Indemnitor will not assume the defense for
matters as to which representation of both the Indemnitor and the Indemnitee by
the same counsel would be inappropriate due to actual or potential differing
interests between them, and the Indemnitee will have the right to retain
separate counsel to represent its interests in such third-party claim and the
reasonable costs, fees and expenses thereof will be borne by the Indemnitor; and
(iv) upon request of the Indemnitor, the Indemnitee uses its commercially
reasonable best efforts to cooperate with the Indemnitor in defending such
third-party claim by providing the Indemnitor with all necessary business
information and relevant documents under its control related to the third-party
claim and cooperating with such other reasonable requests of the Indemnitor at
the Indemnitor’s expense in accordance with applicable law. The indemnity
obligations under this Section 14.2 will not apply to amounts paid in settlement
of any claim, loss, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent will not be unreasonably
withheld or delayed. The Indemnitee’s failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if materially prejudicial to the Indemnitor’s ability to defend such action,
will relieve the Indemnitor of any liability to the Indemnitee under this
Section 14.2, but not any liability that it may have to the Indemnitee otherwise
than under this Section 14.2.

14.3 Amendment; Waiver of Certain Covenants. Neither this Agreement nor any
provision hereof may be amended, waived or modified except pursuant to an
agreement or agreements in writing entered into by the Company and with the
written consent of the parties hereto. The Company may omit in any particular
instance to comply with any term, provision or condition set forth in this
Agreement if waived in writing by the consent of (i) the holders of not less
than a majority in principal amount of the Securities and (ii) the Purchaser, if
the Bond has been converted and the Purchaser holds greater than or equal to 5%
of the outstanding Common Stock, but no such waiver will extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver will become effective, the obligations of the Company in
respect of any such term, provision or condition will remain in full force and
effect.

14.4 Entire Agreement; Counterparts. This Agreement and the other Bond Documents
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among or between any of the parties with
respect to the subject matter hereof and thereof. This Agreement may be executed
in several counterparts, each of which will be deemed an original and all of
which will constitute one and the same instrument. The exchange of a fully
executed Agreement (in counterparts or otherwise) by facsimile or by electronic
delivery will be sufficient to bind the parties to the terms of this Agreement.

14.5 Applicable Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. In any action between any of the
parties arising out of or relating to this

 

52

--------------------------------------------------------------------------------

Agreement: (a) each of the parties irrevocably and unconditionally consents and
submits to the exclusive jurisdiction and venue of the courts of the State of
New York; and (b) each of the parties irrevocably waives the right to trial by
jury.

14.6 Disclosure Schedule. The fact that any item of information is disclosed in
the Disclosure Schedule will not be construed to mean that such information is
required to be disclosed by this Agreement. Inclusion of any item in the
Disclosure Schedule will not be deemed an admission that such item is material,
and inclusion of any item in the Disclosure Schedule will not be deemed an
admission that such item constitutes or is reasonably likely to result in a
Material Adverse Effect. The Disclosure Schedule will be arranged in separate
parts corresponding to the sections contained in Section 2. However, descriptive
headings in the Disclosure Schedule are inserted for reference purposes and for
convenience of the reader only, and will not affect the interpretation thereof
or of this Agreement. Nothing contained in the Disclosure Schedule will be
construed as an admission of liability or responsibility in connection with any
pending, threatened or future matter or proceeding. Any update or modification
to the Disclosure Schedule made or purported to be made on or after the date of
this Agreement will be disregarded.

14.7 Attorneys’ Fees. In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, the prevailing party in
such action or suit will be entitled to receive a reasonable sum for its
attorneys’ fees and all other reasonable out-of-pocket costs and expenses
incurred in such action or suit.

14.8 Assignability; Third-Party Beneficiaries. This Agreement will be binding
upon, will be enforceable by and inure solely to the benefit of, the parties
hereto and their respective successors and assigns; provided, however, that the
Company may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each holder of the Bond (and any
attempted assignment or transfer by the Company without such consent will be
null and void and of no effect). Nothing in this Agreement, express or implied,
is intended to or will confer any right, benefit or remedy of any nature
whatsoever upon any Person (other than the parties hereto and other than any
Person entitled to indemnification under Sections 9.14 or 14.2).

14.9 Notices. Each notice, request, demand or other communication under this
Agreement will be in writing and will be deemed to have been duly given or made
as follows: (a) if sent by registered or certified mail in the United States,
return receipt requested, then such communication will be deemed duly given and
made upon receipt; (b) if sent by nationally recognized overnight air courier
(such as DHL or Federal Express), then such communication will be deemed duly
given and made two (2) Business Days after being sent; (c) if sent by facsimile
transmission before 5:00 p.m. (California time) on any Business Day, then such
communication will be deemed duly given and made when receipt is confirmed;
(d) if sent by facsimile transmission on a day other than a Business Day and
receipt is confirmed, or if sent after 5:00 p.m. (California time) on any
Business Day and receipt is confirmed, then such communication will be deemed
duly given and made on the Business Day following the date which receipt is
confirmed; and (e) if otherwise actually personally delivered to a duly
authorized representative of the recipient, then such communication will be
deemed duly given and made when delivered to such authorized representative;
provided that, in all cases, such

 

53

--------------------------------------------------------------------------------

notices, requests, demands and other communications are delivered to the address
set forth below, or to such other address as any party will provide by like
notice to the other parties to this Agreement:

 

if to the Purchaser:

 

SOFTBANK CORP.

Tokyo Shiodome Bldg.

1-9-1, Higashi-Shimbashi

Minato-ku, Tokyo 105-7303, Japan

Attention:   Masato Suzaki Facsimile:   +81 3 6215 5001

with a copy (which will not constitute notice) to:

 

Morrison & Foerster LLP

Shin-Marunouchi Building, 29th Floor

5-1, Marunouchi 1-Chome

Chiyoda-ku, Tokyo 100-6529

Japan

Attention:   Kenneth A. Siegel Facsimile:   +81 3 3214 6512

 

and to:

 

Morrison & Foerster LLP

425 Market Street

San Francisco, CA 94105-2482

USA

Attention:   Robert S. Townsend  

David A. Lipkin

Brandon C. Parris

Facsimile:   +1 415 268 7522

 

if to the Company:

 

Sprint Nextel Corporation

6200 Sprint Parkway

Overland Park, Kansas 66251

Attention:   Charles R. Wunsch, General Counsel

Facsimile:

  +1 913 794 1432

 

54

--------------------------------------------------------------------------------

with a copy (which will not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, New York 10036

Attention:   Thomas H. Kennedy   Yossi Vebman Facsimile:   +1 212 735 2000

if to any other holder of the Bond, to such holder at such address as such other
holder will have specified to the Company in writing.

14.10 Cooperation. Each party will cooperate with each other and use, and will
cause its Subsidiaries to use, its commercially reasonable best efforts to take
or cause to be taken all actions, and do or cause to be done, all things
necessary, proper or advisable on its part under this Agreement and applicable
Legal Requirements to satisfy the conditions to this Agreement set forth in
Section 4 and Section 5.

14.11 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
will have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the parties hereto
will replace such invalid or unenforceable term or provision with a valid and
enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

14.12 Definitions; Construction.

(a) For purposes of this Agreement, the terms defined in Annex A have the
meanings assigned to them in Annex A.

(b) For purposes of this Agreement, whenever the context requires: the singular
number includes the plural, and vice versa; the masculine gender includes the
feminine and neuter genders; the feminine gender includes the masculine and
neuter genders; and the neuter gender includes masculine and feminine genders.

(c) The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party will not be applied in
the construction or interpretation of this Agreement.

 

55

--------------------------------------------------------------------------------

(d) As used in this Agreement, the words “include” and “including,” and
variations thereof, will not be deemed to be terms of limitation, but rather
will be deemed to be followed by the words “without limitation.”

(e) Except as otherwise indicated, all references in this Agreement to
“Sections,” “Exhibits” and “Schedules” are intended to refer to Sections of this
Agreement and Exhibits or Schedules to this Agreement.

(f) The bold-faced headings contained in this Agreement are for convenience of
reference only, will not be deemed to be a part of this Agreement and will not
be referred to in connection with the construction or interpretation of this
Agreement.

[Signature pages follow.]

 

56

--------------------------------------------------------------------------------

The parties have executed this Agreement as of the date first written above.

COMPANY:

 

SPRINT NEXTEL CORPORATION By:  

/s/ Daniel R. Hesse

Name:  

Daniel R. Hesse

Title:  

Chief Executive Officer

[SIGNATURE PAGE TO BOND PURCHASE AGREEMENT]

--------------------------------------------------------------------------------

PURCHASER:

 

STARBURST II, INC. By:  

/s/ Masayoshi Son

Name:  

Masayoshi Son

Title:  

Chairman and CEO

[SIGNATURE PAGE TO BOND PURCHASE AGREEMENT]

--------------------------------------------------------------------------------

EXHIBITS

 

Exhibit A    -    Form of Bond Exhibit B    -    Form of Conversion Notice
Exhibit C    -    Disclosure Schedule

--------------------------------------------------------------------------------

ANNEX A

For purposes of the Agreement (including this Annex A):

“Affiliate” has the meaning set forth in Section 2.15(a) of the Agreement.

“Agreement” has the meaning set forth in the preamble to the Agreement.

“Approval Request” has the meaning set forth in Section 10.4(i) of the
Agreement.

“Automatic Shelf Registrations” has the meaning set forth in Section 9.1 of the
Agreement.

“Bond” has the meaning set forth in the recitals to the Agreement.

“Bond Documents” means, collectively, the Agreement, the Bond, and any joinder,
amendment, waiver, supplement or other modification to any of the foregoing.

“Business Day” means any day, other than a Saturday, Sunday and any day which is
a legal holiday under the Laws of the State of New York or Kansas, or is a day
on which banking institutions located in the State of New York or Kansas are
authorized or required by law or other governmental action to close.

“Certifications” has the meaning set forth in Section 2.4(a)(i) of the
Agreement.

“Change in Company Board Recommendation” has the meaning ascribed to such term
in the Merger Agreement.

“Change of Control” means either of the following: (i) any Person or two or more
Persons acting in concert acquiring beneficial ownership (within the meaning of
Rule 13d-3 of the SEC under the Exchange Act), directly or indirectly, of voting
stock of the Company (or other securities convertible into such voting stock)
representing 50% or more of the combined voting power of all voting stock of the
Company, or obtaining the power (whether or not exercised) to elect a majority
of the Company’s board of directors; or (ii) any Person or two or more Persons
(other than members of the board of directors of the Company) acting in concert
succeeding in having a sufficient number of its nominees elected to the board of
directors of the Company such that such nominees, when added to any existing
director remaining on the board of directors of the Company after such election
who is a related person of such Person, constitute a majority of the board of
directors of the Company.

“Change Notice” means a notice from the Company to the Purchaser pursuant to
Sections 5.5(c)(i) or 5.5(c)(ii) of the Merger Agreement, that the Company Board
is holding a meeting to consider, or is otherwise considering, whether it is
entitled to effect a Change in Company Board Recommendation.

“Clause A Distribution” has the meaning set forth in Section 10.4(c) of the
Agreement.

 

ANNEX A - 1

--------------------------------------------------------------------------------

“Clause B Distribution” has the meaning set forth in Section 10.4(c) of the
Agreement.

“Clause C Distribution” has the meaning set forth in Section 10.4(c) of the
Agreement.

“Close of Business” means 5:00 p.m., New York City time.

“Closing” has the meaning set forth in Section 1.1(b) of the Agreement.

“Closing Sale Price” of the Common Stock on any date means the closing per share
sale price (or, if no closing sales price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and the average ask prices) at 4:00 p.m. (New York City time) on such date
as reported in composite transactions for the principal United States national
or regional securities exchange on which the Common Stock is traded or, if the
Common Stock is not listed on a United States national or regional securities
exchange, as reported by OTC Markets Group Inc. or a similar organization. If
the Common Stock is not so quoted, the “Closing Sales Price” shall be the
average of the mid-point of the last bid and ask prices for the Common Stock on
the relevant date from each of at least three nationally recognized independent
investment banking firms selected by the Company for this purpose.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
together with the rules and regulations promulgated thereunder.

“Common Stock” means the Series 1 common stock, $2.00 par value per share, of
the Company.

“Communications Act” means the Communications Act of 1934, as amended.

“Communications Licenses” means all Material Licenses issued or granted to any
of the Company or its Subsidiaries by foreign Governmental Bodies regulating
telecommunications businesses, collectively with the FCC Licenses and State
Licenses.

“Company” has the meaning set forth in the preamble to the Agreement.

“Company Affiliate” means any Person under common control with the Company
within the meaning of Sections 414(b), (c), (m) and (o) of the Code or
Section 4001 of ERISA, and the regulations thereunder.

“Company Associate” means any current or former employee, independent
contractor, consultant or director of or to any of the Company, its Subsidiaries
or any Company Affiliate or the beneficiary or dependent of such Person.

“Company Board” means the board of directors of the Company.

“Company Contract” means any Contract to which any of the Company or its
Subsidiaries is a party, by which any of the Company or its Subsidiaries or any
assets of any of the Company or its Subsidiaries are bound or pursuant to which
the Company has any rights.

 

ANNEX A - 2

--------------------------------------------------------------------------------

“Company Equity Award” means any option, restricted stock unit, restricted stock
award or other award relating to Common Stock, whether granted under any of the
Company Equity Plans or otherwise and whether vested or unvested.

“Company Equity Plan” means any of the following Company Plans, in each case as
amended: (a) the 2007 Omnibus Incentive Plan; (b) the 1997 Long-Term Incentive
Program; (c) the Nextel Incentive Equity Plan; and (d) the Management Incentive
Stock Option Plan.

“Company ESPP” means the Company’s Employee Stock Purchase Plan.

“Company Option” means each option to purchase shares of Common Stock from the
Company, whether granted by the Company pursuant to a Company Equity Plan,
assumed by the Company in connection with any merger, acquisition or similar
transaction or otherwise issued or granted and whether vested or unvested.

“Company Plan” means each employment, consulting, salary, bonus, vacation,
deferred compensation, incentive compensation, stock purchase, stock option or
other equity-based, severance, termination, retention, change-in-control, death
and disability benefits, hospitalization, medical, life or other insurance,
flexible benefits, supplemental unemployment benefits, other welfare fringe
benefits, profit-sharing, pension or retirement plan, program, practice,
agreement or commitment and each other employee benefit plan or arrangement
(other than any employment agreement, offer letter, or similar Contract which is
terminable “at will” without any obligation on the part of any of the Company or
its Subsidiaries or any Company Affiliate to make any severance, change in
control or similar payment or provide any benefit), whether written, unwritten
or otherwise, funded or unfunded, including but not limited to each “employee
benefit plan,” within the meaning of Section 3(3) of ERISA (whether or not
subject to ERISA): under which any Company Associate has any present or future
right to benefits and (a) that is or has been maintained, sponsored or
contributed to, or required to be maintained, sponsored or contributed to, by
any of the Company or its Subsidiaries or any Company Affiliate; or (b) with
respect to which any of the Company or its Subsidiaries or any Company Affiliate
has or may incur or become subject to any liability or obligation.

“Company Real Property” means the Owned Real Property and the Leased Real
Property.

“Company SEC Documents” has the meaning set forth in Section 2.4(a)(i) of the
Agreement.

“Contract” means any written, oral or other agreement, contract, subcontract,
lease, understanding, instrument, warrant, note, debenture, indenture, guaranty,
guarantee, security agreement, pledge agreement or other collateral agreement,
option, warranty, purchase order, license, sublicense, or legally binding
commitment or undertaking, and any supplements, amendments or other
modifications to any of the foregoing.

“Conversion Cap” has the meaning set forth in Section 10.4(i) of the Agreement.

 

ANNEX A - 3

--------------------------------------------------------------------------------

“Conversion Date” means the date a holder of the Bond complies with the
procedures for conversion.

“Conversion Notice” means a “Conversion Notice” in the form attached as Exhibit
B hereto.

“Conversion Rate” has the meaning set forth in Section 10.1(a) of the Agreement.

“Counsel” means Morrison & Foerster LLP, in its capacity as counsel to the
Purchaser.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Demand Request” has the meaning set forth in Section 9.1(a) of the Agreement.

“Designated Director” has the meaning set forth in Section 12.1 of the
Agreement.

“Designated Representations” means the representations and warranties of the
Company contained in Sections 2.2 (Authorization; Enforceability), 2.12
(Capitalization) and 2.21 (Brokerage Fees) of the Agreement.

“EDC Agreement” means the Amended and Restated Credit Agreement, dated as of
May 21, 2010, between the Company and Export Development Canada, as amended,
restated, supplemented or otherwise modified from time to time.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval
system.

“EKN Agreement” means the Credit Agreement, dated as of May 25, 2012, among
Nextel Systems Corp., the Company, the co-borrowers named therein, the lenders
party thereto, Deutsche Bank AG, London Branch, as administrative agent and
Deutsche Bank Trust Company Americas, as security agent, as amended, restated,
supplemented or otherwise modified from time to time.

“End Date” has the meaning ascribed to such term in the Merger Agreement.

“Entity” means any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any company limited by shares, limited
liability company or joint stock company), firm, society or other enterprise,
association, organization or entity.

“Environmental Law” means any federal, state, local or foreign Legal Requirement
relating to pollution or protection of occupational health as it relates to
exposure to Materials of Environmental Concern or the environment (including
ambient air, surface water, ground water, land surface or subsurface strata),
including any Legal Requirement relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or otherwise

 

ANNEX A - 4

--------------------------------------------------------------------------------

relating to the generation, use, treatment, disposal or handling of Materials of
Environmental Concern.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Company, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414(m) of the Code.

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043(c) of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period referred to in Section 4043(a) is
waived), (b) any failure by any Plan to satisfy the minimum funding standards
(within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA)
applicable to such Plan, whether or not waived, (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan, (d) the
incurrence by the Company or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan, (e) the receipt
by the Company or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan under Section 4042 of ERISA, (f) the incurrence
by the Company or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or
(g) the receipt by the Company or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent within the meaning
of Section 4245 of ERISA, or is in reorganization within the meaning of
Section 4241 of ERISA, or in endangered or critical status (within the meaning
of Section 432 of the Code or Section 305 or Title IV of ERISA).

“Event of Default” has the meaning set forth in Section 7 of the Agreement.

“Ex-Dividend Date” means the first date on which shares of the Common Stock
trade on the applicable exchange or in the applicable market, regular way,
without the right to receive the issuance, dividend or distribution in question,
from the Company or, if applicable, from the seller of the Common Stock on such
exchange or market (in the form of due bills or otherwise) as determined by such
exchange or market.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Expiration Date” has the meaning set forth in Section 10.4(e) of the Agreement.

“Expiration Time” has the meaning set forth in Section 10.4(e) of the Agreement.

“FAA” has the meaning set forth in Section 2.20(a) of the Agreement.

 

ANNEX A - 5

--------------------------------------------------------------------------------

“FCC” means the Federal Communications Commission or any United States
Governmental Body substituted therefor.

“FCC Licenses” means all Licenses, other than business radio licenses,
point-to-point microwave licenses and experimental licenses, issued or granted
to any of the Company or its Subsidiaries by the FCC, and all Section 214
authorizations.

“Financial Officer” means, with respect to the Company, the Chief Financial
Officer, Principal Accounting Officer, Treasurer, Assistant Treasurer,
Controller or Assistant Controller of the Company.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Force Majeure Event” means any circumstances that are beyond the reasonable
control of the Purchaser, including acts of God, war, sabotage, riot,
insurrection, civil commotion, national emergency (whether in fact or law),
martial law, fire, lightening, flood, cyclone, earthquake, landslide, storm, or
other adverse weather conditions, explosion, power shortage, strike, lockout or
other industrial action, epidemic, quarantine, radiation or radioactive
contamination; provided, however, that the circumstance is not the result of the
willful misconduct or negligent act or omission of the Purchaser (or any Person
over whom the Purchaser has control).

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Body” means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other governmental jurisdiction of
any nature; (b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, and any court or other tribunal); or (d) self-regulatory organization
(including the New York Stock Exchange, the Tokyo Stock Exchange and FINRA).

“Holdco” means Starburst I, Inc., a Delaware corporation and a wholly owned
subsidiary of SoftBank.

“holder” means, with respect to the Bond, the Person in whose name the Bond is
registered.

“Indemnified Party” has the meaning set forth in Section 9.14(c) of the
Agreement.

“Indemnifying Party” has the meaning set forth in Section 9.14(c) of the
Agreement.

“Indemnitee” has the meaning set forth in Section 14.2 (c) of the Agreement.

“Indemnitor” has the meaning set forth in Section 14.2 (c) of the Agreement.

 

ANNEX A - 6

--------------------------------------------------------------------------------

“Intellectual Property” means (a) all rights of the following types, which may
exist or be created under the laws of any jurisdiction in the world: (i) rights
associated with works of authorship, including exclusive exploitation rights,
copyrights, moral rights and mask works; (ii) trademark, service mark and trade
name rights and similar rights; (iii) trade secret rights; (iv) patent and
industrial property rights; and (v) rights in or relating to registrations,
renewals, extensions, combinations, divisions and reissues of, and applications
for, any of the rights referred to in clauses (i) through (iv) above; and
(b) all rights in software, designs, schematics, protocols, documentation, works
of authorship, databases, interfaces, web sites, domain names, trademarks,
service marks, trade names, algorithms, methods, processes, inventions,
proprietary information, and other technology.

“Initiating Holders” has the meaning set forth in Section 9.1(a) of the
Agreement.

“JPM Agreement” means that certain Credit Agreement dated as of May 21, 2010 (as
amended, restated, supplemented, or otherwise modified from time to time), by
and among the Company, the lenders from time to time party thereto, the
Subsidiary Guarantors (as such term is defined therein), and JPMorgan Chase
Bank, N.A., as administrative agent.

“Knowledge” means, with respect to an Entity and a particular fact or other
matter, that any of the members of the Entity’s board of directors or any of its
executive officers has actual knowledge of such fact or other matter.

“Leased Real Property” has the meaning set forth in Section 2.5(b)(ii) of the
Agreement.

“Legal Proceeding” means any action, suit, litigation, arbitration, dispute,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
court or other Governmental Body or any arbitrator or arbitration panel.

“Legal Requirement” means any federal, state, local, municipal, foreign or other
law, statute, constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, Order, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Body.

“License” means any: (a) permit, license, certificate, franchise, permission,
variance, clearance, registration, qualification or authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or (b) right under any
Contract with any Governmental Body.

“Liens” means any mortgage, option, deed of trust, lien, pledge, security
interest, title retention device, lease, license, conditional sale or other
security arrangement, collateral assignment, claim, charge, adverse claim of
title, ownership or right to use, right of first refusal, servitude, proxy,
hypothecation, equitable interest, preference, right of possession, tenancy,
encroachment, infringement, interference, community property interest, defect,
exception, reservation, impairment, imperfection of title, condition or
restriction of any nature or other

 

ANNEX A - 7

--------------------------------------------------------------------------------

encumbrance of any kind, other than: (w) statutory liens for Taxes that are not
yet due and payable or liens for Taxes being contested in good faith by any
appropriate proceedings for which adequate reserves have been established (in
accordance with GAAP); (x) statutory liens to secure obligations to landlords,
lessors or renters under leases or rental agreements; (y) deposits or pledges
made in connection with, or to secure payment of, workers’ compensation,
unemployment insurance or similar programs mandated by Legal Requirements; and
(z) statutory liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens arising in the ordinary course of business consistent with past practice.
For the avoidance of doubt, the term “Lien” shall not include a license of
Intellectual Property.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, property, condition (financial or otherwise), or on the
earnings or stockholders’ equity of the Company and its Subsidiaries, taken as a
whole or (b) the ability of the Company to perform any of its obligations under
the Agreement or the other Bond Documents.

“Material Contract” has the meaning set forth in Section 2.3(a) of the
Agreement.

“Material Licenses” means all material Licenses necessary to conduct the
business of the Company or its Subsidiaries as presently conducted.

“Materials of Environmental Concern” includes chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances and wastes,
petroleum and petroleum products and any other substance that is regulated by
any Environmental Law.

“Maturity Date” has the meaning set forth in Section 1.2 of the Agreement.

“Merger” has the meaning set forth in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of
October 15, 2012, by and among SoftBank, Holdco, the Purchaser, Merger Sub, and
the Company.

“Merger Agreement Termination Date” has the meaning set forth in Section 13.1(c)
of the Agreement.

“Merger Sub” means Starburst III, Inc., a Kansas corporation and a wholly owned
subsidiary of the Purchaser.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Non-Voting Common Stock” means the non-voting common stock, $0.01 par value per
share, of the Company.

“Notice of Default” has the meaning set forth in Section 7.4 of the Agreement.

 

ANNEX A - 8

--------------------------------------------------------------------------------

“Open of Business” means 9:00 a.m., New York City time.

“Order” means any order, writ, injunction, judgment or decree issued, entered or
otherwise promulgated by a court of competent jurisdiction or other Governmental
Body.

“Owned Real Property” has the meaning set forth in Section 2.5(b)(i) of the
Agreement.

“Parent Entities” means, collectively, SoftBank, Holdco, the Purchaser and
Merger Sub.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Person” means any individual, Entity or Governmental Body.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Preferred Stock” means the Preferred Stock, no par value per share, of the
Company.

“Property” means any asset or property of a Person, whether now owned or
hereafter acquired, or any interest therein or any income or profits therefrom,
including capital stock and indebtedness of Subsidiaries.

“Purchaser” has the meaning set forth in the preamble to the Agreement.

“Record Date” means, with respect to any dividend, distribution or other
transaction or event in which the holders of the Common Stock have the right to
receive any cash, securities or other property or in which Common Stock (or
other applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of holders
of the Common Stock entitled to receive such cash, securities or other property
(whether such date is fixed by the board of directors or a duly authorized
committee thereof, statute, contract or otherwise).

“Reference Property” has the meaning set forth in Section 10.5 of the Agreement.

The terms “register,” “registered” and “registration” refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

“Registrable Securities” means the Common Stock of the Company issued or
issuable upon conversion of the Bond, together with any securities issued or
issuable upon any stock split, stock dividend, recapitalization or similar
event; provided, however, that shares of Common Stock or other securities will
only be treated as Registrable Securities if and so long as they have

 

ANNEX A - 9

--------------------------------------------------------------------------------

not been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.

“Registrable Securities Holder” means any Person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 9.12 of the Agreement.

“Registration Expenses” means all expenses, except as otherwise stated below,
incurred by the Company in complying with Sections 9.1 and 9.2 hereof, including
all registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which will be paid in any event by the Company) and the reasonable fees
and disbursements of one counsel for all Registrable Securities Holders.

“Relevant Distribution” has the meaning set forth in Section 10.4(c) of the
Agreement.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the United States Securities and Exchange Commission.

“Securities” has the meaning set forth in the recitals to the Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Selling Expenses” means all underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered on behalf of the
Registrable Securities Holders.

“Series 2 Common Stock” means the Series 2 common stock, $2.00 par value per
share, of the Company.

“Shelf Offering” has the meaning set forth in Section 9.9 of the Agreement.

“Shelf Registration” means the filing of a Short-Form Registration with the SEC
in accordance with and pursuant to Rule 415 under the Securities Act (or any
successor rule then in effect).

“Short-Form Registrations” has the meaning set forth in Section 9.1(c) of the
Agreement.

“Spectrum Lease” means any written agreement, together with all amendments,
waivers, notices to these written agreements, under which any of the Company or
its Subsidiaries (i) leases the right to use the transmission capacity
associated with an FCC License that confers an exclusive right to use spectrum.

“Spin-Off” has the meaning set forth in Section 10.4(c) of the Agreement.

 

ANNEX A - 10

--------------------------------------------------------------------------------

“SoftBank” means SOFTBANK CORP., a Japanese kabushiki kaisha.

“State Commissions” means any state public utility commission, public service
commission or similar state regulatory authority having jurisdiction over the
Company and its Subsidiaries.

“State Licenses” means all Material Licenses issued or granted to any of the
Company or its Subsidiaries by State Commissions for the conduct of any
telecommunications business.

“Stockholder Conversion Approval” has the meaning set forth in Section 10.4(i)
of the Agreement.

“Subsidiary” means, with respect to any Person, any Entity with respect to which
such Person directly or indirectly owns or purports to own, beneficially or of
record, (a) an amount of voting securities or other interests in such Entity
that is sufficient to enable such Person to elect at least a majority of the
members of such Entity’s board of directors or other governing body, or (b) at
least 50% of the outstanding equity, voting or financial interests in such
Entity; provided, however, that that none of Clearwire Corporation, Clearwire
Communications LLC nor any of their respective subsidiaries will be considered a
Subsidiary of the Company.

“Synthetic Sale” means a sale of any or all of the Bond: (i) to an underwriter
reasonably acceptable to the Purchaser that will convert the Bond and sell the
shares of Common Stock underlying the Bond on behalf of the holder in an
underwritten public offering pursuant to procedures substantially similar to
those set forth in Sections 9.1, 9.3(a) and 9.3(d) of the Agreement, provided,
however, that the minimum anticipated aggregate offering price set forth in
Section 9.1 will not apply to a Synthetic Sale, or (ii) to a third-party
financial institution reasonably acceptable to the Purchaser that will convert
the Bond and sell the shares of Common Stock underlying the Bond on behalf of
the Purchaser in a transaction exempt from or not subject to the registration
requirements of the Securities Act.

“Take-Down Notice” has the meaning set forth in Section 9.9 of the Agreement.

“Tax” or “Taxes” means all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof,
imposed by any federal, territorial, state, local or foreign government or any
agency or political subdivision of any such government, which taxes include,
without limiting the generality of the foregoing, all income or profits taxes
(including, but not limited to, U.S. federal income taxes and state income
taxes), payroll and employee withholding taxes, unemployment insurance, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers’ compensation, and other governmental charges, and other obligations of
the same or of a similar nature to any of the foregoing.

“Termination Event” has the meaning set forth in Section 10.1(a) of the
Agreement.

 

ANNEX A - 11

--------------------------------------------------------------------------------

“Trading Day” means a day on which (a) the New York Stock Exchange or, if the
Common Stock is not listed on the New York Stock Exchange, the principal other
United States national or regional securities exchange on which the Common Stock
is then listed is open for trading, in each case, with a scheduled closing time
of 4:00 p.m., New York City time, or the then-standard closing time for regular
trading on the relevant exchange or market and (b) a Closing Sale Price for the
Common Stock is available on such securities exchange or market. If the Common
Stock is not so listed, a “trading day” means any Business Day.

“Trigger Event” has the meaning set forth in Section 10.4(c) of the Agreement.

“Unaudited Interim Balance Sheet” means the unaudited consolidated balance sheet
of the Company and its consolidated Subsidiaries as of June 30, 2012, included
in the Company’s Report on Form 10-Q for the fiscal quarter ended June 30, 2012.

“Underwritten Offering” means an underwritten public offering of Registrable
Securities under Sections 9.1 or 9.2 of the Agreement.

“Valuation Period” has the meaning set forth in Section 10.4(c) of the
Agreement.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

“WKSI” has the meaning set forth in Section 2.15(c) of the Agreement.

 

ANNEX A - 12

--------------------------------------------------------------------------------

EXHIBIT A

Form of Bond

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”), AS AMENDED OR ANY APPLICABLE STATE
SECURITIES LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO,
OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER, SALE, OR
OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY
BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.”

SPRINT NEXTEL CORPORATION

Convertible Bond

 

No. 1

  $3,100,000,000.00

Sprint Nextel Corporation, a Kansas corporation (herein called the “Company,”
which term includes any successor Person under the Bond Purchase Agreement
hereinafter referred to), for value received, hereby promises to pay to
Starburst II, Inc. the principal sum of $3,100,000,000.00 on October 15, 2019
and to pay (a) interest thereon, accruing from and after the Closing, at the
rate of one percent (1.0%) per annum, payable in cash semi-annually in arrears
on April 15 and October 15 of each year, commencing on April 15, 2013, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law, on any overdue payment of interest and, during the continuance
of an Event of Default, on such unpaid balance, at a rate equal to two percent
(2.0%) per annum, payable in cash semi-annually as aforesaid (or, at the option
of the registered holder hereof, on demand).

This Bond is issued pursuant to that certain Bond Purchase Agreement dated as of
October 15, 2012 (as amended, restated, supplemented, or otherwise modified from
time to time, the “Bond Purchase Agreement”), between the Company and the
Purchaser named therein, to which Bond Purchase Agreement reference is hereby
made for a statement of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Company and the holder of
this Bond. The terms of this Bond include the covenants and terms established by
the Bond Purchase Agreement. Defined terms used herein that are not otherwise
defined shall have the meanings given such terms in the Bond Purchase Agreement.

Subject to the terms of the Bond Purchase Agreement, in the event of a Change of
Control, the holder of this Bond shall have the right, at the holder’s option,
to require the

--------------------------------------------------------------------------------

Company to repurchase such holder’s Bond including any portion thereof which is
$1,000 in principal amount or any integral multiple of $1,000.

Subject to Section 10.1 of the Bond Purchase Agreement, the Bond shall be
convertible into shares of Common Stock in accordance with Section 10 of the
Bond Purchase Agreement. To convert the Bond, the holder must satisfy the
requirements of Section 10.3 of the Bond Purchase Agreement. The holder may
convert a portion of this Bond if the portion is $1,000 principal amount or any
integral multiple of $1,000 principal amount.

Upon conversion of this Bond, the holder thereof shall be entitled to receive
shares of Common Stock payable upon conversion in accordance with Section 10 of
the Bond Purchase Agreement, at the Conversion Rate specified in the Bond
Purchase Agreement, as adjusted from time to time as provided in the Bond
Purchase Agreement.

If an Event of Default occurs and is continuing, the principal of this Bond may
be declared or otherwise become due and payable in the manner, at the price, and
with the effect provided in the Bond Purchase Agreement.

The Bond Purchase Agreement permits the amendment, waiver or modification of
provisions thereof pursuant to an agreement or agreements in writing entered
into by the Company and with the written consent of the parties thereto. Any
such amendment, waiver, or modification by the holder of this Bond shall be
conclusive and binding upon such holder and upon all future holders of this Bond
and of any Bond issued upon the registration of transfer hereof or in exchange
or in lieu hereof, whether or not notation of such amendment, waiver, or
modification is made upon this Bond.

No provision of the Bond Purchase Agreement or of this Bond shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and any premium and interest on this Bond.

The transfer of this Bond is subject to the limitations set forth in Section 11
of the Bond Purchase Agreement.

All interest hereunder will be computed on the basis of a year of 360 days
composed of twelve 30-day months.

No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

This Bond will be governed by, and construed in accordance with, the laws of the
State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

[Remainder of page intentionally left blank; signature page follows]

 

Exhibit A - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
and delivered.

 

Dated:                     , 2012     SPRINT NEXTEL CORPORATION     By:  

 

    Name:  

 

    Title:  

 

    By:  

 

    Name:  

 

    Title:  

 

 

Exhibit A - 3