Exhibit M
NEXTLINK STOCK DISTRIBUTION AGREEMENT
This Nextlink Stock Distribution Agreement (this "Agreement") is entered
into by and among Xxxxx X. XxXxx ("WPM"), Xxxxx X. XxXxx ("COM"), and Eagle
River Investments, LLC, a Washington limited liability company ("Eagle River")
and, as to its obligations under Sections 10, 12 and 13 only, NEXTLINK
Communications, Inc., a Washington corporation (the "Company"), as of November
3, 1997 (the "Effective Date"). WPM, COM, Eagle River and the Company are
collectively referred to in this Agreement as the "Parties" and each may be
referred to as a "Party."
For the purposes of this Agreement, "Affiliate" shall mean an individual,
corporation, partnership, limited liability company, association, trust or other
entity ("Person"), whether in existence on the Effective Date or created after
the Effective Date, that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
RECITALS
WHEREAS, pursuant to the Property Settlement Agreement between COM and WPM
dated as of November 3, 1997 (the "PSA"), in partial liquidation of WPM's
ownership interest in Eagle River, COM and WPM desire to effect the allocation
and distribution of certain shares of common stock of the Company to WPM as her
separate property.
WHEREAS, the distribution of such shares of Company common stock is
pursuant to an agreed upon allocation of assets reflecting WPM's ownership
interest in Eagle River and is undertaken in connection with the dissolution of
the marriage between COM and WPM.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the PSA, and for other consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties agree as
follows:
1. Distribution of Shares.
1.1 Eagle River hereby distributes to WPM (i) Nine Million, Seven
Hundred and Twenty-Two Thousand, Six Hundred and Forty-Nine
(9,722,649) issued and outstanding shares of Class B Common Stock of
the Company (the "Shares") free and clear of all liens, claims,
options, charges, pledges and encumbrances. The Shares shall be
vested in WPM's name. Eagle River shall pay any documentary, stamp or
other similar types of taxes, if any, payable with respect of the
distribution of the Shares to WPM. Concurrently with WPM's execution
of this Agreement, Eagle River shall cause the original stock
certificates, duly endorsed, to be delivered to WPM.
1.2 WPM, COM and Eagle River acknowledge and agree that the number
of Shares set forth in Section 1.1 was calculated after giving effect
to the Class B membership interests in Eagle River as of September
19, 1997. In the event any such interests are forfeited and not
replaced in accordance with the terms of the "Eagle River Minority
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Interest Agreement" among WPM, COM and Eagle River of even date
herewith, the number of Shares shall be increased pursuant to the
Eagle River Minority Interest Agreement.
2. Effectiveness. This Agreement shall become effective, and the distribution
of the Shares shall be deemed to have been completed, as of the Effective Date.
3. Representations and Warranties of COM and Eagle River. Eagle River and
COM represent and warrant to WPM as of the Effective Date that:
3.1 Organization. Eagle River is a limited liability company duly
organized, validly existing and in good standing under the laws of
the State of Washington.
3.2 Ownership of Shares; No Encumbrances.
------------------------------------
3.2.1 Eagle River is the owner of record of all of the Shares, free
and clear of any liens, encumbrances, pledges, security interests,
restrictions (other than restrictions arising under applicable law,
including securities laws and SEC regulations), prior assignments and
claims of any kind or nature whatsoever. Upon consummation of the
distribution contemplated by this Agreement, WPM shall be the owner,
beneficially and of record, of all of the Shares, free and clear of
any liens, encumbrances, pledges, security interests, restrictions
(other than restrictions arising under applicable law,including
securities laws and SEC regulations), prior assignments and claims of
any kind or nature whatsoever, except as otherwise hereafter created
by WPM, or pursuant to the existing agreements and rights of third
parties identified on Exhibit B to the extent such rights under
Exhibit B are not inconsistent with the provisions of Sections 6
through 10 and 12 hereof which shall supersede such third-party
rights. Each party will its use best efforts to minimize the effect
of the limitations and restrictions imposed by the agreements set
forth on Exhibit B.
3.2.2 All of the Shares have been duly and validly authorized and
issued, are fully paid and nonassessable, and were issued
in full compliance with all applicable laws, rules,
regulations and ordinances.
3.3 Power and Authority. Each of Eagle River and COM has all
required power and authority and has taken all actions necessary to
enter into this Agreement, to deliver this Agreement and to perform
its obligations hereunder and to consummate all transactions
contemplated hereby. The execution, delivery, and performance of this
Agreement have been duly authorized by Eagle River. This Agreement
has been duly executed by Eagle River and COM and delivered to the
other parties hereto and constitutes the legal, valid, and binding
obligation of Eagle River and COM enforceable in accordance with its
terms.
3.4 No Conflicts; Consents. The execution, delivery and
performance of this Agreement by Eagle River and COM and the
consummation of the transactions contemplated hereby will not (a)
conflict with or violate any provision of the organizational
documents of Eagle River (b) violate the provisions of, or constitute
a breach or default (whether upon lapse of time and/or the occurrence
of any act or event, or otherwise) under, any contract or agreement
to which Eagle River or COM is a party
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or (c) violate any law, statute or other law, rule, regulation,
interpretation, award, decree, injunction, judgment, order, ruling,
assessment or writ by or of any court, arbitrator or governmental or
regulatory entity. The execution, delivery, and performance of this
Agreement by Eagle River and COM and the consummation of the
transactions contemplated hereby do not require Eagle River or COM to
obtain any consent, approval, or action of, or make any filing with
or give notice to, any corporation, partnership, person, firm or
other entity or any public, governmental or judicial authority except
as have been made or obtained, and except for required SEC filings.
3.5 Litigation. Neither Eagle River nor COM is a party to any
litigation, action, suit, proceeding or investigation presently
pending or threatened before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, that would restrict or prohibit the consummation of the
transactions contemplated by this Agreement.
3.6 Insolvency Proceedings. Neither Eagle River nor COM is the
subject of any pending insolvency proceedings of any character.
Neither Eagle River nor COM has made an assignment for the benefit of
creditors or taken any action with a view to the institution of any
such insolvency proceedings.
4. WPM's Representations and Warranties. WPM represents and warrants to
Eagle River and COM as of the Effective Date that:
4.1 Power and Authority. WPM has all required power and authority
and has taken all actions necessary to enter into this Agreement, to
deliver this Agreement and to perform her obligations hereunder and
to consummate all transactions contemplated hereby. The execution,
delivery, and performance of this Agreement have been duly authorized
by WPM. This Agreement has been duly executed by WPM and delivered to
the other parties hereto and constitutes the legal, valid, and
binding obligation of WPM, enforceable in accordance with its terms.
4.2 No Conflicts; Consents. The execution, delivery and
performance of this Agreement by WPM and the consummation of the
transactions contemplated hereby will not (a) violate the provisions
of, or constitute a breach or default (whether upon lapse of time
and/or the occurrence of any act or event, or otherwise) under, any
contract or agreement to which WPM is a party or (b) violate any law,
statute or other law, rule, regulation, interpretation, award,
decree, injunction, judgment, order, ruling, assessment or writ by or
of any court, arbitrator or governmental or regulatory entity. The
execution, delivery, and performance of this Agreement by WPM and the
consummation of the transactions contemplated hereby do not require
WPM to obtain any consent, approval, or action of, or make any filing
with or give notice to, any corporation, partnership, person, firm or
other entity or any public, governmental or judicial authority,
except as have been made or obtained, and except for required SEC
filings.
4.3 Litigation. WPM is not a party to any litigation, action,
suit, proceeding or investigation presently pending or threatened
before any court or governmental
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department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that would restrict or prohibit the consummation
of the transactions contemplated by this Agreement.
4.4 Investment Intent. WPM is acquiring the Shares for investment
purposes for her own account and without a view to distribution or
resale thereof.
4.5 Compliance with Laws and Regulations. WPM acknowledges that
dispositions of the Shares subsequent to the Effective Date will be
subject to compliance with applicable laws, including applicable
securities laws and SEC regulations.
4.6 Insolvency Proceedings. WPM is not the subject of any pending
insolvency proceedings of any character. WPM has made no assignment
for the benefit of creditors nor has she taken any action with a view
to the institution of any such insolvency proceedings.
5. Indemnification.
5.1 Indemnification. COM, on behalf of himself and Eagle River,
but not Eagle River, and WPM shall indemnify each other and their
Affiliates and representatives from and against any and all costs,
losses, taxes, liabilities, obligations, damages, lawsuits,
deficiencies, claims, demands and expenses (whether or not arising
out of third-party claims), including, without limitation, interest,
penalties, attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (collectively,
"Damages") incurred or threatened in connection with, arising out of,
resulting from or incident to any breach of any representation,
warranty, covenant, agreement or obligation made by him/it/her in or
pursuant to this Agreement.
5.2 Indemnification Procedures. In the case of any claim asserted
by a third party against a party entitled to indemnification under
this Agreement (the "Indemnified Party"), notice shall be given by
the Indemnified Party to the party required to provide
indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and the Indemnified Party shall permit the
Indemnifying Party (at the expense of such Indemnifying Party) to
assume the defense of any claim or any litigation resulting
therefrom, provided that the omission by any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying
Party of its indemnification obligation under this Agreement except
to the extent that such omission results in a failure of actual
notice to the Indemnifying Party and such Indemnifying Party is
materially damaged as a result of such failure to give notice; and
further provided that, unless the Indemnifying Party agrees to
provide both defense and indemnity, (a) the counsel for the
Indemnifying Party who shall conduct the defense of such claim or
litigation shall be reasonably satisfactory to the Indemnified Party
and (b) the Indemnified Party may participate in such defense at such
Indemnified Party's expense. Except with the prior written consent of
the Indemnified Party, no Indemnifying Party, in the defense of any
such claim or litigation, shall consent to entry of any judgment or
order, interim or otherwise, or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting the
Indemnified Party or that does not include as an
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unconditional term thereof the giving by each claimant or plaintiff
to such Indemnified Party of a release from all liability with
respect to such claim or litigation. In any event, the Indemnifying
Party and the Indemnified Party shall cooperate in the defense of any
claim or litigation subject to this Section 5.2 and the records of
each shall be available to the other with respect to such defense.
6. Tag Along Rights.
None of COM, Eagle River or COM's other Affiliates (other than the
Company) owning shares of capital stock of the Company (collectively, the "COM
Holders") may sell, assign, or otherwise transfer in any transaction or series
of related transactions (a "Sale") either (i) fifty percent (50%) or more of the
shares of capital stock of the Company ("Stock") held by them at the time of
such Sale or (ii) that number of shares of Stock that results in a Change of
Control as defined below (either (i) or (ii) being a "Sale of Control") without
triggering application of this Section 6.
If any or all of the COM Holders (the "Selling Shareholders") intend
to effect a Sale of Control, COM shall give written notice (the "Seller's
Notice") to WPM stating that the Selling Shareholders intend to effect such a
Sale of Control, identifying the party who made the subject offer (the "Proposed
Transferee"), specifying the number of shares of Stock proposed to be sold,
transferred or otherwise affected under such offer (the "Sale Shares"), and
specifying the per share price and any other consideration that the Proposed
Transferee has offered to pay for the Sale Shares and all other terms of such
offer (the "Sale Price and Terms"). A written copy of the offer shall be
attached to the Seller's Notice. For purposes of this Section 6, "Change of
Control" shall occur or exist when COM and his Affiliates cease to be able to
elect a majority of the Board of Directors of the Company.
WPM, on her own behalf and on behalf of her Affiliates owning shares
of capital stock of the Company (collectively, the "WPM Holders"), shall have
the right upon written notice by WPM to COM within ten (10) business days after
receiving the Seller's Notice, to participate on a pro rata basis in the Selling
Shareholders' Sale of Sale Shares at and upon the Sale Price and Terms. The
number of Sale Shares to be sold shall be allocated pro rata between the Selling
Shareholders and, as directed by WPM, the participating WPM Holders, based on
the total number of shares of Stock owned by the COM Holders and the total
number of shares of Stock held by all WPM Holders at the time of such Sale;
provided, however, that WPM may elect to have the participating WPM Holders sell
all or any portion of their collective pro rata share of the Sale Shares.
The participating WPM Holders shall effectuate the sale or transfer
by promptly delivering to COM for transfer to the Proposed Transferee one or
more certificates, properly endorsed for transfer, which represent the number of
shares of Stock which WPM elects to sell or transfer.
The stock certificates that the WPM Holders deliver to COM shall be
transferred by the Selling Shareholders to the Proposed Transferee in
consummation of the Sale of the Sale Shares pursuant to the terms and conditions
specified in the Seller's Notice, and the Selling Shareholders shall promptly
thereafter remit to the participating WPM Holders that portion of the Sale
proceeds to which the participating WPM Holders are entitled by reason of their
participation in such Sale, without reduction or adjustment other than for
transaction costs ascertained on a pro rata basis.
The exercise or non-exercise of the rights of the WPM Holders
hereunder to participate in one or more Sales of Control made by the COM Holders
shall not adversely affect their rights to participate in subsequent Sales of
Control by the COM Holders.
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In the event any of the Selling Shareholders attempt to effect or
engage in a Sale of any shares of Stock of the Company in contravention of this
Section 6, then, in addition to whatever other rights WPM may have in law or in
equity, WPM shall have a put option against the Selling Shareholders to sell
that number of shares of Stock that is equal to the pro rata share of the WPM
Holders of the Sale Shares to the Selling Shareholders at and upon the Sale
Price and Terms in order to effect the intent of this Agreement as set forth in
this Section 6.
7. Drag Along Rights.
If any or all of the COM Holders (the "Transferring Holders") agree
to effect or engage in a Sale of at least 51% of the total shares of Stock then
held by all of the COM Holders in a bona fide arm's-length transaction with a
third party that is not an Affiliate, then the Transferring Holders may elect to
require the WPM Holders to vote all of the shares of Stock held by the WPM
Holders affirmatively for the transaction and to sell to the proposed purchaser
(the "Proposed Purchaser") all or part of the Applicable Percentage (as defined
below) of the total number of shares of Stock then held by the WPM Holders,
concurrently with the Sale by the Transferring Holders and at the same price per
share; provided, however, that the Sale of such shares of Stock by the WPM
Holders is in accordance with all applicable securities laws and does not
violate any applicable law or regulation. In the case of such a transaction
involving a COM Affiliate, the Transferring Holders shall have the same rights,
including the right to require that WPM vote her shares in favor of the
transaction and that she tender her shares, but WPM may elect either to accept
the transaction price or, as part of the contractual rights hereby granted to
WPM, to have the price paid for her shares be in cash at fair market value as
subsequently determined by any court of competent jurisdiction. As used in this
Agreement, "Applicable Percentage" shall mean the percentage of the total number
of shares then held by all of the COM Holders that is proposed to be sold or
transferred by the Transferring Holders.
Such election shall be made by the Transferring Holders by delivering
to the WPM Holders a written notice (the "Drag Along Notice") informing them of
the material terms of the proposed Sale, including, without limitation, the
identity of the Proposed Purchaser, the number of shares of Stock proposed to be
sold or otherwise transferred, the per share price that the Proposed Purchaser
has offered to pay (the "Offered Price") and the scheduled closing date for the
Sale transaction (the "Sale Date"). Notwithstanding anything to the contrary
herein, WPM shall not be required to participate in any Sale unless the Offered
Price equals or exceeds the Current Market Value. For purposes of this Section
7, "Current Market Value" shall mean the average of the closing prices of
Company Class A Common Stock on NASDAQ (or the principal national securities
exchange on which the Class A Common Stock is then traded) for the twenty (20)
trading days immediately preceding the initial public notice of the transaction.
At least three (3) days prior to the Sale Date specified in the Drag
Along Notice, the WPM Holders shall deliver to the Transferring Holders
certificate(s) evidencing the number of shares of Stock to be sold by the WPM
Holders, duly endorsed for transfer to the Proposed Purchaser. On the Sale Date,
and provided that the Transferring Holders consummate such Sale, the
Transferring Holders shall deliver to the Proposed Purchaser certificate(s)
evidencing the shares of Stock being sold by the WPM Holders against payment of
the aggregate Offered Price (or, in the case of a judicial determination, fair
market value) therefor, and the Transferring Holders shall promptly (or as soon
as practicable following a judicial determination of fair market value) remit
such payment to the WPM Holders in the respective amounts due them without
reduction or adjustment other than for transaction costs ascertained on a pro
rata basis.
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8. Board Representation Rights.
8.1 WPM Nominee. WPM shall be entitled, but not required, to
designate one (1) member to the Board of Directors of the Company
(the "WPM Nominee").
8.2 Election of WPM Nominee. Eagle River and COM shall vote, and
shall cause all of COM's Affiliates to vote, all of the shares of the
Company owned or held of record by them, or as to which they hold
proxies, at all regular and special meetings of the stockholders of
the Company called or held for the purpose of filling positions on
the Board of Directors, and in each written consent executed in lieu
of such a meeting of stockholders, in favor of and otherwise to
support the election to the Board of Directors of the WPM Nominee.
8.3 Removal of WPM Nominee. Eagle River and COM shall use their
respective best efforts to call, or cause the appropriate officers
and directors of the Company to call, a special meeting of
stockholders of the Company and to vote all of the shares of the
Company owned or held of record by them, or as to which they hold
proxies, for, or to take all actions by written consent in lieu of
any such meeting necessary to cause, the removal (with or without
cause) of any WPM Nominee if WPM requests such director's removal in
writing for any reason. WPM shall have the right to designate a new
nominee in the event the WPM Nominee shall be so removed under this
Section 8.3 or shall vacate his or her directorship for any reason.
Except as provided in this Section 8.3, each party hereto agrees that
at any time that it is then entitled to vote for the election or
removal of directors, it will not vote in favor of the removal of any
WPM Nominee unless (i) such removal shall be at the request of WPM or
(ii) the right of WPM to nominate such director has terminated in
accordance with Section 8.4.
8.4 Termination of Right to Designate WPM Nominee. The right of
WPM to designate a member to the Board of Directors under this
Section 8 shall terminate at such time as either (i) WPM has sold
fifty percent (50%) or more of the aggregate number of shares of the
Company held by her upon the distribution of the Shares hereunder or
(ii) the combined voting power of WPM, COM, Eagle River, Nextlink,
Inc., and all other Affiliates of COM is insufficient to elect three
(3) members of the Company's Board of Directors.
9. Information Rights.
WPM, at her sole option, shall have the right to receive from COM,
concurrently with the distribution to members of the Company's Board of
Directors, copies of all notices, minutes, consents, and any other written
materials that the Company provides on and after the Effective Date to its
directors in connection with Board meetings or otherwise. WPM shall provide
written notice to COM of her election under this Section 9 and may change her
election or terminate her right under this Section 9 at any time in her sole
discretion upon written notice to COM.
10. Piggy-back Registration Rights.
Concurrently with the execution hereof, the Company and WPM shall
enter into the Nextlink Registration Rights Agreement in the form attached
hereto as Exhibit C. In addition, if COM,
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Eagle River, Nextlink, Inc. or any of COM's other Affiliates are, or at a later
date become, parties to an agreement granting such party or parties registration
rights with respect to securities of the Company, the Company shall grant (and
Eagle River and COM, individually and on behalf of their Affiliates, will take
all action necessary to cause the Company to grant) WPM piggy-back registration
rights with respect to the Shares, which shall be pro rata based upon the ratio
of the number of Shares then held by her and her Affiliates to the total number
of shares then held by COM and Affiliates and shall be equal in priority
(including cutback restrictions) and equal in frequency and number of
registration opportunities to the registration rights held by such other party.
11. Proxy and Lockup
Concurrently with the execution hereof, WPM shall grant to COM a
Proxy in the form attached hereto as Exhibit D and shall grant to the Company a
lockup undertaking in the form previously executed by COM in connection with the
Company's IPO and attached as Exhibit E.
12. Waiver of Conversion Rights.
The Company hereby irrevocably waives its right to require the
conversion into shares of Class A Common Stock of any of the shares of Class B
Common Stock either (i) distributed to WPM or her Affiliates on the Effective
Date or (ii) transferred after the Effective Date between or among WPM and her
Affiliates. COM, Eagle River and Nextlink, Inc. agree to cause their respective
representatives and those of their Affiliates on the Company's Board of
Directors to vote at all regular and special meetings of the Board of Directors
of the Company (and in each written consent executed in lieu of such a meeting)
to ensure that the Company takes all actions otherwise necessary to comply with
the provisions hereof; provided, however, that this waiver shall not apply to
any subsequent transfer by WPM or any of her Affiliates to any third party not
affiliated with WPM or her Affiliates.
13. Miscellaneous.
13.1 Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors and
assigns. No Party to this Agreement may assign this Agreement without the prior
written consent of the other Parties hereto, except that both COM and WPM, both
before and after the Effective Date, may assign their rights and obligations
under this Agreement to any of their Affiliates; provided, however, that in
neither case does such an assignment relieve the assigning Party of his or her
obligations under this Agreement.
13.2 Specific Performance. The Parties recognize that in the event that any
Party defaults in the performance of its obligations under this Agreement,
monetary damages alone will not be adequate. Therefore, in addition to bringing
an action for breach of contract and/or indemnification under this Agreement,
any Party shall be entitled to obtain specific performance of the terms of this
Agreement. In any action to enforce specifically the performance of this
Agreement, the defending Party shall waive the defense that there is an adequate
remedy at law or equity and agree that specific performance is an appropriate
remedy for breach or default except where specific performance is not feasible.
13.3 Further Assurances. Each of the Parties hereto shall cooperate, shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by the other Parties in order to carry out the
provisions and purposes of this Agreement. In particular, Eagle River shall
cause duly endorsed stock powers transferring the Shares to be delivered to WPM
or her representatives as set forth herein.
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13.4 Organizational Documents. Eagle River, COM, and COM's Affiliates agree
to use their best efforts to cause the Company to act in accordance with its
organizational documents in all material respects. Eagle River, COM, and COM's
Affiliates shall vote all the shares owned or held of record by them at any
regular or special meeting of stockholders of the Company or in any written
consent executed in lieu of such a meeting of stockholders, and shall take all
action necessary, to ensure (to the extent within the Parties' collective
control) that the organizational documents of the Company do not, at any time,
conflict with the provisions of this Agreement.
13.5 Governing Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Washington.
13.6 Amendment; Waiver. Neither this Agreement nor any provision hereof may
be amended, waived, discharged or terminated, except by a written instrument
signed by each of the Parties sought to be bound thereby that specifically
references this Agreement and any such amendment, waiver, discharge or
termination.
13.7 Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted from this Agreement and
the remaining provisions of this Agreement shall be unaffected and shall
continue in full force and effect.
13.8 Certain Rules of Construction. Any ambiguities shall be resolved
without reference to which party may have drafted this Agreement. All Article or
Section titles or captions contained in this Agreement are for convenience only,
and they shall not be deemed part of this Agreement and in no way define, limit,
extend or describe the scope or limit of any provisions hereof. Unless the
context otherwise requires: (i) a term has the meaning assigned to it; (ii) "or"
is not exclusive; (iii) words in the singular include the plural, and words in
the plural include the singular; (iv) provisions apply to successive events and
transactions; (v) "herein," "hereof" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision; (vi) all references to "Articles" or "Sections" refer to Articles
and Sections of this Agreement unless otherwise specifically indicated; and
(vii) any pronoun used in this Agreement shall include the corresponding
masculine, feminine and neuter forms.
13.9 Notices. All notices and other communications required or permitted to
be given hereunder or which are given with respect to this Agreement shall be in
writing and shall be personally served or mailed, registered or certified,
return receipt requested, postage prepaid (or by a substantially similar
method), or delivered by a reputable overnight courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth on Exhibit F hereto, or such other address as such party
shall have specified most recently by written notice. Notice shall be deemed
given or delivered on the date of service or transmission if personally served
or transmitted by hand delivery, telegram, telex or facsimile. Notice otherwise
sent as provided herein shall be deemed given or delivered on the fifth business
day following the date mailed or on the next business day following delivery of
such notice to a reputable overnight courier service.
13.10 Attorneys' Fees. If any legal action or other proceeding is commenced
that is related to this Agreement, the prevailing Party shall be entitled to
receive from the other party or parties its reasonable legal fees and expenses
incurred in the preparation of, conduct of or appeal or enforcement of judgment
from the proceeding.
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13.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered, shall be deemed to
be an original and all of which, taken together, shall constitute one and the
same Agreement, and may be executed by FAX.
13.12 Agreement Effective After Death. Should the death of either COM or
WPM occur, all provisions of this Agreement shall nonetheless be valid and shall
be enforceable by or against the estate and heirs of COM and WPM insofar as
applicable law permits.
[signature page follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
XXXXX X. XxXXX EAGLE RIVER INVESTMENTS, LLC
/s/ Xxxxx X. XxXxx By: /s/ Xxxxx X. XxXxx
------------------ Name: Xxxxx X. XxXxx
Its: Managing Member
XXXXX X. XxXXX NEXTLINK COMMUNICATIONS, INC.
/s/ Xxxxx X. XxXxx By: /s/ R. Xxxxx Xxxxxx, Xx.
------------------ Name: R. Xxxxx Xxxxxx
Its: Vice President
(As to Sections 10, 12 and 13 only)
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EXHIBIT A
Copies of Stock Certificates
See attached.
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NUMBER SHARES
NXTB 0034 9,722,649
[LOGO]
THE RIGHTS, PREFERENCES AND NEXTLINK COMMUNICATIONS, INC.
LIMITATIONS OF THE CLASS A COMMON
STOCK REPRESENTED BY THIS CERTIFICATE INCORPORATED UNDER THE LAWS OF THE
ARE DETERMINED BY THE ARTICLES OF STATE OF WASHINGTON
INCORPORATION ESTABLISHING THE RIGHTS,
PREFERENCES AND LIMITATIONS OF THIS CLASS B COMMON STOCK, PAR VALUE
CLASS OF SHARES, WHICH WAS APPROVED $.02 PER SHARE
BY THE BOARD OF DIRECTORS OF THE
CORPORATION AND FILED WITH THE SEE REVERSE FOR CERTAIN DEFINITIONS
SECREARY OF STATE OF THE STATE OF
WASHINGTON. A COPY OF THE ARTICLES OF
INCORPORATION IS AVAILABLE FROM THE
CORPORATION WITHOUT CHARGE TO SHAREHOLDERS
UPON WRITTEN REQUEST.
-----------------------------------------------------------------
THIS IS TO CERTIFY THAT
Xxxxx X. XxXxx
is the owner of
Nine Million Seven Hundred Twenty-Two Thousand Six Hundred Forty Nine
FULLY PAID AND NON-ASSESSABLE SHARES OF THE CLASS B COMMON STOCK, PAR VALUE $.02
PER SHARE, OF
NEXTLINK COMMUNICATIONS, INC.
transferable on the books of the Corporation by the holder hereof in person
or by a duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Articles of Incorporation
of the Corporation and all amendments thereto to all of which the holder by the
acceptance hereof assents.
WITNESS the signatures of its duly authorized officers.
Dated: 10/31/97
/s/R. XXXXX XXXXXX SECRETARY /s/XXXXXXXX X. XXXXX VICE PRESIDENT
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NEXTLINK COMMUNICATIONS, INC.
The Corporation will furnish to any shareholder, upon written request and
without charge, a full statement of the designations, relative rights,
preferences and limitations applicable to the Class A Common Stock, the Class B
Common Stock, the Preferred Stock and any series of Preferred Stock, and the
authority of the Board of Directors to determine variations for future series of
Preferred Stock.
The shares of Class B Common Stock evidenced by this certificate have not
been registered under the Securities Act of 1933, as amended, the Securities Act
of Washington, or the securities act of any state (collectively, the "securities
acts"). They may not be sold or offered for sale in the absence of an effective
registration statement under the applicable securities acts, or an opinion of
counsel satisfactory to the Corporation that an exemption from such registration
requirements is available and that such registration is not required.
If this certificate is presented for transfer, each share of Class B Common
Stock evidenced hereby may, at the option of the Corporation in its sole
discretion, be converted into one share of the Corporation's Class A Common
Stock, whether such transfer results from a contractual obligation of the holder
of this certificate, by operation of law, by a change in control of the holder
of this certificate, by testamentary disposition or gift, or for any other
reason.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -- ......Custodian........
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors
survivorship and not as tenants in common Act.........................
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received,_______________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------
--------------------------------------
------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
------------------------------------------------------------------------------
Shares ---- of
the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney ---
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated -------------------------
X
--------------------------------------
SIGNATURE GUARANTEED
X
--------------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OF
ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO S.E.C. RULE 7Ad-15.
-14-
EXHIBIT B
Existing Agreements
NEXTLINK Communications, Inc.
-----------------------------
Articles of Incorporation of Nextlink Communications, Inc. dated
January 14, 1997
Bylaws of Nextlink Communications, Inc.
Stock Option Plan of Nextlink Communications, Inc. dated January 15, 1997
Registration Rights Agreement dated January 15, 1997 between Nextlink
Communications, Inc. and the holders of Class B Common Stock named
therein.
-15-
EXHIBIT C
Form of Nextlink Registration Rights Agreement
See attached.
-16-
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of November 3, 1997,
is between NEXTLINK COMMUNICATIONS, INC., a Washington corporation (the
"Company") and Xxxxx X. XxXxx.
WHEREAS, Xxxxx X. XxXxx currently owns 9,722,649 shares of Class B
common stock, $.02 par value, of the Company, (the "Class B Common Stock"); and
WHEREAS, the Company wishes to xxxxx Xxxxx X. XxXxx and her controlled
affiliates holding shares of capital stock of the Company (collectively, "WPM")
certain registration rights with respect to the shares of Class A common stock,
par value $.02 per share of the Company (the "Class A Common Stock") for which
the shares of Class B Common Stock are convertible that WPM may acquire in the
future, as provided further herein.
NOW THEREFORE, in consideration of the promises herein contained and
other good and valuable consideration, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement:
(i) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act (and any post-effective amendments filed or required to
be filed) and the declaration or ordering of effectiveness of such registration
statement;
(ii) the term "Registrable Securities" means (A) all shares of Class A
Common Stock owned by WPM as of the date hereof, (B) any shares of Class A
Common Stock acquired by WPM through conversion of Class B Common Stock or
otherwise and (C) any capital stock of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares of Class A Common Stock referred to in clause (A) or (B) above;
(iii) the term "Other Holders" shall mean those parties that are a
signatory to that certain Registration Rights Agreement dated January 15, 1997
among the Company and the parties listed on Schedule A hereto;
(iv) "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Act;
(v) "Registration Expenses" shall mean all third-party expenses
incurred by the Company in compliance with Sections 2 and 3 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company and the underwriters, if any, blue
sky fees and expenses and the third-party expenses of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company);
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(vi) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of securities and all fees and
disbursements of counsel for each of the holders of registered securities;
(vii) "Act" shall mean the Securities Act of 1933, as amended; and
(viii) "Exchange Act" shall mean the Securities Exchange Act of 1934.
2. Requested Registration.
(i) Request for Registration. If the Company shall receive from WPM,
at any time after the earlier of (x) the announcement of the Company's first
quarter 1998 financial results or (y) June 30, 1998, a written request that the
Company effect any registration with respect to all or a part of the Registrable
Securities, the Company will, subject to compliance with any applicable
underwriters' lock-up agreements in effect as of the date hereof:
(A) promptly give written notice of the proposed
registration qualification or compliance to all Other Holders; and
(B) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations issued under
the Act) as may be so requested and as would permit or facilitate the
sale and distribution as soon as is practicable of all or such portion
of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any
Holder or Holders joining in such request as are specified in a
written request received by the Company within twenty (20) business
days after written notice from the Company is given under Section
2(i)(A) above; provided that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant
to this Section 2:
(a) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Act or
applicable rules or regulations thereunder;
(b) After the Company has effected one (1) such registration
pursuant to this Section 2 and such registration has been
declared or ordered effective and the sales of such Registrable
Securities shall have closed;
(c) If the securities requested by WPM and all Other Holders
to be registered pursuant to such request have an anticipated
aggregate public offering price (before any underwriting
discounts and commissions) of less than $10,000,000.
The registration statement filed pursuant to the request of WPM may,
subject to the provisions of Section 2(ii) below, include other securities of
the Company which are held by officers or directors of the Company, or which are
held by persons who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration, but the Company shall have no
absolute right to include any of its securities in any such registration.
-18-
The registration rights set forth in this Section 2 are personal to WPM and
shall not be assignable, by operation of law or otherwise, to any third party
not affiliated with WPM
(ii) Underwriting. If WPM intends to distribute the Registrable Securities
covered by WPM's request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to Section 2.
If officers or directors of the Company holding other securities of the
Company shall request inclusion in any registration pursuant to Section 2, or if
holders of securities of the Company other than Registrable Securities who are
entitled, by contract with the Company or otherwise, to have securities included
in such a registration (the "Other Stockholders") request such inclusion, WPM
shall offer to include the securities of such officers, directors and Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. WPM and the
Company shall (together with all officers, directors and Other Stockholders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by WPM and reasonably
acceptable to the Company. Notwithstanding any other provision of this Section
2, if the representative advises WPM that marketing factors require a limitation
on the number of shares to be underwritten, the securities of the Company held
by officers or directors of the Company and the securities held by Other
Stockholders (other than the Other Holders) shall be excluded from such
registration to the extent so required by such limitation. If, after the
exclusion of such shares, further reductions are still required, the number of
shares included in the registration by WPM and each Other Holder shall be
reduced on a pro rata basis (based on the number of shares proposed to be sold
by WPM or such Other Holders), by such minimum number of shares as is necessary
to comply with such request. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any officer, director or
Other Stockholder who has requested inclusion in such registration as provided
above disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the underwriter and WPM.
The securities so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company may include its securities for its
own account in such registration if the representative so agrees and if the
number of Registrable Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
(iii) Notwithstanding the foregoing, if the Company shall furnish to WPM a
certificate signed by the President or 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 and its shareholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for a period of not more than 120 days after receipt
of the request of WPM; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.
3. Company Registration.
(i) If, at any time, the Company shall determine to register any of
its equity securities either for its own account or for the account of a
security holder or holders exercising their respective demand registration
rights, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as
-19-
would be required to be included in a registration statement covering the
sale of Registrable Securities, the Company will:
(A) promptly give to WPM a written notice thereof (which shall include
a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state
securities laws); and
(B) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by WPM within twenty (20) days after receipt of the written
notice from the Company described in clause (i) above, except as set forth
in Section 3(ii) below. Such written request may specify all or a part of
the WPM's Registrable Securities.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise WPM as a part of the written notice given pursuant to
Section 3(i)(A). In such event, the right of WPM to registration pursuant to
this Section 3 shall be conditioned upon WPM's participation in such
underwriting and the inclusion of WPM's Registrable Securities in the
underwriting to the extent provided herein. WPM shall (together with the Company
and the Other Stockholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for underwriting by
the Company. Notwithstanding any other provision of this Section 3, if the
representative determines that marketing factors require a limitation on the
number of shares to be underwritten, the representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting. The Company shall so advise
all holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following manner: The securities of the Company held
by officers, directors and Other Stockholders (other than the Other Holders) of
the Company (other than securities held by holders who by contractual right
initiated the demand for such registration ("Demanding Holders")) shall be
excluded from such registration and underwriting to the extent required by such
limitation, and, if a limitation on the number of shares is still required, the
number of shares that may be included in the registration and underwriting by
WPM and each of the Other Holders and Demanding Holders shall be reduced, on a
pro rata basis (based on the number of shares proposed to be sold by WPM and
such Other Holders or Demanding Holders), by such minimum number of shares as is
necessary to comply with such limitation. If any of WPM or such Other Holders or
Demanding Holders or any officer, director or Other Stockholder disapproves of
the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
(iii) Number and Transferability. WPM shall be entitled to have their
shares included in an unlimited number of registrations pursuant to this Section
3. The registration rights granted pursuant to this Section 3 are personal to
WPM and shall not be assignable, by operation of law or otherwise to any third
party not affiliated with WPM.
4. Expenses of Registration. All Registration Expenses and Selling
Expenses incurred in connection with any registration, qualification or
compliance pursuant to Section 2 of this Agreement shall be borne by the holders
of the securities so registered pro rata on the basis of the number of shares so
registered. Without limiting the generality of the foregoing, in the event the
Company includes shares in any registration, qualification or compliance
pursuant to Section 2 of this Agreement, the Company shall
-20-
pay the Registration Expenses in proportion to the Company's share of the total
number of shares included in such registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 3 of this Agreement shall be borne by the Company (or the
Demanding Holders if so provided in the applicable contract), and all Selling
Expenses incurred in connection with any such registration, qualification or
compliance shall be borne by the holders of securities so registered pro rata on
the basis of the number of shares so registered.
5. Registration Procedures. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep WPM as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. The Company will:
(i) Keep such registration effective for a period of one hundred
eighty (180) days or until WPM, has completed the distribution described in
the registration statement relating thereto, whichever first occurs;
provided, however, that (A) such 180-day period shall be extended for a
period of time equal to the period during which WPM will refrain from
selling any securities included in such registration in accordance with
provisions in Section 9 hereof; and (B) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 180-day period shall be extended until
all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Act
governing the obligation to file a post-effective amendment permit, in
lieu of filing a post-effective amendment which (1) includes any prospectus
required by Section 10(a) of the Act or (2) reflects facts or events
representing a material or fundamental change in the information set forth
in the registration statement, the incorporation by reference of
information required to be included in (1) and (2) above to be contained in
periodic reports filed pursuant to Section 12 or 15(d) of the Exchange Act
in the registration statement.
(ii) Furnish such number of prospectuses and other documents
incident thereto as WPM, from time to time may reasonably request;
provided, however, that WPM and the other holders of securities so
registered, pro rata on the basis of the number of their shares so included
in such registration, reimburse the Company for expenses incurred in
performing its obligations under this Section 5.
(iii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(iv) Use its 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 shall be reasonably requested by WPM,
provided that the Company shall 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.
(v) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. WPM shall
also enter into and perform their obligations under such an agreement.
-21-
(vii) Furnish, at the request of WPM, on the date that WPM's
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such
securities are being sold through underwriters, or, if such securities are
not being sold through underwriters, on the date that the registration
statement with respect to such securities becomes effective, (A) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to WPM and (B) a letter dated such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to WPM.
6. Indemnification.
(i) The Company will indemnify WPM and each of the officers, directors
and partners and each person controlling each of the WPM entities (collectively
the "WPM Indemnified Parties"), with respect to each registration which has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter, against all 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 prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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, or any violation by the
Company of the Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and will reimburse each
of the WPM Indemnified Parties, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and 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 based upon written
information furnished to the Company by WPM or the underwriter and stated to be
specifically for use therein.
(ii) WPM will, if Registrable Securities held by WPM 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 and
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 the Act and the rules and regulations thereunder, each
Other Stockholder and each of their officers, directors, and partners, and each
person controlling such Other Stockholder against all 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, prospectus, offering circular or other document
made by WPM, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements by WPM
therein not misleading, and will reimburse the Company and such Other
Stockholders, directors, officers, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating 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, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by WPM
-22-
and stated to be specifically for use therein; provided, however, that the
obligations of WPM hereunder shall be limited to an amount equal to the net
proceeds to of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
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 shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 6 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation,
shall, 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. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense 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 which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated by
this Agreement are in conflict with the foregoing provisions, the provisions in
such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and WPM is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was furnished to the underwriter
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Act.
-23-
7. Information by WPM. WPM shall furnish to the Company such
information regarding WPM and the distribution proposed by WPM as the Company
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement.
8. Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144, at all times from and after ninety (90)
days following the effective date of the first registration under the Act
filed by the Company for an offering of its securities to the general
public;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Act and the Exchange Act at any time after it has become subject to such
reporting requirements; and
(iii) so long as WPM owns any Registrable Securities, furnish to
WPM upon request, a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 (at any time from and after
ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents so filed as WPM may reasonably request in availing themselves
of any rule or regulation of the Commission allowing WPM to sell any such
securities without registration.
9. "Market Stand-off" Agreement. WPM agree, if requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
not to sell or otherwise transfer or dispose of any Class A Common Stock (or
other securities) of the Company held by WPM during the 180 day period following
the effective date of the initial registration statement of the Company relating
to any such securities filed under the Act and during the 90 day period
following any subsequent registration statement filed under the Act.
If requested by the underwriters, WPM shall execute a separate
agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of such period.
10. Termination. The registration rights set forth in this Agreement
shall not be available to WPM if, in the opinion of counsel to the Company, all
of the Registrable Securities then owned by WPM could be sold in any 90-day
period pursuant to Rule 144 under the Act (without giving effect to the
provisions of Rule 144(k)). In addition, the registration rights set forth in
this Agreement shall terminate upon the transfer or assignment of the
Registrable Securities by WPM to any non-affiliated third party.
-24-
11. Notices. All communications provided for hereunder shall be sent
by first-class mail or facsimile and (a) if addressed to WPM, addressed to WPM
at the address or fax number contained on Schedule B to this Agreement, or at
such other address or fax number as WPM shall have furnished to the Company in
writing or (b) if addressed to the Company, at 000 000xx Xxxxxx XX, 0xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel, or fax number (206)
000-0000 or at such other address or fax number, or to the attention of such
other officer, as the Company shall have furnished to WPM in writing. Notices
sent by first-class mail shall be deemed received three days after the date of
deposit of such notice in the United States mail. Notices sent by facsimile
shall be deemed received upon receipt by the notified party's facsimile machine.
12. No Assignment. This Agreement is personal to WPM and shall not be
assignable, by operation of law or otherwise to any third party not affiliated
with WPM.
13. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Washington.
15. No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to WPM in this Agreement or
otherwise conflicts with the provisions hereof.
16. Amendments and Waivers. No provision of this Agreement may be
amended or waived except by an instrument in writing signed by the party sought
to be bound.
17. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed and delivered as of the date first above written.
By: \s\ Xxxxx X. XxXxx
------------------
Xxxxx X. XxXxx
NEXTLINK COMMUNICATIONS, INC.
By: \s\ R. Xxxxx Xxxxxx, Xx.
------------------------
Name:R. Xxxxx Xxxxxx, Xx.
Title: Vice President
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SCHEDULE A
OTHER HOLDERS' ADDRESSES FOR NOTICES
EAGLE RIVER INVESTMENTS, L.L.C.
x/x X. Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000)000-0000
NEXTLINK, INC.
c/o R. Xxxxx Xxxxxx, Xx.
000 000xx Xxxxxx X.X., Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000)000-0000
BWP, INC.
c/o Xxxxxx Xxxxxxx
000 X.X. Xxxxxxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000)000-0000
XXXXXX FAMILY LIMITED LIABILITY COMPANY
c/o Xxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Fax: (000)000-0000
PENNS LIGHT COMMUNICATIONS, INC.
c/o Xxxx Xxxxxxx
000 Xxxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Fax: (000)000-0000
PROBE VENTURES CORP.
c/o Xxxxxx Xxxxxx
Three Xxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
Fax: (000)000-0000
CITY SIGNAL, INC.
c/o Xxxxxxx Xxxxxx
Miller, Johnson, Xxxxx & Xxxxxxxxx
000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
Fax: (000)000-0000
-26-
U.S. NETWORK CORPORATION
c/o Xxx Xxxxxxxx
00 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Fax: (000)000-0000
G. XXXXXX XXXXXXX
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: (000)000-0000
X. XXXXXXX BEAN
0000 Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Fax: (000)000-0000
XXXX XXXX
0000 Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Fax: (000)000-0000
XXXX XXXXXX
0000 Xxxxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
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EXHIBIT D
Proxy
See attached.
-28-
IRREVOCABLE PROXY
Pursuant to RCW 23B.07.310 of the Washington Business Corporation Act,
the undersigned, a stockholder of NEXTLINK Communications, Inc., a Washington
corporation (the "Company"), holding 9,722,649 shares of Class B Common Stock,
par value $.02 per share (the "Shares"), does hereby make, constitute and
appoint Xxxxx X. XxXxx ("XxXxx"), the true and lawful attorney-in-fact and proxy
of the undersigned for and in her name, place and xxxxx to attend all meetings
of the stockholders of the Company with respect to the Subject Shares (as
defined below) and to vote any and all Subject Shares at all meetings of the
stockholders or any adjournment or adjournments thereof, and to exercise all
consensual or other voting rights with respect to the Subject Shares on any
matter except a "Specified Matter", subject to the limitations set forth below
and in the NEXTLINK Stock Distribution Agreement between the undersigned and
XxXxx dated as of November 3, 1997 (the "Agreement"). Capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Agreement. As used herein, a "Specified Matter" shall mean (i) any matter that
would result in the creation of a lien or encumbrance of any type on the Shares,
or (ii) any matter that relates to a transaction between the Company and XxXxx
or any of his Affiliates, except as set forth in the Agreement.
For purposes hereof, the term "Subject Shares" shall mean the minimum
number of Shares that, when added to all of the capital stock of the Company
owned directly or indirectly by XxXxx or any Affiliate thereof or over which
XxXxx or any Affiliate thereof has voting rights, are necessary for XxXxx to
hold 51% of the total voting power of the Class A Common Stock and Class B
Common Stock of the Company.
Nothing contained herein shall prevent or limit the undersigned from
converting shares of Class B Common Stock held by the undersigned into shares of
Class A Common Stock of the Company or selling, transferring, conveying or
otherwise disposing of any shares of capital stock of the Company held by the
undersigned.
This proxy is coupled with an interest and is irrevocable, for the
period from the date hereof until the date on which XxXxx sells 50% or more of
the Class B Common Stock of the Company owned directly or indirectly by XxXxx or
any of his Affiliates on the date hereof, at which time it shall automatically
expire. This Proxy shall also expire, as to any of the Subject Shares, upon the
sale, conveyance or transfer of any such Subject Shares to a non-affiliated
third party. The undersigned hereby ratifies and confirms all that the said
proxy may lawfully do or cause to be done by virtue hereof.
GIVEN at Bellevue, Washington this 3rd day of November, 1997.
------/s/ Xxxxx X. XxXxx-------
Xxxxx X. XxXxx
-29-
EXHIBIT E
Lockup
See Attached
-30-
AGREEMENT NOT TO SELL
NEXTLINK Communications, Inc.
000 000xx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Salomon Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Bear, Xxxxxx & Co. Inc.
Lazard Freres & Co. Inc. LLC
As Representatives of the
several U.S. Underwriters
and
Salomon Brothers International Limited
Xxxxxxx Xxxxx International
Bear, Xxxxxx International Limited
Lazard Capital Markets
As Representatives of the
several International Underwriters
c/o Salomon Brothers International Limited
Victoria Plaza
000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxx XXXX Xxxxxxx.
Ladies & Gentlemen:
This letter is being delivered to you in connection with the
Underwriting Agreement ("U.S. Version") and the Underwriting Agreement
("International Version") (together the "Underwriting Agreements"), between
NEXTLINK Communications, Inc., a Washington corporation (the "Company"), and
each of you as representatives of a U.S. syndicate of Underwriters (the "U.S.
Underwriters") and an International syndicate of Underwriters (the
"International Underwriters") named therein, relating to an underwritten public
offering of Class A common stock, par value $.02 per share (the "Class A Common
Stock), of the Company, which offering closed on October 1, 1997.
The undersigned agrees not to offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce an offering of, any
shares of Class A Common Stock, or any securities beneficially owned by the
undersigned convertible into, or exchangeable for, or that represent that right
to receive, Class A Common Stock for a period of 180 days following September
25, 1997, the day on which the Underwriting Agreements were executed, without
-31-
the prior written consent of Salomon Brothers Inc., other than shares of Class A
Common Stock disposed of as bona fide gifts or pledges where the recipients of
such gifts or the pledgees, as the case may be, agree in writing with the
Underwriters to be bound by the terms of such agreement.
The undersigned has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any Class A Common Stock, or which has otherwise constituted or
will constitute any prohibited bid for or purchase of the Class A Common Stock
or any related securities.
The undersigned acknowledges and agrees that the covenants and
agreements set forth herein supersede, to the extent of the subject matter
thereof, the provisions of any agreements or instruments defining the rights of
the undersigned with respect to the shares of Class A Common Stock or other
securities of the Company beneficially owned or controlled by the undersigned.
Very truly yours,
By: \s\ Xxxxx X. XxXxx
------------------
Name:
Title:
Date: November 3, 1997
-32-
Exhibit F
Notices
COM
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Eagle River, Inc.
-----------------
C. Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
NEXTLINK COMMUNICATIONS, INC.
-----------------------------
R. Xxxxx Xxxxxx
Pacific First Plaza
000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
WPM
c/x Xxxxxx Holzappel Sperry & Ebberson, PLLC
0000 Xxx Xxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Att'n: Xxxx X. Xxxxxx, III, Esq.
c/o Xxxxxxx Xxxxxx-Xxxxxx, Esq.
0000 Xxxxxxx Xx., Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
-33-
