Exhibit 10.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of January 14, 1999, between NEXTLINK Communications, Inc., a Delaware
corporation (the "Company"), and the persons and entities that have executed and
delivered the Consent and Indemnity Agreement of Stockholders in the form
attached to the Merger Agreement (as defined) (the "Holders") by and through the
execution of this Agreement by Xxxxxx X. Xxxxx (the "Stockholders'
Representative") as their attorney-in-fact.
This Agreement is made in connection with the Agreement and Plan of Merger,
dated the date hereof (the "Merger Agreement") among the Company, PCO
Acquisition Corp., a Delaware corporation wholly owned by the Company, and WNP
Communications, Inc., a Delaware corporation ("WNP"), pursuant to which the
Holders may acquire Class A Common Stock of the Company. The execution of and
delivery of this Agreement is a condition precedent to the issuance of the
Company's Class A Common Stock pursuant to the Merger Agreement.
Capitalized terms used herein without definition are used as defined in the
Merger Agreement.
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "AFFILIATE OF THE COMPANY" means any officer, director, or holder
of 10% or more of any class of security issued by the Company, other
than a Holder.
(b) "BUSINESS DAY" means any day, other than a Saturday, Sunday or
legal holiday, on which banks in the State of New York are open for
business.
(c) "COMMISSION" means the Securities and Exchange Commission.
(d) "COMMON STOCK" means the Class A Common Stock, par value $.02 per
share, of the Company, as constituted on the date hereof, any shares
into which such Common Stock shall have been changed, or any shares
resulting from any reclassification of such Common Stock.
(e) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute thereto, and the rules and
regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
(f) "HOLDERS" means the Holders referred to in the Preamble, any
person holding Registrable Securities as a result of a distribution of
such securities by a Holder to its
equity owners, and any other person holding Registrable Securities to
whom these registration rights have been assigned pursuant to
Section 9(f) of this Agreement.
(g) "PERSON" shall mean an individual, partnership, corporation,
limited liability company, association, trust, joint venture,
unincorporated organization and any government, governmental department
or agency or political subdivision thereof.
(h) "REGISTRABLE SECURITIES" means (i) the Common Stock held by any
Holder; (ii) any Common Stock or other securities issued or issuable
pursuant to the conversion of, or with respect to, the Common Stock
held by any Holder upon any stock split, stock dividend,
recapitalization, or similar event; and (iii) securities issued in
replacement or exchange of any of the securities issued in clauses (i)
or (ii) above. A security shall cease to be a Registrable Security when
(A) such security has been disposed of by a Holder pursuant to and in
the manner described in an effective registration statement under the
Securities Act or (B) such security has been sold or distributed by a
Holder pursuant to Rule 144 or 145 under the Securities Act.
(i) "REGISTRATION EXPENSES" means all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all registration, filing, listing and National
Association of Securities Dealers, Inc. ("NASD") fees, all fees and
expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, all messenger and
delivery expenses, any transfer taxes, the fees and expenses of the
Company's legal counsel and independent public accountants, including
the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, fees and
disbursements of one counsel for all or a majority of the Holders, and
any fees and disbursements of underwriters customarily paid by issuers
or sellers of securities; PROVIDED, HOWEVER, that Registration Expenses
shall not include underwriting discounts and commissions.
(j) "REQUISITE HOLDERS" means Holders holding Registrable Securities
having a fair market value at the time of no less than $30,000,000.
(k) "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect
at the time.
2. REGISTRATION.
(a) RESALE AT CLOSING. The Company will use reasonable best efforts to
have shares of Common Stock issued to the Holders at the Closing having
an aggregate market value of approximately $175 million registered
under the Securities Act for resale by the Holders in an underwritten
offering (the "Initial Offering") pursuant to a registration statement
(the "Initial Registration Statement") that has been declared effective
by the Commission within 30 days following the Closing, which
registration statement shall be kept effective by the Company until the
earlier of such time as the Initial Offering is completed or the
expiration of 60 days following the effectiveness of the Initial
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Registration Statement. Each Holder shall be entitled to sell its PRO
RATA share of the shares of Common Stock it receives in the Merger in
the Initial Offering; PROVIDED, HOWEVER, that any Holder not wishing to
sell some or all of its PRO RATA portion of shares may elect not to
participate in the Initial Offering or may elect to sell in such
offering less than its PRO RATA portion of shares by written notice
delivered to the Company at least two business days prior to the
Closing, in which case the aggregate number of shares permitted to be
sold by all other participating Holders will be increased PRO RATA by
the number of shares that would otherwise have been allotted to
non-participating or partially participating Holders. Each Holder
acknowledges and agrees that the Company may elect to include
additional shares of Common Stock having an aggregate market value of
approximately $165 million ($115 million for the Company's account and
$50 million for the account of a third party) in the Initial
Registration Statement and the Initial Offering, and may be required to
include additional shares pursuant to registration rights agreements
heretofore furnished to WNP. All shares offered in the Initial Offering
shall be subject to the provisions of subdivision (g) below.
(b) DEMAND REGISTRATION. At any time and from time to time after 180
days following the commencement of the Initial Offering, upon written
request by the Requisite Holders that the Company effect the
registration under the Securities Act of all or part of the Registrable
Securities (a "Demand Request"), the Company will use reasonable best
efforts to register the Registrable Securities which the Company has
been so requested to register by the Holders under the Securities Act
for resale by the Holders in an underwritten offering (a "Subsequent
Offering") pursuant to a registration statement (the "Subsequent
Registration Statement") that has been declared effective by the
Commission, which registration statement shall be kept effective by the
Company until the earlier of such time as the Subsequent Offering is
completed or the expiration of 60 days following the effectiveness of
the Subsequent Registration Statement. The Company will use reasonable
best efforts to have each Subsequent Registration Statement declared
effective by the Commission within ninety (90) days after receipt of
such request or within sixty (60) days after receipt of such request if
the Company is qualified to file a registration statement on Commission
Form X-0, X-0 or any successor or similar short-form registration
statement (collectively, "Commission Form S-3"). Subject to subdivision
(g), the Company may include in such Subsequent Registration Statement
and Subsequent Offering other securities of the Company for sale, for
the Company's account or for the account of any other person. Upon
receipt of a Demand Request, the Company shall promptly give written
notice of such request to all Holders, and all Holders shall be
afforded the opportunity to participate in such request as follows:
subject to subdivision (g), the Company will include in each Subsequent
Registration Statement and Subsequent Offering such number of
Registrable Securities of any Holder joining in such request as are
specified in a written request by the Holder received by the Company
within 20 days after receipt of such written notice from the Company.
(c) INCIDENTAL REGISTRATION. For so long as Registrable Securities are
outstanding, if the Company for itself or any of its security holders
shall at any time or times after the date hereof determine to register
under the Securities Act any shares of its capital stock or
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other securities (other than: (i) the registration of an offer, sale
or other disposition of securities solely to employees of, or other
persons providing services to, the Company, or any subsidiary
pursuant to an employee or similar benefit plan; or (ii) the
issuance of securities in a merger, acquisition or other transaction
of the type described in Rule 145 under the Securities Act or a
comparable or successor rule, registered on Form S-4 or similar or
successor forms), on each such occasion the Company will notify each
Holder of Registrable Securities of such determination at least
thirty (30) days prior to the filing of such registration statement,
and upon the request of any Holder given in writing within twenty
(20) days after the receipt of such notice, the Company will cause
any of the Registrable Securities specified by any such Holder to be
included in such registration statement to the extent such
registration is permissible under the Securities Act and subject to
the conditions of the Securities Act and subdivision (g) (an
"Incidental Registration").
(d) REGISTRATION STATEMENT FORM. The Company shall, if permitted by
law, effect any registration requested under Section 2 by the filing of
a registration statement on Commission Form S-3.
(e) EXPENSES. The Company shall pay all Registration Expenses incurred
in connection with the Initial Registration Statement, any Subsequent
Registration Statement and any Incidental Registration Statement. Those
Holders of Registrable Securities participating in the Initial
Offering, any Subsequent Offering and any Incidental Registration shall
bear their respective PRO RATA share of any applicable underwriting
discounts and commissions; such participating Holders agree that the
proceeds received by them upon consummation of any such offering shall
be net of any and all such discounts and commissions.
(f) EFFECTIVE REGISTRATION STATEMENT. Neither the Initial Registration
Statement, a Subsequent Registration Statement, nor an Incidental
Registration requested pursuant to this Section 2 shall be deemed to
have been effected until it has become effective with the Commission.
Notwithstanding the foregoing, a registration statement will not be
deemed to have been effected if: (i) after it has become effective with
the Commission, such registration is interfered with by any stop order,
injunction, or other order or requirement of the Commission or other
governmental agency or any court proceeding for any reason other than a
misrepresentation or omission by any Holder; or (ii) the conditions to
consummation of the Initial Offering or any Subsequent Offering
contained in the underwriting agreement entered into in connection with
such registration are not satisfied, other than solely by reason of
some act or omission by any Holder.
(G) PRIORITY IN UNDERWRITTEN REGISTRATIONS. If a registration is an
underwritten registration and the managing underwriters shall give
written advice to the Company and the Persons requesting such
registration that, in their opinion, market conditions dictate that no
more than a specified maximum number of securities could successfully
be included in such registration, then the maximum number of securities
included in such registration statement shall be limited to such
specified number, and the rights of the
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Holders to participate in such registration shall be subject to the
following cutback provisions:
(i) In the case of the Initial Offering, the securities
sought to be included in such offering by the Holders shall be
excluded on a PRO RATA basis with the securities sought to be
included in the Initial Offering by the Company and all other
Persons seeking inclusion of securities in such offering
(including pursuant to so-called piggyback registration
rights), based upon the Holder's, the Company's and the other
Persons' relative number of securities sought to be so
included until the aggregate market value of the securities
sought to be included in such offering by the Holders has been
reduced to approximately $125 million, after which any
additional securities required to be excluded from such
offering in order to comply with the advice of the managing
underwriter shall be securities that were to have been offered
for the Company's account until the offering includes no such
securities, after which the securities sought to be included
in such offering by the Holders shall be excluded on a PRO
rata basis with the securities sought to be included in the
Initial Offering by all other Persons seeking inclusion of
securities in such offering (including pursuant to so-called
piggyback registration rights), based upon the Holder's and
the other Persons' relative number of securities sought to be
so included;
(ii) In the case of any Subsequent Offering, (a) the
securities sought to be included in such offering by the
Company for its own account shall have priority for inclusion
over any Registrable Securities held by the Holders and (b)
Registrable Securities held by the Holders may be excluded on
a PRO RATA basis with all other Persons seeking inclusion of
securities in such offering pursuant to the exercise of
so-called piggyback registration rights, based upon such
Holder's and other Persons' relative number of securities
sought to be so included; and
(iii) If the registration is an Incidental Registration, (a)
the securities sought to be registered by the Company for its
own account shall have priority for inclusion, (b) the
securities sought to be registered for the account of other
Persons exercising demand registration rights shall have
priority for inclusion to the extent such rights require such
priority and (c) Registrable Securities held by the Holders
may be excluded on a PRO RATA basis with all other Persons
seeking inclusion of securities in such registration pursuant
to the exercise of so-called piggyback registration rights,
based upon such Holder's and other Persons' relative number of
securities sought to be so included.
(h) BLACKOUT AND POSTPONEMENT. Notwithstanding anything in paragraphs
(a), (b), and (c) of this Section 2, the Company shall have the right
(i) to delay any registration of Registrable Securities requested
pursuant to paragraph (a), (b) or (c) of this Section 2 or (ii) upon
written notice to the Holders, to prohibit the Holders from selling
Registrable Securities under the Initial Registration Statement, any
Subsequent Registration Statement, or any Incidental Registration, in
any case for up to 120 days if such
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registration or sale, as applicable, would, in the judgment of the
Company as reflected in an officer's certificate delivered to the
Holders, require disclosures that would not be in the Company's best
interest to make at such time, as applicable; PROVIDED, HOWEVER,
that (i) the Initial Registration Statement and the Initial Offering
shall not be delayed or blacked-out for more than 120 days in the
aggregate and (ii) registrations other than the Initial Registration
Statement shall not be delayed and/or sale prohibitions relating to
offerings other than the Initial Offering shall not be in effect
pursuant to the provisions of this paragraph (h) for more than 270
days during any period of 365 days. The time period during which any
sale prohibition relating to the Initial Registration Statement or a
Subsequent Registration Statement is in effect under this Section
2(h) shall be added to the time period for which the Initial
Registration Statement or a Subsequent Registration Statement, as
the case may be, is otherwise required to remain effective under
this Agreement.
3. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required to effect the registration
of any Registrable Securities under the Securities Act as provided in
Section 2, the Company, as expeditiously as possible and subject to the
terms and conditions of Section 2, will:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and use its
best efforts to cause such registration to become and remain
effective;
(ii) permit any Holder which, in the reasonable judgment of
the Holder, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the
preparation of such registration statement and to require the
insertion therein of material, furnished to the Company in
writing, which in the reasonable judgment of such Holder and
its counsel should be included and which is not reasonably
objected to by the Company and its counsel;
(iii) prepare and file with the Commission such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement until the earlier of such time as all of such
securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the
expiration of 60 days after such registration statement
becomes effective (in the case of the Initial Registration
Statement or a Subsequent Registration Statement);
(iv) furnish to the Holders such number of conformed copies
of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus
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and any summary prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with
the requirements of the Securities Act, and such other
documents, as the purchaser or any Holder of Registrable
Securities to be sold under such registration statement may
reasonably request in order to facilitate the distribution of
such Registrable Securities;
(v) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement
under such other United States state securities or blue sky
laws of such jurisdictions as any Holder of Registrable
Securities to be sold under registration statement shall
reasonably request, to keep such registration or qualification
in effect for so long as such registration remains in effect,
and take any other action which may be customary in similar
offerings to enable the Holder of Registrable Securities to be
sold under such registration statement to consummate the
disposition in such jurisdictions of the securities owned by
such Holder, except that the Company shall not for any such
purpose be required to (a) qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subdivision (v) be obligated
to be so qualified, or (b) subject itself to taxation in any
such jurisdiction.
(vi) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with
or approved by such other United States state governmental
agencies or authorities as may be necessary to enable the
Holder of Registrable Securities to be sold under such
registration statement to consummate the intended disposition
of such Registrable Securities;
(vii) in the event of the issuance of any stop order
suspending the effectiveness of the registration statement, or
of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Registrable
Securities included in such registration statement for sale in
any jurisdiction, the Company shall use its best efforts
promptly to obtain the withdrawal of such order;
(viii) furnish to the Holders of Registrable Securities to be
sold under such registration statement an opinion, dated the
effective date of the registration statement, of the
independent counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any,
and to the Holders making such request, stating that such
registration statement has become effective under the
Securities Act and that (i) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act; (ii) the registration statement, the related prospectus,
and each amendment or supplement thereto, comply as to form in
all material respects with the requirements of the Securities
Act and the applicable rules and regulations of the Commission
thereunder (except that such counsel need express
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no opinion as to financial statements and related schedules
and other projected financial or statistical data contained
therein); (iii) the descriptions in the registration
statement or the prospectus, or any amendment or supplement
thereto, of all legal and governmental matters and
contracts and other legal documents or instruments are
accurate and fairly present the information required to be
shown; and (v) such counsel does not know of any legal or
governmental proceedings, pending or contemplated, required
to be described in the registration statement or
prospectus, or any amendment or supplement thereto, which
are not described as required nor of any contracts or
documents or instruments of a character required to be
described in the registration statement or prospectus, or
any amendment or supplement thereto or to be filed as
exhibits to the registration statement which are not
described and filed as required. Such counsel shall also
opine that, in the course of assisting the Company in
preparing the Registration Statement, nothing has come to
their attention that would cause them to believe that the
Registration Statement (excluding the financial and
statistical information contained therein) contains any
untrue statement of a material fact or omits a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made not misleading.
(ix) furnish to the Holders of Registrable Securities to be
sold under the Registration Statement a letter, dated the
effective date of the registration statement, from the
independent certified public accountants of the Company,
addressed to the underwriters, if any, and to the Holders
making such request, stating that they are independent
certified public accountants within the meaning of the
Securities Act and that in the opinion of such accountants,
the financial statements and other financial data of the
Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act. Such letter
from the independent certified public accountants shall
additionally cover such other financial matters (including
information as to the period ending not more than five
business days prior to the date of such letter) with respect
to the registration in respect of which such letter is being
given as the Holders may reasonably request.
(x) immediately notify the Holders of Registrable Securities
included in 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
material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which
they were made, and at the request of the Holders promptly
prepare and furnish to the Holders a reasonable number of
copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not
include an untrue statement of a material
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fact or omit 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 under which
they were made;
(xi) otherwise use all reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder, and not file any
amendment or supplement to such registration statement or
prospectus to which any Holder shall have reasonably objected
in writing on the grounds that such amendment or supplement
does not comply in all material respects with the requirements
of the Securities Act or of the rules or regulations
thereunder, having been furnished with a copy thereof at least
two business days prior to the filing thereof to the extent
reasonably possible;
(xii) provide a transfer agent for all Registrable Securities
covered by such registration statement not later than the
effective date of such registration statement;
(xiii) use all reasonable best efforts to cause to be quoted
or listed all Registrable Securities covered by such
registration statement on NASDAQ and any securities exchange
on which any of the Registrable Securities are then quoted or
listed;
(xiv) confer with the Stockholders' Representative as to
mutually beneficial and appropriate time to schedule the
Initial Offering and the first Subsequent Offering and make
available the Company's management to participate in roadshow
presentations and conference calls with respect to such
offerings; and
(xv) confer with the Stockholders' Representative as to
mutually beneficial and appropriate time to schedule any other
underwritten offerings of Company Common Stock that will
include Registrable Securities and use all reasonable best
efforts to work with the Stockholders' Representative to
schedule such offerings so that the Company's management will
be able to participate in roadshow presentations and
conference calls with respect to any additional Subsequent
Offerings in excess of $100 million, the availability of its
senior management, however, being subject to conflicting
business necessities.
(b) As a condition to the Company's obligation under this Section with
respect to any Holder, the Company may require such Holder of
Registrable Securities to be sold under such registration statement, at
the Company's expense, to furnish the Company with such information and
undertakings as it may reasonably request regarding such Holder and the
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distribution of such securities as the Company may from time to time
reasonably request in writing.
(c) Each Holder, by execution of this Agreement, agrees (A) that upon
receipt of any notice of the Company of the happening of any event of
the kind described in subdivision (a)(x) of this Section 3, such Holder
will forthwith discontinue its disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable
Securities until the receipt by such Holder of the copies of the
supplemented or amended prospectus contemplated by subdivision (a)(x)
of this Section 3 and, if so directed by the Company, will deliver to
the Company all copies (other than permanent file copies), then in
possession of the Holders of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice
and (B) that it will immediately notify the Company, at any time when a
prospectus relating to the registration of such Registrable Securities
is required to be delivered under the Securities Act, of the happening
of any event as a result of which information previously furnished in
writing by such Holder to the Company for inclusion in such prospectus
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made. In the event the Company or any such Holder
shall give any such notice, the period referred to in subdivision
(a)(iii) of this Section 3 shall be extended by a number of days equal
to the number of days during the period from and including the giving
of notice pursuant to subdivision (a)(x) of this Section 3 to and
including the date when such Holder shall have received the copies of
the supplemented or amended prospectus contemplated by subdivision
(a)(x) of this Section 3.
4. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITTEN OFFERING. In connection with any underwritten
offering pursuant to a registration under Section 2, the Company will
enter into an underwriting agreement with the underwriters for such
offering, such agreement to be in form and substance reasonably
satisfactory to all Holders requesting such registration and such
underwriters in their reasonable judgment and to contain such
representations and warranties by the Company and such other terms as
are customarily contained in agreements of that type, including,
without limitation, indemnities to the effect and to the extent
provided in Section 6. Each such Holder shall be a party to such
underwriting agreement and may, at its option, require that any or all
of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters
shall also be made to and for the benefit of each such Holder and that
any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent
to the obligations of each such Holder. No Holder shall be required to
make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such Holder and its intended method of
distribution and any other representation required by law.
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(b) SELECTION OF UNDERWRITERS. The Company shall select its customary
underwriter or, alternatively, an underwriting firm of national
reputation, with expertise in comparable offerings by companies engaged
in businesses similar to that of the Company that is reasonably
satisfactory to the Stockholders' Representative, for the Initial
Offering, any Subsequent Offering and any underwritten offering
pursuant to an Incidental Registration.
(c) HOLDBACK AGREEMENTS. Each Holder agrees, if required by the
managing underwriter in any offering, not to effect any public sale or
distribution of Registrable Securities (other than sales pursuant to
the Initial Registration Statement), any sale or distribution thereof
pursuant to Rule 144 or 145 under the Securities Act, or any short sale
thereof or any transaction or series of transactions having a
substantially similar economic effect during the period beginning, in
the case of the Initial Registration Statement, on the date hereof and
,in the case of each Subsequent and Incidental Registration, beginning
seven days prior to the effective date of such registration statement,
and ending on the date 180 days after the Initial Registration
Statement, any Subsequent Registration Statement or any Incidental
Registration Statement shall have been declared effective, PROVIDED
that in the event the Initial Registration Statement shall not have
been declared effective within 30 days following the Closing Date and a
majority-in-interest of the Holders participating in the Initial
Offering shall have voted to be released, in whole or in part, from
such restrictions, all of the Holders shall be released, in whole or in
part, as so determined, from such restrictions with respect to the
Initial Offering. In addition, if (i) the gross proceeds to the Holders
in the Initial Offering are less than $150 million and a
majority-in-interest of the Holders participating in such offering vote
to be released, in whole or in part, from the restrictions contained in
the preceding sentence or (ii) the gross proceeds to the Holders in any
Subsequent Offering are less than $30 million and a
majority-in-interest of all Holders of Registrable Securities vote to
be released, in whole or in part, from the restrictions contained in
the preceding sentence then all Holders shall be released from the
restrictions contained in the preceding sentence with respect to such
offering, in whole or in part, as so determined.
5. PREPARATION, REASONABLE INVESTIGATION.
In connection with the preparation and filing of each
registration statement under the Securities Act, the Company will give
the Stockholders' Representative, the underwriters, if any, and their
respective counsel and accountants, drafts and final copies of such
registration statement, each prospectus included therein or filed with
the Commission and each amendment thereof or supplement thereto, at
least 5 business days prior to the filing thereof with the Commission,
and will give each of them such access to its books and records and
such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such
Holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the
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Securities Act.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration
under the Securities Act pursuant to Section 2 of any Registrable
Securities covered by such registration, the Company will, and hereby
does, indemnify and hold harmless each Holder of Registrable Securities
to be sold under such registration statement, each such Holder's legal
counsel, each other person who participates as an underwriter in the
offering or sale of such securities (if so required by such underwriter
as a condition to including the Registrable Securities of the Holders
in such registration) and each other person, if any, who controls any
such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any
losses, claims, damages or liabilities, joint or several, to which the
Holders or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities
were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein or any
document incorporated therein by reference, or any amendment or
supplement thereto, 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, or arise out of any
violation by the Company of any rule or regulation promulgated under
the Securities Act or state securities law applicable to the Company
and relating to action or inaction required of the Company in
connection with any such registration, and the Company will reimburse
the Indemnified Parties for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; PROVIDED, HOWEVER, that
the Company shall not be liable to any Indemnified Party in any such
case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Party
specifically for use therein.
(b) INDEMNIFICATION BY THE HOLDERS. The Company may require, as a
condition to including any Registrable Securities of any Holder in any
registration statement filed pursuant to Section 2, that the Company
shall have received an undertaking reasonably satisfactory to it from
such Holder to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this Section 6) the
Company, each director of the Company, each officer of the Company and
each other person, if any, who controls the Company within the meaning
of the Securities Act, with respect to any
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statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment
or supplement thereto, if, and only if, and only to the extent that,
such statement or alleged statement or omission or alleged omission
was made in reliance upon and in conformity with information
furnished in writing to the Company directly by such Holder
specifically for use therein; provided, however, that the obligation
of any Holder hereunder shall be limited to an amount equal to the
net proceeds received by such Holder upon the sale of Registrable
Securities sold in the offering covered by such registration.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this
Section 6, such Indemnified Party will, if a claim in respect thereof
is to be made against a party required to provide indemnification (an
"Indemnifying Party"), give written notice to the latter of the
commencement of such action, PROVIDED, HOWEVER, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligation under the preceding
subdivisions of this Section 6, except to the extent that the
Indemnifying Party is actually prejudiced by such failure to give
notice. In case any such action is brought against an Indemnified
Party, unless in such Indemnified Party's reasonable judgment a
conflict of interest between such Indemnified and indemnifying parties
may exist in respect of such claim, the Indemnifying Party shall be
entitled to participate in and to assume the defense thereof, jointly
with any other Indemnifying Party similarly notified to the extent that
it may wish, with counsel reasonably satisfactory to such Indemnified
Party, and after notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Party for
any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No Indemnifying Party shall consent to entry of any
judgment or enter into any settlement without the consent of the
Indemnified Party 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) OTHER INDEMNIFICATION. Indemnification substantially equivalent to
that specified in the preceding subdivisions of this Section 6 (with
appropriate modifications) shall be given by the Company and each
Holder of Registrable Securities included in any registration statement
with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any
governmental authority, other than the Securities Act.
(e) INDEMNIFICATION PAYMENT. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred.
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(f) SURVIVAL OF OBLIGATIONS. The obligations of the Company and of the
Holders under this Section 6 shall survive the completion of any
offering of Registrable Securities under this Agreement.
(g) CONTRIBUTION. If the indemnification provided for in this Section
6 is unavailable or insufficient to hold harmless an Indemnified Party,
then each Indemnifying Party shall contribute to the amount paid or
payable to such Indemnified Party as a result of the losses, claims,
damages or liabilities referred to in this Section 6 an amount or
additional amount, as the case may be, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party or
parties on the one hand and the Indemnified Party on the other in
connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the
Indemnifying Party or parties on the one hand or the Indemnified Party
on the other and the parties' relative, intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The amount paid to an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the first
sentence of this Section 6(g) shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any action or claim which is
the subject of this Section 6. No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities
Act shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
7. COVENANTS RELATING TO RULE 145.
With a view to making available the benefits of certain rules
and regulations of the Commission which may at any time permit the sale
of securities of the Company to the public without registration after
such time as a public market exists for the Common Stock of the
Company, the Company agrees:
(a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times after the date of the Closing;
(b) to use all reasonable best efforts to then file with the
Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act, as
amended; and
(c) so long as a Holder owns any Registrable Securities, to furnish to
the 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, a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents of the Company as a Holder
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may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such securities
without registration.
8. OTHER REGISTRATION RIGHTS.
The Company represents and warrants that it has not granted
any registration rights to any Person other than as described pursuant
to the Merger Agreement. The Company shall not grant to any Person any
registration rights inconsistent with any of those contained herein, so
long as any of the registration rights under this Agreement remain in
effect.
9. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there
may be no adequate remedy at law if any party fails to perform any of
its obligations hereunder and that each party may be irreparably harmed
by any such failure, and accordingly agree that each party, in addition
to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of
any other party under this Agreement in accordance with the terms and
conditions of this Agreement.
(b) NOTICES. All demands, requests, notices and other communications
required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if delivered
personally or sent by United States first class mail, postage prepaid,
and to the parties hereto at the following address or at such other
address as any party hereto shall hereafter specify by notice to the
other party hereto:
(i) if to the Company, addressed to:
NEXTLINK Communications, Inc.
Xxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 000-000-0000
and
NEXTLINK Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Corporate Counsel
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
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Attention: Xxxxx X. Xxxxx, Esq.
Facsimile No.: 000-000-0000
(ii) if to the Stockholders' Representative, addressed to:
Xxxxxx X. Xxxxx
WNP Communications, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: 000-000-0000
(iii) if to the Holders, addressed to them at the addresses
they have provided to the Company.
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Except as otherwise provided herein, all such demands, requests, notices
and other communications shall be deemed to have been received on the date of
personal delivery thereof or on the third business day after the mailing
thereof.
(c) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without
regard to conflicts of law principles thereof.
(d) HEADINGS. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for convenience only, and do
not constitute a part of this Agreement and shall not affect in any way
the meaning or interpretation of this Agreement.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
writings referred to herein or delivered pursuant hereto which form a
part hereof contain the entire understanding of the parties with
respect to its subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to its
subject matter. Each Holder and the Stockholders' Representative agree
that Section 9.14 of the Merger Agreement is hereby incorporated by
reference into this Agreement, with the effect that all rights, duties
and obligations of the Stockholders' Representative under said section
are rights, duties and obligations of the Stockholders' Representative
hereunder. This Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular
instance and either
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retroactively or prospectively) only by a written instrument duly
executed by the Company and the Stockholders' Representative on
behalf of the Holders. Each Holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by an amendment or
waiver authorized by this Section 9(e), whether or not any such
Registrable Securities shall have been marked to indicate such
consent.
(f) ASSIGNABILITY. This Agreement and all of the provisions hereof
will be assigned, without the consent of the Company, by any Holder to,
and shall inure to the benefit of, any purchaser, transferee or
assignee of any Registrable Security to the extent of the securities so
transferred or assigned, provided that the seller, transferor or
assignor does not affirmatively restrict in writing the transfer or
assignment of rights hereunder with respect to such securities.
However, the Company shall not be required to recognize any such
purchaser, transferee or assignee as a Holder under this Agreement
unless and until either (i) such person becomes the holder of record of
Series A Common Stock or (ii) the Company receives written notice of
such purchase, transfer or assignment and a written agreement by the
purchaser, assignee or transferee to be bound by the provisions of this
Agreement.
(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) STOCK SPLITS, ETC. If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization or otherwise) its
outstanding shares of Common Stock into a greater number of shares or
if the outstanding shares of Common Stock shall be combined (by reverse
stock split or otherwise) into a smaller number of shares, all numbers,
percentages, computations and the like in this Agreement shall be
deemed modified as necessary to give appropriate effect to such
subdivision or combination.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
NEXTLINK COMMUNICATIONS, INC.
BY: /S/ XXXXXXXX XXXXXX
--------------------------------------
NAME: XXXXXXXX XXXXXX
TITLE: VICE PRESIDENT
XXXXXX X. XXXXX,
AS STOCKHOLDERS' REPRESENTATIVE
BY: /S/ XXXXXX X. XXXXX
--------------------------------------
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