Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
among
FLCH HOLDINGS CORP.,
FLCH ACQUISITION CORP.,
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP - V, L.P.,
and
FORSTMANN LITTLE & CO. SUBORDINATED DEBT
AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP - VI, L.P.
July 9, 1996
REGISTRATION RIGHTS AGREEMENT, dated as of July 9, 1996, among
FLCH Holdings Corp., a Delaware corporation ("Parent"), FLCH Acquisition Corp.,
a Delaware corporation (the "Company") and wholly owned subsidiary of Parent,
Forstmann Little & Co. Equity Partnership - V, L.P., a Delaware limited
partnership ("Equity-V"), and Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership - VI, L.P. a Delaware limited partnership
("MBO-VI") (Equity-V and MBO-VI are individually referred to as a "Forstmann
Little Partnership" and collectively referred to as the "Forstmann Little
Partnerships").
On the date hereof, the Company is purchasing all of the
shares that have been validly tendered into its tender offer for the outstanding
shares of capital stock of Community Health Systems, Inc. ("CHS"). It is
contemplated that the Company will merge with and into CHS, as a result of which
Parent would own 100% of the capital stock of CHS (such events are collectively
referred to herein as the "Acquisition"). In connection with the Acquisition,
the Forstmann Little Partnerships are acquiring shares of Common Stock (as
defined below) and will acquire additional shares of Common Stock from Parent.
If either of the Forstmann Little Partnerships desires to sell
shares of Common Stock (whether prior to, concurrently with or following any
registration and offering by Parent of shares of its capital stock to the public
(an "Offering")), it may be necessary to register such shares under the
Securities Act (as defined below).
As part of, and as consideration for, the acquisition of
shares of Common Stock by the Forstmann Little Partnerships from Parent on the
date hereof and from time to time hereafter, Parent hereby grants to the
Forstmann Little Partnerships certain registration and other rights with respect
to their shares of Common Stock as more fully set forth herein.
Accordingly, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Certificate of Incorporation" means the Certificate of
Incorporation of Parent, as it may be amended or restated hereafter from time to
time.
"Commission" means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
"Common Stock" means any shares of common stock, par value
$.01 per share, of Parent, now or hereafter authorized to be issued, and any and
all securities of any kind whatsoever of Parent which may be exchanged for or
converted into Common
Stock, any and all securities of any kind whatsoever of Parent which may be
issued on or after the date hereof in respect of, in exchange for, or upon
conversion of shares of Common Stock pursuant to a merger, consolidation, stock
split, stock dividend, recapitalization of Parent or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"Other Investor" means each Person who, at the time of any
registration of Common Stock hereunder, has the right under a stockholder's
agreement or stock option agreement with Parent to participate in any public
offering of all or a portion of the shares of Common Stock owned by the
Forstmann Little Partnerships.
"Person" means a corporation, an association, a partnership,
an organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registrable Securities" means (i) any shares of Common Stock
owned by the Forstmann Little Partnerships and acquired, whether prior or
subsequent to the effectiveness of this Agreement, directly from Parent, (ii)
any shares of Common Stock held pursuant to the terms of a stockholder's
agreement or issuable upon exercise of an option pursuant to the terms of a
stock option agreement, as the case may be, between any Other Investor and
Parent, which agreement gives such Other Investor the right to participate
proportionately with the Forstmann Little Partnerships in a public offering with
respect to such shares, and (iii) any Common Stock issued with respect to the
Common Stock referred to in clauses (i) or (ii) by way of a stock dividend,
stock split or reverse stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or otherwise. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities (a) when a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) when such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by Parent and subsequent public distribution of them shall
not require registration of them under the Securities Act, or (c) when such
securities shall have been sold as permitted by, and in compliance with, the
Securities Act. Any certificate evidencing the Registrable Securities shall bear
a legend stating that the securities have not been registered under the
Securities Act and setting forth or referring to the restrictions on
transferability and sale of the securities.
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"Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to Section 2
hereof, including, without limitation, all registration, filing and applicable
national securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
underwriters or the Forstmann Little Partnerships and the Other Investors in
connection with "blue sky" qualification of the Registrable Securities and
determination of their eligibility for investment under the laws of the various
jurisdictions), all word processing, duplicating and printing expenses, all
messenger and delivery expenses, the fees and disbursements of counsel for
Parent and of its independent public accountants, including the expenses of
"cold comfort" letters or any special audits required by, or incident to, such
registration, all fees and disbursements of underwriters (other than
underwriting discounts and commissions), all transfer taxes, and the fees and
expenses of counsel to the Forstmann Little Partnerships and the Other
Investors; PROVIDED, HOWEVER, that Registration Expenses shall exclude, and the
Forstmann Little Partnerships and the Other Investors shall pay, underwriting
discounts and commissions in respect of the Registrable Securities being
registered.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 REGISTRATION ON REQUEST.
(a) REQUEST. At any time or from time to time,
the Forstmann Little Partnerships, individually or jointly, shall have the right
to require Parent to effect the registration under the Securities Act of all or
part of the Registrable Securities, by delivering a written request therefor to
Parent specifying the number of shares of Registrable Securities and the
intended method of distribution. Parent shall, (i) as expeditiously as possible
(but in any event within 120 days of receipt of a written request), use its best
efforts to effect the registration under the Securities Act (including by means
of a shelf registration pursuant to Rule 415 under the Securities Act if so
requested in such request and if Parent is then eligible to use such a
registration) of the Registrable Securities which Parent has been so requested
to register by the Forstmann Little Partnerships, for distribution in accordance
with the intended method of distribution set forth in the written request
delivered by the Forstmann Little Partnerships, and (ii) if requested by the
Forstmann Little Partnerships, obtain acceleration of the effective date of then
registration statement relating to such registration.
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(b) REGISTRATION OF OTHER SECURITIES. Whenever
Parent shall effect a registration pursuant to this Section 2.1 in connection
with an underwritten offering by any Forstmann Little Partnership and any Other
Investors of Registrable Securities, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the Forstmann Little Partnership or Partnerships so registering
Registrable Securities (the "Registering Forstmann Little Partnerships") shall
have consented in writing to the inclusion therein of such other securities,
which consent may be subject to terms and conditions determined by the
Registering Forstmann Little Partnerships in their sole discretion.
(c) REGISTRATION STATEMENT FORM. Registrations
under this Section 2.1 shall be on such appropriate registration form of the
Commission as shall be selected by Parent and as shall be reasonably acceptable
to the Registering Forstmann Little Partnerships. Parent agrees to include in
any such registration statement all information which, in the opinion of counsel
to the Registering Forstmann Little Partnerships and counsel to Parent, is
necessary or desirable to be included therein.
(d) EXPENSES. Parent and the Company shall pay,
and shall be jointly and severally responsible for, all Registration Expenses in
connection with any registration requested pursuant to this Section 2.1.
(e) EFFECTIVE REGISTRATION STATEMENT. A
registration requested pursuant to this Section 2.1 shall not be deemed to have
been effected (including for purposes of paragraph (h) of this Section 2.1) (i)
unless a registration statement with respect thereto has become effective and
has been kept continuously effective for a period of at least 120 days (or such
shorter period which shall terminate when all the Registrable Securities covered
by such registration statement have been sold pursuant thereto), (ii) if after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Registering Forstmann
Little Partnerships and has not thereafter become effective, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived.
(f) SELECTION OF UNDERWRITERS. The underwriters
of each underwritten offering of the Registrable Securities so to be registered
shall be selected by the Registering Forstmann Little Partnerships.
(g) RIGHT TO WITHDRAW. If the managing
underwriter of any underwritten offering shall advise the Registering Forstmann
Little Partnerships that the Registrable Securities covered by the registration
statement cannot be sold in such offering within a price range acceptable to the
Registering Forstmann Little Partnerships, then the Registering Forstmann Little
Partnerships shall have the right to notify Parent in
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writing that they have determined that the registration statement be abandoned
or withdrawn, in which event Parent shall abandon or withdraw such registration
statement. In the event of such abandonment or withdrawal, such request shall
not be counted for purposes of the requests for registration to which the
Forstmann Little Partnerships are entitled pursuant to this Section 2.1.
(h) LIMITATIONS ON REGISTRATION ON REQUEST. The
Forstmann Little Partnerships shall be entitled to require Parent to effect, and
Parent shall be required to effect, six registrations in the aggregate pursuant
to this Section 2.1, PROVIDED, HOWEVER, that the aggregate offering value of the
shares to be registered pursuant to any such registration shall be at least
$15,000,000 unless the Forstmann Little Partnerships then own shares with an
aggregate value less than $15,000,000 (in which case such lesser number of
shares may be registered).
(i) POSTPONEMENT. Parent shall be entitled once
in any six-month period to postpone for a reasonable period of time (but not
exceeding 90 days) (the "Postponement Period") the filing of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if Parent determines, in its reasonable judgment, that such registration and
offering would materially interfere with any material financing, corporate
reorganization or other material transaction involving Parent or any subsidiary,
or would require premature disclosure thereof, and promptly gives the
Registering Forstmann Little Partnerships written notice of such determination,
containing a general statement of the reasons for such postponement and an
approximation of the anticipated delay. If Parent shall so postpone the filing
of a registration statement, the Forstmann Little Partnerships shall have the
right to withdraw the request for registration by giving written notice to
Parent at any time and, in the event of such withdrawal, such request shall not
be counted for purposes of the requests for registration to which the Forstmann
Little Partnerships are entitled pursuant to this Section 2.1.
2.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If
Parent at any time proposes to register any of its securities under the
Securities Act by registration on Form X-0, X-0 or S-3 or any successor or
similar form(s) (except registrations on any such Form or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation), whether or not for
sale for its own account, it will each such time give prompt written notice to
each of the Forstmann Little Partnerships of its intention to do so and of the
Forstmann Little Partnerships' rights under this Section 2.2. Upon the written
request of any of the Forstmann Little Partnerships (which request shall specify
the maximum number of Registrable Securities intended to be disposed of by the
Forstmann Little Partnerships), made as promptly as practicable and in any event
within 30 days after the
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receipt of any such notice (15 days if Parent states in such written notice or
gives telephonic notice to the Forstmann Little Partnerships, with written
confirmation to follow promptly thereafter, stating that (i) such registration
will be on Form S-3 and (ii) such shorter period of time is required because of
a planned filing date), Parent shall use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which Parent
has been so requested to register by the Forstmann Little Partnerships;
PROVIDED, HOWEVER, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, Parent shall
determine for any reason not to register or to delay registration of such
securities, Parent shall give written notice of such determination and its
reasons therefor to the Forstmann Little Partnerships and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any obligation of Parent to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the Forstmann Little
Partnerships to request that such registration be effected as a registration
under Section 2.1 and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. No registration
effected under this Section 2.2 shall relieve Parent of its obligation to effect
any registration upon request under Section 2.1. Parent will pay all
Registration Expenses in connection with any registration of Registrable
Securities requested pursuant to this Section 2.2.
(b) RIGHT TO WITHDRAW. The Forstmann Little
Partnerships shall have the right to withdraw their request for inclusion of its
Registrable Securities in any registration statement pursuant to this Section
2.2 at any time prior to the execution of an underwriting agreement with respect
thereto by giving written notice to Parent of its request to withdraw.
(c) PRIORITY IN INCIDENTAL REGISTRATIONS. If
the managing underwriter of any underwritten offering shall inform Parent by
letter of its belief that the number of Registrable Securities requested to be
included in such registration, when added to the number of other securities to
be offered in such registration, would materially adversely affect such
offering, then Parent shall include in such registration, to the extent of the
number and type which Parent is so advised can be sold in (or during the time
of) such offering without so materially adversely affecting such offering (the
"Section 2.2 Sale Amount"), (i) all of the securities proposed by Parent to be
sold for its own account; (ii) thereafter, to the extent the Section 2.2 Sale
Amount is not exceeded, the Registrable Securities requested by the Forstmann
Little Partnerships to be included in such registration pursuant to Section
2.2(a) (including Registrable Securities held by Other Investors); and (iii)
thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, any other
securities of Parent requested to be included in such registration by
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any holder thereof, including, in the case where such registration is to be
effected as a result of the exercise by a holder of Parent's securities of such
holder's right to cause such securities to be so registered, the securities of
such holder.
(d) PLAN OF DISTRIBUTION. Any participation by
holders of Registrable Securities in a registration by Parent shall be in
accordance with Parent's plan of distribution, provided that the Registering
Forstmann Little Partnerships shall have the right to select the co-managing
underwriter.
2.3 REGISTRATION PROCEDURES. If and whenever Parent is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof,
Parent shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as
practicable the requisite registration statement to effect
such registration (and shall include all financial statements
required by the Commission to be filed therewith) and
thereafter use its best efforts to cause such registration
statement to become effective; provided, however, that before
filing such registration statement (including all exhibits) or
any amendment or supplement thereto or comparable statements
under securities or blue sky laws of any jurisdiction, Parent
shall furnish such documents to the Registering Forstmann
Little Partnerships and each underwriter, if any,
participating in the offering of the Registrable Securities
and their respective counsel, which documents will be subject
to the review and comments of the Registering Forstmann Little
Partnerships, each underwriter and their respective counsel;
and provided, further, however, that Parent may discontinue
any registration of its securities which are not Registrable
Securities at any time prior to the effective date of the
registration statement relating thereto;
(b) notify the Registering Forstmann Little
Partnerships of the Commission's requests for amending or
supplementing the registration statement and the prospectus,
and 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 Registrable Securities covered by such
registration statement for such period as shall be required
for the disposition of all of such Registrable Securities in
accordance with the intended method of distribution thereof;
PROVIDED, that except with respect to any such registration
statement filed pursuant to Rule 415 under the Securities Act,
such period need not exceed 120 days;
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(c) furnish, without charge, to the Registering
Forstmann Little Partnerships and each underwriter 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 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 Registering Forstmann
Little Partnerships and such underwriters may reasonably
request;
(d) use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such securities or blue sky laws
of such States of the United States of America where an
exemption is not available and as the Registering Forstmann
Little Partnerships or any managing underwriter shall
reasonably request, (ii) to keep such registration or
qualification in effect for so long as such registration
statement remains in effect, and (iii) to take any other
action which may be reasonably necessary or advisable to
enable the Registering Forstmann Little Partnerships to
consummate the disposition in such jurisdictions of the
securities to be sold by the Registering Forstmann Little
Partnerships, except that Parent shall not for any such
purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subsection (d) be obligated
to be so qualified or to consent to general service of process
in any such jurisdiction;
(e) use its best efforts to cause all Registrable
Securities covered by such registration statement to be
registered with or approved by such other federal or state
governmental agencies or authorities as may be necessary in
the opinion of counsel to Parent and counsel to the
Registering Forstmann Little Partnerships to consummate the
disposition of such Registrable Securities;
(f) furnish to the Registering Forstmann Little
Partnerships and each underwriter, if any, participating in
the offering of the securities covered by such registration
statement, a signed counterpart of (i) an opinion of counsel
for Parent, and (ii) a "comfort" letter signed by the
independent public accountants who have certified Parent's
financial statements included or incorporated by reference in
such registration statement, covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein) and, in the case
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of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the
dates such opinions and comfort letters are customarily dated)
and, in the case of the legal opinion, such other legal
matters, and, in the case of the accountants' comfort letter,
such other financial matters, as the Registering Forstmann
Little Partnerships, or the underwriters, may reasonably
request;
(g) promptly notify the Registering Forstmann Little
Partnerships and each managing underwriter, if any,
participating in the offering of the securities covered by
such registration statement (i) when such registration
statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective
amendment to such registration statement has been filed, and,
with respect to such registration statement or any
post-effective amendment, when the same has become effective;
(ii) of any request by the Commission for amendments or
supplements to such registration statement or the prospectus
related thereto or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation
of any proceedings for that purpose; (iv) of the receipt by
Parent of any notification with respect to the suspension of
the qualification of any of the Registrable Securities for
sale under the securities or blue sky laws of any jurisdiction
or the initiation of any proceeding for such purpose; (v) at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or
omits to state 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
in the case of this clause (v), at the request of the
Registering Forstmann Little Partnerships promptly prepare and
furnish to the Registering Forstmann Little Partnerships and
each managing underwriter, if any, participating in the
offering of the Registrable Securities, 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 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; and
(vi) at any time when the representations and warranties of
Parent contemplated by Section 2.4(a) or (b) hereof cease to
be true and correct;
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(h) otherwise 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 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 promulgated thereunder, and
promptly furnish to the Registering Forstmann Little
Partnerships a copy of any amendment or supplement to such
registration statement or prospectus;
(i) provide and cause to be maintained a transfer agent
and registrar (which, in each case, may be Parent) for all
Registrable Securities covered by such registration statement
from and after a date not later than the effective date of
such registration;
(j) (i) use its best efforts to cause all Registrable
Securities covered by such registration statement to be listed
on the principal securities exchange on which similar
securities issued by Parent are then listed (if any), if the
listing of such Registrable Securities is then permitted under
the rules of such exchange, or (ii) if no similar securities
are then so listed, use its best efforts to (x) cause all such
Registrable Securities to be listed on a national securities
exchange or (y) failing that, secure designation of all such
Registrable Securities as a National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") "national
market system security" within the meaning of Rule 11Aa2-1 of
the Commission or (z) failing that, to secure NASDAQ
authorization for such shares and, without limiting the
generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such shares
with the National Association of Securities Dealers, Inc.;
(k) deliver promptly to counsel to the Registering
Forstmann Little Partnerships and each underwriter, if any,
participating in the offering of the Registrable Securities,
copies of all correspondence between the Commission and
Parent, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to
such registration statement;
(l) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration
statement;
(m) provide a CUSIP number for all Registrable
Securities, no later than the effective date of the
registration statement; and
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(n) make available its employees and personnel and
otherwise provide reasonable assistance to the underwriters
(taking into account the needs of Parent's and the Company's
businesses) in their marketing of Registrable Securities.
Parent may require the Registering Forstmann Little Partnerships to furnish
Parent such information regarding the Registering Forstmann Little Partnerships
and the distribution of the Registrable Securities as Parent may from time to
time reasonably request in writing.
The Forstmann Little Partnerships agree that upon receipt of
any notice from Parent of the happening of any event of the kind described in
paragraph (g)(iii) or (v) of this Section 2.3, each of the Registering Forstmann
Little Partnerships will, to the extent appropriate, discontinue its disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until, in the case of paragraph (g)(v) of this
Section 2.3, its receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (g)(v) of this Section 2.3 and, if so directed by
Parent, will deliver to Parent (at Parent's expense) all copies, other than
permanent file copies, then in its possession, of the prospectus relating to
such Registrable Securities current at the time of receipt of such notice. If
the disposition by the Registering Forstmann Little Partnerships of their
securities is discontinued pursuant to the foregoing sentence, Parent shall
extend the period of effectiveness of the registration statement by the number
of days during the period from and including the date of the giving of notice to
and including the date when the Registering Forstmann Little Partnerships shall
have received copies of the supplemented or amended prospectus contemplated by
paragraph (g)(v) of this Section 2.3; and, if Parent shall not so extend such
period, the Registering Forstmann Little Partnerships' request pursuant to which
such registration statement was filed shall not be counted for purposes of the
requests for registration to which the Forstmann Little Partnerships are
entitled pursuant to Section 2.1 hereof.
2.4 UNDERWRITTEN OFFERINGS.
(a) REQUESTED UNDERWRITTEN OFFERINGS. If
requested by the underwriters for any underwritten offering by the Registering
Forstmann Little Partnerships (and any Other Investors) pursuant to a
registration requested under Section 2.1, Parent shall enter into a customary
underwriting agreement with a managing underwriter or underwriters selected by
the Registering Forstmann Little Partnerships. Such underwriting agreement shall
be satisfactory in form and substance to the Registering Forstmann Little
Partnerships and shall contain such representations and warranties by, and such
other agreements on the part of, Parent and such other terms as are generally
prevailing in agreements of that type, including, without limitation, customary
provisions relating to indemnification and contribution. The Registering
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Forstmann Little Partnerships shall be parties to such underwriting agreement
and may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, Parent to and for the
benefit of such underwriters shall also be made to and for the benefit of the
Registering Forstmann Little Partnerships 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 the Registering
Forstmann Little Partnerships. None of the Registering Forstmann Little
Partnerships shall be required to make any representations or warranties to or
agreements with Parent or the underwriters other than representations,
warranties or agreements regarding such Registering Forstmann Little
Partnership, its ownership of and title to the Registrable Securities, and its
intended method of distribution; and any liability of any Registering Forstmann
Little Partnership to any underwriter or other person under such underwriting
agreement shall be limited to liability arising from breach of its
representations and warranties and shall be limited to an amount equal to the
proceeds (net of expenses and underwriting discounts and commissions) that it
derives from such registration.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. In the
case of a registration pursuant to Section 2.2 hereof, if Parent shall have
determined to enter into any underwriting agreements in connection therewith,
all of the Registrable Securities to be included in such registration shall be
subject to such underwriting agreements. The Registering Forstmann Little
Partnerships may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
Parent to and for the benefit of such underwriters shall also be made to and for
the benefit of the Registering Forstmann Little Partnerships 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 the
Registering Forstmann Little Partnerships. None of the Registering Forstmann
Little Partnerships shall be required to make any representations or warranties
to or agreements with Parent or the underwriters other than representations,
warranties or agreements regarding such Registering Forstmann Little
Partnership, its ownership of and title to the Registrable Securities, and its
intended method of distribution; and any liability of any Registering Forstmann
Little Partnership to any underwriter or other Person under such underwriting
agreement shall be limited to liability arising from breach of its
representations and warranties and shall be limited to an amount equal to the
proceeds (net of expenses and underwriting discounts and commissions) that it
derives from such registration.
2.5 PREPARATION; REASONABLE INVESTIGATION. In
connection with the preparation and filing of each registration statement under
the Securities Act pursuant to this Agreement, Parent will give the Registering
Forstmann Little Partnerships, their underwriters, if any, and their respective
counsel, accountants and other representatives and agents the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment
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thereof or supplement thereto, and give each of them such access to its books
and records and such opportunities to discuss the business of Parent with its
officers and employees and the independent public accountants who have certified
its financial statements, and supply all other information reasonably requested
by each of them, as shall be necessary or appropriate, in the opinion of the
Registering Forstmann Little Partnerships and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY PARENT AND THE COMPANY.
Parent and the Company agree, jointly and severally, that in the event of any
registration of any securities of Parent under the Securities Act, each of
Parent and the Company shall, and hereby does, indemnify and hold harmless each
Forstmann Little Partnership, its respective directors, officers, partners,
agents and affiliates and each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls such Forstmann Little Partnership or any such underwriter within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which such Forstmann Little Partnership or any
such director, officer, partner, agent or affiliate or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities, joint or several (or
actions or proceedings, whether commenced or threatened, in respect thereof),
arise out of or are based upon (i) 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
amendment or supplement thereto, (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading, or (iii) any violation by Parent of any federal, state or common law
rule or regulation applicable to Parent and relating to action required of or
inaction by Parent in connection with any such registration, and each of Parent
and the Company shall reimburse such Forstmann Little Partnership and each such
director, officer, partner, agent or affiliate, underwriter and controlling
Person 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 that Parent and the Company shall not be liable
in any such case to the Forstmann Little Partnerships or any such director,
officer, partner, agent, affiliate, or controlling person 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 an 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
13
information furnished to Parent through an instrument duly executed by or on
behalf of the Forstmann Little Partnerships, specifically stating that it is for
use in the preparation thereof; and PROVIDED, FURTHER, that Parent and the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense (i) arises out of or is based upon an
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 Parent through an instrument
duly executed by or on behalf of such Person or (ii) arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force regardless of any investigation made by or on behalf
of any Forstmann Little Partnership or any such director, officer, partner,
agent, affiliate, underwriter or controlling Person and shall survive the
transfer of such securities by such Forstmann Little Partnership.
(b) INDEMNIFICATION BY THE FORSTMANN LITTLE
PARTNERSHIPS. As a condition to including any Registrable Securities in any
registration statement, Parent shall have received an undertaking reasonably
satisfactory to it from each Registering Forstmann Little Partnership so
including any Registrable Securities to indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.6)
Parent, and each director of Parent, each officer of Parent and each other
Person, if any, who controls Parent within the meaning of the Securities Act,
with respect to any 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, but only to the extent such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to Parent through an instrument duly executed by
such Registering Forstmann Little Partnership specifically stating that it is
for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
PROVIDED, HOWEVER, that the liability of such indemnifying party under this
Section 2.6(b) shall be limited to the amount of proceeds (net of expenses and
underwriting discounts and commissions) received by such indemnifying party in
the offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of Parent
or any such director,
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officer or controlling Person and shall survive the transfer of such securities
by such Forstmann Little Partnership.
(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 subsections of this
Section 2.6, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; PROVIDED, HOWEVER, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, 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; PROVIDED, HOWEVER, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are different from or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties, PROVIDED, HOWEVER, that the indemnifying party shall be obligated to
pay for only one counsel for all indemnified parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation (unless the first proviso
in the preceding sentence shall be applicable). No indemnifying party shall be
liable for any settlement of any action or proceeding effected without its
written consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
(d) CONTRIBUTION. If the indemnification
provided for in this Section 2.6 shall for any reason be held by a court to be
unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under
15
subsection (a) or (b) hereof, the indemnified party and the indemnifying party
under subsection (a) or (b) hereof shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating the same), (i) in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand, and the indemnified party on the other, which resulted in such loss,
claim, damage or liability, or action in respect thereof, with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the allocation provided in this clause (ii)
provides a greater amount to the indemnified party than clause (i) above, in
such proportion as shall be appropriate to reflect not only the relative fault
but also the relative benefits received by the indemnifying party and the
indemnified party from the offering of the securities covered by such
registration statement as well as any other relevant equitable considerations.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 2.6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the preceding sentence of this
Section 2.6(d). 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. The Registering Forstmann Little Partnerships' obligations to
contribute as provided in this subsection (d) are several and not joint and
shall be in proportion to the relative value of their respective Registrable
Securities covered by such registration statement. In addition, no Person shall
be obligated to contribute hereunder any amounts in payment for any settlement
of any action or claim effected without such Person's consent, which consent
shall not be unreasonably withheld. Notwithstanding anything in this subsection
(d) to the contrary, no indemnifying party (other than Parent and the Company)
shall be required to contribute any amount in excess of the proceeds (net of
expenses and underwriting discounts and commissions) received by such party from
the sale of the Registrable Securities in the offering to which the losses,
claims, damages or liabilities of the indemnified parties relate.
(e) OTHER INDEMNIFICATION. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 2.6 (with appropriate modifications) shall be given by Parent, the
Company and the Registering Forstmann Little Partnerships with respect to any
required registration or other qualification of securities under any federal,
state or blue sky law or regulation of any governmental authority other than the
Securities Act. The indemnification agreements contained in this Section 2.6
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf
16
of any indemnified party and shall survive the transfer of any of the
Registrable Securities by any of the Forstmann Little Partnerships.
(f) INDEMNIFICATION PAYMENTS. The
indemnification and contribution required by this Section 2.6 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.
2.7 UNLEGENDED CERTIFICATES. In connection with the
offering of any Registrable Securities registered pursuant to this Section 2,
Parent shall (i) facilitate the timely preparation and delivery to the Forstmann
Little Partnerships, the Other Investors and the underwriters, if any,
participating in such offering, of unlegended certificates representing
ownership of such Registrable Securities being sold in such denominations and
registered in such names as requested by the Forstmann Little Partnerships, the
Other Investors or such underwriters and (ii) instruct any transfer agent and
registrar of such Registrable Securities to release any stop transfer orders
with respect to any such Registrable Securities.
2.8 LIMITATION ON SALE OF SECURITIES. Parent hereby
agrees that if it shall previously have received a request for registration
pursuant to Section 2.1 or 2.2 hereof, and if such previous registration shall
not have been withdrawn or abandoned, (i) Parent shall not effect any public or
private offer, sale or distribution of its securities or effect any registration
of any of its equity securities under the Securities Act (other than a
registration on Form S-8 or any successor or similar form which is then in
effect), whether or not for sale for its own account, until a period of 90 days
(or such shorter period as the Registering Forstmann Little Partnerships shall
be advised by their managing underwriter) shall have elapsed from the effective
date of such previous registration, and Parent shall so provide in any
registration rights agreements hereafter entered into with respect to any of its
securities; and (ii) Parent shall use its best efforts to cause each holder of
its equity securities purchased from Parent at any time after the date of this
Agreement to agree not to effect any public sale or distribution of any such
securities during such period, including a sale pursuant to Rule 144 under the
Securities Act.
2.9 NO REQUIRED SALE. Nothing in this Agreement shall
be deemed to create an independent obligation on the part of any of the
Forstmann Little Partnerships to sell any Registrable Securities pursuant to any
effective registration statement.
3. RULE 144. Parent shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144, or (b) any similar rule or regulation
hereafter adopted by the Commission including, without limiting the generality
of the foregoing, filing on a timely basis all reports required to be
17
filed by the Exchange Act. Upon the request of a Forstmann Little Partnership,
Parent will deliver to such holder a written statement as to whether it has
complied with such requirements.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended,
modified or supplemented only by written agreement of the party against whom
enforcement of such amendment, modification or supplement is sought.
5. OTHER INVESTORS. The parties hereto acknowledge and agree
that no Other Investor has any right to request registration of the Common Stock
held by such Other Investor or to participate in any registration of securities
by Parent, other than in accordance with the terms of the stockholder's
agreement or option agreement, as the case may be, between such Other Investor
and Parent, pursuant to which such Other Investor generally may have the right
to participate in any public offering of all or a portion of the shares of
Common Stock owned by the Forstmann Little Partnerships.
6. ADJUSTMENTS. In the event of any change in the
capitalization of Parent as a result of any stock split, stock dividend, reverse
split, combination, recapitalization, merger, consolidation, or otherwise, the
provisions of this Agreement shall be appropriately adjusted. Parent agrees that
it shall not effect or permit to occur any combination or subdivision of shares
which would adversely affect the ability of the Forstmann Little Partnerships or
the Other Investors to include any Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration. Parent agrees that it will take all
reasonable steps necessary to effect a combination or subdivision of shares if
in the reasonable judgment of the Forstmann Little Partnerships such combination
or subdivision would enhance the marketability of the Registrable Securities.
7. NOTICE. All notices and other communications hereunder
shall be in writing and, unless otherwise provided herein, shall be deemed to
have been given when received by the party to whom such notice is to be given at
its address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:
(a) If to any of the Forstmann Little Partnerships, to it:
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
With a copy to:
Fried, Frank, Harris, Xxxxxxx
18
& Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
(b) If to Parent or the Company, to it at:
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
8. ASSIGNMENT; THIRD PARTY BENEFICIARIES. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns; provided, however,
that the Other Investors shall have no rights under this Agreement. This
Agreement may not be assigned by Parent. Any Forstmann Little Partnership may,
at its election, at any time or from time to time, assign its rights under this
Agreement, in whole or in part, to any purchaser of shares of Common Stock held
by it.
9. REMEDIES. The parties hereto agree that money damages or
other remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
In any action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
10. NO INCONSISTENT AGREEMENTS. Parent will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Forstmann Little
Partnerships in this Agreement or otherwise conflicts with the provisions
hereof, other than any customary lock-up agreement with the underwriters in
connection with any Offering effected hereunder, pursuant to which Parent shall
agree not to register for sale, and Parent shall agree not to sell or otherwise
dispose of, Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, for a specified period (not to exceed 180 days)
following such Offering. Parent has not previously entered into any agreement
with respect to its securities granting any registration rights to any Person.
The rights granted to the Forstmann Little Partnerships hereunder do not in any
way conflict with and are not inconsistent with any other agreements to which
Parent is a party or by which it is bound.
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Parent further agrees that if any other registration rights agreement entered
into after the date of this Agreement with respect to any of its securities
contains terms which are more favorable to, or less restrictive on, the other
party thereto than the terms and conditions contained in this Agreement are
(insofar as they are applicable) with respect to the Forstmann Little
Partnerships, then the terms and conditions of this Agreement shall immediately
be deemed to have been amended without further action by Parent or the Forstmann
Little Partnerships so that the Forstmann Little Partnerships shall be entitled
to the benefit of any such more favorable or less restrictive terms or
conditions.
11. DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not control or otherwise affect the meaning hereof.
12. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights and obligations of the parties
hereto shall be governed by, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and the United States of
America located in the County of New York for any action or proceeding arising
out of or relating to this Agreement and the transactions contemplated hereby
(and agrees not to commence any action or proceeding relating thereto except in
such courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in Section
7 hereof shall be effective service of process for any action or proceeding
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America located in the County of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in an
inconvenient forum.
13. COUNTERPARTS. This Agreement may be executed 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.
14. INVALIDITY OF PROVISION. The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction. If any restriction or provision of
this Agreement is held unreasonable, unlawful or unenforceable in any respect,
such restriction or provision shall be interpreted, revised or
20
applied in a manner that renders it lawful and enforceable to the fullest extent
possible under law.
15. FURTHER ASSURANCES. Each party hereto shall do and perform
or cause to be done and performed all further acts and things and shall execute
and deliver all other agreements, certificates, instruments, and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
16. ENTIRE AGREEMENT; EFFECTIVENESS. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized.
FLCH HOLDINGS CORP.
By: _________________________
Name:
Title:
FLCH ACQUISITION CORP.
By: _________________________
Name:
Title:
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP - V, L.P.
By: FLC XXX Partnership,
its general partner
By: _________________________
Xxxxxx X. Xxxxxxx,
a general partner
21
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP - VI, L.P.
By: FLC XXIX Partnership,
its general partner
By: _________________________
Xxxxxx X. Xxxxxxx,
a general partner
22
