EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT, dated as of June 16, 2000, between NM
Acquisition Corp., a Delaware corporation (the "Company"), and Xxxxx X. XxXxx
(the "Stockholder").
RECITALS
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A. The Company and the Stockholder each own fifty percent of the
outstanding limited liability company interests in LHP, L.L.C., a limited
liability company organized under the laws of the State of Washington ("LHP");
and LHP owns one hundred percent of the outstanding limited liability company
interests in INTERNEXT, L.L.C., a limited liability company organized under the
laws of the State of Delaware.
B. The Company has entered into an Amended and Restated Agreement and Plan
of Merger and Share Exchange Agreement, dated May 10, 2000 (the "Transaction
Agreement"), by and among the Company, NM Acquisition Corp. ("Newco"), the
Stockholder, Eagle Rive Investments, L.L.C. and Concentric Network Corporation
("Concentric") providing for, among certain other transactions, the terms and
conditions on which the Company is to purchase from the Stockholder, and the
Stockholder is to sell to the Company, all of the Stockholder's right, title and
interest in LHP in exchange for the issuance to the Stockholder of a certain
number of shares of Class A common stock of the Company, par value $.02 per
share (the "Class A Common Stock" and , together with all other classes of
common stock of the Company, the "Common Stock"), and setting forth certain
alternative transaction structures through which the Stockholder's right, title
and interest in LHP may be acquired by the Company.
C. In order to induce the Stockholder to enter into the Transaction
Agreement, the Company has agreed to grant the Stockholder certain registration
rights regarding the shares of Class A Common Stock to be received by the
Stockholder pursuant to the Transaction Agreement, all upon the terms and
conditions set forth herein.
D. Capitalized terms used in this Agreement have the meanings given to them
in Section 3.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Registration under the Securities Act.
Section 1.1. Required Registrations. (a) Request. Upon the terms and
subject to the conditions of this Agreement, at any time during the period
beginning on the date hereof and ending on the second anniversary of the date
hereof (the "Registration Period"), upon the written request of the Stockholder
(in such capacity, the "Requesting Holder") requesting that the Company effect
registration under the Securities Act of all or a specified number of
Registrable Securities (which request shall, subject to Section 1.1(g), also
specify the intended method or methods of disposition thereof), the Company
shall use its reasonable best efforts to effect the registration under the
Securities Act of the Registrable Securities that the Company has been so
requested to register by the Requesting Holder, for disposition, according to
the intended method or methods of disposition specified by the Requesting
Holder; subject to Section 1.1(g), provided that the Company shall not be
required to (i) effect more than two registrations pursuant to this Section 1.1;
(ii) effect a registration pursuant to this Section 1.1 if, within the 90 days
immediately preceding the effective date of such registration, a registration
pursuant to this Section 1.1 or a registration in which the Requesting Holder
was entitled to participate (or would have been entitled to participate but for
the provisions of Section 1.2(b)) pursuant to Section 1.2 has been effected; or,
(iii) effect a registration pursuant to this Section 1.1 for Registrable
Securities having an estimated aggregate public offering price of less than $50
million.
(b) Effective Registration Statement. A registration requested pursuant to
this Section 1.1 shall not be deemed to be effected unless a registration
statement with respect thereto becomes effective under the Securities Act and
remains effective for a period of at least 120 days (or such shorter period when
all the Registrable Securities covered by such registration statement have been
sold pursuant thereto).
(c) Registration Statement Form. Registration statements filed under this
Section 1.1 shall be on such form of the Commission as shall be selected by the
Company and approved by the Requesting Holder (which approval shall not be
unreasonably withheld), and as shall permit the disposition of the subject
Registrable Securities according to the intended method or methods of
disposition specified by the Requesting Holder.
(d) Expenses. The Company shall pay all Registration Expenses incurred in
connection with any registration requested pursuant to this Section 1.1;
provided that the Requesting Holder shall pay all of such Registration Expenses
described in clause (g) of the definition of such term contained herein, and
shall pay its pro rata share of such Registration Expenses described in clause
(h) of such definition on the basis of the number of shares sold.
(e) Selection of Underwriters. If a registration pursuant to this Section
1.1 involves an underwritten offering, the managing or lead underwriter or
underwriters shall be selected by the Requesting Holder with the approval of the
Company, which approval shall not be unreasonably withheld.
(f) Priority in Requested Registrations. If a registration pursuant to this
Section 1.1 involves an underwritten offering and the managing underwriter
advises that the aggregate number of securities proposed to be included in such
offering should be reduced due to market conditions or otherwise, (i) the number
of securities included in such registration shall be limited to that number of
securities that the managing underwriter has so advised may be included in such
offering (the "Maximum Number"), (ii) if no securities other than Registrable
Securities are proposed to be included in such registration, the Registrable
Securities requested to be registered shall be included in such registration up
to the Maximum Number, and (iii) if securities other than Registrable Securities
("Other Securities") are proposed to be included in such registration, such
Other Securities shall be included in, and Registrable Securities requested to
be registered shall be excluded from, such registration to the extent required
by the terms of any Specified Agreements.
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(g) Manner of Sale. So long as the Stockholder owns in excess of 2.5% of
the fully diluted Common Stock (after giving effect to the exercise of all
outstanding options, warrants and other rights to purchase Common Stock whether
or not such options, warrants or other rights are then exercisable (the
"Threshold Amount")), the Stockholder agrees that, except as provided in the
following sentence or except with the written consent of the Company (which
consent shall not be unreasonably withheld), the Stockholder shall sell or
otherwise effectuate a distribution of Registrable Securities included in a
registration effected pursuant to this Section 1.1 only (i) pursuant to one or
more firm commitment underwritten public offerings, (ii) in one or more block
trades, or (iii) pursuant to a staged sale in which a block of registered
securities is transferred to an independent trustee who is directed pursuant to
irrevocable instructions to sell a specified number of such shares over a
specified period of time at a specified rate, notwithstanding the market price
level of the Company's securities, provided that the number of such shares sold
on any trading day shall not exceed 25,000. Notwithstanding anything to the
contrary set forth in the preceding sentence, at any time while the Stockholder
owns an amount of Common Stock in excess of the Threshold Amount, the
Stockholder shall have the right to effectuate a distribution of Registrable
Securities included in a registration effected pursuant to this Section 1.1 in
any other manner, including pursuant to a shelf registration statement, if in
the opinion of a nationally recognized investment banker selected by the Company
and the Stockholder, distributions of Registrable Securities made in the manner
proposed by the Stockholder would not adversely affect the market for the Common
Stock. Nothing contained herein shall be deemed to impose any restriction on the
transfer of any Common Stock by the Stockholder other than a restriction on the
manner of sale of Registrable Securities included in a registration effected
pursuant to this Section 1.1.
Section 1.2. "Piggy-Back" Registration Rights. (a) Right to Participate. If
the Company at any time proposes to register any of its securities under the
Securities Act (other than by a registration on Form S-4 or S-8 or any successor
or similar forms or filed in connection with an exchange offer or any offering
of securities solely to the Company's existing stockholders, and other than
pursuant to Section 1.1), whether or not for sale for its own account, the
Company shall give prompt written notice to the Stockholder of its intention to
do so. Upon the terms and subject to the conditions of this Agreement, upon the
written request of the Stockholder (in such capacity, the "Participating
Holder") made within 10 days after the delivery of any such notice by the
Company (which request shall specify the number of Registrable Securities
proposed to be included in such registration and to be disposed of by the
Participating Holder and the intended method or methods of such disposition),
the Company shall use its reasonable best efforts to effect the registration
under the Securities Act of all Registrable Securities that the Company has been
so requested to register by such Participating Holder. If, at any time after
giving written notice of its intention to register any such securities and prior
to the effective date of the registration statement filed in connection with
such registration, the Company determines for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Participating Holder and, thereupon,
(i) in the case of a determination not to register, the Company need not
register any Registrable Securities in connection with such registration,
without prejudice, however, to any rights of the Participating Holder to request
that such registration be effected as a registration under Section 1.1, and (ii)
in the case of a determination to delay registering, the Company may delay
registering any Registrable Securities for the same period as the delay in
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registering such other securities. No registration effected under this Section
1.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 1.1.
(b) Priority in Piggy-Back Registration Rights. If a registration pursuant
to this Section 1.2 involves an underwritten offering and the managing
underwriter advises that the aggregate number of securities proposed to be
included in such offering should be reduced due to market conditions or
otherwise, the Company shall include in such registration, to the extent
permitted by the terms of the Specified Agreements, up to the number of the
following securities that the Company is so advised can be sold, in the
following order of priority: (i) securities proposed to be included by the
Company, (ii) on a pro rata basis in accordance with the number of securities
proposed by the relevant Persons to be included in such registration, securities
proposed to be included by any stockholder triggering such piggy-back
registration and Registrable Securities requested by the Participating Holder to
be included pursuant to Section 1.2(a) and (iii) on a pro rata basis in
accordance with the number of securities proposed by the relevant Persons to be
included in such registration, other securities of the Company requested to be
included by any other holder having the right to include securities in such
registration.
(c) Expenses. All Registration Expenses incurred in connection with any
registration requested pursuant to this Section 1.2 shall be borne by the
Company (or such other Persons, other than the Participating Stockholder,
participating in such registration, if the applicable contract so provides),
provided that the Participating Stockholder shall pay all of such Registration
Expenses described in clause (g) of the definition of such term contained
herein, and shall pay its pro rata share of such Registration Expenses described
in clause (h) of such definition on the basis of the number of shares sold.
(d) Selection of Underwriters. If an incidental registration pursuant to
this Section 1.2 involves an underwritten offering, the managing or lead
underwriter or underwriters shall be selected by the Company with the approval
of the Participating Holder, which approval shall not be unreasonably withheld.
Section 1.3. Registration Procedures. If and whenever the Company is
required to use its reasonable best efforts to effect the registration of any
Registrable Securities as provided in Sections 1.1 and 1.2, the Company shall as
expeditiously as possible:
(a) prepare and as soon thereafter as possible file with the Commission the
requisite registration statement to effect such registration and thereafter use
its reasonable best efforts to cause such registration statement to become
effective;
(b) 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 for a period of
either (i) not less than 120 days (subject to extension pursuant to the last
paragraph of this Section 1.3) or, if such registration statement relates to an
underwritten offering, such longer period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection with
sales of securities by an underwriter or dealer; or (ii) such shorter period as
is required for the disposition of all of the Registrable Securities covered by
such registration statement in
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accordance with the methods of disposition intended by the Selling Stockholder
set forth in such registration statement (but in any event not before the
expiration of any longer period of effectiveness required under the Securities
Act), and to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the methods of disposition intended by the Selling Stockholder
set forth in such registration statement;
(c) furnish to the Selling Stockholder 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 incorporated by reference in such registration
statement or prospectus, as the Selling Stockholder may reasonably request to
facilitate the disposition of the Registrable Securities in accordance with the
Selling Stockholder's intended method of disposition, but only during such time
as the Company shall be required under the provisions hereof to cause such
registration statement to remain current;
(d) use its reasonable best efforts to register or qualify Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions in the United States as the Selling
Stockholder shall reasonably request, to keep such registration or qualification
in effect for so long as such registration statement remains in effect, and to
take any other action which may be reasonably necessary to enable the Selling
Stockholder to consummate the disposition in such jurisdictions in the United
States of such Registrable Securities owned by such seller, provided that the
Company shall not for any such purpose be required to (i) qualify generally to
do business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for the requirements of this subsection
(d), (ii) consent to general service of process in any such jurisdiction, (iii)
subject itself to taxation in any such jurisdiction or (iv) conform its
capitalization or the composition of its assets at the time to the securities or
blue sky laws of such jurisdiction;
(e) furnish to the Selling Stockholder a signed counterpart, addressed to
the Selling Stockholder (and the underwriters, if any), of:
(i) if such registration includes an underwritten public offering, an
opinion of counsel for the Company dated the date of the closing under the
underwriting agreement, and
(ii) a "comfort" letter, dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the
Company's financial statements included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events
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subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters
delivered to the underwriters in underwritten public offerings of
securities;
(f) notify the Selling Stockholder, at any time when a prospectus relating
to such Registrable Securities is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event as
a result of which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state 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 Selling Stockholder promptly prepare
and furnish to the Selling Stockholder 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 Registrable 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;
(g) otherwise use its 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 a
period of at least twelve months beginning after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and
(h) use its reasonable best efforts to cause all such Registrable
Securities covered by such registration statement to be listed on a national
securities exchange (if such Registrable Securities are not already so listed),
and on each other securities exchange on which similar securities issued by the
Company are then listed, if the listing of such Registrable Securities is then
permitted under the rules of such exchange.
The Company may require the Selling Stockholder to furnish the Company in
writing for inclusion in any registration statement such information regarding
the Selling Stockholder and the distribution of such Registrable Securities
being sold as the Company may from time to time reasonably request.
The Selling Stockholder agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 1.3(f),
such Selling Stockholder shall forthwith discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until the Selling Stockholder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 1.3(f) and, if so
directed by the Company, such Selling Stockholder shall use its reasonable best
efforts to deliver to the Company all copies, other than permanent file copies
then in the Selling Stockholder's possession, of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice. If the
Company shall give any such notice, the applicable time period mentioned in
Section 1.3(b) during which a registration statement is to remain effective
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 1.3(f), to and including
the date when such Selling Stockholder shall have received the copies of the
supplemented or amended prospectus contemplated by Section 1.3(f).
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Section 1.4. Delay of Filing or Sales. (a) The Company shall have the
right, upon giving notice to the Selling Stockholder of the exercise of such
right, to delay filing a registration statement or to require such Selling
Stockholder not to sell any Registrable Securities pursuant to a registration
statement for a period of 180 days from the date on which such notice is given,
or such shorter period of time as may be specified in such notice or in a
subsequent notice delivered by the Company to such effect prior to or during the
effectiveness of the registration statement, if (i) the Company is engaged in
negotiations with respect to, or has taken a substantial step to commence, or
there otherwise is pending, any merger, acquisition, other form of business
combination, divestiture, tender offer, financing or other similar transaction,
or there is an event or state of facts relating to the Company, in each case
which is material to the Company (any of the foregoing, a "Material Activity"),
(ii) such Material Activity would, in the opinion of counsel for the Company,
require disclosure so as to permit the Registrable Securities to be sold in
compliance with law, and (iii) such disclosure would, in the reasonable judgment
of the Company, be adverse to its interests; provided that the Company may not
utilize this right more than once in any six-month period.
(b) Company shall have no obligation to include in any notice contemplated
by Section 1.4(a) any reference to or description of the facts based upon which
the Company is delivering such notice.
Section 1.5. Underwritten Offerings.
(a) Required Underwritten Offerings. If requested by the underwriters of
any underwritten offering of Registrable Securities pursuant to a registration
requested under Section 1.1, the Company shall enter into an underwriting
agreement with such underwriters for such offering. Such agreement shall be
reasonably satisfactory in substance and form to the Selling Stockholder, the
Company and the underwriters and shall contain representations, warranties,
indemnities and agreements as are customarily provided or entered into by an
issuer in underwriting agreements of this type, including indemnities for the
benefit of the underwriters to the effect and to the extent provided to the
Selling Stockholder in Section 1.6. The Selling Stockholder shall be a party to
such underwriting agreement.
(b) Piggy-Back Underwritten Offerings. If the Company at any time proposes
to register any of its securities under the Securities Act as contemplated by
Section 1.2 and such securities are to be distributed by or through one or more
underwriters, the Company shall, if requested by the Selling Stockholder
pursuant to Section 1.2 and subject to the provisions of Section 1.2(b), use its
reasonable best efforts to arrange for such underwriters to include those
Registrable Securities designated by the Selling Stockholder among the
securities to be distributed by such underwriters. The Selling Stockholder shall
be a party to the underwriting agreement between the Company and such
underwriters.
(c) Holdback Agreements. The Stockholder agrees by becoming a holder of
Registrable Securities not to effect any public sale or distribution of any
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Securities Act (or any similar provision then in force),
during the ten days before and the 180 days after any underwritten registration
pursuant to Section 1.1 or 1.2 has become effective, except as part of such
underwritten registration.
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Section 1.6. Indemnification.
(a) Indemnification by the Company. In the event of any registration of any
Registrable Securities of the Company under the Securities Act pursuant to
Section 1.1 or 1.2, the Company shall, and hereby does, indemnify and hold
harmless the Selling Stockholder, its directors, officers, employees, agents and
advisors, each underwriter in the offer or sale of such securities, and each
other Person, if any, who controls the Selling Stockholder or any such
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which each such 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
(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 used in connection
with the offering of securities covered thereby, 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
not misleading; or
(iii) any violation or alleged violation by the Company of any law or
regulation applicable to the Company and relating to action or inaction
required of the Company with respect to such registration or the offer or
sale of Registrable Securities;
and the Company will reimburse each such Person for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided that the Company
shall not be liable 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 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 prepared
and furnished to the Company by or on behalf of the Selling Stockholder or any
underwriter specifically for use in the preparation thereof; provided, further,
that the Company shall not be liable to an underwriter in any such registration
or to any other Person who controls such underwriter within the meaning of the
Securities Act, to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense 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 the securities to such Person if such statement or
omission was timely corrected in such final prospectus. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any such Person and shall survive the transfer of such securities by
such Person. The Company shall not be obligated to pay the fees and expenses of
more than one counsel or firm of counsel for all parties indemnified in respect
of a claim for each jurisdiction in which such counsel is required unless a
conflict of
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interest exists between such indemnified party and any other indemnified party
in respect of such claim.
(b) Indemnification by the Selling Stockholder. As a condition to including
any Registrable Securities held by the Selling Stockholder in any registration
statement filed pursuant to Sections 1.1 or 1.2, the Company shall have received
an undertaking reasonably satisfactory to it from the Selling Stockholder, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 1.6(a)) the Company, each director, officer, employee, agent
and advisor of the Company; each underwriter in the offering or sale of such
securities; each other Person, if any, who controls the Company or any such
underwriter within the meaning of the Securities Act (other than the Selling
Stockholder); and each other Person who participates as a seller of securities
in such registration and each of its directors, officers, employees, agents and
advisors, and each other Person controlling such seller of securities within the
meaning of the Securities Act, with respect to any untrue statement or alleged
untrue 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 such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information prepared and
furnished to the Company by or on behalf of the Selling Stockholder specifically
for use therein. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer, employee, agent, advisor or controlling Person and shall
survive the transfer of such securities by the Selling Stockholder. The
indemnity provided by the Selling Stockholder under this Section 1.6(b) shall be
only with respect to its own misstatements and omissions and not with respect to
those of any other seller or prospective seller of securities, and not jointly
and severally, and shall be limited in amount to the net amount of proceeds
received by such Selling Stockholder from the sale of Registrable Securities
pursuant to such registration statement.
(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 1.6, such indemnified
party will, 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;
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 1.6, 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 a conflict of interest between such
indemnified and indemnifying parties exists 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, if the
indemnifying party is entitled to do so hereunder, 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, 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
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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 for any reason the indemnity set forth in the
preceding subsections of this Section 1.6 is unavailable, or is insufficient to
hold harmless an indemnified party, other than by reason of the exceptions
provided therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages or liabilities 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 hand in connection with the offering of securities and the
statements or omissions or alleged statements or omissions that resulted in such
loss, claim, damage, or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party. No party shall be liable for contribution under this
Section 1.6(d) except to the extent and under such circumstances as such party
would have been liable to indemnify under this Section 1.6 if such
indemnification were enforceable under applicable law.
(e) Other Indemnification. Indemnification and contributions similar to
those specified in the preceding subsections of this Section 1.6 (with
appropriate modifications) shall be given by the Company and the Stockholder
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 1.6 shall be in addition to any other rights to
indemnification or contribution that 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 of any indemnified party
and shall survive the transfer of any of the Registrable Securities by the
Stockholder.
(f) Payments. The indemnification or contribution required by this Section
1.6 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, subject to refund if the party receiving
such payments is subsequently found not to have been entitled thereto hereunder.
Section 2. Restriction on Transfer of Registration Rights. This Agreement
and the rights provided herein are personal to and for the benefit of the
Stockholder only, and the same may not be transferred or assigned without the
prior written consent of the Company.
Section 3. Definitions. Capitalized terms, as used in this Agreement, have
the following meanings:
Commission means the Securities and Exchange Commission.
Company has the meaning given to it in the Introduction.
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Exchange Act means The Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder, all as the same shall be in effect at the
time.
Governmental Authority means any government, any political subdivision, any
governmental agency, bureau, department, board or commission, any court or
tribunal or any other governmental instrumentality, whether federal, state or
local, domestic or foreign.
Material Activity has the meaning given to it in Section 1.4.
Participating Holder has the meaning given to it in Section 1.2(a).
Person means an individual, corporation, trust, joint venture, association,
partnership or other entity, or any governmental or political subdivision or an
agency or instrumentality thereof.
Registration Expenses means all expenses incident to the Company's
performance of or compliance with Section 1, including, (a) all registration,
filing and National Association of Securities Dealers fees, (b) all fees and
expenses of complying with securities or blue sky laws, (c) all word processing,
duplicating and printing expenses, (d) messenger and delivery expenses, (e) the
fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any "comfort" letters or any special
audits required by or incident to such performance and compliance, (f) any fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding items described in clause (h) below, (g) fees and
disbursements of counsel to the Selling Stockholder, and (h) underwriting
discounts or commissions and brokerage fees for the sale of Registrable
Securities.
Registrable Securities means (a) the shares of Class A Common Stock issued
by the Company to the Stockholder pursuant to the Transaction Agreement and (b)
any shares of Class A Common Stock or other class of common stock of the Company
issued in respect of the securities in the preceding clause 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 when (i) 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, (ii) they shall have been sold to the public pursuant to Rule 144
under the Securities Act, (iii) they shall have been otherwise transferred, or
(iv) they shall have ceased to be outstanding.
Registration Period has the meaning given to it in Section 1.1(a).
Requesting Holder has the meaning given to it in Section 1.1(a).
Securities Act means the Securities Act of 1933, and the rules and
regulations promulgated thereunder, all as the same shall be in effect at the
time.
Selling Stockholder means a Requesting Holder or Participating Holder.
Specified Agreements means these agreements listed on Schedule A hereto.
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Stockholder has the meaning given to it in the Introduction.
Section 4. Miscellaneous.
Section 4.1. Termination. This Agreement shall terminate, except for the
provisions of Section 1.6, which shall survive any such termination, upon the
termination of the Registration Period; provided that if the Selling Stockholder
has made a request for registration pursuant to Section 1.1 or 1.2 prior to the
termination of the Registration Period and all obligations with respect to such
registration set forth in this Agreement have not been fulfilled or satisfied
(including for the payment of Registration Expenses or pursuant to Section 1.3),
this Agreement shall survive until the satisfaction or fulfillment of all such
obligations with respect thereto.
Section 4.2. Notices. All notices, consents, requests, instructions,
approvals and other communications provided for in, or in connection with, this
Agreement shall be in writing and shall be deemed validly given upon personal
delivery or one day after being sent by overnight courier service or by telecopy
(so long as for notices or other communications sent by telecopy, the
transmitting telecopy machine records electronic confirmation of the due
transmission of the notice), at the following address or telecopy number, or at
such other address or telecopy number as a party may designate to the other
parties:
If to the Company, to:
NEXTLINK Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No. (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Stockholder, to:
Xxxxx X. XxXxx
c/o Eagle River Investments, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: C. Xxxxx Xxxxxx, Esq.
Section 4.3. Choice of Forum. Each of the parties hereby irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York and
the Federal courts of the
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Xxxxxx Xxxxxx xx Xxxxxxx located in the State, City, and County of New York
solely in respect of the interpretation and enforcement of the provisions of
this Agreement and of the documents referred to in this Agreement, and in
respect of the transactions contemplated hereby and thereby, and hereby waives,
and agrees not to assert, as a defense in any action, suit, or proceeding for
the interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit, or proceeding may not be brought or
is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced in
or by such courts, and the parties hereto irrevocably agree that all claims with
respect to such action or proceeding shall be heard and determined in such a
court. Each of the parties hereby consents to and grants any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agrees that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 4.2 in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.
Section 4.4. Amendments; Waivers, etc. (a) Neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by an
instrument in writing, signed by the party against which enforcement of such
amendment, discharge, waiver or termination is sought.
(b) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 4.5. Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties hereto to the
maximum extent possible. In any event, 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.
Section 4.6. Section Headings. The article and section headings of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
Section 4.7. Integration. This Agreement constitutes the full and entire
understanding and agreement of the parties and supersede any and all prior
agreements, arrangements and understandings relating to the subject matters
hereof and thereof.
Section 4.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 4.9. Specific Performance. In the event of a breach or a threatened
breach by any party to this Agreement of its obligations under this Agreement,
any party injured
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or to be injured by such breach will be entitled to specific performance of its
rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for objection in any action for specific performance or
injunctive relief that a remedy at law would be adequate is waived.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NM ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
/s/ Xxxxx X. XxXxx
------------------------------
Xxxxx X. XxXxx
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Schedule A
Specified Agreements
--------------------
1. Registration Rights Agreement, dated January 15, 1997, among NEXTLINK
Communications, Inc., Eagle River Investments, L.L.C., NEXTLINK, Inc., BWP,
Inc., Xxxxxx Family Limited Liability Company, Penns Light Communications, inc.,
Probe Ventures Corp., City Signal, inc., U.S. Network Corporations, G. Xxxxxx
Xxxxxxx, X. Xxxxxxx Xxxx, Xxxx Xxxx and Xxxx Xxxxxx.
2. Stock Purchase Agreement, dated June 6, 1997, between NEXTLINK
Communications, Inc. and Comdisco Inc.
3. Merger Agreement, dated July 28, 1997, among NEXTLINK Communications,
Inc., R. Xxxxxxxx Xxxx, Jr. and Xxxx X. Xxxxxxxxx.
4. Stock Purchase Agreement, dated October 31, 1997, among NEXTLINK
Communications, Inc., Rosewood Property Company and Prime II Management, L.P.
5. Registration Rights Agreement, dated November 4, 1997, between NEXTLINK
Communications, Inc. and Xxxxx X. XxXxx.
6. Exchange Agreement, dated May 26, 1998, between NEXTLINK Communications,
Inc. and Questar Corp.
7. Asset Purchase Agreement, dated September 12, 1998, as amended by First,
Second, Third, Fourth and Fifth Amendments thereto, between NEXTLINK
Communications, Inc. and UTT.
8. Registration Rights Agreement, dated January 14, 1999, as amended by
Amendment to Registration Rights Agreement dated April 26, 1999 between NEXTLINK
Communications, inc. and WNP Communications, Inc.
9. Registration Rights Agreement between NEXTLINK Communications, Inc.,
Fortsmann Little & Co. Equity Partnership VI, L.P., FL Fund, L.P., and Forstmann
Little & Co. Subordinated Debt and Equity Management Buyout Partnership VII,
L.P., dated January 20, 2000, by and among such parties.
10. Amended and Restated Registration Rights Agreement between NEXTLINK
Communications, Inc., Forstmann Little & Co. Equity Partnership VI, L.P., FL
Fund L.P. and Forstmann Little & Co. Subordinated Debt and Equity Management
Buyout Partnership VII, L.P., to be entered into pursuant to the Stock Purchase
Agreement, dated as of June 14, 2000, by and among NEXTLINK Communications,
Inc., Forstmann Little & Co. Equity Partnership VI, L.P. and Forstmann Little &
Co. Subordinated Debt and Equity Management Buyout Partnership VII, L.P.
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11. Registration Rights Agreement between NEXTLINK Communications, Inc. and
Xxxxxxxxxx.xxx, dated as of April 11, 2000 between such parties.
12. Registration Rights Agreement, dated as of June 30, 1999, between
NEXTLINK Communications, Inc. and Xxxxx X. XxXxx.
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