WARRANT REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
HORIZON PCS, INC.
AND
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
AND
FIRST UNION SECURITIES, INC.
DATED AS OF SEPTEMBER 26, 2000
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295,000 WARRANTS INITIALLY EXERCISABLE TO PURCHASE
3,805,500 SHARES OF COMMON STOCK
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WARRANT REGISTRATION RIGHTS AGREEMENT
This Warrant Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of September 26, 2000, by and between Horizon PCS, Inc., a
Delaware corporation (the "ISSUER"), and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation and First Union Securities, Inc. (the "INITIAL PURCHASERS"), which
have agreed to purchase the warrants (the "WARRANTS") of the Issuer issued
pursuant to the Warrant Agreement (the "WARRANT AGREEMENT") between the Issuer
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as warrant agent (the
"WARRANT AGENT").
The Warrants are being issued and sold in connection with the offering (the
"OFFERING") by the Issuer of 295,000 Units each consisting of (i) $1,000
principal amount at maturity of the Issuer's 14% Senior Discount Notes due 2010
(the "Notes") and (ii) one Warrant. Each Warrant entitles the holder thereof to
purchase 12.90 shares of the Class A common stock, $0.0001 par value ("COMMON
STOCK"), of the Issuer, subject to adjustment as set forth in the Warrant
Agreement.
This Agreement is made pursuant to the Purchase Agreement, dated September
19, 2000 (the "PURCHASE AGREEMENT"), by and among the Issuer, Horizon Personal
Communications, Inc., Bright Personal Communications Services, LLC and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Warrants, the Issuer has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 9 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Warrant Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144.
BLACK OUT NOTICE: As defined in Section 4(b) hereof.
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BLACK OUT PERIOD: As defined in Section 3(a) hereof.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXPIRATION DATE: 5:00 p.m. New York City time on October 1, 2010.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
REGISTRATION STATEMENT: Any registration statement of the Issuer relating
to the registration for resale of Transfer Restricted Securities that is filed
pursuant to the provisions of this Agreement and including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
RULE 144: Rule 144 promulgated under the Act.
TRANSFER RESTRICTED SECURITIES: (a) Each Warrant and Warrant Share held by
an Affiliate of the Issuer and (b) each other Warrant and Warrant Share until
the earlier to occur of (i) the date on which such Warrant or Warrant Share
(other than any Warrant Share issued upon exercise of a Warrant in accordance
with a Registration Statement) has been disposed of in accordance with a
Registration Statement and (ii) the date on which such Warrant or Warrant Share
(or the related Warrant) is distributed to the public pursuant to Rule 144 under
the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "HOLDER") whenever such Person is the holder of record of Transfer Restricted
Securities.
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SECTION 3. SHELF REGISTRATION
(a) Shelf Registration. The Issuer shall prepare and cause to be filed with
the Commission on or before 90 days from the Closing Date pursuant to Rule 415
under the Securities Act a Registration Statement on the appropriate form
relating to resales of Transfer Restricted Securities by the Holders thereof.
The Issuer shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the Commission on or before 180 days after
the Closing Date.
To the extent necessary to ensure that the Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), the Issuer shall use its
reasonable best efforts to keep any Registration Statement required by this
Section 3(a) continuously effective, supple mented, amended and current as
required by and subject to the provisions of Section 4(a) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the earlier of (A) the Expiration Date and (B) the first date as of which all
Warrants or Warrant Shares issuable thereunder have been sold by the Holders
thereof; provided that such obligation shall expire before such date if the
Issuer delivers to the Warrant Agent a written opinion of counsel to the Issuer
(which opinion of counsel shall be reasonably satisfactory to the Warrant Agent)
that all Holders (other than Affiliates of the Issuer) of Warrants and Warrant
Shares may resell the Warrants and the Warrant Shares without registration under
the Act and without restriction as to the manner, timing or volume of any such
sale; and provided, further, that notwithstanding the foregoing, any Affiliate
of the Issuer may, with notice to the Issuer, require the Issuer to keep the
Registration Statement continuously effective for resales by such Affiliate for
so long as such Affiliate holds Warrants or Warrant Shares, including as a
result of any market-making activities or other trading activities of such
Affiliate. Notwithstanding the foregoing, the Issuer shall not be required to
amend or supplement the Registration Statement, any related prospectus or any
document incorporated therein by reference, for a period (a "BLACK OUT PERIOD")
not to exceed, for so long as this Agreement is in effect, 60 consecutive days
and no more than two times in any calendar year, in the event that (i) an event
occurs and is continuing as a result of which the Registration Statement, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Issuer's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii)(A) the Issuer determines in its
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good faith judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of the Issuer
or (B) the disclosure otherwise relates to a material business transaction which
has not yet been publicly disclosed; provided that such Black Out Period shall
be extended for any period, not to exceed an aggregate of 45 days in any
calendar year, during which the Commission is reviewing any proposed amendment
or supplement to the Registration Statement, any related prospectus or any
document incorporated therein by reference which has been filed by the Issuer;
and provided, further, that no Black Out Period may be in effect during the
three months prior to the Expiration Date.
(b) Provision by Holders of Certain Information in Connection with the
Registration Statement. No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Registration Statement pursuant
to this Agreement unless and until such Holder furnishes to the Issuer in
writing, within 20 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 8 unless such Holder shall
have provided all such information in the time period specified above and the
Company shall have a period of five Business Days after the end of such 20 day
period to include such information in any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. Each selling Holder
agrees to promptly furnish additional information required to be disclosed in
order to make the information previously furnished to the Issuer by such Holder
not materially misleading.
SECTION 4. REGISTRATION PROCEDURES
(a) In connection with the Registration Statement and any related
Prospectus required by this Agreement, the Issuer shall:
(i) use its reasonable best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Issuer pursuant to Section
3(b) hereof), and pursuant thereto the Issuer will prepare and file with
the Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale
of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof;
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(ii) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 of this Agreement. Upon
the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
Agreement, the Issuer shall, subject to Section 3(a), file promptly,
subject to Section 4(a)(vi), an appropriate amendment to such Registration
Statement or a supplement to the Prospectus, as applicable, curing such
defect, and, in the case of an amendment, use its reasonable best efforts
to cause such amendment to be declared effective as soon as practicable;
(iii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
and comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iv) advise the Holders named in any Shelf Registration Statement and
the Initial Purchasers promptly and, if requested by any of such Persons,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to
any applicable Registration Statement or any post-effective amend ment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effective ness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, and (D)
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of the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein, in light of the circumstances under
which they were made, untrue, or that requires the making of any additions
to or changes in the Registration Statement in order to make the statements
therein not misleading, or that requires the making of any additions to or
changes in the Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. If
at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Issuer
shall use its reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time;
(v) subject to Section 4(a)(ii), if any fact or event contem plated by
Section 4(a)(iv)(D) hereof shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) furnish to the Holders named in any Shelf Registration Statement
and the Initial Purchasers, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial filing
of such Registration Statement), which documents will be subject to the
review and comment of such Persons, if any, for a period of at least five
Business Days, and the Issuer will not file any such Registration Statement
or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which any of such Persons shall reasonably object within five
Business Days after the receipt thereof. Such Persons shall be deemed to
have reasonably objected to such filing if such Registration Statement,
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amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or fails to
comply with the applicable requirements of the Act;
(vii) promptly prior to the filing of any document (other than any
document relative to the ordinary course of the Issuer's business) that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the Holders named in any
Shelf Registration Statement and the Initial Purchasers, make the Issuer's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as the Initial Purchasers may
reasonably request;
(viii) make available, at reasonable times, for inspection by the
Holders named in any Shelf Registration Statement and the Initial
Purchasers and any attorney or accountant retained by such Persons, all
financial and other records, pertinent corporate documents of the Issuer
and cause the Issuer's officers, directors and employees to supply all
information reasonably requested by the Initial Purchasers, attorney or
accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and prior
to its effectiveness;
(ix) if requested by the Holders named in any Shelf Registration
Statement and the Initial Purchasers, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such Persons may reasonably
request to have included therein, including, without limitation,
information relating to the plan of distribution (the "PLAN OF
DISTRIBUTION") of the Transfer Restricted Securities and the use of the
Registration Statement or Prospectus for market-making activities; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Issuer is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(x) furnish to the Initial Purchasers and each Holder named in any
Shelf Registration Statement upon request, without charge, at least one
copy of the Registration Statement, as first filed with the Commission, and
of each amendment thereto, including all documents incorporated by
reference therein and all exhibits (excluding exhibits incorporated therein
by reference);
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(xi) deliver to the Initial Purchasers and each Holder named in any
Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as the Initial Purchasers or such Holder reasonably may
request; the Issuer hereby consents to the use (in accordance with law and
subject to Section 4(d) hereof) of the Prospectus and any amendment or
supplement thereto by each selling Person in connection with the offering
and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto and all market-making
activities of the Initial Purchasers, as the case may be;
(xii) upon the request of the Initial Purchasers, enter into such
agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any applicable Registration
Statement contemplated by this Agreement as may be reasonably requested by
the Initial Purchasers in connection with any sale or resale pursuant to
any applicable Registration Statement. In such connection, the Issuer
shall:
(A) upon request of the Initial Purchaser, furnish (or in the
case of paragraphs (2) and (3), use its reasonable best efforts to
cause to be furnished) to the Initial Purchaser, upon the
effectiveness of the Registration Statement:
(1) a certificate, dated such date, signed on behalf of
the Issuer by (x) the President or any Vice President and (y) a
principal financial or accounting officer of the Issuer,
confirming, as of the date thereof, the matters set forth in
Sections 6(dd) (with respect to the applicable registration
statement and prospectus), 9(a) and 9(b) of the Purchase Agree
ment and such other similar matters as such Person may reason
ably request;
(2) an opinion, dated the date of effectiveness of the
Registration Statement, of counsel for the Issuer covering
matters similar to those set forth in Sections 9(e) of the
Purchase Agreement and such other matters as the Initial
Purchaser may reasonably request, and in any event including a
statement to the effect that such counsel has participated in
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conferences with officers and other representatives of the
Issuer, representatives of the independent public accountants for
the Issuer and have considered the matters required to be stated
therein and the statements contained therein, although such
counsel has not independently verified the accuracy, completeness
or fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to materiality to
the extent such counsel deems appropriate upon the statements of
officers and other representatives of the Issuer) and without
independent check or verification, no facts came to such
counsel's attention that caused such counsel to believe that the
applicable Registra tion Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that
the Prospectus contained in such Registration Statement as of its
date contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial or statistical data
included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
effectiveness of the Registration Statement, from the Issuer's
independent accountants, in the customary form and covering
matters of the type customarily covered in comfort letters to
underwriters in connection with underwritten offerings, and
affirming the matters set forth in the comfort letters delivered
pursuant to Section 9(g) of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the Initial Purchaser to evidence compliance
with the matters covered in clause (A) above and with any customary
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conditions contained in any agreement entered into by the Issuer
pursuant to this clause;
(xiii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under
the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided that the Issuer shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiv) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale
of Transfer Restricted Securities;
(xv) use its reasonable best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xiii) above;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Warrant Agent or the
Transfer Agent and Registrar for the Warrant Shares, as applicable, with
printed certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with The Depository Trust Company;
(xvii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
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Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in Rule 158(c) under the
Act); and
(xviii) provide promptly to the Initial Purchaser, upon request, each
document filed with the Commission pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security and the Initial Purchasers agree that, upon receipt
of the notice from the Issuer of the commencement of a Black Out Period (in each
case, a "BLACK OUT NOTICE"), such Person will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Person is advised in writing by the Issuer of the
termination of the Black Out Period. Each Person receiving a Black Out Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Person's possession which have been replaced
by the Issuer with more recently dated Prospectuses or (ii) deliver to the
Issuer (at the Issuer's expense) all copies, other than permanent file copies,
then in such Person's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Black Out
Notice.
SECTION 5. REGISTRATION EXPENSES
All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing, including printing Prospectuses (whether for sales, market-making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) if the Common Stock shall then be
listed on any national securities exchange or automated quotation system, all
application and filing fees in connection with listing the Warrant Shares
thereon, and (vi) all fees and disbursements of independent certified public
accountants of the Issuer (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Issuer will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
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performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
SECTION 6. INDEMNIFICATION
(a) The Issuer agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including, without limitation, any reasonable legal or other expenses incurred
in connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Issuer to
any Holder or any prospective purchaser of Transfer Restricted Securities, or
caused by 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, except insofar as such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to any of the
Holders furnished in writing to the Issuer by or on behalf of the Holders,
provided further, that the Issuer shall not be liable to any Holder or any of
such Holder's directors, officers and Persons controlling such Holder with
respect to any preliminary prospectus to the extent that any such losses,
claims, damages, liabilities or judgments of such Person results proximately and
primarily from the fact that such Person sold Transfer Restricted Securities to
a second Person to whom there was not sent or given, at or before the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) if the Issuer has previously furnished copies thereof
to such first Person in compliance with this Agreement and the losses, claims,
damages, liabilities or judgments of such first Person results proximately and
primarily from an untrue statement or omission of a material fact contained in
such preliminary prospectus which was corrected in the Prospectus (or the
Prospectus as then amended or supplemented).
(b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Issuer, its directors and officers,
and each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Issuer, to the same extent as the
foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but only
with reference to information relating to such Holder furnished in writing to
the Issuer by or on behalf of such Holder expressly for use in any Registration
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Statement. In no event shall any Holder, its directors, officers or any Person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any Person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing,
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that,
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 6(a) and 6(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 6(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
one such counsel shall be at the expense of the indemnified party, unless (i)
the employment of such counsel shall have been specifically authorized in
writing by the indemnifying party, (ii) the indemnifying party shall have failed
to assume the defense of such action or employ counsel reasonably satisfactory
to the indemnified party or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by a
majority of the Holders, in the case of the parties indemnified pursuant to
Section 6(a), and by the Issuer, in the case of parties indemnified pursuant to
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Section 6(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 6
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to herein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 6(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) hereof but also the relative
fault of the Issuer, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Issuer, on the one hand, and
of the Holder, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer, on the one hand, or by or on behalf of the
Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to above shall be deemed to
include, subject to the limitations set forth in the second paragraph of Section
6(a), any legal or other fees or expenses reasonably incurred by such
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indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments.
The Issuer and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
(e) The Issuer agrees that the cross indemnity and contribution provisions
of this Section 6 shall apply to the Initial Purchasers to the same extent, on
the same conditions, as it applies to Holders.
SECTION 7. RULE 144
The Issuer agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Issuer is
subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.
SECTION 8. LIQUIDATED DAMAGES
(a) Liquidated Damages. The Issuer and the Initial Purchasers agree that
the Holders will suffer damages if the Issuer fails to fulfill its obligations
pursuant to Section 3 and 4 of this Agreement and that it would not be possible
to ascertain the extent of such damages. Accordingly, in the event of such
15
failure by the Issuer to fulfill such obligations, the Issuer hereby agrees to
pay liquidated damages ("LIQUIDATED DAMAGES") to each Holder under the
circumstances and to the extent set forth below:
(i) if the Registration Statement has not been filed with the
Commission within 90 days after the Closing Date;
(ii) if the Registration Statement has not been declared effective by
the Commission within 180 days after the Closing Date; or
(iii) if the Registration Statement has been declared effective by the
Commission and such Registration Statement ceases to be effective or usable
at any time after the expiration of a Black Out Period until the earlier of
(A) the Expiration Date and (B) the first date as of which all Warrants
have been exercised by the Holders thereof (the "EFFECTIVENESS PERIOD"),
without being succeeded on the same day immediately by a post-effective
amendment to such Registration Statement that cures such failure and that
is itself immediately declared effective on the same day, (any of the
foregoing, a "REGISTRATION DEFAULT");
then the Issuer shall pay Liquidated Damages to each Holder in an amount equal
to $0.03 per week per Warrant held by such Holder for each week or portion
thereof that the Registration Default continues for the first 90-day period
immediately following the occurrence of such Registration Default. This amount
will increase by an additional $0.02 per week per Warrant with respect to each
subsequent 90-day period, up to a maximum amount of Liquidated Damages equal to
$0.07 per week per Warrant. The provision for Liquidated Damages will continue
until such Registration Default has been cured. The Issuer will not be required
to pay Liquidated Damages for more than one Registration Default at any given
time. A Registration Default under clause (i) above shall be cured on the date
that the Registration Statement is filed with the Commission; a Registration
Default under clause (ii) above shall be cured on the date that the Registration
Statement is declared effective by the Commission; a Registration Default under
clause (iii) above shall be cured on the earlier of (A) the date that the post-
effective amendment curing the deficiency in the Registration Statement is
declared effective or (B) the Effectiveness Period expires. Notwithstanding the
foregoing, the Issuer shall not be deemed to have failed to perform its
obligations under clauses (i) through (iii) above by the reason of the failure
of any Holder to provide information regarding itself reasonably requested by
the Issuer or any regulatory agency having jurisdiction over any of the Holders
at least 10 business days prior to a Registration Default.
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(b) Payment of Liquidated Damages. The Issuer shall notify the Warrant
Agent within one Business Day after each and every date on which a Registration
Default occurs (an "EVENT DATE"). Liquidated Damages shall accrue from the most
recent date to which Liquidated Damages have been paid or, if no Liquidated
Damages have been paid, from the date hereof. Liquidated Damages accrued as of
April 1 or October 1 of each year (each a "PAYMENT DATE") will be payable on
such Payment Date. The Issuer shall pay Liquidated Damages on the applicable
Payment Date to the Persons who are Holders of Warrants at the close of business
on March 15 or September 15 next preceding the Payment Date. Liquidated Damages
shall be payable at the office of the Warrant Agent or, at the option of the
Issuer, payment of Liquidated Damages may be made by check mailed to the Holders
at their addresses set forth in the register of Holders, provided that payment
by wire transfer of immediately available funds shall be required with respect
to the Liquidated Damages on all Warrants the Holders of which shall have
provided written wire transfer instructions to the Issuer and the Warrant Agent.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
SECTION 9. MISCELLANEOUS
(a) Remedies. The Issuer acknowledges and agrees that any failure by the
Issuer to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Issuer's obligations under Section 3 hereof. The Issuer
further agrees to waive the defense in any action for specific performance that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as set forth in the
Offering Memorandum, the Issuer has not previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Issuer's
securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of this Section
17
9(c)(i), the Issuer has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities, and (ii) in the case of all other
provisions hereof, the Issuer has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Issuer or its Affiliates);
provided that this Agreement may be amended without the consent of any Holder in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions in regard to matters or questions arising
hereunder which the Issuer may deem necessary or desirable and which shall not
in any way adversely affect any Holder.
(d) Third Party Beneficiary. The Holders shall be third party beneficiaries
to the agreements granting rights to Holders made hereunder between the Issuer,
on the one hand, and the Initial Purchasers, on the other hand, and shall have
the right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Warrant Agent, with a copy to the Warrant Agent; and
(ii) if to the Issuer:
Horizon PCS, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
With a copy to:
Arnall Golden & ▇▇▇▇▇▇▇, LLP
2800 One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in Warrant Agreement.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Warrant
Agreement. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement or
Warrant Agreement, as the case may be, and such Person shall be entitled to
receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
HORIZON PCS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
FIRST UNION SECURITIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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