EXHIBIT (e)(26)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of May
16, 2001, is entered into by and between MOTOROLA, INC., a Delaware corporation
("Motorola"), and NEXT LEVEL COMMUNICATIONS, INC., a Delaware corporation ("Next
Level").
WHEREAS, in connection with the Credit Agreement dated as of May 16,
2001, by and between Next Level and Motorola (the "Credit Agreement"), Next
Level has granted to Motorola warrants to purchase Seven Million Five Hundred
Thousand (7,500,000) shares of Common Stock, par value $0.01 per share, of Next
Level (the "Common Stock") subject to the terms and conditions set forth therein
(as such term is further defined below, the "Warrants");
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Motorola and Next Level, for
themselves, their successors, and assigns, hereby agree as follows:
Article I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms will
have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"Agreement" has the meaning ascribed thereto in the preamble
hereto, as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Common Stock" means the Common Stock of Next Level or any other
class of Next Level stock for which the Warrants become exercisable or
convertible.
"Holder" means the holder of any Registrable Security or of a
Warrant.
"Next Level Entities" means Next Level and any subsidiaries of
Next Level.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.
"Registrable Securities" shall mean, collectively, any shares or
other securities issued or issuable upon exercise of the Warrants or in exchange
for or in respect of any such securities. As to any particular Registrable
Securities, such Registrable Securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale by the Holder thereof
shall have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement, (ii)
they shall have been distributed to the public in accordance with Rule 144,
(iii) they shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by Next
Level and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any state securities or blue
sky law then in effect or (iv) they shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
this Agreement, including, without limitation, (i) the fees, disbursements and
expenses of Next Level's counsel and accountants and the reasonable fees and
expenses of counsel selected by the Holders in accordance with this Agreement in
connection with the registration of the securities to be disposed of; (ii) all
expenses, including filing fees, in connection with the preparation, printing
and filing of the registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and supplements thereto
and the mailing and delivering of copies thereof to any underwriters and
dealers; (iii) the cost of printing or producing any underwriting agreements and
blue sky or legal investment memoranda and any other documents in connection
with the offering, sale or delivery of the securities to be disposed of; (iv)
all expenses in connection with the qualification of the securities to be
disposed of for offering and sale under state securities laws, including the
fees and disbursements of counsel for the underwriters or the Holders of
securities in connection with such qualification and in connection with any blue
sky and legal investment surveys; (v) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the securities to be disposed of; (vi) transfer agents' and
registrars', fees and expenses and the fees and expenses of any other agent or
trustee appointed in connection with such offering; (vii) all security engraving
and security printing expenses; (viii) all fees and expenses payable in
connection with the listing of the securities on any securities exchange or
automated interdealer quotation system or the rating of such securities; (ix)
any other fees and disbursements of underwriters customarily paid by the sellers
of securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, and (x) other reasonable out-of-pocket expenses of Holders other
than legal fees and expenses referred to in clause(s) (i) and/or (iv) above.
"Rule 144" means Rule 144 (or any successor rule to similar
effect) promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous
basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.
"Warrant" means any of those certain warrants granted by Next
Level to Motorola pursuant to the Credit Agreement and any warrants issued in
substitution for, or replacement or, such warrants.
1.2 Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.
Article II
REGISTRATION RIGHTS
2.1 Demand Registration - Registrable Securities.
(a) Upon written notice provided at any time from a majority in
interest of the Holders, requesting that Next Level effect the registration
under the Securities Act of any or all of the Registrable Securities held by
such Holders, which notices shall specify the intended method or methods of
disposition of such Registrable Securities, Next Level shall use its best
efforts to effect the registration under the Securities Act and applicable state
securities laws of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request
(including in a Rule 415 Offering, if Next Level is then eligible to register
such Registrable Securities on Form S-3 (or a successor form) for such
offering); provided that,
(i) with respect to any registration statement filed, or
to be filed, pursuant to this Section 2.1, if Next Level shall furnish to the
Holders that have made such request a certified resolution of the Board of
Directors of Next Level stating that in the Board of Directors' good faith
judgment it would (because of the existence of, or in anticipation of, any
acquisition or financing activity, or the unavailability for reasons beyond Next
Level's reasonable control of any required financial statements, or any other
event or condition of similar significance to Next Level) be seriously
disadvantageous (a "Disadvantageous Condition") to Next Level for such a
registration statement to be maintained effective, or to be filed and become
effective, and setting forth the general reasons for such judgment, Next Level
shall be entitled to cause such registration statement to be withdrawn and the
effectiveness of such registration statement terminated, or, in the event no
registration statement has yet been filed, shall be entitled not to file any
such registration statement, until such Disadvantageous Condition no longer
exists (notice of which Next Level shall promptly deliver to such Holders). Upon
receipt of any such notice of a Disadvantageous Condition, such Holders shall
forthwith discontinue use of the prospectus contained in such registration
statement and, if so directed by Next Level, each such Holder will deliver to
Next Level all copies, other than permanent file copies then in such Holder's
possession, of the prospectus then covering such Registrable Securities current
at the time of receipt of such notice; provided, that the filing of any such
registration statement may not be delayed for a period in excess of 60 days in
any calendar year due to the occurrence of one or more Disadvantageous
Conditions;
(ii) the Holders may collectively exercise their rights
under this Section 2.1 on not more than four (4) occasions;
(iii) except as otherwise provided in Section 2.2 or
elsewhere in this Agreement, the Holders shall not have the right to exercise
registration rights pursuant to this Section 2.1 within the 180-day period
following the date hereof or following the registration and sale of Registrable
Securities effected pursuant to a prior exercise of the registration rights
provided in this Section 2.1.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder pursuant to this Section 2.1
shall not be deemed to have been effected (and, therefore, not requested for
purposes of paragraph (a) above), (i) if it shall not have become effective,
(ii) if after it has become effective such registration is interfered with by
any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason other than a misrepresentation or an
omission by a Holder or ceases to be maintained effective due to a
Disadvantageous Condition and, as a result thereof, the Registrable Securities
requested to be registered cannot be completely distributed in accordance with
the plan of distribution set forth in the related registration statement or
(iii) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by a Holder within its control.
(c) In the event that any registration pursuant to this Section
2.1 shall involve, in whole or in part, an underwritten offering, the Holders of
a majority of the Registrable Securities to be registered pursuant to this
Section 2.1 shall have the right to designate an underwriter or underwriters
reasonably acceptable to Next Level as the lead or managing underwriters of such
underwritten offering and, in connection with each registration pursuant to this
Section 2.1, such Holders may select one counsel reasonably acceptable to Next
Level to represent all such Holders.
(d) Next Level shall have the right to cause the registration of
additional equity securities for sale for its account or any existing or former
directors, officers or employees of the Next Level Entities in any registration
of Registrable Securities requested for the benefit of the Holders pursuant to
paragraph (a) above; provided, however, that, if such Holders are advised in
writing (with a copy to Next Level) by a nationally recognized investment
banking firm selected by such Holders reasonably acceptable to Next Level (which
shall be the lead underwriter or a managing underwriter in the case of an
underwritten offering) that, in such firm's good faith view, the inclusion of
such additional equity securities in such registration would be likely to have
an adverse effect on the price, timing or distribution of the offering and sale
of the Registrable Securities then contemplated by such Holders, the
registration of such additional equity securities or part thereof shall not be
permitted. The Holders of the Registrable Securities to be registered pursuant
to this Section 2.1 may require that any such additional equity securities be
included in the offering proposed by such Holders on the same conditions as the
Registrable Securities that are included therein. In the event that the number
of Registrable Securities requested to be included in such registration by such
Holders exceeds the number which, in the good faith view (delivered in writing)
of such investment banking firm, can be sold without adversely affecting the
price, timing, distribution or sale of securities in the offering, the number
shall be allocated pro rata among the requesting Holders on the basis of the
relative number of Registrable Securities then held by each such Holder
(including Registrable Securities such Holder may acquire on exercise of such
Holder's Warrant(s)), provided that any number in excess of a Holder's request
may be reallocated among the remaining requesting Holders in a like manner.
2.2 Piggyback Registration. In the event that Next Level at any time
after the date hereof proposes to register any Common Stock or any securities
convertible into or exchangeable for Common Stock under the Securities Act,
whether or not for sale for its own account and including pursuant to Section
2.1 (such stock or securities, "Other Securities"), in a manner that would
permit registration of Registrable Securities for sale for cash to the public
under the Securities Act, it shall at each such time give prompt written notice
to each of the Holders of its intention to do so and of the rights of such
Holders under this Section 2.2. Subject to the terms and conditions hereof,
such notice shall offer each such Holder the opportunity to include in such
registration statement such number of the Registrable Securities of such Holder
as such Holder may request. Upon the written request of any such Holder made
within 15 days after the receipt of Next Level's notice (which request shall
specify the number of Registrable Securities intended to be disposed of and the
intended method of disposition thereof), Next Level shall use its best efforts
to effect, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities which Next
Level has been so requested to register, to the extent required to permit the
disposition (in accordance with such
intended method of disposition thereof) of the Registrable Securities so
requested to be registered; provided, that:
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, Next
Level shall determine for any reason not to register the Other Securities, Next
Level may, at its election, give written notice of such determination to such
Holders and thereupon Next Level shall be relieved of its obligation to register
such Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the Holders immediately
to request that such registration be effected as a registration under Section
2.1 to the extent permitted thereunder;
(b) if a nationally recognized investment banking firm selected
by Next Level advises Next Level in writing that, in such firm's good faith
view, all or a part of such Registrable Securities cannot be sold and the
inclusion of all or a part of such Registrable Securities in such registration
would be likely to have an adverse effect upon the price, timing or distribution
of the offering and sale of the Other Securities then contemplated, Next Level
shall include in such registration: (i) first, the Other Securities being sold
for its own account or the Other Securities which are Registrable Securities
included pursuant to Section 2.1 and/or any Other Securities being registered
pursuant to any demand registration rights held by Persons other than Next Level
and the Holders and (ii) second, up to the full number of Registrable Securities
requested to be included pursuant to this Section 2.2 and the remaining Other
Securities that are requested to be included in such registration in excess of
the number of securities referred to in clause (i) which, in the good faith view
of such investment banking firm, can be sold without adversely affecting such
offering, such full number to be allocated pro rata among the holders of the
securities referred to in this clause (ii) based on the relative number of
securities requested to be included by each such holder (provided further that,
in the event that such investment banking firm advises in writing that less than
all of such Registrable Securities may be included in such offering, one or more
of such Holders may withdraw their request for registration of their Registrable
Securities under this Section 2.2 and ninety (90) days subsequent to the
effective date of the registration statement for the registration of such Other
Securities request that such registration be effected as a registration under
Section 2.2 to the extent permitted thereunder);
(c) Next Level shall not be required to effect any registration
of Registrable Securities under this Section 2.2 incidental to the registration
of any of its securities in connection with mergers, acquisitions, exchange
offers, subscription offers, dividend reinvestment plans or stock option or
other executive or employee benefit or compensation plans; and
(d) no registration of Registrable Securities effected under
this Section 2.2 shall relieve Next Level of its obligation to effect a
registration of Registrable Securities pursuant to Section 2.1.
2.3 Expenses. Next Level shall pay all Registration Expenses with
respect to a particular offering (or proposed offering). Notwithstanding the
foregoing, each of the Holders and Next Level shall be responsible for its own
internal administrative and similar costs, which shall not constitute
Registration Expenses.
2.4 Registration and Qualification. If and whenever Next Level is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 2.1 or 2.2, Next Level shall as promptly
as practicable:
(a) prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (B) the
expiration of three months after such registration statement becomes effective;
provided, that such three-month period shall be extended for such number of days
that equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (f) below is given by Next Level to (y) the date on
which Next Level delivers to the Holders of Registrable Securities the
supplement or amendment contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities 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
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and upon request a copy
of any and all transmittal letters or other correspondence to or received from,
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;
(d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such U.S. jurisdictions as the Holders of such Registrable
Securities or any underwriter to such Registrable Securities shall reasonably
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
of Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such registration
statement; provided, that Next Level shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts (i) to furnish to each of the Holders of
Registrable Securities included in such registration (each, a "Selling Holder")
and to any underwriter of such Registrable Securities an opinion of counsel for
Next Level addressed to each Selling Holder and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement) and (ii)
to furnish to each Selling Holder a "cold comfort" letter addressed to each
Selling Holder and signed by the independent public accountants who have audited
the financial statements of Next Level included in such registration statement,
in each such case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein)
as are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of securities
and such other matters as the Selling Holders may reasonably request and, in the
case of such accountants' letter, with respect to events subsequent to the date
of such financial statements;
(f) as promptly as practicable, notify the Selling Holders in
writing (i) at any time when a prospectus relating to a registration pursuant to
Sections 2.1 or 2.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) of any request by the SEC or any
other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such 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, in light of the circumstances under which they are made, not
misleading;
(g) if requested by the lead or managing underwriters, use its
best efforts to list all such Registrable Securities covered by such
registration on each securities exchange and automated inter-dealer quotation
system on which common equity securities of Next Level are then listed;
(h) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Next Level to attend and participate
in any "road shows" scheduled in connection with any such registration, with all
out-of-pocket costs and expense incurred by Next Level or such officers in
connection with such attendance to be paid by Next Level; and
(i) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 2.1 or 2.2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters.
2.5 Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Agreement, Next Level shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by Next Level and such other terms and provisions
as are customarily contained in underwriting agreements of Next Level to the
extent relevant and as are customarily contained in underwriting agreements
generally with respect to secondary distributions to the extent relevant,
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 2.6, and
agreements as to the provision of opinions of counsel and accountants' letters
to the effect and to the extent provided in Section 2.4(e). The Selling Holders
on whose behalf the Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of,
Next Level to and for the benefit of such underwriters, shall also be made to
and for the benefit of such Selling Holders. Such underwriting agreement shall
also contain such representations and warranties by such Selling Holders and
such other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, when relevant, including,
without limitation, indemnification and contribution provisions substantially to
the effect and to the extent provided in Section 2.6.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Agreement, Next Level shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Next Level with its
officers and the independent public accountants who have certified the financial
statements of Next Level as shall be necessary, in the opinion of such Holders
and such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6 Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities made
pursuant to this Agreement, Next Level agrees to indemnify and hold harmless, to
the extent permitted by law, each of the Selling Holders, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, against
any and all losses, liabilities, costs (including reasonable attorney's fees and
disbursements and reasonable costs of investigation and preparation), claims and
damages, joint or several, to which they or any of them may become subject,
under the Securities Act or otherwise, including any amount paid in settlement
of any litigation commenced or threatened, insofar as such losses, liabilities,
costs, claims and damages (or actions or proceedings in respect thereof, whether
or not such indemnified Person is a party thereto) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or in any offering memorandum or other offering
document relating to the offering and sale of such Registrable Securities, or
any amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however that Next Level shall not be liable to
any Person in any such case to the extent that any such loss, liability, cost,
claim or damage arises out of or relates to any untrue statement or alleged
untrue statement, or any omission, if such statement or omission shall have been
made in reliance upon and in conformity with information relating to a Selling
Holder, another holder of securities included in such registration statement or
underwriter furnished in writing to Next Level by or on behalf of such Selling
Holder, other holder or underwriter specifically for use in the registration
statement (or in any preliminary or final prospectus included therein), offering
memorandum or other offering document, or any amendment thereof or supplement
thereto. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Selling Holder, any other holder or
any underwriter and shall survive the transfer of such securities. The foregoing
indemnity agreement is in addition to any liability that Next Level may
otherwise have to each Selling Holder, other holder or underwriter of the
Registrable Securities or any controlling person of the foregoing and the
officers, directors, affiliates, employees and agents of each of the foregoing;
provided, further, that, in the case of an offering with respect to which a
Selling Holder has designated the lead or managing underwriters (or a Selling
Holder is offering Registrable Securities directly, without an underwriter),
this indemnity does not apply to any loss, liability, cost, claim or damage
arising out of or relating to any untrue statement or alleged untrue statement
or omission or alleged omission in any preliminary prospectus or offering
memorandum if a copy of a final prospectus or offering memorandum was available
on a timely basis and not sent or given by or on behalf of any underwriter (or
such Selling Holder or other holder, as the case may be) to such Person
asserting such loss, liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to use reasonable best efforts to cause each
underwriter of Registrable Securities included in such offering (in the same
manner and to the same extent as set forth in Section 2.6(a)) to agree to
indemnify and hold harmless, Next Level, each other underwriter who participates
in such offering, each other Selling Holder or other holder with securities
included in such offering and in the case of an underwriter, such Selling Holder
or other holder, and each Person, if any, who controls any of the foregoing
within the meaning of the Securities Act and the officers, directors,
affiliates, employees and agents of each of the foregoing, against any and all
losses, liabilities, costs (including reasonable attorney's fees and
disbursements and reasonable costs of investigation and preparation), claims and
damages to which they or any of them may become subject, under the Securities
Act or otherwise, including any amount paid in settlement of any litigation
commenced or threatened, insofar as such losses, liabilities, costs, claims and
damages (or actions or proceedings in respect thereof, whether or not such
indemnified Person is a party thereto) arise out of or are based upon any untrue
statement or alleged untrue statement by such Selling Holder or underwriter, as
the case may be, of a material fact contained in the registration statement (or
in any preliminary or final prospectus included therein) or in any offering
memorandum or other offering document relating to the offering and sale of such
Registrable Securities prepared by Next Level or at its direction, or any
amendment thereof or supplement thereto, or any omission by such Selling Holder
or underwriter, as the case may be, or alleged omission by such Selling Holder
or underwriter, as the case may be, of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement of a material fact is
contained in, or such material fact is omitted from such registration statement
or prospectus in reliance on and in conformity with information relating to such
Selling Holder or underwriter, as the case may be, furnished in writing to Next
Level by or on behalf of such Selling Holder or underwriter, as the case may be,
specifically for use in such registration statement (or in any preliminary or
final prospectus included therein), offering memorandum or other offering
document, or any amendment thereof or supplement thereto. The foregoing
indemnity is in addition to any liability which such Selling Holder or
underwriter, as the case may be, may otherwise have to Next Level, or
controlling persons and the officers, directors, affiliates, employees, and
agents of each of the foregoing; provided, however, that, in the case of an
offering made pursuant to this Agreement with respect to which Next Level has
designated the lead or managing underwriters (or Next Level is offering
securities directly, without an underwriter), this indemnity does not apply to
any loss, liability, cost, claim, or damage arising out of or based upon
any untrue statement or alleged untrue statement or omission or alleged omission
in any preliminary prospectus or offering memorandum if a copy of a final
prospectus or offering memorandum was not sent or given by or on behalf of any
underwriter (or Next Level, as the case may be) to such Person asserting such
loss, liability, cost, claim or damage at or prior to the written confirmation
of the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such final prospectus or
offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) above except to the extent that the
indemnifying party is prejudiced thereby. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified party and indemnifying
parties may exist in respect of such claim, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party); provided that, if an indemnified party and an indemnifying party shall
have conflicting claims or defenses, the indemnifying party shall not have
control of such conflicting claims or defenses and the indemnified party shall
be entitled to appoint separate counsel for such claims and defenses at the cost
and expense of the indemnifying party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 2.6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying party does not assume the
defense of such claim or action, it is understood that the indemnifying party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or 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
one separate firm of local attorneys in each such jurisdiction) at any time for
all such indemnified parties. No indemnifying party shall (i) without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent, but if settled with its written consent or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss of liability
by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 2.6 shall
for any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, liability,
cost, claim or damage as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the indemnifying party
on the one hand or the indemnified party on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission, but not by reference to any indemnified
party's stock ownership in Next Level. The amount paid or payable by an
indemnified party as a result of the loss, cost, claim, damage or liability, or
action in respect thereof, referred to above in this paragraph (d) shall be
deemed to include, for purposes of this paragraph (d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in
the preceding paragraphs of this Section 2.6 (with appropriate modifications)
shall be given by Next Level, the Selling Holders and underwriters with respect
to any required registration or other qualification of securities under any
state law or regulation or governmental authority.
(f) The obligations of the parties under this Section 2.6 shall
be in addition to any liability which any party may otherwise have to any other
party.
2.7 Rule 144 and Form S-3. Commencing 90 days after the date hereof,
Next Level shall use its best efforts to ensure that the conditions to the
availability of Rule 144 set forth in paragraph (c) thereof shall be satisfied.
Upon the request of any Holder of Registrable Securities, Next Level will
deliver to such Holder a written statement as to whether it has complied with
such requirements. Next Level further agrees to use its reasonable efforts to
cause all conditions to the availability of Form S-3 (or any successor form)
under the Securities Act of the filing of registration statements under this
Agreement to be met as soon as practicable after the date hereof.
2.8 Transfer of Registration Rights. Any Holder may transfer all or any
portion of its rights under this Agreement to any transferee of Registrable
Securities owned by such Holder. Any transfer of registration rights pursuant to
this Section 2.8 shall be effective upon receipt by Next Level of (i) written
notice from such Holder stating the name and address of any transferee and
identifying the number of Registrable Securities with respect to which the
rights under this Agreement are being transferred and the nature of the rights
so transferred and (ii) a written agreement from such transferee to be bound by
the terms of this Agreement. The Holders may exercise their rights hereunder in
such priority as they shall agree upon among themselves.
2.9 Holdback Agreement. If Next Level effects any registration of equity
securities of Next Level or any securities convertible into or exchangeable or
exercisable for any equity securities of Next Level pursuant
to this Agreement or otherwise in which 20% or more of the securities registered
thereby are Registrable Securities, each Holder agrees not to effect any public
sale or distribution, including any sale under Rule 144, of any equity security
of Next Level or any security convertible into or exchangeable or exercisable
for any equity security of Next Level (otherwise than through the registered
public offering then being made) within 7 days prior to or 90 days (or such
lesser period as the lead or managing underwriters may permit) after the
effective date of the registration statement (or the commencement of the
offering to the public of such Registrable Securities in the case of Rule 415
offerings). Next Level hereby also so agrees; provided, that, subject to Section
2.5(a) hereof, Next Level shall not be so restricted from effecting any public
sale or distribution of any security in connection with any merger, acquisition,
exchange offer, subscription offer, dividend reinvestment plan or stock option
or other executive or employee benefit or compensation plan.
ARTICLE III
MISCELLANEOUS
3.1 Assistance in Disposition of Shares. Regardless of whether one or
more Holders or other parties shall have requested registration of Common Stock
hereunder, but subject to any market stand-off, hold-back, or similar provisions
that may apply, one or more Holders of Registrable Securities may at any time
request that Next Level assist such Holder(s) in the sale of such securities on
favorable terms. In such an event, Next Level shall use its commercially
reasonable best efforts to assist such Holder (or such Holders, on an equitable
basis) in identifying opportunities and making arrangements for a private
placement, block trade, or other sale, transfer, or exchange of such securities
on reasonable and favorable terms consistent with all applicable securities laws
and regulations.
3.2 Limitation of Liability. No party hereto shall be liable hereunder
for any special, indirect, incidental or consequential damages of the other
arising in connection with this Agreement.
3.3 Amendments. This Agreement may not be amended or terminated orally,
but only by a writing duly executed by or on behalf of each of the parties
hereto, or their respective permitted transferees or assignees. Any such
amendment shall be validly and sufficiently authorized for purposes of this
Agreement if it is signed on behalf of the parties hereto by any of their
respective presidents or vice presidents.
3.4 Term. This Agreement shall remain in effect until no Registrable
Securities remain outstanding; provided, that the provisions of Sections 2.6,
2.7 and 3.2 shall survive any such expiration.
3.5 Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid, illegal or unenforceable to any
extent, the remainder of this Agreement or such provision or the application of
such provision to such party or circumstances, other than those to which it is
so determined to be invalid, illegal or unenforceable, shall remain in full
force and effect to the fullest extent permitted by law and shall not be
affected thereby, unless such a construction would be unreasonable.
3.6 Notices. All notices and other communications required or permitted
hereunder shall be in writing, shall be deemed duly given upon actual receipt,
and shall be delivered (a) in person (including by commercial courier service),
(b) by registered or certified mail, postage prepaid, or
(c) by facsimile or other generally accepted means of electronic transmission
(provided that a copy of any notice delivered pursuant to this clause (c) shall
also be sent pursuant to clause (b)), addressed as follows:
(a) if to Next Level, to:
Next Level Communications, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Motorola, to:
Motorola, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
3.7 Further Assurances. The parties hereto shall execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any exhibit, document or
other instrument delivered pursuant hereto.
3.8 Counterparts; Execution. This Agreement may be executed and
delivered in counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute but one and the same agreement. This
Agreement may be executed and delivered by facsimile.
3.9 Governing Law; Consent to Jurisdiction. This Agreement and the
transactions contemplated hereby shall be construed in accordance with, and
governed by, the laws of the State of New York. Each of Next Level and Motorola
hereby submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. Each
of Next Level and Motorola irrevocably waives, to the fullest extent permitted
by applicable law, any objection that each may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
3.10 Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
3.11 Transfers and Assignments. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns (including transferees). Nothing contained in
this Agreement, express or implied, is intended to confer upon any other person
or entity any benefits, rights or remedies.
3.12 Specific Performance. The parties hereto acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, it is agreed that they shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof in
any court of competent jurisdiction in the United States or any state thereof,
in addition to any other remedy to which they may be entitled at law or equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
NEXT LEVEL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. Zar
Name: ▇▇▇▇▇ ▇. Zar
Title: Senior Vice President
MOTOROLA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
ame: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
Treasurer