Document:

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                                                                     EXHIBIT 4.2

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                          REGISTRATION RIGHTS AGREEMENT

                               Dated May 29, 2001

                                     between

                           NEXTEL COMMUNICATIONS, INC.

                                       and

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                        MORGAN STANLEY & CO. INCORPORATED

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                          REGISTRATION RIGHTS AGREEMENT

                THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into May 29, 2001, between NEXTEL COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and MORGAN STANLEY & CO. INCORPORATED (the "Initial
Purchaser").

                This Agreement is made pursuant to the Purchase Agreement dated
May 23, 2001, between the Company and the Initial Purchaser (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial Purchaser
of $1,000,000,000 aggregate principal amount of 6% Convertible Senior Notes due
2011 of the Company plus up to an additional $150,000,000 aggregate principal
amount of 6% Convertible Senior Notes due 2011 in the event the Initial
Purchaser exercises its option to purchase additional securities (collectively,
the "Securities"). The Securities will be issued pursuant to the terms of an
indenture, dated as of May 29, 2001 (the "Indenture"), between the Company and
BNY Midwest Trust Company, as trustee. The Securities will be convertible, at
the option of the holder thereof, in whole or in part, into Class A Common
Stock, par value $.001 per share, of the Company. In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchaser and its direct and indirect transferees the
registration rights with respect to the Securities and the Common Shares (as
defined herein) set forth in this Agreement.

                In consideration of the foregoing, the parties hereto agree as
follows:

                1.      Definitions.

                As used in this Agreement, the following capitalized defined
terms shall have the following meanings:

                "1933 Act" shall mean the Securities Act of 1933, as amended
        from time to time.

                "1934 Act" shall mean the Securities Exchange Act of 1934, as
        amended from time to time.

                "Closing Date" shall mean the Closing Date as defined in the
        Purchase Agreement.

                "Common Shares" shall mean any shares of Class A Common Stock,
        par value $.001 per share, of the Company issued upon conversion of the
        Securities at the rate and in the manner described in the Indenture and
        any other capital stock of the Company into which such Common Shares may
        be converted, or reclassified or that may be issued in respect of, in
        exchange for or in substitution of, such Common Shares by reason of any
        stock splits, stock dividends, distributions, mergers, consolidations or
        other like events.

                "Company" shall have the meaning set forth in the preamble and
        shall also include the Company's successors.

                "Company Representative" means the Company's Corporate Counsel
        -- SEC Finance, 2001 Edmund Halley Drive, Reston, Virginia 20191, phone:
        (703) 433-4000 or

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        such different person and or such different address and/or phone number
        as the Company may specify in a notice to the Purchaser Representative
        given in accordance with the provisions of Section 5(d).

                "Conversion Price" shall have the meaning set forth in the
        Indenture.

                "Effectiveness Period" shall have the meaning set forth in
        Section 2(a) hereof.

                "Effective Time" means the date on which the SEC declares the
        Resale Registration Statement effective or on which the Resale
        Registration Statement otherwise becomes effective.

                "Electing Holder" shall mean any holder of Registrable
        Securities that has returned a completed and signed Notice and
        Questionnaire to the Company in accordance with Section 3(A)(a)(i) or
        3(A)(a)(ii) hereof.

                "Filing Notice" shall have the meaning set forth in Section
        3(A)(g) hereof.

                "Holders" shall mean the Initial Purchaser, for so long as it
        owns any Registrable Securities, and each of its successors, assigns and
        direct and indirect transferees who become registered owners of
        Registrable Securities under and in compliance with the Indenture.

                "Indenture" shall have the meaning set forth in the preamble.

                "Initial Purchaser" shall have the meaning set forth in the
        preamble.

                "Liquidated Damages Amount" shall have the meaning set forth in
        Section 2(c) hereof.

                "NASD Rules" means the Rules of the National Association of
        Securities Dealers, Inc., as amended from time to time.

                "Notice and Questionnaire" means a Selling Security Holder
        Notice and Questionnaire substantially in the form of Exhibit A hereto.

                "Person" shall mean an individual, partnership, corporation,
        trust or unincorporated organization, or a government or agency or
        political subdivision thereof.

                "Prospectus" shall mean the prospectus included in the Resale
        Registration Statement, including any preliminary prospectus, and any
        such prospectus as amended or supplemented by any prospectus supplement,
        including a prospectus supplement with respect to the terms of the
        offering of any portion of the Registrable Securities covered by the
        Resale Registration Statement, and by all other amendments and
        supplements to such prospectus, and in each case including all material
        incorporated by reference therein.

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                "Purchase Agreement" shall have the meaning set forth in the
        preamble.

                "Purchaser Representative" means a representative of Morgan
        Stanley & Co. Incorporated, or such other persons as may be appointed
        from time to time.

                "Registrable Securities" shall mean the Securities and the
        Common Shares; provided, however, that the Securities and the Common
        Shares shall cease to be Registrable Securities (i) when the Resale
        Registration Statement with respect to such Securities and such Common
        Shares shall have been declared effective under the 1933 Act and such
        Securities and such Common Shares, as applicable, shall have been
        disposed of pursuant to such Resale Registration Statement, (ii) when
        such Securities and such Common Shares are saleable to the public
        pursuant to Rule 144(k) (or any similar provision then in force, but not
        Rule 144A) under the 1933 Act or (iii) when such Securities and such
        Common Shares shall have ceased to be outstanding or (iv) on May 29,
        2003.

                "Registration Default" shall have the meaning set forth in
        Section 2(c) hereof.

                "Registration Expenses" shall mean any and all expenses incident
        to performance of or compliance by the Company with this Agreement,
        including without limitation: (i) all SEC, stock exchange or National
        Association of Securities Dealers, Inc. registration and filing fees,
        (ii) all fees and expenses incurred in connection with compliance with
        state securities or blue sky laws (including reasonable fees and
        disbursements of counsel for any Underwriters or Holders in connection
        with blue sky qualification of any of the Registrable Securities), (iii)
        all expenses of any Persons in preparing or assisting in preparing, word
        processing, printing and distributing the Resale Registration Statement,
        any Prospectus, any amendments or supplements thereto, any underwriting
        agreements, securities sales agreements and other documents relating to
        the performance of and compliance with this Agreement, (iv) all rating
        agency fees, if any, (v) the fees and disbursements of the Transfer
        Agent and its counsel, if any, (vi) the fees and disbursements of
        counsel for the Company, the fees and disbursements of one counsel for
        the Electing Holders (which counsel shall be selected by the Electing
        Holders holding a majority of the Registrable Securities and which
        counsel may also be counsel for the Initial Purchaser) and in the case
        of an Underwritten Offering, the fees and disbursements of one counsel
        for the Electing Holders (which counsel shall be selected by a plurality
        of the Electing Holders (which plurality shall be not less than 25% of
        the Registrable Securities to be included in such Underwritten Offering
        to represent them in connection therewith and which counsel may also be
        counsel for the Initial Purchaser) and (vii) the fees and disbursements
        of the independent public accountants of the Company, including the
        expenses of any special audits or "cold comfort" letters required by or
        incident to such performance and compliance, but excluding fees and
        expenses of counsel to the Underwriters (other than fees and expenses
        set forth in clause (ii) above) or the Electing Holders and underwriting
        discounts and commissions and transfer taxes, if any, relating to the
        sale or disposition of Registrable Securities by an Electing Holder.

                "Resale Registration Statement" shall have the meaning set forth
        in Section 2(a) hereof.

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                "SEC" shall mean the Securities and Exchange Commission.

                "Transfer Agent" shall mean First Chicago Trust Company of New
        York, or such other transfer agent as shall be appointed by the Company
        from time to time as transfer agent for the Common Shares, and who is
        designated as such in a written notice sent by the Company to the
        Holders.

                "Underwriters" shall have the meaning set forth in Section 3(D)
        hereof.

                "Underwritten Registration" or "Underwritten Offering" shall
        mean a registration in which Registrable Securities are sold to an
        Underwriter for reoffering to the public.

                2.      Registration Under the 1933 Act.

                (a)     The Company shall file as soon as practicable after the
Closing Date a Resale Registration Statement (the "Resale Registration
Statement") providing for the offer and sale of the Registrable Securities. The
Company shall use its best efforts:

                (i)     to cause such Resale Registration Statement to be
        declared effective by the SEC as promptly as is practicable after filing
        and in any event, by November 30, 2001; provided, however, that no
        Holder shall be entitled to be named as a selling security holder in the
        Resale Registration Statement or to use the Prospectus forming a part
        thereof for resales of Registrable Securities unless such Holder is an
        Electing Holder;

                (ii)    to keep the Resale Registration Statement continuously
        effective (subject to the last sentence of Section 3(A)(k) and 3(C)
        hereof) until the earlier of (w) the expiration of the period referred
        to in Rule 144(k) (or any successor provision thereto) with respect to
        all Registrable Securities held by Persons that are not Affiliates of
        the Company, (x) such time as all of the Registrable Securities covered
        by the Resale Registration Statement have been sold pursuant to the
        Resale Registration Statement, (y) the date on which all Registrable
        Securities have ceased to be outstanding as such and (z) May 29, 2003
        (the "Effectiveness Period");

                (iii)   upon receipt of a properly completed Notice and
        Questionnaire, after the Effective Time of the Resale Registration
        Statement (subject to Section 3(A)(k) hereof) and promptly upon the
        request of any Electing Holder of Registrable Securities to take any
        action reasonably necessary to enable such Electing Holder to use the
        Prospectus forming a part thereof for resales of Registrable Securities,
        including, without limitation, any action necessary to identify such
        Electing Holder as a selling security holder in the Resale Registration
        Statement; provided, however, that nothing in this subparagraph shall
        relieve such Electing Holder of the obligation to return a properly
        completed and signed Notice and Questionnaire to the Company in
        accordance with Section 3(A)(a)(ii) hereof; and

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                (iv)    if at any time prior to the end of the Effectiveness
        Period the Registrable Securities, pursuant to the Indenture, are
        convertible into securities other than Common Shares, the Company shall,
        or shall cause any successor under the Indenture to, cause such
        securities to be included in the Resale Registration Statement no later
        than the date on which the Registrable Securities may then be
        convertible into such securities.

                The Company further agrees to supplement or amend the Resale
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Resale
Registration Statement or by the 1933 Act or by any other rules and regulations
thereunder for shelf registration or if reasonably requested by an Electing
Holder with respect to information timely furnished to the Company in writing
by, and relating to such Electing Holder, and to use its best efforts to cause
any such amendment to become effective and such Resale Registration Statement to
become usable as soon as thereafter practicable. The Company agrees to furnish
to the Electing Holders of Registrable Securities a reasonable number of copies
of any such supplement or amendment promptly after its being used or filed with
the SEC.

                (b)     The Company shall pay all Registration Expenses in
connection with the registration pursuant to Sections 2 and 3. Each Electing
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Electing Holder's
Registrable Securities pursuant to the Resale Registration Statement.

                (c)     A Resale Registration Statement pursuant to Section 2(a)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Resale
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Resale Registration Statement will be deemed not to have become effective during
the period of such interference until the offering of Registrable Securities
pursuant to such Resale Registration Statement may legally resume. As provided
for in the Indenture, in the event (w) the Resale Registration Statement with
respect to all Registrable Securities is not declared effective on or prior to
November 30, 2001, (x) prior to the end of the Effectiveness Period the
Prospectus is unavailable (including pursuant to any suspension under Section
3(A)(k)) for periods in excess of those specified in Section 3(C)), (y) the
Company fails to make any filing within the periods required under Section
3(A)(a)(ii)(x), or (z) any filing required pursuant to Section 3(A)(a)(ii)(y) is
a post-effective amendment required to be declared effective under the 1933 Act
and such amendment is not declared effective within 45 days of the filing
thereof (each, a "Registration Default"), then the Company shall pay liquidated
damages ("Liquidated Damages Amount") to the Holders of Securities and Common
Shares (but in the case of any Registration Default described in clauses (x),
(y) and (z), such Liquidated Damages Amount shall only be paid to the Electing
Holders of Securities and Common Shares that are Registrable Securities and that
are, by reason of such Registration Default, not entitled (or legally permitted)
to effect sales of such Registrable Securities pursuant to the Resale
Registration Statement) from and including the day on which such Registration
Default first occurs to (but excluding) the day on which such Registration
Default is cured. Such Liquidated Damages Amount shall accrue (i) in respect of
any such Securities that are Registrable Securities, at a rate per annum equal
to 0.5% of the principal amount of such Securities and (ii) in respect of any
Common Shares that are

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Registrable Securities, at a rate per annum equal to 0.5% of the product of the
number of such Common Shares multiplied by the then applicable Conversion Price.

                (d)     Without limiting the remedies available to the Initial
Purchaser and the Electing Holders, the Company acknowledges that any failure by
the Company to comply with its obligations under Section 2(a) hereof may result
in material irreparable injury to the Initial Purchaser or the Electing 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 Electing Holder may obtain such relief as
may be required to specifically enforce the Company's obligations under Section
2(a) hereof.

                3.      Registration Procedures.

                (A)     In connection with the obligations of the Company with
respect to the Resale Registration Statement pursuant to Section 2(a) hereof
(and subject to Section 3(A)(k) hereof), the Company shall as expeditiously as
possible:

                (a)     (i) on the date of the Filing Notice, mail the Notice
        and Questionnaire to the Holders of Registrable Securities as of such
        date. Any Person that acquires any Registrable Securities from an
        Electing Holder in compliance with the applicable provisions of the
        Indenture (excluding any Registrable Securities that were not identified
        in the Notice and Questionnaire delivered by such Electing Holder) will
        be entitled to have such Registrable Securities included in the Resale
        Registration Statement so long as such transferee provides the Company
        with an updated Notice and Questionnaire. If any such Electing Holder's
        or transferee's Notice and Questionnaire is received on or prior to the
        fifth business day prior to the Effective Time, such Electing Holder or
        transferee will be entitled to have such Electing Holder's or
        transferee's Registrable Securities included in the Resale Registration
        Statement at the Effective Time; provided, however, Holders of
        Registrable Securities shall have 30 calendar days from the date on
        which the Notice and Questionnaire is first mailed to such Holders to
        return a completed and signed Notice and Questionnaire to the Company;
        if such Electing Holder's or transferee's Notice and Questionnaire is
        received subsequent to such fifth business day, the Registrable
        Securities covered by such Notice and Questionnaire will be included in
        the Resale Registration Statement reasonably promptly after receipt
        (which date of inclusion may be subsequent to the Effective Time), as
        provided in Section 3(A)(a)(ii) below. No Holder shall be entitled to be
        named as a selling security holder in the Resale Registration Statement
        as of the Effective Time and no Holder shall be entitled to use the
        Prospectus forming a part thereof for resales of Registrable Securities
        at any time, unless such Holder has returned a completed and signed
        Notice and Questionnaire to the Company by the deadline for response set
        forth therein.

                (ii)    After the Effective Time of the Resale Registration
        Statement and prior to the end of the Effectiveness Period, the Company
        shall, upon the request of any Holder of Registrable Securities that is
        not then an Electing Holder, promptly send a Notice and Questionnaire to
        such Holder. The Company shall not be required to take any action to
        name such Holder as a selling security holder in the Resale Registration
        Statement or to enable

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        such Holder to use the Prospectus forming a part thereof for resales of
        Registrable Securities until such holder has returned a properly
        completed and signed Notice and Questionnaire to the Company. Upon
        receipt of a properly completed and signed Notice and Questionnaire,
        together with such other information as may be reasonably requested by
        the Company, from a Holder following the Effective Time and prior to the
        end of the Effectiveness Period, the Company will (x) as promptly as
        practicable but in any event within five business days of such receipt,
        file such amendments to the Resale Registration Statement or supplements
        to the Prospectus as are necessary to permit such holder to deliver the
        Prospectus to purchasers of Registrable Securities (subject to the
        Company's right to suspend the use of the Prospectus as provided in
        Section 3(C) hereof) and (y) if a post-effective amendment to the Resale
        Registration Statement is required to be declared effective under the
        Securities Act, use its best efforts to cause such amendment to be
        declared effective within 45 days of the filing thereof;

                (b)     prepare and file with the SEC the Resale Registration
        Statement on the appropriate form under the 1933 Act (x) which form
        shall be selected by the Company, (y) which form shall be available for
        the sale of the Registrable Securities by the Electing Holders and (z)
        which Resale Registration Statement and any amendment thereto and the
        Prospectus forming part thereof and any amendment or supplement thereto
        (and each other document incorporated therein by reference in each case)
        shall comply as to form in all material respects with the 1933 Act and
        the 1934 Act and the respective rules and regulations thereunder and
        shall include (or incorporate by reference) all financial statements
        required by the SEC to be filed therewith, and use its best efforts to
        cause such Resale Registration Statement to become effective and remain
        effective in accordance with Section 2 hereof;

                (c)     promptly take such action as may be necessary so that
        (x) each of the Resale Registration Statement and any amendment thereto
        does not, when it becomes effective, contain an untrue statement of a
        material fact or omit to state a material fact required to be stated
        therein or necessary to make the statements therein not misleading and
        (y) each of the Prospectus forming part of the Resale Registration
        Statement, and any amendment or supplement to such Prospectus, does not
        at any time during the Effectiveness Period in which such Prospectus or
        amendment or supplement thereto is furnished and available for use as
        provided herein, include an untrue statement of a material fact or omit
        to state a material fact necessary in order to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading;

                (d)     prepare and file with the SEC such amendments and
        post-effective amendments to the Resale Registration Statement as may be
        necessary to keep such Resale Registration Statement effective for the
        Effectiveness Period and cause each Prospectus to be supplemented by any
        required prospectus supplement and, as so supplemented, to be filed
        pursuant to Rule 424 under the 1933 Act; to keep each Prospectus current
        during the period described under Section 4(3) and Rule 174 under the
        1933 Act that is applicable to transactions by brokers or dealers with
        respect to the Registrable Securities;

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                (e)     (i) furnish to each Electing Holder of Registrable
        Securities, to counsel for the Initial Purchaser, to counsel for the
        Electing Holders and to each Underwriter of an Underwritten Offering of
        Registrable Securities, if any, without charge, as many copies, as
        reasonable, of each Prospectus, including each preliminary Prospectus,
        and any amendment or supplement thereto and such other documents as such
        Holder or Underwriter may reasonably request, in order to facilitate the
        public sale or other disposition of the Registrable Securities and (ii)
        if requested, promptly include or incorporate in a Prospectus supplement
        or post-effective amendment to the Resale Registration Statement such
        information as the Underwriters reasonably agree should be included
        therein (provided that such information is timely furnished to the
        Company in writing for inclusion therein (A) by any underwriter,
        concerning such underwriter, the underwriting arrangements or similar
        matters or (B) by any Electing Holder, relating to such Electing Holder
        or such holder's participation in the Underwritten Offering), and to
        which the Company does not reasonably object and make all required
        filings of such Prospectus supplement or post-effective amendment as
        soon as practicable after the Company is notified of (and furnished
        appropriate information in writing concerning) the matters to be
        included or incorporated in such Prospectus supplement or post-effective
        amendment; and the Company consents to the use of such Prospectus and
        any amendment or supplement thereto (except during the continuance of
        any event described in Section 3(A)(g)(vii) or during any period
        specified in Section 3(C)) in accordance with applicable law by each of
        the selling Electing Holders of Registrable Securities and any such
        Underwriters in connection with the offering and sale of the Registrable
        Securities covered by and in the manner described in such Prospectus or
        any amendment or supplement thereto in accordance with applicable law;

                (f)     register or qualify the Registrable Securities under all
        applicable state securities or "blue sky" laws of such jurisdictions as
        any Electing Holder of Registrable Securities covered by the Resale
        Registration Statement shall reasonably request in writing by the time
        the Resale Registration Statement is declared effective by the SEC, to
        cooperate with such Holder in connection with any filings required to be
        made with the National Association of Securities Dealers, Inc. and do
        any and all other acts and things which may be reasonably necessary or
        advisable to enable such Electing Holder to consummate the disposition
        in each such jurisdiction of such Registrable Securities owned by such
        Electing Holder; provided, however, that the Company shall not be
        required to (i) qualify as a foreign corporation or as a dealer in
        securities in any jurisdiction where it would not otherwise be required
        to qualify but for this Section 3(f), (ii) file any general consent to
        service of process or (iii) subject itself to taxation in any such
        jurisdiction if it is not so subject;

                (g)     notify the Purchaser Representative, counsel for the
        Electing Holder and counsel for the Initial Purchaser promptly and, if
        requested by any such Purchaser Representative or counsel, confirm such
        advice in writing (i) when the Resale Registration Statement and any
        amendment thereto has been filed with the SEC (a "Filing Notice") and
        when the Resale Registration Statement or any post-effective amendment
        thereto has become effective, in each case making a public announcement
        thereof by release made to Reuters Economic Services and Bloomberg
        Business News, (ii) of any request by the SEC or any state securities
        authority for amendments and supplements to the Resale Registration

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        Statement and Prospectus or for additional information after the Resale
        Registration Statement has become effective, (iii) of the issuance by
        the SEC or any state securities authority of any stop order suspending
        the effectiveness of the Resale Registration Statement or the initiation
        of any proceedings for that purpose, (iv) if, between the effective date
        of the Resale Registration Statement and the closing of any sale of
        Registrable Securities covered thereby, the representations and
        warranties of the Company contained in any underwriting agreement,
        securities sales agreement or other similar agreement, if any, relating
        to the offering cease to be true and correct in all material respects or
        if the Company receives any notification with respect to the suspension
        of the qualification of the Registrable Securities for sale in any
        jurisdiction or the initiation of any proceeding for such purpose, (v)
        of the receipt by the Company of any notification with respect to the
        suspension of the qualification of the Registrable Securities included
        in the Resale Registration Statement for sale in any jurisdiction or the
        initiation of any proceeding for such purpose, (vi) of the happening of
        any event during the period the Resale Registration Statement is
        effective which makes any statement made in such Resale Registration
        Statement or the related Prospectus untrue in any material respect or
        which requires the making of any changes in such Resale Registration
        Statement or Prospectus in order to make the statements therein not
        misleading and (vii) of any determination by the Company that a
        post-effective amendment to the Resale Registration Statement would be
        appropriate;

                (h)     make every reasonable effort to prevent the issuance
        and, if issued to obtain the withdrawal of, any order suspending the
        effectiveness of the Resale Registration Statement at the earliest
        possible moment and provide immediate notice to each Electing Holder of
        the withdrawal of any such order;

                (i)     upon request, furnish to each Electing Holder of
        Registrable Securities, without charge, at least one conformed copy of
        the Resale Registration Statement and any post-effective amendment
        thereto (without documents incorporated therein by reference or exhibits
        thereto, unless requested);

                (j)     cooperate with the selling Electing Holders of
        Registrable Securities to facilitate the timely preparation and delivery
        of certificates representing Registrable Securities to be sold and not
        bearing any restrictive legends and enable such Registrable Securities
        to be in such denominations (consistent with the provisions of the
        Indenture) and registered in such names as the selling Electing Holders
        may reasonably request at least two business days prior to the closing
        of any sale of Registrable Securities;

                (k)     upon the occurrence of any event contemplated by Section
        3(g)(vi) hereof, use its best efforts to prepare and file with the SEC a
        supplement or post-effective amendment to the Resale Registration
        Statement or the related Prospectus or any document incorporated therein
        by reference or file any other required document so that, as thereafter
        delivered to the purchasers of the Registrable Securities, such
        Prospectus will not contain any untrue statement of a material fact or
        omit to state a material fact necessary to make the statements therein,
        in light of the circumstances under which they were made, not
        misleading. The Company agrees to notify the Purchaser Representative to
        suspend use of

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        the Prospectus as promptly as practicable after the occurrence of such
        an event, and the Electing Holders will not be permitted to use the
        Prospectus until the Company has amended or supplemented the Prospectus
        to correct such misstatement or omission;

                (l)     a reasonable time prior to the filing of the Resale
        Registration Statement, any Prospectus, any amendment to the Resale
        Registration Statement or amendment or supplement to a Prospectus or any
        document which is to be incorporated by reference into the Resale
        Registration Statement (other than filings pursuant to the 1934 Act) or
        a Prospectus after the initial filing of the Resale Registration
        Statement, provide upon request a reasonable number of copies of such
        document to the Initial Purchaser, its counsel, the Purchaser
        Representative or its counsel and make such of the representatives of
        the Company as shall be reasonably requested by the Initial Purchaser,
        its counsel, the Electing Holders or their counsel available for
        discussion of such document, and shall not at any time file or make any
        amendment to the Resale Registration Statement, any Prospectus or any
        amendment of or supplement to the Resale Registration Statement or a
        Prospectus or any document which is to be incorporated by reference into
        the Resale Registration Statement (other than filings pursuant to the
        1934 Act) or a Prospectus, of which the Initial Purchaser, its counsel,
        the Purchaser Representative and its counsel shall not have previously
        been advised and furnished a copy or to which the Initial Purchaser, its
        counsel, the Purchaser Representative or its counsel shall object;

                (m)     obtain a CUSIP number for the Securities not later than
        the effective date of the Resale Registration Statement;

                (n)     use its best efforts to comply with all applicable rules
        and regulations under the 1933 Act and the 1934 Act, and to make
        generally available to its security holders as soon as practicable, but
        in any event not later than eighteen months after (i) the Effective
        Time, (ii) the effective date of each post-effective amendment to the
        Resale Registration Statement, and (iii) the date of each filing by the
        Company with the SEC of an Annual Report on Form 10-K that is
        incorporated by reference in the Resale Registration Statement, an
        earning statement of the Company and its subsidiaries complying with
        Section 11(a) of the 1933 Act and the rules and regulations of the SEC
        thereunder (including, at the option of the Company, Rule 158);

                (o)     (i) make available for inspection by the Purchaser
        Representative, any Underwriter participating in any disposition
        pursuant to the Resale Registration Statement, and attorneys and
        accountants designated by the Electing Holders, at reasonable times and
        in a reasonable manner, all financial and other records, pertinent
        documents and properties of the Company, and cause the respective
        officers, directors and employees of the Company to supply all
        information reasonably requested by any such Purchaser Representative,
        Underwriter, attorney or accountant in connection with the Resale
        Registration Statement and (ii) cause the Company's officers, directors
        and employees to supply all information reasonably requested by such
        Purchaser Representative, Underwriter, attorney or accountant in
        connection with the Resale Registration Statement, in each case, as is
        customary for similar due diligence examinations; provided, however,
        that all records, information and

                                       10
<PAGE>   12

        documents that are designated in writing by the Company, in good faith,
        as confidential shall be kept confidential by such Electing Holders and
        any such Purchaser Representative, Underwriter, attorney or accountant,
        unless such disclosure is made in connection with a court proceeding or
        required by law, or such records, information or documents become
        available to the public generally or through a third party without an
        accompanying obligation of confidentiality; and provided further that,
        if the foregoing inspection and information gathering would otherwise
        disrupt the Company's conduct of its business, such inspection and
        information gathering shall, to the greatest extent possible, be
        coordinated on behalf of the Electing Holders through a single counsel
        and the other parties entitled thereto by one counsel designated by and
        on behalf of Electing Holders and other parties;

                (p)     use its best efforts to cause all Common Shares to be
        listed on any securities exchange or any automated quotation system on
        which similar securities issued by the Company are then listed, to the
        extent such Common Shares satisfy applicable listing requirements on or
        prior to the Effective Time;

                (q)     use its best efforts to cause the Securities to be rated
        by two nationally recognized statistical rating organizations (as such
        term is defined in Rule 436(g)(2) under the 1933 Act);

                (r)     if reasonably requested by any Electing Holder of
        Registrable Securities covered by the Resale Registration Statement, (i)
        promptly incorporate in a Prospectus supplement or post-effective
        amendment such information with respect to such Electing Holder as such
        Electing Holder furnished in writing to the Company to be included
        therein and (ii) make all required filings of such Prospectus supplement
        or such post-effective amendment as soon as the Company has received
        notification of the matters to be incorporated in such filing;

                (s)     enter into such customary agreements and take all such
        other actions in connection therewith (including those requested by the
        Electing Holders of a majority of the Registrable Securities being sold)
        in order to expedite or facilitate the disposition of such Registrable
        Securities including, but not limited to, an Underwritten Offering and
        in such connection, (i) if an underwriting agreement is entered into,
        cause the same to contain indemnification provisions and procedures
        substantially identical to those set forth in Section 4 hereof with
        respect to all parties to be indemnified pursuant to Section 4 hereof,
        (ii) to the extent possible, make such representations and warranties to
        the Holders and any Underwriters of such Registrable Securities with
        respect to the business of the Company and its subsidiaries, the Resale
        Registration Statement, Prospectus and documents incorporated by
        reference or deemed incorporated by reference, if any, in each case, in
        form, substance and scope as are customarily made by issuers to
        underwriters in underwritten offerings and confirm the same if and when
        requested, (iii) obtain opinions of counsel to the Company (which
        counsel and opinions, in form, scope and substance, shall be reasonably
        satisfactory to the Electing Holders and such Underwriters and their
        respective counsel) addressed to each selling Electing Holder and
        Underwriter of Registrable Securities, covering the matters customarily
        covered in opinions requested in underwritten offerings, (iv) obtain
        "cold

                                       11
<PAGE>   13

        comfort" letters from the independent certified public accountants of
        the Company (and, if necessary, any other certified public accountant of
        any subsidiary of the Company, or of any business acquired by the
        Company for which financial statements and financial data are or are
        required to be included in the Resale Registration Statement) addressed
        to each selling Electing Holder and Underwriter of Registrable
        Securities, such letters to be in customary form and covering matters of
        the type customarily covered in "cold comfort" letters in connection
        with underwritten offerings, and (v) deliver such documents and
        certificates as may be reasonably requested by the Electing Holders of a
        majority of the Registrable Securities being sold or the Underwriters,
        and which are customarily delivered in underwritten offerings, to
        evidence the continued validity of the representations and warranties of
        the Company made pursuant to clause (ii) above and to evidence
        compliance with any customary conditions contained in an underwriting
        agreement; and

                (t)     in the event that any broker-dealer registered under the
        1934 Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the
        NASD Rules (or any successor provision thereto)) of the Company or has a
        "conflict of interest" (as defined in Rule 2720(b)(7) of the NASD Rules
        (or any successor provision thereto)) and such broker-dealer shall
        underwrite, participate as a member of an underwriting syndicate or
        selling group or assist in the distribution of any Registrable
        Securities covered by the Resale Registration Statement, whether as a
        holder of such Registrable Securities or as an underwriter, a placement
        or sales agent or a broker or dealer in respect thereof, or otherwise,
        the Company shall assist such broker-dealer in complying with the
        requirements of the NASD Rules, including, without limitation, by (i)
        engaging a "qualified independent underwriter" (as defined in Rule
        2720(b)(15) of the NASD Rules (or any successor provision thereto)) to
        participate in the preparation of the Resale Registration Statement, to
        exercise usual standards of due diligence in respect thereto and to
        recommend the public offering price of such Registrable Securities, (ii)
        indemnifying such qualified independent underwriter to the extent of the
        indemnification of underwriters provided in Section 4 hereof, and (iii)
        providing such information to such broker-dealer as may be required in
        order for such broker-dealer to comply with the requirements of the NASD
        Rules.

                (B)     The Company may require each Electing Holder of
Registrable Securities to furnish to the Company in writing such information
regarding the Holder and the proposed distribution by such Electing Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.

                (C)     Each Electing Holder agrees that, upon receipt of any
notice from the Company or being advised by the Purchaser Representative of the
happening of any event of the kind described in Section 3(A)(g)(vi) hereof, such
Electing Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Resale Registration Statement until such Electing Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(A)(k) hereof, and, if so directed by the Company or by the Purchaser
Representative such Electing Holder will deliver to the Company (at its expense)
all copies in its possession, other than permanent file copies then in such
Electing Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. The Company will be

                                       12
<PAGE>   14

permitted to suspend the use of the Prospectus (x) in connection with pending
corporate developments, public filings with the SEC and similar events, for a
period not to exceed 30 days in any three-month period or an aggregate of 90
days (whether or not consecutive) in any twelve-month period or (y) in
connection with any pending or potential acquisitions, financings or similar
transactions, for a period not to exceed 60 days in any three-month period or 90
days (whether or not consecutive) in any twelve-month period.

                In the event use of the Prospectus is suspended due to the
occurrence of any event described in Subsection 3(A)(g)(vi), the Company shall
deliver written notice thereof to the Purchaser Representative as promptly as
practicable thereafter. Absence of the receipt of any such notice by the
Purchaser Representative shall constitute a deemed representation by the Company
to the Purchaser Representative and the Electing Holders that no such suspension
is in effect. Prior to selling Registrable Securities pursuant to the Resale
Registration Statement an Electing Holder must, at any time during the
Effectiveness Period, contact the Company Representative or the Purchaser
Representative in order to determine whether the Prospectus is available for use
at such time. The Company shall comply with the procedures set forth in Annex II
hereto with respect to notification of the Purchaser Representative as to the
availability for use of any Resale Registration Statement.

                (D)     The Electing Holders whose Registrable Securities are
covered by the Resale Registration Statement who desire to do so may sell such
Registrable Securities in an Underwritten Offering with the prior written
consent of the Company, which shall not be unreasonably withheld. Upon receipt
of such a request, and if the Company consents, the Company shall provide all
Holders of Registrable Securities written notice of the request, which notice
shall inform such Holders that they have the opportunity to participate in the
offering. In any such Underwritten Offering, the investment banker or investment
bankers and manager or managers (the "Underwriters") that will administer the
offering will be selected by the Electing Holders holding the majority of the
Registrable Securities to be included in such offering. No Holder that is not an
Electing Holder may participate in any Underwritten Offering and no Electing
Holder may participate in any Underwritten Offering contemplated hereby unless
(i) such Electing Holder agrees to sell such Holder's Registrable Securities to
be included in the Underwritten Offering in accordance with any approved
underwriting arrangements, (ii) such Holder completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements, and (iii) if such Holder is not then an
Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(A)(a)(i) hereof within
a reasonable amount of time before such Underwritten Offering. The Electing
Holders participating in any Underwritten Offering shall be responsible for any
underwriting discounts and commissions and fees. The Company shall pay all
expenses customarily borne by issuers, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such Underwritten Offering.
Notwithstanding the foregoing or the provisions of Section 3(A)(e)(ii) hereof,
upon receipt of a request from the Underwriters or a representative of the
Electing Holders holding a majority of the Registrable Securities to be included
in an Underwritten Offering to prepare and file an amendment or supplement to
the Resale Registration Statement and Prospectus in connection with an
Underwritten Offering, the Company may delay the filing of any such amendment or
supplement for up to 90 days if the Board of Directors of the

                                       13
<PAGE>   15

Company shall have determined in good faith that the Company has a bona fide
business reason for such delay.

                4       Indemnification and Contribution.

                (a)     The Company agrees to indemnify and hold harmless the
Initial Purchaser, each Electing Holder and each Person, if any, who controls
the Initial Purchaser or any Electing Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common
control with, or is controlled by, the Initial Purchaser or any Electing Holder,
from and against all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by the Initial
Purchaser, any Electing Holder or any such controlling or affiliated Person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Resale Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, 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, or caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchaser or any
Electing Holder furnished to the Company in writing by the Initial Purchaser or
any selling Electing Holder expressly for use therein; provided, however, that
the foregoing indemnity with respect to any Resale Registration Statement or
Prospectus shall not inure to the benefit of the Initial Purchaser, Electing
Holder or any such controlling Person, with respect to any such losses, claims,
damages or liabilities arising with respect to any person who is a purchaser of
Registrable Securities if a copy of an amended Resale Registration Statement or
amended or supplemented Prospectus (if furnished by the Company) was not sent or
given by or on behalf of the Initial Purchaser or Electing Holder to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of such Registrable Securities to such person, and if
such amended Resale Registration Statement or amended or supplemented Prospectus
would have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company
with Section 3(A)(e)(i) hereof.

In connection with any Underwritten Offering permitted by Section 3(D) of this
Agreement, the Company will also indemnify the Underwriters, if any, selling
brokers, dealers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent
as provided above with respect to the indemnification of the Electing Holders,
if requested in connection with any Resale Registration Statement.

                (b)     Each Electing Holder agrees, severally and not jointly,
to indemnify and hold harmless the Company, the Initial Purchaser and the other
selling Electing Holders, and each of their

                                       14
<PAGE>   16

respective directors, officers who sign the Resale Registration Statement and
each Person, if any, who controls the Company, the Initial Purchaser and any
other selling Electing Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing
indemnity from the Company to the Initial Purchaser and the Electing Holders,
but only with reference to information relating to such Electing Holder
furnished to the Company in writing by such Electing Holder expressly for use in
any Resale Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto).

                (c)     In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchaser and all
Persons, if any, who control the Initial Purchaser within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Resale Registration
Statement and each Person, if any, who controls the Company within the meaning
of either such Section and (c) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Electing Holders and all
Persons, if any, who control any Electing Holders within the meaning of either
such Section, and that all such fees and expenses shall be reimbursed as they
are incurred. In such case involving the Initial Purchaser and Persons who
control the Initial Purchaser, such firm shall be designated by Morgan Stanley &
Co. Incorporated. In such case involving the Electing Holders and such Persons
who control Electing Holders, such firm shall be designated in writing by the
Electing Holders holding a majority of the Registrable Securities. In all other
cases, such firm shall be designated by the Company. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent (which consent shall not be unreasonably withheld) but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request (ii) such

                                       15
<PAGE>   17

indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party for such fees
and expenses of counsel in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (i) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding; provided that such unconditional release may be subject to a
parallel release of a claimant or plaintiff by such indemnified party from all
liability in respect of claims or counterclaims asserted by such indemnified
party 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 such indemnified party.

                (d)     If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Electing Holders 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 Company or by the Electing Holders and the parties
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Electing Holders' obligations to
contribute pursuant to this Section 4(d) are several in proportion to the
principal amount of the Securities and/or the number of Common Shares, as
applicable, of such Electing Holder that were registered pursuant to the Resale
Registration Statement.

                (e)     The Company and each Electing Holder agree that it would
not be just or equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses. claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4, no Electing Holder shall be required to indemnify
or contribute any amount in excess of the amount by which the total price at
which Registrable Securities were sold by such Electing Holder exceeds the
amount of any damages that such Electing 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 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 4 are not

                                       16
<PAGE>   18

exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or at equity.

                The indemnity and contribution provisions contained in this
Section 4 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchaser, any Electing Holder or any Person controlling the
Initial Purchaser or any Electing Holder, or by or on behalf of the Company, its
officers or directors or any Person controlling the Company and (iii) any sale
of Registrable Securities pursuant to the Resale Registration Statement.

                5.      Miscellaneous.

                (a)     Other Registration Rights. The Company may grant
registration rights that would permit any Person that is a third party the right
to piggyback on any Resale Registration Statement; provided that if the
Underwriters of any Underwritten Offering conducted pursuant to Section 3(D)
hereof notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggyback rights
intend to include in any Resale Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggyback rights will be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the Underwriters
prior to any reduction in the amount of Registrable Securities to be included in
such Resale Registration Statement.

                (b)     No Inconsistent Agreements. The Company has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. 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 Company's other issued and outstanding securities under any such agreements.

                (c)     Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Holders of at least a majority of the sum of (a) the aggregate
principal amount in respect of the Securities that are Registrable Securities,
and (b) the product of the number of Common Shares that are Registrable
Securities, multiplied by the then applicable Conversion Price, in either case
that are affected by such amendment, modification, supplement, waiver or
consent; provided, however, that no amendment, modification, supplement, waiver
or consents to any departure from the provisions of Section 4 hereof shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder.

                (d)     Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by

                                       17
<PAGE>   19

such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 5(d), which address initially is, with respect to the
Initial Purchaser, the address set forth in the Purchase Agreement; (ii) if to
the Company, initially at the Company's address set forth in the Purchase
Agreement and thereafter at such other address. notice of which is given in
accordance with the provisions of this Section 5(d) and (iii) if to the
Purchaser Representative at: Morgan Stanley & Co. Incorporated, 1585 Broadway,
New York, New York 10036, Attention: Equity Capital Markets, Telecopier No.
(212) 716-0538.

                All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is 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 Trustee at
BNY Midwest Trust Company, 2 N. LaSalle Street, Suite 1020, Chicago, Illinois
60602, the Transfer Agent, at First Chicago Trust Company of New York, 525
Washington Blvd., Jersey City, NJ 07310 or to such other Trustee or Transfer
Agent as may be appointed by the Company from time to time at the address
indicated in writing by the Company to the Holders.

                (e)     Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees 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 Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable 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 and such person shall be entitled to receive the benefits hereof. The
Initial Purchaser (in its capacity as Initial Purchaser) shall have no liability
or obligation to the Company with respect to any failure by a Holder to comply
with, or any breach by any Holder of, any of the obligations of such Holder
under this Agreement.

                (f)     Purchases and Sales of Registrable Securities. The
Company shall not, and shall use its best efforts to cause its affiliates (as
defined in Rule 405 under the 1933 Act) not to, purchase and then resell or
otherwise transfer any Registrable Securities.

                (g)     Third Party Beneficiary. The Holders shall be third
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchaser, on the other hand, and each Holder shall
have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.

                                       18
<PAGE>   20

                (h)     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.

                (i)     Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                (j)     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to any conflicts or choice of laws principles which otherwise might be
applicable.

                (k)     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.

                                       19
<PAGE>   21

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                           NEXTEL COMMUNICATIONS, INC.

                                           By:
                                              ----------------------------------
                                              Name:
                                              Title:

                                           MORGAN STANLEY & CO. INCORPORATED

                                           By:
                                              ----------------------------------
                                              Name:
                                              Title:

<PAGE>   22

                                                                       EXHIBIT A

                           NEXTEL COMMUNICATIONS, INC.

                             SELLING SECURITY HOLDER
                            NOTICE AND QUESTIONNAIRE

        The undersigned beneficial holder of 6 % Convertible Senior Notes due
2011 (the "Notes") of Nextel Communications, Inc. ("Nextel") or Class A Common
Stock, par value $0.001 issued upon conversion of the Notes (the "Common Stock"
and together with the Notes, the "Registrable Securities"), of Nextel
understands that Nextel has filed or intends to file with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (the
"Resale Registration Statement") for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the "Securities Act"), of the
Registrable Securities in accordance with the terms of the Registration Rights
Agreement, dated as of May 29, 2001 (the "Registration Rights Agreement"), among
Nextel and the Initial Purchaser named therein. A copy of the Registration
Rights Agreement is available from Nextel upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Registration Rights Agreement.

        Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Resale Registration
Statement, a beneficial owner of Registrable Securities generally will be
required to be named as a selling security holder in the related prospectus,
deliver a prospectus to purchasers of Registrable Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below). Beneficial owners that do not complete this Notice and Questionnaire and
deliver it to Nextel as provided below will not be named as selling security
holders in the prospectus and therefore will not be permitted to sell any
Registrable Securities pursuant to the Resale Registration Statement. Beneficial
owners are encouraged to complete and deliver this Notice and Questionnaire
prior to the effectiveness of the Resale Registration Statement so that such
beneficial owners may be named as selling security holders in the related
prospectus at the time of effectiveness. Upon receipt of a completed Notice and
Questionnaire from a beneficial owner following the effectiveness of the Resale
Registration Statement, Nextel will, as promptly as practicable but in any event
within five business days of such receipt, file such amendments to the Resale
Registration Statement or supplements to the related prospectus as are necessary
to permit such holder to deliver such prospectus to purchasers of Registrable
Securities. Nextel has agreed to pay liquidated damages pursuant to the
Registration Rights Agreement under certain circumstances as set forth therein.

        Certain legal consequences arise from being named as a selling security
holder in the Resale Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the

                                       A-1
<PAGE>   23

consequences of being named or not being named as a selling security holder in
the Resale Registration Statement and the related prospectus.

                                     NOTICE

        The undersigned beneficial owner (the "Selling Security Holder") of
Registrable Securities hereby gives notice to Nextel of its intention to sell or
otherwise dispose of Registrable Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3) pursuant to the Resale
Registration Statement. The undersigned, by signing and returning this Notice
and Questionnaire and the Registration Rights Agreement, understands that it
will be bound by the terms and conditions of this Notice and Questionnaire and
the Registration Rights Agreement.

        Pursuant to the Registration Rights Agreement, the undersigned has
agreed to indemnify and hold harmless Nextel, Nextel's directors, Nextel's
officers who sign the Resale Registration Statement and each person, if any, who
controls Nextel within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against certain losses arising in connection with statements
concerning the undersigned made in the Resale Registration Statement or the
related prospectus in reliance upon the information provided in this Notice and
Questionnaire as if such Selling Security Holder were an original party thereto.

                The Selling Security Holder understands and agrees that neither
Nextel nor the Transfer Agent shall have any obligation to take any action to
register the transfer of any Registrable Securities, unless and until a properly
completed and signed Notice of Transfer has been delivered to each of Nextel and
the Transfer Agent.

        The undersigned hereby provides the following information to Nextel,
authorizes Nextel to include such information (without independently verifying
the accuracy or completeness thereof) in the Resale Registration Statement
and/or other documents prepared or filed in connection therewith or in
connection with sales of Registrable Securities thereunder, and represents and
warrants that such information is accurate and complete:

                                  QUESTIONNAIRE

 .       (a)     Full Legal Name of Selling Security Holder:

                                      A-2
<PAGE>   24

                        --------------------------------------------------------

        (b)     Full Legal Name of Registered Holder (if not the same as (a)
                above) through which Registrable Securities listed in (3) below
                are held:

                        --------------------------------------------------------

        (c)     Full Legal Name of Registered Holder (if not the same as (a)
                above) through which Registrable Securities listed in (3) are
                held:

                        --------------------------------------------------------

 .       Address for Notices to Selling Security Holder:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Telephone:
          ----------------------------------------------------------------------

Fax:
    ----------------------------------------------------------------------------

Contact Person:
               -----------------------------------------------------------------

3.      Beneficial Ownership of Registrable Securities:

        (a)     Type and Principal Amount of Registrable Securities Beneficially
                Owned:

                        --------------------------------------------------------

                        --------------------------------------------------------

        (b)     CUSIP No(s). of Such Registrable Securities Beneficially Owned:

                        --------------------------------------------------------

                                      A-3
<PAGE>   25
                        --------------------------------------------------------

4.      Beneficial Ownership of Nextel Securities Owned by the Selling Security
        Holder.

        Except as set forth below in this Item (4), the undersigned is not the
        beneficial or registered owner of any securities of Nextel other than
        the Registrable Securities listed above in Item (3).

        (a)     Type and Amount of Other Securities Beneficially Owned by the
                Selling Security Holder:

                        --------------------------------------------------------

                        --------------------------------------------------------

        (b)     CUSIP No(s). of Such Other Securities Beneficially Owned:

                        --------------------------------------------------------

                        --------------------------------------------------------

5.      Relationship with Nextel:

        Except as set forth below, neither the undersigned nor any of its
        affiliates, officers, directors or principal equity holders (5% or more)
        has held any position or office or has had any other material
        relationship with Nextel (or its predecessors or affiliates) during the
        past three years.

        State any exceptions here:

                        --------------------------------------------------------

                        --------------------------------------------------------

                        --------------------------------------------------------

6.      Plan of Distribution:

        Except as set forth below, the undersigned (including its donees or
        pledgees) intends to distribute the Registrable Securities listed above
        in Item (3) pursuant to the Resale

                                       A-4
<PAGE>   26

        Registration Statement only as follows (if at all): Such Registrable
        Securities may be sold from time to time directly by the undersigned or,
        alternatively, through underwriters, broker-dealers or agents. If the
        Registrable Securities are sold through underwriters or broker-dealers,
        the Selling Security Holder will be responsible for underwriting
        discounts or commissions or agent's commissions. Such Registrable
        Securities may be sold in one or more transactions at fixed prices, at
        prevailing market prices at the time of sale, at varying prices
        determined at the time of sale, or at negotiated prices. Such sales may
        be effected in transactions (which may involve crosses or block
        transactions) (i) on any national securities exchange or quotation
        service on which the Registrable Securities may be listed or quoted at
        the time of sale, (ii) in the over-the-counter market, (iii) in
        transactions otherwise than on such exchanges or services or in the
        over-the-counter market, or (iv) through the writing of options. In
        connection with sales of the Registrable Securities or otherwise, the
        undersigned may enter into hedging transactions with broker-dealers,
        which may in turn engage in short sales of the Registrable Securities
        and deliver Registrable Securities to close out such short positions, or
        loan or pledge Registrable Securities to broker-dealers that in turn may
        sell such securities.

        State exceptions here:

                        --------------------------------------------------------

                        --------------------------------------------------------

                        --------------------------------------------------------

        NOTE: IN NO EVENT MAY METHOD(S) OF DISTRIBUTION TAKE THE FORM OF AN
        UNDERWRITTEN OFFERING OF THE REGISTRABLE SECURITIES WITHOUT THE PRIOR
        WRITTEN AGREEMENT OF NEXTEL.

        The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable Securities
pursuant to the Resale Registration Statement. The undersigned agrees that
neither it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.

        The Selling Security Holder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein.

        Pursuant to the Registration Rights Agreement, Nextel has agreed under
certain circumstances to indemnify the Selling Security Holders against certain
liabilities.

        In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Resale Registration Statement, the undersigned agrees to
promptly notify Nextel of any inaccuracies or changes in the

                                      A-5
<PAGE>   27

information provided herein that may occur subsequent to the date hereof at any
time while the Resale Registration Statement remains effective. All notices
hereunder and pursuant to the Registration Rights Agreement shall be made in
writing at the address set forth below.

        In the event that the Selling Security Holder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to Nextel, the Selling Security Holder agrees
to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.

        By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Resale Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by Nextel without independent investigation or inquiry in connection
with the preparation or amendment of the Resale Registration Statement and the
related prospectus.

                                      A-6
<PAGE>   28

        IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

Dated:

                                             BENEFICIAL OWNER

                                             By:
                                                --------------------------------
                                                Name:
                                                Title:

            PLEASE RETURN THE COMPLETED AND EXECUTED SELLING SECURITY
                 HOLDER NOTICE AND QUESTIONNAIRE TO NEXTEL AT:

                           NEXTEL COMMUNICATIONS, INC.
                            2001 EDMUND HALLEY DRIVE
                             RESTON, VIRGINIA 20191
                              ATTENTION: SECRETARY

                                      A-7
<PAGE>   29

                                                                      APPENDIX A

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Nextel Communications, Inc.
[c/o First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, New Jersey 07310
Attention:  Corporate Trust Services]

[c/o BNY Midwest Trust Company
2 N. LaSalle Street
Suite 1020
Chicago, Illinois 60602
Attention:  Corporate Trust Services]

                Re:     Nextel Communications, Inc. (the "Company")

                        6% Convertible Senior Notes due 2011 (the "Securities")

        Dear Sirs:

                        Please be advised that _____________________ has
transferred ________ aggregate principal amount of Securities or ____ shares of
the Company's Class A Common Stock, par value $.001 per share (the "Common
Stock"), issued with respect to the Securities pursuant to an effective
Registration Statement on Form [___] (File No. 333-____) filed by the Company.

                        We hereby certify that the prospectus delivery
requirements, if any, of the Securities Act of 1933, as amended, have been
satisfied and that the above-named beneficial owner of the Securities and/or
Common Stock is named as a "Selling Security Holder" in the Prospectus dated
[DATE], or in supplements thereto, and that the aggregate amount of Securities
or number of shares of Common Stock transferred are listed in such Prospectus
opposite such owner's name.

        Dated:

                                                  Very truly yours,

                                                    (Name)

                                            By:
                                                    ----------------------------
                                                    (Authorized Signature)

<PAGE>   30

                                                                        ANNEX II

        Terms used herein that are not defined below are used as defined in the
Registration Rights Agreement to which this Annex is attached, dated May 29,
2001, between Nextel Communications, Inc. and Morgan Stanley & Co. Incorporated.

Each Friday during the Effectiveness Period, the Company Representative will, on
or about 4:00 p.m. Eastern Standard Time, contact the Purchaser Representative
and will inform such Purchaser Representative whether the Resale Registration
Restatement will be available for use throughout the following week (the
"Available Period"). In the event the Company Representative fails to so contact
the Purchaser Representative, the Purchaser Representative will be entitled to
assume that the Resale Registration Statement is not available for use for the
Available Period. If the Company Representative informs such Purchaser
Representative that the Resale Registration Statement is available (or fails to
notify such Purchaser Representative that the Resale Registration Statement is
not available), then unless the Company Representative informs such Purchaser
Representative subsequent to such phone call (or subsequent to the date and time
on which such notice could have been timely provided) that sales under the
Resale Registration Statement must be suspended in accordance with Section
3(A)(k) of the Registration Rights Agreement, sales may be made thereunder. If
the Company Representative informs the Purchaser Representative that the Resale
Registration Statement is not available, then such Company Representative will
also provide written notice of such suspension to such Purchaser Representative.<PAGE>   1
                                                                     EXHIBIT 4.1

                                ZIXIT CORPORATION
                             STOCK OPTION AGREEMENT

Date of Grant                                                  Expiration Date
-------------                                                  ---------------

January 9, 2001                                                January 8, 2011

         THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered into as
of the 9th day of January 2001 by and between ZixIt Corporation, a Texas
corporation (the "Company"), and Steve Gersten ("Optionee").

         WHEREAS, the Company wishes to recognize the contributions of the
Optionee to the Company and to encourage the Optionee's sense of proprietorship
in the Company by owning the Common Stock, par value $.01 per share (the "Common
Stock"), of the Company;

         NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the Company hereby grants to the Optionee a non-qualified
stock option to purchase up to a total of 200,000 shares of the Common Stock at
a price per share of $7.94 (the "Option Price") on the terms and conditions set
forth herein.

1.       DEFINITIONS.

         a. Acquiring Person. An "Acquiring Person" shall mean any person
(including any "person" as such term is used in Sections 13 (d) (3) or 14 (d)
(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
that, together with all Affiliates and Associates of such person, is the
beneficial owner of 10% or more of the outstanding Common Stock. The term
"Acquiring Person" shall not include the Company, any subsidiary of the Company,
any employee benefit plan of the Company or subsidiary of the Company, or any
person to the extent such person is holding Common Stock for or pursuant to the
terms of any such plan. For the purposes of this Agreement, a person who becomes
an Acquiring Person by acquiring beneficial ownership of 10% or more of the
Common Stock at any time after the date of this Agreement shall continue to be
an Acquiring Person whether or not such person continues to be the beneficial
owner of 10% or more of the outstanding Common Stock.

         b. Affiliate and Associate. "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act in effect on the date of this Agreement.

         c. Change in Control. A "Change in Control" of the Company shall have
occurred if at any time during the term of this Agreement any of the following
events shall occur:

         (i)      (a) Any Sale of the Company or (b) any Sale of a Material
                  Subsidiary; or

                                       1
<PAGE>   2

         (ii)     Any Acquiring Person has become the beneficial owner of
                  securities which, when added to any securities already owned
                  by such person, would represent in the aggregate 25% or more
                  of the then-outstanding securities of the Company that are
                  entitled to vote to elect any class of directors;

         (iii)    If at any time, the Continuing Directors then serving on the
                  Board of Directors of the Company cease for any reason to
                  constitute at least a majority thereof; or

         (iv)     Any occurrence that would be required to be reported in
                  response to Item 6(e) of Schedule 14A of Regulation 14A or any
                  successor rule or regulation promulgated under the Exchange
                  Act.

         d. Continuing Director. A "Continuing Director" shall mean a director
of the Company who (i) is not an Acquiring Person or an Affiliate or Associate
thereof, or a representative of an Acquiring Person or nominated for election by
an Acquiring Person, and (ii) was either a member of the Board of Directors of
the Company on the date of this Agreement or subsequently became a director of
the Company and whose initial election or initial nomination for election by the
Company's shareholders was approved by a majority of the Continuing Directors
then on the Board of Directors of the Company.

         e. Disability. "Disability" shall mean any medically determinable
physical or mental impairment that, in the opinion of the Committee, based upon
medical reports and other evidence satisfactory to the Committee, can reasonably
be expected to prevent the Optionee from performing substantially all of his or
her customary duties of employment (with or without reasonable accommodation)
for a continuous period of not less than 12 months.

         f. Material Subsidiary. A "Material Subsidiary" shall mean ZixMail.com,
Inc., a Delaware corporation.

         g. Person. A "Person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an incorporated
organization, or a government or political subdivision thereof and any other
entity. A Person, together with that Person's Affiliates and Associates, and any
Persons acting as a partnership, limited partnership, joint venture,
association, syndicate, or other group (whether or not formally organized), or
otherwise acting jointly or in concert or in a coordinated or consciously
parallel manner (whether or not pursuant to any express agreement), for the
purpose of acquiring, holding, voting, or disposing of securities of the Company
with that Person, shall be deemed a single "Person."

         h. Resignation. "Resignation" shall mean the voluntary termination by
the Optionee of his or her employment relationship with the employing Subsidiary
and, if applicable, Company under circumstances other than voluntary Retirement.

         i. Retirement. "Retirement" shall mean the termination of Optionee's
employment in accordance with the requirements of a written retirement plan,
policy or rule of the Company that has been duly adopted by the Company or
employing Subsidiary, as applicable.

                                       2
<PAGE>   3

         j. Sale. A "Sale" occurs with respect to the Company or a Material
Subsidiary, as applicable, if it engages in a merger, consolidation, or sale,
lease, license, transfer, or other effective disposition of all or substantially
all of the Company's or Material Subsidiary's assets and the Company or its
shareholders or Affiliates immediately before such transaction beneficially own,
immediately after or as a result of such transaction, equity securities of the
surviving or acquiring corporation or such corporation's parent corporation
possessing less than fifty one percent (51%) of the voting power of the
surviving or acquiring Person or such Person's parent corporation, provided that
a Sale shall not be deemed to occur upon any public offering or series of such
offerings of securities of the Company or a Material Subsidiary that results in
any such change in beneficial ownership.

2. TERM OF OPTION. The term of this option shall expire on the date set forth in
the upper right hand corner on page 1 of this Agreement (the "stated term"),
except as such term may be otherwise shortened by the other provisions of the
Plan or this Agreement.

3. EXERCISE OF OPTION.

         a. Exercise. This option shall become exercisable in increments as
follows:

<TABLE>
<CAPTION>
                                                Date Upon Which Right
                      Number of Shares           To Purchase Accrues
                      ----------------          ---------------------
<S>                                             <C>
                           66,667                  January 9, 2002
                           66,667                  January 9, 2003
                           66,666                  January 9, 2004
</TABLE>

         Except as provided in the Plan, the Option shall not be exercisable
unless Optionee shall, at the time of exercise, be an Employee or Director of
the Company or a Subsidiary, and once the Option has become exercisable with
respect to a certain number of shares as provided above, it shall thereafter be
exercisable as to all of that number of shares, or as to any part thereof, until
expiration or termination of this option. However, this option may not be
exercised as to less than 100 shares at any one time (or the remaining shares
then purchasable under this option, if less than 100 shares).

         b. Adjustment. In the event there is any adjustment to the Common Stock
subject to Section 5(b) of the Plan, the Board of Directors or Committee shall
make such adjustment as it deems appropriate to the number of shares subject to
Award or to the Option Price, or both.

         c. Exercise - Change of Control. If the Optionee is still an employee
or director of the Company or a Subsidiary on the date of the occurrence of a
Change of Control, this option shall become exercisable in full on such date and
may be exercised at any time or times thereafter and until expiration or
termination of this option; provided, however, that this option may not be
exercised as to less than 100 shares at any one time (or the remaining shares
then purchasable under this option, if less than 100 shares).

                                       3
<PAGE>   4

         d. Method of Exercise. This option may be exercised only by written
notice (the "Exercise Notice") by the Optionee to the Company at its principal
executive office. The Exercise Notice shall be deemed given when deposited in
the U. S. mails, postage prepaid, addressed to the Company at its principal
executive office, or if given other than by deposit in the U.S. mails, when
delivered in person to an officer of the Company at that office. The date of
exercise of this option (the "Exercise Date") shall be the date of the postmark
if the notice is mailed or the date received if the notice is delivered other
than by mail. The Exercise Notice shall state the number of shares in respect of
which this option is being exercised and, if the shares for which this option is
being exercised are to be evidenced by more than one stock certificate, the
denominations in which the stock certificates are to be issued. The Exercise
Notice shall be signed by the Optionee and shall include the complete address of
such person, together with such person's social security number.

         This option may be exercised either by tendering cash in the amount of
the Option Price or, with the Company's consent, subject to compliance with
applicable requirements of Section 16(b) under the Exchange Act, by tendering
shares of Common Stock (which may include shares previously acquired upon
exercise of options granted under the Plan). The Exercise Notice shall be
accompanied by payment of the aggregate Option Price of the shares purchased by
cash, a certified cashier's check or, at the Company's option, by delivery of
shares of Common Stock having a Fair Market Value on the date immediately
preceding the exercise date equal to the Option Price.

         If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended, any option granted under
the Plan may be exercised by a broker-dealer acting on behalf of an Optionee if
(a) the broker-dealer has received from the Optionee or the Company a fully- and
duly-endorsed agreement evidencing such option, together with instructions
signed by the Optionee requesting the Company to deliver the shares of Common
Stock subject to such option to the broker-dealer on behalf of the Optionee and
specifying the account into which such shares should be deposited, (b) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise, and (c) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.

         The certificates for shares of Common Stock as to which this option
shall have been so exercised shall be registered in the name of the Optionee and
shall be delivered to the Optionee at the address specified in the Exercise
Notice. An option exercise shall be valid only if the Optionee makes payment or
other arrangements relating to the withholding tax obligations discussed in
Paragraph 8. In the event the person exercising this option is a transferee of
the Optionee by will or under the laws of descent and distribution, the Exercise
Notice shall be accompanied by appropriate proof of the right of such transferee
to exercise this Option.

                                       4
<PAGE>   5

4.       TERMINATION OF OPTION.

         In the event an Optionee ceases to be an employee or director of either
the Company or a Subsidiary of the Company due to death, Retirement,
Resignation, Disability or termination by the Company for any reason other than
"cause" (such five events each being a "Qualified Termination"), this option may
be exercised by the Optionee or his or her estate, personal representative or
beneficiary to the fullest extent that the Optionee was entitled to exercise the
same on the day immediately prior to such termination at any time within the
one-year period commencing on the day next following such termination or, if
shorter, only for the remaining stated term of this option. In the event that
the Optionee's employment is terminated for any reason other than a Qualified
Termination, this option shall automatically expire simultaneously with such
termination. For purposes of this Paragraph, "cause" shall mean (i) the failure,
in the sole opinion of the Company or a Subsidiary of the Company that employs
Optionee, of Optionee to adequately perform the duties assigned to Optionee
(other than any such failure resulting from Optionee's Disability); (ii) the
engagement by Optionee in misconduct that, in the sole opinion of the Company or
a Subsidiary of the Company that employs Optionee, is or may have the effect of
being materially injurious to the Company or its Subsidiaries; or (iii) the
conviction of Optionee of any felony or crime of moral turpitude.

         After the Optionee's death, this option shall be exercisable only by
the executor or administrator of the Optionee's estate, or if the Optionee's
estate is not in administration, by the person or persons to whom the Optionee's
rights shall have passed by the Optionee's will or under the laws of descent and
distribution of the state where the Optionee was domiciled at the date of death.

5.       NO RIGHTS AS SHAREHOLDER. Neither the Optionee nor any person claiming
under or through the Optionee shall be or have any rights or privileges of a
shareholder of the Company in respect of any of the shares issuable upon the
exercise of this option, unless and until certificates representing such shares
shall have been issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).

6.       STATE AND FEDERAL SECURITIES REGULATION. No shares shall be issued
by the Company upon the exercise of this option unless and until any
then-applicable requirements of state and federal laws and regulatory agencies
shall have been fully complied with to the satisfaction of the Company and its
counsel. The Company may suspend for a reasonable period or periods the time
during which this option may be exercised if, in the opinion of the Company,
such suspension is required to enable the Company to remain in compliance with
regulatory requirements relating to the issuance of shares of Common Stock
subject to this option. This option is subject to the requirement that, if at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of the shares of common stock subject to this
option upon any securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting or exercise of this
option or the issue or purchase of shares under this option, this option may not
be exercised in whole or in part until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not

                                       5
<PAGE>   6

acceptable to the Company. The Company shall be under no obligation to effect or
obtain any such listing, registration, qualification, consent or approval if the
Company shall determine, in its discretion, that such action would not be in the
best interest of the Company. The Company shall not be liable for damages due to
a delay in the delivery or issuance of any stock certificates for any reason
whatsoever, including, but not limited to, a delay caused by listing,
registration or qualification of the shares of Common Stock subject to an option
upon any securities exchange or under any federal or state law or the effecting
or obtaining of any consent or approval of any governmental body with respect to
the granting or exercise of this option or the issue or purchase of shares under
this option.

7.       MODIFICATION OF OPTIONS. At any time and from time to time the
Committee may execute an instrument providing for modification, extension, or
renewal of any outstanding option, provided that no such modification, extension
or renewal shall (i) impair this option in any respect without the written
consent of the holder of this option or (ii) conflict with the provisions of
Rule 16b-3 under the Exchange Act.

8.       WITHHOLDING OF TAXES. The Company may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of any
taxes which the Company or any Subsidiary is required by any law or regulation
of any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any option, including, but not limited
to, the withholding of the issuance of all or any portion of the shares of
Common Stock subject to this option until the Optionee reimburses the Company or
the applicable Subsidiary for the amount the Company or the applicable
Subsidiary is required to withhold with respect to such taxes, subject to
compliance with applicable requirements of Section 16(b) under the Exchange Act,
canceling any portion of the issuance in an amount sufficient to reimburse the
Company or the applicable Subsidiary for the amount it is required to so
withhold, or taking any other action reasonably required to satisfy the
withholding obligation of the Company or the applicable Subsidiary.

9.       CONTINUED EMPLOYMENT NOT PRESUMED. Nothing in this Agreement, the Plan
or any document describing it nor the grant of an option shall give the Optionee
the right to continue in employment with the Company or any of its Subsidiaries
or affect the right of the Company or a Subsidiary to terminate the employment
of the Optionee with or without cause.

10.      NON-COMPETITION COVENANTS.

         a. The provisions of this subparagraph a. shall apply both during
normal working hours and at all other times including, but not limited to,
nights, weekends and vacation time, while Optionee is employed by the Company or
any Subsidiary. Optionee shall not directly or indirectly (i) engage in any
employment, business, or activity that is competitive with the business of the
Company or any Subsidiary, (ii) assist any other person or organization in
competing with, or in preparing to engage in competition with, the business of
the Company or any Subsidiary. Direct competition shall include, but not be
limited to, the design, development, production, promotion or sale of products,
software, or services competitive with those of the Company or any Subsidiary.
In addition, Optionee shall not directly or indirectly (i) engage in

                                       6
<PAGE>   7

any employment, business, or activity that is competitive with either (A) the
proposed business of the Subsidiary that employs Optionee ("Employing
Subsidiary") or (B) any proposed business of any of the Company's other
Subsidiaries (the "Non-Employing Subsidiaries") of which Optionee has actual
knowledge, or (ii) assist any other person or organization in competing with, or
in preparing to engage in competition with, either (A) the proposed business of
the Employing Subsidiary or (B) any proposed business of any Non-Employing
Subsidiary of which Optionee has actual knowledge.

         b. The provisions of this subparagraph b. shall apply during Optionee's
employment with the Company or any Subsidiary and for a period of six months
after Optionee ceases to be employed by the Company or any Subsidiary. Optionee
shall not directly or indirectly solicit to conduct any Competitive Business
with, or conduct any Competitive Business with, any (i) then-current customer of
the Employing Subsidiary or (ii) any person that has been a customer of the
Employing Subsidiary within the six months prior to the time of Optionee's
separation from employment. The phrase "Competitive Business" means the line(s)
of business(es) conducted by the Employing Subsidiary.

         c. The provisions of this subparagraph c. shall apply during Optionee's
employment with the Company or any Subsidiary and for a period of 12 months
after Optionee's separation from employment. Optionee shall not directly or
indirectly solicit to hire, or cause to be hired, any employee of the Company or
any Subsidiary as an employee or agent of, or consultant to, any business
enterprise that Optionee is associated with.

         d. Each non-competition covenant of Optionee contained in the preceding
provisions of this Paragraph 10 (the "non-competition covenant") shall be
construed as an agreement independent of any other provision of this Agreement
and the existence of any claim or cause of action of Optionee against the
Company or any Subsidiary, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company or any
Subsidiary of such non-competition covenant.

         e. The Company and Optionee have in good faith used their best efforts
to make each non-competition covenant contained in the preceding provisions of
this Paragraph 10 reasonable in both scope and in duration. It is not
anticipated, nor is it intended, by either party to this Agreement that any
court or other tribunal having jurisdiction over the matter will find it
necessary to reform any non-competition covenant to make it reasonable in both
scope and in duration, or otherwise. If any non-competition covenant is deemed
by a tribunal having jurisdiction over the matter to be unlawful or
unenforceable, such provision will be deemed severable from this Agreement and
such provision will be limited or eliminated to the minimum extent necessary so
that the remaining provisions of this Agreement shall otherwise remain in full
force and effect and be enforceable. Furthermore, in lieu of such unlawful or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in terms as may be possible and be enforceable.

         f. Optionee is agreeing to the provisions of this Paragraph 10 in
consideration of the grant of this option. The provisions of this Paragraph 10
shall be valid and enforceable by the

                                       7
<PAGE>   8

Company and its Subsidiaries, regardless of whether or not any of this option
granted hereunder actually becomes exercisable, or whether or not Optionee
actually exercises any rights under this option. In the event of any conflict or
inconsistency between any provision of this Paragraph 10 and any similar or
analogous provision of any other agreement (either currently in effect or that
may be entered into in the future) between Optionee, on the one hand, and the
Company or any Subsidiary, on the other hand, whichever provision is most
favorable to the Company or such Subsidiary shall govern.

11.    APPLICABILITY OF 1995 LONG-TERM INCENTIVE PLAN. The relevant provisions
of the ZixIt Corporation 1995 Long-Term Incentive Plan (the "Plan") are
applicable to this option, and such provisions are hereby incorporated by
reference. All defined terms contained herein shall have the meanings ascribed
to them in the Plan, except as otherwise provided herein or the context
otherwise requires. In the event of any inconsistency between this option and
the Plan, the provisions of the Plan shall govern unless the context otherwise
requires. This option does not apply toward the maximum number of shares
issuable under the Plan.

12.    NO LIABILITY OF OPTION. This option is not liable for or subject to, in
whole or in part, the debts, contracts, liabilities or torts of the Optionee nor
shall it be subject to garnishment, attachment, execution, levy or other legal
or equitable process.

13.    NO ASSIGNMENT. This option is not transferable otherwise than by will
or the laws of descent and distribution, and is exercisable during the
Optionee's lifetime only by Optionee. Without limiting the generality of the
foregoing, this option may not be assigned, transferred (except as aforesaid),
pledged or hypothecated in any way (whether by operation of law or otherwise),
and shall not be subject to execution, attachment, or similar process, without
the prior written consent of the Company. Any attempted assignment, transfer,
pledge, or hypothecation contrary to the provisions hereof shall be void and
ineffective for all purposes.

14.    GOVERNING LAW. This Agreement has been executed in, and shall be deemed
to be performable in, Dallas, Dallas County, Texas. The parties agree that this
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas (excluding its conflict of laws rules). The parties further agree
that the courts of the State of Texas, and any courts whose jurisdiction is
derivative on the jurisdiction of the courts of the State of Texas, shall have
personal jurisdiction over all parties to this Agreement.

15.    ENTIRE AGREEMENT. Except for the Plan, this Agreement constitutes the
entire agreement between the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the party to be charged
therewith. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver.

16.    DUPLICATE ORIGINALS. Duplicate originals of this document shall be
executed by both the Company and the Optionee, each of which shall retain one
duplicate original.

                                       8
<PAGE>   9

17.     NOTICE. Other than any Exercise Notice, any notice required or
permitted to be given under the Plan or this Agreement shall be in writing and
delivered in person or sent by registered or certified mail, return receipt
requested, first-class postage prepaid, (i) if to the Optionee, at the address
shown on the books and records of the Company or at the Optionee's place of
employment, or (ii) if to the Company, at 2711 N. Haskell Avenue, Suite 2850, LB
36, Dallas, Texas 75204-2911: Attention: Treasurer, or any other address that
may be given by either party to the other party by notice pursuant to this
Paragraph. Any notice other than any Exercise Notice, if sent by registered or
certified mail, shall be deemed to have been given when received.

                                  ZIXIT CORPORATION

                                  By:   /s/ DAVID P. COOK
                                        ----------------------------------------
                                          David P. Cook
                                          President and Chief Executive Officer

OPTIONEE:

/s/ STEVE GERSTEN
--------------------
Steve Gersten

                                       9

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