REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into on and as of , 1999 by and among (i) NETIA HOLDINGS S.A., (formerly R.P.
Telekom S.A.), a company organized and existing under the laws of the Republic
of Poland with its headquarters at xx. Xxxxxxxx 00, 00-000 Xxxxxx, Xxxxxx (the
"Company"), (ii) XXXXXXX INVESTMENTS LIMITED, a public company incorporated
under the laws of Israel ("Xxxxxxx"), (iii) TREFOIL CAPITAL INVESTORS L.P., a
Delaware limited partnership ("Trefoil, (iv) SHAMROCK HOLDINGS, INC., a
corporation organized under the laws of Texas ("Shamrock'), (v) GS CAPITAL
PARTNERS L.P., a limited partnership organized under the laws of Delaware
("GSCP"), (vi) STONE STREET FUND 1994, L.P., a limited partnership organized
under the laws of Delaware ("Stone Street"), (vii) XXXXXX XXXXXX XXXX 0000,
L.P., a limited partnership organized under the laws of Delaware ("Xxxxxx
Xxxxxx" and, together with GSCP and Stone Street, the "GSCP Entities"), (viii)
TELIA AB (publ.), a company organized under the laws of the Kingdom of Sweden
("Telia") and (ix) (a) WARBURG, XXXXXX EQUITY PARTNERS, L.P., a Delaware limited
partnership ("WPEP"), (b) WARBURG, XXXXXX VENTURES INTERNATIONAL, L.P., a
Bermuda limited partnership ("WPVI"), (c) WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS 1, C.V., a Dutch limited partnership ("WPNE I"), (d) WARBURG, XXXXXX
NETHERLANDS EQUITY PARTNERS II, C.V., a Dutch limited partnership ("WPNE II")
and (e) WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS III, C.V., a Dutch Limited
partnership ("WPNE 111" and, together with WPEP, WPVl, WPNE I and WPNE II, the
"WP Entities" and each individually a "WP Entity"). Xxxxxxx, Trefoil, Shamrock,
the GSCP Entities, Telia and the WP Entities (and their Permitted Assignees (as
defined herein)) are collectively referred to as the "Holders" and each
individually, a "Holder", and the Company and the Holders are collectively
referred to as the "Parties" and each individually, a "Party."
AGREEMENT
1. DEFINITIONS
"Commission" means the U.S. Securities and Exchange Commission or any other
U.S. federal agency at the time administering the Securities Act.
"Common Stock" means any and all common stock of the Company, of whatever
series.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initiating Holders" means any Holder or Holders of no less than five
percent (5%) of the Common Stock (Shamrock and Trefoil to be treated as one
Holder for such purposes, the GSCP Entities to be treated as one holder for such
purposes and the WP Entities to be treated as one Holder for such purposes).
"Person" means any individual, company, trust, partnership, association, or
other entity.
"Registrable Securities" means (i) all shares of Common Stock and/or
American Depositary Shares representing shares of Common Stock ("ADSs") now or
hereafter held by the Holders (such common stock and ADSs collectively referred
to herein as the "Stock"), (ii) any Common Stock issued as a dividend or other
distribution with respect to or in replacement of the Stock and (iii) any Common
Stock issued in any combination or subdivision of the Stock. In determining the
amount of Common Stock held by any Holder, the sum of (i), (ii) and (iii) shall
be used.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar U.S. federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. REGISTRATION RIGHTS
2.1. Demand Registration.
Upon the written request from any Initiating Holder ("Requesting Initiating
Holder") that the Company effect any registration with respect to all or any
portion of the Registrable Securities (other than a registration on Form F-3 or
any related form of registration statement), the Company will:
2.1.1. Promptly give written notice of the proposed registration to
all other Holders holding Registrable Securities; and
2.1.2. As soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file posteffective amendments, appropriate qualifications
under foreign, blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act), as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder(s) joining in such request as are
specified in a written request given within twenty (20) days after receipt
of such written notice from the Company in accordance with the provisions
of Section 2.2 hereof (such Holder(s) being referred to as "Participating
Holders"); provided that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance
pursuant to this Section 2. 1:
(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;
(ii) Prior to two hundred and seventy (270) days after the date
hereof,
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(iii) If the Initiating Holders propose to sell a number of
shares of Registrable Securities at an aggregate offering price (after
deduction for underwriter commissions and expenses) to the public of
less than Five Million Dollars ($5,000,000);
(iv) After the Company has effected two (2) such registrations
pursuant to this Section 2.1 at the request of Telia, and one such
registration pursuant to this Section 2.1 at the request of Xxxxxxx,
and one (1) such registration pursuant to this Section 2.1 at the
request of Shamrock and Trefoil, taken together, and one (1) such
registration pursuant to this Section 2.1 at the request of the WP
Entities, and each such registration has been declared or ordered
effective; or
(v) If the request is received by the Company less than one
hundred and twenty (120) days following the effective date of any
previous registration statement filed pursuant to a request made
pursuant to this Section 2. L
Subject to the foregoing clauses (i) through (v) and to Section
2.1.5 (below), the Company shall file a registration statement
covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the request from the Requesting
Initiating Holders.
2.1.3. Underwriting. If the Requesting Initiating Holder(s) intend to
distribute the Registrable Securities covered by their request by means of
an underwriting, they shall so advise the Company as part of their request
made pursuant to Section 2.1 and the Company shall include such information
in the written notice referred to in Section 2.1.1. The right of any Holder
to registration pursuant to Section 2.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Registrable Securities in the underwriting to the extent requested (unless
otherwise mutually agreed by a majority in interest of the Requesting
Initiating Holders and such Holder to the extent provided herein).
2.1.4. Underwriting Agreement/Withdrawals. The Company shall (together
with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement (an "Underwriting
Agreement") in such form and containing such provisions as are customary in
the securities business for such an arrangement between such underwriter
and companies of the Company's size and investment status (it being
understood that the Company will not require any Requesting Initiating
Holder or Participating Holder to make any representation, warranty or
agreement in such Underwriting Agreement other than with respect to such
Requesting Initiating Holder's or Participating Holder's ownership of the
shares being registered and such Requesting Initiating Holder's or
Participating Holder's intended method of disposition) with the underwriter
or underwriters selected for such underwriting by a majority in interest of
the Registrable Securities held by those Participating Holders
participating in such registration and approved by the Company (such
approval not to be
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unreasonably withheld). The rights of the Requesting Initiating Holders and
Participating Holders and the Company to participate in such registration
shall be subject to the cutback provisions of Section 2.2-2. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder owning Registrable Securities disapproves of the terms
of the underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Requesting Initiating
Holders. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration;
provided, however, that if by the withdrawal of such Registrable Securities
a greater number of Registrable Securities held by other Holders may be
included in such registration (up to the maximum of any limitation imposed
by the underwriters), then the Company shall offer to all Participating
Holders the right to include additional Registrable Securities in the same
proportion used in determining the underwriter limitation in this Section.
2.1.5. Right to Delay a Demand Registration. If at the time of any
request to register Registrable Securities pursuant to this Section, (i)
the Company is preparing a registration statement for a public offering
(other than a registration effected solely to implement an employee benefit
plan or a transaction to which Rule 145 of the Commission is applicable)
which in fact is filed and becomes effective within ninety (90) days after
the request, or (ii) the Company's supervisory board determines, in good
faith, that effecting such a registration would require the Company to make
public disclosure of information, the public disclosure of which would have
a material adverse effect upon the Company, then the Company may at its
option direct that such request be delayed, in the case of clause (i), for
a period not in excess of one hundred and twenty (120) days from the
effective date of such registration, such right to delay a request pursuant
to clause (i) of this Section 2.1.5 to be exercised by the Company not more
than once during the term of this Agreement or in the case of clause (ii),
for a period not in excess of one hundred and twenty (120) days from the
date of the request, such right to delay a request pursuant to clause (ii)
of this Section 2.1.5 to be exercised by the Company not more than once in
any twelve month period. Nothing in this section shall preclude a Holder of
Registrable Securities from enjoying registration rights which it might
otherwise possess under this Agreement.
2.1.6. Certain Registrations not to be Counted. In the event that the
transactions contemplated by the Underwriting Agreement executed in
connection with a requested registration pursuant to Section 2.1 are not
consummated due to a breach by the Company of any of its representations
and warranties or obligations thereunder (it being understood that a
failure to close due to changes in market conditions shall not constitute
such a breach), such request for registration shall not be counted for
purposes of Section 2.1.2.(iv). In addition, in the event that as a result
of the application of limitations on the number of shares of Registrable
Securities held by a Requesting Initiating Holder to be included in a
registration, less than 50% of the shares of Registrable Securities that
such Requesting Initiating Holder originally requested to be registered are
actually registered, the Requesting Initiating Holder may elect to either
(i) proceed with such registration, in
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which case such registration shall count for purposes of Section
2.1.2.(iv), or (ii) withdraw from such registration, in which case such
registration shall not count for purposes of Section 2.1.2.(iv) but only if
such Requesting Initiating Holder reimburses the Company for all
Registration Expenses (as defined herein) incurred by the Company in
connection with such registration.
2.2. Piggyback Registration.
2.2.1. The Company's Obligation to Register. If the Company at any
time proposes to initiate a registration of its securities under the
Securities Act on its own or upon request of any other persons (including
any Requesting Initiating Holders) and thereafter registers any of its
securities under the Securities Act (other than a registration effected
solely to implement an employee benefit plan, a transaction to which Rule
145 of the Commission is applicable or any other form or type of
registration in which Registrable Securities cannot be included pursuant to
Commission rule or practice), it will give written notice to all Holders of
the outstanding Registrable Securities of its intention to do so (stating
the intended method and terms of disposition of such securities, including
a list of the jurisdictions in which the Company intends to qualify such
securities). If such registration is proposed to be on a form which permits
inclusion of the Registrable Securities, upon the written request from any
Holder within twenty (20) days after transmittal by the Company to the
Holders of such notice, the Company will, subject to the limits contained
in this Section, use its best efforts to cause all such Registrable
Securities of said Holders to be registered under the Securities Act and
qualified for sale under any state blue sky law, all to the extent
requisite to permit such sale or other disposition by such Holders of the
Registrable Securities so registered. The Holders' registration rights
under this Section 2.2.1 shall be in addition to their rights under Section
2. 1.
2.2.2. Cutbacks. Notwithstanding any other provision of Section 2.1 or
this Section 2.2, if the underwriter(s) managing the applicable
registration determines that marketing factors require a limitation of the
number of shares of Common Stock and Registrable Securities that may be
included in such registration and so advises the Company and the Requesting
Initiating Holders (if any) in writing, then the Company shall so advise
all Participating Holders exercising their piggyback rights pursuant to
Section and the number of shares of Common Stock and Registrable Securities
that may be included in the registration and underwriting shall be
allocated as follows: (i) in the case of a registration initiated by the
Company on its own, first to the Company and thereafter to the
Participating Holders of such Registrable Securities pro rata based on the
number of shares of Registrable Securities that such Participating Holders
have requested to be included in such registration; and (h) in the case of
a registration initiated by a Requesting Initiating Holder(s) pursuant to
Section 2.1 or by another person having the right to demand such a
registration, first to such Requesting Initiating Holder(s) (in the event
there are more than one Requesting Initiating Holder, pro rata based on the
number of shares of Registrable Securities that such Requesting Initiating
Holders have demanded to be included in such registration) or to such other
person as the case may be (but subject, in the event that such Requesting
Holder is Xxxxxxx or Shamrock and Trefoil or any of the
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GSCP Entities, to the provisions of Section 2.2.3 below), and thereafter to
the Company (if the Company wishes to include any shares of Common Stock in
such registration) and to the Participating Holders of such Registrable
Securities pro rata based, in the case of the Company, on the number of
shares of Common Stock that the Company wishes to include in such
registration (but not more than the largest number of shares of Registrable
Securities requested to be included in such registration by any
Participating Holder), and in the case of Participating Holders, on the
number of shares of Registrable Securities that such Participating Holders
have requested to be included in such registration, respectively.
2.2.3. The Parties acknowledge and agree that if either (i) Xxxxxxx or
(ii) Shamrock and Trefoil (as one Holder) or (iii) any of the GSCP
Entities, is the Requesting Initiating Holder of a registration under
Section 2.1, then any of Xxxxxxx, Shamrock, Trefoil and the GSCP Entities
shall also be treated as Requesting Initiating Holders (except for purposes
of Section 2.1.2.(iv)) as to any shares they propose to include in such
registration pursuant to this Section 2.2. In that event, the total number
of shares includable in any such registration by Xxxxxxx, Shamrock, Trefoil
and the GSCP Entities (and their respective assignees), determined as
provided in clause 2.2.2 above, shall be allocated among such parties on
the basis agreed to in writing by Xxxxxxx, Shamrock, Trefoil and the GSCP
Entities.
2.3. Form S-3.
2.3.1. Obligation to Register. The Company shall use its best efforts
to qualify for registration on Form S-3 (or comparable form for a foreign
issuer). After the Company has qualified for the use of Form S-3, the
Initiating Holders of Registrable Securities shall have the right to
request registrations on Form S-3 thereafter, as the case may be (but the
Holders, as a group, may not make more than three (3) such requests in any
twelve (12) month period and no more than six (6) such request(s) in the
aggregate) under this Section (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and
the intended method of disposition of such shares by such Holder or
Holders), provided that the Company shall not be required to effect a
registration pursuant to this Section unless (i) the Holder or Holders
requesting registration propose to dispose of Registrable Securities which
they reasonably anticipate will have an aggregate offering price (before
deduction of underwriting discounts and expenses of sale) of at least One
Million Dollars ($1,000,000), or (ii) the Company has initiated a proposed
registration as described in Section 2. 1.
2.3.2. Notice. The Company shall give written notice to all Holders of
Registrable Securities of the receipt of a request for registration
pursuant to this Section 2.3 and shall permit such other holders to
participate in the registration upon their request thereto given within
twenty (20) days after receipt of such notice. Subject to the foregoing,
the Company will use its best efforts to effect promptly the registration
of all shares of Registrable Securities on Form S-3, to the extent
requested by the Holders thereof for purposes of disposition. The Company
need not register shares on Form S-3 (or comparable form) in any
jurisdiction in which the Company does not qualify to do business. If at
the time of any request to register Registrable Securities pursuant to this
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Section 2.3, (i) the Company is preparing a registration statement for a
public offering (other than a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 of the Commission
is applicable) which in fact is filed and becomes effective within ninety
(90) days after the request, or (ii) the Company's supervisory board
determines, in good faith, that effecting such a registration would require
the Company to make public disclosure of information, the public disclosure
of which would have a material adverse effect upon the Company, then the
Company may at its option direct that such request be delayed, in the case
of clause (i), for a period not in excess of one hundred and twenty (120)
days from the effective date of such registration, such right to delay a
request pursuant to clause (i) of this Section 2.3.2 to be exercised by the
Company not more than once during the term of this Agreement or in the case
of clause (H), for a period not in excess of one hundred and twenty (120)
days from the date of the request, such right to delay a request pursuant
to clause (ii) of this Section 2.3.2 to be exercised by the Company not
more than once in any twelve month period.
2.4. Registration Procedures.
If and whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
2.4.1. Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period
provided in this Section;
2.4.2. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by
such registration statement whenever the seller or sellers of such
securities shall desire to sell or otherwise dispose of the same, but only
to the extent provided in this Section;
2.4.3. Furnish to each seller of Registered Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as such persons may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by such seller
and covered by such registration statement;
2.4.4. Use its reasonable best efforts to register or qualify the
securities covered by such registration statement under such other United
States, foreign or state blue sky laws of such jurisdictions as each seller
or, in the case of an underwritten public offering, the managing
underwriter, shall reasonably request, and do any and all other acts and
things which may be necessary under such securities or blue sky laws to
enable such seller to consummate the public sale or other disposition in
such jurisdictions of the
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securities owned by such seller, except that the Company shall not for any
such purpose be required to qualify to do business as a foreign company in
any jurisdiction wherein it is not so qualified or intends to be so
qualified prior to the effective date of the applicable registration
statement;
2.4.5. Use its reasonable best efforts to list the Registrable
Securities covered by such registration statement with any securities
exchange or market on which the Common Stock of the Company, if applicable,
is then listed or quoted;
2.4.6. Notify each seller of Registrable Securities and each
underwriter under such registration statement as promptly as practicable at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event of which the
Company has knowledge as result of which, in the Company's reasonable
judgment, the prospectus contained in such registration statement, as then
in effect, would include an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements, therein not misleading in light of the circumstances then
existing;
2.4.7. Before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to one counsel selected by a
majority of the voting interests of the participating holders of
Registrable Securities copies of such documents proposed to be filed which
shall be subject to the reasonable approval of such counsel;
2.4.8. Furnish on the date the Registrable Securities are delivered to
the underwriters for sale pursuant to such registration to each prospective
seller a signed counterpart, addressed to the prospective seller, of (i) an
opinion of counsel for the Company, dated such date stating that such
registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus and
each amendment or supplement thereof comply as to form in all material
respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements contained
therein) and (C) to such other effects as reasonably may be requested by
counsel for the underwriters or by such seller or its counsel, and (ii) a
"comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in the registration
statement, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants,
the financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof, comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act, and such letter shall additionally
cover such other financial matters with respect to such registration as
such underwriters reasonably may request; provided, however, that
notwithstanding any other provision of this Section, the Company shall not
in any event be required to use its best efforts to maintain the
effectiveness of any such registration statement for a period in excess of
one hundred eighty (I 80) days;
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2.4.9. (i) Make available for inspection by each seller of Registrable
Securities, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, (ii) cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or agent in connection with such registration statement and (iii) provide
each seller and its counsel with the opportunity to participate in the
preparation of such registration statement; and
2.4.10. Enter into such agreements and take such other actions as the
sellers of Registrable Securities and the underwriters reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities, including but not limited to participating in road shows and
other customary selling efforts.
2.5. Registration Expenses.
As used herein, "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 2.1, 2.2, 2.3 and 2.4 hereof, including,
without limitation, all registration and filing fees; printing expenses; fees
and disbursements of counsel for the Company; fees and disbursements of one
counsel for all the selling shareholders of the Registrable Securities; blue sky
fees and expenses; foreign securities laws fees and expenses; and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall be
paid in any event by the Company); and "Selling Expenses" shall mean all
underwriting discounts and selling commissions applicable to the sales
thereunder. Except as specifically provided in Section 2.1.6, the Company will
pay all Registration Expenses in connection with the registrations pursuant to
Sections 2.1, 2.2 and 2.3, regardless of which Initiating Holders have requested
registration pursuant to Sections 2.1 or 2.2. All Selling Expenses in connection
with each registration pursuant to Sections 2.1, 2.2 and 2.3 shall be borne by
the Company and the selling Holders pro rata in proportion to the Registrable
Securities covered thereby being sold by them.
2.6. Indemnification.
2.6.1. Indemnification by the Company. In the event of any
registration of any of its securities under the Securities Act pursuant to
this Agreement, the Company shall indemnify and hold harmless each of the
following parties: each seller of such securities; (ii) each underwriter
(as defined in the Securities Act); (iii) each other Person who is an
officer, director or partner of such seller or who participates in the
offering of such securities; and (iv)each other Person, if any, who
controls (within the meaning of the Securities Act) such seller,
underwriter or participating Person against any losses, claims, damages or
liabilities, as incurred (collectively the "liability"), joint or several,
to which such seller, underwriter, participating Person or controlling
Person may become subject under the Securities Act or any other statute or
at common law, insofar as such liability (or action in respect thereof)
arises out of or is based upon (x) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under
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which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, (y) 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 (z) any violation by the
Company of the Securities Act or any rule or regulation promulgated
thereunder or any foreign securities rules or regulations applicable to the
Company in connection with any such registration, qualification or
compliance, except as otherwise provided in Section 2.6.2 below. Except as
otherwise provided in Section 2.6.4 below, the Company shall reimburse each
such seller, underwriter, participating Person or such controlling Person
in connection with investigating or defending any such liability, as such
expenses are incurred; provided, however, that the Company shall not be
liable to any seller, underwriters, participating Persons, or controlling
Persons in any such case to the extent that any such liability arises out
of or is based upon any statement or alleged omission made in such
registration statement, preliminary or final prospectus, or amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Person to be specifically
stated for use therein; the Company shall not be required to indemnify any
Person against any liability arising from any untrue or alleged untrue or
misleading statement or omission or alleged omission contained in any
preliminary prospectus if such deficiency is corrected in the final
prospectus and liability arises out of the failure of any Person to deliver
a prospectus as required by the Securities Act. The indemnity provided for
in this Section shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller, underwriter,
participating Person or controlling Person and shall survive transfer of
such securities by such seller.
2.6.2. Indemnification by Holders of Registrable Securities. Each
Holder of any Registrable Securities shall, in the event of a Registration
of any of its Registrable Securities under the Securities Act pursuant to
Sections 2.1, 2.2 or 2.3, severally and not jointly, indemnify and hold
harmless the Company, its directors and officers, each underwriter and each
other Person, if any, who controls the Company or such underwriter, against
any liability, joint or several, as incurred, to which the Company,
underwriter or any such director or officer or controlling person may
become subject under the Securities Act or any other statute or at common
law, in so far as such liability (or actions in respect thereof) arises out
of or is based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under which such
Registrable Securities were registered under the Securities Act at the
request of such Holder pursuant to this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided however, that no Holder of
Registrable Securities shall be required to indemnify any Person against
any liability arising from any untrue or alleged untrue or misleading
statement or omission or alleged omission contained in any preliminary
prospectus if such deficiency is corrected in the final prospectus and
liability arises out of the failure of any Person to deliver a prospectus
as required by the Securities Act. Notwithstanding the above, the
indemnification set forth in this Section 2.6.2 shall be
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given to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Holder and expressly stated
for use therein. Such Holder shall reimburse the Company, such underwriter
or such director, officer, or controlling person for any legal fees
incurred in investigating or defending any such liability, as incurred;
provided, that the obligations of such Holder of Registrable Securities for
the indemnity hereunder shall be limited to the net proceeds received by
such Holder of Registrable Securities from the sale of Registrable
Securities covered by such registration statement and shall not extend to
any settlement of claims related thereto without the express written
consent of such Holder of Registrable Securities.
2.6.3. Further Indemnity. Indemnification similar to that specified in
Sections 2.6.1 and 2.6.2 shall be given by the Company and each Holder of
any Registrable Securities (with such modifications as may be appropriate)
with respect to any required registration or other qualification of the
Common Stock under any federal, foreign or state law or regulation of
governmental authority other than the Securities Act.
2.6.4. Procedures, Rights to Separate Counsel. (i) Each party entitled
to indemnification under this Section 2.6 (the "Indemnified Party") shall
give notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has received
written notice of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, unless there shall be a conflict of
interest; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such Indemnified
Party's expense; and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 2.6 unless such failure to give
notice shall materially adversely affect the Indemnifying Party in the
defense of any such claim or any such litigation. The Indemnified Party
shall also have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such
counsel shall not be at the expense of the Indemnifying Party unless either
(A) in the reasonable opinion of counsel to the Indemnified Party, there
are defenses available to the Indemnified Party that are not available to
the Indemnifying Party or representation of the Indemnified Party by
counsel for the Indemnifying Party would present a conflict of interest for
such counsel, or (B) the Indemnifying Party fails to promptly defend, in
which case the fees and expenses of such counsel for the Indemnified Party
shall be borne by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party a release
from all liability in respect to such claim or litigation.
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(ii) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either
(A) any Indemnified Party exercising rights under this Agreement, or
any controlling Person of any such Holder, makes a claim for
indemnification pursuant to this Section but is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that this Section provides for
indemnification in such cases, (B) contribution under the Securities
Act may be required on the part of any such selling Holder or any such
controlling Person in circumstances for which indemnification is
provided under this Section or (C) the indemnification provided for by
this Section is insufficient to hold harmless an Indemnified Party,
other than by reason of the exceptions provided therein; then, and in
each such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liability to which they may be
subject (after contribution from others) (X) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and the Indemnified Party on the other or (Y) if the
allocation provided by clause (X) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relevant fault referred to in clause (X) above but also the relative
benefits received by the Indemnifying Party and the Indemnified Party
from the offering of the securities (taking into account the portion
of the proceeds of the offering received by each such party) as well
as the statements or omissions or alleged statements or omissions
which resulted in such losses, claims, damages or liabilities and any
other relevant equitable considerations. No Person will be required to
contribute any amount in excess of the proceeds received by such
Person in respect of all such Registrable Securities offered and sold
by it pursuant to such registration statement and no Person or entity
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any
Person or entity who was not guilty of such fraudulent
misrepresentation.
2.7. Termination of Registration Rights.
The rights to registration and the designation of Common Stock as
Registrable Securities shall terminate as to any particular securities when such
securities shall have been lawfully sold by the Holder thereof to the public
pursuant to a registration statement or after a sale thereof pursuant to Rule
144.
2.8. Compliance with Rule 144.
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
Registrable Securities to the public without registration, at all times ninety
(90) days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
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2.8.1. Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
2.8.2. Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
2.8.3. Furnish to each Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request availing itself of any rule or
regulation of the Commission allowing such Holder to sell any Registrable
Securities without registration.
2.9. Assignability of Registration Rights.
The registration rights set forth in this Agreement are assignable by any
Holder to each assignee (a "Permitted Assignee") of at least 33.3% of the
Registrable Securities owned by such Holder on the date of this Agreement
(appropriately adjusted for recapitalizations) who agrees in writing to be bound
by the terms and conditions of this Agreement within ten (10) days of such
assignment. The term "seller" as used in this Agreement refers to a Holder of
the Registrable Securities selling such shares.
2.10. Rights Which May not be Granted to Subsequent Investors.
The Company shall not grant registration rights or enter into any
registration rights agreement or similar agreement with any Person after the
date hereof which are superior to the rights granted hereunder.
2.11. Information by Holder.
The Holder or Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
or Holders, the Registrable Securities held by them, and the distribution
proposed by such Holder or Holders, as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section.
3. MISCELLANEOUS.
3.1. Consent to Amendments.
Except as otherwise expressly provided herein, the provisions of this
Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by them, only if it
has obtained the written consent of each of the Holders. No course of dealing
between the Company and any Holder or any delay in
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exercising any rights hereunder or under the Company's Articles of Incorporation
will operate as a waiver of any rights of any such Holders.
3.2. Successors and Assigns.
Except as otherwise expressly provided herein, all covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
3.3. Severability.
Each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
3.4. Counterparts.
This Agreement may be executed in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts when taken together shall constitute one and the same Agreement.
3.5. Descriptive Headings.
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
3.6. Notices.
All notices, demands, consents or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given
when personally delivered or three (3) business days (including Saturday) if
sent by first class certified mail, return receipt requested or the next
business day if sent by facsimile, Express Mail, Federal Express or similar
service, addressed as follows:
The Company:
Netia Holdings S.A.
Netia Holdings S.A.
xx. Xxxxxxxx 00
00-000 Xxxxxx
Xxxxxx
Attn: Meir Srebernik
Facsimile: 48 22 496435
Telephone: 00 00 000000
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with a copy to:
Weil, Gotshal & Xxxxxx
Xxx Xxxxx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attn: Xxxxxxx Xxxxxxx
Facsimile: 44 171 903 0990
Telephone: 00 000 000 0000
and to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 10 1 53
U.S.A.
Attn: Xxxxxxx Xxxxx
Facsimile: 1 212 310 8007
Telephone: 0 000 000 0000
The Holders:
Telia AB
Business Area International
X-000 00 Xxxxxx
Xxxxxx
Attn: Clas Hygrell, Vice President, Business Development
Facsimile: 46 8 713 3152
Telephone: 00 0 000 0000
With a copy to:
Telia AB, Legal Affairs
Attn: Jan-Henrik Ahmell, Director, Legal Affairs
X-000 00 Xxxxxx
Xxxxxx
Facsimile: 46 8 94 64 70
Telephone: 00 0 000 0000
Xxxxxxx Investments Limited
0, Xxxxxx Xxxxxx
Xxx Xxxx
Xxxxxx 00000
Fax: 000-0-000 0999
Attn: Xxxxx Xxxxxx
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GS Capital Partners, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Facsimile: 1 212 902 3000
Attn: Xxx Xxxxxxxx
With a copy to:
Xxxxxxx Sachs International Limited
Xxxxxxxxxxxx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile: 44 171 774 4123
Telephone: 00 000 000 0000
Attn: Xxxxxx Xxxxx
Shamrock Holdings, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
X.X.X.
Facsimile: 1 818 845 4675
Attn: Xxxxxx X. Xxxxxxx
Trefoil Capital Investors L.P.
000 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
U.S.A.
Facsimile: 1 818 842 3142
Attn: Xxxxxx X. Xxxxxxxxx
Managing Director of Trefoil Investors, Inc.
Stone Street Fund 1994, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 1 212 902 3000
Attn: Xxx Xxxxxxxx
Xxxxxx Xxxxxx Xxxx 0000, X.X.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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U.S.A.
Facsimile: 1 212 902 3000
Attn: Xxx Xxxxxxxx
The WP Entities
X.X. Xxxxxxx, Xxxxxx & Co., LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 100 1 7
U.S.A.
Attention: Xxxxxxx Xxxxxxx
Facsimile: 1 212 878 9351
Telephone: 0 000 000 0000
with a copy to:
X.X. Xxxxxxx, Xxxxxx & Co. International Ltd.
Xxxxxx House
00 Xxxx Xxxxxx, Xx. James's
London SWIY 6QW
England
Attention: Xxxxxxx Italia
Facsimile: 44 171 321 0881
Telephone: 00 000 000 0000
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
U.S.A.
Attention: Xxxxx X. Xxxxx
Facsimile: 1 212 728 8111
Telephone: 0 000 000 0000
3.7. Governing Law, Consent to Service of Process.
The validity, meaning and effect of this Agreement shall be determined in
accordance with the laws of the State of New York, applicable to contracts made
and to be performed entirely within the State of New York.
3.8. Schedules and Exhibits.
All schedules and exhibits are an integral part of this Agreement.
3.9. Litigation Costs.
Subject to Section 2.6, if any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of a
dispute, breach, default, or
-17-
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
3.10. Specific Performance.
Each Party's obligation under this Agreement is unique. If any Party should
default in its obligations under this Agreement, the Parties each acknowledge
that it would be extremely impracticable to measure the resulting damages;
accordingly, the non-defaulting Party, in addition to any other available rights
or remedies, may xxx in equity for specific performance and the parties each
expressly waive the defense that a remedy in damages will be adequate.
3.11. Final Agreement.
This Agreement constitutes the entire agreement between the Parties
pertaining to the subject matter hereof and supersedes and terminates all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written.
-18-
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered
this Agreement as an instrument under seal as of the day and year first above
written.
NETIA HOLDINGS S.A.
By: ______________________________
Name: ____________________________
Title: ___________________________
THE HOLDERS:
TELIA AB (publ.)
By: ______________________________
Name: ____________________________
Title: ___________________________
XXXXXXX INVESTMENTS LIMITED
By: ______________________________
Name: ____________________________
Title: ___________________________
SHAMROCK HOLDINGS, INC.
By: ______________________________
Name: ____________________________
Title: ___________________________
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TREFOIL CAPITAL INVESTORS L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
G.S. CAPITAL PARTNERS L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
XXXXX XXXXXX XXXX 0000, X.X.
By: ______________________________
Name: ____________________________
Title: ___________________________
XXXXXX XXXXXX XXXX 0000, X.X.
By: ______________________________
Name: ____________________________
Title: ___________________________
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By Warburg, Xxxxxx & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
-00-
XXXXXXX, XXXXXX VENTURES
INTERNATIONAL, L.P.
By Warburg, Xxxxxx & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
WARBURG, XXXXXX NETHERLANDS
EQUITY PARTNERS 1, C.V.
By Warburg, Xxxxxx & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS II, C.V.
By Warburg, Xxxxxx & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
-21-
