EXHIBIT 10.4
NOTES REGISTRATION RIGHTS AGREEMENT
This Notes Registration Rights Agreement, dated as of ______ __,
1999, is entered into by and between METROMEDIA FIBER NETWORK, INC., a Delaware
corporation ("Company"), and XXXX ATLANTIC INVESTMENTS, INC., a Delaware
corporation ("Purchaser").
W I T N E S S E T H
WHEREAS, Company and Purchaser have entered into a certain
Securities Purchase Agreement, dated as of October 7, 1999 (the "Purchase
Agreement"), pursuant to which Company has agreed to issue and sell to
Purchaser, and Purchaser has agreed to purchase from Company, shares of Class A
common stock of Company, par value $0.01 per share ("Class A Common Stock"), and
up to $975,281,364 principal amount of Company's 6.15% Convertible Subordinated
Notes due [2009] (the "Convertible Notes"), which are convertible into shares of
Class A Common Stock;
WHEREAS, in connection with consummation of the transactions
contemplated by the Purchase Agreement, Company agreed to enter into an
Indenture, dated as of the date hereof (the "Indenture"), relating to the
Convertible Notes, and a subsidiary of Company and an Affiliate of Purchaser
have entered into that certain Fiber Optic Private Network Agreement, dated
October 7, 1999, pursuant to which certain of Purchaser's Affiliates shall lease
fiber on Company's fiber optic network; and
WHEREAS, in order to induce Purchaser to purchase the Convertible
Notes contemplated by the Purchase Agreement and to enter into the Indenture,
Company has agreed to provide registration rights with respect thereto.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person.
"Agreement" shall mean this Notes Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Notes Registration
Rights Agreement as the same may be in effect at the time such reference becomes
operative.
"Blackout Period" shall have the meaning assigned to such term in
Section 5 hereof.
"Business Day" shall mean any day that is not a Saturday, a Sunday
or a day on which commercial banks are required or permitted by law to be closed
in the City of New York in the State of New York.
"Class A Common Stock" shall have the meaning assigned to such term
in the recitals hereof.
"Convertible Notes" shall have the meaning assigned to such term in
the recitals hereof.
"Demand Registration" shall have the meaning assigned to such term
in Section 2(a) hereof.
"Demand Registration Statement" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Equity Registration Rights Agreement" shall mean that certain
Equity Registration Rights Agreement, dated as of the date hereof, between
Company and Purchaser, relating to, among other things, registration rights with
respect to the shares of Class A Common Stock purchased by Purchaser pursuant to
the Purchase Agreement.
"Holder" shall mean Purchaser and any transferee of Purchaser to
whom Registrable Securities are permitted to be transferred pursuant to the
Stockholders Agreement (other than pursuant to a Public Resale (as defined in
the Stockholders Agreement)) and in accordance therewith and who continues to be
entitled to the rights of a Holder hereunder.
"Indemnified Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Indemnifying Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Indenture" shall have the meaning assigned to such term in the
recitals hereto.
"Maximum Number of Securities" shall have the meaning assigned to
such term in Section 2(b) hereof.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor entity thereof.
"Participating Demand Holders" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Participating Piggy-Back Holders" shall have the meaning assigned
to such term in Section 3(b) hereof.
2
"Person" shall mean any individual, corporation, partnership, joint
venture, firm, trust, unincorporated organization, government or any agency or
political subdivision thereof or other entity.
"Piggy-Back Registration" shall have the meaning assigned to such
term in Section 3(a) hereof.
"Piggy-Back Registration Statement" shall have the meaning assigned
to such term in Section 3(a) hereof.
"Purchase Agreement" shall have the meaning assigned to such term in
the recitals hereof.
"Registrable Securities" shall mean (a) each Convertible Note held
by a Holder, (b) any shares of Class A Common Stock issued upon conversion of
any Convertible Note (the "Underlying Shares"), and (c) any Securities issuable
or issued or distributed in respect of any of the Class A Common Stock
identified in clause (b) by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, reorganization,
merger, consolidation or otherwise, or as otherwise contemplated by the
Indenture. For purposes of this Agreement, (i) Registrable Securities shall
cease to be Registrable Securities when a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by
the SEC and such Registrable Securities have been disposed of pursuant to such
effective Registration Statement and (ii) the Registrable Securities of a Holder
shall not be deemed to be Registrable Securities at any time when the entire
amount of such Registrable Securities proposed to be sold by such Holder in a
single sale are or, in the opinion of counsel satisfactory to Company and such
Holder, each in their reasonable judgment, may be, so distributed to the public
pursuant to Rule 144 (or any successor provision then in effect) under the
Securities Act or any such Registrable Securities have been sold in a sale made
pursuant to Rule 144 of the Securities Act.
"Registration Statement" shall mean the Demand Registration
Statement, the Piggy-Back Registration Statement and/or the Shelf Registration
Statement, as the case may be.
"Securities" shall have the meaning assigned to such term in Section
2(a)(1) of the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated thereunder.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shelf Registration" shall have the meaning assigned to such term in
Section 4 hereof.
"Shelf Registration Statement" shall have the meaning assigned to
such
3
term in Section 4 hereof.
"Stockholders Agreement" shall mean the Stockholders Agreement,
dated the date hereof, by and among Company and, Purchaser and the other
stockholders of Company listed on Schedule I thereto.
"Underlying Shares" shall have the meaning assigned to such term
under the definition of Registrable Securities.
2. Demand Registration.
(a) At any time from and after 180 days following the date
hereof and subject to Section 2(c) hereof, after receipt of a written request
from a Holder requesting that Company effect a registration (a "Demand
Registration") under the Securities Act covering all or part of the Registrable
Securities which specifies the intended method or methods of disposition
thereof, Company shall promptly notify all Holders in writing of the receipt of
such request and each such Holder, in lieu of exercising its rights under
Section 3 hereof may elect (by written notice sent to Company within ten (10)
Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have all or part of such Holder's Registrable Securities
included in such registration thereof pursuant to this Section 2, and such
Holder shall specify in such notice the number of Registrable Securities that
such Holder elects to include in such registration. Thereupon Company shall, as
expeditiously as is possible, file with the SEC and use its reasonable best
efforts to cause to be declared effective, a registration statement (a "Demand
Registration Statement") relating to all shares of Registrable Securities which
Company has been so requested to register by such Holders ("Participating Demand
Holders") for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered, provided; however, that the aggregate
value of the Registrable Securities requested to be registered be at least
$100,000,000 or include all Registrable Securities which remain outstanding at
such time. With respect to any Registrable Securities that are Convertible
Notes, the value of such Convertible Notes shall be based on the aggregate
principal amount of the Convertible Notes to be so registered. With respect to
any Registrable Securities that are Class A Common Stock, the value of such
Class A Common Stock shall be based on the closing trading price of the Class A
Common Stock on the date the demand to file such Demand Registration Statement
is made.
(b) If the majority of the Holders in a Demand Registration
relating to a public offering so request that the offering shall be underwritten
with a managing underwriter selected in the manner set forth in Section 12 below
and such managing underwriter of such Demand Registration advises Company in
writing that, in its opinion, the number of Securities to be included in such
offering is greater than the total number or amount of Securities which can be
sold therein without having a material adverse effect on the distribution of
such Securities or otherwise having a material adverse effect on the
marketability thereof (the "Maximum Number of Securities"), then Company shall
include in such Demand Registration the Registrable Securities that
4
the Participating Demand Holders have requested to be registered thereunder only
to the extent the number of such Registrable Securities does not exceed the
Maximum Number of Securities. If such amount exceeds the Maximum Number of
Securities, the number of Registrable Securities included in such Demand
Registration shall be allocated among all the Participating Demand Holders on a
pro rata basis. If the amount of such Registrable Securities does not exceed the
Maximum Number of Securities, Company may include in such Registration any other
Securities of Company and other Securities held by other security holders of
Company, on a pro rata basis if necessary, in an amount which together with the
Registrable Securities included in such Demand Registration shall not exceed the
Maximum Number of Securities.
(c) Holders shall be entitled to four (4) registrations of
Registrable Securities pursuant to this Section 2. Each Shelf Registration
pursuant to Section 4 hereof shall be deemed one (1) Demand Registration
pursuant hereto. A Shelf Registration for the Underlying Shares that is
requested as part of a Demand Registration for the Notes, shall not constitute,
or be deemed to be, a separate Demand Registration under this Section 2.
(d) Notwithstanding anything to the contrary contained herein,
Company shall not be required to prepare and file (i) more than two (2) Demand
Registration Statements under this Agreement and the Equity Registration Rights
Agreement in any twelve-month period, or (ii) any Demand Registration Statement
within 90 days following the date of effectiveness of any Registration Statement
(other than a Shelf Registration Statement) or any registration statement
effective under the Equity Registration Rights Agreement.
5
3. Piggy-Back Registration.
(a) If Company at any time after 180 days from the date hereof
proposes to file on its behalf and/or on behalf of any holder of its Securities
a registration statement under the Securities Act on any form (other than a
registration statement on Form S-4 or S-8 or any successor form for Securities
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of Company pursuant to any employee benefit plan,
respectively) for the registration of Securities (a "Piggy-Back Registration"),
it will give written notice to all Holders at least 20 days before the initial
filing with the SEC of such piggy-back registration statement (a "PiggyBack
Registration Statement") which notice shall set forth the intended method of
disposition of the Securities proposed to be registered by Company. The notice
shall offer to include in such filing the aggregate number of shares of
Registrable Securities as such Holders may request.
(b) Each Holder desiring to have Registrable Securities
registered under this Section 3 ("Participating Piggy-Back Holders") shall
advise Company in writing within ten (10) days after the date of receipt of such
offer from Company, setting forth the amount of such Registrable Securities for
which registration is requested. Company shall thereupon include in such filing
the number or amount of Registrable Securities for which registration is so
requested, subject to paragraph (c) below, and shall use its reasonable best
efforts to effect registration of such Registrable Securities under the
Securities Act.
(c) If the Piggy-Back Registration relates to an underwritten
public offering and the managing underwriter of such proposed public offering
advises in writing that, in its opinion, the amount of Registrable Securities
requested to be included in the Piggy-Back Registration in addition to the
Securities being registered by Company would be greater than the Maximum Number
of Securities, then:
(i) in the event Company initiated the Piggy-Back Registration,
Company shall include in such Piggy-Back Registration first, the
Securities Company proposes to register and second, the Securities of all
other selling security holders, including the Participating Piggy-Back
Holders, to be included in such Piggy-Back Registration in an amount which
together with the Securities Company proposes to register, shall not
exceed the Maximum Number of Securities, such amount to be allocated among
such selling security holders on a pro rata basis;
(ii) in the event any holder of Securities of Company initiated the
Piggy-Back Registration, Company shall include in such Piggy-Back
Registration first, the Securities such security holder proposes to
register and second, the Securities of any other selling security holders,
in an amount which together with the Securities the first selling security
holder proposes to register, shall not exceed the Maximum Number of
Securities, such amount to be allocated among such selling security
holders on a pro rata basis;
6
(d) Company will not hereafter enter into any agreement which
is inconsistent with the rights of priority provided in paragraph (c) above.
4. Shelf Registration. Upon the written request of Holder, as
promptly as practicable, but in any event no later than 30 days (excluding any
days which occur during a permitted Blackout Period under Section 5 below) after
receipt of such request, Company shall file with the SEC and thereafter use its
reasonable best efforts to cause to be declared effective as promptly as
practicable, but no later than 90 days (excluding any days which occur during a
permitted Blackout Period under Section 5 below) after receipt of such request,
a registration statement (the "Shelf Registration Statement") on an appropriate
form under the Securities Act relating to any or all of the Registrable
Securities in accordance with the methods and distribution set forth in the
Shelf Registration Statement and Rule 415 under the Securities Act (hereafter,
the "Shelf Registration"). A Shelf Registration relating to any or all of the
Underlying Shares may be made in connection with a (i) Demand Registration of
Convertible Notes under Section 2 above, in which case it will not constitute,
or be deemed to be, a separate Demand Registration, or (ii) a Rule 144A/Reg S
Transaction (as such term is defined in Section 2.2(b) of the Stockholders
Agreement) with respect to the Convertible Notes, in which case, such Shelf
Registration shall constitute and be deemed to be a Demand Registration, but the
provisions applicable to such registration shall be governed by this Section 4
and not Section 2 above. Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered to Holders for a period of
time ending the earlier of (a) such time as all the Registrable Securities have
been disposed pursuant thereto, and (b) the date on which Company receives an
opinion of outside counsel, satisfactory to Company and the Holders, to the
effect that in their reasonable judgment, all the Registrable Securities may be
distributed to the public pursuant to Rule 144 (or any successor provision then
in effect) under the Securities Act.
5. Blackout Periods. Company shall have the right to delay the
filing or effectiveness of a Registration Statement required pursuant to
Sections 2, 3 or 4 hereof during no more than two (2) periods aggregating to not
more than 90 days in any twelve-month period (a "Blackout Period") in the event
that (i) Company would, in accordance with the advice of its counsel, be
required to disclose in the prospectus information not otherwise then required
by law to be publicly disclosed or (ii) in the judgment of Company's Board of
Directors, there is a reasonable likelihood that such disclosure, or any other
action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction involving Company; provided,
however, that Company shall delay during such Blackout Period the filing or
effectiveness of any registration statement required pursuant to the
registration rights of the holders of any Securities of Company. Company shall
promptly give the Holders written notice of such determination containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay; and provided further, however, that the implementation of
any Blackout Period shall be done in good faith, taking into account Purchaser's
limited rights to transfer Securities of Company under the Stockholders
Agreement, and not for the purpose or
7
intention of impeding such rights.
6. Registration Procedures. If Company is required by the provisions
of Section 2, 3 or 4 to use its reasonable best efforts to effect the
registration of any of its Securities under the Securities Act, Company will, as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement
with respect to such Securities and use its reasonable best efforts to cause
such Registration Statement to become and remain effective for a period of time
required for the disposition of such Securities by the holders thereof but not
to exceed 180 days (except with respect to the Shelf Registration Statement).
Company shall not be deemed to have used its reasonable best efforts to keep a
Registration Statement effective during the applicable period if it voluntarily
takes any action that would result in the Holders of such Registrable Securities
not being able to sell such Registrable Securities during that period, unless
such action is required under applicable law;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Securities covered by such Registration Statement until
the earlier of such time as all of such Securities have been disposed of in a
public offering or (except with respect to the Shelf Registration Statement) the
expiration of 180 days;
(c) furnish to such selling security holders such number of
copies of the applicable Registration Statement and each such amendment and
supplement thereto, and of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such selling security holders may reasonably
request;
(d) use its reasonable best efforts to register or qualify the
Securities covered by such Registration Statement under such other Securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
each Holder of such Securities shall reasonably request (provided, however, that
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service or process), and do such other reasonable
acts and things as may be required of it to enable such Holder to consummate the
disposition in such jurisdiction of the Securities covered by such Registration
Statement;
(e) furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such shares of
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable Securities are not being sold through
underwriters, on the date that the Registration Statement with respect to such
shares of Registrable Securities becomes effective, (1) an opinion, dated such
date, of the independent counsel representing Company for the purposes of such
registration, addressed to the underwriters, if any, in customary form
8
and covering matters of the type customarily covered in such legal opinions; and
(2) a comfort letter dated such date, from the independent certified public
accountants of Company, addressed to the underwriters, in a customary form and
covering matters of the type customarily covered by such comfort letters and as
the underwriters shall reasonably request. Such opinion of counsel shall
additionally cover such other legal matters with respect to the registration in
respect of which such opinion is being given as such underwriters may reasonably
request;
(f) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities;
(g) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make earnings statements
satisfying the provisions of Section 11(a) of the Securities Act generally
available to the Holders no later than 45 days after the end of any twelve-month
period (or 90 days, if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in an underwritten public offering, or (ii) if not sold to underwriters in such
an offering, beginning with the first month of Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statements shall cover said twelve-month periods;
(h) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or quotation
system on which similar securities issued by Company are listed or traded;
(i) give written notice to Holders:
(i) when such Registration Statement or any amendment thereto has
been filed with the SEC and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to such
Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Class A Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires Company to make
changes in such Registration Statement or the prospectus in order to make
the statements therein not misleading (which notice shall be accompanied
by an
9
instruction to suspend the use of the prospectus until the requisite
changes have been made);
(j) use its reasonable best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of such
Registration Statement at the earliest possible time;
(k) furnish to each Holder, without charge, at least one copy
of such Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits (including those, if any, incorporated by reference);
(l) upon the occurrence of any event contemplated by Section
6(h)(v) above, promptly prepare a post-effective amendment to such Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to Holders, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If Company notifies the Holders in
accordance with Section 6(h)(v) above to suspend the use of the prospectus until
the requisite changes to the prospectus have been made, then the Holders shall
suspend use of such prospectus, and the period of effectiveness of such
Registration Statement provided for above shall be extended by the number of
days from and including the date of the giving of such notice to the date
Holders shall have received such amended or supplemented prospectus pursuant to
this Section 6(l);
(m) (i) make reasonably available for inspection by a single
representative of the Holders, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
agent retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of
Company and (ii) cause Company's officers, directors and employees to supply all
relevant information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with the registration;
provided that the foregoing inspection and information gathering shall be
coordinated on behalf of the Purchaser by Purchaser and on behalf of the other
parties, by one counsel designated by and on behalf of such other parties; and
(n) in connection with any underwritten offering, make
appropriate officers of Company available to the selling security holders for
meetings with prospective purchasers of the Registrable Securities and prepare
and present to potential investors customary "road show" material in a manner
consistent with other new issuances of Securities similar to the Registrable
Securities, in connection with any proposed sale of the Registrable Securities
in an aggregate offering of at least $100,000,000.
It shall be a condition precedent to the obligation of Company to
take any action pursuant to this Agreement in respect of the Securities which
are to be registered
10
at the request of any Holder that such Holder shall furnish to Company such
information regarding the Securities held by such Holder and the intended method
of disposition thereof as Company shall reasonably request and as shall be
required in connection with the action taken by Company.
7. Expenses. All expenses incurred in complying with the provisions
of this Agreement, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the NASD), printing
expenses, fees and disbursements of counsel for Company, the reasonable fees and
expenses of a single counsel for the selling security holders (selected by those
holding a majority of the securities being registered determined based upon the
value thereof), expenses of any special audits incident to or required by any
such registration and expenses of complying with the Securities or blue sky laws
of any jurisdiction pursuant to Section 6(d), shall be paid by Company, except
that:
(a) all such expenses in connection with any amendment or
supplement to the Registration Statement or prospectus filed more than 180 days
after the effective date of such Registration Statement because any Holder has
not effected the disposition of the Securities requested to be registered shall
be paid by such Holder; and
(b) Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
underwriter in respect of the Securities sold by such Holder.
8. Indemnification and Contribution.
(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Company shall
indemnify and hold harmless the Holder of such Registrable Securities, such
Holder's directors and officers, and each other person (including each
underwriter) to the extent permitted by law who participated in the offering of
such Registrable Securities and each other person, if any, who controls such
Holder or such participating person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder or any such director or officer or participating person or
controlling person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any alleged
untrue statement of any material fact contained, on the effective date thereof,
in any Registration Statement under which such Securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse such Holder or such
director, officer or participating person or controlling person for any legal or
any other expenses reasonably incurred by such Holder or such director, officer
or participating person or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any indemnified party from whom
11
the person asserting such losses, claims, damages, liabilities, expenses and
judgments purchased securities if such untrue statement or omission or alleged
untrue statement or omission made in such preliminary prospectus is eliminated
or remedied in the prospectus and a copy of the prospectus shall not have been
furnished to such person in a timely manner, unless such prospectus was not
furnished because Company failed to provide the indemnified party with
sufficient copies of such corrected prospectus within the time period required;
provided, further that Company shall not be liable in any case to the extent
such losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or actual or alleged omission made in such Registration
Statement, preliminary prospectus, prospectus or amendment or supplement, in
reliance upon and in conformity with written information furnished to Company by
such Holder or such Holder's directors or officers specifically for use therein,
or (in the case of any underwritten offering) so furnished for such purpose by
any underwriter.
(b) Each Holder, by acceptance hereof, agrees to indemnify and
hold harmless Company, its directors and officers and each other person, if any,
who controls Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which Company or
any such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information in writing provided to Company by such Holder
specifically for use in the following documents and contained, on the effective
date thereof, in any Registration Statement under which Securities were
registered under the Securities Act at the request of such Holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto. Notwithstanding the provisions of this paragraph (b) or
paragraph (c) below, no Holder shall be required to indemnify any person
pursuant to this Section 8 or to contribute pursuant to paragraph (c) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder in connection with any such registration under the Securities Act.
(c) If the indemnification provided for in this Section 8 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal
12
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding. If the allocation provided in this paragraph
(c) is not permitted by applicable law, the parties shall contribute based upon
the relevant benefits received by the Company and the Holders from the sale of
Securities.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) Any person entitled to indemnification hereunder (the
"Indemnified Party") agrees to give prompt written notice to the indemnifying
party (the "Indemnifying Party") after the receipt by the Indemnified Party of
any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement;
provided, that the failure so to notify the Indemnifying Party shall not relieve
the Indemnifying Party of any liability that it may have to the Indemnifying
Party hereunder unless such failure is materially prejudicial to the
Indemnifying Party. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action, (iii) the named parties to any
such action (including any impleaded parties) have been advised by such counsel
that either (A) representation of such Indemnified Party and the Indemnifying
Party by the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there are one or more legal defenses available to it
which are substantially different from or additional to those available to the
Indemnifying Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.
(e) The agreements contained in this Section 8 shall survive
the transfer of the Registered Securities by any Holder and sale of all the
Registrable Securities pursuant to any registration statement and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Holder or such director, officer or participating or controlling person.
9. Certain Additional Limitations on Registration Rights.
Notwithstanding the other provisions of this Agreement, Company shall not be
obligated to register the Registrable Securities of any Holder (i) if, in the
opinion of counsel to Company reasonably satisfactory to the Holder and its
counsel (or, if the Holder has
13
engaged an investment banking firm, to such investment banking firm and its
counsel), the sale or other disposition of such Holder's Registrable Securities,
in the manner proposed by such Holder (or by such investment banking firm), may
be effected without registering such Registrable Securities under the Securities
Act, (ii) such Holder or any underwriter of such Registrable Securities shall
fail to furnish to Company necessary information in respect of the distribution
of such Registrable Securities, or (iii) if such registration involves an
underwritten offering, such Registrable Securities are not included in such
underwritten offering on the same terms and conditions as shall be applicable to
the other Securities being sold through underwriters in the registration or such
Holder fails to enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwritten offering. In
addition, each Holder agrees not to effect any public sale or distribution of
any Registrable Securities or of any securities convertible into or exchangeable
or exercisable for such Registrable Securities, including a sale pursuant to
Rule 144 under the Securities Act and to enter into a customary lock-up
agreement with the managing underwriter for an offering, during the 90-day
period beginning on the effective date of any Demand Registration Statement
(initiated by such Holder) or Piggy-Back Registration Statement or other
underwritten offering (initiated by the Company) (except as part of such
registration), if and to the extent requested by the managing underwriter for
such offering.
10. Limitations on Registration of Other Securities; Representation.
From and after the date of this Agreement, except for the Equity Registration
Rights Agreement, Company shall not, without the prior written consent of a
majority in interest of the Holders, enter into any agreement with any holder or
prospective holder of any Securities of Company giving such Holder or
prospective holder any registration rights the terms of which are as or more
favorable taken as a whole than the registration rights granted to the Holders
hereunder unless Company shall also give such rights to the Holders hereunder.
11. No Inconsistent Agreements. Company will not hereafter enter
into any agreement with respect to its Securities which is inconsistent in any
material respects with the rights granted to the Holders in this Agreement.
12. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Registrable Securities to be registered
pursuant to Sections 2 or 3 hereto shall be selected by Holders of a majority of
the securities being so registered and shall be acceptable to Company.
13. Miscellaneous.
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision
14
hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
(b) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has obtained the written consent of a majority
in interest of the Holders.
(c) Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by overnight courier mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed as follows:
(i) If to any Holder, at its last known address appearing on the
books of Company maintained for such purpose.
(ii) If to Company, at
c/o Metromedia Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telecopy Number: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided.
The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three (3) Business Days after the same shall have been sent by
overnight courier.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto including any person to whom Registrable Securities are transferred in
accordance with the Stockholders Agreement.
15
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Governing Law; Jurisdiction. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York without giving effect to the conflict of laws provisions thereof. Each
of the parties hereby submits to personal jurisdiction and waives any objection
as to venue in the County of New York, State of New York. Service of process on
the parties in any action arising out of or relating to this Agreement shall be
effective if mailed to the parties in accordance with Section 13(c) hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights hereunder.
(g) Severability. Wherever possible, 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 shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(h) Entire Agreement. This Agreement represents the complete
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.
[Signatures appear on next page.]
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
METROMEDIA FIBER NETWORK, INC.
By:_____________________________________
Name:
Title:
XXXX ATLANTIC INVESTMENTS, INC.
By:_____________________________________
Name:
Title:
17
