REGISTRATION AGREEMENT
Dated as of March 17, 2000
Among
FLAG TELECOM HOLDINGS LIMITED
as Issuer
and
XXXXXXX XXXXX XXXXXX INC.
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED,
DEUTSCHE BANK SECURITIES INC. and
BEAR, XXXXXXX & CO. INC.
as Initial Purchasers
11.625% Senior Euro Notes due 2010
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") is dated as of March
17, 2000, by and among FLAG TELECOM HOLDINGS LIMITED, a Bermuda corporation (the
"Company" or the "Issuer), as issuer, and XXXXXXX XXXXX XXXXXX INC., XXXXXX
XXXXXXX & CO. INTERNATIONAL LIMITED, DEUTSCHE BANK SECURITIES INC. AND BEAR,
XXXXXXX & CO. INC., as Initial Purchasers (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated March 14, 2000, by and among the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of (euro)300 million aggregate
principal amount of the Company's 11.625% Senior Euro Notes due 2010 (the
"Notes") and $300 million aggregate principal amount of the Company's 11.625%
Senior Dollar Notes due 2010. In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Issuer has agreed to provide the registration
rights set forth in this Agreement for the benefit of the Initial Purchasers and
any subsequent holder or holders of each of the Notes. The execution and
delivery of this Agreement is a condition to the Initial Purchasers' obligation
to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 3 hereof.
Closing: See Purchase Agreement.
Company: See the introductory paragraph hereto.
Effectiveness Date: The Exchange Effectiveness Date or the Initial
Shelf Registration Effectiveness date, as the case may be.
Effectiveness Period: See Section 3 hereof.
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Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Effectiveness Date: See Section 2 hereof.
Exchange Filing Date: See Section 2 hereof.
Exchange Notes: The 11.625% Senior Euro Notes due 2010, of the
Company, that are identical to the Notes in all material respects, except that
the provisions regarding restrictions on transfer shall be modified, as
appropriate, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Offer: See Section 2 hereof.
Exchange Registration Statement: See Section 2 hereof.
Filing Date: The Exchange Filing Date or Initial Shelf Registration
Filing Date, as the case may be.
Holder: Any holder of a Registrable Note.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of March 17, 2000, by and among
the Issuer and The Bank of New York, as Trustee, pursuant to which the Notes are
being issued, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Initial Shelf Registration Effectiveness Date: See Section 3(a)
hereof.
Initial Shelf Registration Filing Date: See Section 3(a) hereof.
Inspectors: See Section 5(m) hereof.
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Issue Date: March 17, 2000, the date of original issuance of the
Notes.
Issuer: See the introductory paragraphs hereto.
NASD: See Section 5(r) hereof.
Notes: See the introductory paragraphs hereto.
Offering Memorandum: The final offering memorandum of the Issuer
dated March 14, 2000, in respect of the offering of the Notes.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2 hereof.
Private Exchange Notes: See Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(m) hereof.
Registrable Notes: (a) Each Note upon its original issuance and at
all times subsequent thereto, (b) each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance and at all times subsequent
thereto and (c) each Private Exchange Note upon original issuance thereof and at
all times subsequent thereto, until (w) a Registration Statement (other than,
with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note,
Exchange Note or Private Exchange Note has been declared effective by the SEC
and such Note, Exchange Note or such Private Exchange Note, as the case may be,
has been disposed of in accordance
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with such effective Registration Statement, (x) such Note has been exchanged
pursuant to the Exchange Offer for an Exchange Note or Exchange Notes that may
be resold without complying with the prospectus delivery requirements under the
Securities Act, (y) such Note, Exchange Note or Private Exchange Note, as the
case may be, ceases to be outstanding for purposes of the Indenture or (z) such
Note, Exchange Note or Private Exchange Note, as the case may be, may be resold
without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the Company
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes,
filed with the SEC under the Securities Act, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee under any
indenture
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governing the Exchange Notes and Private Exchange Notes.
Underwritten registration or underwritten offering: A registration
in which securities of the Issuer are sold to an underwriter for reoffering to
the public.
2. Exchange Offer.
(a) The Issuer shall (A) prepare and, on or prior to 60 days after
the Issue Date (the "Exchange Filing Date"), file with the SEC a Registration
Statement under the Securities Act with respect to an offer by the Company to
the holders of the Notes to issue and deliver to such holders, in exchange for
Notes, a like principal amount of Exchange Notes (the "Exchange Offer"), (B) use
its best efforts to cause the Registration Statement relating to the Exchange
Offer to be declared effective by the SEC under the Securities Act on or prior
to 150 days after the Issue Date (the "Exchange Effectiveness Date") and (C)
commence the Exchange Offer and use its best efforts to issue, on or prior to
180 days after the Issue Date, the Exchange Notes. The offer and sale of the
Exchange Notes pursuant to the Exchange Offer shall be registered pursuant to
the Securities Act on the appropriate form (the "Exchange Registration
Statement") and duly registered or qualified under all applicable state
securities or Blue Sky laws and will comply with all applicable tender offer
rules and regulations under the Exchange Act and state securities or Blue Sky
laws. The Exchange Offer shall not be subject to any condition, other than that
the Exchange Offer does not violate any applicable law or interpretation of the
staff of the SEC. Upon consummation of the Exchange Offer in accordance with
this Section 2, the Issuer shall have no further registration obligations other
than with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by
Participating Broker-Dealers and (iii) Notes or Exchange Notes as to which
Section 3 hereof applies. No securities shall be included in the Exchange
Registration Statement other than the Exchange Notes.
(b) The Issuer may require each holder of Notes as a condition to
its participation in the Exchange Offer to represent to the Issuer and its
counsel in writing (which may be contained in the applicable letter of
transmittal) that at the time of the consummation of the Exchange Offer (i) any
Exchange Notes received by such holder will be acquired in the ordinary course
of its business, (ii) such holder will have no arrangement or understanding with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes and (iii) such holder is not an Affiliate
of the Issuer, or if it is an Affiliate of the Issuer, it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable.
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having, or that are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other holder of Notes is not entitled to
participate in the Exchange Offer, the Company upon the request of such Initial
Purchaser or any such holder shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
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Purchaser and any such holder, in exchange (the "Private Exchange") for such
Notes held by such Initial Purchaser and any such holder, a like principal
amount of debt securities of the Company, that are identical in all material
respects to the Exchange Notes (the "Private Exchange Notes") (and that are
issued pursuant to the same indenture as the Exchange Notes). The Private
Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
The Issuer and the Initial Purchasers acknowledge that the staff of
the SEC has taken the position that any broker-dealer that owns Exchange Notes
that were received by such broker-dealer for its own account in the Exchange
Offer (a "Participating Broker-Dealer") may be deemed to be an "underwriter"
within the meaning of the Securities Act and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes (other than a resale of an unsold allotment resulting from the
original offering of the Notes).
The Issuer and the Initial Purchasers also acknowledge that it is
the SEC staff's position that if the Prospectus contained in the Exchange
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Securities Act in connection with resales of Exchange
Notes for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
In light of the foregoing, if requested by a Participating
Broker-Dealer, the Issuer agrees (x) to use its best efforts to keep the
Exchange Registration Statement continuously effective for a period of up to six
months or such earlier date as each Participating Broker-Dealer shall have
notified the Company in writing that such Participating Broker-Dealer has resold
all Exchange Notes acquired in the Exchange Offer, (y) to comply with the
provisions of Section 5 of this Agreement, as they relate to the Exchange Offer
and the Exchange Registration Statement, and (z) to deliver to such
Participating Broker-Dealer a "cold comfort" letter of the independent public
accountants of the Issuer and a legal opinion as to matters reasonably requested
by such Participating Broker-Dealer relating to the Exchange Registration
Statement and the related Prospectus and any amendments or supplements thereto.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor and (ii) if the
Notes are surrendered for exchange on a date in a period which includes the
record date for an interest payment date to occur on or after the
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date of such exchange and as to which interest will be paid, the date of such
interest payment date or (B), if no interest has been paid on the Notes, from
the Issue Date.
In connection with each Exchange Offer, the Issuer shall:
(1) mail, or cause to be mailed, to each Holder of record entitled
to participate in the Exchange a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate letter
of transmittal and related documents;
(2) use their best efforts to keep the Exchange Offer open for not
less than 20 business days after the date that notice of the Exchange
Offer is mailed to Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw validly tendered Notes at any time
prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the applicable Exchange
Offer and the applicable Private Exchange, if any, the Issuer shall:
(1) accept for exchange all Registrable Notes validly tendered and
not validly withdrawn pursuant to the applicable Exchange Offer and the
applicable Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange and cause the Trustee to authenticate and deliver
promptly to each Holder of Registrable Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount to the
securities of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and that, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that (a) the Exchange Notes
shall not be subject to the transfer restrictions
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set forth in the Indenture and (b) the Private Exchange Notes shall be subject
to the transfer restrictions set forth in such indenture. The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes and
the Notes shall vote and consent together on all matters as one class and that
none of the Exchange Notes, the Private Exchange Notes or the Notes will have
the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer is not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not consummated within 180 days
of the Issue Date, (iii) any holder of any Private Exchange Notes so requests in
writing to the Issuer within 45 days after the consummation of the Exchange
Offer, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Issuer within the meaning of the Securities Act), then in the case of each of
clauses (i) to and including (iv) of this sentence, the Issuer shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration.
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuer shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange
Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is
applicable (the "Initial Shelf Registration"). The Issuer shall use its best
efforts to file with the SEC the Initial Shelf Registration on or before the
60th day after the occurrence of any of the events set forth in Section 2(c)
(the "Initial Shelf Registration Filing Date"). The Initial Shelf Registration
shall be on Form F-1 or another appropriate form permitting registration of such
Registrable Notes for resale by Holders in the manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Issuer shall not permit any securities other than the Registrable Notes to be
included in the Initial Shelf Registration or any Subsequent Shelf Registration
(as defined below).
The Issuer shall use its best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act on or prior to
the 90th day after the Initial Shelf Registration Filing Date (the "Initial
Shelf Registration Effectiveness Date") and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
which is the earlier of (a) two years from the Issue Date (the "Effectiveness
Period") and (b) such shorter period ending when (i) all Registrable Notes
covered by the Initial Shelf Registration have been sold in the manner set forth
and as contemplated in the Initial Shelf Registration or
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(ii) a Subsequent Shelf Registration covering all of the Registrable Notes
covered by and not sold under the Initial Shelf Registration or an earlier
Subsequent Shelf Registration has been declared effective under the Securities
Act (the "Applicable Period"); provided, however, that the Effectiveness Period
in respect of the Initial Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Issuer shall use its
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Initial Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Notes covered by and not sold under the Initial Shelf
Registration or an earlier Subsequent Shelf Registration (each, a "Subsequent
Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuer
shall use its best efforts to cause the Subsequent Shelf Registration to be
declared effective under the Securities Act as soon as practicable after such
filing and to keep such subsequent Shelf Registration continuously effective for
the remainder of the Effectiveness Period. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Issuer shall promptly supplement
and amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes.
4. Additional Interest.
(a) The Issuer and the Initial Purchasers agree that the Holders
will suffer damages if the Issuer fails to fulfill its obligations under Section
2 or Section 3 hereof and that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, the Issuer agrees to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the applicable Filing
Date or (B) notwithstanding that the Issuer has consummated or will
consummate the
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Exchange Offer, the Issuer is required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the Filing Date
applicable thereto, then commencing on the day after any such Filing Date,
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days immediately following each
such Filing Date, and such Additional Interest shall increase by an
additional 0.25% per annum at the beginning of each subsequent 30-day
period; or
(ii) if (A) neither the Exchange Registration Statement nor the Initial
Shelf Registration is declared effective by the SEC on or prior to the
relevant Effectiveness Date or (B) notwithstanding that the Issuer has
consummated or will consummate the Exchange Offer, the Issuer is required
to file a Shelf Registration and such Shelf Registration is not declared
effective by the SEC on or prior to the Effectiveness Date in respect of
such Shelf Registration, then, commencing on the day after the applicable
Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 30 days
immediately following the day after such Effectiveness Date, and the rate
of such Additional Interest shall increase by an additional 0.25% per
annum at the beginning of each subsequent 30-day period; or
(iii) if (A) the Issuer has not exchanged Exchange Notes for all Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to the 180th day after the Issue Date or (B) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (other
than such time as all Notes have been disposed of thereunder), then
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days commencing on the (x) 181st
day after such Issue Date, in the case of (A) above, or (y) the day such
Shelf Registration ceases to be effective in the case of (B) above, such
Additional Interest shall increase by an additional 0.25% per annum at the
beginning of each such subsequent 30-day period (it being understood and
agreed that, notwithstanding any provision to the contrary, so long as any
Note that is the subject of a Shelf Notice is then covered by an effective
Shelf Registration, no Additional Interest shall accrue or accumulate on
such Notes);
provided, however, that the rate of Additional Interest that shall accrue on the
Notes may not exceed in the aggregate 1.50% per annum; provided, further,
however, that (1) upon the filing of the applicable Exchange Registration
Statement or the applicable Shelf Registration as required hereunder (in the
case of clause (i) above of this Section 4(a)), (2) upon the effectiveness of
the applicable Exchange Registration Statement or the applicable Shelf
Registration Statement as required hereunder (in the case of clause (ii) of this
Section 4(a)), or (3) upon the exchange of the applicable Exchange Notes for all
Notes tendered (in the case of
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clause (iii)(A) of this Section 4(a), or upon the effectiveness of the
applicable Shelf Registration Statement which had ceased to remain effective (in
the case of (iii)(B) of this Section 4(a)), Additional Interest on the Notes in
respect of which such events relate as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue or accumulate, as
the case may be.
(b) The Issuer shall notify the Trustee (who shall be acting under
and protected by the terms of the Indenture) within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 shall be
payable in cash semiannually on each March 30 and September 30 (to the holders
of record on the March 15 and September 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the applicable rate of Additional Interest by the principal amount
of the Registrable Notes, multiplied by a fraction, the numerator of which is
the number of days such rate of Additional Interest was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days elapsed),
and the denominator of which is 360.
5. Registration Procedures.
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuer shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuer hereunder, the Issuer shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; provided,
however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuer shall furnish to
and afford the Holders of the Registrable Notes included in such Registration
Statement or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five days prior to such filing, or such later date as is
reasonable under the
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circumstances). The Issuer shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Holders of a majority
in aggregate principal amount of the Registrable Notes included in such
Registration Statement, or any such Participating Broker-Dealer, as the case may
be, their counsel, or the managing underwriters, if any, shall reasonably object
in writing on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Issuer shall be deemed not to have used its
best efforts to keep a Registration Statement effective during the Effectiveness
Period or the Applicable Period, as the case may be, relating thereto if the
Issuer voluntarily takes any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law or permitted by this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period relating thereto from whom the Company has
received written notice that it will be a Participating Broker-Dealer in the
applicable Exchange Offer, notify the selling Holders of Registrable Notes or
each such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within 2 business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuer, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any
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time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Issuer
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(l) hereof cease to be true and correct in all material respects,
(iv) of the receipt by the Issuer of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange Notes to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or written threat of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the Issuer's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its best efforts to prevent the issuance
of any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Notes
or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in
any jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
reasonably requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Issuer has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and
13
(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes and to each such Participating Broker-Dealer who so requests
and to their respective counsel and each managing underwriter, if any, at the
sole expense of the Issuer, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver to each selling Holder of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole expense of
the Issuer, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuer hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the Exchange
Notes pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and to cooperate
with the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, the managing underwriter or underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters reasonably request in
writing; provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Issuer agrees to cause its counsel to perform Blue
Sky
14
investigations and file registrations and qualifications required to be filed
pursuant to this Section 5(h), keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Exchange held by Participating Broker-Dealers or the Registrable Notes covered
by the Registration Statement; provided, however, that the Issuer shall not be
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuer, a supplement or post-effective amendment to the
applicable Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the purchasers
of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, the Issuer shall not be required to amend or supplement a
Registration Statement, any related Prospectus or any document incorporated
therein by reference, in the event that, and for a period not to exceed an
aggregate of 75 days in any calendar year if, (i) an event occurs and is
continuing as a result of which a Shelf Registration would, in the Issuer's good
faith judgment, contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (ii) (a)
the Issuer determines in its good faith judgment that the disclosure of such
event at such time would have a material
15
adverse effect on the business, operations or prospects of the Issuer or (b) the
disclosure otherwise relates to a pending material business transaction that has
not yet been publicly disclosed.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) and take all such other appropriate actions
as are reasonably requested in order to expedite or facilitate the registration
or the disposition of such Registrable Notes, and in such connection, (i) make
such representations and warranties to Holders of such Registrable Notes with
respect to the business of the Issuer and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) obtain an opinion of counsel to the Issuer and
updates thereof in form and substance reasonably satisfactory to the Holders of
a majority in principal amount of the Registrable Notes being sold, addressed to
each selling Holder covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such Holders; (iii) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Issuer (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Issuer or of any business acquired by any of the Issuer for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the selling Holders of Registrable
Notes that satisfy the applicable requirements of Statement of Accounting
Standards No. 72, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
selling Holders; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and procedures
acceptable to the Issuer and the Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration with respect to all
parties to be indemnified pursuant to said Section including, without
limitation, such selling Holders). The above shall be done at each closing in
respect of the sale of Registrable Notes, or as and to the extent required
thereunder.
(m) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer
16
who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold, or
each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
regular business hours and upon reasonable notice, all financial and other
records, pertinent corporate documents and instruments of the Issuer and
subsidiaries of the Issuer (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuer
and any of its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement and
Prospectus. Each Inspector shall agree in writing that it will keep the Records
confidential and that it will not disclose any of the Records that the Issuer
determines, in good faith, to be confidential and notify the Inspectors in
writing are confidential unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or material omission in such
Registration Statement or Prospectus, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in such Records has been made generally
available to the public; provided, however, that prior notice shall be provided
as soon as practicable to the Issuer of the potential disclosure of any
information by such Inspector pursuant to clauses (i) or (ii) of this sentence
to permit the Issuer to obtain a protective order (or waive the provisions of
this paragraph (m)) and that such Inspector shall take such actions as are
reasonably necessary to protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not inconsistent with, an
impairment of or in derogation of the rights and interests of the Holder or any
Inspector.
(n) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders
of the Registrable Notes, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use their best efforts to cause such trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders with regard to any applicable
Registration Statement, a consolidated earning statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities
17
Act) no later than 45 days after the end of any twelve-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which any Registrable Notes are
sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Issuer after the effective date of
a Registration Statement, which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes as the case may be, and the related indenture constitute legal,
valid and binding obligations of the Issuer, enforceable against it in
accordance with their respective terms subject to customary exceptions and
qualifications.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuer (or
to such other Person as directed by the Issuer) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Issuer shall xxxx,
or cause to be marked, on such Registrable Notes that such Registrable Notes are
being canceled in exchange for the Exchange Notes or the Private Exchange Notes,
as the case may be; provided that in no event shall such Registrable Notes be
marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(s) Use its best efforts to take all other steps reasonably
necessary to effect the registration of the applicable Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuer may require each seller of any Registrable Notes as to
which any registration is being effected to furnish to the Issuer such
information regarding such seller and the distribution of such Registrable Notes
as the Issuer may, from time to time, reasonably request. The Issuer may exclude
from such registration the Registrable Notes of any seller for so long as such
seller fails to furnish such information within a reasonable time after
receiving such request and in such event shall have no further obligation under
this Agreement (including without limitation the obligation under Section 4)
with respect to such seller or any subsequent holder of such Registrable Notes.
Each seller as to which any Shelf Registration is being effected agrees to
furnish promptly to the Issuer all information required to be disclosed in order
to make the information previously furnished to the Issuer by such
18
seller not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Issuer, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Issuer, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the applicable Registration Statement
filed or prepared subsequent to the time that such reference ceases to be
required.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes, as the case may be, to be sold by such Participating Broker-Dealer, as
the case may be, that, upon actual receipt of any notice from the Issuer of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder or Participating Broker-Dealer, as the
case may be, will forthwith discontinue disposition of such Registrable Notes or
Exchange Notes, as the case may be, covered by such Registration Statement or
Prospectus until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof, or until it is advised in writing (the "Advice") by the Issuer that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event that the Issuer shall give any
such notice, the Applicable Period shall be extended by the number of days
during such periods from and including the date of the giving of such notice to
and including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof or (y)
the Advice.
6. Registration Expenses.
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuer (other than any underwriting discounts or
commissions) shall be borne by the Issuer whether or not the Exchange
Registration Statement or any Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection
19
with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes or Exchange Notes, as the case may be, are located, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes, as the case may be, to be sold by a Participating Broker-Dealer during
the Applicable Period)), (ii) printing expenses, including, without limitation,
expenses of printing certificates for Registrable Notes or Exchange Notes in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Registrable Notes included in any Registration Statement
or to be sold by any Participating Broker-Dealer, as the case may be, (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuer and fees and disbursements of one special counsel for all
of the sellers of each of the Registrable Notes (exclusive of any counsel
retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(l)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Issuer desires such insurance, (vii) fees and
expenses of all other Persons retained by the Issuer, (viii) internal expenses
of the Issuer (including, without limitation, all salaries and expenses of
officers and employees of the Issuer performing legal or accounting duties),
(ix) the expense of any annual audit, (x) any fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, indentures
and any other documents necessary in order to comply with this Agreement.
7. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each Holder of
the Registrable Notes and each Participating Broker-Dealer selling the Exchange
Notes during the Applicable Period, the affiliates, officers and directors of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages, judgments, liabilities and expenses (including, without
limitation, the legal fees and other expenses actually incurred in connection
with any suit, action or proceeding or any claim asserted) caused by, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
20
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Issuer in writing by
such Participant expressly for use therein and with respect to any preliminary
Prospectus, to the extent that any such loss, claim, damage or liability arises
solely from the fact that any Participant sold Registrable Notes or Exchange
Notes to a person to whom there was not sent or given a copy of the Prospectus
(as amended or supplemented) at or prior to the written confirmation of such
sale if the Issuer shall have previously furnished copies thereof to the
Participant in accordance herewith and the Prospectus (as amended or
supplemented) would have corrected any such untrue statement or omission.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, the affiliates, officers and directors of the
Issuer and each Person who controls the Issuer within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent (but
on a several, and not joint, basis) as the foregoing indemnity from the Issuer
to each Participant, but only with reference to information relating to such
Participant furnished to the Issuer in writing by or on behalf of such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may reasonably designate in such proceeding and shall pay
the fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Persons will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture by the
Indemnifying Person of substantial rights and defenses and the Indemnifying
Person was not otherwise aware of such action or claim. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
21
(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person or any affiliate thereof and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Persons shall
not, in connection with such proceeding or separate but substantially similar
related proceedings in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes and Exchange Notes sold by all such Participants and shall
be reasonably acceptable to the Issuer, and any such separate firm for the
Issuer, their affiliates, officers, directors, representatives, employees and
agents and such control Persons of the Issuer shall be designated in writing by
the Issuer and shall be reasonably acceptable to the Holders.
The Indemnifying Persons shall not be liable for any settlement of
any proceeding effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld or delayed), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as
22
well as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuer
on the one hand or such Participant or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability that the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A.
The Issuer covenants and agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time the Issuer is not required to file such reports, the Issuer will,
upon the request of any Holder or beneficial owner of Registrable Notes, make
available such information necessary to permit sales pursuant to Rule 144A under
the Securities Act. The Issuer further covenants and agrees, for so long as any
Registrable Notes remain outstanding that it will take such further action as
any Holder of Registrable Notes may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Notes
without registration under the Securities Act within the limitation of the
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exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Issuer has not, as of the date
hereof, and the Issuer shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's other issued and outstanding
securities under any such agreements. The Issuer will not enter into any
agreement with respect to any of its securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Securities. The Issuer shall
not, directly or indirectly, take any action with respect to the Registrable
Notes that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuer and (II)(A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect the Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount or liquidation preference, as the case may be, of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7 and this Section 10(c) may not be amended, modified or supplemented without
the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including,
without
24
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, the Exchange Indenture or of the Issuer, as
appropriate.
(ii) if to the Issuer, at the address as follows:
FLAG Telecom Holdings Limited
0xx Xxxxx, 000 Xxxxx Xxxxxx
Xxxxxx X0X 0XX
Facsimile No.: (00) 000-000-0000
Attention: Xxxxxx Xxxxx, General Counsel
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in the Indenture if such communication
relates to the Notes, Exchange Notes or Private Exchange Notes.
(e) 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, the Holders and the Participating Broker-Dealers; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder or a Participating Broker-Dealer unless and to
the extent such successor or assign holds Registrable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
25
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuer or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes, and
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, the Purchase Agreement and the
Indenture are intended by the parties as a final and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein and any and all prior oral or written
agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuer on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FLAG TELECOM HOLDINGS LIMITED
By:_____________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
Xxxxxxx Xxxxx Barney Inc.
By:________________________________
Name:
Title:
Xxxxxx Xxxxxxx & Co. International Limited
By:________________________________
Name:
Title:
Deutsche Bank Securities Inc.
By:________________________________
Name:
Title:
Bear, Xxxxxxx & Co. Inc.
By:________________________________
Name:
Title:
For themselves and the other Initial
Purchasers named in Schedule I to
the foregoing Agreement
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