Exhibit 99.5
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[Exhibit B to Merger Agreement]
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
___________________________ , 2003, is made among ISLAND, INC., a Delaware
corporation (the "Company"), [Xxxxx X. Xxxxxx, an individual ("[Xxxxxx]")], and
each Person listed on the signature pages hereof under the heading "WCAS
Securityholders" (collectively, "W").
WITNESSETH:
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WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
_____________, 2003, by and among the Company, , BTI Telecom, Inc., 8DBC1 Corp.,
WCAS Capital Partners III, L.P., Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P.,
WCAS Information Partners, L.P. and certain individual investors and trusts
listed on the signature pages thereto (the "Merger Agreement"), the Company has
issued to W (i) ___________________________ shares of the common stock, par
value $0.01 per share, of the Company (the "Common Stock") and (ii)
______________________ shares of the 8% Series B Convertible Redeemable
Preferred Stock, par value $0.01 per share, of the Company (the "Series B
Preferred Stock");
WHEREAS, pursuant to the Merger Agreement and the Warrant Agreement,
dated as of the date hereof, between the Company and the warrant agent
thereunder (the "Warrant Agreement"), the Company has issued to W warrants to
purchase shares of the Common Stock; and
WHEREAS, in connection with and pursuant to the Merger Agreement, the
Company has agreed to grant to W and other permitted holders the registration
rights described in this Agreement with respect to the securities referred to
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
"Adverse Offering Effect" has the meaning specified in Section 6(a).
"Affiliate" has the meaning specified in Rule 12b-2 under the Exchange
Act.
"Amendment" has the meaning specified in Section 18.
"Blackout Period" has the meaning specified in Section 8(a).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
or the State of Georgia are authorized or obligated by law or other governmental
actions to close.
"Closing Date" means the date on which the Effective Time occurs.
"Common Stock" has the meaning specified in the recitals to this
Agreement.
"Company" has the meaning specified in the first paragraph of this
Agreement.
"Company Shelf Response" has the meaning specified in Section 3(b).
"Cutback Notice" has the meaning specified in Section 6(a).
"Effective Time" has the meaning specified in the Merger Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, as the same shall be in effect from time to
time. Reference to a particular section of the Securities Exchange Act of 1934,
as amended, shall include reference to the comparable section, if any, of any
such successor federal statute.
"Excluded Registration" means a registration of Common Stock under the
Securities Act pursuant to a registration statement filed (i) on Form S-4 or
Form S-8 or any successor registration forms that may be adopted by the SEC or
(ii) in connection with an exchange offer or an offering of securities solely to
existing stockholders of the Company or employees of the Company or its
subsidiaries.
"Governance Agreement" has the meaning specified in the Merger
Agreement.
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"Holders" means, collectively, the [Xxxxxx Holders and the] WCAS
Holders.
"Initiating Demand Holders" has the meaning specified in Section 4(a).
"Initiating Securityholder" has the meaning specified in Section 5(a).
"Initiating Shelf Demand Holders" has the meaning specified in Section
4(b).
"[Xxxxxx" has the meaning specified in the first paragraph of this
Agreement.]
"[Loftin Holder" means Xxxxxx and, subject to Section 17, each other
Person to whom Xxxxxx has transferred Registrable Securities and who has agreed
to become bound by the provisions of this Agreement in accordance with Section
16, but only so long as such other Person holds Registrable Securities.]
"Losses" has the meaning specified in Section 12(a).
"Majority of the Registrable Securities" means, as of any date of
determination with respect to the designated Holders, a majority of the shares
of Common Stock that are Registrable Securities held by such Holders on an
as-converted basis, assuming that all of such Holder's Registrable Securities
that are convertible into or exercisable for Common Stock are converted into or
exercised for Common Stock as of such date of determination.
"Merger Agreement" has the meaning specified in the recitals to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Registrable Securities" means, with respect to any offering
hereunder, the securities that any Person is entitled to request be included in
such offering pursuant to any registration rights agreement other than this
Agreement or the Series A Registration Rights Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
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a government or a political subdivision or an agency or instrumentality thereof.
"PIK Dividend Shares" means any shares of the Series B Preferred Stock
that have been issued as dividends on shares of the Series B Preferred Stock.
"Plan of Distribution" has the meaning specified in Section 3(c).
"Preferred Shares" means (i) the shares of Series B Preferred Stock
issued by the Company on or after the Closing Date pursuant to the Merger
Agreement and (ii) any other shares of Series B Preferred Stock issued as a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares of Series B Preferred Stock described in clause (i)
above, including PIK Dividend Shares.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by any Registration Statement, and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registrable Securities" means, collectively, (i) the shares of Common
Stock held by the WCAS Holders immediately prior to the Closing Date plus the
shares of Common Stock acquired by the WCAS Holders on or after the Closing Date
(including, without limitation, the shares of Common Stock issued or issuable
upon conversion of the Preferred Shares or upon exercise of the Warrants) in
accordance with the Governance Agreement (or otherwise following the expiration
of the Governance Agreement), (ii) the Preferred Shares, (iii) the Warrants and
(iv) any securities paid, issued or distributed in respect of any shares of
Common Stock referred to in clause (i) by way of stock dividend or distribution
or stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise; [provided that, in the case
of any Loftin Holder, "Registrable Securities" means, collectively, (A) the
Warrants, (B) the shares of Common Stock issued or issuable upon exercise of the
Warrants and (C) any securities paid, issued or distributed in respect of any
such shares of Common Stock referred to in clause (B) by way of stock dividend
or distribution or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation or otherwise].
Securities shall cease to be Registrable Securities in accordance with
Section 2.
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"Registration Expenses" means any and all out-of-pocket expenses
incident to the Company's performance of its registration obligations under this
Agreement, including, without limitation, (i) all SEC registration and filing
fees and expenses incurred in connection with the preparation, printing and
distribution of the Registration Statement and Prospectus and any other document
or amendment thereto and the mailing and delivery of copies thereof to the
Holders and any dealers or underwriters, (ii) fees and disbursements of the
Company, including, without limitation, fees and disbursements of counsel for
the Company and of independent public accountants and other experts of the
Company, (iii) fees and expenses in connection with the qualification of
Registrable Securities for offering and sale under state securities laws
(including fees and expenses incurred in connection with blue sky qualifications
of the Registrable Securities and including all reasonable fees and
disbursements of counsel in connection with any survey of state securities or
blue sky laws and the preparation of any memorandum thereon), (iv) fees and
expenses incident to any filing with the NASD or to securing any required review
by NASD of the terms of the sale of Registrable Securities, (v) all fees and
expenses incurred in connection with the listing of Registrable Securities on
each securities exchange or automated quotation system on which the Common Stock
is then listed, (vi) the internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties and expenses incurred by the Company in connection
with any "road show" or marketing presentation), (vii) with respect to each
registration, up to $35,000 (or up to $50,000 in the case of each Underwritten
Offering) of the reasonable fees and disbursements of a single counsel selected
by the Holders of a Majority of the Registrable Securities being registered
incurred in connection with the preparation and review of the Registration
Statement relating to such registration, and (viii) with respect to each
registration, the reasonable fees and disbursements of all independent public
accountants (including the expenses of any audit and/or "cold comfort" letter)
and the reasonable fees and expenses of other persons, including special
experts, retained by the Company, but excluding (x) any underwriting discounts
and fees, brokerage and sales commissions, and transfer and documentary stamp
taxes, if any, relating to the sale or disposition of the Registrable Securities
and (y) any fees or disbursements of counsel for the Holders or any Holder,
other than the fees and disbursements referred to in clause (vii) above.
"Registration Rights Period" means the period commencing on the date
of this Agreement and ending on the eighth anniversary thereof.
"Registration Statement" means any registration statement of the
Company referred to in Section 3, 4 or 5, including any Prospectus, amendments
and supplements to any such registration statement, including
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post-effective amendments, and all exhibits and all material incorporated by
reference in any such registration statement.
"Requesting Holder" has the meaning specified in Section 5(a).
"Rule 144" means Rule 144 (or any similar provisions then in effect)
promulgated by the SEC under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Section 9(e) Period" has the meaning specified in Section 9(e).
"Section 9(k) Period" has the meaning specified in Section 9(k).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, as the same shall be in effect from time to time.
Reference to a particular section of the Securities Act of 1933, as amended,
shall include reference to the comparable section, if any, of any such successor
federal statute.
"Series A Preferred Stockholder" means any holder of Series A
Registrable Securities.
"Series A Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 29, 2002, as amended and in effect as of the date
hereof, among the Company and the other Persons listed on the signature pages
thereof.
"Series A Registrable Securities" means, with respect to any offering
hereunder, the "Registrable Securities" (as defined in the Series A Registration
Rights Agreement) that the Holders (as defined in the Series A Registration
Rights Agreement) are entitled to request be included in such offering pursuant
to the Series A Registration Rights Agreement as in effect on the date hereof.
"Series B Preferred Stock" has the meaning specified in the recitals
to this Agreement.
"Shelf Registration" means the registration of Registrable Securities
effected pursuant to Section 3.
"Shelf Registration Statement" means a shelf registration statement of
the Company filed pursuant to Section 3 which covers Registrable Securities on
an appropriate form under Rule 415 of the Securities Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-
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effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"Shelf Resale Notice" has the meaning specified in Section 3(b).
"Similar Securities" means, in connection with any registration of
securities of the Company under the Securities Act, all securities of the
Company which are (i) the same as or similar to the securities being registered,
(ii) convertible into or exchangeable or exercisable for the securities being
registered or (iii) the same as or similar to the securities into or for which
the securities being registered are convertible or exchangeable or exercisable.
"Suspension Period" means any period during which the offering of
Registrable Securities by any Holder under the Shelf Registration Statement
shall be suspended as a result of the occurrence of a Blackout Period, a Section
9(e) Period or a Section 9(k) Period.
"Suspension Period Notice" means a notice provided by the Company
pursuant to Section 3(b) in which the Company states that, as of the date of
such notice, there exists a Blackout Period, a Section 9(e) Period or a Section
9(k) Period.
"Underwritten Offering" means an underwritten offering in which
securities are sold to an underwriter or underwriters, on a firm commitment
basis, for reoffering to the public.
"Warrant Agreement" has the meaning specified in the recitals to this
Agreement.
"Warrants" means the warrants to purchase shares of the Common Stock
issued pursuant to the Warrant Agreement and any warrants issued in exchange,
substitution or replacement thereof.
"W" has the meaning specified in the first paragraph of this
Agreement.
"WCAS Holders" means, collectively, W and, subject to Section 17, each
other Person to whom W has transferred Registrable Securities and who has agreed
to become bound by the provisions of this Agreement in accordance with Section
16, but only so long as such other Person holds Registrable Securities.
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"WCAS Securityholder" has the meaning specified in the first paragraph
of this Agreement.
2. Securities Subject to this Agreement. The Registrable Securities
are the sole securities entitled to the benefits of this Agreement. For the
purposes of this Agreement, Registrable Securities held by any Holder shall
cease to be Registrable Securities (and such Holder shall cease to have any
registration rights with respect to such securities under this Agreement) on the
date and to the extent that (i) a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act and
such Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities have been sold or
transferred in accordance with the requirements of Rule 144, (iii) such
Registrable Securities have been otherwise transferred or disposed of,
certificates therefor not bearing a legend restricting further transfer or
disposition thereof shall have been delivered by the Company and, at such time,
subsequent transfer or disposition of such securities shall not require
registration of such securities under the Securities Act, (iv) all Registrable
Securities then owned by such Holder may be sold or transferred by such Holder
without holding period, volume or manner of offering limitations under the
Securities Act and the rules and regulations thereunder, provided that such
Registrable Securities, on an as-converted basis assuming that all of such
Registrable Securities that are convertible into or exercisable for Common Stock
are converted into or exercised for Common Stock, do not exceed 2% of the total
number of shares of Common Stock then outstanding, (v) all Registrable
Securities then owned by such Holder may be sold or transferred by such Holder
within any three-month period in accordance with the requirements of Rule 144 or
(vi) such Registrable Securities have ceased to be outstanding.
3. Shelf Registration Statement.
(a) Within 30 Business Days after the Company files with the
SEC the financial statements required under Item 7 of SEC Form 8-K in connection
with the consummation of the transactions contemplated by the Merger Agreement,
the Company shall file with the SEC a Shelf Registration Statement relating to
the offer and sale, by the Holders from time to time, of the Registrable
Securities then outstanding or otherwise then registrable under SEC regulations,
and shall use its reasonable best efforts to cause the Shelf Registration
Statement to be declared effective by the SEC as soon as reasonably practicable
after filing. Notwithstanding any provision of this Agreement to the contrary,
the Shelf Registration Statement may also register the offering of the
securities that have shelf registration rights pursuant to the Series A
Registration Rights Agreement. The Company shall
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notify each Holder of the date on which the Shelf Registration Statement is
declared effective.
(b) If a Holder wishes to sell, transfer or otherwise dispose
of Registrable Securities pursuant to the Shelf Registration Statement, such
Holder shall deliver to the designated representative of the Company a written
notice (a "Shelf Resale Notice") of such Holder's good-faith present intention
to sell, transfer or otherwise dispose of some or all of such Holder's
Registrable Securities, and the number and type of Registrable Securities such
Holder proposes to sell, transfer or otherwise dispose of. Upon receipt of each
Shelf Resale Notice, the Company shall, no later than the second Business Day
after such Shelf Resale Notice has been given, either (i) provide a Suspension
Period Notice or (ii) give written notice (a "Company Shelf Response") to the
Holder who gave such Shelf Resale Notice stating that the prospectus relating to
the Registration Statement is current and that the Registrable Securities
covered by the Shelf Resale Notice may be resold within ten Business Days after
receipt of such Company Shelf Response. If the Company does not respond within
such two Business Days, it shall be deemed to have given a Company Shelf
Response. Any Holder who receives or is deemed to have received a Company Shelf
Response shall then have ten Business Days after receipt of such Company Shelf
Response in which to sell, transfer or otherwise dispose of the shares subject
to the Shelf Resale Notice. If such Holder does not sell, transfer or otherwise
dispose of such Registrable Securities within such period, the Holder shall be
required to deliver another Shelf Resale Notice and comply again with the other
requirements of this Section 3(b) before selling, transferring or otherwise
disposing of Registrable Securities pursuant to the Shelf Registration
Statement. All notices pursuant to this Section 3(b) shall be provided by
facsimile transmission or electronic mail delivery and confirmed by direct
telephonic communication with the Company's designated representative referred
to in Section 19.
(c) The Shelf Registration Statement shall cover the offering
and sale of the Registrable Securities only in accordance with the methods of
distribution described in Exhibit A attached to this Agreement (the "Plan of
Distribution"), which shall be included in the Prospectus forming part of the
Shelf Registration Statement. Notwithstanding the foregoing, if any WCAS Holder
wishes to effect an Underwritten Offering of Registrable Securities pursuant to
the Shelf Registration Statement, such Holder shall be required to exercise a
demand registration right pursuant to, and shall have the rights and obligations
of a WCAS Holder under, Section 4.
[(d) No Loftin Holder shall be permitted to cause the Company to
effect an Underwritten Offering of Registrable Securities by reason of such
Loftin Holder's rights pursuant to this Section 3.]
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4. Demand Registration Rights.
(a) During the Registration Rights Period, upon the written
request of WCAS Holders holding at least a Majority of the Registrable
Securities held by all WCAS Holders (the "Initiating Demand Holders") that the
Company effect the registration under the Securities Act of all or part of such
Initiating Demand Holders' Registrable Securities (which written request shall
specify the aggregate number of Registrable Securities requested to be
registered and the proposed method of distribution thereof), the Company shall
(i) as soon as reasonably practicable, but no later than 30 days, after its
receipt of such request (or, if the Company shall be legally prohibited from
making such a filing, as soon thereafter as is legally permissible), file with
the SEC a Registration Statement with respect to such requested registration and
(ii) within five Business Days after its receipt of such request, notify in
writing all other Holders of such request and indicate in such notice the
planned initial filing date of such Registration Statement. Subject to reduction
pursuant to Section 6(a), such Registration Statement shall cover the
Registrable Securities requested by the Initiating Demand Holders to be
registered and such other Registrable Securities as the Holders other than the
Initiating Demand Holders shall request, by written notice to the Company given
no later than five Business Days prior to such planned initial filing date, to
be registered.
(b) Upon the written request of WCAS Holders holding a Majority
of the Registrable Securities held by all WCAS Holders (the "Initiating Shelf
Demand Holders") that the Company effect the registration of all or part of such
Initiating Shelf Demand Holders' Registrable Securities for offer and sale in an
Underwritten Offering under the Shelf Registration Statement after it has been
declared effective by the SEC (which written request shall specify the aggregate
number of Registrable Securities requested to be so registered), the Company
shall (i) as soon as reasonably practicable, but no later than 30 days, after
its receipt of such request (or, if the Company shall be legally prohibited from
making such a filing, as soon thereafter as is legally permissible), prepare and
file with the SEC post-effective amendments to the Shelf Registration Statement
and such amendments and supplements to the Prospectus used in connection
therewith as are reasonably required to effect such Underwritten Offering
pursuant to the Shelf Registration Statement and (ii) within five Business Days
after its receipt of such request, notify in writing all other Holders of such
request and indicate in such notice the planned initial filing date of such
amendments or supplements. Subject to reduction pursuant to Section 6(a), such
Registration Statement shall cover the Registrable Securities requested by the
Initiating Shelf Demand Holders to be registered and such other Registrable
Securities as the Holders other than the Initiating Shelf Demand
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Holders shall request, by written notice to the Company given no later than five
Business Days prior to such planned initial filing date, to be registered.
(c) Notwithstanding the provisions of Section 4(a) and Section
4(b), the Company shall not be required to take any action pursuant to this
Section 4:
(i) if at the date of such request (other than a request
for an Underwritten Offering made in accordance with this Section 4)
the Company shall have effective a Shelf Registration pursuant to
which the WCAS Holders could effect the disposition of their
Registrable Securities according to their proposed method of
distribution;
(ii) if prior to the date of a request pursuant to Section 4(a),
the Company shall have effected three registrations (or, if prior to
such date the Company shall not have effected an Underwritten Offering
pursuant to Section 4(b), four registrations) pursuant to Section
4(a);
(iii) if prior to the date of a request pursuant to Section 4(b),
the Company shall have effected either (x) one registration pursuant
to Section 4(b) or (y) four registrations pursuant to Section 4(a);
(iv) if the Company shall have effected a registration pursuant
to this Section 4 within the 120-day period immediately preceding the
date of such request which permitted WCAS Holders to register
Registrable Securities;
(v) if the Registrable Securities which the Company shall
have been requested to register shall have an aggregate offering price
of less than $5,000,000, unless such registration request is for all
remaining Registrable Securities held by the WCAS Holders; or
(vi) during the pendency of any Blackout Period;
provided, however, that the Company shall be permitted to satisfy its
obligations under Section 4(a) by amending (to the extent permitted by
applicable law) within 30 days after a written request for registration, any
Registration Statement previously filed by the Company under the Securities Act
so that such Registration Statement (as amended) shall permit the disposition
(in accordance with the intended methods of disposition, including, without
limitation, an Underwritten Offering, specified by the
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WCAS Holders as aforesaid) of all of the Registrable Securities for which a
demand for registration has been made under Section 4(a). If the Company shall
so amend a previously filed Registration Statement, it shall be deemed to have
effected a registration for purposes of this Section 4.
(d) Subject to the requirement that a request pursuant to
Section 4(b) shall only be made for an Underwritten Offering pursuant to the
Shelf Registration Statement, the WCAS Holders delivering a request pursuant to
Section 4(a) or Section 4(b) may distribute the Registrable Securities covered
by such demand by means of an Underwritten Offering or any other method of
distribution, as determined by the WCAS Holders holding a Majority of the
Registrable Securities so requested to be registered by all WCAS Holders.
(e) Subject to Section 4(f), a registration requested pursuant
to this Section 4 shall not be deemed to be effected for purposes of this
Section 4: (i) if the Registration Statement for such registration has not been
declared effective by the SEC or become effective in accordance with the
Securities Act and the rules and regulations thereunder; (ii) in the case of a
Registration Statement which does not contemplate an Underwritten Offering, if
such Registration Statement does not remain effective for at least 120 days (or
such shorter period that will terminate when all Registrable Securities covered
by such Registration Statement have been sold or withdrawn); or (iii) in the
case of a Registration Statement which contemplates an Underwritten Offering, if
(A) such Registration Statement does not remain effective for at least 120 days
plus such longer period (not to exceed 90 days after the 120th day) as, in the
opinion of counsel for the underwriter or underwriters, is required by law for
the delivery of a Prospectus in connection with the sale of Registrable
Securities by an underwriter or dealer, or (B) the conditions to closing
specified in the applicable underwriting agreement are not satisfied by reason
of a violation or breach of such underwriting agreement or this Agreement by the
Company.
(f) WCAS Holders holding a Majority of the Registrable
Securities held by all WCAS Holders to be included in a Registration Statement
to be filed pursuant to Section 4(a) or Section 4(b) may, at any time prior to
the effective date of the Registration Statement relating to such registration,
revoke such request by providing a written notice to the Company revoking such
request. The Company shall be deemed to have effected a registration pursuant to
Section 4(a) in the case of any such revocation of an offering initiated by the
Initiating Demand Holders and the Company shall be deemed to have effected a
registration pursuant to Section 4(b) in the case of any such revocation of an
offering initiated by the
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Initiating Shelf Demand Holders, unless (i) the revocation is based on a
reasonable determination, made by WCAS Holders holding a Majority of the
Registrable Securities held by all WCAS Holders to be included in such
Registration Statement, that there has been, since the date of the applicable
request pursuant to Section 4(a) or Section 4(b), a material adverse change in
the business, financial condition, results of operations or prospects of the
Company, in general market conditions or in market conditions for businesses in
the Company's industry generally or (ii) the WCAS Holders requesting that
Registrable Securities be included in such registration reimburse the Company
for all Registration Expenses incurred by the Company with respect to such
revoked request. Except as otherwise contemplated by clause (ii) of the
immediately preceding sentence, no revocation pursuant to this Section 4(f)
shall relieve the Company of its obligation hereunder to pay the Registration
Expenses in connection with any such request.
5. Piggy-Back Registration Rights.
(a) If, during the Registration Rights Period, the Company
shall propose to file a Registration Statement under the Securities Act relating
to a public offering of Common Stock or other securities (other than in
connection with an Excluded Registration or a Registration Statement filed
pursuant to Section 3 of the Series A Registration Rights Agreement that does
not involve an Underwritten Offering) for the Company's own account or for the
account of any holder or holders of Common Stock or other securities (including,
without limitation, any Holder or any Series A Preferred Stockholder) pursuant
to the exercise of registration rights (each such Person or Persons for whose
account such a Registration Statement is proposed to be filed, an "Initiating
Securityholder"), in each case, on a registration form and in a manner that
would permit the registration of Registrable Securities for sale to the public
under the Securities Act, the Company shall (x) give written notice at least 15
Business Days prior to the filing thereof to each Holder, specifying the
approximate date on which the Company proposes to file such Registration
Statement and advising such Holder of its right to have any or all of the
Registrable Securities of such Holder included among the securities to be
covered thereby, and (y) at the written request of any such Holder given to the
Company within 15 Business Days after written notice from the Company has been
given to the Holder, include among the securities covered by such Registration
Statement the number of Registrable Securities which such Holder (a "Requesting
Holder") shall have requested be so included (subject, however, to reduction, in
accordance with the applicable provisions of Section 6).
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(b) Nothing in this Section 5 shall create any liability on the
part of the Company to any Holder of Registrable Securities if for any reason
the Company shall decide not to file, or to delay the filing of, a Registration
Statement proposed to be filed under Section 5(a) or to withdraw such
Registration Statement subsequent to its filing, regardless of any action
whatsoever that a Holder may have taken, whether as a result of the issuance by
the Company of any notice hereunder or otherwise, provided, however, that the
Company shall not be relieved of its obligation hereunder to pay the
Registration Expenses in connection with any such filing or proposed filing.
(c) Any Holder participating in an Underwritten Offering by the
Company for its own account may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of the underwriters of such Underwritten Offering
shall also be made to and for the benefit of such Holder and that any or all of
the conditions precedent to the obligations of such underwriters under the
underwriting agreement for such Underwritten Offering shall also be conditions
precedent to the obligations of such Holder, in each case to the extent that
such agreements and conditions precedent shall reasonably be applicable to
selling securityholders in addition to such underwriters.
6. Cutbacks.
(a) Offerings by the Holders or Series A Preferred
Stockholders. In connection with any offering covered by a Registration
Statement filed pursuant to Section 4 or pursuant to Section 4 of the Series A
Registration Rights Agreement, if the lead managing underwriter (if the offering
shall be an Underwritten Offering) or the Holders or Series A Preferred
Stockholders who have exercised a demand registration to initiate such offering
(if the offering shall not be an Underwritten Offering) give written notice to
the Company (it being understood that the Company shall as soon as reasonably
practicable deliver copies of such notice to all Holders and Series A Preferred
Stockholders who have requested to include Registrable Securities or Series A
Registrable Securities in such offering) (a "Cutback Notice") that, in its or
their reasonable and good faith opinion, the Registrable Securities and Series A
Registrable Securities requested to be included in such offering exceed the
number which can be sold in such offering without being likely to have a
significant adverse effect on the offering price, timing or distribution of the
class of securities offered or the market for the securities offered or for the
Common Stock (an "Adverse Offering Effect"), then the Company shall include in
such offering only the number of Registrable Securities and Series A Registrable
Securities which,
-14-
in the good faith opinion of such underwriter or (if the offering shall not be
an Underwritten Offering) the Holders holding a Majority of the Registrable
Securities held by Holders who have exercised a demand registration to initiate
such offering or Series A Preferred Stockholders holding a majority of the
registrable securities held by Series A Preferred Stockholders who have
exercised a demand registration to initiate such offering, as the case may be,
can be included without having an Adverse Offering Effect. In such event, the
shares of Common Stock and other securities to be included in such offering
shall consist of (i) first, all of the Registrable Securities that the Holders
propose to sell pursuant to Section 4 or 5 and all of the Series A Registrable
Securities that the Series A Preferred Stockholders propose to sell pursuant to
Section 4 or 5 of the Series A Registration Rights Agreement (with any reduction
in such number being allocated among the Holders and the Series A Preferred
Stockholders pro-rata based on the number, as of the date of delivery of the
first Cutback Notice delivered to the Holders and Series A Preferred
Stockholders in connection with such offering, of shares of Common Stock
represented by Registrable Securities or Series A Registrable Securities, as the
case may be, requested by each Holder and each Series A Preferred Stockholder to
be included in such offering, calculated on an as-converted basis assuming that
all of such Registrable Securities of such Holder and all of such Series A
Registrable Securities of such Series A Preferred Stockholder requested to be so
included that are convertible into or exercisable for Common Stock are converted
into or exercised for Common Stock as of such date), (ii) second, the number, if
any, of shares of Common Stock or other securities the Company proposes to sell
for its own account that, in the reasonable and good faith opinion of such lead
managing underwriter or the Holders or Series A Preferred Stockholders who have
exercised a demand registration to initiate such offering (if the offering shall
not be an Underwritten Offering) can be sold without adversely affecting the
success of the offering of all the Registrable Securities that each Holder, and
all of the Series A Registrable Securities that each Series A Preferred
Stockholder, desires to sell for its own account, and (iii) third, the number,
if any, of other shares of Common Stock and other securities requested to be
included in such offering that, in the reasonable and good faith opinion of such
lead managing underwriter or the Holders or Series A Preferred Stockholders who
have exercised a demand registration to initiate such offering (if the offering
shall not be an Underwritten Offering) can be sold without having an Adverse
Offering Effect or adversely affecting the success of the offering of all the
Registrable Securities, Series A Registrable Securities and other securities
that each Holder, each Series A Preferred Stockholder and the Company, as the
case may be, desires to sell for its own account, such other shares of Common
Stock and other securities to be allocated among the holders thereof who have
requested that their shares
-15-
and other securities be so included in accordance with the provisions of their
registration rights agreements with the Company.
(b) Offerings by the Company. Each Holder wishing to include
Registrable Securities pursuant to Section 5(a) in any offering covered by a
Registration Statement filed by the Company relating to a public offering of
Common Stock or other securities for its own account (other than in connection
with an Excluded Registration) shall have the right to include such Registrable
Securities in any such offering only to the extent that the inclusion of such
Registrable Securities shall not reduce the number of shares of Common Stock or
other securities to be offered and sold therein by the Company for its own
account. In connection with the inclusion of Registrable Securities pursuant to
Section 5(a) in any such offering by the Company, if the lead managing
underwriter in an Underwritten Offering or the Company (if the offering shall
not be an Underwritten Offering) delivers a Cutback Notice to the Holders and
the Series A Preferred Stockholders, then the Company shall include in such
offering, in addition to the securities the Company proposes to sell for its own
account, only the aggregate number of securities that, in the reasonable and
good faith opinion of such lead managing underwriter or the Company (if the
offering shall not be an Underwritten Offering), can be included without
adversely affecting the offering of all of the securities that the Company
wishes to sell for its own account. Such aggregate number of securities to be
included in such offering shall be allocated on a pro rata basis among (i) the
Holders who have requested that their Registrable Securities be so included and
(ii) the Series A Preferred Stockholders who have requested that their Series A
Registrable Securities be so included, based on the as-converted number, as of
the date of delivery of the Cutback Notice to such Holders and Series A
Preferred Stockholders, of shares of Common Stock represented by Registrable
Securities or Series A Registrable Securities, as the case may be, that each
Holder and each Series A Preferred Stockholder has requested to be so included,
assuming that all of such Holder's Registrable Securities and all of such Series
A Preferred Stockholder's Series A Registrable Securities requested to be so
included that are convertible into or exercisable for Common Stock are converted
into or exercised for Common Stock as of such date. No other securities shall be
included in such offering except to the extent that, in the reasonable and good
faith opinion of such lead managing underwriter or (if the offering shall not be
an Underwritten Offering) the Company, such securities can be included without
adversely affecting the offering of all of the securities that the Company, all
of the Registrable Securities that each Holder, and all of the Series A
Registrable Securities that each Series A Preferred Stockholder proposes to sell
for its own account in such offering.
-16-
(c) Other Offerings In connection with any offering described
in Section 5(a), other than an offering covered by a Registration Statement
filed pursuant to Section 4 of this Agreement or pursuant to Section 4 of the
Series A Registration Rights Agreement, or an offering by the Company for its
own account, if the lead managing underwriter (if the offering shall be an
Underwritten Offering) or the Initiating Securityholder (if the offering shall
not be an Underwritten Offering) delivers a Cutback Notice to all Holders and
Series A Preferred Stockholders who have requested to include Registrable
Securities or Series A Registrable Securities in such offering, then the Company
shall include in such offering only the number of Registrable Securities, Series
A Registrable Securities and Other Registrable Securities which, in the good
faith opinion of such underwriter or the Initiating Securityholders holding a
majority of the registrable securities held by the Initiating Securityholders,
as the case may be, can be included without having an Adverse Offering Effect.
In such event, the shares of Common Stock and other securities to be included in
such offering shall consist of (i) first, all of the Registrable Securities that
the Holders propose to sell pursuant to Section 5, all of the Series A
Registrable Securities that the Series A Preferred Stockholders propose to sell
pursuant to Section 5 of the Series A Registration Rights Agreement and all
Other Registrable Securities that the Initiating Securityholders propose to sell
(with any reduction in such number being allocated among the Holders, the Series
A Preferred Stockholders and the Initiating Securityholders pro-rata based on
the number of shares of Common Stock represented by Registrable Securities,
Series A Registrable Securities or Other Registrable Securities, as the case may
be, requested by each Holder, each Series A Preferred Stockholder and each
Initiating Securityholder to be included in such offering, in each case,
calculated on an as-converted basis assuming that all of such Holder's
Registrable Securities, all of such Series A Preferred Stockholder's Series A
Registrable Securities and all of such Initiating Securityholder's Other
Registrable Securities requested to be so included that are convertible into or
exercisable for Common Stock are converted into or exercised for Common Stock,
as of the date of delivery of the first Cutback Notice delivered to the Holders
and Series A Preferred Stockholders in connection with such offering), (ii)
second, the number, if any, of shares of Common Stock or other securities the
Company proposes to sell for its own account that, in the reasonable and good
faith opinion of such lead managing underwriter or the Initiating
Securityholders, as applicable, can be sold without having an Adverse Offering
Effect or adversely affecting the success of the offering of all the Registrable
Securities that each Holder, all of the Series A Registrable Securities that
each Series A Preferred Stockholder and all of the Other Registrable Securities
that each Initiating Securityholder desires to sell for its own account, and
(iii) third, the number, if any, of other shares of Common Stock and other
securities requested to be included in such offering
-17-
that, in the reasonable and good faith opinion of such lead managing underwriter
or the Initiating Securityholders, as applicable, can be sold without having an
Adverse Offering Effect or adversely affecting the success of the offering of
all the Registrable Securities, Series A Registrable Securities and Other
Registrable Securities that each Holder, each Series A Preferred Stockholder,
each Initiating Securityholder and the Company, as the case may be, desires to
sell for its own account, such other shares of Common Stock and other securities
to be allocated among the holders thereof who have requested that their shares
and other securities be so included in accordance with the provisions of their
registration rights agreements with the Company.
7. Selection of Underwriters. In connection with any Underwritten
Offering pursuant to a Registration Statement filed pursuant to Section 4(a) or
4(b), the WCAS Holders holding a Majority of the Registrable Securities held by
all WCAS Holders to be included in such Registration Statement shall have the
right to select a lead managing underwriter or underwriters to administer such
offering, which lead managing underwriter or underwriters shall be reasonably
satisfactory to the Company; provided, however, that the Company shall have the
right to select a co-managing underwriter or underwriters for such offering,
which co-managing underwriter or underwriters shall be reasonably satisfactory
to the WCAS Holders holding a Majority of the Registrable Securities held by all
WCAS Holders to be included in such Registration Statement.
8. Blackout Periods; Holdback.
(a) If the Company determines that the registration and
distribution of Registrable Securities (i) would materially impede, delay,
interfere with or otherwise adversely affect any pending financing, registration
of securities by the Company in a primary offering for its own account,
acquisition, corporate reorganization or other significant transaction involving
the Company or (ii) would require disclosure of non-public material information
that the Company has a bona fide business purpose for preserving as
confidential, as determined by the Company's Board of Directors in good faith,
the Company shall be entitled to defer the filing or effectiveness of a
Registration Statement, or to suspend the use of an effective Registration
Statement, for the shortest period of time reasonably required (each such
period, a "Blackout Period"); provided that the Company shall not be entitled to
obtain deferrals or suspensions under (x) clause (i) of this Section 8(a), for
more than an aggregate of 90 days in any 12-month period or (y) clause (ii) of
this Section 8(a), for more than 30 days on any one occasion, on more than two
occasions in any 12-month period or for more than an aggregate of 60 days in any
12-month period. The Company shall
-18-
notify each Holder of the expiration or earlier termination of a Blackout Period
and, as soon as reasonably practicable after such expiration or termination,
shall amend or supplement any effective Registration Statement to the extent
necessary to permit the Holders to resume use thereof in connection with the
offer and sale of their Registrable Securities in accordance with applicable
law.
(b) In the case of an Underwritten Offering of securities of
the Company, each Holder agrees, if requested by the lead managing underwriter
of such Underwritten Offering, that it shall not effect any public sale or
distribution, including any sale pursuant to Rule 144, of any Registrable
Securities or Similar Securities held by such Holder during the period beginning
seven days before, and ending 90 days (or such shorter period as may be
permitted by such lead managing underwriter) after, the effective date of the
Registration Statement filed in connection with such registration, except for
Registrable Securities included in such registration; provided, however, that
the foregoing shall not prohibit any Holder at any time from distributing
Registrable Securities to any of its Affiliates, members, partners or other
equity holders. If requested by such managing underwriter, each Holder shall
enter, and shall use commercially reasonable efforts to ensure that all
Affiliates (other than any Affiliates of such Holder that are portfolio
companies of Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. or of any investment
funds that are Affiliates of Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P.) of such
Holder holding Registrable Securities or Similar Securities enter, into a
lock-up agreement with the applicable underwriters that is consistent with the
agreement in the preceding sentence.
(c) Notwithstanding any provision of Section 8(a) or 8(b) to
the contrary, the cumulative period of any Blackout Periods pursuant to Section
8(a) and of any holdbacks pursuant to Section 8(b) shall not exceed, in the
aggregate, 97 days in any 12-month period.
(d) In the case of any Underwritten Offering of Registrable
Securities initiated by a WCAS Holder pursuant to Section 4, the Company agrees,
if requested by the lead managing underwriter of such Underwritten Offering, not
to effect (or register for sale) any public sale or distribution of any
securities which are Similar Securities for the Company's own account during the
period beginning seven days before, and ending 90 days (or such lesser period as
may be permitted by such lead managing underwriter) after, the effective date of
the Registration Statement filed in connection with such registration, except
for securities of the Company to be offered for the Company's account in such
Underwritten Offering. Notwithstanding the foregoing, the Company may effect a
public sale or distribution of Common Stock and other securities which are
Similar Securities for the Company's
-19-
own account during the period described above (A) pursuant to registrations on
Forms S-4 or S-8 or any successor registration forms or (B) as part of any
registration of securities for offering and sale to employees, directors or
consultants of the Company pursuant to any stock plan or other benefit plan
arrangement. The Company agrees to use commercially reasonable best efforts to
obtain from each director or executive officer of the Company who holds Similar
Securities an agreement not to effect any public sale or distribution of such
Similar Securities (other than any sale under Rule 144) for the account of such
director or executive officer during any period referred to in this Section
8(d), except as part of any Underwritten Offering contemplated in this Section
8(d).
(e) Notwithstanding any provision of Section 8(d) to the
contrary, the Company shall not be required to comply with the provisions of
Section 8(d) in connection with more than one Underwritten Offering of
Registrable Securities under the Shelf Registration Statement in any 12-month
period; provided, however, that the limitations in this Section 8(e) shall not
apply to any Underwritten Offering pursuant to a request that is treated as the
exercise of a demand registration under Section 4(a) or Section 4(b).
9. Registration Procedures. In connection with the registration
obligations of the Company under Sections 3, 4 and 5, the Company shall:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on any registration form adopted by the
SEC for which the Company then qualifies or which counsel for the Company shall
deem appropriate, and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of distribution
thereof, and use reasonable best efforts to cause such Registration Statement to
become and remain effective; provided that, at least five Business Days prior to
filing a Registration Statement or Prospectus or any amendment or supplement
thereto, the Company shall furnish to a single counsel selected by the Holders
of a Majority of the Registrable Securities included or to be included in such
Registration Statement copies of such Registration Statement or Prospectus (or
amendment or supplement) as proposed to be filed (including, upon the request of
such counsel, documents to be incorporated by reference therein) which documents
shall be subject to the reasonable review and comments of such counsel and the
Holders of the Registrable Securities included or to be included in such
Registration Statement during such five-Business-Day period, and the Company
shall not file any Registration Statement, any Prospectus or any amendment or
supplement thereto (or any such documents
-20-
incorporated by reference) containing any statements with respect to any such
Holder to which such Holder shall reasonably object in writing;
(b) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement and such amendments and supplements to
the Prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration or as may be required by the rules,
regulations or instructions applicable to the registration form utilized by the
Company or by the Securities Act or rules and regulations thereunder necessary
to keep such Registration Statement effective until the earlier of (i) the date
on which the Registrable Securities covered by such Registration Statement cease
to be Registrable Securities or have been sold or withdrawn and (ii) subject to
Sections 9(e) and 9(k), (x) in the case of the Shelf Registration, until the
third anniversary of the date of initial effectiveness of the Shelf Registration
Statement, plus any Suspension Periods (which shall be added to such three-year
period), or (y) in the case of a Registration Statement filed pursuant to
Section 4 which does not contemplate an Underwritten Offering, for at least 120
days or (z) in the case of a Registration Statement filed pursuant to Section 4
which contemplates an Underwritten Offering, for at least 120 days plus such
longer period (not to exceed 90 days after the 120th day) as, in the opinion of
counsel for the underwriter or underwriters of such Underwritten Offering, is
required by law for the delivery of a Prospectus in connection with the sale of
Registrable Securities by an underwriter or dealer, and cause the Prospectus as
so amended and supplemented to be filed pursuant to Rule 424 under the
Securities Act, and otherwise use reasonable best efforts to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement until such time as is
specified in clause (i) or (ii) above, as the case may be;
(c) furnish to each Holder of such Registrable Securities such
number of copies of such Registration Statement and of each amendment and
post-effective amendment thereto, any Prospectus or Prospectus supplement and
such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities by such Holder (the
Company hereby consenting to the use (subject to the limitations set forth in
Section 10(b)) of the Prospectus or any amendment or supplement thereto in
connection with such disposition);
(d) use reasonable best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and to do any and all other acts and things which may be
reasonably necessary to enable such Holder to consummate the disposition in
-21-
such jurisdictions of the Registrable Securities owned by such Holder, except
that the Company shall not be required for any such purpose to qualify generally
to do business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 9(d), it would not be obligated to be so qualified,
to subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(e) promptly notify each Holder of any such Registrable
Securities covered by such Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act within the
applicable period referred to in Section 9(b), that the Company has become aware
that the Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing (the period during
which the Holders are required in such case pursuant to Section 10(b) to refrain
from effecting public sales or distributions of Registrable Securities referred
to herein as a "Section 9(e) Period"), and prepare and furnish to such Holder,
as soon as reasonably practicable, without charge to such Holder, a reasonable
number of copies of an amendment to such Registration Statement or supplement to
such related Prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing; provided that if the Company
gives such notice, the Company shall extend the period during which such
Registration Statement shall be maintained effective (including the periods
referred to in Section 9(b)) by the number of days in the Section 9(e) Period;
(f) promptly notify each Holder of Registrable Securities covered by
such Registration Statement at any time,
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed and, with respect to the
Registration Statement or any post-effective amendment, when the
Registration Statement or such post-effective amendment has become
effective;
(ii) of the issuance by the SEC of any stop order of which the
Company is aware suspending the effectiveness of the Registration Statement
or any order preventing the use of a related Prospectus, or the initiation
of any proceedings for such purposes; and
-22-
(iii) of the receipt of the Company of any written notification
of the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction or the initiation of any proceeding for such
purpose;
(g) make available to its stockholders, as soon as reasonably
practicable, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act, provided that the Company shall be deemed to have
complied with this Section 9(g) if it has complied with Rule 158 under the
Securities Act;
(h) if the registration involves an Underwritten Offering, enter into
a customary underwriting agreement and in connection therewith:
(i) make such representations and warranties to the
underwriters in form, substance and scope as are customarily made by
issuers to underwriters in comparable Underwritten Offerings;
(ii) use reasonable best efforts to obtain opinions of counsel
to the Company (in form, scope and substance reasonably satisfactory to the
managing underwriters), addressed to the underwriters, and covering the
matters customarily covered in opinions requested in comparable
Underwritten Offerings;
(iii) use reasonable best efforts to obtain "cold comfort"
letters and bring-downs thereof from the Company's independent certified
public accountants addressed to the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters by independent accountants in connection with
Underwritten Offerings; and
(iv) deliver such documents and certificates as may be
reasonably requested by the managing underwriters to evidence compliance
with any customary conditions contained in the underwriting agreement;
(i) cooperate with the Holders of Registrable Securities
covered by such Registration Statement and the managing underwriter or
underwriters or agents, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing the
securities to be sold under such Registration Statement, and enable such
securities to be in such denominations and registered in such names as the
managing underwriter or underwriters or agents, if any, or such Holders, may
request;
-23-
(j) if reasonably requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in connection with
an Underwritten Offering, incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
managing underwriters and the WCAS Holders of a Majority of the Registrable
Securities being sold by all WCAS Holders agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
principal amount of Registrable Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and any other terms of
the Underwritten Offering of the Registrable Securities to be sold in such
offering and make all required filings of such Prospectus supplement or
post-effective amendment upon being notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
(k) in the event of the issuance of any stop order of which the
Company is aware suspending the effectiveness of the Registration Statement, or
of any order suspending or preventing the use of any related Prospectus or
suspending the qualification of any Registrable Securities included in the
Registration Statement for sale in any jurisdiction, use reasonable best efforts
to obtain at the earliest practicable time the withdrawal of such stop order or
other order (the period between the issuance and withdrawal of any stop order or
other order referred to herein as a "Section 9(k) Period"); provided that the
Company shall extend the period during which such Registration Statement will be
maintained effective (including the periods referred to in Section 9(b)) by the
number of days in the Section 9(k) Period;
(l) use reasonable best efforts to cause all Common Stock
covered by such Registration Statement to be listed on any securities exchange
or automated quotation system on which the Common Stock is then listed, if such
Common Stock is not already so listed and if such listing is then permitted
under the rules of such securities exchange or automated quotation system;
(m) in the case of an Underwritten Offering, cause the senior
executive officers of the Company to participate in the customary "road show"
presentations that may be reasonably requested by the lead managing underwriter
in any such Underwritten Offering and otherwise to cooperate with and
participate in customary selling efforts related thereto;
(n) upon the request of any Holder, promptly amend any Shelf
Registration Statement or take such other action as may be necessary
-24-
to de-register, remove or withdraw all or any portion of the Holder's
Registrable Securities from a Shelf Registration Statement, as requested by such
Holder;
(o) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and, unless such Registrable Securities shall be registered in book-entry form,
provide the applicable transfer agent and registrar for such Registrable
Securities with printed certificates for the Registrable Securities, which
certificates shall be in a form eligible for deposit with The Depository Trust
Company;
(p) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(q) make available upon reasonable notice at reasonable times
and for reasonable periods for inspection by one representative appointed by the
Holders of a Majority of the Registrable Securities covered by the applicable
Registration Statement, by any managing underwriter or underwriters
participating in any Underwritten Offering to be effected pursuant to such
Registration Statement, and by any attorney, accountant or other agent retained
by such Holders or any such managing underwriter, all pertinent financial and
other records, pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors and employees and the independent
public accountants who have certified its financial statements to make
themselves available during normal business hours to discuss the business of the
Company and to supply all information reasonably requested by any such Holders
or managing underwriter or agent thereof in connection with such Registration
Statement as shall be necessary to enable such Persons to exercise their due
diligence responsibility (subject to the entry by each Person referred to in
this Section 9(q) into customary confidentiality agreements in a form reasonably
acceptable to the Company);
(r) if requested in writing by Holders holding a Majority of
the Registrable Securities included in such Registration Statement, prepare and
file with the SEC amendments and post-effective amendments to such Registration
Statement and amendments and supplements to the Prospectus used in connection
with such Registration Statement as shall be necessary to enable any transferee
of Registrable Securities included in such Registration Statement who becomes a
Holder under this Agreement to resell such Holder's Registrable Securities
pursuant to such Registration Statement, to the extent that such amendments,
post-effective amendments and
-25-
supplements shall be required for such transferee- Holders to be named as
selling securityholders in such Registration Statement and Prospectus; and
(s) use reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby.
10. Agreements of Holders.
(a) As a condition to the Company's obligation under this
Agreement to cause Registrable Securities of any Holder to be included in a
Registration Statement, such Holder shall timely provide the Company with all of
the information required to be provided in the Registration Statement with
respect to such Holder pursuant to Items 507 and 508 of Regulation S-K under the
Securities Act and such other information as otherwise may reasonably be
requested by the Company in connection with the Registration Statement.
(b) Each Holder shall comply with the prospectus delivery
requirements of the Securities Act in connection with the offer and sale of
Registrable Securities made by such Holder pursuant to any Registration
Statement. Upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 9(e) or Section 9(k), each Holder of
Registrable Securities shall forthwith discontinue the disposition of
Registrable Securities pursuant to the Prospectus or Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 9(e) or the
withdrawal of any stop order or other order referred to in Section 9(k), and, if
so directed by the Company, shall deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities at the time of receipt of such notice.
(c) Each Holder shall effect all sales and distributions of
such Holder's Registrable Securities made pursuant to the Shelf Registration
Statement in a manner consistent with the terms of the Plan of Distribution.
(d) To the extent required by the Securities Act or rules or
regulations thereunder, as reasonably determined by the Company, a Holder shall
consent to disclosure in any Registration Statement to the effect that such
Holder is or may be deemed to be an underwriter for purposes of the Securities
Act in connection with the offering of Registrable Securities of such Holder
included in such Registration Statement.
-26-
(e) Each Holder shall comply with Regulation M under the
Exchange Act in connection with the offer and sale of Registrable Securities
made by such Holder pursuant to any Registration Statement. Each Holder shall
provide the Company with such information about such Holder's offer and sale of
Registrable Securities pursuant to any Registration Statement as the Company
shall reasonably request to enable the Company and its Affiliates to comply with
Regulation M under the Exchange Act in connection with any such offer and sale.
11. Registration Expenses. The Company shall pay all Registration
Expenses in connection with all registrations pursuant to this Agreement to the
extent provided herein. In connection with all such registrations, each Holder
shall pay all underwriting discounts and fees, brokerage and sales commissions,
and transfer and documentary stamp taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Registration
Statement, and, except as provided in clause (vii) of the definition of
Registration Expenses, all fees and expenses of counsel to such Holder.
12. Indemnification; Contribution.
(a) The Company shall indemnify and hold harmless, to the
fullest extent permitted by law, each Holder in any offering or sale of
Registrable Securities, each Person, if any, who participates as an underwriter
in any offering and sale of Registrable Securities, and each Person, if any, who
controls such Holder or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and their respective directors,
trustees, officers, partners, agents, employees and affiliates against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees, disbursements and expenses, as incurred, and any amounts paid
in any settlement effected with the Company's consent, which consent shall not
be unreasonably withheld or delayed) (collectively, "Losses") incurred by such
party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon: (i) any untrue or alleged untrue
statement of a material fact contained in, or any omission or alleged omission
of a material fact required to be stated in, the Registration Statement,
Prospectus or preliminary Prospectus or any amendment or supplement to any of
the foregoing or necessary to make the statements therein (in the case of a
Prospectus or a preliminary Prospectus, in the light of the circumstances then
existing) not misleading, except in each case insofar as such statements or
omissions arise out of or are based upon (A) any such untrue statement or
alleged untrue statement or omission or alleged omission made in reliance on and
in conformity with information with respect to such Holder furnished in writing
to the Company by such Holder or
-27-
its counsel expressly for use therein, (B) the use of any Prospectus after such
time as the obligation of the Company to keep effective the Registration
Statement of which such Prospectus forms a part has expired or (C) the use of
any Prospectus after such time as the Company has advised the Holders that the
filing of an amendment or supplement thereto is required, except such Prospectus
as so amended or supplemented; or (ii) any violation by the Company of any other
federal or state securities laws or regulations applicable to the Company and
relating to action required of or inaction by the Company in connection with any
such registration. Notwithstanding the foregoing provisions of this Section
12(a), the Company shall not be liable to any such Holder or underwriter or to
any other indemnified party under the indemnity agreement in this Section 12(a)
for any Losses that arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Prospectus
if either (i) (A) such Holder or underwriter failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the sale
of Registrable Securities by such Holder or underwriter to the Person asserting
the claim from which such Losses arise and (B) the Prospectus would have
corrected such untrue statement or alleged untrue statement or such omission or
alleged omission, or (ii) (x) such untrue statement or alleged untrue statement
or omission or alleged omission is corrected in an amendment or supplement to
the Prospectus and (y) having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented as required
hereunder, such Holder or underwriter thereafter fails to deliver such
Prospectus, as so amended or supplemented, with or prior to the delivery of
written confirmation of the sale of Registrable Securities by such Holder or
underwriter to the Person asserting the claim from which such Losses arise. Such
rights to indemnity and reimbursement of expenses shall survive the transfer of
the Registrable Securities by such indemnified party.
(b) In connection with any Registration Statement filed
pursuant hereto, each Holder of Registrable Securities to be covered thereby
shall, severally and not jointly with any other Holders, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, each Person, if
any, who participates as an underwriter in any offering and sale of Registrable
Securities and each Person, if any, who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and their respective directors, trustees, officers, partners,
agents, employees and affiliates, against all Losses incurred by such party
pursuant to any actual action, suit, proceeding or investigation arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in, or any omission or alleged omission of a material fact required to
be stated in, the Registration Statement, Prospectus or preliminary Prospectus
or any amendment or supplement to
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any of the foregoing or necessary to make the statements therein (in case of a
Prospectus or preliminary Prospectus, in the light of the circumstances then
existing) not misleading, but only to the extent that any such untrue statement
or omission is made in reliance on and in conformity with information with
respect to such Holder furnished in writing to the Company by such Holder or its
counsel specifically for use therein; provided, however, that no Holder shall be
required to indemnify the Company or any other indemnified party under this
Section 12(b) with respect to any amount in excess of the amount of the total
net proceeds received by such Holder from sales of the Registrable Securities of
such Holder under such Registration Statement.
(c) Any Person entitled to indemnification hereunder agrees to
give prompt written notice to the indemnifying party after the receipt by such
indemnified party of any written notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for which such
indemnified party may claim indemnification or contribution pursuant to this
Agreement, provided that failure to give such notification shall not affect the
obligations of the indemnifying party pursuant to this Section 12 except to the
extent the indemnifying party shall have been actually and materially prejudiced
as a result of such failure. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation, unless in the
reasonable judgment of any indemnified party, based on the opinion of counsel, a
conflict of interest is likely to exist between the indemnifying party and such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall not be liable for the fees
and expenses of (i) more than one counsel for all Holders of Registrable
Securities who are indemnified parties, selected by the Holders of a Majority of
the Registrable Securities who are indemnified parties (which selection shall be
reasonably satisfactory to the Company), (ii) more than one counsel for the
underwriters in an Underwritten Offering or (iii) more than one counsel for the
Company, in each case in connection with any one action or separate but similar
or related actions. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the
-29-
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party, based on the opinion of counsel, a conflict of
interest is likely to exist between an indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional
counsel, provided that the indemnifying party shall not be liable for the fees
and expenses of (i) more than one counsel for all Holders of Registrable
Securities who are indemnified parties, selected by the Holders of a Majority of
the Registrable Securities who are indemnified parties (which selection shall be
reasonably satisfactory to the Company), (ii) more than one counsel for the
underwriters in an Underwritten Offering or (iii) more than one counsel for the
Company, in each case in connection with any one action or separate but similar
or related actions. No indemnifying party, in defense of any such action, suit,
proceeding or investigation, shall, except with the consent of each indemnified
party, consent to the entry of any judgment or entry into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such action, suit, proceeding or investigation to the extent such liability
is covered by the indemnity obligations set forth in this Section 12. No
indemnified party shall consent to entry of any judgment or entry into any
settlement without the consent of each indemnifying party.
(d) If the indemnification from the indemnifying party provided
for in this Section 12 is unavailable to an indemnified party hereunder in
respect to any Losses, 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 in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations; provided, however, that
no Holder shall be required to contribute any amount in excess of the amount of
the total net proceeds received by such Holder from sales of the Registrable
Securities of the Holder under the applicable Registration Statement. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement 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
party, 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 referred to above shall be deemed to include,
subject to the limitations set
-30-
forth in Section 12(c), any legal or other fees and expenses reasonably incurred
by such indemnified party in connection with any investigation or proceeding. 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. The parties agree that
it would not be just and equitable if contribution pursuant to this Section
12(d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the consideration referred to in this
Section 12(d). If indemnification is available under this Section 12, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 12(a) or 12(b), as the case may be, without regard to the
relative fault of such indemnifying parties or indemnified party or any other
equitable consideration provided for in this Section 12(d).
(e) The provisions of this Section 12 shall be in addition to
any liability which any indemnifying party may have to any indemnified party and
shall survive the termination of this Agreement.
(f) The indemnification and contribution required by this
Section 12 shall be made by periodic payments of the amount thereof during the
course of any action, suit, proceeding or investigation, as and when invoices
are received or Losses are incurred.
13. Participation in Underwritten Offerings. No Holder of
Registrable Securities may participate in any Underwritten Offering pursuant to
this Agreement unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Company, which approval shall not be unreasonably withheld or delayed, and
(ii) completes and executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
14. Reports Under the Exchange Act. For so long as any Registrable
Securities remain outstanding, the Company shall use best efforts to file with
the SEC in a timely manner all reports required to be filed by the Company
pursuant to Section 13 or 15(d) of the Exchange Act and shall furnish to any
Holder, upon request by such Holder, a written statement by the Company as to
whether it has complied with the current public information requirements of Rule
144(c) under the Securities Act.
15. No Inconsistent Agreements; Most Favorable Provisions. The
Company is not currently a party to, and after the date hereof shall not enter
-31-
into, any agreement which is inconsistent with the rights granted to the Holders
of Registrable Securities by this Agreement. The Holders agree for purposes of
this Section 15 that the Series A Registration Rights Agreement, as in effect on
the date hereof, is not inconsistent with the rights of the Holders hereunder.
If the Company shall amend the Series A Registration Rights Agreement or enter
into any agreement after the date hereof with any other Person pursuant to which
the Series A Preferred Stockholders under the Series A Registration Rights
Agreement or such other Person under such other agreement, as the case may be,
shall have registration rights with respect to any security of the Company that
are materially more favorable to the Series A Preferred Stockholders or such
other Person, as the case may be, than those set forth in this Agreement, this
Agreement shall thereupon, and without any further action on the part of any
Holder or the Company, be deemed to be, and shall be, automatically amended to
provide such materially more favorable rights to the Holders.
16. Assignment of Registration Rights. The right to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned (but only with all related obligations hereunder) by any Holder in
connection with a transfer of such Registrable Securities to any transferee who,
immediately following such transfer, holds at least 5% of then-outstanding
Registrable Securities (calculated on an as-converted basis, assuming that all
outstanding Registrable Securities that are convertible into or exercisable for
Common Stock are converted into or exercised for Common Stock); provided that,
as a condition to the effectiveness of such assignment, such transferee shall be
required to execute a counterpart of this Agreement. Upon such transferee's
execution of such counterpart, such transferee shall be deemed to be a Holder
for all purposes of this Agreement and shall be entitled to the benefits of, and
shall be subject to the restrictions contained in, this Agreement as a Holder
hereunder to the same extent as if such transferee had originally been included
in the definition of a Holder and had originally been a party hereto.
Notwithstanding the foregoing, a Permitted Transferee (as defined in the
Governance Agreement) who otherwise would become entitled to registration rights
in accordance with the foregoing provisions of this Section 16 in connection
with a Distribution In Kind (as defined in the Governance Agreement) of
Registrable Securities shall not become entitled to any such registration rights
under this Agreement unless such Permitted Transferee becomes bound by the
Governance Agreement.
17. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, any Holder and any successor,
permitted assign, heir and legal representative thereof; provided, however,
that, except as provided in Section 16, this Agreement and the provisions of
this Agreement that are for the benefit of the Holders shall not
-32-
be assignable by any Holder, and any such purported assignment shall be null and
void. Except to the extent provided in Section 12, nothing in this Agreement,
expressed or implied, is intended to confer upon any Person other than the
Company, the Holders and their respective successors, permitted assigns, heirs
and legal representatives any rights, remedies, obligations or liabilities under
or by reason of this Agreement. No purchaser of Registrable Securities from a
Holder shall be deemed to be a successor or assignee of such Holder merely by
reason of such purchase.
18. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
(each such amendment, modification, supplement, waiver or consent, an
"Amendment") may not be given, unless the Company has obtained the written
consent thereto of Holders of a Majority of the Registrable Securities; provided
that if any Amendment would materially and adversely affect any Holder
disproportionately relative to any other Holder or Holders, then such Amendment
shall also require the written consent of Holders holding a Majority of the
Registrable Securities held by all Holders so disproportionately affected.
Notwithstanding the foregoing, an Amendment with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being included in a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities shall be effective if consented to by Holders of at least a Majority
of the Registrable Securities being included in such Registration Statement;
provided that the provisions of this sentence may not be amended, modified or
supplemented, nor may waivers or departures from the provisions thereof be
given, except in accordance with the provisions of the immediately preceding
sentence. Each Holder of Registrable Securities outstanding at the time of any
such Amendment thereafter shall be bound by any such Amendment effected pursuant
to this Section 18, whether or not any notice, writing or marking indicating
such Amendment appears on the Registrable Securities or is delivered to such
Holder.
19. Notices; Designated Representative. All notices, demands,
requests, consents or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when (i) delivered personally to the recipient, (ii)
sent by confirmed facsimile or confirmed electronic mail transmission before
5:00 p.m. New York City time on a Business Day, and otherwise on the next
Business Day, or (iii) one Business Day after being sent to the recipient by
reputable overnight courier service (charges prepaid). Such notices, demands,
requests, consents and other communications shall be sent (i) if to the Company,
to ITC/\DeltaCom, Inc., 1791 X.X. Xxxxxxx Drive, West Point,
-33-
Georgia 31833, Attention: General Counsel, telecopy no.: (000) 000-0000, or to
such other address as the Company shall designate in writing to the Holders from
time to time, and (ii) if to any Holder, to such Holder at the address of such
Holder set forth on the signature pages hereto, or to such other address of any
Holder as such Holder shall designate in writing to the Company from time to
time. The designated representative of the Company shall be its General Counsel
or such other Person as the Company shall designate in writing to the Holders
from time to time.
20. Headings. The headings contained in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this Agreement.
21. Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument. This
Agreement shall become effective as between the Company and any Holder when the
Company and such Holder shall have received a copy of counterparts hereof signed
by the other.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR
RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK FOR
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY ACTION OR
PROCEEDING RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT
SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO
ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 19 SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY ACTION OR PROCEEDING BROUGHT AGAINST IT IN ANY SUCH COURT. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF
NEW YORK OR THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK, AND
HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
-34-
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
23. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
24. Termination. This Agreement shall terminate with respect to any
Holder upon the earlier to occur of (i) the expiration of the Registration
Rights Period or (ii) the date on which such Holder no longer holds any
Registrable Securities, except for any liabilities or obligations under Sections
11 and 12, which shall remain in effect in accordance with their terms. No
termination of any provision of this Agreement shall relieve any party of any
liability for any breach of such provision occurring prior to such termination.
25. Entire Agreement. This Agreement is intended by the parties to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Merger Agreement, the Governance Agreement
(as defined in the Merger Agreement), the Warrant Agreement and the instruments
authorizing or evidencing the Registrable Securities, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the Registrable Securities. This Agreement supersedes all prior
agreements and undertakings among the parties with respect to such registration
rights. No party hereto shall have any rights, duties or obligations other than
those specifically set forth in this Agreement.
26. Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for any other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, to the extent permitted by applicable law, shall be
entitled to specific performance, injunctive relief or other equitable remedies
in the event of any such failure, without bond or other security being required.
27. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held
-35-
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
[Signature pages follow]
-36-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth in the first paragraph hereof.
COMPANY:
ISLAND, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[XXXXXX:
------------------------------------------
Xxxxx X. Xxxxxx]
Address for Notices:
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
WCAS SECURITYHOLDERS:
[Signature blocks, with addresses]
-37-
Signature Page to WCAS
Registration Rights Agreement
Exhibit A
---------
PLAN OF DISTRIBUTION
Securities may be sold or distributed from time to time by the selling
securityholders named in this prospectus and, to the extent permitted by their
registration rights agreement with the Company, by their donees or transferees
and their other successors in interest. The selling securityholders may sell
their securities at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed. Each selling securityholder reserves the right to
accept or reject, in whole or in part, any proposed purchase of securities,
whether the purchase is to be made directly or through agents.
The selling securityholders may offer their securities at various times in
one or more of the following transactions, which may include an underwritten
offering:
. in ordinary brokers' transactions and transactions in which the
broker solicits purchasers;
. in transactions involving cross or block trades or otherwise on the
NASDAQ National Market or any national securities exchange on which the Common
Stock is listed;
. in transactions "at the market" to or through market makers in the
common stock or into an existing market for the common stock;
. in other ways not involving market makers or established trading
markets, including direct sales of the securities to purchasers or sales of the
securities effected through agents;
. through transactions in options, swaps or other derivatives which
may or may not be listed on an exchange;
. in privately negotiated transactions; or
. in a combination of any of the foregoing transactions.
The selling securityholders also may sell their securities in
accordance with Rule 144 under the Securities Act.
From time to time, one or more of the selling securityholders may pledge or
grant a security interest in some or all of the securities owned by them. If the
selling securityholders default in performance of their secured obligations, the
pledgees or secured parties may offer and sell the securities from time to time
by
1
this prospectus. The selling securityholders also may transfer and donate
securities in other circumstances. The amount of securities beneficially owned
by selling securityholders will decrease as and when the selling securityholders
transfer or donate their securities or default in performing obligations secured
by their securities. The plan of distribution for the securities offered and
sold under this prospectus will otherwise remain unchanged, except that the
transferees, donees, pledgees, other secured parties or other successors in
interest will be selling securityholders for purposes of this prospectus.
The selling securityholders may also enter into hedging transactions. For
example, a selling securityholder may:
. enter into transactions with a broker-dealer, affiliate thereof or
other third party in connection with which such other party may
engage in sales of their securities pursuant to this prospectus, in
which case such other party may use shares of the securities
received from the selling securityholder to close out any short
positions created;
. sell their securities short itself pursuant to this prospectus and
use shares of their securities to close out its short positions;
. enter into option or other types of transactions that require the
selling securityholder to deliver their securities to a
broker-dealer or an affiliate thereof or other third party, who may
then resell or transfer the securities pursuant to this prospectus;
or
. loan or pledge their securities to a broker-dealer or an affiliate
thereof or other third party, who may sell the loaned securities
or, in an event of default in the case of a pledge, sell the
pledged securities pursuant to this prospectus.
The selling securityholders may use brokers, dealers, underwriters or
agents to sell their securities. The persons acting as agents may receive
compensation in the form of commissions, discounts or concessions. This
compensation may be paid by the selling securityholders or the purchasers of the
securities of whom such persons may act as agent, or to whom they may sell as
principal, or both. The compensation as to a particular person may be less than
or in excess of customary commissions. Any agents or broker-dealers that
participate in the offer and sale of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act. Any commissions they
receive and any profit they realize on the resale of the securities by them may
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither we nor any selling securityholders can presently estimate the amount of
such compensation.
If a selling securityholder sells securities in an underwritten offering,
the underwriters may acquire the securities for their own account and resell the
2
securities from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. In such event, we will set forth in a supplement to this
prospectus the names of the underwriters and the terms of the transactions,
including any underwriting discounts, concessions or commissions and other items
constituting compensation of the underwriters and broker-dealers. The
underwriters from time to time may change any public offering price and any
discounts, concessions or commissions allowed or reallowed or paid to
broker-dealers. Unless otherwise set forth in a supplement, the obligations of
the underwriters to purchase the securities will be subject to certain
conditions, and the underwriters will be obligated to purchase all of the
securities specified in the supplement if they purchase any of the securities.
We have informed the selling securityholders that during such time as they
may be engaged in a distribution of the securities, they are required to comply
with Regulation M under the Securities Exchange Act. With exceptions, Regulation
M prohibits any selling securityholder, any affiliated purchasers and other
persons who participate in such a distribution from bidding for or purchasing,
or attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
This offering by any selling securityholder will terminate on the date
specified in the selling securityholder's registration rights agreement with the
Company, or, if earlier, on the date on which the selling securityholder has
sold all of such selling securityholder's securities.
3
