REGISTRATION RIGHTS AGREEMENT
AMONG
VIATEL HOLDING (BERMUDA) LIMITED
AND
THE INVESTORS NAMED HEREIN
-----------------
DATED AS OF APRIL 21, 2004
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions.......................................................................... 1
ARTICLE II
REGISTRATION UNDER THE SECURITIES ACT
Section 2.1. Required Registration and Priority................................................... 5
Section 2.2. Incidental Registration.............................................................. 8
Section 2.3. Expenses............................................................................. 10
Section 2.4. Effective Registration Statement; Suspension......................................... 10
Section 2.5. Selection of Underwriters............................................................ 10
ARTICLE III
RESTRICTIONS ON PUBLIC SALE
Section 3.1. Public Sale or Distribution.......................................................... 11
Section 3.2. Transfers by Holders................................................................. 11
ARTICLE IV
REGISTRATION PROCEDURES
Section 4.1. Procedures........................................................................... 12
Section 4.2. Information to be Provided by Holders................................................ 16
Section 4.3. Additional Obligations of Holders.................................................... 16
Section 4.4. Additional Obligations of Company and Holders........................................ 17
ARTICLE V
INDEMNIFICATION/CONTRIBUTION
Section 5.1. Indemnification and Contribution..................................................... 17
ARTICLE VI
MISCELLANEOUS
Section 6.1. No Inconsistent Agreements........................................................... 20
Section 6.2. Amendments and Waivers............................................................... 20
Section 6.3. Notices.............................................................................. 20
Section 6.4. Successors and Assigns............................................................... 21
Section 6.5. Recapitalizations, Exchanges, etc., Affecting Registrable Securities................. 21
Section 6.6. Counterparts......................................................................... 22
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Section 6.7. Descriptive Headings, Etc............................................................ 22
Section 6.8. Severability......................................................................... 22
Section 6.9. Governing Law; Jurisdiction; Waiver of Jury Trial.................................... 22
Section 6.10. Specific Performance................................................................. 23
Section 6.11. Additional Documents................................................................. 23
Section 6.12. No Third-Party Beneficiaries......................................................... 24
Section 6.13. Entire Agreement..................................................................... 24
Section 6.13. Termination of Obligations With Respect to Registrable Notes......................... 24
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REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
April 21, 2004, by and among Viatel Holding (Bermuda) Limited, a company
organized under the laws of Bermuda (the "Company"), the Investors (as
hereinafter defined), Xxxx Xxxxx and any other Person that shall from and after
the date hereof acquire or otherwise be the transferee of any Registrable
Securities (herein referred to collectively as the "Holders" and individually as
a "Holder", subject to Section 2.2(c)).
WHEREAS, on April 21, 2004, the Company, Xxxx Xxxxx and the
Investors entered into an Investment and Note Purchase Agreement (the
"Investment Agreement") pursuant to which, under the terms and subject to the
conditions contained therein, Xxxx Xxxxx and each Investor shall purchase 8%
Convertible Senior Secured Notes Due 2014 of the Company (the "Notes") and the
Special Share Purchaser shall purchase the Special Share (as such terms are
defined in the Investment Agreement).
WHEREAS, in order to induce the Purchasers (as defined in the
Investment Agreement) to complete the transactions contemplated by the
Investment Agreement, the Company has agreed to provide registration rights on
the terms and subject to the conditions provided herein.
WHEREAS, the execution and delivery of this Agreement is a
condition to the obligations of the Purchasers set forth in Article VI of the
Investment Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1.Definitions. (a) As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act.
"Closing Date" shall have the meaning set forth in the
Investment Agreement.
"Common Shares" means the Common Shares of the Company, par
value $0.01 per share.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors, including by means of a Solvent
Reorganization.
"Conversion Shares" the meaning set forth in the Investment
Agreement.
"Demand Registration" shall have the meaning set forth in
Section 2.1(a)(i).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time and the rules and regulations promulgated
thereunder.
"Holder" shall have the meaning set forth in the preamble.
"Incidental Registration" shall have the meaning set forth in
Section 2.2(a).
"Incidental Registration Statement" shall have the meaning set
forth in Section 2.2(a).
"Indenture" shall have the meaning set forth in Section 4.4.
"Investor Notes" shall have the meaning set forth in the
Investment Agreement, but shall exclude, for purposes of this Agreement, the
Investor Notes issued or issuable to Xxxx Xxxxx.
"Investors" means each of the Purchasers (as defined in the
Investment Agreement) other than Xxxx Xxxxx.
"Majority Conversion Date" shall mean the date that a majority
in principal amount of the Notes issued on the Closing Date has been converted
into Common Shares.
"Notes" shall have the meaning set forth in the recitals to
this Agreement.
"Notes Request" shall have the meaning set forth in Section
2.1(a)(i).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
Prospectus as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities and by
all other amendments and supplements to such Prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.
"Registrable Notes" shall mean the Investor Notes and any
securities of the Company issued or issuable directly or indirectly with respect
to or in exchange, or substitution for, or conversion of such Investor Notes by
way of dividend or distribution, recapitalization, merger, consolidation,
exchange or other reorganization.
"Registrable Securities" shall mean the Registrable Notes and
the Registrable Shares. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under
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the Securities Act or sold to the public in compliance with Rule 144 under the
Securities Act (or any similar rule then in force).
"Registrable Shares" means the Common Shares into which the
Registrable Notes may be converted pursuant to their terms and any securities of
the Company issued or issuable directly or indirectly with respect to or in
exchange, or substitution for, or conversion of such Common Shares by way of
dividend or distribution, recapitalization, merger, consolidation, exchange or
other reorganization. With respect to any Person that is a Holder (without
reference to this sentence), Registrable Shares also includes any other Common
Shares, or other securities of the Company issued or issuable directly or in
exchange, or substitution for or conversion of Common Shares, held by such
Holder by way of dividend or distribution, recapitalization, merger,
consolidation, exchange or other reorganization.
"Registration Expenses" shall mean (i) all registration,
listing, qualification and filing fees (including any NYSE or NASD filing fees),
(ii) fees and disbursements of counsel for the Company, (iii) accounting fees
incident to any such registration, (iv) blue sky fees and expenses (including
counsel fees in connection with the preparation of a Blue Sky Memorandum and
legal investment survey), (v) all reasonable expenses of any Persons incurred on
behalf of the Holders or the Company in preparing or assisting in preparing,
printing, distributing, mailing and delivering any Registration Statement, any
Prospectus, any underwriting agreements, transmittal letters, securities sales
agreements, securities certificates and other documents relating to the
performance of and compliance with this Agreement, (vi) the expenses incurred in
connection with making road show presentations and holding meetings with
potential investors to facilitate the distribution and sale of Registrable
Securities which are customarily borne by the issuer, (vii) all internal
expenses of the Company (including all salaries and expenses of officers and
employees performing legal or accounting duties) and (viii) the reasonable fees
and expenses of the Holders incurred in connection with the sale of Registrable
Securities (including reasonable fees and expenses of counsel for the Holders);
provided, however, that Registration Expenses shall not include any Selling
Expenses.
"Registration Statement" shall mean any registration statement
of the Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Request" shall mean a Shares Request or a Notes Request.
"Required Registration" shall mean a registration required to
be effected pursuant to Section 2.1.
"Required Registration Statement" shall mean a Registration
Statement which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 on an appropriate form
pursuant to the Securities Act (other than pursuant to Rule 415 thereof), and
which form shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof, and all
amendments and supplements to such Registration Statement, including
post-effective amendments, in each case
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including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Required Shelf Registration Statement" shall mean a
Registration Statement which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.1 on an appropriate
form or any similar successor or replacement form (in accordance with Section
4.1 hereof) pursuant to Rule 415 of the Securities Act, and which form shall be
available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof, and all amendments and
supplements to such Registration Statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Selling Expenses" shall mean underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders.
"Shares Request" shall have the meaning set forth in Section
2.1(a)(i).
"Shelf Registration" shall have the meaning set forth in
Section 2.1(a)(i).
"Solvent Reorganization" means any solvent reorganization of
the Company, including by merger, consolidation, recapitalization, Transfer or
sale of shares or assets, or contribution of assets and/or liabilities, or any
liquidation, exchange of securities, conversion of entity, migration of entity,
formation of new entity, or any other transaction or group of related
transactions (in each case other than to or with an unaffiliated third party),
in which:
(i) all holders of the same class of equity
securities of the Company are offered the same consideration in respect
of such equity securities,
(ii) the Holders' pro rata indirect economic
interests in the Company, relative to each other and all other holders
of equity securities of the Company, are preserved and
(iii) the rights of the Holders under this
Registration Rights Agreement and the Investment Agreement are
preserved in all material respects.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
"Transfer" means any direct or indirect sale, transfer, pledge
or other disposition of any economic, voting or other rights of or with respect
to any Notes or Common Shares.
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"Triggering Registration" shall mean the first Required
Registration or Incidental Registration prior to which, or as a result of which,
Xxxxxx Xxxxxxx shall have sold or otherwise disposed of (a) 20% or more of the
Notes issued to it on the Closing Date or (b) a number of Conversion Shares
equal to the number of Conversion Shares issuable upon conversion of 20% of the
Notes issued to it on the Closing Date.
"Trustee" shall have the meaning set forth in Section 4.4.
"Underwriter" means a Person who participates as an
underwriter in connection with a sale or offering.
"Underwritten Offering" shall mean a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
(b) Capitalized terms used herein and not otherwise
defined shall have the meanings assigned such terms in the Investment Agreement.
ARTICLE II
REGISTRATION UNDER THE SECURITIES ACT
Section 2.1. Required Registration and Priority.
(a) Required Registration. (i) At any time from and after the
Closing Date and prior to the Majority Conversion Date, upon the written request
of holders of a majority of the principal amount of the Notes issued to the
Investors on the Closing Date, one or more Holders shall have the right to
request in writing (a "Notes Request") (which Notes Request shall specify the
Registrable Notes intended to be disposed, the identity of the Holders intending
to dispose of the Registrable Notes, and the intended method of distribution
thereof) that the Company register all or a portion of the Registrable Notes
held by such Holder(s) by filing with the SEC (x) a Required Registration
Statement (a "Demand Registration") or (y) if the Notes Request shall specify, a
Required Shelf Registration Statement (a "Shelf Registration").
(ii) At any time from and after the Closing Date, upon the
written request of:
(x) if, at the time of the request, the Company is
subject to the provisions of the Exchange Act,
Holders directly or indirectly owning 10% or more of
the outstanding Common Shares, and
(y) if, at the time of the request, the Company is not
subject to the provisions of the Exchange Act,
Holders directly or indirectly owning at least a
majority of the outstanding Common Shares,
one or more holders of Registrable Shares shall have the right to request in
writing (a "Shares Request") (which Shares Request shall specify the Registrable
Shares intended to be disposed, the identity of the Holders intending to dispose
of Registrable Shares, and the intended method of distribution thereof) that the
Company register all or a portion of the Registrable Shares held
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by such Holder(s) by filing with the SEC (a) a Demand Registration or (b) if the
Request shall specify, a Shelf Registration.
(iii) Upon the receipt of a valid Shares Request, the
Company shall, by the fifth Business Day (as defined in the Investment
Agreement) thereafter, give written notice of such requested registration to all
Holders of Registrable Shares, and, not later than the 30th (or in the case of
clause (a)(ii)(y) above, the 60th) calendar day after the receipt of such a
Request by the Company, the Company will cause to be filed with the SEC a
Required Registration Statement or Required Shelf Registration Statement, as the
case may be, covering the Registrable Shares that the Company has been so
requested to register in such Request and all other Registrable Shares that the
Company has been requested to register by Holders thereof other than the
Holder(s) who initiated the Request, by written request given to the Company
within ten (10) Business Days after the giving of such written notice by the
Company (which requests may be withdrawn prior to effectiveness of the relevant
registration statement), providing for the registration under the Securities Act
of the Registrable Shares that the Company has been so requested to register by
all such Holders, to the extent necessary to permit the disposition of such
Registrable Shares so to be registered in accordance with the intended methods
of distribution thereof specified in such Request or further requests, and shall
use all reasonable efforts to have such Required Registration Statement or
Required Shelf Registration Statement, as the case may be, declared effective by
the SEC as soon as practicable thereafter and to keep such Required Registration
Statement continuously effective for a period of at least (x) 60 calendar days,
in the case of a Demand Registration (or, in the case of an Underwritten
Offering, such period as the Underwriters shall reasonably require) following
the date on which such Required Registration Statement is declared effective (or
such shorter period which will terminate when all of the Registrable Securities
covered by such Required Registration Statement have been sold pursuant thereto)
or (y) 180 calendar days, in the case of a Shelf Registration, following the
date on which such Required Shelf Registration Statement is declared effective
(or such shorter period which will terminate when all of the Registrable
Securities covered by such Required Shelf Registration Statement have been sold
pursuant thereto), including, in either case, if necessary, by filing with the
SEC a post-effective amendment or a supplement to the Required Registration
Statement or Required Shelf Registration Statement or the related Prospectus or
any document incorporated therein by reference or by filing any other required
document or otherwise supplementing or amending the Required Registration
Statement or Required Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Required Registration Statement or Required Shelf Registration
Statement or by the Securities Act, the Exchange Act, any state securities or
blue sky laws, or any rules and regulations thereunder.
(iv) Upon the receipt of a valid Notes Request, the
Company shall, by the fifth Business Day thereafter, give written notice of such
requested registration to all Holders of Registrable Notes, and, not later than
the 60th calendar day after the receipt of such a Notes Request by the Company,
the Company will cause to be filed with the SEC a Required Registration
Statement or Required Shelf Registration Statement, as the case may be, covering
the Registrable Notes that the Company has been so requested to register in such
Notes Request and all other Registrable Notes that the Company has been
requested to register by Holders thereof other than the Holder(s) who initiated
the Notes Request, by written request given to the Company within ten (10)
Business Days after the giving of such written notice by the Company
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(which requests may be withdrawn prior to effectiveness of the relevant
registration statement), providing for the registration under the Securities Act
of the Registrable Notes that the Company has been so requested to register by
all such Holders, to the extent necessary to permit the disposition of such
Registrable Notes so to be registered in accordance with the intended methods of
distribution thereof specified in such Request or further requests, and shall
use all reasonable efforts to have such Required Registration Statement or
Required Shelf Registration Statement, as the case may be, declared effective by
the SEC as soon as practicable thereafter and to keep such Required Registration
Statement continuously effective for a period of at least (x) 60 calendar days,
in the case of a Demand Registration (or, in the case of an Underwritten
Offering, such period as the Underwriters shall reasonably require) following
the date on which such Required Registration Statement is declared effective (or
such shorter period which will terminate when all of the Registrable Securities
covered by such Required Registration Statement have been sold pursuant thereto)
or (y) 180 calendar days, in the case of a Shelf Registration, following the
date on which such Required Shelf Registration Statement is declared effective
(or such shorter period which will terminate when all of the Registrable
Securities covered by such Required Shelf Registration Statement have been sold
pursuant thereto), including, in either case, if necessary, by filing with the
SEC a post-effective amendment or a supplement to the Required Registration
Statement or Required Shelf Registration Statement or the related Prospectus or
any document incorporated therein by reference or by filing any other required
document or otherwise supplementing or amending the Required Registration
Statement or Required Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Required Registration Statement or Required Shelf Registration
Statement or by the Securities Act, the Exchange Act, any state securities or
blue sky laws, or any rules and regulations thereunder.
(v) The Company shall not be required to effect, pursuant
to this Section 2.1, (a) more than one Shelf Registration or Demand Registration
with respect to the Registrable Notes, (b) more than two Demand Registrations
requested by any single Holder with respect to Registrable Shares, (c) more than
a total of four Demand Registrations with respect to Registrable Shares and (d)
a Demand Registration with respect to Registrable Shares which covers
Registrable Shares having a value of less than $10 million in the aggregate.
(vi) A Request may be withdrawn prior to the filing of the
Required Registration Statement or Required Shelf Registration Statement by the
Holder that made such Request (a "Withdrawn Request") and a Required
Registration Statement or Required Shelf Registration Statement may be withdrawn
prior to the effectiveness thereof by the Holders of a majority of the
Registrable Securities included therein (a "Withdrawn Required Registration"),
and, in either such event, such withdrawal shall not be treated as a Required
Registration for purposes of the immediately preceding paragraph, unless the
Withdrawn Registration Statement is withdrawn after its having been filed with
the SEC and the requesting Holders have not reimbursed the Company for the
reasonable expenses incurred in connection therewith, in which case it shall be
treated as a Required Registration.
(vii) Notwithstanding the foregoing, the Company may delay
the filing of a registration statement required pursuant to this Section 2.1 if
the Board of Directors of the Company determines that such action is in the best
interests of the Company's stockholders and only for a period not to exceed 90
days (a "Blackout Period"); provided that after any initial
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Blackout Period the Company may not invoke a subsequent Blackout Period until 12
months elapse from the end of any previous Blackout Period.
(viii) The registration rights granted pursuant to
the provisions of this Section 2(a)(i) shall be in addition to the registration
rights granted pursuant to the other provisions of this Section 2.1.
(b) Priority in Required Registrations. If a Required
Registration pursuant to this Section 2.1 involves an Underwritten Offering, and
the sole Underwriter or the lead managing Underwriter, as the case may be, of
such Underwritten Offering shall advise the Company in writing (with a copy to
each Holder requesting registration) on or before the date 2 days prior to the
date then scheduled for the pricing of such offering that, in its opinion, the
amount of Registrable Securities requested to be included in such Required
Registration exceeds the amount that can be sold in such offering without
adversely affecting the distribution of the Registrable Securities being
offered, the Company will include in such Required Registration only the amount
of Registrable Securities that the Company is so advised can be sold in such
offering without adversely affecting the distribution of the Registrable
Securities being offered. The reduced number of Registrable Securities to be
included in the Required Registration shall be allocated pro rata among the
Holders participating in the Offering, based on the number of Registrable
Securities beneficially owned by each participating Holder.
Section 2.2. Incidental Registration.
(a) Right to Include Registrable Securities. If at any
time from and after the Closing Date the Company proposes to register any of its
Notes or Common Shares under the Securities Act (other than (A) any registration
of public sales or distributions solely by and for the account of the Company of
securities issued (x) pursuant to any employee benefit or similar plan or any
dividend reinvestment plan or (y) in any acquisition by the Company or (B)
pursuant to Section 2.1 hereof), either in connection with a primary offering
for cash for the account of the Company or a secondary offering for the account
of any holders of the Company's securities (in each case, an "Incidental
Registration"), the Company shall, each time it intends to effect such a
registration, give written notice to all Holders of Registrable Securities at
least ten (10) but no more than thirty (30) Business Days prior to the expected
initial filing of a registration statement with the SEC pertaining thereto (an
"Incidental Registration Statement"), informing such Holders of its intent to
file such Incidental Registration Statement, the expected filing date, and of
the Holders' rights to request the registration of certain Registrable
Securities held by the Holders under this Section 2.2 (the "Company Notice").
Upon the written request of any Holder made within seven (7) Business Days after
any such Company Notice is given (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company will use all reasonable efforts to effect the
registration under the Securities Act of all Registrable Shares (and, if the
Company proposes or is required pursuant to another section of this Agreement to
register Notes in such offering, all other Registrable Securities) that the
Company has been so requested to register by such Holders to the extent required
to permit the disposition (in accordance with the intended methods of
distribution thereof or, in the case of a registration which is intended to
effect a primary offering for cash for the account of the Company, in accordance
with the Company's intended method of distribution) of the Registrable
Securities so requested to be registered, including, if necessary,
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by filing with the SEC a post-effective amendment or a supplement to the
Incidental Registration Statement or the related Prospectus or any document
incorporated therein by reference or by filing any other required document or
otherwise supplementing or amending the Incidental Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Incidental Registration Statement
or by the Securities Act, any state securities or blue sky laws, or any rules
and regulations thereunder; provided, however, that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the Incidental Registration Statement filed in connection with
such registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and, thereupon, (A) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses incurred in connection therewith), and (B) in the case of
a determination to delay such registration, the Company shall be permitted to
delay registration of any Registrable Securities requested to be included in
such Incidental Registration Statement for the same period as the delay in
registering such other securities.
The registration rights granted pursuant to the provisions of
this Section 2.2 shall be in addition to the registration rights granted
pursuant to the other provisions of this Section.
(b) Priority in Incidental Registrations. If a
registration pursuant to this Section 2.2 involves an Underwritten Offering of
the securities so being registered, whether or not for sale for the account of
the Company, and the sole Underwriter or the lead managing Underwriter, as the
case may be, of such Underwritten Offering shall advise the Company in writing
(with a copy to each Holder of Registrable Securities requesting registration)
on or before the date 5 days prior to the date then scheduled for such offering
that, in its opinion, the amount of securities (including Registrable
Securities) requested to be included in such registration exceeds the amount
that can be sold in (or during the time of) such offering without adversely
affecting the distribution of the securities being offered, then the Company
shall be required to include in such registration, unless the managing
Underwriter shall otherwise specify (which specification may not adversely
affect any Holder relative to any other Holder), first, all the securities
entitled to be sold pursuant to such Incidental Registration Statement without
reference to the incidental registration rights of any holder (including
Holders), and second a number of Registrable Securities to be allocated pro rata
on the basis of the number of Registrable Securities beneficially owned at that
time by all the Holders requesting to participate in the Underwritten Offering
and included in such request (based on fully diluted Common Shares represented
by or that may be acquired upon exercise of such Registrable Securities) or on
such other basis as shall be agreed among the Holders; provided, however, that
in the event the Company will not, by virtue of this paragraph, include in any
such registration all of the Registrable Securities of any Holder requested to
be included in such registration, such Holder may, upon written notice to the
Company given within three (3) days of the time such Holder first is notified of
such matter, reduce the amount of Registrable Securities it desires to have
included in such registration, whereupon only the Registrable Securities, if
any, it desires to have included will be so included and the Holders not so
reducing shall be entitled to a corresponding increase in the amount of
Registrable Securities to be included in such registration. Notwithstanding the
foregoing, if the Underwritten Offering pertains solely to Registrable Shares,
at the
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request of such Underwriter, all Registrable Securities that are not Registrable
Shares may be excluded from the Incidental Registration Statement prior to
exclusion of any other Registrable Securities.
(c) With respect to the Triggering Registration and each
Required Registration or Incidental Registration thereafter (for so long as she
continues to beneficially own any Conversion Shares), for purposes of Sections
2.1, 2.2(a), 2.2(b), 2.3, 2.4, 2.5, 4.1, 4.2 and 4.3 hereof and Article V
hereof, (i) Xxxx Xxxxx shall be deemed to be a "Holder" and shall have the
rights and obligations of a Holder under such Sections with respect to
Registrable Shares and (ii) the Conversion Shares that Xxxx Xxxxx beneficially
owns shall be deemed to be "Registrable Shares". Notwithstanding anything to the
contrary herein, from and after the date hereof, Xxxx Xxxxx shall be deemed to
be a "Holder" and shall be subject to the obligations thereof under Sections 3.2
and 4.4 hereof and Article VI hereof.
Section 2.3. Expenses. The Company agrees to pay all Registration
Expenses in connection with each of the registrations requested pursuant to
Section 2.1 and Section 2.2. All Selling Expenses relating to securities
registered on behalf of Holders shall be borne by the Holders of securities
included in such registration pro rata on the basis of the number of Registrable
Shares so registered or issuable upon conversion of the Registrable Notes so
registered, as the case may be.
Section 2.4. Effective Registration Statement; Suspension. Subject to
Section 2.1 (a)(vi), a Registration Statement pursuant to Section 2.1 shall not
be deemed to have become effective (and the related registration will not be
deemed to have been effected) unless it has been declared effective by the SEC
or in the case of a Required Shelf Registration Statement unless Registrable
Securities have been disposed of pursuant thereto, prior to a request by the
Holders of a majority of the Registrable Securities included in such
registration that such Registration Statement be withdrawn; provided, however,
that if, after it has been declared effective, the offering of any Registrable
Securities pursuant to such Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement shall be deemed not to
have become effective and the related registration will not be deemed to have
been effected.
Section 2.5. Selection of Underwriters. At any time or from time to
time, the Holders of a majority (based on fully diluted Common Shares
represented by or that may be acquired upon exercise of such Registrable
Securities) of the Registrable Securities covered by a Required Registration
Statement may elect to have such Registrable Securities sold in an Underwritten
Offering and may select the investment banker or investment bankers and manager
or managers that will serve as lead and co-managing Underwriters with respect to
the offering of such Registrable Securities, subject to the consent of the
Company which shall not be unreasonably withheld. No Holder may participate in
any Underwritten Offering hereunder unless such Holder (a) agrees to sell such
Holder's securities on the basis provided in any underwriting arrangements
approved by (i) in the context of a Demand Registration or Shelf Registration,
the Holders of such a majority of Registrable Securities to be covered by the
Registration Statement, or (ii) in the context of an Incidental Registration,
the Company, and (b) completes and executes all questionnaires, powers of
attorney, custody agreements, indemnities, underwriting agreements and other
documents required under the terms of such Underwritten Offering. The
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underwriting agreement entered into with the lead Underwriter in connection with
an Underwritten Offering shall contain such representations, warranties,
indemnities and agreements then customarily included in underwriting or purchase
agreements by such lead Underwriter with respect to secondary distributions of
securities; provided, however, that a Holder's indemnity obligations thereunder
shall be limited to the proceeds received by such Holder in the related
offering.
ARTICLE III
RESTRICTIONS ON PUBLIC SALE
Section 3.1. Public Sale or Distribution. If requested by the sole
Underwriter or lead managing Underwriter(s) in an Underwritten Offering being
made pursuant to Section 2.1 of this Agreement, the Company agrees not to effect
any sale or distribution (other than, in the case of the Company, sales or
distributions solely by and for the account of the Company of securities issued
pursuant to any employee benefit or similar plan or any dividend reinvestment
plan) of any equity or equity-linked securities during the period commencing on
the date the Company receives a Request from any Holder and continuing until 180
days after the effective date of any Underwritten Offering (or for such shorter
period as the sole or lead managing Underwriter shall request) unless earlier
terminated by the sole Underwriter or lead managing Underwriter(s) in such
Underwritten Offering.
Section 3.2. Transfers by Holders. If requested by the sole Underwriter
or lead managing Underwriter(s) in an Underwritten Offering, the Holders shall
not sell or otherwise transfer or dispose of any securities of the Company held
by the Holders (other than those included in the registration) during the 90-day
period following the effective date of any Underwritten Offering, or such
shorter period as the sole Underwriter or lead managing Underwriter(s) may
request, of a registration statement of the Company filed under the Securities
Act; provided, however, that the obligations described in this Section 3.2 shall
not apply to a registration relating solely to the sale of securities to
employees of the Company pursuant to a stock option, stock purchase or similar
plan or Rule 145 or similar transaction. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restriction
until the end of said 90-day period. With respect to any agreement entered into
after the date of this Agreement pursuant to which the Company issues or agrees
to issue any privately placed securities, the Company shall use all reasonable
efforts to include in each such agreement a provision under which holders of
such securities agree not to effect any sale or distribution of any such
securities during the period referred to in the first sentence of this Section
3.2, including any sale pursuant to Rule 144 under the Securities Act (except as
part of such registration, if permitted).
ARTICLE IV
REGISTRATION PROCEDURES
Section 4.1. Procedures. In connection with the obligations of the
Company pursuant to Article II, the Company shall use all reasonable efforts to
effect or cause to be effected the registration of the Registrable Securities
under the Securities Act to permit the sale of such
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Registrable Securities by the Holders in accordance with their intended method
or methods of distribution, and the Company shall:
(a) (i) prepare and file a Registration
Statement with the SEC which (x) shall be on Form S-3 (or any successor
to such form), if available, (y) shall be available for the sale or
exchange of the Registrable Securities in accordance with the intended
method or methods of distribution by the selling Holders thereof, and
(z) shall comply as to form with the requirements of the applicable
form and include all financial statements required by the SEC to be
filed therewith and all other information reasonably requested by the
lead managing Underwriter or sole Underwriter, if applicable, to be
included therein, (ii) use all reasonable efforts to cause such
Registration Statement to become effective and remain effective in
accordance with Article II, (iii) use all reasonable efforts to not
take any action that would cause a Registration Statement to contain a
material misstatement or omission or to be not effective and usable for
resale of Registrable Securities during the period that such
Registration Statement is required to be effective and usable, and (iv)
cause each Registration Statement and the related Prospectus and any
amendment or supplement thereto, as of the effective date of such
Registration Statement, amendment or supplement (x) to comply in all
material respects with any requirements of the Securities Act and the
rules and regulations of the SEC and (y) not to contain any 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;
(b) subject to paragraph (j) of this Section
4.1, prepare and file with the SEC such amendments and post-effective
amendments to each such Registration Statement, as may be necessary to
keep such Registration Statement effective for the applicable period;
cause each such Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof, as set forth in such registration statement;
(c) furnish to each Holder of Registrable
Securities and to each Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or
Underwriter may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities; the Company
hereby consents to the use of the Prospectus, including each
preliminary Prospectus, by each Holder of Registrable Securities and
each Underwriter of an Underwritten Offering of Registrable Securities,
if any, in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or the preliminary Prospectus;
(d) (i) use all reasonable efforts to register
or qualify the Registrable Securities, no later than the time the
applicable Registration Statement is declared effective by the SEC,
under all applicable state securities or "blue sky" laws of such
jurisdictions as each Underwriter, if any, or any Holder of Registrable
Securities covered by a
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Registration Statement, shall reasonably request; (ii) use all
reasonable efforts to keep each such registration or qualification
effective during the period such Registration Statement is required to
be kept effective; and (iii) do any and all other acts and things which
may be reasonably necessary or advisable to enable each such
Underwriter, if any, and Holder to consummate the disposition in each
such jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be obligated to qualify
as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to consent to be
subject to general service of process (other than service of process in
connection with such registration or qualification or any sale of
Registrable Securities in connection therewith) in any such
jurisdiction;
(e) notify each Holder of Registrable Securities
promptly, and, if requested by such Holder, confirm such advice in
writing, (i) when a Registration Statement has become effective and
when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order, injunction or other order or requirement
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iii) if, between the
effective date of a Registration Statement and the closing of any sale
of securities covered thereby pursuant to any agreement to which the
Company is a party, the representations and warranties of the Company
contained in such agreement cease to be true and correct in all
material respects or if the Company receives any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and (iv) of the happening of any event
during the period a Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus contains
any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading;
(f) furnish counsel for each such Underwriter,
if any, and for the Holders of Registrable Securities copies of any
request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement and Prospectus or for
additional information;
(g) use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement at the earliest possible time;
(h) upon request, furnish to the sole
Underwriter or lead managing Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, at least one signed
copy of each Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits; and furnish to each
Holder of Registrable Securities, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference
or exhibits thereto, unless requested);
(i) cooperate with the selling Holders of
Registrable Securities and the sole Underwriter or lead managing
Underwriter of an Underwritten Offering of Registra-
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ble Securities, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations (consistent with the provisions
of the governing documents thereof) and registered in such names as the
selling Holders or the sole Underwriter or lead managing Underwriter of
an Underwritten Offering of Registrable Securities, if any, may
reasonably request at least three Business Days prior to any sale of
Registrable Securities;
(j) upon the occurrence of any event
contemplated by paragraph (e)(iv) of this Section, use all reasonable
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus, or any document
incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(k) enter into customary agreements (including,
in the case of an Underwritten Offering, underwriting agreements in
customary form, and including provisions with respect to
indemnification and contribution in customary form and consistent with
the provisions relating to indemnification and contribution contained
herein) and take all other customary and appropriate actions in order
to expedite or facilitate the disposition of such Registrable
Securities and in connection therewith:
(1) make such representations and
warranties to the Holders of such Registrable Securities and
the Underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar
underwritten offerings;
(2) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to
the lead managing Underwriter, if any, or, if no Underwriter,
the majority Holders of the Registrable Securities being sold)
addressed to each selling Holder and the Underwriters, if any,
covering the matters customarily covered in opinions requested
in sales of securities or underwritten offerings and such
other matters as may be reasonably requested by such Holders
and Underwriters;
(3) obtain "cold comfort" letters and
updates thereof from the Company's independent certified
public accountants addressed to the selling Holders of
Registrable Securities, if permissible, and the Underwriters,
if any, which letters shall be customary in form and shall
cover matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with primary
underwritten offerings;
(4) to the extent requested and
customary for the relevant transaction, enter into a
securities sales agreement with the Holders providing for,
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among other things, the appointment of such representative as
agent for the selling Holders for the purpose of soliciting
purchases of Registrable Securities, which agreement shall be
customary in form, substance and scope and shall contain
customary representations, warranties and covenants not more
onerous than those provided in the relevant underwriting
agreement(s), if any; and
(5) deliver such customary documents
and certificates as may be reasonably requested by the
majority Holders of the Registrable Securities being sold or
by the managing Underwriters, if any.
The above shall be done (i) at the effectiveness of such Registration
Statement (and each post-effective amendment thereto) in connection
with any registration, and (ii) at each closing under any underwriting
or similar agreement as and to the extent required thereunder;
(l) in the event the Company is required to
register the sale or disposition of any Registrable Notes pursuant to a
Registration Statement required by this Agreement, the Company shall
(i) cause the Indenture (as defined below) to be qualified under the
TIA not later than the effective date of such Registration Statement
and, in connection therewith, cooperate with the Trustee (as defined
below) and the Holders to effect such changes to the Indenture as may
be required for such Indenture to be so qualified in accordance with
the terms of the TIA and (ii) execute, and use all reasonable efforts
to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a
timely manner.
(m) make available for inspection by
representatives of the Holders of the Registrable Securities and any
Underwriters participating in any disposition pursuant to a
Registration Statement and any counsel or accountant retained by such
Holders or Underwriters, all relevant financial and other records,
pertinent corporate documents and properties of the Company and cause
the respective officers, directors and employees of the Company to
supply all information reasonably requested by any such representative,
Underwriter, counsel or accountant in connection with a Registration
Statement;
(n) (i) within a reasonable time prior to the
filing of any Registration Statement, any Prospectus, any amendment to
a Registration Statement or amendment or supplement to a Prospectus,
provide copies of such document to the Holders of Registrable
Securities and to counsel to such Holders and to the Underwriter or
Underwriters of an Underwritten Offering of Registrable Securities, if
any; fairly consider such reasonable changes in any such document prior
to or after the filing thereof as the counsel to the Holders or the
Underwriter or the Underwriters may request and not file any such
document in a form to which the majority Holders of Registrable
Securities being registered or any Underwriter shall reasonably object;
and make such of the representatives of the Company as shall be
reasonably requested by the Holders of Registrable Securities being
registered or any Underwriter available for discussion of such
document;
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(ii) within a reasonable time prior to the filing
of any document that is to be incorporated by reference into a
Registration Statement or a Prospectus, provide copies of such document
to counsel for the Holders; fairly consider such reasonable changes in
such document prior to or after the filing thereof as counsel for such
Holders or such Underwriter shall request; and make such of the
representatives of the Company as shall be reasonably requested by such
counsel available for discussion of such document;
(o) cause all Registrable Securities to be qualified for
inclusion in or listed on The New York Stock Exchange, Inc. or any
securities exchange or the NASDAQ National Market on which securities
of the same class issued by the Company are then so qualified or listed
if so requested by the majority Holders of Registrable Securities
covered by a Registration Statement, or if so requested by the
Underwriter or Underwriters of an Underwritten Offering of Registrable
Securities, if any;
(p) otherwise use all reasonable efforts to comply with
all applicable rules and regulations of the SEC, including making
available to its security holders an earnings statement covering at
least twelve (12) months which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(q) cooperate and assist in any filings required to be
made with regulatory agencies (including stock markets) and in the
performance of any due diligence investigation by any Underwriter in an
Underwritten Offering; and
(r) use all reasonable efforts to facilitate the
distribution and sale of any Registrable Securities to be offered
pursuant to this Agreement, including without limitation, upon
reasonable request of the Underwriter(s), by making road show
presentations, holding meetings with potential investors and taking
such other actions as shall be requested by the majority Holders of
Registrable Securities covered by a Registration Statement or the lead
managing Underwriter of an Underwritten Offering.
Section 4.2. Information to be Provided by Holders. Each selling Holder
of Registrable Securities as to which any registration is being effected
pursuant to this Agreement agrees, as a condition to the registration
obligations with respect to such Holder provided herein, to furnish in writing
to the Company such information regarding such Holder required to be included in
the Registration Statement, the ownership of Registrable Securities by such
Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing.
Section 4.3. Additional Obligations of Holders. Each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in paragraph (e)(iv) of Section 4.1, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
affected Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus, contemplated by paragraph (j) of this
Section, and, if so directed by the Company, such Holder will deliver to the
Company (at the expense of the Company), all copies in its possession, other
than permanent file copies then in
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such Holder's possession, of the Prospectus covering such Registrable Securities
which was current at the time of receipt of such notice.
Section 4.4. Additional Obligations of Company and Holders. The Company
and each Holder agrees that, in the event of a Notes Request, it shall cooperate
and use all reasonable efforts in good faith to agree upon a form of indenture
that reflects the terms and conditions of the Notes, which complies with the
terms of the Trust Indenture Act, and permits the Notes to be registered as
contemplated hereby (in each case, the "Indenture"). Such Persons shall also
cooperate in good faith to select a trustee (the "Trustee") for such -------
indenture. All fees and expenses of the Company, the Trustee and the Holders in
connection with the negotiation of the form of Indenture (and all related
qualifications) and of retaining the Trustee shall be borne by the Company.
ARTICLE V
INDEMNIFICATION/CONTRIBUTION
Section 5.1. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Holder, each Person, if any, who controls any Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of any Holder within the meaning of Rule 405 under the Securities
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or any amendment thereof, any preliminary
prospectus or any Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Holder furnished to the Company in writing by such
Holder expressly for use therein; provided that the foregoing indemnity shall
not inure to the benefit of any Holder (or to the benefit of any Person
controlling such Holder) from whom the Person asserting such losses, claims or
liabilities purchased the Registrable Securities, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Holder to such Person, if required by law so to have been delivered at or prior
to the written confirmation of the sale of the Registrable Securities to such
Person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 4.1(j)
hereof.
(b) Each Holder agrees severally and not jointly to
indemnify and hold harmless the Company and its directors, its officers who sign
any Registration Statement and each Person, if any, who controls the Company
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) or any other Holder, to the same extent as the
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foregoing indemnity from the Company to such Holder, but only with reference to
information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in such Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of any Holder
hereunder be greater in amount than the dollar amount of the gross proceeds from
the sale by such Holder upon the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such indemnification obligation.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to Sections 5.1(a) or (b) hereof, such Person
(the "indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by, in the case of parties
indemnified pursuant to Section 5.1(a), the Holders of a majority of the
Registrable Securities covered by the Registration Statement held by Holders
that are indemnified parties pursuant to Section 5.1(a) and, in the case of
parties indemnified pursuant to Section 5.1(b), the Company. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent (which shall not be unreasonably withheld), but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
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(d) To the extent that the indemnification provided for
in Sections 5.1(a) or (b) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the greater of the total purchase price received under the
Investment Agreement with respect to the Registrable Securities or the value
received by the Company in connection with the disposition of securities in the
relevant offering. The relative benefits received by any Holder shall be deemed
to be equal to the value received by such Holder in connection with the
disposition of such securities in the relevant offering. The relative fault of
the Holders on the one hand and the Company on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Holders or by the
Company, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 5.1(d) are several
in proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.1(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 5.1(d), no indemnifying party that is a selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities sold by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 5.1 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity, hereunder, under the
Investment Agreement or otherwise.
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(f) The indemnity and contribution provisions contained
in this Section 5.1 shall remain operative and in full force and effect
regardless of iii) any termination of this Agreement, iv) any investigation made
by or on behalf of any Holder, any Person controlling any Holder or any
affiliate of any Holder or by or on behalf of the Company, its officers or
directors or any Person controlling the Company and v) the sale of any
Registrable Securities by any Holder.
(g) All indemnified parties are third-party beneficiaries
of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1. No Inconsistent Agreements. The Company will not on or
after the date of this Agreement enter into any agreement that conflicts with
the provisions of this Agreement or that grants registration or similar rights
without the prior written consent of the Holders of a majority of the
Registrable Securities, nor has the Company entered into any such agreement,
except for the agreements set forth on Schedule 3.03(d) of the Investment
Agreement. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities under any such agreements.
Section 6.2. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the prior written consent of
the Holders of a majority of the Registrable Securities then outstanding (which
for this purpose shall be the Registrable Shares outstanding plus the
Registrable Shares issuable upon conversion of the Registrable Notes), and, if
any such amendment, modification, supplement, waiver or consent would materially
adversely affect the rights of any specific group of Holders hereunder in a
different manner or degree than would affect the rights of all Holders, the
written consent of Holders of a majority of the Registrable Securities so
affected shall be obtained, and, if any such amendment, modification,
supplement, waiver or consent would materially adversely affect the rights of
any specific Holders hereunder in a different manner or degree than would affect
the rights of all Holders, the written consent of each such adversely affected
Holder shall be obtained; provided, however, that nothing herein shall prohibit
any amendment, modification, supplement, waiver or consent the effect of which
is limited only to those Holders who have agreed to such amendment,
modification, supplement, waiver or consent.
Section 6.3. Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be governed by the terms and conditions
for the giving of notices under Section 9.04 of the Investment Agreement.
Section 6.4. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without the need for an express assignment,
subsequent Holders other than a Holder which acquires Registrable Notes or
Registrable Shares in a public offer or pursuant to an exemption under Rule
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144 of the Securities Act; provided the subsequent holder agrees in writing to
be bound by the provisions of this Agreement. If any successor, assignee or
transferee of any Holder shall acquire Registrable Securities in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement. The Company shall refuse to register any securities held by any such
transferee until such time as such transferee has duly executed and delivered a
counterpart signature page by which such person agrees to all terms and
conditions of this Agreement. For purposes of this Agreement, "successor" for
any entity other than a natural person shall mean a successor to such entity as
a result of such entity's merger, consolidation, liquidation, dissolution, sale
of substantially all of its assets, or similar transaction.
Section 6.5. Recapitalizations, Exchanges, etc., Affecting Registrable
Securities. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Registrable Securities, to any and all
securities or capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise.
including any Solvent Reorganization) that may be issued in respect of, in
exchange for, or in substitution of such Registrable Securities, by reason of
any dividend, split, issuance, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise.
Section 6.6. Counterparts. This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.
Section 6.7. Descriptive Headings, Etc. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section and paragraph references are to the Articles,
Sections and paragraphs to this Agreement unless otherwise specified; (4) the
word "including" and words of similar import when used in this Agreement shall
mean "including, without limitation," unless otherwise specified; (5) "or" is
not exclusive; and (6) provisions apply to successive events and transactions.
Section 6.8. Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
Section 6.9.GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.
This Agreement shall be construed in accordance with the internal laws of the
State of New York
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without regard to the conflicts of laws provisions thereof. The Company hereby
irrevocably submits to the jurisdiction of any court of the State of New York
located in the County of New York or the United States District Court for the
Southern District of the State of New York, any appellate courts from any
thereof (any such court, a "New York Court") or any court of the United Kingdom
located in London, or any appellate courts from any thereof (any such court, a
"UK Court"), but shall not be required to submit to the jurisdiction of a court
other than a New York Court or UK Court, for the purpose of any suit, action or
other proceeding arising out of or relating to this Agreement or under any
applicable securities laws and arising out of the foregoing, which is brought by
or against the Company, and the Company hereby irrevocably agrees that all
claims in respect of any such suit, action or proceeding will be heard and
determined in any such court. Each party hereto (other than the Company) hereby
irrevocably submits to the jurisdiction of any New York Court, but shall not be
required to submit to the jurisdiction of a court other than a New York Court,
for the purpose of any suit, action or other proceeding arising out of or
relating to this Agreement or under any applicable securities laws and arising
out of the foregoing, which is brought by or against such party, and such party
hereby irrevocably agrees that all claims in respect of any such suit, action or
proceeding will be heard and determined in any such court. The Company hereby
agrees not to commence any action, suit or proceeding relating to this Agreement
other than in a New York Court except to the extent mandated by applicable law.
The Company hereby waives any objection that it may now or hereafter have to the
venue of any such suit, action or proceeding in any New York Court or any UK
Court or that such suit, action or proceeding was brought in an inconvenient
court and agree not to plead or claim the same. Each party hereto (other than
the Company) hereby waives any objection that it may now or hereafter have to
the venue of any such suit, action or proceeding in any New York Court or that
such suit, action or proceeding was brought in an inconvenient court and agree
not to plead or claim the same. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
THIS AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
The submission to the jurisdiction referred to in the
preceding paragraph shall not limit the right of any Holder to take proceedings
against any other party hereto in courts of any other competent jurisdiction nor
shall the taking of proceedings against such other party in any one or more
jurisdictions preclude the taking of proceedings against such other party in any
other jurisdiction (whether concurrently or not) if and to the extent permitted
by applicable law.
The Company agrees that the process by which any suit, action
or proceeding is begun in connection with this Agreement may be served on it at
its principal place of business in the United Kingdom for the time being. If the
Company ceases to have a principal place of
-22-
business in the United Kingdom, it shall immediately appoint a further person in
the United Kingdom to accept service of process on its behalf in such
jurisdiction. Nothing contained herein shall affect the right of the parties
hereto to serve process in any other manner permitted by law. In addition, the
Company acknowledges and agrees that (a) it has, by separate letter, irrevocably
appointed CT Corporation System, as its authorized agent upon which process may
be served in any suit or proceeding against the Company arising out of or
relating to this Agreement or under any securities laws of the United States or
any state thereof and arising out of the foregoing, (b) it has, prior to the
date hereof, paid such agent an amount in cash sufficient to procure such
agent's services for eleven years from the date hereof and (c) service of
process upon such agent, and written notice of said service to the Company by
the person serving the same to the address provided above, shall be deemed in
every respect effective service of process upon the Company in any such suit or
proceeding. The Company agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and effect
for a period of at least eleven years from the date of this Agreement.
Section 6.10. Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform in any
material respect any of its obligations hereunder, and accordingly agree that
each party, in addition to any other remedy to which it may be entitled at law
or in equity, shall be entitled to compel specific performance of the
obligations of any other party under this Agreement in accordance with the terms
and conditions of this Agreement.
Section 6.11. Additional Documents. Each party agrees to execute any
and all further documents and writings within its powers and to perform such
other actions which may be or become necessary or expedient to effectuate and
carry out this Agreement.
Section 6.12. No Third-Party Beneficiaries. Except as set forth in
Section 5.1 hereof, none of the provisions of this Agreement shall be for the
benefit of, or enforceable by, any third-party beneficiary.
Section 6.13. Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the Company, on the one hand, and
the other parties to this Agreement, on the other, with respect to such subject
matter.
Section 6.14. Termination of Obligations With Respect to Registrable
Notes. The right to require the Company to register Registrable Notes pursuant
to Sections 2.1 and 2.2 hereof shall terminate and cease to be of any further
force or effect upon the earlier to occur of (a) the Majority Conversion Date
and (b) the eleventh anniversary of the date of this Agreement (it being
understood and agreed that such termination shall have no effect on the
Company's other obligations under this Agreement (including, without limitation,
its obligation to register Registrable Shares)).
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
XXXXXX XXXXXXX & CO. INCORPORATED VIATEL HOLDING (BERMUDA) LIMITED
By: ____________________________ By: ___________________________
Name: Name:
Title: Title:
AHAB PARTNERS, X.X. XXXXX PARTNERS, INC.
By: ________________, its ______ By: ___________________________
Name:
Title:
By: ____________________________
Name:
Title:
STONEHILL INSTITUTIONAL PARTNERS, L.P. ORE HILL HUB FUND LTD.
By: _______________, its ________ By: __________, its ___________
By: _____________________________ By: ___________________________
Name: Name:
Title: Title:
[Signature Page #1 to Registration Rights Agreement]
XXXX XXXXX WAYLAND DISTRESSED OPPORTUNITIES
FUND I-A, LLC
________________________________
Name: Xxxx Xxxxx By: _____________, its ________
By: ___________________________
Name:
Title:
SAPPHIRE SPECIAL OPPORTUNITIES FUND, LLC
By: ________________, its ________
By: ______________________________
Name:
Title:
[Signature Page #2 to Registration Rights Agreement]
