Exhibit 99.9
EXECUTION COPY
iBASIS, INC.
AND
THE NOTEHOLDERS NAMED HEREIN
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 18, 2004
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June 18,
2004, among iBasis, Inc., a Delaware (the "COMPANY"), and each of the
individuals and entities listed on Schedule I hereof (the "INITIAL HOLDERS").
WHEREAS, the Company and Initial Holders are parties to that certain Note
Purchase Agreement, dated as of the date hereof, pursuant to which the Company
has agreed to issue, and the Initial Holders have agreed to purchase, as more
fully described therein, $29,000,000 aggregate principal amount of the Company's
8% Secured Convertible Notes due 2007 (the "NOTES").
WHEREAS, the Notes are convertible into shares of Common Stock of the
Company (the shares of Common Stock issued or issuable upon conversion of any
Notes being referred to herein as the "CONVERSION SHARES"), at an initial
conversion price of $1.85 per share pursuant to that certain Indenture relating
to the Notes, dated as of the date hereof, by and between the Company and the
Trustee named therein (the "INDENTURE").
WHEREAS, upon conversion of any Notes by a Noteholder, such Noteholder
shall own Conversion Shares, which shall continue to be subject to the terms of
this Agreement.
WHEREAS, in accordance with the terms of the Indenture, the conversion
price of the Notes may be adjusted in the event that the Company does not file a
Registration Statement to cover the resale of the Notes and/or the Conversion
Shares within thirty (30) days of the date of receipt of a Demand Request (as
defined below), or a Registration Statement to cover such resale is not
effective within one hundred and twenty days (120) days of the date of receipt
of a Demand Request.
WHEREAS, the Noteholders shall have certain registration rights with
respect to the Notes and the Conversion Shares as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. REGISTRATION RIGHTS. The Company will perform and comply, and
cause each of its Subsidiaries to perform and comply, with each of the following
provisions as are applicable to it. Each Noteholder and each holder of
Conversion Shares will perform and comply with each of the following provisions
as are applicable to such holder.
1.1. DEMAND REGISTRATION RIGHTS.
1.1.1. GENERAL. Any holders of Registrable Securities who at
such time hold greater than 50% of the Conversion Shares ("INITIATING
HOLDERS") may request, by written notice to the Company (a "DEMAND
REQUEST"), that the Company effect the registration under the
Securities Act for a Public Offering of all or a specified part of the
Registrable Securities held by such Initiating Holders, without
converting any Notes held by such Initiating Holders prior to making
such request. Such Demand Request shall specify the intended method or
1
methods of distribution. Within ten (10) days after receipt of such
notice from the Initiating Holders, the Company shall give notice of
such requested registration to all other holders of Registrable
Securities in accordance with Section 1.2 hereof. The Company will
then use its reasonable best efforts to effect the registration under
the Securities Act of the Registrable Securities which the Company has
been requested to register pursuant to the Demand Request, together
with all other Registrable Securities which the Company has been
requested to register pursuant to this Section 1.1 or Section 1.2
hereof or otherwise by notice delivered to the Company within 20 days
after the Company has given the required notice of such requested
registration (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent
requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities which the
Company has been so requested to register; PROVIDED, HOWEVER, that,
from and after the ninety-first (91st) day following the date hereof,
the Company shall not be obligated to take any action to effect any
such registration pursuant to this Section 1.1.1 within ninety (90)
days immediately following the effective date of any registration
statement pertaining to an underwritten public offering of securities
of the Company for its own account (other than a Rule 145 Transaction,
or a registration relating solely to employee benefit plans).
1.1.2. FORM; LIMITATIONS. Except as otherwise provided above,
each registration requested pursuant to Section 1.1.1 hereof shall be
effected by the filing of a registration statement on Form S-1 (or any
other form which includes substantially the same information as would
be required to be included in a registration statement on such form as
currently constituted), unless the use of a different form has been
agreed to in writing by holders of at least fifty percent (50%) of the
Conversion Shares held by persons who have requested that their
Registrable Securities be included in the proposed registration
statement in question (the "MAJORITY PARTICIPATING HOLDERS") or the
Company is then eligible to use Form S-3 for a Public Offering by the
Majority Participating Holders of their Registrable Securities;
PROVIDED, HOWEVER, that the Company shall not be required to effect
any registration requested pursuant to Section 1.1.1 hereof on any
form other than Form S-3 (or any successor form) if the Company has
previously effected three or more registrations of Registrable
Securities under Section 1.1.1 hereof on any form other than Form S-3
(or any successor form). No registration of Registrable Securities
which shall not have become and remained effective in accordance with
this Section 1.1 shall be included in the calculation of the number of
registrations contemplated by this Section 1.1.2 (unless the
Initiating Holders withdraw their request for such registration, other
than (i) if such withdrawal is a result of information concerning the
business or financial condition of the Company which is made known
after the date on which such registration was requested or (ii) if the
Initiating Holders pay all the expenses of such registration otherwise
payable by the Company pursuant to Section 1.1.3 hereof). In addition,
a registration requested pursuant to this Section 1.1 shall not be
included in the calculation of the number of registrations
contemplated by this Section 1.1.2, if the number or principal amount
of each class of Registrable Securities of the
Initiating Holders actually registered falls below 50% of the number
or principal amount of Registrable Securities of such class requested
to be registered by the Initiating Holders. If at the time of any
request to register Registrable Securities pursuant to this Section
1.1 that is made after the thirtieth (30th) day following the date
hereof, the Company is engaged or has plans to engage in a registered
public offering or is engaged in any other activity which, in the good
faith determination of the Board, would be adversely affected by the
requested registration, then the Company may at its option direct that
such request be delayed for a period not in excess of 30 days from the
date of such request, such right to delay a request to be exercised by
the Company not more than once in any 12-month period. In the event
that, in the judgment of the Company, it is advisable to suspend use
of a prospectus included in a registration statement due to pending
material developments or other events that have not yet been publicly
disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all selling
stockholders to such effect, and, upon receipt of such notice, each
such selling stockholder shall immediately discontinue any sales of
Registrable Securities pursuant to such registration statement until
such selling stockholder has received copies of a supplemented or
amended prospectus or until such selling stockholder is advised in
writing by the Company that the then current prospectus may be used
and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such
prospectus. Notwithstanding anything to the contrary herein, the
Company shall not exercise its rights under the foregoing sentence to
suspend sales of Registrable Securities for a period in excess of 30
days consecutively or 60 days in any 365-day period.
1.1.3. PAYMENT OF EXPENSES. The Company shall pay all
reasonable expenses of holders of Registrable Securities incurred in
connection with the first three registrations of Registrable
Securities requested pursuant to this Section 1.1 (including the
reasonable fees and expenses of a single legal counsel representing
all selling stockholders), other than underwriting discounts and
commissions, if any, and applicable transfer taxes, if any.
1.1.4. ADDITIONAL PROCEDURES. In the case of a registration
pursuant to this Section 1.1, whenever the Initiating Holders shall
request that such registration shall be effected pursuant to an
underwritten offering, the Company shall include such information in
the written notices to holders of Registrable Securities referred to
in Section 1.1.2 hereof. In such event, the right of any holder of
Registrable Securities to have securities owned by such holder
included in such registration pursuant to this Section 1.1 shall be
conditioned upon such holder's participation in such underwriting and
the inclusion of such holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed upon by the Majority
Participating Holders and such holder). If requested by the
underwriters of such registration, the Company, together with the
holders of Registrable Securities proposing to distribute their
securities through such underwriting, will enter into an underwriting
agreement with such underwriters for such offering containing such
representations and warranties by the Company and such holders
and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions,
including, without limitation, customary indemnity and contribution
provisions (subject, in each case, to the limitations on such
liabilities set forth in this Agreement).
1.2. PIGGYBACK REGISTRATION RIGHTS.
1.2.1. GENERAL. Each time the Company proposes to register any
shares of Common Stock under the Securities Act, on a form which would
permit registration of Registrable Securities for sale to the public,
for sale in a Public Offering, the Company will promptly give notice
to all holders of Registrable Securities of its intention to do so.
Any such holder may, by written response delivered to the Company
within 20 days after receipt of such notice, request that some or all
of the Common Shares held by such holder be included in such
registration. The Company thereupon will use its reasonable best
efforts to cause to be included in such registration under the
Securities Act, all Common Shares which the Company has been so
requested to register by such holders, to the extent required to
permit the disposition (in accordance with the methods to be used by
the Company or other holders of shares of Common Stock in such Public
Offering) of the Common Shares to be so registered. No registration of
Registrable Securities effected under this Section 1.2 shall relieve
the Company of any of its obligations to effect registrations of
Registrable Securities pursuant to Section 1.1 hereof. The Company may
withdraw or suspend any registration covered by this Section 1.2 at
any time (subject, in the case of any registration also covered by
Section 1.1 hereof, to any limitations set forth therein).
1.2.2. EXCLUDED TRANSACTIONS. The Company shall not be
obligated to effect any registration of Registrable Securities under
this Section 1.2 incidental to the registration of any of its
securities in connection with:
(a) Any Public Offering relating to employee benefit
plans or dividend reinvestment plans; or
(b) Any Public Offering relating to the acquisition or
merger after the date hereof by the Company or any of its
Subsidiaries of or with any other businesses.
1.2.3. PAYMENT OF EXPENSES. The Company shall pay all
reasonable fees and expenses of a single legal counsel representing
any and all holders of Registrable Securities incurred in connection
with the first three registrations of Registrable Securities requested
pursuant to this Section 1.2.
1.2.4. ADDITIONAL PROCEDURES. Holders of Registrable
Securities participating in any Public Offering pursuant to this
Section 1.2 shall take all such actions and execute all such documents
and instruments that are reasonably requested by the Company to effect
the sale of their Common Shares in such Public Offering, including,
without limitation, being parties to the underwriting
agreement entered into by the Company and any other selling
stockholders in connection therewith and being liable in respect of
the representations and warranties by, and the other agreements
(including without limitation customary selling stockholder
representations, warranties, indemnifications and "lock-up"
agreements) for the benefit of the underwriters; PROVIDED, HOWEVER,
that (a) with respect to individual representations, warranties,
indemnities and agreements of selling holders of Registrable
Securities in such Public Offering, the aggregate amount of such
liability shall not exceed such holder's net proceeds from such
offering and (b) to the extent selling holders of Registrable
Securities give further representations, warranties and indemnities,
then with respect to all other representations, warranties and
indemnities of sellers of shares in such Public Offering, the
aggregate amount of such liability shall not exceed the lesser of (i)
such holder's pro rata portion of any such liability, in accordance
with such holder's portion of the total number of Registrable
Securities included in the offering or (ii) such holder's net proceeds
from such offering.
1.3. CERTAIN OTHER PROVISIONS.
1.3.1. UNDERWRITER'S CUTBACK IN CONNECTION WITH A DEMAND
REQUEST. In connection with any registration of shares of Common Stock
pursuant to an underwritten offering conducted pursuant to a Demand
Request, the underwriter may determine that marketing factors
(including, without limitation, an adverse effect on the per share
offering price) require a limitation of the number of shares of Common
Stock to be underwritten. Notwithstanding any contrary provision of
Section 1.1 hereof, and subject to the terms of this Section 1.3.1,
the underwriter may limit the number of shares which would otherwise
be included in such registration. Upon receipt of notice from the
underwriter of the need to reduce the number of shares to be included
in the registration, the Company shall advise all holders of Common
Stock that would otherwise be registered and underwritten in such
registration, and the number of shares of Common Stock, including
Common Shares, that may be included in the registration shall be
allocated:
(a) first, to the holders of Common Shares; and
(b) second, to the Company and any other shareholders
of the Company requesting registration of shares of Common Stock;
PROVIDED, HOWEVER, that if the Company has, prior to the date hereof,
or after the date hereof with the consent of the Majority Holders,
granted registration rights which are to be treated on an equal basis
with Registrable Securities for the purpose of the exercise of the
underwriter cutback, the registration rights granted to the holders of
any such shares of Common Stock shall be treated on an equal basis
with Registrable Securities for purposes of this underwriting cutback;
PROVIDED, FURTHER, that it is specifically agreed and acknowledged
that the registration rights granted (1) to Silicon Valley Bank
pursuant to the Registration Rights Agreement, dated on or around
December 30, 2002, between the Company and Silicon Valley Bank, (2) to
certain holders pursuant to the Amended and
Restated Warrant and Registration Rights Agreement, dated February 21,
2003, by and among the Company and the warrant agent named therein and
(3) to certain holders pursuant to the 2004 Warrant and Registration
Rights Agreement, dated June 18, 2004, by and among the Company and
the warrant agent named therein are to be treated on an equal basis
with Registrable Securities for the purposes of this underwriting
cutback. If further limitation on the number of shares to be included
in the offering is required, the number of Registrable Securities and
other shares of Common Stock that may be included in such registration
under Section 1.3.1(a) above, shall be allocated among holders in
proportion, as nearly as practicable, to the respective amounts of
Common Stock which each stockholder requested be registered in such
registration. No securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration. Upon delivery of a written request that Registrable
Securities be included in an underwritten offering pursuant to Section
1.1.1 hereof, the holder thereof may not thereafter elect to withdraw
therefrom without the written consent of the Company and the Majority
Participating Holders, unless 50% or more of the Common Shares it
requested to be included in such registration are subject to an
underwriter cutback.
1.3.2. UNDERWRITER'S CUTBACK IN CONNECTION WITH A PIGGYBACK
REGISTRATION. In connection with any registration of shares of Common
Stock pursuant to an underwritten offering, the underwriter may
determine that marketing factors (including, without limitation, an
adverse effect on the per share offering price) require a limitation
of the number of shares of Common Stock to be underwritten.
Notwithstanding any contrary provision of Section 1.2 hereof, and
subject to the terms of this Section 1.3.2, the underwriter may limit
the number of shares which would otherwise be included in such
registration. Upon receipt of notice from the underwriter of the need
to reduce the number of shares to be included in the registration, the
Company shall advise all holders of Common Stock that would otherwise
be registered and underwritten in such registration, and the number of
shares of Common Stock, including Common Shares, that may be included
in the registration shall be allocated:
(a) first, to the Company and, if the registration is
pursuant to a demand request made by a third party, to the
holders making the demand request;
(b) second, pari passu to the holders of Registrable
Securities; PROVIDED, HOWEVER, that no Registrable Securities
requested to be included in the registration by a Holder shall be
excluded from the registration until all shares proposed to be
registered by the Company's founders, officers, directors or
employees are excluded from the registration; and
(c) third, to any others requesting registration of
securities of the Company pursuant to piggyback registration
rights that are junior;
PROVIDED, HOWEVER, that if the Company has, prior to the date hereof,
or after the date hereof, subject to Sections 1.3.6 and 1.3.7 of this
Agreement, granted registration rights which are to be treated on an
equal basis with Registrable Securities for the purpose of the
exercise of the underwriter cutback, the registration rights granted
to the holders of any such shares of Common Stock shall be treated on
an equal basis with Registrable Securities for purposes of this
underwriting cutback; PROVIDED, FURTHER, that it is specifically
agreed and acknowledged that the registration rights granted (1) to
Silicon Valley Bank pursuant to the Registration Rights Agreement,
dated on or around December 30, 2002, between the Company and Silicon
Valley Bank, (2) to certain holders pursuant to the Amended and
Restated Warrant and Registration Rights Agreement, dated February 21,
2003, by and among the Company and the warrant agent named therein and
(3) to certain holders pursuant to the 2004 Warrant and Registration
Rights Agreement, dated June 18, 2004, by and among the Company and
the warrant agent named therein are to be treated on an equal basis
with Registrable Securities for the purposes of this underwriting
cutback. No securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration. Upon delivery of a written request that Registrable
Securities be included in an underwritten offering pursuant to Section
1.2.1 hereof, the holder thereof may not thereafter elect to withdraw
therefrom without the written consent the Company and the Majority
Participating Holders, unless 50% or more of the Common Shares it
requested to be included in such registration are subject to an
underwriter cutback.
1.3.3. REGISTRATION PROCEDURES. If and in each case when the
Company is required to use its reasonable best efforts to effect a
registration of any Registrable Securities as provided in Section 1.1
or Section 1.2 hereof, the Company shall take appropriate and
customary actions in furtherance thereof, including, without
limitation:
(a) promptly filing with the Commission a registration
statement and using best efforts to cause such registration
statement to become effective (subject to additional obligations
set forth in Section 1.1);
(b) preparing and filing with the Commission such
amendments and supplements to such registration statements as may
be required to comply with the Securities Act and to keep such
registration statement effective (i) if in connection with a
Demand Request, until such time as all of such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the Initiating Holders thereof;
PROVIDED, HOWEVER, that if the registration is effected by the
filing of a registration statement on Form S-3, then the Company
shall keep such registration statement effective for a period not
to exceed 3 years from the date of effectiveness or such earlier
time as the Registrable Securities covered by such registration
statement have been disposed of in accordance with the intended
method of distribution therefore, the
expiration of the time when a prospectus relating to such
registration is required to be delivered under the Securities
Act, or such registration statement no longer covers Registrable
Securities and (ii) if in connection with Section 1.2, for a
period not to exceed 270 days from the date of effectiveness or
such earlier time as the Registrable Securities covered by such
registration statement shall have been disposed of in accordance
with the intended method of distribution therefor or the
expiration of the time when a prospectus relating to such
registration is required to be delivered under the Securities
Act;
(c) using its best efforts to register or qualify such
Registrable Securities under the state securities or "blue sky"
laws of such jurisdictions as the sellers shall reasonably
request; PROVIDED, HOWEVER, that the Company shall not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it would not
otherwise be so subject; and
(d) otherwise cooperating reasonably with, and taking such
customary actions as may reasonably be requested by the holders
of Registrable Securities in connection with, such registration.
1.3.4. LOCK-UP. If, in connection with any Public Offering,
the Company or the underwriters managing such Public Offering request
that the Noteholders enter into a "lock-up" agreement with respect to
the Conversion Shares held by the Noteholders, the Noteholders agree
to act in a commercially reasonable manner in considering and
responding to any such request.
1.3.5. SELECTION OF UNDERWRITERS AND COUNSEL. The underwriters
and legal counsel to be retained in connection with any Public
Offering shall be selected by the Board or, in the case of an offering
following a Demand Request, the Initiating Holders with the consent of
the Company as it specifically relates to the underwriters (which
consent shall not be unreasonably withheld).
1.3.6. FUTURE REGISTRATION RIGHTS. If, after the date hereof,
the Company enters into an agreement or other commitment with any
other Person that has the effect of establishing registration rights
with respect to the Company's capital stock the terms of which are
pari passu or more favorable, taken as a whole, to such Person than
the registration rights established in favor of the holders of
Registrable Securities and Noteholders pursuant to Section 1.1 or
Section 1.2 hereof, then the Company will promptly so notify such
holders in writing, and the Company shall, without the necessity of
any action on the part of such holders, extend the benefits of such
pari passu or more favorable terms to such holders as if such terms
were contained in this Agreement, or permit such holders to enter into
such other agreement establishing such rights in lieu of this
agreement.
1.3.7. RIGHT TO PRIORITY REGISTRATION. Notwithstanding
anything to the contrary express or implied in this Agreement, the
Company hereby agrees that, in the event that a Demand Request is
delivered on or prior to the thirty (30) day anniversary of the date
hereof, the Company shall not grant registration rights after the date
hereof to any other Person that would entitle such Person to have the
sale of Securities held by such Person registered by the Company under
a registration statement that is declared effective contemporaneously
with or prior to the effectiveness of the Registration Statement filed
by the Company in connection with such Demand Request.
1.3.8. TRANSFER OF REGISTRATION RIGHTS. The rights of an
Initial Holder hereunder may be transferred or assigned in connection
with a transfer of Registrable Securities to (i) any Affiliate of an
Initial Holder, (ii) any subsidiary, parent, partner, retired partner,
limited partner, shareholder or member of an Initial Holder or (iii)
any family member or trust for the benefit of any Initial Holder, or
(iv) any transferee who, after such transfer, holds at least 25% of
the Registrable Securities (as adjusted for any stock dividends, stock
splits, combinations and reorganizations and similar events)
originally issued to such transferring or assigning Initial Holder.
Notwithstanding the foregoing, such rights may only be transferred or
assigned provided that all of the following additional conditions are
satisfied: (a) such transfer or assignment is effected in accordance
with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement;
and (c) the Company is given written notice by such Initial Holder of
such transfer or assignment, stating the name and address of the
transferee or assignee and identifying the Registrable Securities with
respect to which such rights are being transferred or assigned.
1.4. INDEMNIFICATION AND CONTRIBUTION.
1.4.1. INDEMNITIES OF THE COMPANY. In the event of any
registration of any Registrable Securities or other debt or equity
securities of the Company or any of its Subsidiaries under the
Securities Act pursuant to Section 1.1, Section 1.2 hereof or
otherwise, and in connection with any registration statement or any
other disclosure document produced by or on behalf of the Company or
any of its Subsidiaries including, without limitation, reports
required and other documents filed under the Exchange Act, and other
documents pursuant to which any debt or equity securities of the
Company or any of its Subsidiaries are sold (whether or not for the
account of the Company or its Subsidiaries), the Company will, and
hereby does, and will cause each of its Subsidiaries, jointly and
severally, to indemnify and hold harmless each seller of Registrable
Securities, any Person who is or might be deemed to be a controlling
Person of the Company or any of its Subsidiaries within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
their respective direct and indirect partners, advisory board members,
directors, officers, trustees, members and stockholders, and each
other Person, if any, who controls any such seller or any such
controlling Person within the meaning of Section 15 of the Securities
Act or Section 20 of the
Exchange Act (each such person being referred to herein as a "COVERED
PERSON"), against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), joint or several, to which
such Covered Person may be or become subject under the Securities Act,
the Exchange Act, any other securities or other law of any
jurisdiction, the common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or
incorporated by reference in any registration statement under the
Securities Act, any preliminary prospectus or final prospectus
included therein, or any related summary prospectus, or any amendment
or supplement thereto, or any document incorporated by reference
therein, or any other such disclosure document (including without
limitation reports and other documents filed under the Exchange Act
and any document incorporated by reference therein) or other document
or report, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any violation or alleged
violation by the Company or any of its subsidiaries of any federal,
state, foreign or common law rule or regulation applicable to the
Company or any of its Subsidiaries and relating to action or inaction
in connection with any such registration, disclosure document or other
document or report, and will reimburse such Covered Person for any
legal or any other reasonable expenses incurred by it in connection
with investigating or defending any such loss, claim, damage,
liability, action or proceeding; PROVIDED, HOWEVER, that neither the
Company nor any of its Subsidiaries shall be liable to any Covered
Person in any such case to the extent that any such loss, claim,
damage, liability, action or proceeding arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement,
incorporated document or other such disclosure document or other
document or report, in reliance upon and in conformity with written
information furnished to the Company or to any of its Subsidiaries
through an instrument duly executed by such Covered Person
specifically stating that it is for use in the preparation thereof.
The indemnities of the Company and of its subsidiaries contained in
this Section 1.4.1 shall remain in full force and effect regardless of
any investigation made by or on behalf of such Covered Person and
shall survive any transfer of securities.
1.4.2. INDEMNITIES TO THE COMPANY. The Company and any of its
Subsidiaries may require, as a condition to including any securities
in any registration statement filed pursuant to this Agreement, that
the Company and any of its Subsidiaries shall have received an
undertaking satisfactory to it from the prospective seller of such
securities, to indemnify and hold harmless the Company and any of its
Subsidiaries, each director of the Company or any of its Subsidiaries,
each officer of the Company or any of its Subsidiaries who shall sign
such registration statement and each other Person (other than such
seller), if any, who controls the Company and any of its Subsidiaries
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and each other
prospective seller of such securities with respect to any statement in
or omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus included therein,
or any amendment or supplement thereto, or any other disclosure
document (including, without limitation, reports and other documents
filed under the Exchange Act or any document incorporated therein) or
other document or report, if such statement or omission was made in
reliance upon and in conformity with written information furnished to
the Company or any of its Subsidiaries through an instrument executed
by such seller specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Company, any of its Subsidiaries or any such director, officer or
controlling Person and shall survive any transfer of securities.
1.4.3. CONTRIBUTION. If the indemnification provided for in
Section 1.4.1 or Section 1.4.2 hereof is unavailable to a party that
would have been entitled to indemnification pursuant to the foregoing
provisions of this Section 1.4 (an "INDEMNITEE") in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder shall, in lieu of indemnifying
such Indemnitee, contribute to the amount paid or payable by such
Indemnitee as a result of such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative fault of such indemnifying
party on the one hand and such Indemnitee on the other in connection
with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof). The relative fault 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 such indemnifying
party or such Indemnitee and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just or
equitable if contribution pursuant to this Section 1.4.3 were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred
to in the preceding sentence. The amount paid or payable by a
contributing party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 1.4.3 shall include any legal or other expenses
reasonably incurred by such Indemnitee in connection with
investigating or defending any such action or claim. 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.
1.4.4. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder (the "INDEMNIFIED PARTY") agrees
to give prompt written notice to the indemnifying party (the
"INDEMNIFYING PARTY") after the receipt by the Indemnified Party of
any written notice of the commencement of any action, suit, proceeding
or investigation or threat thereof made in writing for
which the Indemnified Party intends to claim indemnification or
contribution pursuant to this Agreement; PROVIDED, HOWEVER, that, the
failure so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of any liability that it may have to the
Indemnified Party hereunder unless and to the extent such Indemnifying
Party is prejudiced by such failure. If notice of commencement of any
such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party
similarly notified, to assume the defense of such action at its own
expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be
paid by the Indemnified Party unless (i) the Indemnifying Party agrees
to pay the same, (ii) the Indemnifying Party fails to assume the
defense of such action with counsel satisfactory to the Indemnified
Party in its reasonable judgment or (iii) the named parties to any
such action (including, but not limited to, any impleaded parties)
reasonably believe that the representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate
under applicable standards of professional conduct. In the case of
clause (ii) above and (iii) above, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent
shall not be unreasonably withheld. No Indemnifying Party shall,
without the written consent of the Indemnified Party, effect the
settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the Indemnified Party is an actual or potential party
to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the Indemnified
Party from all liability arising out of such action or claim and (B)
does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of any Indemnified
Party. The rights afforded to any Indemnified Party hereunder shall be
in addition to any rights that such Indemnified Party may have at
common law, by separate agreement or otherwise.
1.4.5. LIMITATION ON LIABILITY OF INITIAL HOLDERS OF
REGISTRABLE SECURITIES. The liability of each holder of Registrable
Securities in respect of any indemnification or contribution
obligation of such holder arising under this Section 1.4 shall not in
any event exceed an amount equal to the net proceeds to such holder
(after deduction of all underwriters' discounts and commissions) from
the disposition of the Registrable Securities disposed of by such
holder pursuant to the registration giving rise to such liability.
1.5. REPORTS UNDER EXCHANGE ACT. In order to provide to the holders of
Registrable Securities the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit any such holder to
sell securities of the Company to the public without registration, and in
order to make it possible for the sale
of Common Shares to be registered pursuant to a registration on Form S-3 if
the Company is then otherwise eligible to use such Form, the Company agrees
to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) take such action, including the registration of
its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the holders of Common Shares to utilize Form
S-3 for the resale of their Common Shares (ignoring, for this
purpose, the provisions of Items I.A.5 and I.B.3 of the General
Instructions thereto);
(c) file with the Commission in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(d) furnish to any holder of Registrable Securities,
so long as the holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold in a secondary offering
pursuant to Form S-3; (ii) a copy of the most recent annual or
quarterly report of the Company filed with the Commission and
such other reports and documents so filed by the Company; and
(iii) such other information as may be reasonably requested in
availing any holder of Registrable Securities any rule or
regulation of the Commission which permits the selling of any
such securities without registration or pursuant to such form.
Section 2. RULE 144. The Company shall use its reasonable best efforts to
file the reports required to be filed by it under the Exchange Act in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Initial Holder, make publicly available other
information so long as necessary to permit sales of its securities pursuant to
Rule 144 of the Securities Act. The Company covenants to take such further
action as any Initial Holder may reasonably request, all to the extent required
from time to time to enable such Initial Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144. The Company will provide a copy of this
Agreement to prospective purchasers of Registrable Securities identified to the
Company by the Initiating Holders upon request. Upon the request of any Initial
Holder, the Company shall deliver to such Initial Holder a written statement as
to whether it has complied with such requirements.
Section 3. DEFINITIONS. For the purposes of this Agreement, the following
terms have the meanings below:
"AFFILIATE" shall mean, with respect to the Company or any of its
Subsidiaries (or any other specified Person), any other Person which,
directly or indirectly controls or is
controlled by or is under direct or indirect common control with the
Company or such Subsidiary (or such specified Person), and, without
limiting the generality of the foregoing, shall include (a) any other
Person which beneficially owns or holds 10% of more of any class of voting
securities of such Person or 10% or more of the equity interest in such
Person, (b) any other Person of which such Person beneficially owns or
holds 10% or more of any class of voting securities or in which such Person
beneficially owns or holds 10% or more of the equity interest in such
Person and (c) any director or executive officer of such Person. For the
purposes of this definition, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"AGREEMENT" shall have the meaning set forth in the first paragraph of
this Agreement.
"BOARD" shall mean the Board of Directors of the Company.
"BUSINESS DAY" shall mean any day, excluding Saturday, Sunday and any
day which shall be in New York, New York or Boston, Massachusetts a legal
holiday or a day on which banking institutions are authorized by law or
other governmental actions to close.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMMON SHARES" shall mean the Conversion Shares and all other shares
of Common Stock held by the Noteholders from time to time, including
without limitation, shares of Common Stock issued or issuable upon
conversion of Subordinated Notes.
"COMMON STOCK" shall mean the Company's common stock, par value $0.001
per share.
"COMPANY" shall have the meaning set forth in the first paragraph of
this Agreement.
"CONVERSION SHARES" shall have the meaning set forth in the preamble
of this Agreement.
"COVERED PERSON" shall have the meaning set forth in Section 1.4.1
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as in
effect from time to time.
"EXCHANGE AGREEMENT" shall have the meaning set forth in the second
paragraph hereof.
"INDEMNITEE" shall have the meaning set forth in Section 1.4.3 hereof.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 1.4.3
hereof.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 1.4.3
hereof.
"INDENTURE" shall mean the Indenture relating to the Notes, dated as
of the date hereof, by and among the Company, the Subsidiary Guarantors (as
defined therein) and The Bank of New York.
"INITIAL HOLDERS" shall have the meaning set forth in the preamble to
this Agreement.
"INITIATING HOLDERS" shall have the meaning set forth in Section 1.1.1
hereof.
"MAJORITY HOLDERS" shall mean, as of any date, the holders of a
majority of the Conversion Shares outstanding on such date.
"MAJORITY PARTICIPATING HOLDERS" shall have the same meaning set forth
in Section 1.1.2 hereof.
"MAJORITY NOTEHOLDERS" shall mean at any time holders of more than 50%
of the aggregate principal amount of the Notes or, if the Notes have been
converted, holders of more than 50% of the then outstanding Conversion
Shares.
"NOTEHOLDERS" shall mean the Initial Holders, together with any
permitted transferees of such holders who subsequently acquire Notes.
"NOTES" shall have the meaning set forth in the preamble of this
Agreement.
"PERSON" shall mean any individual, firm, corporation, company,
partnership, trust, incorporated or unincorporated association, limited
liability company, joint venture, joint stock company, government (or an
agency or political subdivision thereof) or other entity of any kind, and
shall include any successor (by merger or otherwise) of any such entity.
"PUBLIC OFFERING" shall mean a public offering and sale of Common
Stock for cash pursuant to an effective registration statement under the
Securities Act.
"REGISTRABLE SECURITIES" shall mean the Notes and the Common Shares;
PROVIDED, HOWEVER, that the Notes and shares of Common Stock which are
Registrable Securities shall cease to be Registrable Securities (i) upon
any sale pursuant to a registration statement or Rule 144 under the
Securities Act, or (ii) when such securities cease to be outstanding.
"REGISTRATION PERIOD" shall mean the date on which the Registrable
Securities can be sold by non-affiliates of the Company pursuant to Rule
144(k) promulgated under the Securities Act.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company filed with the SEC on the appropriate form pursuant to the
Securities Act which covers any Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, all exhibits
thereto and all materials incorporated by reference therein.
"RULE 144" shall mean Rule 144 under the Securities Act (or any
successor Rule).
"RULE 145 TRANSACTION" shall mean a registration on Form S-4 pursuant
to Rule 145 of the Securities Act (or any successor Form or provision, as
applicable).
"SECURITIES" shall mean any debt or equity securities of the Company,
whether now or hereafter authorized, and any instrument convertible into or
exchangeable for Securities or a Security. "SECURITY" shall mean one of the
Securities.
"SECURITIES ACT" shall mean the Securities Act of 1933, as in effect
from time to time.
"STOCK" shall include any and all shares, interests or other
equivalents (however designated) of, or participants in, the capital stock
of a corporation of any class.
"SUBORDINATED NOTES" shall mean $38,180,000 aggregate principal amount
of the Company's 6 3/4% Convertible Subordinated Notes due 2009.
"SUBSIDIARY" shall mean, for any Person, (i) a corporation a majority
of whose voting stock is at the time, directly or indirectly, owned by such
Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person, (ii) a partnership in which such
Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if such Person or
its Subsidiary is entitled to receive more than 50% of the assets of such
partnership upon its dissolution, (iii) a limited liability company, a
majority of whose membership interests is, at the time, directly or
indirectly owned by such Person or with respect to which such Person has a
right, under any scenario, to receive 50% or more of the distributions of
the assets of such limited liability company upon its dissolution, or (iv)
any other Person (other than a corporation or partnership) in which such
Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (a) at least a majority ownership interest or
(b) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
Section 4. NOTICES. Any notice or demand authorized by this Agreement to be
given or made by any holder of any Notes or Conversion Shares to or on the
Company shall be sufficiently given or made when and if delivered by facsimile
transmission (provided confirmation of receipt is received immediately
thereafter) or when received, if deposited in the mail, first class or
registered, postage prepaid, addressed, as follows:
iBasis, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxxx, XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: 000-000-0000
if to an Initiating Holder, at the corresponding address set forth for such
Initiating Holder on Schedule I, PROVIDED, HOWEVER, that notice to such
Initiating Holder shall not be valid unless a copy of such notice (which alone
shall not constitute notice) is also at the same time delivered to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxxxx, Esq.
Xxxx Xxxxxxxxxx, Esq.
Facsimile No.: 000 000-0000
Any notice pursuant to this Agreement to be given by the Company to any
holder of any Notes or Conversion Shares shall be sufficiently given when and if
delivered by facsimile transmission (provided confirmation of receipt is
received immediately thereafter) or deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by such holder with the Company).
Section 5. SUPPLEMENTS AND AMENDMENTS. Any supplement or amendment of this
Agreement shall be in writing and executed and delivered by the Majority
Noteholders and Company.
Section 6. SUCCESSORS AND ASSIGNS. All the covenants and provisions of this
Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 7. SURVIVAL OF REGISTRATION RIGHTS PROVISIONS, WARRANT AGENT
PROVISIONS. The provisions of Section 1 shall survive the conversion of the
Notes.
Section 8. GOVERNING LAW; SUBMISSION TO JURISDICTION: WAIVER OF JURY TRIAL.
This Agreement shall be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be governed by and construed in
accordance with the internal laws of said State, without regard to principles of
conflicts of laws. Each party hereto hereby submits to the nonexclusive
jurisdiction of the United States District Court for the State of New York and
of any New York state court sitting in New York for purposes of all legal
proceedings arising out of
or relating to this agreement or the transactions contemplated hereby. Each
party hereto irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 9. EXERCISE OF RIGHTS AND REMEDIES. No delay of or omission in the
exercise of any right, power or remedy accruing to any party as a result of any
breach or default by any other party under this Agreement shall impair any such
right, power or remedy, nor shall it be construed as a waiver of or acquiescence
in any such breach or default, or of any similar breach or default occurring
later; nor shall any such delay, omission or waiver of any single breach or
default be deemed a waiver of any other breach or default occurring before or
after that waiver.
Section 10. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person or corporation other than the Company and the
Noteholders (including any holder of a beneficial interest in any Note or
Registrable Securities) any legal or equitable right, remedy or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of the
Company, and the Noteholders (including any holder of a beneficial interest in
any Note or Registrable Securities).
Section 11. NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Initiating Holders herein or otherwise conflicts with the
provisions hereof.
Section 12. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
Section 13. SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Initiating Holders of a specified percentage of principal amount of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or their affiliates (other than subsequent Initiating Holders of
Registrable Securities if such subsequent Initiating Holders are deemed to be
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Initiating Holders of such required percentage.
Section 14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 15. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
iBASIS, INC.
By: /s/ Xxxxxx X. XxxxxxXxxx
----------------------------------------
Name: Xxxxxx X. XxxxxxXxxx
Title: Executive Vice President
Signature Page to Registration Rights Agreement
THE NOTEHOLDERS:
GREYWOLF CAPITAL OVERSEAS FUND
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Operating Officer
GREYWOLF CAPITAL PARTNERS II LP
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Operating Officer
TEJAS SECURITIES GROUP, INC. 401K PLAN &
TRUST
XXXX XXXXXX TTEE UAD 1/1/96 FBO
XXXX X XXXXXX
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Trustee
XXXXXXXXXXXX QUALIFIED ASSOCIATES
By: /s/ Xxxxxxx Xxxxxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Managing Member of the General
Partner
Signature Page to Registration Rights Agreement
LC CAPITAL MASTER FUND, LTD.
By: /s Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Member of the Advisor
SINGER CHILDREN'S MANAGEMENT TRUST
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Investment Advisor
LOEB PARTNERS CORP.
By /s/ Xxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
JMG TRITON OFFSHORE FUND LIMITED
BY ITS INVESTMENT MANAGER, PACIFIC ASSETS
MANAGEMENT, LLC
By /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Member Manager
Signature Page to Registration Rights Agreement
JMG CAPITAL PARTNERS
BY ITS GENERAL PARTNER, JMG CAPITAL
MANAGEMENT, LLC
By /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Member Manager
WINDWARD CAPITAL, L.P.
By: /s/ Xxx Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxx Xxxxxxx Xxxxxx
Title: Portfolio Manager
Signature Page to Registration Rights Agreement
SCHEDULE I
LIST OF INITIAL HOLDERS
Grewolf Capital Overseas Fund
Greywolf Capital Partners II LP
Tejas Securities Group, Inc. 401K Plan & Trust
Xxxx Xxxxxx TTEE UAD 1/1/96 FBO Xxxx X. Xxxxxx
Xxxxxxxxxxxx Qualified Associates
LC Capital Master Fund, Ltd.
Singer Children's Management Trust
Loeb Partners Corp.
JMG Capital Partners, LP
JMG Triton Offshore Fund Limited
Windward Capital, L.P.
