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REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 25, 1997
BY AND BETWEEN
SA TELECOMMUNICATIONS, INC.
AND
NORTHSTAR HIGH TOTAL RETURN FUND
AS PURCHASER
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$3,800,000
10% CONVERTIBLE DEBENTURE DUE 2006
TABLE OF CONTENTS
Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Piggyback Registration . . . . . . . . . . . . . . . . . . . 3
3. Registration Procedures. . . . . . . . . . . . . . . . . . . 4
4. Registration Expenses. . . . . . . . . . . . . . . . . . . . 9
5. Indemnification . . . . . . . . . . . . . . . . . . . . . . 10
6. Rule 144 and 144A . . . . . . . . . . . . . . . . . . . . . 13
7. Underwritten Registrations . . . . . . . . . . . . . . . . . 13
8. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 13
(a) No Inconsistent Agreements. . . . . . . . . . . . . . . 13
(b) Adjustments Affecting Registrable Debenture . . . . . . 13
(c) Amendments and Waivers. . . . . . . . . . . . . . . . . 13
(d) Notices . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Successors and Assigns. . . . . . . . . . . . . . . . . 15
(f) Counterparts. . . . . . . . . . . . . . . . . . . . . . 15
(g) Headings. . . . . . . . . . . . . . . . . . . . . . . . 15
(h) Governing Law . . . . . . . . . . . . . . . . . . . . . 15
(i) Severability. . . . . . . . . . . . . . . . . . . . . . 15
(j) Securities Held by the Company or its Affiliates. . . . 15
(k) Third Party Beneficiaries . . . . . . . . . . . . . . . 16
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT"), dated as of March
25, 1997, is being entered into by and between SA Telecommunications Inc., a
Delaware corporation (the "COMPANY"), and Northstar High Total Return Fund
(the "PURCHASER").
This Agreement is being entered into in connection with the Purchase
Agreement, dated March 25, 1997, between the Company and the Purchaser (the
"PURCHASE AGREEMENT"), which provides for the sale by the Company to the
Purchaser of $3,800,000 aggregate principal amount of the Company's 10%
Convertible Debenture Due 2006 (the "DEBENTURE"). In order to induce the
Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit
of the Purchaser and its direct and indirect transferees. The execution and
delivery of this Agreement is a condition to the obligation of the Purchaser
to purchase the Debenture under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
ADVICE: See the last paragraph of SECTION 3 hereof.
AGREEMENT: See the first introductory paragraph hereto.
CLOSING DATE: The Closing Date as defined in the Purchase Agreement.
COMMON STOCK: The common stock, par value $0.0001 per share, of the
Company.
COMPANY: See the first introductory paragraph hereto.
DEBENTURE: See the second introductory paragraph hereto.
EFFECTIVENESS PERIOD: See SECTION 2(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
HOLDER: Any holder of a Registrable Security.
INDEMNIFIED PERSON: See SECTION 5(c) hereof.
INDEMNIFYING PERSON: See SECTION 5(c) hereof.
INSPECTORS: See SECTION 3(o) hereof.
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NASD: See SECTION 3(r) hereof.
OFFERING MEMORANDUM: The Offering Memorandum dated March 25, 1997 (and all
documents comprising a part thereof) pursuant to which the Debenture is being
offered to the Purchaser under the Purchase Agreement.
PARTICIPANT: See SECTION 5(a) hereof.
PERSON: An individual, trustee, corporation, partnership, limited liability
company, joint stock company, trust, unincorporated association, union, business
association, firm or other legal entity.
PIGGYBACK REGISTRATION: See SECTION 2(a) hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement including
post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the second introductory paragraph hereto.
PURCHASER: See the first introductory paragraph hereto.
RECORDS: See SECTION 3(o) hereof.
REGISTRABLE SECURITIES: Each share of Common Stock of the Company issuable
upon conversion of the Debenture, until each such share (i) has been effectively
registered under the Securities Act and disposed of in accordance with the
Piggyback Registration Statement covering it or (ii) is distributed to the
public pursuant to Rule 144.
REGISTRATION STATEMENT: Any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
RULE 144: Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
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RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. PIGGYBACK REGISTRATION
(a) RIGHT TO PIGGYBACK. Subject to SECTION 2(b) below, until March 25,
2000 whenever the Company proposes to register any of its securities other than
Registrable Securities under the Securities Act (a "PIGGYBACK REGISTRATION"),
either for the Company's own account or for the account of any of its security
holders (other than Holders in their capacity as Holders), the Company will give
prompt written notice to all Holders of its intention to effect such a
registration and will include in such Piggyback Registration all Registrable
Securities of Holders with respect to which the Company has received written
requests for inclusion therein within 20 days after receipt of the Company's
notice. Except as may otherwise be provided in this Agreement, Registrable
Securities with respect to which such request for registration has been received
will be registered by the Company and offered to the public pursuant to this
Agreement on the same terms and conditions as any similar securities of the
Company included in the proposed registration.
(b) RESTRICTIONS ON PIGGYBACK RIGHTS.
(i) Holders will not be entitled to include securities pursuant to
SECTION 2(a) in (A) a registration statement on Form S-4 or S-8 or similar
form, or (B) an exchange offer or an offering of securities solely to the
Company's existing securityholders.
(ii) If the managing underwriter or underwriters advise the Company
and the Holders in writing that in its or their opinion or, in the case of
a Piggyback Registration not being underwritten, the Company shall
reasonably determine after consultation with an investment banker of
nationally recognized standing that, the number of securities proposed to
be sold exceeds the number which can be effectively sold in, or would have
a material adverse effect on, such offering, the Company will include in
such registration the number of securities which, in the opinion of such
underwriter or underwriters, or the Company, as the case may be, can be
sold as follows: (A) first, any securities to be included in such
registration by a Person holding a demand registration right, and (B)
second, all other securities requested to be included in such registration
on a pro rata basis.
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The Company shall use its commercially reasonable efforts to cause the Piggyback
Registration to be declared effective under the Securities Act and to keep the
Piggyback Registration continuously effective under the Securities Act for the
Registrable Securities only so long as the Registration Statement giving the
Holders the Piggyback Registration right contained in this Section 2 would
otherwise remain effective in the absence of the Holders participation therein
(the "EFFECTIVENESS PERIOD").
(b) WITHDRAWAL OF STOP ORDERS. If the Piggyback Registration ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company shall use its commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly supplement
and amend the Piggyback Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Piggyback
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority of the Registrable Securities covered by such
Registration Statement or by any underwriter of such Registrable Securities.
(d) CALCULATION OF MAJORITY OF THE REGISTRABLE SECURITIES. Unless the
context otherwise requires, whenever it is necessary pursuant to the terms of
this Agreement to determine the Holders of a majority of the Registrable
Securities covered by a Registration Statement, no distinction shall be made
between shares already issued and shares acquirable upon conversion of the
Debenture. Accordingly, all shares of Common Stock issued upon conversion of a
Debenture which constitute Registrable Securities shall be treated as if such
conversions have in fact taken place in making such calculation.
3. REGISTRATION PROCEDURES. In connection with the filing of any Registration
Statement pursuant to SECTION 2 hereof, the Company shall effect such
registration(s) to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Company hereunder, the Company shall:
(a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall, if requested, furnish to
and afford the Holders of the Registrable Securities covered by such
Registration Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five business days prior to
such filing). The Company shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which the
Holders must be afforded an opportunity to review prior to the filing of such
document, if the Holders of a majority of the Registrable Securities covered by
such Registration Statement, their counsel, or the managing underwriters, if
any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period;
cause the related Prospectus to be supplemented by any
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Prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act; and comply with the provisions of the Securities Act and
the Exchange Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notify the selling Holders of Registrable Securities, their counsel
and the managing underwriters, if any, promptly (but in any event within two
business days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Company, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time the representations and warranties of the Company contained
in any agreement (including any underwriting agreement), contemplated by SECTION
3(n) hereof cease to be true and correct in any material respect, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or any
of the Registrable Securities in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known
(including pending corporate developments, acquisitions or public filings) that
requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, (vi) of the determination by the Company that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its commercially reasonable efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, and, if any such order is issued, to
use its commercially reasonable efforts to obtain the withdrawal of any such
order at the earliest possible moment.
(e) If reasonably requested by the managing underwriter or underwriters
(if any), or the Holders of a majority of the Registrable Securities being sold
in connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for any
of them reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the
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Company has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment, and (iii) supplement or
make amendments to such Registration Statement.
(f) Furnish to each selling Holder of Registrable Securities who so
requests and to counsel and each managing underwriter, if any, at the sole
expense of the Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules.
(g) Deliver to each selling Holder of Registrable Securities, their
respective counsel, and the underwriters, if any, at the sole expense of the
Company, as many copies of the Prospectus or Prospectuses (including each form
of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this SECTION 3, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Securities, and the
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Securities covered by, such Prospectus and
any amendment or supplement thereto.
(h) The Company will cooperate with the Purchaser in attempting to
arrange for the qualification of the shares of Common Stock issuable upon
conversion of the Debenture for offering and sale under the securities or "Blue
Sky" laws of such jurisdictions as the Purchaser may designate and will continue
such qualifications in effect for as long as may be necessary to complete the
resale of the underlying shares of Common Stock; provided, however, that in
connection therewith, the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(i) [intentionally omitted]
(j) Use its commercially reasonable efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Holders thereof or the underwriter or underwriters, if any, to
dispose of such Registrable Securities, except as may be required solely as a
consequence of the nature of a selling Holder's business, in which case the
Company will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) Upon the occurrence of any event contemplated by paragraph 3(c)(v) or
3(c)(vi) hereof, as promptly as practicable prepare and (subject to SECTION 3(a)
hereof) file with the SEC, at the sole expense of the Company, a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
any such Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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(l) [intentionally omitted]
(m) [intentionally omitted]
(n) In connection with any underwritten offering of Registrable
Securities, enter into an underwriting agreement as is customary in underwritten
offerings of equity Securities similar to the Common Stock and to take all such
other actions as are reasonably requested by the managing underwriter or
underwriters in order to facilitate the registration or the disposition of such
Registrable Securities and, in such connection, (i) make such representations
and warranties to, and covenants with, the underwriters with respect to the
business of the Company and its subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of equity securities similar to the
Common Stock and confirm the same in writing if and when requested; (ii) obtain
the written opinion of counsel to the Company and written updates thereof in
form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions provided in underwritten offerings of equity securities
similar to the Common Stock and such other customary matters as may be
reasonably requested by the managing underwriter or underwriters; (iii) obtain
"cold comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings of
equity securities similar to the Common Stock and such other customary matters
as reasonably requested by the managing underwriter or underwriters; and (iv) if
an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in SECTION 5 hereof (or such other provisions and procedures acceptable to
Holders of a majority of Registrable Securities covered by such Registration
Statement and the managing underwriter or underwriters or agents and the
Company) with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(o) Until such time as the Holders no longer have a Piggyback
Registration right as provided in SECTION 2 hereof, make available for
inspection by any selling Holder of such Registrable Securities being sold, any
underwriter participating in any such disposition of Registrable Securities, if
any, and any attorney, accountant or other agent retained by any such selling
Holder or underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and instruments of the Company and its
subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Company and its subsidiaries to
supply all information reasonably requested by any such Inspector in connection
with such Registration Statement. Records which the Company determines, in good
faith, to be confidential and any Records which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors
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unless (i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission of a material fact in such Registration Statement,
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such
information is, in the opinion of counsel for any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly
or indirectly, involving or potentially involving such Inspector and arising
out of, based upon, relating to, or involving this Agreement, or any
transactions contemplated hereby or arising hereunder, or (iv) the
information in such Records has been made generally available to the public.
Each selling Holder of such Registrable Securities will be required to agree
that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such
information is generally available to the public. Each selling Holder of
such Registrable Securities will be required to further agree that it will,
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at the Company's sole expense.
(p) [intentionally omitted]
(q) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) Cooperate with each seller of Registrable Securities covered by the
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(s) Use its commercially reasonable efforts to take all other steps
necessary or advisable to effect the registration of the Registrable Securities
covered by the Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request. The
Company may exclude from such registration the Registrable Securities of any
seller who unreasonably fails to furnish such information within a reasonable
time after receiving such request. Each seller as to which any Piggyback
Registration is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such seller not materially misleading.
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Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon actual receipt of any notice from the Company
of the happening of any event of the kind described in SECTION 3(c)(ii),
3(c)(iv), 3(c)(v), OR 3(c)(vi) hereof, such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by SECTION 3(k) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amendments or
supplements thereto. In the event the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by the Registration
Statement shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by SECTION 3(k) hereof or (y) the Advice.
4. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Piggyback Registration is filed or becomes effective, including, without
limitation, (i) all registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of one counsel in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as provided in
SECTION 3(h) hereof)), (ii) printing expenses, including printing prospectuses
if the printing of prospectuses is reasonably requested by the managing
underwriter or underwriters, if any, or by the Holders of a majority of the
Registrable Securities included in the Registration Statement, (iii) messenger,
telephone and delivery expenses, (iv) reasonable fees and disbursements of
counsel for the Company and reasonable fees and disbursements of special counsel
for the sellers of Registrable Securities (subject to the provisions of SECTION
4(b) hereof), (v) fees and disbursements of all independent certified public
accountants referred to in SECTION 3(n)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) [intentionally omitted],
(vii) Securities Act liability insurance, if the Company desires such insurance,
(viii) fees and expenses of all other Persons retained by the Company, (ix)
internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees of the Company performing legal or
accounting duties), (x) the expense of any annual audit, (xi) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, if applicable, and (xii) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
(b) The Company shall (i) reimburse the Holders of the Registrable
Securities being registered in a Piggyback Registration for the reasonable fees
and disbursements, not to exceed $10,000, of not more than one counsel chosen by
the Holders of a majority of the Registrable Securities to be included in such
Registration Statement and (ii) reimburse out-of-pocket
9
expenses (other than legal expenses) of Holders of Registrable Securities
incurred in connection with the registration and sale of the Registrable
Securities pursuant to a Piggyback Registration; PROVIDED, HOWEVER, that the
Company shall not be required to reimburse Holders for any underwriting
discounts or commissions, and any transfer fees or taxes.
5. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities offered pursuant to the Registration Statement, the
affiliates, directors, officers, agents, representatives and employees of each
Holder or its affiliates, and each other Person, if any, who controls any such
Person or its affiliates within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "PARTICIPANT"), from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement pursuant to which the offering of such Registrable Securities is
registered (or any amendment thereto) or related Prospectus (or any amendments
or supplements thereto) or any related preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the Company will not be required to
indemnify a Participant if (i) such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Participant furnished to the Company in writing by or on behalf of such
Participant expressly for use therein or (ii) if such Participant sold to the
person asserting the claim the Registrable Securities which are the subject of
such claim and such untrue statement or omission or alleged untrue statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and it is established by the Company in the related proceeding that
such Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of the
sale of such Registrable Securities sold to such Person if required by
applicable law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance by the
Company with SECTION 3 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify and
hold harmless the Company, its affiliates, directors, officers, agents,
representatives and employees, and each other 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 (each, a "COMPANY PARTICIPANT") to the same extent as the
foregoing indemnity from the Company to each Participant, but only (i) with
reference to information relating to such Participant furnished to the Company
in writing by or on behalf of such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus or (ii) with respect to any untrue statement or
representation made by such Participant in writing to the Company. The
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liability of any Participant under this paragraph shall in no event exceed the
proceeds received by such Participant from sales of Registrable Securities
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity or contribution may be sought pursuant
to either of the two preceding paragraphs or the next succeeding paragraph, such
Person (the "INDEMNIFIED PERSON") shall promptly notify the Person against whom
such indemnity or contribution may be sought (the "INDEMNIFYING PERSON") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
reasonably designate in such proceeding and shall pay the reasonable fees and
expenses actually incurred by such counsel related to such proceeding; provided,
however, that the failure to so notify the Indemnifying Person shall not relieve
it of any obligation or liability which it may have hereunder or otherwise
(unless and only to the extent that such failure directly results in the loss or
compromise of any material rights or defenses by the Indemnifying Person and the
Indemnifying Person was not otherwise aware of such action or claim). In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person 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, unless there
exists a conflict among Indemnified Persons, the Indemnifying Person shall not,
in connection with any one such proceeding or separate but substantially similar
related proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants shall be designated in writing by
Participants who sold a majority in interest shares of Common Stock sold by all
such Participants and any such separate firm for the Company Participants shall
be designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent, but if settled with such consent or if there be a final non-appealable
judgment for the plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, the Indemnifying Person agrees to
indemnify and hold harmless each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for reasonable fees and
expenses actually incurred by counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person 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 60 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement; provided, however, that the Indemnifying Person shall
not be liable for any settlement effected without its consent pursuant to this
sentence if the
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Indemnifying Person is contesting, in good faith, the request for reimbursement.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that
are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this SECTION 5 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Registrable Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the Indemnifying Person or Persons on the one
hand and the Indemnified Person or Persons on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof). The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this SECTION 5 were determined by PRO RATA allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this SECTION 5, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Securities
exceeds the amount of any damages that such Participant has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
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(f) The indemnity and contribution agreements contained in this SECTION 5
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
6. RULE 144 AND 144A
The Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
Holder of Registrable Securities, make publicly available annual reports and
such information, documents and other reports of the type specified in Section
13 and 15(d) of the Exchange Act. The Company further covenants for so long as
any Registrable Securities remain outstanding, make available to any Holder or
beneficial owner of Registrable Securities in connection with any sale thereof
and any prospective purchaser of such Registrable Securities from such Holder or
beneficial owner the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Securities
pursuant to Rule 144A.
7. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Securities are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Holders of a majority of
such Registrable Securities included in such offering and reasonably acceptable
to the Company.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
8. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company has not entered (except as
described in the Offering Memorandum), as of the date hereof, and the Company
will not, after the date of this Agreement, enter into any agreement with
respect to any of its securities that is inconsistent with the rights granted to
the Holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof.
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will not,
directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may
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not be given, otherwise than with the prior written consent of the Holders of
not less than a majority of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this
sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Securities, at the
most current address of such Holder set forth on the records of the Company
as follows:
(ii) if to Purchaser, as follows:
Northstar High Total Return Fund
c/o Northstar Investment Management
0 Xxxxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxx Dial
with a copy to Xxxxxxx X. Xxxxxx at the same address and
facsimile number
(iii) if to the Purchaser, at the address specified in SECTION
8(d)(i);
(iv) if to the Company, as follows:
SA Telecommunications, Inc.
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Vice President and
General Counsel
14
with copies to:
Xxxxx & Xxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto;
provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign holds Registrable Securities.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
(i) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(j) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the
15
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders of Registrable Securities are
intended third party beneficiaries of this Agreement and this Agreement may be
enforced by such Persons.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SA TELECOMMUNICATIONS INC.
By: /s/ J. XXXXX XXXXXXX
----------------------------------
Name: J. Xxxxx Xxxxxxx
Title: Vice President-Finance
and Chief Financial Officer
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xxxxxxx X. Xxxxxx
Vice President
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