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Exhibit 10.12
Registration Rights Letter Agreement
February 2, 1996
Capital International Emerging
Markets Fund
0 Xxxxxxxxx xx xx Xxxxx
Xxxxxxxxxx X-0000
Xxxxxxxxx:
We refer to the Senior Note Purchase Agreement (the "Note
Purchase Agreement"), the Warrant Agreement (as defined in the Note Purchase
Agreement) and the Initial Note (as defined in the Note Purchase Agreement),
each dated, or dated as of, the date hereof, and executed between the
undersigned (the "Company") and Capital International Emerging Markets Fund
(the "Initial Rights Holder" and, together with its permitted transferees
hereunder, the "Rights Holders" and, individually, a "Rights Holder").
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Note Purchase Agreement, or, as indicated herein, the
Stock Purchase Agreement.
In connection with the purchase of the Initial Note, the
issuance of the Warrants and the transactions contemplated by the Note Purchase
Agreement and the Warrant Agreement, and in consideration for and as an
inducement to the purchase of the Initial Note by the Initial Rights Holders,
we hereby grant to each Rights Holder, with respect to all shares of the
Company's Common Stock that such Rights Holder may acquire (whether by exercise
of the Warrants or otherwise), on a most-favored-nation basis, all of the
registration rights and (with respect to all such shares of the Company's
Common Stock and, in addition, with respect to and upon the issuance of the
Warrants) all rights of first offer granted to any stockholder pursuant to the
Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of June 15,
1995 (a form of which is attached as Exhibit A), executed by the Company and
certain stockholders, which rights are no less favorable than the rights
provided to any of the Company's stockholders pursuant to any other stock
purchase agreement, any other agreement, or otherwise. Such rights include,
without limitation, (A) unlimited rights to demand registration after the
Company qualifies as an S-3 Registrant (limited to one such registration in any
12 month period), as set forth in Section 6.2 of the Stock Purchase Agreement;
(B) unlimited piggyback registration rights, as set forth in Section 6.3
thereof; (C) the Company's payment of all expenses (with certain exceptions)
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incurred with respect to such registrations, as set forth in Section 6.4
thereof; and (D) the right of first offer to purchase a pro rata share of any
issue of "New Securities" as defined in the Stock Purchase Agreement, which
right shall not expire prior to an initial public offering of the Company, as
set forth in Section 8.11 of the Stock Purchase Agreement.
In the event that the Company effects or causes to be effected
any amendments to the Stock Purchase Agreement that would diminish or restrict
in any way the registration rights or the rights of first offer granted to
stockholders under the Stock Purchase Agreement, such amendment shall in no way
diminish, restrict or otherwise apply to or affect the registration rights,
rights of first offer to purchase New Securities or any other rights granted to
each Rights Holder hereunder and under the Stock Purchase Agreement as now in
effect. In the event the Company amends the Stock Purchase Agreement to
increase or enhance the registration rights or rights of first offer of any
stockholder, or if the Company otherwise agrees to enhance or increase such
rights, or if such rights are increased or enhanced for any other reason or in
any other manner, each Rights Holder will automatically and immediately benefit
from and receive such increased or enhanced rights with no further action
required by such Rights Holder, and this agreement shall be deemed to be
amended to incorporate such increased or enhanced rights. The Company shall
notify each Rights Holder immediately in writing of any such amendments or
other agreements or occurrences.
In addition to any other transfer rights granted to each Rights
Holder pursuant to the terms of the Stock Purchase Agreement, each Rights
Holder may assign or transfer its rights under this agreement to any
transferees to which the Warrants, the Notes or shares of Common Stock have
been transferred in accordance with the Note Purchase Agreement or the Warrant
Agreement.
Notwithstanding any provision of the Stock Purchase Agreement
or any other document or agreement to the contrary, each Rights Holder shall,
immediately upon the issuance of the Warrants, be entitled to the full benefit
of and shall be entitled to exercise all rights of first offer granted hereby
or otherwise with respect to any issue of New Securities, whether or not any of
the Warrants have been exercised by any Rights Holder.
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This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, and may be executed in
counterparts by the parties hereto, each of which counterparts shall be an
original and all of which taken together shall constitute one and the same
letter agreement.
Very truly yours,
Global Telesystems Group, Inc.
By: /s/ X. X. Xxxxxxxxx
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Name: X. X. Xxxxxxxxx
Accepted and Agreed to by:
Capital International Emerging
Markets Fund
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Director
and /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Director
