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EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of July
28, 1997 (the "Effective Date"), among the entities listed on Schedule 1 hereto
(collectively, the "Holders") and Long Distance International, Inc., a Florida
corporation ("LDI").
W I T N E S S E T H:
WHEREAS, LDI and the Holders are on this date entering into a Stock
Purchase Agreement to which this Agreement is an exhibit, whereby the Holders
will purchase shares of Series B Preferred Stock, par value $0.001 per share of
LDI ("Series B Preferred") and a warrant (as amended, supplemented, reissued or
replaced from time to time pursuant to the terms thereof, the "Warrant") to
purchase shares of common stock, par value $0.001 per share ("LDI Common
Stock");
WHEREAS, LDI and the Holders, and certain other shareholders of LDI,
are entering into a Shareholders Agreement of even date herewith, whereby the
parties will agree, among other things, to certain terms upon which the
relations between the shareholders of LDI will be regulated; and
WHEREAS, in order to induce the Holders to enter into and perform the
Stock Purchase Agreement, and in order to induce the Holders to enter into and
perform the Shareholders Agreement, LDI has agreed to provide the Holders with
certain rights in respect of the registration of shares of LDI Common Stock
issuable to the Holders upon the exercise of the Warrant ("Common Shares").
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, LDI and the Holders agree as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) DEFINITIONS. As used in this Agreement, the following
terms shall have the respective meanings set forth below (such meanings
to be equally applicable to both the singular and plural forms of the
terms defined):
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"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"LDI REGISTRATION EXPENSES" means any and all expenses
incident to LDI's performance of its obligations under Section 2, other
than Requesting Shareholder Registration Expenses. LDI Registration
Expenses shall include but not be limited to (i) registration and
filing fees with the SEC, (ii) fees and expenses of compliance with
state securities or "blue sky" laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue
sky qualifications of Registrable Shares), (iii) printing expenses,
(iv) registrars and transfer agents fees, (v) the fees and expenses
incurred in connection with the registration, listing or quotation of
Registrable Shares on any National Securities Exchange, (vi) any
transfer taxes attributable to the sale of the Registrable Shares by
any Requesting Shareholder and, (vii) fees and expenses of counsel for
LDI, the reasonable fees and expenses for one counsel for the
Requesting Shareholders and fees and expenses for the independent
certified public accountants for LDI.
"NATIONAL SECURITIES EXCHANGE" means the New York Stock
Exchange, American Stock Exchange, NASDAQ Small Cap or National Market
System.
"PERSON" shall mean and include any individual, partnership,
joint venture, corporation, trust, unincorporated organization or
association or any other entity or association of any kind and any
authority, federal, state, local or foreign government, any political
subdivision of any thereof and any court, panel, judge, board, bureau,
commission, agency or other entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government.
"REGISTRABLE SHARES" means (i) the Common Shares and (ii) any
shares of LDI Common Stock issued in respect of the Common Shares or
other securities issued in respect of the Common Shares including,
without limitation, upon any stock split, stock dividend,
recapitalization or as a distribution.
"REQUESTING SHAREHOLDER" means any of the Holders, or any
permitted transferee of Registrable Shares, when the same shall have
requested LDI to register some or all of its/their Registrable Shares
in accordance with this Agreement.
"REQUESTING SHAREHOLDER REGISTRATION EXPENSES" means with
respect to a Requesting Shareholder, (i) underwriting discounts and
commissions relating to the sale of such
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Requesting Shareholder's Registrable Shares, and (ii) the fees and
disbursements of counsel incurred by such Requesting Shareholder, other
than the reasonable fees and disbursements one counsel incurred on
behalf of Requesting Shareholder as a group.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
(b) INTERPRETATIONS. In this Agreement, where the context
permits, words in the singular shall be construed as including the
plural and words in the plural shall be construed as including the
singular, and words denoting a specific gender shall be construed as
including every gender.
2. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION. Subsequent to the first to occur of
(x) a Qualified Public Offering (as defined in the Articles of
Amendment to Second Restated Certificate of Incorporation of LDI) of
LDI Common Stock or (y) the fifth anniversary of the Effective Date,
the Holders shall be entitled to request that LDI effect a registration
under the Securities Act with respect to some or all of the Registrable
Shares held by them upon the following terms and conditions:
(i) REQUEST FOR REGISTRATION OF REGISTRABLE SHARES.
In the event that LDI shall receive from the Holders a written
request ("Notice of Registration") that LDI effect a
registration under the Securities Act with respect to all or
any part not less than 25% of the Registrable Shares held by
any of the Holders, LDI shall use its diligent best efforts to
effect, at the earliest practicable date, such registration
(including, without limitation, the execution of an
undertaking to file required post-effective amendments, the
execution and filing of a listing agreement with a National
Securities Exchange selected by LDI and reasonably approved by
the Holders, qualification under applicable blue sky or other
state securities laws (provided that such jurisdictions do not
require LDI to qualify as a foreign corporation or become
subject to taxation in such jurisdiction) and compliance with
applicable regulations issued under the Securities Act) as
would permit or facilitate the sale and distribution of all or
such portion of such Registrable Shares on such National
Securities Exchange; provided that LDI shall not be obligated
to take any action to effect any such registration pursuant to
this
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Section 2(a): (A) if two separate Notices of Registration with
respect to all or any part of not less than 25% of the
Registrable Shares held by any of the Holders have been
submitted to LDI and LDI has effected two such registrations
pursuant to this Section 2(a), which registrations have been
declared or ordered effective by the SEC, subject to the
following paragraph; (B) during the period starting with the
date of LDI's filing of, and ending on the date one hundred
and eighty (180) days immediately following the effective date
of, any registration statement pertaining to a pubic offering
of securities of LDI; or (C) if the number of Registrable
Shares as to which such registration has been requested shall
be less than 25% of the shares of LDI Common Stock into which
the Warrant may then be exercised.
If the Requesting Shareholder informs LDI by written notice
that it is withdrawing its Notice of Registration made
pursuant to Section 2(a)(i) above, then the registration
statement need not be filed and all efforts pursuant to such
notice will count as a registration (or an exercise of rights)
under this Section 2(a), provided, however, that the
Requesting Shareholder may pay all LDI Registration Expenses
with respect to such registration incurred to the date of such
notice of withdrawal and then all efforts pursuant to such
Notice of Registration will not so count; provided, further,
that LDI may in any event proceed with the registration on its
own behalf, or on behalf of any other Persons holding
securities of LDI.
Subject to the foregoing clauses (A) through (C) LDI shall
file a registration statement covering the Registrable Shares
so requested to be registered as soon as practicable after
receipt of the request or requests of the Requesting
Shareholder. The Holders shall not be required to exercise the
Warrant into LDI Common Stock prior to exercising their demand
registration rights hereunder with respect to such shares of
LDI Common Stock.
(ii) UNDERWRITING. The right of the Requesting
Shareholder to registration pursuant to this Section 2(a)
shall be conditioned upon the Requesting Shareholder's
participation in the underwriting arrangements required by
this Section 2(a)(ii) and the inclusion in the underwriting of
the Registrable Shares requested to be registered.
LDI and the Requesting Shareholder shall enter into
an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by
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LDI, which managing underwriter shall be a nationally
recognized or regional underwriting firm which is not an
affiliate or associate (each as defined in Rule 12b-2
promulgated under the Exchange Act) of the Requesting
Shareholder and which is reasonably acceptable to the
Requesting Shareholder. Notwithstanding any other provision of
this Section 2(a), if the managing underwriter determines, in
good faith, that marketing factors require a limitation of the
number of shares to be underwritten, the managing underwriter
may limit the number of Registrable Shares to be included in
the registration and underwriting to the extent such managing
underwriter deems necessary. Such managing underwriter may
limit the number or amount of securities to be included in the
registration such that all Persons holding securities of LDI
(including the Holders) who hold registration rights and who
have requested registration (collectively, for the purposes of
this paragraph only, the "Security Holders") shall participate
in the underwritten public offering pro rata based upon the
total number or amount of securities requested to be so
registered by each Security Holder. LDI shall so advise the
Requesting Shareholder, and the number of Registrable Shares
that may be included in the registration and underwriting
shall be limited accordingly; provided, however, that in the
event the number of Registrable Shares excluded from such
registration either (A) exceeds 25% of the number of
Registrable Shares for which registration was originally
requested by the Requesting Shareholder or (B) reduces the
number of Registrable Shares to be included in the
registration and underwriting to an amount less than 25% of
the total number of Registrable Shares, then LDI and the
Requesting Shareholder, at the Requesting Shareholder's
election, may proceed with such registration of Registrable
Shares, as so reduced, and such registration, if so effected,
shall be included for purposes of determining the number of
registrations permitted to the Holders pursuant to Section
2(a)(i)(B).
LDI and any Persons holding any securities of LDI to
whom LDI has granted registration rights may include their
respective securities for their own accounts in such
registration if the managing underwriter so agrees and if the
number of Registrable Shares of the Holders which would
otherwise have been included in such registration and
underwriting will not thereby be limited and if such inclusion
will not otherwise have a material adverse effect upon the
offering of the Holders' Registrable Shares.
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(iii) EXPENSES OF REQUESTED REGISTRATION. LDI shall
pay all LDI Registration Expenses incurred in connection with
each registration pursuant to Section 2(a), and the Requesting
Shareholder will pay its Requesting Shareholder Registration
Expenses in connection therewith.
(b) PIGGY-BACK REGISTRATION.
(i) REGISTRATION INITIATED BY LDI. If LDI at any
time proposes to register an offering of its securities of the
same class as the Registrable Securities under the Securities
Act, either for its own account or for the account of or at
the request of one or more Persons holding securities of LDI,
LDI will:
(A) give written notice thereof to the Holders
(which shall include a list of the jurisdictions in
which LDI intends to attempt to qualify such
securities under the applicable blue sky or other
state securities laws) within 10 business days of its
receipt of a request from one or more Persons holding
securities of LDI to register securities, or from its
decision to effect a registration of securities for
its own account, whichever first occurs; and
(B) use its diligent best efforts to include in
such registration (and any related qualification
under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable
Shares specified in a written request by a Holder
made within 30 days after receipt of such written
notice from LDI, except as set forth in Sections
2(b)(ii) and 2(b)(iii) below; provided, however, that
if at any time after giving written notice to the
Holders of its intention to register LDI securities
under the Securities Act, LDI shall determine not to
register any such securities, LDI may, at its
election, give written notice of such determination
to the Holders and, thereupon, shall be relieved of
its obligation to register such Registrable Shares
pursuant to this Section 2(b) in connection with such
registration, without prejudice, however, to any
rights of the Holders to request that such
registration be effected as a registration under
other provisions of this Agreement, and provided
further that if at any time after giving written
notice to the Holders of its intention to register
LDI securities under the
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Securities Act, LDI shall determine to delay the
registration of such securities, LDI shall be
permitted to delay the registration of such
Registrable Shares for the same period as the delay
in registering the securities to be registered by LDI
for its own account or for others.
(ii) AMOUNT TO BE INCLUDED. In the event that
Registrable Shares are requested to be included in any
registration initiated pursuant to Section 2(b)(i) that
contemplates an underwritten public offering, and if, in the
good faith judgment of the managing underwriting of such
public offering, the inclusion of all of the Registrable
Shares originally covered by a request for registration,
together with the number or amount of securities that were
intended to be offered by LDI or other Persons holding
securities of LDI who hold registration rights, would
interfere with the successful marketing of such securities,
then, such managing underwriter may limit the number or amount
of securities to be included in the registration such that LDI
and all Persons holding securities of LDI (including the
Holders) who hold registration rights and who have requested
registration (collectively, the "Security Holders") shall
participate in the underwritten public offering pro rata based
upon the total number or amount of securities to be offered by
LDI and the total number or amount of securities held by each
Security Holder (including the number or amount of securities
which each such Security Holder may then be entitled to
receive upon the exercise of any option or warrant, or the
exchange or conversion of any security, held by such Security
Holder). If LDI or any such Security Holder would thus be
entitled to include more securities than LDI or such Security
Holder requested to be registered, the excess shall be
allocated among LDI and the other Security Holders pro rata in
a manner similar to that described in the previous sentence.
(iii) UNDERWRITING. If the registration of which LDI
gives notice is for a registered public offering involving an
underwriting, LDI shall so advise the Holders as a part of the
written notice given pursuant to Section 2(b)(i). In such
event, the right of each Requesting Shareholder to
registration pursuant to this Section 2(b) shall be
conditioned upon its participation in such underwriting and
the inclusion of the Registrable Shares in the underwriting to
the extent provided herein. The Requesting Shareholder shall
(together with LDI and the other Security Holders (if any)
distributing their
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securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting by LDI. If the
Requesting Shareholder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written
notice to LDI and the underwriter. Any Registrable Shares
excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
(iv) WITHDRAWAL FROM REGISTRATION. Any Holder
requesting inclusion of Registrable Shares pursuant to this
Section 2(b) may, at any time prior to the effective date of
the registration statement relating to such registration,
revoke such request by delivering written notice of such
revocation to LDI; provided, however, that if LDI, in
consultation with its financial and legal advisors, determines
that such revocation would materially delay the registration
or otherwise require a recirculation of the prospectus
contained in the registration statement, then such Holder
shall have no such right to revoke his, her or its request.
(v) EXPENSES OF REGISTRATION. LDI shall bear all LDI
Registration Expenses incurred in connection with each
registration pursuant to Section 2(b), and each Requesting
Shareholder shall pay its own Requesting Shareholder
Registration Expenses.
(c) REGISTRATION PROCEDURES. In the case of each
registration effected by LDI pursuant to this Section 2 pursuant to
which Registrable Shares are included therein, LDI shall:
(i) take all such reasonable actions, including
without limitation preparing and filing with the SEC
amendments (including post-effective amendments) and
supplements, as may be necessary to keep such registration
current and effective and to comply with the provisions of the
Securities Act and the rules and regulations promulgated
thereunder, and the rules and regulations of any applicable
National Securities Exchange, with respect to the distribution
of the Registrable Shares covered by such registration in the
case of a registration, qualification and compliance pursuant
to Sections 2(a) or 2(b) hereof, for a period of at least 90
days or until the Requesting Shareholder has completed the
distribution described in the registration statement relating
thereto, whichever first occurs;
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(ii) promptly notify each Requesting Shareholder and
confirm such notification in writing (w) when such
registration statement becomes effective, (x) when the filing
of any post-effective amendment to such registration statement
or supplement to the prospectus is required, when the same is
filed and, in the case of a post-effective amendment, when the
same becomes effective, (y) of any written request by the SEC
for any amendment of or supplement to such registration
statement or the prospectus or for additional information, and
(z) of the entry by the SEC of any stop order suspending the
effectiveness of such registration statement or of the
initiation by the SEC of any proceedings for that purpose,
and, if such stop order shall be entered, LDI shall use its
reasonably diligent efforts to obtain the lifting thereof;
(iii) furnish to each Requesting Shareholder and any
underwriter acting on behalf of such Requesting Shareholder
(x) at a reasonable time prior to the filing thereof with the
SEC a copy of the registration statement in substantially the
form in which LDI proposes to file the same, and a copy of any
amendment (including any post-effective amendment) to such
registration statement, and promptly following the
effectiveness thereof, a conformed copy of the registration
statement as declared effective by the SEC and of each
post-effective amendment thereto, including financial
statements and (y) such number of copies of the preliminary,
any amended preliminary, and final prospectus and of each
post-effective amendment or supplement thereto, as may
reasonably be required in order to facilitate the disposition
of the Registrable Shares covered by such registration
statement in conformity with the requirements of the
Securities Act and the rules and regulations promulgated
thereunder, but only while LDI is required under the
provisions hereof to cause the registration statement to
remain effective;
(iv) use best efforts to list such Registrable Shares
on each securities exchange (if any) or qualify the
Registrable Shares for trading on any over the counter market
(if any) on which the LDI Common Stock is then listed or
traded; and
(v) use best efforts to provide a transfer agent and
registrar for all Registrable Securities registered pursuant
to such registration statement no later than the effective
date of such registration.
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In connection with the registration of the Registrable Shares pursuant
to this Section 2, each Requesting Shareholder, hereby agrees as follows:
(vi) the Requesting Shareholder shall cooperate
with LDI in connection with the preparation of the
registration statement, and for so long the registration
statement remaining effective, shall provide to LDI, in
writing, for use in the registration statement, all such
information regarding the Requesting Shareholder and its plan
of distribution of the Registrable Shares as may be necessary
to enable LDI to prepare the registration statement and
prospectus covering the Registrable Shares, to maintain the
currency and effectiveness thereof and otherwise to comply
with all applicable requirements of law in connection
therewith;
(vii) during such time as the Requesting Shareholder
may be engaged in a distribution of Registrable Shares, the
Requesting Shareholder shall comply with Rules 10b-2, 10b-6
and 10b-7 promulgated under the Exchange Act, to the extent
applicable, and pursuant thereto it shall, among other things:
(w) not engage in any stabilization or manipulation activity
in connection with the securities in contravention of such
rules; (x) distribute the Registrable Shares solely in the
manner described in the registration statement; (y) cause to
be furnished to each broker through whom the Registrable
Shares may be offered, if any, or to the offeree if an offer
is not made through a broker, such copies of the prospectus
and any amendment or supplement thereto and documents
incorporated by reference therein as may be required by law;
and (z) not bid for or purchase any securities of LDI or
attempt to induce any Person to purchase any securities of LDI
other than as permitted under the Exchange Act;
(viii) upon receipt of a notice pursuant to Section
2(d)(ii)(x), (y) or (z), discontinue any distribution of
Registrable Shares if such discontinuance is required under
the Securities Act;
(ix) at least five (5) days prior to any
distribution of the Registrable Shares other than in an
underwritten offering, the Requesting Shareholder will advise
LDI in writing of the dates on which the distribution is
intended to commence and terminate, the number of the
Registrable Shares to be sold and the terms and the manner of
sale; such Person also shall inform LDI and any broker/dealers
through whom sales of the
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Registrable Shares may be made when each distribution of such
shares is completed; and
(x) if cessation is required under applicable federal
and state securities laws, immediately upon notice from LDI,
the Holders on whose behalf Registrable Shares have been
registered will cease sales of Registrable Shares, for so long
as cessation is required under applicable federal and state
securities law;
(e) INDEMNIFICATION.
(i) If Registrable Shares held by any of the Holders
are included in the securities as to which any registration is
being effected, LDI will indemnify the Holders, each of its
general and limited partners, each of the officers and
directors of any corporate general or limited partner of each
of the Holders and any Person which controls, within the
meaning of Section 15 of the Securities Act, any of the
Holders, their general or limited partners, or such officers
and directors of any corporate general or limited partner and
each underwriter, if any, and each Person who controls any
underwriter within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (and
actions in respect thereof) ("Loss") arising out of or based
on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus or other document
(including any related registration statement, notification or
the like) incident to any such registration or based on 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 any violation by LDI of
any rule or regulation promulgated under the Securities Act,
or of any other federal, state or common law applicable to LDI
and relating to any action or inaction required of LDI in
connection with any such registration, qualification of
compliance, and will reimburse the Holders, each general or
limited partner of each of the Holders, each director and
officer of any corporate general or limited partner of any of
the Holders, any Person who so controls any of the foregoing
and each such underwriter and each Person who controls any
such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating or
defending any such Loss; provided, that LDI will not be liable
to so indemnify or reimburse in any such case to the extent
that any such Loss arises out of or is based on any statement
or omission resulting
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from written information furnished to LDI by or on behalf of
the Holders or such underwriter for use therein.
(ii) The Requesting Shareholder will, if Registrable
Shares held by the Requesting Shareholder are included in the
securities as to which such registration is being effected,
indemnify LDI, each of its directors and officers, each other
Security Holder, each other Requesting Shareholder, the
independent accountants and legal counsel of LDI, each
underwriter, if any, of LDI's securities covered by such a
registration statement, the respective officers, directors and
(with respect only to accountants and legal counsel practicing
in partnership and to each other Security Holder that is a
partnership) partners of the foregoing and each person who
controls any of the foregoing within the meaning of Section 15
of the Securities Act, against all Loss arising out of or
based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement,
prospectus, or other document, or 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, and will reimburse LDI, such directors, officers,
accountants, counsel, Security Holders, the other Requesting
Shareholder, underwriters, officers, directors, (with respect
only to accountants and legal counsel practicing in
partnership and to each other Security Holder that is a
partnership) partners and controlling Persons for any legal or
any other expenses reasonably incurred in connection with
investigating or defending any such Loss in each case to the
extent that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, or other document in
reliance upon and in conformity with written information
furnished to LDI by or on behalf of the Requesting Shareholder
for use therein; provided, however, that (i) the obligations
of the Requesting Shareholder hereunder shall be limited to an
amount equal to the aggregate public offering price of the
Registrable Shares of the Requesting Shareholder sold as
contemplated herein, unless such liability arises out of or is
based upon willful misconduct by the Requesting Shareholder
and (ii) the indemnity for untrue statements or omissions
described above, and the reimbursements obligation relating
thereto, shall not apply if the Requesting Shareholder
provides LDI with such additional written information prior to
the effectiveness of the registration statement as is required
to make the previously supplied written information true and
complete, together with a description in reasonable
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detail of the information previously supplied which was untrue
or incomplete.
(iii) Each Person entitled to indemnification under
this Section 2(e) (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom; provided, that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such Indemnified Party's
expense, and provided further that the failure or delay of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Section 2(e) except to the extent that the Indemnifying Party
is prejudiced by such failure or delay. After notice from the
Indemnifying Party to the Indemnified Party of its election to
assume the defense of such claim or litigation, the
Indemnifying Party will not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof,
unless the Indemnifying Party abandons the defense of such
claim or litigation. No Indemnifying Party in the defense of
any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(f) CONTRIBUTION. If the indemnification provided for in
subsections (i) or (ii) of Section 2(e) is unavailable to or
insufficient to hold the Indemnified Party harmless in respect of any
Loss referred to therein for any reason other than as specified
therein, then the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Loss in
such proportion as appropriate to reflect the relative fault of the
Indemnifying Party, on the one hand, and such Indemnified Party, on the
other, in connection with the statements or omissions which resulted in
such Loss, as well as any other relevant equitable considerations. 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
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alleged omission to state a material fact relates to information
supplied by (or omitted to be supplied by) the Indemnifying Party or
the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an Indemnified
Party as a result of Loss referred to above in this subsection (f)
shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party 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.
(g) INFORMATION FROM THE REQUESTING SHAREHOLDER. The
Requesting Shareholder shall furnish to LDI such information regarding
the Requesting Shareholder, and each of its general or limited
partners, each of the directors and officers of any of its corporate
general or limited partner, and any Person controlling any of the
foregoing, and the distribution proposed by the Requesting Shareholder,
as LDI may reasonably request in writing and as shall be required in
connection with any registration referred to in Section 2.
3. TERMINATION.
(a) Notwithstanding any other provision of this Agreement, the
respective covenants, agreements and obligations contained in Section 2
of this Agreement shall continue until the earlier to occur of: (i)
such date as the Holders cease to own any Registrable Shares, and (ii)
the twelfth anniversary of the Effective Date; provided that the
indemnification obligations contained in Section 2(e) and the
contribution obligations contained in Section 2(f) shall survive for
the period of the statute of limitations with respect thereto.
4. MISCELLANEOUS.
(a) The Holders and LDI acknowledge and agree that irreparable
damage would occur in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court identified in paragraph 4(j) hereof.
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15
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given (i) when delivered if sent by
courier, (ii) when received if sent by registered or certified mail,
return receipt requested, or by air courier or (iii) when received by
facsimile transmission with electronic verification if received during
normal business hours or otherwise the next business day, in each case
to the parties at the following addresses (or at such other address as
a party may specify by like notice):
(A) If to LDI, addressed to:
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy thereof addressed to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(B) If to the Holders, addressed to:
Advent International Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy thereof addressed to:
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx, Esq.
(c) This Agreement supersedes all prior agreements between the
parties (written or oral) relating to registration of the Registrable
Shares under the Securities Act and is intended as a complete and
exclusive statement of the terms of the agreement between the parties
with respect to such matters.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and shall be
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16
construed and enforced in accordance with the laws of such state
without regard to the principles of conflicts of laws of choice of
laws.
(e) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Any term or provision of this Agreement may be waived at
any time by an instrument in writing signed by the party which is
entitled to the benefits thereof and this Agreement may be amended or
supplemented at any time by an instrument in writing signed by all
parties hereto.
(g) Except as otherwise provided herein, LDI shall not assign
this Agreement or any part hereof or any rights or obligations
hereunder. Each Holder shall be entitled, without the consent of any
other party hereto, to assign and transfer any or all of its rights
hereunder to any permitted transferee of its Registrable Shares. Except
as otherwise provided herein, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(h) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent
possible.
(i) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute but one and the same agreement.
(j) Any claim, suit, action, or proceeding among any or all of
the parties hereto relating to this Agreement, to any document,
instrument, or agreement delivered pursuant hereto, referred to herein,
or contemplated hereby, or in any other manner arising out of or
relating to the transactions contemplated by or referenced in this
Agreement, shall be commenced and maintained exclusively in the United
States District Court for the Southern District of New York, or, if
such Court lacks jurisdiction over the subject matter, in a state court
of competent subject-matter jurisdiction sitting
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17
in the State of New York. The parties hereby submit themselves
unconditionally and irrevocably to the personal jurisdiction of such
courts. The parties further agree that venue shall be exclusively in
New York County in the State of New York. The parties irrevocably waive
any objection to such personal jurisdiction or venue including, but not
limited to, the objection that any suit, action, or proceeding brought
in the State of New York has been brought in an inconvenient forum. The
parties irrevocably agree that process issuing from such courts may be
served on them, either personally or by certified mail, return receipt
requested, at the addresses given in Section 4 hereof; and further
irrevocably waive any objection to service of process made in such
manner and at such addresses, including without limitation any
objection that service in such manner and at such addresses is not
authorized by the local or procedural laws of the State of New York.
(k) In any suit or proceeding brought or instituted by any of
the parties to enforce or interpret any of the provisions of this
Agreement or on account of any damages claimed to be sustained by such
instituting party by reason of another party's violation of any of the
terms or provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and court costs.
IN WITNESS WHEREOF, LDI and the Holders have caused this
Agreement to be duly executed by their respective officers, each of whom is duly
authorized, all as of the day and year first above written.
[Signatures begin on next page]
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18
GLOBAL PRIVATE EQUITY III L.P., a
Delaware limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
GLOBAL PRIVATE EQUITY III-A L.P., a
Delaware limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
GLOBAL PRIVATE EQUITY III-B L.P., a
Delaware limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
19
GLOBAL PRIVATE EQUITY III-C L.P., a
Delaware limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
ADVENT PGGM GLOBAL L.P., a Delaware
limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
ADVENT EURO-ITALIAN DIRECT
INVESTMENT PROGRAM L.P., a Delaware
limited partnership
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
ADVENT PARTNERS (NA) GPE III L.P.,
a Delaware limited partnership
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
20
ADVENT PARTNERS GPE III L.P., a
Delaware limited partnership
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
ADVENT PARTNERS L.P., a Delaware
limited partnership
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
ADVENT GLOBAL GECC III L.P., a
Delaware limited partnership
By: Advent Global Management L.P.,
General Partner
By: Advent International L.P.,
General Partner
By: Advent International
Corporation, General Partner
By: _____________________________
Its: _____________________________
FOUR SEASONS VENTURE II AS, a
Norwegian limited company
By: _____________________________
Pursuant to a Power of
Attorney
LONG DISTANCE INTERNATIONAL INC., a
Florida corporation
By: _____________________________
Its: _____________________________
