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EXHIBIT 9.1
SECURITYHOLDERS AGREEMENT
dated as of March 19, 1998
among
IMPSAT CORPORATION,
CORPORACION IMPSA S.A.,
NEVASA HOLDINGS LTD.,
XXXXXXXXX LIMITED,
ROTLING INTERNATIONAL CORPORATION,
PRINCES GATE INVESTORS II, L.P.,
XXXXXX XXXXXXX GLOBAL EMERGING MARKETS PRIVATE INVESTMENT
FUND, L.P.,
XXXXXX XXXXXXX GLOBAL EMERGING MARKETS PRIVATE INVESTORS, L.P.,
PGI INVESTMENTS LIMITED,
GREGOR VON OPEL,
INVESTOR INVESTMENTS AB
and
PG INVESTORS II, INC.
as Agent
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
RESTRICTIVE LEGEND
SECTION 2.1. Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
REGISTRATION RIGHTS
SECTION 3.1. Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.2. Piggy-Back Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Reduction of Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.5. Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.6. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.7. Indemnification by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.8. Indemnification by Selling Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.9. Conduct of Indemnification Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.10. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.11. Participation in Underwritten Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.12. Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.13. Holdback Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.14. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV
COVENANTS
SECTION 4.1. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Right to Participate in Certain Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.3. Drag-Along . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.4. Prohibited Issuance of Additional Series A Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.5. Right of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.6. Annual Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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Page
SECTION 4.7. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V
BOARD OF DIRECTORS
SECTION 5.1. Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.2. Appointment; Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.3. Special Trigger Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.4. Mechanics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI
THE AGENT
SECTION 6.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.2. Reliance by the Issuer and Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.3. Liability of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.5. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.2. No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.3. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.5. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.8. Successors, Assigns, Transferees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.9. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.10. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.11. Recapitalization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.12. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.13. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.14. Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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SECURITYHOLDERS AGREEMENT
SECURITYHOLDERS AGREEMENT (this "Agreement") dated as of March
19, 1998 among IMPSAT Corporation, a Delaware corporation (the "Issuer"),
Corporacion IMPSA S.A., Nevasa Holdings Ltd., Xxxxxxxxx Limited ("Xxxxxxxxx"),
Rotling International Corporation ("Rotling") and Princes Gate Investors II,
L.P., a Delaware limited partnership ("Princes Gate"), Xxxxxx Xxxxxxx Global
Emerging Markets Private Investment Fund, L.P., a Delaware limited partnership
("MSGEM"), Xxxxxx Xxxxxxx Global Emerging Markets Private Investors, L.P.
("Private Investors"), and the other purchasers stated on the signature pages
hereof (such purchasers, together with Princes Gate, MSGEM and Private
Investors, the "Purchasers"), and PG Investors II, Inc., as agent (to the
extent provided herein) (the "Agent") for the Holders (as defined below) of
Series A Stock (as defined below); and
WHEREAS, the Issuer and the Purchasers have entered into the
Securities Purchase Agreement (as defined below) pursuant to which the
Purchasers have agreed to purchase shares of Series A Stock (as defined below)
in accordance with the terms thereof.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions
(a) The following terms, as used herein, have the
following meanings:
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person and "Affiliated" has a
meaning correlative with the foregoing. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" has the meaning set forth in the first paragraph of
this Agreement.
"Agreement" has the meaning set forth in the first paragraph
of this Agreement.
"Annual Budget" means the annual budget of the Issuer and its
Subsidiaries on a consolidated basis, which shall include (i) a
detailed projected statement of operations/income statement, statement
of cash flows, balance sheet and other financial
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data in reasonable detail, broken down by quarter of the next
succeeding Fiscal Year and (ii) a written business plan describing the
business activities of the Issuer and its Subsidiaries for the next
succeeding Fiscal Year and specifying quarterly objectives, all in
reasonable detail, adopted in accordance with the procedures set forth
in Section 4.6(a) herein.
"Board of Directors" means the Board of Directors of the
Issuer.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the City of New York are
authorized or required by law to close.
"Certificate of Designations" means the Certificate of Voting
Powers, Designations, Preferences and Relative Participating, Optional
or other Special Rights and Qualifications, Limitations and
Restrictions Thereof of the Series A Stock.
"Charter" means the Certificate of Incorporation of the
Issuer, as amended as of the Closing Date, in the form attached as
Exhibit M to the Securities Purchase Agreement.
"Closing Date" means the date of the closing of the purchase
of Series A Stock pursuant to the Securities Purchase Agreement.
"Commission" means the United States Securities and Exchange
Commission and any successor agency having similar powers.
"Common Stock" means Class A common stock, par value $1.00 per
share, of the Issuer and any other class of stock that is the same
class as the securities to be issued on the conversion of the Series A
Stock.
"Director" means a member of the Board of Directors.
"Equity Securities" means the Series A Stock and the Series A
Common Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute.
"Financial Expert" has the meaning set forth in the
Certificate of Designations.
"Fiscal Year" means the fiscal year of the Issuer, beginning
on January 1 of each year and ending on the following December 31.
"Holder" means any registered holder of shares of Series A
Stock or Series A
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Common Shares.
"Indebtedness" has the meaning set forth in the Securities
Purchase Agreement.
"Initial Public Offering" means the first registration solely
of shares of Common Stock to be issued by the Issuer after the date
hereof under the Securities Act, using Form X-0, X-0 or S-3 or any
successor forms, and after which the Common Stock is listed or quoted
for trading on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market.
"Issuer" has the meaning set forth in the first paragraph of
this Agreement.
"Liquidation Preference" has the meaning ascribed thereto in
the Certificate of Designations.
"Material Debt" means Indebtedness of the Issuer and/or one or
more of its Subsidiaries that individually or in the aggregate have a
principal amount (or if any Indebtedness was issued at a discount from
its principal amount at maturity then the accreted value of such
Indebtedness as of the end of the most recent fiscal quarter shall be
used in making this calculation) equal to or exceeding the amount
equal to 15% of the total assets of the Issuer and its consolidated
Subsidiaries as set forth on its consolidated balance sheet for the
fiscal year preceding the date of determination.
"Material Debt Default" means the failure of the Issuer and/or
any of its Subsidiaries to pay any principal of or premium or interest
or other amount on any Material Debt when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any other event shall occur or
condition shall exist with respect to any financial or economic
covenant or any event of default under any agreement or instrument
relating to any such Material Debt, if the effect of such event or
condition or event of default is to accelerate or require early
termination, or with notice or passage of time would permit the
acceleration or early termination of, the original maturity of such
Material Debt; or any such Material Debt shall be declared to be due
and payable, or required to be prepaid, redeemed, terminated,
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Material Debt shall be required to be made (other than by
a regularly scheduled required prepayment or redemption or pursuant to
the exercise of a "change of control" provision under the terms of any
Indebtedness), in each case prior to the original stated maturity
thereof.
"Nevasa" means Nevasa Holdings Ltd. or any successor thereof.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, limited liability company,
unincorporated association, joint venture or
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any other entity or organization, whether or not a legal entity,
including, without limitation, a government or political subdivision
or an agency or instrumentality thereof.
"Purchasers" has the meaning set forth in the first paragraph
of this Agreement.
"Registrable Securities" means the Series A Common Shares;
provided, in any event, that such securities shall cease to be
Registrable Securities when a registration statement relating to such
securities shall have been declared effective by the Commission and
such securities shall have been disposed of pursuant to such effective
registration statement or sold under Rule 144 (but not Rule 144A).
"Registration Expenses" means any and all expenses incurred in
connection with or incidental to a registration or other offering,
listing, marketing or selling efforts (but not underwriting discounts
or commissions), including all (i) registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws or
the rules of the National Association of Securities Dealers, Inc. or
any successor agency and the cost of preparing any blue sky or legal
investment memorandum in connection with the qualification of
Registrable Securities (including reasonable fees and disbursements of
a qualified independent underwriter, if any, counsel in connection
therewith and the reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) internal expenses of the
Issuer (including, without limitation, all salaries and expenses of
officers and employees performing legal or accounting duties), (v)
fees and disbursements of U.S. and foreign counsel for the Issuer,
(vi) customary fees and expenses for independent certified public
accountants retained by the Issuer (including the expenses of any
comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters),
(vii) fees and expenses of any special experts retained by the Issuer
in connection with such registration or other offering, listing,
marketing or selling efforts, (viii) fees and expenses of one U.S.
counsel for the Holders and one foreign counsel, if any, for each
applicable foreign jurisdiction, (ix) fees and expenses of listing the
Registrable Securities on a securities exchange or on the NASDAQ
National Market System, (x) the costs and other out-of-pocket expenses
of the Issuer relating to investor presentations on the "road show"
undertaken in connection with the marketing of Registrable Securities,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Issuer, travel and lodging expense of the
representatives and officers of the Issuer and any such consultants,
and the cost of any transportation utilized in connection with the
road show, and (xi) all other costs or expenses incident to the
performance of the obligations of the Issuer with respect to Article
III.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be
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amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time.
"Rule 144(k)" means Rule 144(k) under the Securities Act, as
such rule may be amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor statute.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of March 19, 1998 among the Issuer, Jonesboro
Financial Inc., Princes Gate, MSGEM and the other purchasers signatory
thereto.
"Series A Common Shares" means the shares of Common Stock to
be issued upon conversion of the Series A Stock.
"Series A Stock" means the Issuer's Convertible Preferred
Stock, Series A, having the rights, preferences and privileges set
forth in the Certificate of Designations.
"Significant Subsidiary" shall mean a Significant Subsidiary
within the meaning of Regulation S-X under the Exchange Act or any
group of non-Significant Subsidiaries that at the end of any fiscal
quarter collectively would constitute a "Significant Subsidiary"
within the meaning of Regulation S-X under the Exchange Act.
"Special Trigger Event" shall be deemed to occur if (i) a
Material Debt Default occurs, (ii) the Issuer breaches any covenant
or agreement contained in the Securities Purchase Agreement, the
Certificate of Designations or Article IV or V of this Agreement and
such breach has not been cured within 30 days of written notice
thereof, (iii) the Issuer or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, (iv) a court of
competent jurisdiction enters a decree or order for (A) relief in
respect of the Issuer or any of its Significant Subsidiaries in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or any of its Significant Subsidiaries or for
all or substantially all of the property and assets of the Issuer or
any of its Significant Subsidiaries or (C) the winding up or
liquidation of the affairs of the Issuer or any of its Significant
Subsidiaries or (v) the Issuer or any of its Significant Subsidiaries
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case
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under any such law, (B) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or any of its
Significant Subsidiaries or for all or substantially all of the
property and assets of the Issuer or any of its Significant
Subsidiaries or (C) effects any general assignment for the benefit of
creditor.
"Subsidiary" means, with respect to any Person, any other
Person of which more than fifty percent (50%) of (i) the economic
interest in the assets, earnings or cash flow or (ii) the total voting
power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof, is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or a combination thereof.
"Transfer" means any transfer, in whole or in part, by sale,
pledge, assignment, grant or other means.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as a principal in connection with a
distribution of such Registrable Securities and not as part of such
dealer's market-making activities.
"Voting Securities" of any Person means any securities (i)
ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person
or (ii) entitling the holder thereof to an economic interest in the
assets, earnings or cash flow of such Person.
(b) Each of the following terms is defined in the Section
opposite such term:
Term Section
---- -------
Demand Registrant 3.1
Demand Registration 3.1
Effective Date 7.10
Indemnified Party 3.9
Indemnifying Party 3.9
IPO Demand 3.1
Piggy-Back Registration 3.2
Registration Demand 3.1
Selling Holder 3.2
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ARTICLE II
RESTRICTIVE LEGEND
SECTION 2.1. Restrictive Legend.
(a) For so long as this Agreement remains in effect, each
certificate representing an Equity Security owned by any Holder or a subsequent
transferee shall (unless otherwise permitted by the provisions of Section
2.1(b) or the Charter) include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE ACT, THE RULES AND REGULATIONS PROMULGATED
THEREUNDER AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A SECURITYHOLDERS AGREEMENT DATED AS OF MARCH 19, 1998 THAT
FIXES CERTAIN RIGHTS AND OBLIGATIONS OF THE ISSUER AND THE
HOLDER OF THIS SECURITY. A COPY OF THE AGREEMENT IS ON FILE
AT THE ISSUER'S PRINCIPAL OFFICE.
(b) Any Holder or transferee of an Equity Security may,
upon providing evidence reasonably satisfactory to the Issuer that such Equity
Security is not a "restricted security" (as defined in Rule 144), may be sold
pursuant to Rule 144(k) or has been registered under the Securities Act,
exchange the certificate representing such Equity Security for a new
certificate that does not bear the legend set forth in Section 2.1(a).
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ARTICLE III
REGISTRATION RIGHTS
SECTION 3.1. Demand Registration.
Demand Registration Rights. (a) IPO Demand. From and after
the date of the third anniversary of the Closing Date until the consummation of
the Initial Public Offering, Holders of at least 10% of the outstanding
Registrable Securities (determined on a fully diluted basis, including assuming
the conversion of all Series A Stock then outstanding) may make a written
request (the "IPO Demand") that the Issuer consummate the Initial Public
Offering and, upon receipt of such IPO Demand, the Issuer shall be obligated to
promptly use its best efforts to proceed to consummate the Initial Public
Offering as provided for in Section 3.4 hereof.
(b) Subsequent Demand. At any time after the
consummation of the Initial Public Offering, the Holders of outstanding
Registrable Securities having a Current Market Value (as defined in the
Certificate of Designations) (determined on a fully diluted basis, including
assuming the conversion of all Series A Stock then outstanding) in excess of
$25 million may make written requests (each a "Registration Demand") for
registration (a "Demand Registration") under the Securities Act of such
Registrable Securities. The Registration Demand will specify the number of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. The Issuer shall not be obligated to effect
more than one Demand Registration in any six-month period. The Holder or
Holders (as applicable) making such request are referred to herein collectively
as the "Demand Registrant."
(c) Effective Registration. A registration requested
pursuant to this Section 3.1 shall be deemed not to be effected (i) if a
registration statement with respect thereto shall not have become effective,
(ii) if, after it has become effective, such registration is interfered with
for any reason by any stop order, injunction or other order or requirement of
the Commission or any other governmental agency or any court, and the result of
such interference is to prevent a Holder from disposing of the Registrable
Securities to be sold thereunder in accordance with the intended methods of
disposition or (iii) if the closing specified in the purchase agreement or
underwriting agreement entered into in connection with any underwritten
registration shall not have occurred due to a breach by the Issuer of any
provision contained in any such purchase or underwriting agreement.
(d) Underwriting. If the Demand Registrant so elects,
the offering of Registrable Securities pursuant to a Demand Registration shall
be in the form of an underwritten offering consistent with the covenants of the
Issuer set forth in Section 4.5 hereof.
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SECTION 3.2. Piggy-Back Registration. If the Issuer proposes
to file a registration statement under the Securities Act with respect to an
offering of its Common Stock (i) for its own account (other than a registration
statement on Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission) and other than with respect to an Initial Public Offering) or (ii)
for the account of any holders of capital stock of the Issuer, then the Issuer
shall give written notice of such proposed filing to all other Holders as soon
as practicable (but in any event not less than 20 days before the anticipated
filing date), and such notice shall offer each of the Holders of Registrable
Securities the opportunity to register any of its Registrable Securities that
are then eligible for registration. If any Holder wishes to register
securities of the same class or series as the Issuer or such holder, such
registration shall be on the same terms and conditions as the registration of
the Issuer or such holders' securities (a "Piggy-Back Registration"). If the
Piggy-Back Registration is of a different class, then the Issuer has the option
of effecting a concurrent registration. Holders participating in a Piggy-Back
Registration, together with the Demand Registrant, if any, are referred to
herein as "Selling Holders."
SECTION 3.3. Reduction of Offering. Notwithstanding anything
contained in any other Section herein, if the lead Underwriter of an offering
described in Section 3.1 or 3.2 informs the Issuer in writing that the success
of such offering could be materially and adversely affected by inclusion of all
the securities of each class requested to be included, then the Issuer may,
upon written notice to the Selling Holders, reduce (if and to the extent stated
by such Underwriter to be necessary to eliminate such effect) the number of the
securities of each class requested to be registered so that the resultant
aggregate number of the securities of each class requested to be registered
that will be included in such registration shall be equal to the numbers of the
securities of each class stated in such Underwriter's letter; provided,
however, that priority in such registration shall be as follows:
(a) in the case of an Initial Public Offering resulting
from the giving of an IPO Demand, (i) first, securities offered for
the account of the Issuer, (ii) second, securities offered for the
account of the Selling Holders and (iii) third, among any other
securityholders entitled to registration rights pursuant to any
contractual right of registration, in accordance therewith;
(b) in the case of any other initial public offering, (i)
first, securities for the account of the Issuer and (ii) second, among
the Selling Holders and any other securityholders of the Issuer
entitled to registration rights pursuant to any contractual right of
registration, in accordance therewith, with one-half of the shares
requested to be registered allocated to the other securityholders of
the Issuer and the balance of such shares allocated to the Selling
Holders;
(c) in the case of any Registration Demand, (i) first,
securities offered for the account of the Demand Registrant, (ii)
second, pro rata among any other securityholders of the Issuer
entitled to register securities pursuant to a contractual right of
registration in accordance therewith and (iii) third, securities
offered for the account
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of the Issuer; and
(d) in any case where any securityholder other than a
holder of Registrable Securities has requested registration pursuant
to a contractual right of registration (i) first, among securities
offered for the account of any such holders, in accordance therewith,
and any securities of the holders of Registrable Securities, to the
extent requested to be registered pursuant to Section 3.2, with
one-half of the shares requested to be registered allocated to
securityholders of the Issuer other than holders of Registrable
Securities and the balance of such shares allocated to the holders of
Registrable Securities and (ii) second, securities offered for the
account of the Issuer.
SECTION 3.4. Registration Procedures. Whenever the Issuer
receives an IPO Demand or a Registration Demand or any holder of Registrable
Securities elects to participate in a Piggy-Back Registration pursuant to
Section 3.2 hereof, the Issuer will use its best efforts, (i) in the case of
the IPO Demand, to consummate the Initial Public Offering, and (ii) in the case
of a Registration Demand or election to participate in a Piggy-Back
Registration, to effect the registration and the sale of the relevant
Registrable Securities in accordance with the intended method of disposition
thereof, in each case as promptly as practicable, and in connection therewith:
(a) The Issuer will as expeditiously as possible prepare
and file with the Commission a registration statement on any form for
which the Issuer then qualifies or which counsel for the Issuer shall
deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use its best efforts
to cause such filed registration statement to become and remain
effective until all Registrable Securities requested to be registered
thereunder have been sold thereunder.
(b) The Issuer will, concurrently with filing a
registration statement or prospectus or any amendment or supplement
thereto, furnish to the Selling Holders and each Underwriter, if any,
such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus
included in such registration statement (including each preliminary
prospectus) and such other documents as the Selling Holders or such
Underwriter may reasonably request in order to facilitate the sale of
the Registrable Securities.
(c) After the filing of the registration statement, the
Issuer will promptly notify the Selling Holders of any comments from
or any material correspondence with the Commission or the National
Association of Securities Dealers, Inc. and of any stop order issued
or threatened by the Commission and use its best efforts to prevent
the entry of such stop order or to remove it if entered.
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(d) The Issuer will use its best efforts to (i) register
or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States or elsewhere
as the Selling Holders request and to keep such registration or
qualification in effect for so long as such registration statement
remains in effect, and to take any other action which may be
reasonably necessary or advisable to enable the Selling Holders to
consummate the disposition in such jurisdictions of the securities
owned by the Selling Holders and (ii) cause such disposition and
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary or advisable
by virtue of the business and operations of the Issuer and/or its
Subsidiaries, so as to enable the Selling Holders to consummate the
disposition of such Registrable Securities; provided that the Issuer
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction other than taxation arising with respect to the
registration of securities or (iii) consent to general service of
process in any such jurisdiction.
(e) At any time when a prospectus relating to the sale of
Registrable Securities is required to be delivered under the
Securities Act, the Issuer will immediately notify the Selling Holders
of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and promptly
make available to the Selling Holders and the Underwriters any such
supplement or amendment. The Selling Holders agree that, upon receipt
of any notice from the Issuer of the happening of any event of the
kind described in the preceding sentence, the Selling Holders will
forthwith discontinue the offer and sale of Registrable Securities
pursuant to the registration statement covering such Registrable
Securities until receipt of the copies of such supplemented or amended
prospectus and, if so directed by the Issuer, the Selling Holders will
deliver to the Issuer all copies, other than permanent file copies
then in the possession of the Selling Holders, of the most recent
prospectus covering such Registrable Securities at the time of receipt
of such notice.
(f) The Issuer will enter into customary agreements
(including an underwriting agreement in customary form) and take such
other actions (including engaging in a road show) as are necessary or
desirable in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) The Issuer will furnish to the Selling Holders and to
each Underwriter, if any, addressed to the Selling Holders or such
Underwriter, signed copies of (i) an opinion or opinions of counsel to
the Issuer and (ii) a comfort letter or comfort letters from the
Issuer's independent public accountants, each in such form and
covering such
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matters as the Selling Holders or the lead Underwriter reasonably
requests.
(h) The Issuer will otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission,
and make available to its securityholders, as soon as reasonably
practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(i) The Issuer will provide and cause to be maintained a
transfer agent and registrar of national standing for all Registrable
Securities covered by such registration statement from and after a
date not later than the effective date of such registration statement.
(j) The Issuer will use its best efforts (i) to cause all
such Registrable Securities covered by such registration statement to
be listed or quoted on any U.S. national securities exchange or
quotation system on which the Common Stock is then listed or quoted or
will be listed or quoted in connection with an Initial Public Offering
if the listing of such Registrable Securities is then permitted under
the rules of such exchange; or (ii) to secure the designation of all
such Registrable Securities covered by such registration statement as
a NASDAQ "national market system security" within the meaning of Rule
11Aa2-1 under the Exchange Act or, failing that, to secure NASDAQ
authorization for listing or quoting such Registrable Securities, in
each case if the Registrable Securities so qualify, and, without
limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable
Securities with the National Association of Securities Dealers, Inc.
in the case of each action referred to in this clause (ii) if
requested by a Selling Holder or by the lead Underwriter.
SECTION 3.5. Shelf Registration.
(a) At any time after 180 days following the closing of
the Initial Public Offering, the Issuer, upon the request of any Purchaser or
any Affiliate of any Purchaser, as applicable, will use its best efforts to
file a "shelf" registration statement (the "Shelf Registration") with respect
to the Registrable Securities owned by such Purchaser or Affiliate of a
Purchaser on an appropriate form pursuant to Rule 415 (or any similar provision
that may be adopted by the Commission) under the Securities Act and to cause
such Shelf Registration to become effective and to keep such Shelf Registration
effective and the disclosure therein current and complete until the Purchasers
and their Affiliates shall no longer hold any Registrable Securities. Any sale
of Registrable Securities pursuant to the Shelf Registration in an underwritten
public offering shall be deemed to be a Demand Registration subject to the
provisions of Sections 3.1, 3.3 and 3.13 hereof.
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(b) In the event that counsel for the Purchasers
determines that any of the Purchasers, or any successors thereto, has become an
Affiliate (as such term is defined in Rule 405 under the Securities Act) of the
Issuer, or any successor thereto, the Issuer (or its successor) shall use its
best efforts to cause to be filed as soon as practicable after receiving notice
thereof from such counsel a shelf registration statement (the "Resales
Registration Statement") under the Securities Act providing for the resale by
the Purchasers (or any of their Affiliates) of all securities of the Issuer
that were originally offered to the public (in the case of debt securities of
the Issuer) or pursuant to Rule 144A and that they acquire from time to time in
connection with market-making activities and to have such shelf registration
statement declared effective by the Commission. The Issuer (or its successor)
will use its best efforts to keep the Resales Registration Statement effective
and current until such time as each Purchaser and its Affiliates shall, in its
opinion, cease to be an Affiliate of the Issuer, as evidenced by written notice
sent promptly upon such event to the Issuer.
(c) During any consecutive 365-day period, the Issuer
shall have the privilege to suspend availability of either or both of the Shelf
Registration or the Resales Registration Statement and the related prospectus,
in each case for up to 60 days, if the Board of Directors determines in good
faith that there is a valid purpose for such suspension and provides notice of
such determination to the Agent at its address set forth in the Securities
Purchase Agreement. Notice of such suspension shall be given promptly to the
Agent.
SECTION 3.6. Registration Expenses. The Issuer shall pay
Registration Expenses incurred in connection with (x) any registration made or
requested to be made pursuant to this Article III, whether or not any
registration statement becomes effective and (y) any resale of Registrable
Securities pursuant to any underwritten Rule 144A offering.
SECTION 3.7. Indemnification by the Issuer. The Issuer
agrees to indemnify and hold harmless each Selling Holder, its officers,
directors, agents and Affiliates, and each Person, if any, who controls each
such Selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented
if the Issuer shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein (in the case of a prospectus, in the light
of the circumstances under which they were made) not misleading except insofar
as such losses, claims, damages, liabilities or expenses are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Issuer by or on behalf of any such
Selling Holder expressly for use therein. The Issuer also agrees, to the
extent permitted by applicable law, to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such underwriters on reasonable and customary terms.
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SECTION 3.8. Indemnification by Selling Holders. Each
Selling Holder agrees, severally but not jointly, to indemnify and hold
harmless the Issuer, its officers, directors and agents and each Person, if
any, who controls the Issuer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Issuer to such Selling Holder, but only with
reference to information related to such Selling Holder furnished in writing by
such Selling Holder (or by the Purchasers on its behalf) expressly for use in
any registration statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any preliminary
prospectus. Each Selling Holder also agrees to indemnify and hold harmless
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Issuer provided in this Section 3.8.
SECTION 3.9. Conduct of Indemnification Proceedings. In case
any proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 3.7 or 3.8, such Person (the "Indemnified Party") shall promptly notify
the Person against whom such indemnity may be sought (the "Indemnifying Party")
in writing and the Indemnifying Party upon request of the Indemnified Party
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to the proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of
both parties by the same counsel would be in conflict or otherwise
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties,
and that all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Indemnified Parties, such firm
shall be designated in writing by the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested an Indemnifying Party to reimburse the Indemnified Party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is
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entered into more than 30 Business Days after receipt by such Indemnifying
Party of the aforesaid request and (ii) such Indemnifying Party shall not have
reimbursed the Indemnified Party in accordance with such request prior to the
date of such settlement. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement (x) includes an unconditional release
of such Indemnified Party from all liability arising out of such proceeding and
(y) provides that such Indemnified Party does not admit any fault or guilt with
respect to the subject matter of such proceeding.
SECTION 3.10. Contribution.
(a) To the extent the indemnification provided for herein
is for any reason unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities as between the Issuer on the one
hand and the Selling Holders on the other, in such proportion as is appropriate
to reflect the relative benefits received by the Issuer and such Selling
Holders from the offering of the securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Issuer on the
one hand and of the Selling Holders on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer on the one hand and the Selling
Holders on the other shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Issuer and such Selling Holders, as
set forth in the table on the cover page of the prospectus. The relative fault
of the Issuer on the one hand and of any Selling Holder on the other 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 Issuer or such
Selling Holder. The relative fault of the Issuer on the one hand and any
Selling Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(b) The Issuer and each Selling Holder agree that it
would not be just and equitable if contribution pursuant to this Section 3.10
were determined by pro rata allocation (even if the Selling Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding
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paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 3.10, no Selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities of such Selling
Holder were offered to the public (less underwriters' discounts and
commissions) exceeds the amount of any damages which such Selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
SECTION 3.11. Participation in Underwritten Registrations.
No Person may participate in any underwritten registration hereunder unless
such Person (a) agrees to sell such Person's securities on the basis provided
in any underwriting arrangements approved by such Person and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and these registration rights.
SECTION 3.12. Rule 144. The Issuer covenants that it will
file any reports required to be filed by it under the Securities Act and the
Exchange Act and will take such further action as any Selling Holder shall
reasonably request, all to the extent required from time to time to enable the
Selling Holders to sell Registrable Securities without registration under the
Securities Act pursuant to (a) Rule 144 under the Securities Act and Rule 144A
under the Securities Act, as such Rules are amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder, the Issuer will deliver to such Holder a written
statement as to whether it has complied with such requirements.
SECTION 3.13. Holdback Agreements.
(a) Restrictions on Public Sale by Holder of Registrable
Securities. If and to the extent requested by the Issuer, in the case of a
non-underwritten public offering, and if and to the extent requested by the
lead Underwriter or Underwriters, in the case of an underwritten public
offering, the Holders agree not to effect, except as part of such registration
or a concurrent registration, any public sale or distribution of the securities
being registered or a similar security of the Issuer, or any securities
convertible into or exchangeable or exercisable for such securities, including
a sale pursuant to Rule 144 or Rule 144A, during the 10 days prior to, and
during such period that the Issuer (in the case of a non-underwritten public
offering) or the lead Underwriter (in the case of an underwritten public
offering) may reasonably request, but in no event longer than (1) in the case
of the Initial Public Offering, 180 days and (2) in all other cases, 90 days,
in each case beginning on the effective date of the registration statement.
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(b) Restrictions on Public Sale by the Issuer. The
Issuer agrees (i) not to effect any public sale or distribution of any
securities similar to those being registered in accordance with Section 3.1 or
Section 3.2 hereof, or any securities convertible into or exchangeable or
exercisable for such securities, during the 10 days prior to, and during such
period as the lead Underwriter may reasonably request, but in no event longer
than 180 days, beginning on, the effective date of any registration statement
(except pursuant to such registration statement and except pursuant to
registrations on Form S-4 or S-8 or any successor or similar form thereto or
pursuant to an unregistered offering to employees of the Issuer or its
Subsidiaries pursuant to an employee benefit plan as defined in Rule 405 of
Regulation C of the Securities Act) or the commencement of a public
distribution of Registrable Securities; and (ii) that any agreement entered
into after the date of this Agreement pursuant to which the Issuer issues or
agrees to issue any securities shall contain a provision under which holders of
such securities agree not to effect any public sale or distribution of any such
securities during the periods described in (a) above, in each case including a
sale pursuant to Rule 144 or Rule 144A (except as part of any such
registration, if permitted); provided, however, that the provisions of this
paragraph (b) shall not prevent the exercise, conversion or exchange of any
securities pursuant to their terms into or for other securities.
SECTION 3.14. Exclusivity. For so long as the Purchasers and
their Affiliates own a majority of the Series A Stock or Series A Common
Shares, the Issuer shall not grant any registration rights, except to Nevasa or
any of its Affiliates, or register any of its equity securities (other than
Common Stock issued pursuant to Section 4.7(a)(vi)(i)), except in accordance
with this Agreement or with the consent of the Holders of a majority of the
shares of Series A Stock or Series A Common Shares then outstanding.
ARTICLE IV
COVENANTS
SECTION 4.1. Information. So long as any shares of the
Series A Stock remain outstanding, the Issuer shall deliver to (x) MSGEM and
(y) the Agent, on behalf of each of the Holders (other than MSGEM), for so long
as the Purchasers own a majority of the Series A Stock originally issued
pursuant to the Securities Purchase Agreement, and thereafter, to each of the
Holders (or in the case of clauses (c), (d) and (e) below, to each of the Agent
and MSGEM):
(a) as soon as practicable and in any event within
forty-five (45) days after the end of the first three fiscal quarters,
consolidated balance sheets of the Issuer and its Subsidiaries as at
the end of such period and the related consolidated statements of
operations, stockholders' equity and cash flows of the Issuer and its
Subsidiaries for such fiscal quarter, setting forth in each case in
comparative form the consolidated figures for the corresponding
periods of the previous fiscal year, all in reasonable detail
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and certified by the Issuer's Chief Financial Officer that they fairly
present the financial condition of the Issuer and its Subsidiaries as
at the dates indicated and the results of their operations and changes
in their financial position for the periods indicated in accordance
with generally accepted accounting principles in the United States
consistently applied except as described therein, subject to changes
resulting from normal year-end adjustments;
(b) as soon as practicable and in any event within ninety
(90) days after the end of each fiscal year of the Issuer commencing
with the fiscal year ended December 31, 1997, audited consolidated
balance sheets of the Issuer and its Subsidiaries as at the end of
such year and the related audited consolidated statements of income,
stockholders' equity and cash flow of the Issuer and its Subsidiaries
for such fiscal year, setting forth in each case, in comparative form
the consolidated figures for the previous year, all in reasonable
detail and accompanied by a report thereon of independent certified
public accountants of recognized national standing selected by the
Issuer, which report shall be unqualified as to scope of audit and
shall state that such consolidated financial statements present fairly
the financial position of the Issuer and its Subsidiaries as at the
dates indicated and the results of their operations and changes in
their financial position for the periods indicated in conformity with
generally accepted accounting principles in the United States applied
on a basis consistent with prior years (except as otherwise stated
therein) and that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards in the United
States;
(c) for so long as the Purchasers and their Affiliates
own a majority of the Series A Stock and at least 20% of the Series A
Stock originally issued pursuant to the Securities Purchase Agreement
remains outstanding, promptly upon receipt thereof, copies of all
reports submitted to the Issuer by independent public accountants in
connection with each annual, interim or special audit of the Issuer's
financial statements made by such accountant, including, without
limitation, the comment letter submitted by such accountants to
management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available generally by the Issuer to its securityholders or by
any Subsidiary of the Issuer to its securityholders other than the
Issuer or another Subsidiary, of all regular and periodic reports and
all registration statements and prospectuses, if any, filed by the
Issuer or any of its Subsidiaries with any securities exchange or
quotation system or with the Commission or any governmental authority
succeeding to any of its functions, and of all press releases and
other written statements made available generally by the Issuer or any
Subsidiary to the public or to other investors or potential investors
in securities of the Issuer;
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(e) within five (5) Business Days after the last day of
each fiscal quarter, a certificate signed by the Issuer's Chief
Financial Officer certifying that the Issuer is in compliance in all
material respects with the terms and conditions of this Agreement, the
Charter and the Securities Purchase Agreement; and
(f) for so long as the Purchasers and their Affiliates
own a majority of the Series A Stock and at least 20% of the Series A
Stock originally issued pursuant to the Securities Purchase Agreement
remains outstanding, from time to time such additional information
regarding the financial position or business of the Issuer and its
Subsidiaries as the Agent or the Holders may reasonably request.
SECTION 4.2. Right to Participate in Certain Dispositions.
(a) For so long as the Purchasers own at least 10% of the
issued and outstanding capital stock of the Issuer (determined on a fully
diluted basis, including assuming the conversion of all Series A Stock then
outstanding), any Transfer of shares of stock of the Issuer or Nevasa or of any
other Person that directly or in the aggregate with its Affiliates owns 10% or
more of the capital stock of the Issuer (an "IMPSAT Holder") by any holder (a
"Transferor") of such stock (except a Transfer (x) by any Holder of its Series
A Stock or Series A Common Shares, (y) by any Existing Stockholder (as defined
in the Securities Purchase Agreement) to any other Existing Stockholder or to
any Person the majority of the outstanding equity interests of which is owned
by any Existing Stockholder, in each case which is, or at the time of any
Transfer becomes, a party to this Agreement and (z) pursuant to a public
offering registered under the Securities Act or a sale through the facilities
of the New York Stock Exchange, American Stock Exchange or NASDAQ National
Market) shall include by its terms and conditions an offer to include in such
Transfer (in accordance with the provisions of paragraphs (a)-(d) of this
Section 4.2), at the option of each of the Holders, the Pro Rata Portion (as
hereinafter defined) of the Series A Common Shares then owned by each such
Holder, on the same terms and conditions as the Transfer by the Transferor.
(b) If any holder of shares of stock (other than Series A
Stock, in the case of the Issuer) of the Issuer or an IMPSAT Holder receives or
solicits from a third party or parties (a "Transferee") an offer (an "Offer")
or offers to purchase or otherwise acquire shares of Common Stock, in the case
of the Issuer, or any common equity interests, in the case of an IMPSAT Holder
(the "Offered Shares") held by such holder, and such holder intends to pursue a
Transfer of such Offered Shares to such Transferee, such holder shall provide
written notice (the "Offer Notice") of such Offer to each Holder not later than
30 days prior to the consummation of such Transfer. The Offer Notice shall
identify the Offered Shares, the price offered for such Offered Shares (which,
if the Offered Shares are equity interests in an IMPSAT Holder, shall be the
price effectively offered for the Common Stock of the Issuer held by the IMPSAT
Holder), all other material terms and conditions of the Offer and, in the case
of an Offer in which the consideration payable for the Offered Shares consists
in whole or in part of consideration other than cash, reasonably detailed
information regarding such other
23
20
consideration. Each Holder shall have the right and option, for a period of
not less than 20 days after the date the Offer Notice is given to the Holder
(the "Notice Period"), to notify the Transferee of its interest in Transferring
to the Transferee up to the Pro Rata Portion of such Holder's Series A Common
Shares pursuant to the Offer. Each Holder desiring to exercise such option
shall, prior to the expiration of the Notice Period, provide the Transferee
with a written notice specifying the number of Series A Common Shares which
such Holder has an interest in Transferring pursuant to the Offer (a "Notice of
Interest"). In addition, the Transferor shall use reasonable efforts to cause
the Transferee to make himself available to the Holders and representatives
thereof, at reasonable times and places, and to respond to reasonable inquiries
with respect to the Offer, the terms and conditions thereof and all other
matters with respect thereto. This Section 4.2(b) shall not apply to any
Transfer not subject to Section 4.2(a).
(c) If, at the end of the Notice Period, any Holder shall
not have given a Notice of Interest with respect to some or all of the Pro Rata
Portion of such Holder's Series A Common Shares contemplated by the Offer, such
Holder will be deemed to have waived all its rights under this Section 4.2 with
respect to the Transfer pursuant to the Offer of the portion of the Pro Rata
Portion of the Series A Common Shares owned by such Holder with respect to
which a Notice of Interest shall not have been given.
(d) "Pro Rata Portion" means, with respect to each
Holder, (A) in the case of a Transfer in connection with a Change of Control
(as defined in the Certificate of Designations), the total number of Series A
Common Shares owned by such Holder, and (B) in all other cases, a number equal
to the product of (i) the total number of Series A Common Shares then owned
(beneficially or of record) by such Holder (calculated on an as converted basis
for any shares of Series A Stock owned by such Holder), times (ii) a fraction,
the numerator of which shall be the total number of shares of Common Stock (or
in the case of a Transfer of equity interests in an IMPSAT Holder, the number
of shares of Common Stock that will be effectively Transferred as a result of
such transfer (the "Effective Number")) proposed to be Transferred by any
Transferor (together with the number of shares of Common Stock (or, if
applicable, the Effective Number) issuable upon the exercise of any derivative
security proposed to be Transferred by any Transferor), and the denominator of
which shall be the total number of shares of Common Stock (or, if applicable,
the Effective Number) (together with the number of shares of Common Stock (or,
if applicable, the Effective Number) issuable upon the exercise of any
derivative security) owned (beneficially or of record) by all Transferors
(including such shares and derivative securities so proposed to be
Transferred). If a Transferor shall Transfer any other shares of stock of the
Issuer or an IMPSAT Holder, each Holder shall have the right to include with
such Transfer its pro rata portion of the equity value of the Issuer.
SECTION 4.3. Drag-Along. For so long as any shares of Series
A Stock remain outstanding, if Nevasa or any of its Affiliates (a "Non
Purchaser Holder") proposes to Transfer substantially all of the shares of
capital stock of the Issuer beneficially owned (as
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21
defined in Rule 13d-3 under the Exchange Act) by such Non Purchaser Holder, and
if such Non Purchaser Holder so requests, the Holders shall Transfer all of the
Series A Stock and Series A Common Shares held by them acquired pursuant to
this Agreement (or any securities into which such securities are convertible or
exchangeable or for which they are exercisable) on the same terms as the
Transfer by such Non Purchaser Holder. Notwithstanding the first two sentences
of this paragraph, any such Holder may instead, contemporaneously with the
Transfer contemplated above, require the Issuer to redeem the securities of the
Issuer otherwise subject to the first two sentences of this Section 4.3 in
accordance with Article VI(C) of the Certificate of Designations, as if a
Change of Control (as defined in the Certificate of Designations) had occurred.
SECTION 4.4. Prohibited Issuance of Additional Series A
Stock. As long as any of the shares of Series A Stock remain outstanding, the
Issuer shall not issue any shares of Series A Stock to any Person other than
pursuant to the Securities Purchase Agreement.
SECTION 4.5. Right of First Offer. For the period from the
date hereof to the third anniversary of the Closing Date, in the event that the
Issuer or any of its Subsidiaries shall engage in any public offering or
private placement of any of its securities (except with respect to any sale by
IMPSAT S.A. of its commercial paper under its existing commercial paper
program) or any sale, transfer or other disposition of any material assets, or
any merger, consolidation or other material corporate transaction (a "Material
Transaction"), in each case for which the Issuer or any of its Subsidiaries
utilizes an underwriter, placement agent or advisor, the Issuer shall offer
first to Xxxxxx Xxxxxxx & Co. Incorporated (or any successor thereto or an
Affiliate thereof selected by Xxxxxx Xxxxxxx & Co. Incorporated ("MS&Co.")) the
right to act (on market terms) as sole (or, at the option of MS&Co., co-)
underwriter, placement agent or advisor to the Issuer or such Subsidiary with
respect to such Material Transaction. Following the receipt of any written
offer by MS&Co. with respect to such Material Transaction, the Issuer may
solicit an offer from any other party to act as underwriter, placement agent or
advisor to the Issuer or its Subsidiaries in respect thereof. If during such
three year period the Issuer or any of its Subsidiaries is in receipt of an
offer from any party other than MS&Co. to act as underwriter, placement agent
or advisor to the Issuer or such Subsidiary in respect of any Material
Transaction which the Issuer or its Subsidiaries propose to accept, the Issuer
or such Subsidiary shall offer first to MS&Co. in writing, setting forth the
material terms on which such party offers to consummate the proposed Material
Transaction, the right to act as sole (or, at the option of MS&Co., co-)
underwriter, placement agent or advisor to the Issuer or such Subsidiary and to
consummate such Material Transaction on such terms in lieu of such other party.
If MS&Co. shall fail to accept in writing the Issuer's or any of its
Subsidiaries' offer with respect to such proposed Material Transaction within
15 days of receipt thereof, and the Issuer or any of its Subsidiaries shall use
any other party in the role offered to MS&Co. or if the Issuer or any of its
Subsidiaries shall fail to make such offer, the Issuer and each of its
Subsidiaries shall, jointly and severally, pay MS&Co., as liquidated damages,
in cash on the closing date of such proposed Material Transaction, all fees,
commissions and other remuneration earned by or paid to such other party for
fulfilling
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such role, unless such Material Transaction shall have been consummated in
accordance with such terms with such party within 105 days after the Issuer
provided written notice of the proposed Material Transaction to MS&Co. on the
terms specified in such writing. It is agreed that MS&Co.'s damages for a
breach of the foregoing are not currently calculable, in that they would
consist of monetary loss as well as damage to the reputation of MS&Co. The
Issuer and its Subsidiaries shall promptly deliver to MS&Co. all documents
requested by MS&Co. for the purpose of determining the terms of such proposed
Material Transaction and the fees, commissions and other remuneration earned by
or paid to such other party for fulfilling such role. MS&Co. shall be an
express, intended third party beneficiary of this Section 4.5.
SECTION 4.6. Annual Budget. The Issuer will adopt an Annual
Budget for each Fiscal Year at a regularly scheduled meeting of the Board of
Directors, held no later than the December 5 of the immediately preceding
Fiscal Year.
SECTION 4.7. Approvals.
(a) Unless specifically approved or consented to in
writing by the Director or Directors appointed by the Purchasers or their
Affiliates pursuant to Article V, and except as otherwise expressly provided by
this Agreement, the Issuer and its Subsidiaries shall not, and no Person acting
on behalf of the Issuer or any of its Subsidiaries shall, permit or cause the
Issuer or any of its Subsidiaries to:
(i) add to, or permit, an increase in the number of
members of the Board of Directors of the Issuer (other than as
provided for in Section 5.2 hereof);
(ii) hire, remove or change the Issuer's Chief Executive
Officer, Chief Financial Officer, Deputy Chief Executive Officer,
Chief Operating Officer or materially amend the employment contract or
arrangements with any such Person;
(iii) commence a voluntary case under any applicable
bankruptcy, insolvency or other similar laws now or hereafter in
effect, or consent to the entry of an order for relief in any
involuntary case under any such law;
(iv) authorize any amendment to the charter or by-laws of
the Issuer or any Significant Subsidiary (within the meaning of
Regulation S-X under the Exchange Act), except as required by law,
that would have a material adverse effect on the rights of the
Holders;
(v) merge or consolidate with or into any Person or enter
into a similar business combination transaction, or convey, sell,
transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or a substantial part of the Issuer's
or any Significant Subsidiary's assets or take any action to bring
about a liquidation, winding-up or dissolution of the Issuer or any
Significant Subsidiary
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thereof;
(vi) issue or grant any capital stock, stock options,
warrants or other securities exchangeable or exercisable for or
convertible into any capital stock except (i) any issuance of Common
Stock by the Issuer to the public as part of a Public Equity Offering
(as defined in the Certificate of Designations), (ii) prior to an
Initial Public Offering, issuance by the Issuer of Common Stock at a
price per share which is at least equal to the then Current Market
Value per share of Common Stock (as defined in the Certificate of
Designations) to Existing Stockholders (as defined in the Securities
Purchase Agreement) for cash if the Holders are provided pre-emptive
rights on the same terms and conditions (determined on a fully diluted
basis, including assuming the conversion of all Series A Stock then
outstanding), (iii) issuances of Common Stock by the Issuer to Credit
Suisse First Boston or its Affiliates solely in exchange for capital
stock of IMPSAT Argentina S.A. if a Financial Expert (as defined in
the Certificate of Designations) provides to the Purchasers a written
opinion that such transaction is fair to the Issuer from a financial
point of view and (iv) stock options pursuant to a bona fide employee
stock option plan approved by the Purchasers, which approval shall not
be unreasonably withheld;
(vii) engage in any transaction or series of related
transactions outside the ordinary course of business with any
Affiliate or any Director or officer of the Issuer or any material
Subsidiary or any relative of any such Director or officer; or
(viii) authorize, release, circulate, or permit the release
of any public announcement or press release relating to the
Purchasers, the Agent, Xxxxxx Xxxxxxx & Co. Incorporated or any of
their Affiliates.
(b) The provisions of this Section 4.7 (other than
(a)(viii)) shall no longer be binding if at any time the Purchasers and their
Affiliates do not beneficially own a majority of the shares of Series A Stock
issued on the Closing Date.
ARTICLE V
BOARD OF DIRECTORS
SECTION 5.1. Number. The Board of Directors currently
consists of six Directors and shall be increased as specified in Section 5.2
and Section 5.3 below.
SECTION 5.2. Appointment; Removal. (a) For so long as the
Purchasers and their Affiliates beneficially own a majority of the shares of
Series A Stock issued on the Closing Date, each of Princes Gate and MSGEM shall
have the right to appoint one Director (and remove and replace such Director).
Purchasers and their Affiliates that are holders of
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Series A Common Shares shall have the right to appoint one Director (and remove
and replace such Director) for so long as such holders own (beneficially or of
record) at least 5% of the capital stock of the Issuer, but in no event (other
than as provided in Section 5.3) will the holders of the Series A Stock and
Series A Common Shares be entitled to elect more than two Directors in the
aggregate. Each of the parties hereto shall vote all Common Stock owned by it,
at any regular or special meeting of the stockholders of the Issuer at which
Directors will be elected, or in any written consent executed in lieu of such a
meeting of stockholders, and shall take all actions necessary, to ensure the
election to the Board of Directors of any Person designated pursuant to this
Section 5.2 as a nominee for such position. The Issuer may appoint up to four
Directors that are not related to, and are not Affiliates of, any Existing
Stockholder (as defined in the Securities Purchase Agreement), and are not
directors of or employed by the Issuer or any Affiliate of the Issuer.
So long as MSGEM shall own any Series A Stock or Series A
Common Shares, it shall have the following rights with respect to the Issuer:
(a) the right to routinely consult with the management of the Issuer on matters
relating to the Issuer; (b) the right to inspect the books and records of the
Issuer; (c) the right to inspect the properties and operations of the Issuer;
and (d) except for any period during which MSGEM, acting on its own, has the
right to elect a Director, the right to have its representative attend the
meetings of the Board of Directors and to participate in discussions (but not
vote) at such meetings; provided, however, that any such rights may only be
exercised during business hours and on the giving by MSGEM of advance notice to
the Issuer of the exercise thereof. The rights provided to MSGEM in this
Section 5.2 are intended to enable MSGEM to be operated as a "venture capital
operating company" within the meaning of the regulations of the Department of
Labor set forth in 29 CFR Section 2510.3-101(d), and this Section 5.2 shall be
interpreted accordingly.
(b) Each Director appointed by the Holders of Series A
Stock or Series A Common Shares shall be entitled to be reimbursed by the
Issuer in respect of any expenses incurred by such Director in such capacity.
SECTION 5.3. Special Trigger Event. Notwithstanding anything
to the contrary set forth herein, for so long as the Purchasers and their
Affiliates beneficially own a majority of the shares of Series A Stock issued
on the Closing Date, upon the occurrence of any Special Trigger Event the
Holders of a majority of the shares of the Series A Stock then outstanding
shall have the right to immediately appoint on that date, and thereafter,
one-half of the members of the Board of Directors (and to remove and replace
such Directors), until the Special Trigger Event has been cured and is no
longer of any force or effect.
SECTION 5.4. Mechanics. Any appointment, removal or
replacement referred to in Section 5.2 or Section 5.3 shall be effective
immediately upon the sending by the Agent of written notice to the Issuer;
provided, however, that any appointment, removal or replacement by MSGEM
pursuant to the first sentence of Section 5.2 shall be effective
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immediately upon the sending by MSGEM of written notice to the Issuer.
ARTICLE VI
THE AGENT
SECTION 6.1. Appointment and Authorization. Each Holder of
Series A Stock irrevocably appoints and authorizes the Agent to (x) receive all
notices required to be given to any Holder of Series A Stock or Series A Common
Shares and (y) except as with respect to MSGEM, take all such actions and
exercise all such rights and powers as agent on its behalf as are conferred
upon such Holder of Series A Stock or Series A Common Shares under this
Agreement, together with all such powers as are reasonably incidental thereto;
provided, further, that this Section 6.1 shall not apply with respect to any of
MSGEM's rights under Section 5.2. The Agent hereby acknowledges and confirms
its acceptance of such appointment. Such authority may be exercised by the
Agent in its absolute discretion.
SECTION 6.2. Reliance by the Issuer and Other Holders. The
Issuer shall be entitled to treat the Agent as attorney-in-fact of each Holder
of Series A Stock and Series A Common Shares with respect to all matters under
this Agreement and shall not seek to communicate with any Holder of Series A
Stock or Series A Common Shares as to matters under this Agreement except
through the Agent.
SECTION 6.3. Liability of the Agent. Neither the Agent nor
any of its Affiliates nor any of their respective directors, officers, agents
or employees shall be liable to the Holders of Series A Stock for any action
taken or not taken by it in connection herewith in the absence of bad faith on
the part of the Agent. Neither the Agent nor any of its Affiliates nor any of
their respective directors, officers, agents or employees shall be responsible
for or have any duty to the Holders of Series A Stock to ascertain, inquire
into or verify (i) any statement, warranty or representation made in connection
with this Agreement or the Securities Purchase Agreement; (ii) the performance
or observance of any of the covenants or agreements of any other party to this
Agreement; or (iii) the validity, effectiveness or genuineness of this
Agreement or any other instrument or writing furnished in connection herewith.
The Agent shall not incur any liability to the Holders of Series A Stock by
acting in reliance upon any notice, consent, certificate, statement, or other
writing believed by it to be genuine or to be signed by the proper party or
parties.
SECTION 6.4. Indemnification. Each Holder of Series A Stock
jointly and not severally shall indemnify, when and as suffered or incurred,
the Agent, its Affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Issuer) against any cost,
expense (including the reasonable fees and expenses of counsel), claim, demand,
action, loss or liability (except such as result from such indemnitees' gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with this
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Agreement or any action taken or omitted by such indemnitees hereunder.
SECTION 6.5. Successor Agent. The Agent may resign at any
time by giving notice thereof to the Holders of Series A Stock and the Issuer.
Upon any such resignation, the Holders of Series A Stock shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Holders of Series A Stock and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Holders of Series A
Stock, appoint a successor Agent. Upon the acceptance of its appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Headings. The headings in this Agreement are
for convenience of reference only and shall not control or affect the meaning
or construction of any provisions hereof.
SECTION 7.2. No Inconsistent Agreements. The Issuer is not a
party to and will not hereafter enter into any agreement with respect to its
securities which is inconsistent with, or otherwise conflicts with or grants
rights superior to, the rights granted to the Holders under this Agreement; and
each of the Issuer and the Holders represents that it is not and agrees that it
will not become a party to any other agreement relating to the voting or
transfer of Voting Securities, or the management of the Issuer, or granting any
registration rights to any Person with respect to any of the Issuer's equity
securities except as permitted by the terms of this Agreement.
SECTION 7.3. Entire Agreement. This Agreement, the
Securities Purchase Agreement, the Note Purchase Agreement and the Certificate
of Designations constitute the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein,
and there are no restrictions, promises, representations, warranties,
covenants, or undertakings with respect to the subject matter hereof, other
than those expressly set forth or referred to herein or therein. This
Agreement and the documents referred to in the preceding sentence supersede all
prior agreements and understandings between the parties hereto with respect to
the subject matter hereof.
SECTION 7.4. Notices. Any notice, request, instruction or
other document to
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27
be given hereunder by any party hereto to another party hereto shall be in
writing (including telex, telecopier or similar writing) and shall be given to
such party by certified first class mail at its address with a return receipt
requested, by Federal Express or similar overnight mail service with signature
required for receipt, or by telex or telecopy at the telex or telecopier number
set forth on its signature page or to such other address as the party to whom
notice is to be given may provide in a written notice to the party giving such
notice, a copy of which written notice shall be on file with the Secretary of
the Issuer. Each such notice, request or other communication shall be
effective (i) if given by telex or telecopy, which such telex or telecopy is
transmitted to the telex or telecopy number specified in its signature page and
the appropriate answerback or confirmation, as the case may be, is received,
and a copy of such notice is sent by overnight mail service or (ii) if given by
certified mail or overnight courier, 72 hours after such communication is
deposited in the mails with first class postage prepaid or given to overnight
courier service, addressed as aforesaid.
SECTION 7.5. Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.
SECTION 7.6. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction shall
not affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.
SECTION 7.7. Termination. This Agreement shall terminate and
be of no further force or effect with respect to each Holder (except as to
matters preceding the Holder's disposition of Equity Securities) when such
Holder no longer owns any Equity Securities; provided that the provisions of
Article I, Section 2.1, Article III, Sections 4.3 and 4.7(a)(viii) and this
Section 7.7 shall survive any such termination.
SECTION 7.8. Successors, Assigns, Transferees. The
provisions of this Agreement shall be binding upon and accrue to the benefit of
the parties hereto and their respective heirs, successors their direct and
indirect transferees and assigns. Neither this Agreement nor any provision
hereof shall be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns; provided that any provision of this Agreement expressly granting any
right or benefit to the Purchasers and their Affiliates shall (unless otherwise
provided) not be constituted to confer such right or benefit upon a transferee
or assignee of any Purchaser or Affiliate of a Purchaser.
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SECTION 7.9. Amendments; Waivers.
(a) No failure or delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) Neither this Agreement nor any term or provision
hereof may be amended or waived except by an instrument in writing signed, in
the case of an amendment, by the parties thereto or, in the case of a waiver,
by the party against whom the enforcement of such waiver is sought.
SECTION 7.10. Counterparts; Effectiveness. This Agreement
may be executed in any number of counterparts, each of which shall be an
original with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto, and the closing under the Securities Purchase Agreement shall have
occurred (the "Effective Date").
SECTION 7.11. Recapitalization, Etc. If any capital stock or
other securities are issued in respect of, or in exchange or substitution for,
any Equity Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Common Stock or any other change
in capital structure of the Issuer, appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement.
SECTION 7.12. Remedies. The parties hereby acknowledge that
money damages would not be adequate compensation for the damages that a party
would suffer by reason of a failure of any other party to perform any of the
obligations under this Agreement. Therefore, each party hereto agrees that
specific performance is the only appropriate remedy under this Agreement and
hereby waives the claim or defense that any other party has an adequate remedy
at law.
SECTION 7.13. Consent to Jurisdiction. Each Holder and each
of the Issuer, Corporacion IMPSA S.A., Nevasa, Xxxxxxxxx and Rotling
irrevocably submit to the non-exclusive jurisdiction of any Court of Chancery
of Delaware or United States Federal Court sitting in Delaware over any suit,
action or proceeding arising out of or relating to this Agreement. Each of the
Holders of Series A Stock hereby irrevocably appoints the Agent as its
authorized agent to accept and acknowledge on its behalf service of any and all
process
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which may be served in any such suit, action or proceeding in any such court
and represents and warrants that such agent has accepted such appointment.
Each Holder of Series A Stock consents to process being served in any such
suit, action or proceeding by serving a copy thereof upon the agent for service
of process referred to above, provided that to the extent lawful and possible,
written notice of such service shall also be mailed to such Holder. Each
Holder of Series A Stock agrees that such service shall be deemed in every
respect effective service of process upon such Holder of Series A Stock in any
such suit, action or proceeding and shall be taken and held to be valid
personal service upon and personal delivery to such Holder. Nothing in this
paragraph shall affect or limit any right to serve process in any manner
permitted by law, to bring proceedings in the courts of any jurisdiction or to
enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.
Each of Corporacion IMPSA, Nevasa, Xxxxxxxxx and Rotling (i)
irrevocably appoints CT Corporation (together with any successor, the "Process
Agent"), as its authorized agent in the State of Delaware in the upon which
process may be served in any such suit, action or proceeding described in this
Section 7.13, acknowledges that the Process Agent has accepted such designation
and agrees that service of process upon the Process Agent, and written notice
of such service to each of Corporacion IMPSA S.A., Nevasa, Xxxxxxxxx and
Rotling by the person serving the same to the addresses specified on the
signature pages hereof, shall be deemed in every respect effective service of
process upon each of Corporacion IMPSA S.A., Nevasa, Xxxxxxxxx and Rotling in
any such suit, action or proceeding and (ii) agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments as may be necessary to continue such designation and appointment of
the Process Agent in full force and effect for the term of this Agreement.
SECTION 7.14. Transferability. The Holders shall have the
right to Transfer the Series A Stock and the Series A Common Shares to any
Person; provided that each such transfer is made in compliance with the
Securities Act and the Issuer receives evidence of such compliance reasonably
satisfactory to it.
33
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed, as of the day and year first above written.
IMPSAT CORPORATION(1)
By:
--------------------------------------
Name:
Title:
CORPORACION IMPSA S.A.(2)
By:
--------------------------------------
Name:
Title:
NEVASA HOLDINGS LTD.(3)
By:
--------------------------------------
Name:
Title:
XXXXXXXXX LIMITED(4)
By:
--------------------------------------
Name:
Title:
ROTLING INTERNATIONAL CORPORATION(5)
By:
--------------------------------------
Name:
Title:
34
PRINCES GATE INVESTORS II, L.P.(6)
By: PG Investors II, Inc.,
General Partner
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice-President
XXXXXX XXXXXXX GLOBAL
EMERGING MARKETS PRIVATE
INVESTMENT FUND, L.P.(7)
By: Xxxxxx Xxxxxxx Global Emerging
Markets, Inc., General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXXX GLOBAL
EMERGING MARKETS PRIVATE
INVESTORS, L.P.(7)
By: Xxxxxx Xxxxxxx Global Emerging
Markets, Inc., General Partner
By:
--------------------------------------
Name:
Title:
35
PGI INVESTMENTS LIMITED(6)
By: PG Investors II, Inc., as Attorney in Fact
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice-President
GREGOR VON OPEL(6)
By: PG Investors II, Inc., as Attorney in Fact
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice-President
INVESTOR INVESTMENTS AB(4)
By: PG Investors II, Inc., as Attorney in Fact
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
-------------------------------
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33
Name: Xxxxx X. Xxxxxxx
Title: Vice-President
PG INVESTORS II, INC.,
AS AGENT(4)
By:
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice-President
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(1) Address: Xxxxxxx Xxxxxx 000
0000 Xxxxxx Xxxxx
Xxxxxxxxx
Attention: Chief Executive Officer
Telecopier number: 000-000-000-0000
(2) Address: 940 Xxxxxxx Xxxxxxx Xxxxxx
Xxxx 00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Telecopier number: (000) 000-0000
(3) Address: 940 Xxxxxxx Xxxxxxx Xxxxxx
Xxxx 00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Telecopier number: (000) 000-0000
(4) Address: c/o Mr. Roberto Vivo Chaneton
940 Xxxxxxx Xxxxxxx Xxxxxx
Xxxx 00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Telecopier number: (000) 000-0000
(5) Address: Xx. Xxxxxxx Xxxxxxxxx
940 Xxxxxxx Xxxxxxx Xxxxxx
Xxxx 00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Telecopier number: (000) 000-0000
(6) Address: 0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone number: (000) 000-0000
Telecopier number: (000) 000-0000
(7) Address: 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telephone number: (000) 000-0000
Telecopier number: (000) 000-0000
