EXHIBIT 10.55
REGISTRATION RIGHTS AGREEMENT
Dated as of June 8, 1998
by and among
CONCENTRIC NETWORK CORPORATION
and
BEAR, XXXXXXX & CO. INC.
FIRST UNION CAPITAL MARKETS
UBS SECURITIES LLC
CIBC OPPENHEIMER
LIBRA INVESTMENTS, INC.
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 8, 1998 by and among Concentric Network Corporation, a Delaware
corporation (the "Company"), and Bear, Xxxxxxx & Co. Inc., First Union Capital
Markets, a division of Wheat First Securities, Inc., UBS Securities LLC, CIBC
Oppenheimer and Libra Investments, Inc. (each an "Initial Purchaser" and
together, the "Initial Purchasers"), each of whom have agreed to purchase the
Company's 13-1/2% Series A Redeemable Exchangeable Preferred Stock due 2010 (the
"Series A Preferred Stock") pursuant to the Purchase Agreement (as defined
below). Pursuant to the terms of the Certificate of Designation (as defined
below), the Series A Preferred Stock is exchangeable under certain circumstances
for the Company's 13-1/2% Subordinated Debentures due 2010 (the "Exchange
Debentures") or for the New Preferred Stock (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June 3,
1998 (the "Purchase Agreement"), by and among the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the Series A
Preferred Stock, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 8 of
the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: New Preferred Stock or New
Exchange Debentures that are acquired by a Broker-Dealer in the Exchange Offer
in exchange for Series A Preferred Stock or Exchange Debentures, as the case may
be, that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Preferred
Stock or Exchange Debentures acquired directly from the Company or any of its
affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the City of
New York, or in the city of the corporate trust office of the Trustee, on which
banks are authorized to close.
Certificate of Designation: The Certificate of Designation filed with the
Secretary of State of the State of Delaware pursuant to which the shares of
Series A Preferred Stock and New Preferred Stock are to be issued, as such
Certificate of Designation is amended or supplemented from time to time in
accordance with the terms thereof.
Certificated Securities: As defined in the Certificate of Designation and
the Indenture.
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Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes of
this Agreement upon the occurrence of (a) the filing and effectiveness under the
Act of the Exchange Offer Registration Statement relating to the New Preferred
Stock, or if the Series A Preferred Stock has been exchanged for Exchange
Debentures, the New Exchange Debentures to be issued in the Exchange Offer, (b)
the maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Transfer Agent of shares of New Preferred Stock with the same aggregate
Liquidation Preference as the aggregate Liquidation Preference of the shares of
Series A Preferred Stock that were tendered by Holders thereof pursuant to the
Exchange Offer, or, if the Series A Preferred Stock has been exchanged for
Exchange Debentures, the delivery by the Company to the Trustee of New Exchange
Debentures in the same aggregate principal amount as the aggregate principal
amount of Exchange Debentures that were tendered by Holders thereof pursuant to
the Exchange Offer.
Damages Payment Date: Each Dividend Payment Date or Interest Payment Date,
as the case may be.
Dividend Payment Date: As defined in the Certificate of Designation.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the New
Preferred Stock or, if the Series A Preferred Stock has been exchanged for
Exchange Debentures, the New Exchange Debentures pursuant to the Exchange Offer
Registration Statement pursuant to which the Company shall offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange all
such outstanding Transfer Restricted Securities for New Preferred Stock with the
same aggregate Liquidation Preference as the Series A Preferred Stock tendered
in such exchange by such Holders, or New Exchange Debentures in an aggregate
principal amount equal to the aggregate principal amount of the Exchange
Debentures tendered in such exchange offer by such Holders, as the case may be.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose to
sell the Series A Preferred Stock or Exchange Debentures to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act.
Global Security Holder: As defined in the Certificate of Designation and
the Indenture.
Holders: As defined in Section 2 hereof.
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Indenture: The Indenture to be entered into upon exchange of the Series A
Preferred Stock for Exchange Debentures, by the Company and the Trustee
substantially in the form attached to Exhibit A to the certificate of the
Company dated June 8, 1998 provided to the Transfer Agent, pursuant to which the
Exchange Debentures and New Exchange Debentures are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with the
terms thereof.
Interest Payment Date: As defined in the Indenture and the Exchange
Debentures.
Liquidated Damages: As defined in Section 5 hereof.
Liquidation Preference: As defined in the Certificate of Designation.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: The final offering memorandum, dated June 3, 1998,
relating to the Company and the Series A Preferred Stock.
New Exchange Debentures: The Company's 13-1/2% Series B Subordinated
Debentures due 2010 to be issued pursuant to the Indenture (i) in the Exchange
Offer or (ii) upon the request of any Holder of Exchange Debentures covered by a
Shelf Registration Statement in exchange for such Exchange Debentures.
New Preferred Stock: The Company's 13-1/2% Series B Redeemable Exchangeable
Preferred Stock due 2010 to be issued pursuant to the Certificate of Designation
(i) in the Exchange Offer or (ii) upon the request of any Holder of Series A
Preferred Stock covered by a Shelf Registration Statement in exchange for such
Series A Preferred Stock.
Person: An individual, partnership, corporation, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
Preliminary Offering Memorandum: The preliminary offering memorandum,
dated May 20, 1998 relating to the Company and the Series A Preferred Stock.
Prospectus: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including post-
effective amendments, and all material incorporated by reference into such
Prospectus.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company relating
to (a) an offering of New Preferred Stock or New Exchange Debentures pursuant to
an Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) which
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
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Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Target Effectiveness Date: As defined in Section 5.
Transfer Agent: The transfer agent with respect to the Series A Preferred
Stock.
Transfer Restricted Securities: Each share of New Preferred Stock or each
Exchange Debenture until the earliest to occur of (i) the date on which such
Series A Preferred Stock or Exchange Debenture is exchanged by a person other
than a broker-dealer in the Exchange Offer, (ii) following the exchange by a
broker-dealer in the Exchange Offer, the date on which such New Preferred Stock
or New Debenture, as the case may be, is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Series A Preferred Stock or Exchange Debenture is effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iv) the date on which such Series A Preferred Stock
or Exchange Debenture is distributed to the public pursuant to Rule 144 under
the Act.
Underwritten Registration or Underwritten Offering: A registration in which
securities of the Company are sold to an underwriter for re-offering to the
public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), the Company shall (i) cause to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 30 days after the
Closing Date, the Exchange Offer Registration Statement, (ii) use its best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 120 days after the
Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be necessary in
order to cause such Exchange Offer Registration Statement to become effective,
(B) file, if applicable, a post-effective amendment to such Exchange Offer
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings, if any, in connection with the registration and qualification
of the New Preferred Stock or the New Exchange Debentures, as the case may be,
to be made under the Blue Sky laws of such jurisdictions as are necessary to
permit Consummation of the Exchange
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Offer and (iv) upon the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the New Preferred Stock or
the New Exchange Debentures, as the case may be, to be offered in exchange for
the Series A Preferred Stock or the Exchange Debentures, as the case may be,
that are Transfer Restricted Securities and to permit sales of Broker-Dealer
Transfer-Restricted Securities by Restricted Broker-Dealers as contemplated by
Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement to
be effective continuously, and shall keep the Exchange Offer open, for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the New Preferred Stock and the New Exchange
Debentures shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Series A Preferred Stock or
Exchange Debentures that are Transfer Restricted Securities and that were
acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities, may exchange such Series A Preferred
Stock or Exchange Debentures (other than Transfer Restricted Securities acquired
directly from the Company) pursuant to the Exchange Offer; however, such Broker-
Dealer may be deemed to be an "underwriter" within the meaning of the Act and
must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each New Preferred Stock or New Exchange
Debenture received by such Broker-Dealer in the Exchange Offer, which prospectus
delivery requirement may be satisfied by the delivery by such Broker-Dealer of
the Prospectus contained in the Exchange Offer Registration Statement. Such
"Plan of Distribution" section shall also contain all other information with
respect to such sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers that the Commission may require in order to permit
such sales pursuant thereto, but such "Plan of Distribution" shall not name any
such Broker-Dealer or disclose the amount of Series A Preferred Stock or
Exchange Debentures held by any such Broker-Dealer except to the extent required
by the Commission as a result of a change in policy after the date of this
Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as
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announced from time to time, for a period expiring on the earlier of (i) the
date that all Holders of Transfer Restricted Securities have registered such
securities pursuant to the Exchange Offer and (ii) 365 days from the date on
which the Exchange Offer Registration Statement is declared effective.
The Company shall promptly provide sufficient copies of the latest version
of such Prospectus to such Restricted Broker-Dealers upon request at any time
during such 365-day period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company is not required to file the
Exchange Offer Registration Statement with respect to the New Preferred Stock or
the New Exchange Debentures or permitted to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a)(i) below have been
complied with) or (ii) any Holder of Transfer Restricted Securities notifies the
Company within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder is prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the New
Preferred Stock or New Exchange Debentures acquired by it in the Exchange Offer
to the public without delivering a prospectus and the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder or (C) such Holder is a Broker-Dealer and holds
Series A Preferred Stock or Exchange Debentures acquired directly from the
Company or an affiliate of the Company, then the Company shall (x) cause to be
filed on or prior to (1) in the case of a Registration Statement filed pursuant
to clause (i) above, 30 days after the date on which the Company determines that
it is not required to file the Exchange Offer Registration Statement and (2) in
the case of a Registration Statement filed pursuant to clause (ii) above, 30
days after the date on which the Company receives the notice specified in clause
(ii) above (and in any event, within 150 days after the Closing Date), a shelf
registration statement pursuant to Rule 415 under the Act, (which may be an
amendment to the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement")), relating to all Transfer Restricted Securities
the Holders of which shall have provided the information required pursuant to
Section 4(b) hereof, and (y) use its best efforts to cause such Shelf
Registration Statement to become effective on or prior to (1) in the case of a
Registration Statement filed pursuant to clause (i) above, 90 days after the
date on which the Company becomes obligated to file such Shelf Registration
Statement and (2) in the case of a Registration Statement filed pursuant to
clause (ii) above, 90 days after the date on which the Company receives the
notice specified in clause (ii) above (and in any event, within 240 days after
the Closing Date). If, after the Company has filed an Exchange Offer
Registration Statement which satisfies the requirements of Section 3(a) above,
the Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer is not permitted under applicable
federal law, then the filing of the Exchange Offer Registration Statement shall
be deemed to satisfy the requirements of clause (x) above. Such an event shall
have no effect on the requirements of this clause (y), or on the Target
Effectiveness Date as defined in Section 5 below. The Company shall use its best
efforts to keep the
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Shelf Registration Statement discussed in this Section 4(a) continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) hereof to the extent necessary to ensure that it is available for
sales of Transfer Restricted Securities by the Holders thereof entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period expiring on the
earlier of (i) the date that all Holders of Transfer Restricted Securities have
sold such securities pursuant to the Exchange Offer and (ii) 365 days from the
date on which the Exchange Offer Registration Statement is declared effective.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 Business Days after receipt of a request
therefor, such information specified in item 507 of Regulation S-K under the Act
for use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information required
to be provided by such Holder for inclusion therein. Each Holder as to which any
Shelf Registration Statement is being effected agrees to furnish promptly to the
Company, for so long as the Registration Statement is effective, all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) the Company fails to file any of the Registration Statements
required by this Agreement on or before the date specified for such filing in
this Agreement, (ii) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness (the "Target Effectiveness Date"), (iii) the Company fails to
Consummate the Exchange Offer within 30 business days of the Target
Effectiveness Date with respect to the Exchange Offer Registration Statement or
(iv) the Shelf Registration Statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective or usable
in connection with resales of Transfer Restricted Securities during the periods
specified in this Agreement without being succeeded within the time period
provided for herein by a post effective amendment to such Registration Statement
that cures such failure and that is itself declared effective within ten
Business Days of the filing thereof (each such event referred to in clauses (i)
through (iv) above, a "Registration Default"), the dividend rate of the Series A
Preferred Stock or the interest rate borne by the Exchange Debentures, as the
case may be, shall be increased by one-half of one percent per annum for the 90-
day period following such Registration Default, which rate will further increase
by one-half of one percent per annum with respect to each subsequent 90-day
period up to a maximum aggregate increase in rate of one and one-half percent
(1.50%) per annum until cured ("Liquidated Damages"). Following the cure of
all Registration Defaults, the
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accrual of Liquidated Damages will cease and the dividend rate or the interest
rate, as the case may be, will revert to the original rate.
All accrued Liquidated Damages shall be paid to the Global Security Holder
by wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by mailing checks to their registered
addresses by the Company on each Damages Payment Date. All obligations of the
Company set forth in the preceding paragraph that are outstanding with respect
to any Transfer Restricted Security at the time such security ceases to be a
Transfer Restricted Security shall survive until such time as all such
obligations with respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the Exchange
Offer, the Company shall comply with all applicable provisions of Section 6(c)
below, shall use its best efforts to effect such exchange and to permit the sale
of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i) If, following the date hereof there has been published a change
in Commission policy with respect to exchange offers such as the Exchange Offer,
such that in the reasonable opinion of counsel to the Company there is a
substantial question as to whether the Exchange Offer is permitted by applicable
federal law, the Company hereby agrees to seek a no-action letter or other
favorable decision from the Commission allowing the Company to Consummate an
Exchange Offer for such Series A Preferred Stock or Exchange Debentures, as the
case may be. The Company hereby agrees to pursue the issuance of such a decision
to the Commission staff level. In connection with the foregoing, the Company
hereby agrees to take all such other actions as are requested by the Commission
or otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic conferences with
the Commission, (B) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted and (C)
diligently pursuing a resolution by the Commission staff of such submission.
Nothing in this Section 6(a)(i) shall prevent the Company from promptly filing a
Registration Statement in accordance with Section 3(a) hereof.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the New Preferred Stock or New Exchange
Debentures to be issued in the Exchange Offer and (C) it is acquiring the New
Preferred Stock or New Exchange Debentures in its ordinary course of business.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such
Holder using the Exchange Offer to
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participate in a distribution of the securities to be acquired in the Exchange
Offer (1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Xxxxxx Xxxxxxx
and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to Shearman
& Sterling dated July 2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a secondary
resale transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K if the resales are of New Preferred Stock or
New Exchange Debentures obtained by such Holder in exchange for Series A
Preferred Stock or Exchange Debentures acquired by such Holder directly from the
Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the Commission (A)
stating that the Company is registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings Corporation
(available May 13, 1988), Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991),
K-III Communications Corporation (available May 14, 1993) and, if applicable,
any no-action letter obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the New Preferred Stock or New
Exchange Debentures to be received in the Exchange Offer and that, prior to
consummation of the Exchange Offer the Company will have received appropriate
representations from participating Holders to allow the Company to state to the
best of the Company's information and belief, that each Holder participating in
the Exchange Offer is not affiliated with the Company, is acquiring the New
Preferred Stock or New Exchange Debentures in its ordinary course of business
and has no arrangement or understanding with any Person to participate in the
distribution of the New Preferred Stock or New Exchange Debentures received in
the Exchange Offer and (C) any other undertaking or representation required by
the Commission as set forth in any no-action letter obtained pursuant to clause
(i) above.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) GENERAL PROVISIONS. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration
9
Statement and the related Prospectus, to the extent that the same are required
to be available to permit sales of Broker-Dealer Transfer Restricted Securities
by Restricted Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for the
period specified in Section 3 or 4 of this Agreement, as applicable. Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to such Registration Statement (1) in the case
of clause (A), correcting any such misstatement or omission, and (2) in the case
of either clause (A) or (B), use its best efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to keep
the Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement have been
sold; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Act, and to comply fully with Rules 424 and 430A, as applicable, under the Act
in a timely manner; and comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time the
Commission shall issue any
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stop order suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) make available to each selling Holder named in any Registration
Statement or Prospectus and each of the underwriter(s) in connection with such
sale, if any, before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or supplements to
any such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment of such
Holders and underwriter(s) in connection with such sale, if any, for a period of
at least five Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which the selling Holders of the Transfer Restricted Securities covered by
such Registration Statement or the underwriter(s) in connection with such sale,
if any, shall reasonably object within five Business Days after the receipt
thereof. A selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission or fails to comply with the applicable
requirements of the Act;
(v) promptly upon the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, make
available copies of such document to the selling Holders and to the
underwriter(s) in connection with such sale, if any, make the Company's
representatives available for discussion of such document and other customary
due diligence matters, and include such information in such document prior to
the filing thereof as such selling Holders or underwriter(s), if any, reasonably
may request;
(vi) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by such selling
Holders or any of such underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Company and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in connection
with such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness; provided that
any person to whom information is provided under this clause (vi) agrees in
writing to maintain the confidentiality of such information to the extent such
information is not in the public domain;
(vii) if requested by any selling Holders or the underwriter(s) in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as
11
such selling Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being sold to
such underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or post-
effective amendment as soon as practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate Liquidation Preference of
Series A Preferred Stock or aggregate principal amount of Exchange Debentures,
as the case may be, covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the underwriter(s) in
connection with such sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, and make available all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each selling Holder and each of the underwriter(s), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the use of the Prospectus
and any amendment or supplement thereto by each of the selling Holders and each
of the underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(xi) enter into such agreements (including, unless not required
pursuant to Section 10 hereof, an underwriting agreement) and make such
representations and warranties and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any Registration Statement contemplated by
this Agreement as may be reasonably requested by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement, and in
such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an Underwritten Registration, the Company
shall:
(A) furnish to each selling Holder and each underwriter, if any, upon the
effectiveness of the Shelf Registration Statement and to each
Restricted Broker-Dealer upon consummation of the Exchange Offer:
(1) a certificate, dated the date of effectiveness of the Shelf
Registration Statement or the date of Consummation of the
Exchange Offer, as the case may be, signed by (x) the President
or any Vice President and (y) a principal financial or accounting
12
officer of the Company, confirming, as of the date thereof, the
matters set forth in paragraphs (a), (b), (c) and (d) of Section
8 of the Purchase Agreement and such other matters as the Holders
and/or underwriter(s) may reasonably request;
(2) an opinion, dated the date of effectiveness of the Shelf
Registration Statement or the date of Consummation of the
Exchange Offer, as the case may be, of counsel for the Company,
covering (i) due authorization and enforceability of the Series A
Preferred Stock, the New Preferred Stock, the Exchange Debentures
and the New Exchange Debentures, (ii) a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company and representatives of
the independent public accountants for the Company and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the basis
of the foregoing (relying as to materiality to a large extent
upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-
effective amendment thereto became effective, and, in the case of
the Exchange Offer Registration Statement, as of the date of
Consummation, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that
the Prospectus contained in such Registration Statement as of its
date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (iii) such other matters of
the type customarily covered in opinions of counsel for an issuer
in connection with similar securities offerings, as may
reasonably be requested by such parties. Without limiting the
foregoing, such counsel may state further that such counsel
assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial, statistical
and accounting data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) if the registration is a registration in which securities of the
Company are sold to any underwriter for offering to the public, a
13
customary comfort letter, dated as of the date of effectiveness
of the Shelf Registration Statement or the date of Consummation
of the Exchange Offer, as the case may be, from the Company's
independent accountants, in the customary form and covering
matters of the type customarily covered in comfort letters to
underwriters in connection with primary underwritten offerings,
and affirming the matters set forth in the comfort letters
delivered pursuant to Section 8(h) of the Purchase Agreement,
without exception; (B) set forth in full or incorporate by
reference in the underwriting agreement, if any, in connection
with any sale or resale pursuant to any Shelf Registration
Statement the indemnification provisions and procedures of
Section 8 hereof with respect to all parties to be indemnified
pursuant to said Section; and (C) deliver such other documents
and certificates as may be reasonably requested by such parties
to evidence compliance with clause (A) above and with any
customary conditions contained in the underwriting agreement or
other agreement entered into by the Company pursuant to this
clause (xi), if any.
The above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company contemplated in (A)(1) above cease
to be true and correct, the Company shall so advise the underwriter(s), if any,
and selling Holders promptly and if requested by such Persons, shall confirm
such advice in writing;
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may request and
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities covered
by the applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation where it
is not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction where
it is not now so subject;
(xiii) issue, upon the request of any Holder of Series A Preferred
Stock or covered by any Shelf Registration Statement contemplated by this
Agreement, New Preferred Stock or New Exchange Debentures, as the case may be,
having an aggregate Liquidation Preference or an aggregate principal amount, as
the case may be, equal to the aggregate Liquidation Preference of Series A
Preferred Stock or the aggregate principal amount of Exchange Debentures, as the
case may be, surrendered to the Company by such Holder in exchange therefor or
being sold by such Holder; such New Preferred Stock or New Exchange Debentures
to be registered in the name of such Holder or in the name of the purchaser(s)
of such New Preferred Stock or New Exchange Debentures, as
14
the case may be; in return, the Series A Preferred Stock or Exchange Debentures,
as the case may be, held by such Holder shall be surrendered to the Company for
cancellation;
(xiv) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders and the underwriter(s), if any,
to facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the Holders or the underwriter(s), if any, may
request at least two Business Days prior to such sale of Transfer Restricted
Securities;
(xv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (xii) above;
(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Transfer Agent or the Trustee, as
the case may be, with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository Trust
Company;
(xviii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is required
to be retained in accordance with the rules and regulations of the NASD, and use
its best efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xix) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to any applicable Registration Statement, as soon
as practicable, a consolidated earnings statement meeting the requirements of
Rule 158 (which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
15
(xx) in the event such Transfer Restricted Securities are Exchange
Debentures, cause the Indenture to be qualified under the TIA not later than (a)
the date on which the Series A Preferred Stock is exchanged for Exchange
Debentures or (b) the effective date of the first Registration Statement
relating to the Exchange Debentures required by this Agreement, and, in
connection therewith, cooperate with the Trustee and the Holders of Exchange
Debentures to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the Holders of
a majority in aggregate Liquidation Preference of Series A Preferred Stock or
aggregate principal amount of Exchange Debentures or the managing
underwriter(s), if any;
(xxii) provide promptly to each Holder upon written request each
document filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act; and
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice from the Company
of the existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the applicable Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 6(c)(iii)(D) hereof to and including the date when each
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xvi) hereof or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made with the NASD
(including, if applicable, the
16
fees and expenses (excluding underwriting discounts or commissions) of any
"qualified independent underwriter" and its counsel, as may be required by the
rules and regulations of the NASD)); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the New Preferred
Stock or New Exchange Debentures and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and, in accordance with Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the New Preferred Stock or New Exchange Debentures on a national
exchange or automated quotation system if required hereunder; and (vi) all fees
and disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with any Registration Statement required by this
Agreement, the Company will reimburse the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in Liquidation Preference or principal amount of the
Transfer Restricted Securities for whose benefit such Registration Statement is
being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each Holder,
(ii) each person, if any, who controls a Holder within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act and (iii) the respective
officers, directors, partners, employees, representatives and agents of any
Holder or any controlling person to the fullest extent lawful, from and against
any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent, but only to the extent, that
(i) any such loss, liability,
17
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Holder expressly for use therein and (ii)
the foregoing indemnity with respect to any untrue statement contained in or
omitted from a Registration Statement or the Prospectus shall not inure to the
benefit of any Holder (or any person controlling such Holder), from whom the
person asserting any such loss, liability, claim, damage or expense purchased
any of the Series A Preferred Stock, New Preferred Stock, Exchange Debentures or
New Exchange Debentures, as the case may be, which are the subject thereof if it
is finally judicially determined that such loss, liability, claim, damage or
expense resulted solely from the fact that the Holder sold Series A Preferred
Stock, New Preferred Stock, Exchange Debentures or New Exchange Debentures, as
the case may be, to a person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the Registration Statement and
the Prospectus, as amended or supplemented, and (x) the Company shall have
previously and timely furnished sufficient copies of the Registration Statement
or Prospectus, as so amended or Supplemented, to such Holder in accordance with
this Agreement and (y) the Registration Statement or Prospectus, as so amended
or supplemented, would have corrected such untrue statement or omission of a
material fact. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
(b) Each Holder, severally and not jointly, agrees to indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Holder
expressly for use therein. This indemnity will be in addition to any liability
which a Holder may otherwise have, including under this Agreement. In no event,
however, shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the proceeds received by such Holder upon its
sale of the Series A Preferred Stock, New Preferred Stock, Exchange Debenture or
New Exchange Debenture giving rise to such indemnification obligation.
18
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above, shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent; provided, however, that such consent
was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section 8 is for any reason held to be
unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and each Holder shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from persons,
other than the Holders, who may also be liable for contribution, including
persons who control the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company and any Holder may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by the Company from the offering of Series A Preferred Stock, New
Preferred Stock, Exchange Debentures or New Exchange Debentures, as the case may
be, and any such Holder from its sale of Series A
19
Preferred Stock, New Preferred Stock, Exchange Debentures or New Exchange
Debentures, as the case may be, or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in this Section 8, in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Holders in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and any
Holder shall be deemed to be in the same proportion as (x) the total proceeds
from the offering (net of discounts but before deducting expenses) of the Series
A Preferred Stock, New Preferred Stock, Exchange Debentures or New Exchange
Debentures, as the case may be, received by the Company and (y) the total
proceeds received by such Holder upon its sale of Series A Preferred Stock, New
Preferred Stock, Exchange Debentures or New Exchange Debentures, as the case may
be, which would otherwise give rise to the indemnification obligation,
respectively. The relative fault of the Company and of the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Holder agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) no Holder shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the total received by such Holder with respect
to the sale of its Series A Preferred Stock, New Preferred Stock, Exchange
Debentures or New Exchange Debentures, as the case may be, exceeds the sum of
(A) the amount paid by such Holder for such Series A Preferred Stock, New
Preferred Stock, Exchange Debentures or New Exchange Debentures, as the case may
be, plus (B) the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, (A) each person, if any, who
controls a Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (B) the respective officers, directors, partners,
employees, representatives and agents of a Holder or any controlling person
shall have the same rights to contribution as such Holder, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) of this Section 8(d).
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 8 or otherwise. No party shall be
20
liable for contribution with respect to any action or claim settled without its
prior written consent; provided, however, that such written consent was not
unreasonably withheld.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available, upon request of any
Holder of Transfer Restricted Securities, to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
The Holders of Transfer Restricted Securities may elect to sell their
Transfer Restricted Securities pursuant to one or more Underwritten
Registrations; provided, however, that in no event shall any Holder commence any
such Underwritten Registration if a period of less than 180 days has elapsed
since the consummation of the most recent Underwritten Registration hereunder;
and provided further that in no event shall the Holders effect more than three
such Underwritten Registrations hereunder. No Holder may participate in any
Underwritten Registration hereunder unless such Holder (a) agrees to sell such
Holder's Transfer Restricted Securities on the basis provided in customary
underwriting arrangements entered into in connection therewith and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
In any Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate Liquidation Preference or aggregate
principal amount of the Transfer Restricted Securities included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Company. Such investment bankers and managers are referred
to herein as the "underwriters."
SECTION 12. MISCELLANEOUS
(a) REMEDIES. Each Holder, in addition to being entitled to exercise all
rights provided herein, in the Certificate of Designation, the Indenture, the
Purchase Agreement or granted by law, including recovery of liquidated or other
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages (including the Liquidated
Damages contemplated hereby) would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
21
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
conflicts with the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any agreement in
effect on the date hereof, except where a waiver with respect thereto has been
obtained prior to the date of effectiveness of any registration statement
required under this Agreement.
(c) ADJUSTMENTS AFFECTING THE SERIES A PREFERRED STOCK OR EXCHANGE
DEBENTURES. The Company will not take any action, or permit any change to occur,
with respect to the Series A Preferred Stock or Exchange Debentures that would
materially adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding Liquidation
Preference or principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being tendered pursuant to such Exchange Offer may be given by the Holders
of a majority of the outstanding Liquidation Preference or principal amount of
Transfer Restricted Securities that are subject to such Exchange Offer.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:(i) if to a Holder, at the address set
forth on the records of the Transfer Agent or the Trustee, as the case may be,
with a copy to the Transfer Agent or the Trustee, as the case may be; and (ii)
if to the Company:
Concentric Network Corporation
00000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being
22
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Transfer Agent or
the Trustee, as the case may be, at the address specified in the Certificate of
Designation or the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
RULES THEREOF.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CONCENTRIC NETWORK CORPORATION
By: __________________________________
Name: Xxxxx X. Xxxxxxxx
Title: President, Chief Executive Officer
and Director
BEAR, XXXXXXX & CO. INC.
FIRST UNION CAPITAL MARKETS
UBS SECURITIES LLC
CIBC XXXXXXXXXXX
LIBRA INVESTMENTS, INC.
By: BEAR, XXXXXXX & CO. INC., on behalf of the Initial
Purchasers
By: __________________________________
Name:
Title:
24
