TEL-SAVE HOLDINGS, INC.
5% Convertible Subordinated Notes Due 2004
REGISTRATION AGREEMENT
New York, New York
December 10, 1997
Xxxxx Xxxxxx Inc.
As Representative of the Initial Purchasers Named in
Schedule I to the Purchase Agreement (as defined below)
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Tel-Save Holdings, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell (such issuance and sale, the "Initial
Placement") to you (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement of even date herewith (the "Purchase Agreement"),
$200,000,000 principal amount (plus an additional $40,000,000 principal amount
to cover over-allotments, if any) of its 5% Convertible Subordinated Notes Due
2004 (the "Securities"). The Securities will be convertible into shares of
Common Stock, par value $0.01 per share (the "Common Stock"), of the Company at
the conversion price set forth in the Offering Memorandum. As an inducement to
you to enter into the Purchase Agreement and in satisfaction of a condition to
your obligations thereunder, the Company agrees with you, (i) for your benefit
and (ii) for the benefit of the holders from time to time of the Securities or
the Common Stock issuable upon conversion of the Securities (including you)
(each of the foregoing, a "Holder" and together, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person
that, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities
dated as of December 10, 1997, between the Company and First Trust of New York,
National Association, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble
hereto.
"Initial Purchasers" has the meaning set forth in the preamble
hereto.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Securities registered under a Shelf
Registration Statement; provided that Holders of Common Stock issued upon
conversion of Securities shall be deemed to be Holders of the aggregate
principal amount of Securities from which such Common Stock was converted.
"Managing Underwriters" means the Underwriter or Underwriters
that shall administer an Underwritten Offering.
"Offering Memorandum" has the meaning set forth in the
Purchase Agreement.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities or Common Stock issuable upon
conversion thereof, covered by such Shelf Registration Statement, and all
amendments and supplements to such prospectus, including post-effective
amendments.
"Purchase Agreement" has the meaning set forth in the preamble
hereto.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 2 hereof which
covers some or all of the Securities and the Common Stock issuable upon
conversion thereof, as applicable, on
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an appropriate form under Rule 415 under the Act, or any similar rule that may
be adopted by the Commission, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Trustee" means the trustee with respect to the Securities
under the Indenture.
"Underwriter" means any underwriter of Securities or Common
Stock issuable upon conversion thereof in connection with an offering thereof
under a Shelf Registration Statement.
"Underwritten Offering" means an offering in which the
Securities or Common Stock are sold to an Underwriter or with the assistance of
an Underwriter for reoffering to the public.
2. Shelf Registration; Suspension of Use of Prospectus.
(a) The Company shall prepare and, not later than 120 days
following the Closing Date, shall file with the Commission and
thereafter, but no later than 180 days following the Closing Date,
shall use its best efforts to cause to be declared effective under the
Act a Shelf Registration Statement relating to the offer and sale of
the Securities and the Common Stock issuable upon conversion thereof by
the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf
Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders until the
earliest of (i) the second anniversary of the Closing Date, (ii) the
date on which the Securities or Common Stock issuable upon conversion
thereof may be sold pursuant to paragraph (k) of Rule 144 (or any
successor provision) promulgated by the Commission under the Act and
(iii) such date as of which all the Securities or the Common Stock
issuable upon conversion thereof have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the
"Shelf Registration Period"). The Company shall be deemed not to have
used its best efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any
action that would result in Holders of Securities covered thereby not
being able to offer and sell such Securities during that period, unless
such action is required (x) by applicable law or (y) pursuant to
Section 2(c) hereof, and, in either case, so long as the Company
promptly thereafter complies with the requirements of Section 3(i)
hereof, if applicable.
(c) The Company may suspend the use of the Prospectus for a
period not to exceed 30 days in any three-month period or for three
periods not to exceed an aggregate of 90 days in any twelve-month
period for valid business reasons, to
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be determined by the Company in its sole reasonable judgment (not
including avoidance of the Company's obligations hereunder), including,
without limitation, the acquisition or divestiture of assets, public
filings with the Commission, pending corporate developments and similar
events; provided that the Company promptly thereafter complies with the
requirements of Section 3(i) hereof, if applicable.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing
thereof with the Commission, a copy of any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement,
if any, to the Prospectus included therein and shall use its best
efforts to reflect in each such document, when so filed with the
Commission, such comments as Xxxxx Xxxxxx Inc. reasonably may propose.
(b) The Company shall ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part
thereof and any amendment or supplement thereto comply in all material
respects with the Act and the rules and regulations thereunder, (ii)
any Shelf Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that no
representation or agreement is made hereby with respect to information
with respect to you, any Underwriter or any Holder required to be
included in any Shelf Registration or Prospectus pursuant to the Act or
the rules and regulations thereunder.
(c) (1) The Company shall advise you and the Holders and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments
or supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Company shall advise you and the Holders and,
if requested by you or any such Holder, confirm such advice in writing:
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(i) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities included in any Shelf
Registration Statement for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose; and
(iii) of the suspension of the use of the Prospectus
pursuant to Section 2(c) hereof or of the happening of any
event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such
date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they
were made) not misleading (which advice shall be accompanied
by an instruction to suspend the use of the Prospectus until
the requisite changes have been made).
(d) The Company shall use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities or
the Common Stock issued upon conversion thereof included within the
coverage of any Shelf Registration Statement, without charge, at least
one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and,
if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities or the Common Stock issued upon
conversion thereof included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such
Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Securities or the Common Stock issued upon conversion thereof covered
by the Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Securities or the Common Stock
issued upon conversion thereof pursuant to any Shelf Registration
Statement, the Company shall register or qualify or cooperate with the
Holders of Securities or the Common Stock issued upon conversion
thereof included therein and their respective counsel in connection
with the registration or qualification of such
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Securities or Common Stock for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the
Securities and the Common Stock issued upon conversion thereof covered
by such Shelf Registration Statement; provided, however, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing
Securities or the Common Stock issued upon conversion thereof to be
sold pursuant to any Shelf Registration Statement free of any
restrictive legends and in such denominations and registered in such
names as Holders may request prior to sales of Securities or the Common
Stock issued upon conversion thereof pursuant to such Shelf
Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the
Securities or the Common Stock issued upon conversion thereof included
therein, the Prospectus will not include 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.
(j) The Company shall use its best efforts to cause The
Depository Trust Company ("DTC") on the first Business Day following
the effective date of any Shelf Registration Statement hereunder or as
soon as possible thereafter to remove (i) from any existing CUSIP
number assigned to the Securities any designation indicating that the
Securities are "restricted securities", which efforts shall include
delivery to DTC of a letter executed by the Company substantially in
the form of Exhibit A hereto and (ii) any other stop or restriction on
DTC's system with respect to the Securities. In the event the Company
is unable to cause DTC to take actions described in the immediately
preceding sentence, the Company shall take such actions as Xxxxx Xxxxxx
Inc. may reasonably request to provide, as soon as practicable, a CUSIP
number for the Securities registered under such Shelf Registration
Statement and to cause such CUSIP number to be assigned to the
Securities (or to the maximum aggregate principal amount of the
securities to which such number may be assigned). Upon compliance with
the foregoing requirements of this Section 3(j), the Company shall
provide the Trustee with global certificates for such Securities, in a
form eligible for deposit with The Depository Trust Company.
(k) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make
generally available to its
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security holders as soon as practicable after the effective date of the
applicable Shelf Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act and Rule 158
promulgated by the Commission thereunder.
(l) The Company shall use its best efforts to cause the
Indenture to be qualified under the Trust Indenture Act in a timely
manner.
(m) The Company may require each Holder of Securities or the
Common Stock issued upon conversion thereof to be sold pursuant to any
Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such Securities or Common
Stock as may, from time to time, be required by the Act and the rules
and regulations promulgated thereunder, and the obligations of the
Company to any Holder hereunder shall be expressly conditioned on the
compliance of such Holder with such request.
(n) The Company shall, if requested, use its best efforts to
promptly incorporate in a Prospectus supplement or post-effective
amendment to a Shelf Registration Statement (i) such information as the
Majority Holders provide or, if the Securities or Common Stock are
being sold in an Underwritten Offering, as the Managing Underwriters
and the Majority Holders reasonably agree should be included therein
and provide to the Company in writing for inclusion in the Shelf
Registration Statement or Prospectus, and (ii) such information as a
Holder may provide from time to time to the Company in writing for
inclusion in a Prospectus or any Shelf Registration Statement
concerning such Holder and the distribution of such Holder's Securities
and Common Stock and, in either case, shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as
practicable after being notified in writing of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such agreements (including
underwriting agreements) and take all other appropriate actions as may
be reasonably requested in order to expedite or facilitate the
registration or the disposition of the Securities or the Common Stock
issuable upon conversion thereof, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those
set forth in Section 5 (or such other provisions and procedures
acceptable to the Majority Holders and the Managing Underwriters, if
any, with respect to all parties to be indemnified pursuant to Section
5 from Holders of Securities or the Common Stock issuable upon
conversion thereof to the Company).
(p) The Company shall (i) make reasonably available for
inspection by the Holders of Securities or the Common Stock issued upon
conversion thereof to be registered under a Shelf Registration
Statement, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and any attorney, accountant or
other agent retained by the Holders or any such
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Underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by the Holders or any
such Underwriter, attorney, accountant or agent in connection with any
such Shelf Registration Statement as is customary for similar due
diligence examinations; provided, however, that any information that is
designated in writing by the Company, in its sole discretion, as
confidential at the time of delivery of such information shall be kept
confidential by the Holders or any such Underwriter, attorney,
accountant or agent, unless disclosure thereof is made in connection
with a court proceeding or required by law, or such information has
become available to the public generally through the Company or through
a third party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to the Holders of
Securities or the Common Stock issued upon conversion thereof
registered thereunder and the Underwriters, if any, in form, substance
and scope as are customarily made by issuers to Underwriters and
covering matters including, but not limited to, those set forth in the
Purchase Agreement; (iv) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the
Underwriters, if any, covering such matters as are customarily covered
in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Holders and Underwriters; (v)
obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in
the Shelf Registration Statement), addressed to each selling Holder of
Securities or the Common Stock issued upon conversion thereof
registered thereunder (provided such Holder furnishes the accountants
with such representations as the accountants customarily require in
similar situations) and the Underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings; and (vi)
deliver such documents and certificates as may be reasonably requested
by the Majority Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section 3(i) and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The foregoing actions set forth
in clauses (iii), (iv), (v) and (vi) of this Section 3(p) shall be
performed at (A) the effectiveness of such Shelf Registration Statement
and each post-effective amendment thereto and (B) each closing under
any underwriting or similar agreement as and to the extent required
thereunder.
4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel designated by the Majority Holders to act
as counsel for the Holders in
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connection therewith. Notwithstanding the provisions of this Section 4, each
Holder shall bear the expense of any broker's commission, agency fee or
Underwriter's discount or commission.
5. Indemnification and Contribution.
(a) (i) In connection with any Shelf Registration Statement,
the Company agrees to indemnify and hold harmless each Holder of
Securities or Common Stock issued upon conversion thereof covered
thereby (including the Initial Purchasers), the directors, officers,
employees and agents of each such Holder and each person who controls
any such Holder within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (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 Shelf Registration Statement as
originally filed or in any amendment thereof, or in any preliminary
Prospectus or 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 not misleading, and agrees
to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon (A) 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 any such Holder or any Initial Purchaser
specifically for inclusion therein, (B) use of a Shelf Registration
Statement or the related Prospectus during a period when a stop order
has been issued in respect of such Shelf Registration or any
proceedings for that purpose have been initiated or use of a Prospectus
when use of such Prospectus has been suspended pursuant to Section
2(c); provided, further, in each case, that Holders received prior
notice of such stop order, initiation of proceedings or suspension or
(C) if the Holder fails to deliver a Prospectus or the then current
Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(ii) The Company also agrees to indemnify or contribute
to Losses, as provided in Section 5(d), of any Underwriters of
Securities or the Common Stock issued upon conversion thereof
registered under a Shelf Registration Statement, their officers and
directors and each person who controls such Underwriters on
substantially the same basis as that of the indemnification of the
Initial Purchasers and the selling Holders provided in this Section
5(a) and shall,
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if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 3(o) hereof.
(b) Each Holder of Securities or Common Stock issued
upon conversion thereof covered by a Shelf Registration Statement
(including the Initial Purchasers) severally agrees to indemnify and
hold harmless (i) the Company, (ii) each of its directors, (iii) each
of its officers who signs such Shelf Registration Statement and (iv)
each person who controls the Company within the meaning of either the
Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by
or on behalf of such Holder specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise
have.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 5, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party
shall have the right to employ separate
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counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel
(and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party; provided
further, that the indemnifying party shall not be responsible for the
fees and expenses of more than one separate counsel (together with
appropriate local counsel) representing all the indemnified parties
under paragraph (a)(i), paragraph (a)(ii) or paragraph (b) above. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 5 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party,
shall have a joint and several obligation to contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which such indemnified party
may be subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the one hand,
and such indemnified party, on the other hand, from the Initial
Placement and the Shelf Registration Statement which resulted in such
Losses; provided, however, that in no case shall the Initial Purchasers
be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, as set
forth on the cover page of the Offering Memorandum, nor shall any
Underwriter be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities and Common Stock
issued upon conversion thereof purchased by such Underwriter under the
Shelf Registration Statement which resulted in such Losses. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified
party shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the
other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be
equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of
the Offering Memorandum and (y) the total amount of additional interest
which the Company was not required to pay as a result of registering
the Securities and Common Stock issued upon conversion thereof covered
by the Shelf Registration Statement which resulted in such Losses.
Benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions as set forth on the
cover page of the Offering Memorandum, and benefits received by any
other Holders shall be deemed to be equal to the value of
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receiving Securities or the Common Stock issuable upon conversion
thereof registered under the Act. Benefits received by any Underwriter
shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a
part of the Shelf Registration Statement which resulted in such Losses.
Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on
the other hand. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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 5, each person who
controls a Holder within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of such Holder shall
have the same rights to contribution as such Holder, and each person
who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the
Shelf Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force
and effect, regardless of any investigation made by or on behalf of any
Holder or the Company or any of the officers, directors or controlling
persons referred to in Section 5 hereof, and will survive the sale by a
Holder of Securities covered by a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not, as of the
date hereof, entered into nor shall it, on or after the date hereof,
enter into, any agreement with respect to its Securities that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the Majority Holders;
provided that with respect to any matter that directly or indirectly
affects the rights of the Initial Purchasers hereunder, the Company
shall obtain the written consent of the Initial Purchasers against
which such amendment, qualification, supplement, waiver or consent is
to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders whose Securities are being sold pursuant to a
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Shelf Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities being sold rather than
registered under such Shelf Registration Statement.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(1) if to you, initially at the address set forth in
the Purchase Agreement;
(2) if to any other Holder, at the most current address
given by such Holder to the Company in accordance with the
provisions of this Section 6(c), which address initially is,
with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy
in like manner to Xxxxx Xxxxxx Inc.; and
(3) if to the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given when received, if delivered by hand or air courier, and when
sent, if sent by first-class mail, telex or telecopier.
The Initial Purchasers or the Company by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
(d) 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 the need for an express assignment or
any consent by the Company thereto, subsequent Holders. The Company
hereby agrees to extend the benefits of this Agreement to any Holder
and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
(e) 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.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State,
without regard to the conflicts of law rules thereof.
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(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired or affected thereby, it being intended
that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Securities or the Common Stock issuable upon conversion thereof is
required hereunder, Securities or the Common Stock issued upon
conversion thereof held by the Company or its Affiliates (other than
subsequent Holders of Securities or the Common Stock issued upon
conversion thereof if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities) shall
not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
TEL-SAVE HOLDINGS, INC.
----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXX XXXXXX INC.
For itself and the other Initial
Purchasers named in Schedule I to the
Purchase Agreement.
BY: XXXXX XXXXXX INC.
By
-------------------------
Name:
Title:
EXHIBIT A
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: 5% Subordinated Convertible Notes Due 2004 (the "Securities") of
Tel-Save Holdings, Inc.
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission
has declared effective a Registration Statement on Form S-3 under the Securities
Act of 1933, as amended, with regard to all of the Securities referenced above.
Accordingly, there is no longer any restriction as to whom such Securities may
be sold and any restrictions on the CUSIP designation are no longer appropriate
and may be removed. I understand that upon receipt of this letter, DTC will
remove any stop or restriction on its system with respect to this issue.
As always, please do not hesitate to call if we can of further
assistance.
Very truly yours,
Authorized Officer
