TERREMARK WORLDWIDE, INC. REGISTRATION RIGHTS AGREEMENT
Exhibit 10.41
Execution
Copy
TERREMARK WORLDWIDE, INC.
This REGISTRATION RIGHTS AGREEMENT (the “Agreement”), is made and entered into as of
January 5, 2007, by and between Terremark Worldwide, Inc. (the “Company”) and Credit Suisse
International (the “Purchaser”).
R
E C I T A L S:
A. The Company and the Purchaser have entered into a Purchase Agreement (“Purchase
Agreement”), dated as of the date hereof for (i) the purchase and sale of $4,000,000 principal
amount of the Company’s 0.50% Senior Subordinated Convertible Notes due 2009 (the “Notes”)
issued pursuant to an Indenture between the Company and The Bank of New York Trust Company, N.A.,
as trustee (the “Indenture”), and (ii) the issuance of 145,985 shares (the “Fee
Shares”, and together with the shares of common stock issuable upon conversion of the Notes,
the “Shares”) of the Company’s common stock, par value $.001 (the “Common Stock”).
B. As a condition to closing of the Purchase Agreement, the parties have agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants,
representations, warranties and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
intending to be legally bound do hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Purchase Agreement.
2. Representations of the Purchasers. The Purchaser represents and warrants to the
Company as follows:
(a) The Purchaser acknowledges and agrees that the certificates representing the Shares shall
bear a legend in substantially the form appearing below (unless subsequently registered under the
Act) in addition to any other legend required by a subordination agreement or intercreditor
agreement:
“THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR
TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT THAT HAS BECOME EFFECTIVE AND IS CURRENT WITH
RESPECT TO THESE SECURITIES, OR (ii) PURSUANT
TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
BUT ONLY (EXCEPT IN THE CASE OF A TRANSFER MADE PURSUANT TO RULE
144,
RULE 144A OR REGULATION S PROMULGATED UNDER THE SECURITIES ACT)
UPON THE COMPANY FIRST HAVING OBTAINED THE WRITTEN OPINION OF
COUNSEL TO THE CORPORATION, OR OTHER COUNSEL REASONABLY ACCEPTABLE
TO THE CORPORATION, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH
ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
APPLICABLE “BLUE SKY” OR SIMILAR SECURITIES LAWS.”
The Purchaser also acknowledges that the Company may place a stop transfer order against
transfer of any of the Shares, if necessary in the Company’s reasonable judgment, in order to
assure compliance by the Purchaser with the terms of the Purchase Agreement and this Agreement.
(b) The individual executing this Agreement has appropriate authority to act on behalf of the
Purchaser. This Agreement has been duly executed and delivered by or on behalf of such Purchaser
and constitutes the valid and binding agreement of the Purchaser, enforceable against the Purchaser
in accordance with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors’ rights generally and except that the availability of the equitable remedy
of specific performance or injunctive relief is subject to the discretion of the court before which
any proceeding may be brought).
3. Representations and Warranties of the Company. The Company represents and warrants
to the Purchaser that the Company has full right, power and authority to enter into this Agreement
and this Agreement has been duly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding agreement of the Company enforceable against the Company in accordance
with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws. affecting the enforcement of creditors’
rights generally and except that the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any proceeding may be
brought).
4. Covenants of the Purchaser. The Purchaser agrees and covenants that it will not
sell, transfer or make any disposition of any securities of the Company after the effectiveness of
any registration statement relating to a primary public offering by the Company for a period of
time as required by the managing underwriter of any such offering not to exceed 90 days;
provided that each director, executive officer and 5% or greater shareholder of the Company
shall have agreed to such restrictions for the same time period.
5. Registration and Listing of Shares . The Company hereby agrees with the Purchasers that:
(a) (i) (i) The Company shall use its commercially reasonable efforts to file or cause to be
filed, a registration statement (the “Registration Statement”) under the Securities Act, to
permit the resale by a holder thereof of the Shares and to have such registration statement
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declared effective no later than 180 days following the Closing Date (the “Effectiveness
Deadline”).
(ii) The Company shall use its commercially reasonable efforts to cause such Registration
Statement to remain effective until the earlier to occur of (A) the date on which the shares are
transferable without registration pursuant to Rule 144(k) under the Securities Act with respect to
the Purchaser and (B) such time as all the Shares covered by the Registration Statement have been
sold or are otherwise freely tradable without registration under the Securities Act (the
“Effectiveness Period”).
(b) In connection with the foregoing, the Company will:
(i) Prepare and file with the Securities and Exchange Commission (the “Commission”) a
Registration Statement with respect to such securities and use its commercially reasonable efforts
to cause such Registration Statement to become and remain effective.
(ii) Prepare and file with the Commission such amendments and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities covered by such Registration Statement
whenever the holder of such securities shall desire to sell the same.
(iii) Furnish to each holder of shares such number of copies of a summary prospectus or other
prospectus, including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as such holder may reasonably request in order to
facilitate the sale of the Common Stock owned by holder.
(iv) Use its commercially reasonable efforts to register or qualify the securities covered by
such Registration Statement under applicable blue sky laws, and do such other reasonable acts and
things as may be required in jurisdictions to which such blue sky laws apply; provided,
however, that the Company shall not be obligated to file any general consent to service of
process or qualify as a foreign corporation in any jurisdiction.
(c) Deliver such documents and certificates as may be reasonably requested by such holder,
including those to evidence compliance with Section (b)(ii) hereof.
(d) If requested, promptly include or incorporate in a prospectus supplement or post-effective
amendment to the Registration Statement such information as such holder requests should be included
therein and to which the Company does not reasonably object and
shall make all required filings of such prospectus supplement or post-effective amendment as
soon as practicable after it is notified of the matters to be included or incorporated in such
prospectus supplement or post-effective amendment.
(e) All of the expenses incurred in complying with the foregoing, including, without
limitation, all registration and filing fees (including all expenses incident to filing with the
NASD), printing expenses, fees and disbursements of counsel for the Company, expenses of
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any
special audits incident to or required by any such registration and expenses of
complying with the
securities or blue sky laws or any jurisdictions shall be paid by the Company.
(f) The Company shall also use its commercially reasonable efforts to cause such Common Stock
to be listed on the American Stock Exchange or such other principal national securities exchange on
which the shares of Common Stock are then listed or if the shares are not so listed, on The NASDAQ
Stock Market, if the shares are then listed on such market.
(g) The Purchaser shall furnish to the Company such information regarding itself and, the
Shares beneficially owned by it and the intended method of disposition of the Shares beneficially
owned by it as shall be reasonably required to effect the registration of such Shares and shall
execute such documents in connection with such registration as the Company may reasonably request.
6. Indemnification. In the event of any offer of the Shares pursuant to the
Registration Statement or any amendment thereof hereof, the Company agrees to indemnify and hold
harmless the Purchaser, each underwriter, if any, of such Shares, and each other person, if any,
who controls the Purchaser or any such underwriter within the meaning of the Act, from and against
any and all losses, claims, damages or liabilities (or actions in respect thereof including,
without limitation, any action brought under Section 11 or Section 12 of the Securities Act) which
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement under which the Shares were registered and offered
under the Act or any prospectus contained therein, 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 will reimburse such Purchaser, each such
underwriter, and each such controlling person for any legal or any other expenses reasonably
incurred by such Purchaser, such underwriter or controlling person in connection with the
investigation or defense of any such loss, claim, damage, liability or action, provided,
however, that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration Statement or such
prospectus in reliance upon, and in conformity with, written information furnished to the Company
by such Purchaser, such underwriter or such controlling person, specifically for use in preparation
thereof, provided further, that the Company shall not file any such Registration
Statement or prospectus containing information relating to such Purchaser without providing the
Purchaser with an opportunity to review and, to the extent incorrect, correct such information.
In the event of any offer of the Shares pursuant to the Registration Statement or any
amendment thereof, and to the extent permitted by applicable law, the Purchaser, agrees to
indemnify and hold harmless the Company, each person who controls the Company within the meaning of
the Act, and each officer and director of the Company from and against any losses, claims, damages
or liabilities, joint or several, to which the Company, such controlling person or any such officer
or director may become subject under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof including, without limitation, any action brought
under Section 11 or Section 12 of the Securities Act) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
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post-effective
amendment or other Registration Statement under which such Shares were offered or any prospectus
contained therein, 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, which untrue statement or alleged untrue statement or omission or alleged omission
was made therein in reliance upon, and in conformity with, written information furnished to the
Company by such Purchaser or such controlling person specifically for use in connection with the
preparation thereof (provided that the Company shall have afforded the Purchaser with an
opportunity to review, and to the extent incorrect, correct such information prior to the filing
thereof), and to reimburse the Company, each such controlling person and each such officer or
director for any legal or any other expenses reasonably incurred by them in connection with
investigating, or defending any such loss, claim, damage, liability or action; provided,
however, that any such indemnification obligation shall be individual to a Purchaser and
limited to an aggregate maximum dollar amount not to exceed the aggregate dollar amount of the
proceeds received by the Purchaser in any such offering.
Promptly after receipt by an indemnified party of notice of the commencement of any action or
the assertion of a claim that may be subject to indemnification hereunder, such indemnified party,
if a claim in respect thereof is to be made against an indemnifying party, will give written notice
to such indemnifying party of the commencement or assertion thereof. Indemnification provided for
under this Section 6 shall not be available to the indemnified party if it shall fail to give such
notice to the indemnifying party (if the indemnifying party was not aware of the action) to the
extent the indemnifying party was prejudiced by failure to receive such notice, but the omission to
give such notice shall not relieve the indemnifying party from any liability it otherwise may have
to the indemnified party. In case any such action is brought or such assertion is made against any
indemnified party, and it notifies any indemnifying party of such commencement or assertion, the
indemnifying party will be entitled to participate in and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than the reasonable cost of
investigation.
7. Liquidated Damages. If the Registration Statement covering the securities required
to be filed by the Company pursuant to Section 5 hereof is not declared effective by the Commission
by the Effectiveness Deadline, or the Registration Statement shall cease to be effective at any
time after
the Effectiveness Deadline but prior to the termination of the Effectiveness Period (a
“Noneffective Period”), then the Company shall make the payments to the Purchaser as
provided in the next sentence as liquidated damages and not as a penalty; provided
however, that if after a Registration Statement is declared effective the Board of
Directors of the Company reasonably determines in good faith that the continued effectiveness of
the filing of such Registration Statement at such time would be materially detrimental to the
Company and it is therefore necessary to suspend the filing of such Registration Statement the
Company may suspend the effectiveness of such Registration Statement for a period of time not to
exceed 90 days in any 12 month period without incurring any liquidated damages pursuant to this
Section 7 for such Noneffective Period. The amount to be paid by the Company to each Purchaser
shall be determined as of each Computation Date (as defined below), and such amount
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per share shall
be equal to 0.5% (the “Liquidated Damage Rate”) of the total proceeds received by the
Company pursuant to the sale of the Notes divided by the aggregate number of shares into which the
Notes are convertible on the Computation Date for the period from the Effectiveness Deadline or the
commencement of a Noneffective Period, as applicable, to the first Computation Date, and for each
30-day period of any subsequent Computation Dates thereafter, calculated on a pro rata basis to the
date on which the Registration Statement is declared effective by the Commission (the “Periodic
Amount”). The full Periodic Amount shall be paid by the Company to the Purchaser by wire
transfer of immediately available funds within three days after each Computation Date. As used in
this Section 7, “Computation Date” means the date which is 30 days after the Effectiveness
Deadline or the commencement of a Noneffective Period, as applicable, and, if the Registration
Statement to be filed by the Company pursuant to Section 5 has not theretofore been declared
effective by the Commission, each date which is 30 days after the previous Computation Date until
such Registration Statement is so declared effective.
8. Rule 144. The Company covenants that it will file the reports required to be filed
by it under the Act and the Exchange Act and the rules and regulations adopted by the Commission
thereunder, and it will take such further action as the Purchasers may reasonably request, all to
the extent required from time to time to enable the Purchasers to sell the Shares without
registration under the Act within the limitation of the exemptions provided by (a) Rule 144 under
the Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of the Purchaser, the Company will deliver
to it a written statement as to whether the. Company has complied with such information disclosure
and other requirements.
9. Notices.
(a) Any notice required to be given or delivered to the Purchaser shall be sent to the
Purchaser’s address as follows:
If to the Purchaser:
|
00 Xxxxxxx Xxxxxx | |
| Xxx Xxxx, XX 00000-0000 | ||
| Attention: Xxxxxx Xxxx | ||
| Telecopy: 000-000-0000 | ||
| With a copy to: | ||
| Xxxxxx & Xxxxxxx LLP | ||
| 000 Xxxxx Xxxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Attention: Xxxxxx Xxxxxxxxx | ||
| Telecopy: (000) 000-0000 |
(b) Any notice required to be given or delivered to the Company shall be sent to:
| Terremark Worldwide, Inc. | ||
| 0000 X. Xxxxxxxx Xxxxx |
0
| Xxxxx, Xxxxxxx 00000 | ||
| Attention: Xxxx Xxxxx, Chief Legal Officer | ||
| Telecopy: (000) 000-0000 |
(c) All notices hereunder shall be in writing and shall be deemed to have been given (i) when
delivered personally, (ii) when received via facsimile if on a business day during customary
business hours (otherwise, on the next business day), (iii) three (3) days after being deposited in
the United States mail, registered, postage prepaid, or (iv) the next business day after being
delivered to a nationally recognized overnight courier.
10. Survival of Representations and Warranties. All representations and warranties
and agreements hereunder shall survive execution of this Agreement.
11. Governing Law/Venue. This Agreement and the rights and obligations of the parties
shall be governed by and construed in accordance with the laws of the State of Florida applicable
to contracts made and to be performed wholly within that State. The Purchaser hereby irrevocably
consents to the non-exclusive jurisdiction of the state or federal courts located in Miami-Dade
County, Florida in connection with any suit, action, or other proceeding arising out of or related
to this Agreement and hereby agrees not to assert, by way of motion, as a defense, or otherwise in
any such suit
action or other proceeding that the same is brought in an inconvenient forum, that the venue
is improper, or that the subject matter hereof can not be enforced by such courts.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first set forth
above:
| COMPANY: | INVESTORS: | |||||||||
| TERREMARK WORLDWIDE, INC. | CREDIT SUISSE INTERNATIONAL | |||||||||
By:
|
/s/ Xxxx X. Xxxxxxx | By: | /s/ Xxxxxx Xxxxxxxx | |||||||
Print Name:
|
Xxxx X. Xxxxxxx | Name: | Xxxxxx Xxxxxxxx | |||||||
Title:
|
Chief Financial Officer | Title: | Managing Director | |||||||
| By: | /s/ Xxxxxx Xxxx | |||||||||
| Name: | Xxxxxx Xxxx | |||||||||
| Title: | Director | |||||||||
