EXHIBIT 10.37
AMENDMENT OF REGISTRATION RIGHTS AGREEMENT
(The Trust)
THIS AMENDMENT OF REGISTRATION RIGHTS AGREEMENT (this "Amendment") is
entered into as of the 18 day of March, 1999, by and among XXX-XXXX.xxx, INC., a
Delaware corporation (the "Company"), and XXXX XXXXX, as Trustee of that certain
D&K Grantor Retained Annuity Trust dated June 15, 1998 (the "Trust").
RECITALS:
A. The parties hereto and XXXXXX X. XXXXXXXX, a former director, officer,
and shareholder of the Company ("Borislow"), and XXXX XXXXXX, as Trustee of that
certain D&K Grantor Retained Annuity Trust II dated August 18, 1998 ("Trust II")
have entered into that certain Registration Rights Agreement dated as of
December 31, 1998 (the "Registration Rights Agreement").
B. The parties hereto, Borislow, and certain other parties have entered
into that certain Agreement dated March 15, 1999, pertaining, among other
things, to the modification of certain promissory notes issued by Communications
TeleSystems International, and it is a condition to that Agreement that the
parties hereto agree to enter into this Amendment.
C. The Company, Borislow, and Trust II have entered into a separate
Amendment of Registration Rights Agreement (Borislow and Trust II).
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Terms in this Agreement with initial capital letters and
not otherwise defined herein shall have the meanings defined for such terms in
the Registration Rights Agreement.
2. Amendment of Section 7(a) of the Registration Rights Agreement. Section
7(a) of the Registration Rights Agreement is hereby amended to read in full as
follows:
"(a) The Company agrees that in the event that it makes a public or
private offering of its debt securities in exchange for cash, to the
extent permitted by law the Company will, at the option of the Trust
(subject to the terms stated herein), utilize up to forty percent
(40%) of the net cash proceeds of that offering to the Company after
payment of the expenses relating to the offering that are to be borne
by the Company (the "Net Cash Proceeds") to repurchase at then fair
market value convertible subordinated notes of the Company then owned
of record
and beneficially by the Trust; provided, however, that the rights of
the Trust hereunder are subject and subordinate to the rights of
Borislow and Trust II under Section 2 of the Amendment of Registration
Rights Agreement (Borislow and Trust II), which Section 2 amends
Section 7(a) of the Registration Rights Agreement as to Borislow and
Trust II. To the extent that any Net Cash Proceeds remain after
Borislow's exercise or failure to exercise timely his option set forth
in Section 2 of the Amendment of Registration Rights Agreement
(Borislow and Trust II) and after Trust II's exercise or failure to
exercise timely its option set forth in Section 2 of the Amendment of
Registration Rights Agreement (Borislow and Trust II), the Trust may
exercise its rights under this Section 7(a) to the extent of such
remaining balance of Net Cash Proceeds. The Trust may exercise its
option set forth in this Section 7(a) by delivering notice to the
Company within five (5) days after the receipt by the Trust of written
notice from the Company, such notice to be sent by Registered or
Certified Mail with Return Receipt Requested, that the Company intends
to make a public or private offering of its debt securities in
exchange for cash. Notwithstanding the foregoing, this Section 7(a)
shall not apply to any debt offering by the Company to a bank or
financial institution or in a commercial context."
3. Amendment of Section 7(d) of the Registration Rights Agreement. Section
7(d) of the Registration Rights Agreement is hereby amended to read in full as
follows:
"(d) If, during the period commencing March 18, 1999, and ending on
the close of business on September 17, 2000 (the "Time Period"), the
Company shall sell any shares of its capital stock (including its
Common Stock) in connection with any employee benefit plan or
stockholder rights distribution, up to the entire proceeds from the
sale of shares in connection with such employee benefit plan or
stockholder rights distribution ("Sale Proceeds") during the Time
Period shall be used, at the Trust's option and if permitted by
applicable law and as provided in this Section 7(d), to purchase
Common Stock then owned by the Trust; provided, however, that the
rights of the Trust under this Section 7(d) are subject and
subordinate to the rights of Borislow under Section 3 of the Amendment
of Registration Rights Agreement (Borislow and Trust II), which
Section 3 amends Section 7(d) of the Registration Rights Agreement as
to Borislow. To the extent that any Sale Proceeds remain after
Borislow's exercise or failure to
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exercise timely his option set forth in Section 3 of the Amendment of
Registration Rights Agreement (Borislow and Trust II), the Trust may
exercise its rights under this Section 7(d).
"(i) The Trust may exercise its option by giving timely written
notice of such exercise to the Company. Such notice shall be timely if
it is received by the Company within five (5) days after the receipt
by the Trust of a written Quarterly Notice (hereinafter defined) sent
to the Trust by Registered or Certified Mail with Return Receipt
Requested.
"(ii) The Company agrees to give the Trust written notice within
five (5) calendar days following the end of each calendar quarter of
the amount of any Sale Proceeds as to which the option set forth in
this Section 7(d) shall remain unterminated at the time of such notice
and after Borislow's exercise or failure to exercise timely his option
in Section 3 of the Amendment of Registration Rights Agreement
(Borislow and Trust II), such notice to be sent by Registered or
Certified Mail with Return Receipt Requested (the "Quarterly Notice").
The Trust's option set forth in this Section 7(d) shall terminate as
to any Sale Proceeds as to which the Trust shall have failed to
exercise its option pursuant to a proper Quarterly Notice.
"(iii) The purchase price of any Common Stock purchased pursuant
to an option exercised in response to a Quarterly Notice shall be the
average of the daily closing prices (or of the closing bid and asked
prices) for the last ten (10) trading days of the calendar quarter
then most recently ended with respect to Common Stock that is listed
on a national securities exchange or traded on the over-the-counter
market or quoted on NASDAQ."
"(v) The valuation of the Common Stock and the closing of the
purchase and sale shall take place as expeditiously as practicable
after the exercise by the Trust of its option set forth in this
Section 7(d)."
4. Amendment of Section 7(e) of the Registration Rights Agreement. Section
7(e) of the Registration Rights Agreement is hereby amended to read in full as
follows:
"(e) The Company agrees to make available to the Trust, upon
reasonable written notice from Trust, in connection
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with one (1) securities offering to be made by the Trust on or prior
to June 30, 2000, the following Company employees to participate in a
standard securities offering "road show" of not longer than ten (10)
days' duration regarding that offering: the Chief Executive Officer of
the Company; and certain other appropriate employees of the Company as
designated by such Chief Executive Officer; provided, however, that
the rights of the Trust under this Section 7(e) are subject and
subordinate to the rights of Borislow under Section 4 of the Amendment
of Registration Rights Agreement (Borislow and Trust II), which
Section 4 amends Section 7(e) of the Registration Rights Agreement as
to Borislow, and the Trust's rights under this Section 7(e) are
subject to the condition precedent that Borislow waive in writing his
rights under Section 4 of the Amendment of Registration Rights
Agreement (Borislow and Trust II); and, provided further, that such
Borislow waiver shall not be a condition to the exercise by the Trust
of its rights under this Section 7(e) if, at the time the Trust
exercises such rights, Borislow does not own any shares of Common
Stock. The Company may delay such participation if the time of such
participation requested by the Trust would cause undue hardship on the
Company; in the event of such a delay, the June 30, 2000, date set
forth above in this Scetion 7(e) shall be extended by one day for each
day of such delay. The Company shall pay for the reasonable
out-of-pocket expenses incurred by the Company and its officers in
complying with this Section."
5. Miscellaneous.
(a) Each of the parties hereto represents and warrants to, and agrees
with, each of the other parties hereto that, at the date hereof: (i) such
representing and warranting party is not in default under the Registration
Rights Agreement; (b) such party has not suffered any damage under the
Registration Rights Agreement and has no cause of action, right of set-off or
counterclaim, or any other claim of any nature whatsoever against any of the
other parties hereto or any director, officer, attorney, agent, employee, or
affiliate of any of such other parties under the Registration Rights Agreement
or otherwise (collectively, "Claims"); and (c) such party hereby waives and
relinquishes any and all Claims. Each such party further hereby agrees to
indemnify and hold harmless each of the other parties and their respective
officers, directors, attorneys, agents, employees, and affiliates harmless from
any loss, damage, judgment, liability, and expense (including counsel fees)
suffered by or rendered against the other parties or any of them on account of
anything arising out of the Registration Rights Agreement, this Amendment, or
any other document delivered pursuant hereto.
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(b) Except as expressly modified by this Amendment, the Registration
Rights Agreement continues in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
day and year first above written.
Xxx-Xxxx.xxx, Inc.
Witness
By:
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Xxxxxxxx X. Lawn, Secretary Name:
Title:
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Address: The Trust
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Xxxx Xxxxx, as Trustee of that certain D&K
Grantor Retained Annuity Trust dated June 15,
1998
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