EXHIBIT 9.1
STOCKHOLDERS' AGREEMENT
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This Stockholders' Agreement (this "Agreement") is entered into as of
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December __, 1999 (the "Effective Date"), by and among Infonet Services
Corporation, a Delaware corporation ("INFONET"), each of the stockholders listed
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on the signature pages hereto, and each other entity which subsequent to the
date hereof becomes a holder of Class A Stock of INFONET and a party to this
Agreement (each stockholder and each entity which subsequent to the date hereof
becomes a holder of Class A Stock of INFONET are individually referred to as a
"Class A Stockholder" and collectively referred to as the "Class A
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Stockholders").
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RECITALS
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WHEREAS, the Stockholders own all of the outstanding Class A Stock of
INFONET;
WHEREAS, it is intended that the Class A Stockholders will, directly or
through their affiliates, be distributors or sales agents of INFONET's services;
WHEREAS, it is intended that the Class A Stockholders will utilize, on a
non-exclusive basis, the INFONET data communications network in providing
end-to-end supported international data communications services to their
respective customers;
WHEREAS, it is desirable to set forth certain understandings among the
parties with respect to their relative rights and obligations in connection with
the management of INFONET and the purchase and sale of shares of its Class A
stock; and
WHEREAS, the parties hereto intend that their activities as stockholders of
INFONET shall constitute commercial activities carried on in the United States.
AGREEMENT
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NOW THEREFORE, the parties agree as follows:
1. Directors. During the term of this Agreement, each of the Class A
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Stockholders shall vote all of the Class A Stock of INFONET held by it, and take
any and all other actions necessary, to ensure that the Board of Directors of
INFONET (the "Board of Directors") shall consist of a number of directors equal
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to the number of Class A Stockholders that hold at least 14,950,000 shares of
Class A Stock (appropriately adjusted for stock splits, consolidations and
similar changes in capital structure each, a "Recapitalization") plus three, but
in no event more than twelve. During the term of this Agreement, at any
election of directors (other than an election to fill a vacancy on the Board of
Directors due to removal or otherwise) each of the Class A Stockholders shall
vote all of the Class A Stock of INFONET held by it for the election of a slate
of directors which shall consist of the President of INFONET and one person
designated by each Class A Stockholder that holds at least 14,950,000 shares of
Class A Stock of INFONET (appropriately adjusted for any Recapitalization). The
maximum number of
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directors which may be designated by such Class A Stockholders (that is, the
directors other than the director which is the President of INFONET and other
than the two directors to be elected by the holders of Class B Stock) shall be
nine, with the right to designate such directors allocated to Class A
Stockholders on the basis of when each such Class A Stockholder first acquires
the requisite number of shares of Class A Stock of INFONET, unless otherwise
agreed in writing by all of the Class A Stockholders. For purposes of
determining the number of shares of Class A Stock of INFONET owned or held by
any Class A Stockholder, the holdings of all entities which are under "common
control" shall be aggregated and all such entities shall constitute a single
Class A Stockholder for purposes of this Agreement. For purposes of this
Agreement, one entity shall be under "common control" with another entity if
either entity owns, directly or indirectly, 90% of the capital stock (or other
equivalent interests) of the other entity or if 90% of the capital stock (or
other equivalent interests) of each such entity is owned, directly or
indirectly, by a third entity.
Upon written request by any Class A Stockholder, each of the Class A
Stockholders shall vote all of the Class A Stock of INFONET held by it in favor
of the removal from the Board of Directors of any person or persons designated
to the Board of Directors by the party making such request, and shall cause all
persons designated by it as directors to elect to the unexpired term of each
director so removed another person designated by the party making such request
as the replacement for the director so removed. No Class A Stockholder shall
vote any of the Class A Stock of INFONET held by it for the removal of any
director not designated by it unless so requested by the person designating such
director. Vacancies on the Board of Directors which occur other than by removal
shall be filled in a manner consistent with that set forth in the first sentence
of this paragraph.
2. Marketing and Support. Except as otherwise agreed by Infonet in its
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sole discretion, each Class A Stockholder shall establish, within six months of
the date upon which it becomes a Class A Stockholder, a local organization
suitable in structure and staffing (based upon the area and customer base to be
served) for the marketing and support of INFONET data communication services in
its respective home country. Each such marketing and support organization shall,
to the extent necessary to accomplish the objectives of this Section 2, contract
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directly with INFONET. Thereafter, each Class A Stockholder will utilize
INFONET on a non-exclusive basis in order to support, on an end-to-end basis,
users of its data communications services and will further utilize INFONET on a
non-exclusive basis in providing end-to-end supported international data
communications services to its customers.
3. Right of First Refusal.
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(a) Any sale, pledge, transfer or assignment or conversion of any of
the outstanding Class A Stock of INFONET (including, without limitation, any
proposed conversion into Class B Stock of Infonet pursuant to the registration
provisions of Section 4 of this Agreement or otherwise) (each, a "Transfer")
shall be subject to a right of first refusal of all then existing Class A
Stockholders in accordance with the terms of, and subject to the exceptions
set forth in, this Section 3. In the event any Class A Stockholder proposes to
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Transfer any of its Class A Stock of INFONET, any Class A Stock of INFONET
held by entities under "common control" or any interest therein to any entity
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not under "common control" with the transferring holder, such transferring
holder shall give advance written notice of such intention to all other Class
A Stockholders (such notice, a "Transfer Notice"). Each Transfer Notice in
respect of a proposed sale for cash shall set out, in detail all material
terms of the proposed transaction including, without limitation, the identity
of the proposed transferee, the proposed purchase price and the payment terms.
Any Transfer Notice in respect of a proposed Transfer other than a sale for
cash shall set forth: (a) the terms of the proposed Transfer (solely for
reference by the Class A Stockholders); and (b) the terms of an offer to sell
the Class A Stockholders for cash the Class A Stock proposed to be transferred
in the Transfer Notice (such offer, the "Equivalent Offer"). The per share
purchase price for any Equivalent Offer shall be equal to: (a) the average of
the per share closing prices of INFONET's listed Class B Stock on the New York
Stock Exchange (or on the Nasdaq National Market, if appropriate) for each day
in the 20 day trading period ending the day prior to the date the Transfer
Notice is delivered; or (b) if INFONET's Class B Stock is not listed on the
New York Stock Exchange or on the Nasdaq National Market for the 20 trading
day period prior to delivery of the Transfer Notice, a price to be negotiated
in good faith by the proposed transferor and the Class A Stockholders. In the
event any Holder intends to offer any options, rights, warrants or other
securities issued by it or any other person that are offered with, convertible
or exchangeable into, or exercisable for, Stock (as defined in Section 4) such
Holder shall deliver a Transfer Notice including an Equivalent Offer.
Each Transfer Notice shall constitute an irrevocable offer by the proposed
transferor to sell to each Class A Stockholder the shares of Class A Stock
proposed to be transferred on the terms of such proposed Transfer or, if
applicable, on the terms of the Equivalent Offer. The ability of the Class A
Stockholders to accept the offer set forth in any Transfer Notice shall expire
thirty (30) days after the date of delivery of such Transfer Notice, provided
that, in the case of a proposed conversion of Class A Stock into Class B Stock
in connection with the exercise of any Class A Stockholder's registration
rights as set forth in Section 4 or a proposed unilateral conversion of Class
A Stock into Class B Stock with or without a subsequent sale, the thirty-day
period shall be ten days. Any stockholder purchasing shares pursuant to its
exercise of a right of first refusal shall receive shares of Class A Stock.
The Class A Stockholders shall have the right to purchase all, but not less
than all, of the Class A Stock subject to the Transfer on the terms set forth
in the Transfer Notice. Each Class A Stockholder may exercise such right by
giving notice to the Seller, within thirty (30) days after the date of receipt
of the Transfer Notice (or ten days in the case of a proposed conversion of
Class A Stock into Class B Stock as described in the preceding paragraph), of:
(a) its intention to purchase all of the shares of Class A Stock offered for
sale in the Transfer Notice; and (b) the number of shares of Class A Stock
that such Class A Stockholder is electing to purchase on the terms set forth
in the Transfer Notice (the "Response Notice"). The Response Notice shall
constitute an irrevocable commitment by the Class A Stockholder to purchase
from the
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proposed transferor on the terms set forth in the Transfer Notice the number
of shares of Class A Stock specified in the Transfer Notice.
In the event more than one other Class A Stockholder indicates by a
Response Notice to the transferring holder its acceptance of the offer to sell
the shares of Class A Stock described in and on the terms of the Transfer
Notice, each such other Class A Stockholder shall purchase, unless otherwise
agreed between or among them, the portions of Class A Stock of INFONET to be
transferred in the same relative amounts as their existing holdings of Class A
Stock bear to each other. If no Class A Stockholder indicates by a Response
Notice its intention to exercise the right of first refusal provided herein
prior to the expiration of the offer set forth in the Transfer Notice as set
forth above or if the other Class A Stockholders waive their right of first
refusal hereunder prior to the expiration of such period, the transferring
Class A Stockholder shall be free to transfer its Class A Stock of INFONET to
the proposed transferee identified in the Transfer Notice or to convert its
Class A Shares, in each case in the amounts and on the terms specified in such
notice; provided, however, that in the case of any Transfer (i) such proposed
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transferee shall first be approved in writing by the holders of not less than
two-thirds of the outstanding shares of Class A Stock (including the
transferring Class A Stockholder), which approval shall not be unreasonably
withheld, and (ii) such Transfer shall be made within the next sixty days and
on the same terms as described in the Transfer Notice. For the avoidance of
doubt, (i) no Transfer of Class B Stock shall give rise to a right of first
refusal, (ii) no approval by the Class A Stockholders shall be required for
Transfers of Class B Stock and (iii) the right of first refusal set forth in
this Section 3 shall apply only to the number of shares of Class A Stock which
such transferring holder or entities under "common control" with it propose to
Transfer from time to time as accurately set forth in the written notice of
intention referred to above. An appropriate legend shall be placed on the
Class A Stock share certificates informing transferees of all of these
restrictions on transfer and no purported transfer in violation of this
Section 3 shall be valid or recorded on the books of INFONET.
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Notwithstanding anything herein to the contrary, the provisions of this
Section 3 shall not apply to any actual conversion of Class A Stock into Class
B Stock following a notice of proposed conversion of such Class A Stock
pursuant to the terms of this Agreement.
(b) For purposes of this Section 3, "Transfer" shall also include and
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apply to a Change of Control of any Class A Stockholder. "Change of Control"
shall mean (i) the sale of 50% or more of the then-outstanding common stock of
such Class A Stockholder to another corporation or entity, or a sale of
substantially all of the assets of such Class A Stockholder or any
reorganization, merger or consolidation of such Class A Stockholder with one
or more corporations, whether or not such Class A Stockholder is the surviving
corporation, if the shareholders of the Class A Stockholder immediately prior
to such sale or transaction do not own immediately after such sale or
transaction at least 50% of the Class A Stockholder's or surviving entity's
common stock, or (ii) where voting rights over more than 25% of a Class A
Stockholder's Class A Stock are acquired by another corporation or person by
contract (other than pursuant hereto) or by operation
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of law. Any Class A Stockholder which has undergone or is undergoing a Change
of Control shall deliver written notice of such Change of Control to INFONET
and each other Class A Stockholder as soon as practicable, but in no event
later than 30 days next following the effective date of such Change of
Control. Such notice shall give rise to the right of each other Class A
Stockholder to purchase the Class A Stock of INFONET held by the Class A
Stockholder giving such notice in accordance with the provisions of Section
3(a) (which provisions shall as nearly as may be possible apply to any Class A
Stockholder's exercise of its right to purchase the capital stock of INFONET).
In such case, the per share purchase price shall be equal to the average of
the per share closing prices of INFONET's listed Class B securities on the New
York Stock Exchange for the 20-trading-day period ending the day prior to the
effective date of such Change of Control. If INFONET's Class B Stock is not
listed on the New York Stock Exchange at such time, then the per share
purchase price shall be negotiated by the parties in good faith. For purposes
of this Section 3(b), a "Change of Control" shall not be deemed to have
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occurred solely due to the sale by a controlling shareholder ("original
controlling shareholder") of some or all of the equity securities in a Class A
Stockholder, whether in one or more installments or at one time or over
successive periods of time, by way of a broadly distributed offer or offers to
the public and where the Class A Stockholder becomes or remains a publicly-
listed company on a recognized stock exchange with its own board which is
independent or has a majority of directors appointed by the original
controlling shareholder.
4. Registration Rights. The parties hereto shall have the following
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rights with respect to the registration of Class B Stock:
(a) Piggyback Registrations. If INFONET at any time proposes to file
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a registration statement under the United States Securities Act of 1933, as
amended (the "Securities Act"), with respect to any of its capital stock,
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whether or not for sale for its own account, on a form and in a manner which
would permit registration of Class B Stock held by any Class A Stockholder,
including, without limitation, Class B Stock which any Class A Stockholder may
obtain by converting its Class A Stock as permitted by INFONET's restated
certificate of incorporation (such shares of capital stock are herein referred
to as the "Stock" and each of the Class A Stockholders are referred to as a
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"Holder" and collectively the "Holders") for sale to the public under the
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Securities Act, INFONET shall give written notice of the proposed registration
to each Holder not later than 30 days prior to the filing of any such
registration statement, it being understood that notice to the other Holders
of the exercise of any demand registration right pursuant to Section 4(b) will
constitute notice hereunder. Each Holder shall have the right to request that
all or any part of its Stock be included in such registration statement by
giving written notice to INFONET within 20 days after the giving of notice by
INFONET (any Holder giving INFONET such notice requesting that shares of Stock
owned by it be included in such proposed registration is hereinafter referred
to as a "Piggybacking Holder"); provided, however, that (i) if the
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registration statement relates to an underwritten primary offering on behalf
of INFONET and the prospective underwriters of such offering determine in good
faith that the aggregate number of shares of capital stock of INFONET which
all Piggybacking Holders and INFONET propose to include in such registration
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statement exceeds the number of shares of capital stock of INFONET that should
be included therein, INFONET will include in such registration, first, the
capital stock which INFONET proposes to sell and, second, the Stock of such
Piggybacking Holders, pro rata among all such Piggybacking Holders, on the
basis of the relative amounts of Stock owned by all Piggybacking Holders (it
being agreed and understood, however, that such underwriters shall have the
right to eliminate entirely the participation in such registration of all
Piggybacking Holders), and (ii) if the registration statement relates to an
underwritten secondary offering on behalf of any other holder of capital stock
of INFONET and the prospective underwriters determine in good faith that the
aggregate amount of securities which all Piggybacking Holders and all such
other holders propose to include in such registration exceeds the maximum
amount of securities that should be included therein, INFONET will include in
such registration the shares of Stock to be sold for the account of such other
holders demanding registration and the shares of Stock of such Piggybacking
Holders, pro rata among all such holders and Piggybacking Holders, on the
basis of the relative amount of capital stock owned by all such holders and
Piggybacking Holders. Shares of Stock proposed to be registered and sold
pursuant to an underwritten offering for the account of any Piggybacking
Holder pursuant to this Section 4(a) shall be sold to prospective underwriters
selected or approved by INFONET and on the terms and subject to the conditions
of one or more underwriting agreements negotiated among INFONET, the
Piggybacking Holders and the prospective underwriters. INFONET may withdraw
any registration statement at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Holder, provided that it shall give written notice of any such determination
to the Piggybacking Holders. Any such withdrawal or postponing shall be
without prejudice to the rights of the Holders immediately to request that
such registration be effected as a registration under Section 4(b) to the
extent permitted thereunder.
No registration of securities effected under this Section 4(a) shall relieve
INFONET of its obligation to effect a registration of securities pursuant to
Section 4(b).
(b) Demand Registration. Subject to the limitations set forth in this
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Section 4(b), each Class A Stockholder (including all entities under "common
control," an "Initiating Holder" and together with the Piggyback Holders, a
"Registering Holder") shall have the right, which shall be exercisable twice,
subject to the last sentence of this paragraph, to cause INFONET to use its
commercially reasonable efforts to file and cause to be declared effective as
soon as practicable a registration statement on any appropriate form under the
Securities Act for the Stock which form shall be available for the sale or
distribution referred to in such notice in accordance with the intended method
or methods of distribution thereof. INFONET shall use its commercially
reasonable efforts to (i) file such registration statement as soon as
practicable after the receipt of such request and in any event within 35 days,
which time period may be extended for up to 60 days at the option of INFONET,
but not more than once in any 12 month period, if INFONET's management
determines based upon the advice of counsel that it would be advisable to
disclose in the registration statement a financing, acquisition or other
corporate transaction or event, and a majority of the members of the Board of
Directors other than the directors appointed by the Initiating Holders shall
have determined in good faith that
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such disclosure would not be in the best interests of INFONET
and its stockholders and (ii) use its commercially reasonable efforts to
have the registration statement declared effective as soon as practicable
thereafter. As promptly as practicable after receiving such request and in
any event no later than 5 days thereafter, INFONET shall give written
notice thereof to all Holders other than the Initiating Holder and each
such other Holder shall, by notice to INFONET given within 20 days after
the giving of notice by INFONET, be entitled to have any Stock which it
then proposes to sell or distribute included under such registration
statement as if it were an Initiating Holder. The Initiating Holder shall
have the right to cause INFONET to file additional registration statements
at any time (if otherwise permitted hereunder) with respect to Stock owned
by such Initiating Holder in the event (i) the first (or any subsequent)
registration statement filed at the request of such Initiating Holder is
not declared effective by the Securities and Exchange Commission (the
"Commission") within 60 days of its initial filing therewith and such
registration statement is withdrawn after such 60th day, or (ii) all Stock
owned by such Initiating Holder which it requests be included in such
registration statement is not included due to the restrictions set forth in
this Section 4, (iii) any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court
prevents the complete distribution of the Stock of the Initiating Holder
included in such registration statement in accordance with the plan of
distribution set forth therein, or (iv) the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived other than by
reason of some act or omission by such Initiating Holder.
INFONET shall not be obligated pursuant to this Section 4(b) to file
and have declared effective (i) more than one registration statement during
the period between the Effective Date and the first anniversary of the
Effective Date, inclusive, (ii) more than two registration statements
during any consecutive 12-month period after the first anniversary of the
Effective Date and (iii) any registration statement which does not cover at
least five percent (5%) of the total shares of capital stock outstanding as
of the closing of INFONET's initial public offering.
Shares of Stock proposed to be registered and sold pursuant to an
underwritten offering for the account of the Initiating Holders pursuant to
this Section 4 (b) shall be sold to prospective underwriters designated by
the Initiating Holders and reasonably satisfactory to Infonet and any
Piggybacking Holders and on the terms and subject to the conditions of one
or more underwriting agreements negotiated among INFONET, the Registering
Holders and the prospective underwriters.
INFONET may include in any such registration statement other shares of
capital stock of INFONET; provided, however, that (i) if such registration
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statement relates to an underwritten offering and the prospective
underwriters of such offering determine in good faith that the aggregate
number of shares of capital stock of INFONET which all Holders and INFONET
propose to include in such registration statement exceeds the maximum
number of shares of capital stock that should be included therein, INFONET
will include in such registration, first, the Stock of the Initiating
Holders participating in the offering pro rata among such Initiating
Holders on the basis of the
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relative amount of Stock owned by all such Initiating Holders, second the
Stock of any Piggybacking Holders participating in the offering pursuant to
Section 4(a) pro rata among such Holders on the basis of the relative
amount of Stock owned by all such Piggybacking Holders, and, third, the
shares of capital stock which INFONET proposes to include in such
registration statement, and (ii) if such offering is not underwritten, then
no other shares of capital stock of INFONET shall be included in such
registration statement unless the holders of a majority of the shares of
Stock held by the Holders participating in the offering consent to the
inclusion of such shares therein (which consent shall not be unreasonably
withheld).
INFONET shall not be required to effect a registration pursuant to
this Section 4(b) (other than on Form S-3 or a similar short form, if then
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permitted) until a period of 90 days has elapsed from the effective date of
the most recent previous registration which was not effected on Form S-3 or
similar short form, except in the case of a registration in which any
Holders shall have been prevented from including in such previous
registration more than 25% of the amount of Stock which such Holders
requested to have included because of a reduction required hereunder, in
which case such period shall be 45 days. The right of the Initiating
Holders to request a registration of Stock pursuant to this Section 4(b)
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shall not apply to any Holder to whom INFONET shall deliver an opinion of
its counsel, which opinion shall be reasonably satisfactory to such Holder,
that all of the Stock which such Holder proposes to sell may lawfully be
sold or distributed publicly without registration within a period of 90
days commencing on the date which is 45 days after the date of such
Holder's registration request.
Each Registering Holder agrees that, upon receipt of any notice from
INFONET of the happening of any event requiring the preparation of a
supplement or amendment to a prospectus prepared pursuant to this Section 4
so that, as thereafter delivered to the purchasers of such Stock, such
prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, such Registering Holder will
forthwith discontinue disposition of Stock pursuant to the registration
statement covering such Stock until such Registering Holder's receipt of
the copies of the supplemented or amended prospectus contemplated hereby.
If so directed by INFONET, such Registering Holder will deliver to INFONET
all copies, other than permanent file copies then in such Registering
Holder's possession, of the most recent prospectus covering such Stock at
the time of receipt of such notice. Each Registering Holder of Stock agrees
that it will immediately notify INFONET at any time when a prospectus
relating to the registration of such Stock is required to be delivered
under the Securities Act of the happening of any event as a result of which
information previously furnished by such Registering Holder to INFONET in
writing for inclusion in such prospectus contains an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances in which they were made. In the event INFONET shall
give such notice, INFONET shall extend the period during which such
registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of notice
pursuant to this paragraph to
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the date when INFONET shall make available to the Registering Holders of
Stock covered by such registration statement a prospectus supplement
amended to conform with the requirements hereof.
(c) Holdback Agreements. Notwithstanding any other provision of
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this Section 4, each Registering Holder agrees that it will not (and it
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shall be a condition to the rights of each such Holder under this Section 4
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that such Holder does not) offer for public sale any Stock for such period
following the effective date of the registration statement as INFONET and
the Registering Holders may agree with the underwriters in a written
agreement in connection with an underwritten public offering, unless such
Stock is covered by such registration statement or a separate effective
registration statement.
Notwithstanding any other provision of this Section 4, INFONET agrees
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that it will not and it will cause its affiliates (other than the Class A
Holders) not to effect any public or private sale or distribution of its
capital stock including a sale pursuant to Regulation D or Rule 144 or Rule
144A under the Securities Act during the ten days prior to and the 90 days
after the effective date of any such registration statement (or the
commencement of the public offering in the case of Rule 415 offerings) in
connection with an underwritten offering, to the extent timely requested by
the prospective underwriters (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or S-8 or any
successor form to such forms).
(d) Exchangeable Securities, etc. In the event any Registering
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Holder offers any options, rights, warrants or other securities issued by
it or any other person that are offered with, convertible or exchangeable
into or exercisable for any Stock, the Stock underlying such options,
rights warrants or other securities shall continue to be eligible for
registration pursuant to Sections 4(a) and 4(b) hereof; provided that, at
any time during which INFONET is eligible to use a Form S-3 or a similar
short form, if then permitted), INFONET shall file a shelf registration
statement in respect of such Stock which it shall keep continuously
effective, so as to permit, subject to such exceptions as are customary and
reasonably agreed to by such Holders, the sale on a registered basis of the
Class B Stock at the time the options, rights, warrants or other securities
are converted into or exercised for Class B Stock.
(e) Expenses. All Registration Expenses (as defined below) in
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connection with any registration under this Section 4 shall be borne by
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INFONET. Registration Expenses shall include all expenses, disbursements
and fees incident to INFONET's performance of, or compliance with this
Agreement, including, without limitation:
(1) all expenses in connection with the preparation of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto;
(2) all registration and filing fees (including with respect to
filings required to be made with the National Association of Securities
Dealers) and all fees and expenses incurred in connection with the listing
of the Stock on each securities exchange
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on which similar securities issued by INFONET are then listed;
(3) fees and expenses of compliance with securities or blue sky
laws of or within the United States of American (including reasonable fees
and disbursements of counsel for the underwriters or Registering Holders in
connection with blue sky qualifications of the Stock and determination of
their eligibility for investment under the laws of such jurisdictions as
the managing underwriters or the Registering Holders may reasonably
designate);
(4) printing, messenger, telephone and delivery expenses,
including the cost of mailing and delivery of copies of any documents
mentioned in (i) above to the underwriters or dealers;
(5) fees and disbursements of counsel for INFONET and reasonable
fees and disbursements for one common counsel for the Registering Holders;
(6) fees and disbursements of all independent certified public
accountants of INFONET (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance);
(7) fees and disbursements of underwriters (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or
similar securities industry professional relating to the distribution of
the Stock) to the extent set forth in the underwriting agreement (into
which underwriting agreement INFONET agrees to enter upon customary terms
and conditions); and
(8) out-of-pocket expenses incurred by INFONET's offering
participants and INFONET's advisors in connection with any "road show".
INFONET shall also pay all transfer taxes with respect to the Stock sold by
each such Holder.
(f) Registration Procedures. In connection with any
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registration of shares of Stock under the Securities Act pursuant to this
Agreement, (i) any shares of Stock which are to be sold must be converted
by the Holder thereof prior to such sale into shares of Class B Stock, and,
notwithstanding anything else contained herein, no Holder shall have any
right to have any Class A Stock registered, and (ii) INFONET will furnish
each Holder whose Stock is registered thereunder and each prospective
underwriter, if any, with a copy of the registration statement and all
amendments thereto and will supply each such Holder and each such
underwriter, if any, with copies of any prospectus included therein
(including any preliminary prospectus and all amendments and supplements
thereto) in such quantities as may be reasonably necessary for the purposes
of the proposed sale or distribution covered by such registration. INFONET
shall not, however, subject to Section 4(b) above, be required to maintain
the registration statement and to supply copies of a prospectus for a
period beyond 90 days after the effective date of such registration
statement and, at the end of such period, INFONET may deregister
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any Stock covered by such registration statement not then sold or
distributed.
In connection with INFONET's registration obligations pursuant to
this Section 4, INFONET will use its best efforts to effect such
---------
registrations to permit the sale of such Stock in accordance with the
intended method or methods of disposition thereof, and pursuant thereto
INFONET will as expeditiously as possible:
(i) prepare and file with the Commission, as soon as
practicable a registration statement or registration statements on any
appropriate form under the Securities Act (a "Registration
------------
Statement"), which form shall be available for the sale of the Stock
---------
in accordance with the intended method or methods of distribution
thereof, and use its best efforts to cause such Registration Statement
to become effective; provided that before filing a Registration
--------
Statement or any prospectus related thereto (a "Prospectus") or any
----------
amendments or supplements thereto, including documents incorporated by
reference after the initial filing of any Registration Statement,
INFONET will furnish to the Holders of the Stock covered by such
Registration Statement and the prospective underwriters, if any,
copies of all such documents proposed to be filed, which documents
will be subject to the review of such Holders and such underwriters.
If the Holders of a majority in interest of the Stock covered by such
Registration Statement shall reasonably object to any disclosure in
any Registration Statement or any amendment thereto or any Prospectus
or any supplement thereto (including documents incorporated by
reference) which INFONET in good faith on the advice of counsel
believes is necessary or appropriate to be included therein, and prior
to the effectiveness of such Registration Statement advises INFONET
that they choose not to participate in such offering, the Holders may
choose not to participate in such offering. For the purposes of this
paragraph (i) such Holders and such underwriters shall be deemed to
-------------
have no objections if INFONET has not received notice from any such
Holder or underwriter within five business days after delivery of such
documents to such Holders and underwriters. For the purposes of this
paragraph (i), objections to information specifically required to be
-------------
included in the Registration Statement by the Commission or pursuant
to statute or rules shall not be deemed to be reasonable;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to a Registration Statement as may be
necessary to keep such Registration Statement continuously effective
and to comply with the provisions of the Securities Act with respect
to the disposition of all capital stock of INFONET covered by such
Registration Statement by such legislation statement for 90 days
(subject to Section 4(b) above), or until such earlier time as all of
the Stock registered thereon has been sold; cause the related
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act with respect to the disposition of all capital stock of
INFONET covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement;
11
(iii) notify the selling Holders and the prospective
underwriters, if any, promptly, and (if requested by any such person)
confirm such advice in writing, (1) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request by
the Commission for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (3) of
the issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (4) if at any time the representations
and warranties of INFONET contemplated by paragraph (xiv) below cease
---------------
to be true and correct, (5) of the receipt by INFONET of any
notification with respect to the suspension of the qualification of
any of the Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (6) of the
existence of any fact which results in a Registration Statement, a
Prospectus or Prospectus supplement or any document incorporated
therein by reference containing an untrue statement of a material fact
or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iv) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement
at the earliest possible moment;
(v) if requested by the prospective underwriters or a
selling Holder, immediately incorporate in a Prospectus supplement or
post-effective amendment such information as the prospective
underwriters or the holders of a majority of the Stock being sold by
Holders agree should be included therein relating to the sale of such
Stock, including without limitation, information with respect to the
amount of Stock being sold to such underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other
terms of the underwritten (or best efforts underwritten) offering of
the Stock to be sold in such offering; and make all required filings
of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(vi) furnish to such selling Holder and each prospective
underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(vii) deliver to such selling Holder and the prospective
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) and any amendment or
supplement thereto as such persons may reasonably request; INFONET
hereby consents to the use of the
12
Prospectus or any amendment or supplement thereto by each of the
selling Holders and the prospective underwriters, if any, in
connection with the offering and sale of the Stock covered by such
Prospectus or any amendment or supplement thereto;
(viii) prior to any public offering of Stock, register or
qualify or cooperate with the selling Holders, the prospective
underwriters, if any, and their respective counsel in connection with
the registration or qualification of such Stock for offer and sale
under the securities or "blue sky" laws or such jurisdictions within
the United States as any Holder or prospective underwriter reasonably
requests in writing and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Stock covered by the Registration Statement; provided that INFONET
--------
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 in any such
jurisdiction where it is not then so subject;
(ix) cooperate with the selling Holders and the prospective
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing shares of Stock to be sold and
not bearing any restrictive legends; and enable such shares of Stock
to be in such denominations and registered in such names as the
prospective underwriters may request at least two business days prior
to any sale of Stock to the prospective underwriters;
(x) use its best efforts to cause the Stock covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may
be necessary to enable the Holders or the prospective underwriters, if
any, to consummate the disposition of such Stock;
(xi) if any fact contemplated by paragraph (iii)(6) above
------------------
shall exist, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Stock being
sold thereunder, such Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to
make the statements therein not misleading;
(xii) cause all Stock covered by any Registration Statement
to be listed on each securities exchange on which similar securities
issued by INFONET are then listed if requested by the Holders of a
majority of the shares of Stock or the prospective underwriters, if
any;
(xiii) provide a CUSIP number for all shares of Stock, not
later than the effective date of the Registration Statement;
13
(xiv) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of such Stock and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten
registration: (1) make such representations and warranties to the
Holders and the prospective underwriters, if any, in form, substance
and scope as are customarily made by issuers to underwriters in
primary underwritten offerings; (2) obtain opinions of counsel to
INFONET and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the
prospective underwriters, if any, and the Holders holding a majority
of the Stock being sold) addressed to each selling Holder and the
prospective underwriters, if any, covering the matters customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Holders and
underwriters; (3) obtain "cold comfort" letters and updates thereof
from INFONET's independent certified public accountants, addressed to
the selling Holders and the prospective underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in
connection with primary underwritten offerings; (4) if an underwriting
agreement is entered into, the same shall set forth in full the
indemnification provisions and procedures of Section 4(g) hereof with
------------
respect to all parties to be indemnified pursuant to said section; and
(5) INFONET shall deliver such documents and certificates as may be
requested by the Holders holding a majority of the Stock being sold
and the prospective underwriters, if any, to evidence compliance with
clause (1) above and with any customary conditions contained in the
----------
underwriting agreement or other agreement entered into by INFONET.
The above shall be done at each closing under such underwriting or
similar agreement or as and to the extent required thereunder;
(xv) make available for inspection by a representative of
the Holders of a majority of the shares of Stock being sold, any
prospective underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney or accountant retained by
such selling Holders or underwriter, all financial and other records,
pertinent corporate documents and properties of INFONET, and cause
INFONET's officers, directors and employees to supply all information
reasonably requested by such representative, underwriter, attorney or
accountant in connection with such Registration Statement; provided
--------
that any records, information or documents that are designated by
INFONET in writing as confidential shall be kept confidential by such
persons unless disclosure of such records, information or documents is
required by court or administrative order; and
(xvi) send appropriate officers, after consultation with
the Registering Holders and, in the case of an underwritten offering,
the managing underwriters, to attend a reasonable number of "road
show" and analyst presentations scheduled in connection with any such
registration, with all out-of-
14
pocket costs and expenses incurred by INFONET or such officers in
connection with such attendance to be paid by INFONET in accordance
with Section 4(d) above.
(xvii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to the holders of capital stock of INFONET earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of any 12-month
period (or 90 days, if such period is a fiscal year) (1) commencing at
the end of any fiscal quarter in which Stock is sold to underwriters
in an underwritten offering, or, if not sold to underwriters in such
an offering, (2) beginning with the first month of INFONET's first
fiscal quarter commencing after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(g) Conditions to Holders' Rights; Indemnification by Holders.
---------------------------------------------------------
It shall be a condition of each Holder's rights hereunder to have Stock
owned by it registered that:
(i) such Holder shall cooperate with INFONET by supplying
information and executing documents relating to such Holder or the
securities of INFONET owned by such Holder in connection with such
registration;
(ii) such Holder shall enter into such undertakings and take
such other action relating to the conduct of the proposed offering
which INFONET or the prospective underwriters may reasonably request
as being necessary to insure compliance with federal and state
securities laws and the rules or other requirements of the National
Association of Securities Dealers, Inc. or otherwise to effectuate the
offering; and
(iii) such Holder shall execute and deliver an agreement to
indemnify and hold harmless INFONET, each of its directors, each of
its officers who has signed the Registration Statement, any
underwriter (as defined in the Securities Act), and each person, if
any, who controls INFONET or such underwriter within the meaning of
the Securities Act, against such losses, claims, damages or
liabilities (including reimbursement for legal and other expenses) to
which INFONET or any such director, officer, underwriter or
controlling person may become subject under the Securities Act or
otherwise, in such manner as is customary for registrations of the
type then proposed and, in any event, at least equivalent in scope to
indemnities given by INFONET in connection with such registration, but
only with respect to information furnished by such Holder in writing
expressly for use in the Registration Statement or prospectus in
connection with such registration.
(h) Indemnification by INFONET. In the event of any registration
--------------------------
under the Securities Act of any Stock either pursuant to this Section 4, or in
---------
connection with the
15
initial public offering of shares of Class B Stock of INFONET pursuant to the
registration statement on Form S-1 initially filed with the Commission on
October 12, 1999, INFONET hereby agrees to indemnify and hold harmless each
Holder disposing of such Stock in connection with such disposition and any
prospective underwriters in connection with an underwritten offering to the
extent set forth in the underwriting agreement (into which underwriting
agreement INFONET agrees to enter upon customary terms and conditions) against
such losses, claims, damages or liabilities (including reimbursement for legal
and other expenses as they are incurred) to which such Holder or underwriter may
become subject under the Securities Act or otherwise insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of material fact contained in any
registration statement or any amendment thereof, any preliminary prospectus or
prospectus (as amended or supplemented) relating to the Stock, or arise out of
or are based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, that INFONET shall not be liable to any Holder in any
such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment or supplement thereto or in any
such preliminary, final or summary prospectus in reliance upon and in conformity
with written information with respect to any Holder furnished to INFONET by such
Holder for use in the preparation thereof. The indemnity agreements contained in
this Section 4(h) shall not apply to amounts paid in settlement of claims if
such settlement is effectuated without the consent of INFONET (which shall not
be unreasonably withheld).
5. Future Class A Stockholders. Each Class A Stockholder agrees that
---------------------------
each person who acquires shares of Class A Stock of INFONET during the term of
this Agreement, whether such shares are acquired from INFONET or a Class A
Stockholder, shall be required to execute a counterpart of this Agreement, and
any such transfer of any Class A Stock of INFONET to any person who does not
execute a counterpart of this Agreement shall not be effective. Upon executing
such counterpart, each such person shall become a "Class A Stockholder"
hereunder.
6. Assignment of Rights. Neither this Agreement nor any rights hereunder
--------------------
may be assigned or transferred, except in conjunction with a transfer of a Class
A Stockholder's interest in its shares of Class A Stock of INFONET in accordance
with the terms of this Agreement.
7. Term; Termination. Each party to this Agreement (including subsequent
-----------------
Class A Stockholders) shall remain bound by this Agreement for so long as it
owns any shares of Class A Stock of INFONET. This Agreement shall remain in
effect for the maximum duration permitted by applicable law and for so long as
there is more than one holder of Class A Stock of INFONET.
8. Entire Agreement; Amendments and Waivers. This Agreement constitutes
----------------------------------------
the entire agreement among the Class A Stockholders pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or
16
written, of the parties hereto. This Agreement may be amended only in a writing
signed by each of the Class A Stockholders and INFONET. No waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
9. Headings. The headings of the paragraphs and sections herein are
--------
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
10. Notices. Unless otherwise provided herein, any notice, request,
-------
instruction or other document to be given hereunder by any party to the others
shall be in writing and shall be deemed to be given and effective (i) upon
delivery if delivered in person or by courier, (ii) when sent by electronic
transmission (telegraph, telex, telecopy or facsimile transmission), receipt
confirmed, (iii) five days after being sent by airmail, postage prepaid or (iv)
when receipt is acknowledged if mailed by certified mail, postage prepaid,
return receipt requested, in each case to the address of record for each Class A
Stockholder as shown in the records of INFONET.
11. Choice of Law. This Agreement shall be construed, interpreted and
-------------
the rights of the parties determined in accordance with the laws of the State of
Delaware.
12. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be resolved by final and binding
arbitration conducted in Los Angeles, California, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in
effect (the "AAA Rules"). Any such arbitration shall be conducted by one
---------
neutral arbitrator selected by the parties to such dispute. If such parties
cannot agree on an arbitrator within 30 days after any of such parties notifies
the other such parties of its election to arbitrate, then within 5 days after
such 30-day period, each such party shall select an arbitrator and, within 10
days after such 5-day period, all of such arbitrators shall select one neutral
arbitrator. If such arbitrators are not able to so agree on the selection of a
neutral arbitrator, then one neutral arbitrator shall be selected in accordance
with the AAA Rules. Any award issued as a result of such arbitration shall be
final and binding between the parties thereto, and shall be enforceable by any
court having jurisdiction over the party against whom enforcement is sought.
The fees and expenses of such arbitration shall be shared equally by the parties
thereto, provided, that each party thereto shall bear the costs of its own
--------
lawyers, accountants, experts, etc. Notwithstanding the foregoing, any
preliminary legal proceedings (including attachment) may be brought in any court
of competent jurisdiction in any jurisdiction in which either party has a legal
presence.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Invalidity. In the event that any one or more of the provisions
----------
contained in
17
this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
INFONET SERVICES CORPORATION, a Delaware corporation
By:________________________________________________________
Xxxx X. Xxxxxxx
Chairman of the Board and President
TELEFONICA INTERNATIONAL HOLDING B.V.
By:________________________________________________________
Name:
Title:
TELSTRA CORPORATION LIMITED
By:________________________________________________________
Name:
Title:
SWISSCOM AG
By:________________________________________________________
Name:
Title:
18
KPN ROYAL DUTCH TELECOM
By:________________________________________________________
Name:
Title:
TELIA AB
By:________________________________________________________
Name:
Title:
KDD CORPORATION
By:________________________________________________________
Name:
Title:
19
