REGISTRATION RIGHTS AGREEMENT
by and among
WORLDWIDE FIBER INC.,
DWF SRL,
GSCP3 WWF (BARBADOS) SRL,
WWF (BARBADOS) SRL,
PROVIDENCE EQUITY FIBER, L.P.,
and
TYCO GROUP S.A.R.L.
Dated as of September 9, 1999
TABLE OF CONTENTS
Page
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1. Certain Definitions.......................................................1
1.1. "Affiliate"......................................................1
1.2. "Canadian Prospectus"............................................1
1.3. "Canadian Securities Laws".......................................2
1.4. "Commission" or "SEC"............................................2
1.5. "Common Shares"..................................................2
1.6. "Common Share Equivalents".......................................2
1.7. "Dollars"........................................................2
1.8. "Exchange Act"...................................................2
1.9. "Holder" or "Holders"............................................2
1.10. "IPO"............................................................2
1.11. "Person".........................................................2
1.12. "Preferred Shares"...............................................3
1.13. "Register" "Registered" and "Registration".......................3
1.14. "Registrable Securities".........................................3
2. Registration Rights.......................................................4
2.1. Demand Registrations.............................................4
2.2. Piggyback Registrations..........................................6
2.3. Allocation of Securities Included in Registration Statement......7
2.4. Registration Procedures.........................................10
2.5. Registration Expenses...........................................15
2.6. Certain Limitations on Registration Rights......................16
2.7. Limitations on Sale or Distribution of Other Securities.........17
2.8. No Required Sale................................................17
2.9. Indemnification for Registrations...............................17
3. Underwritten Offerings...................................................21
3.1. Requested Underwritten Offerings................................21
3.2. Piggyback Underwritten Offerings................................22
3.3. Underwriting Services...........................................22
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Page
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4. General..................................................................22
4.1. Adjustments Affecting Registrable Securities....................22
4.2. Rule 144........................................................23
4.3. Nominees for Beneficial Owners..................................23
4.4. Amendments......................................................23
4.5. Notices.........................................................23
4.6. Miscellaneous...................................................26
4.7. Prior Agreements................................................28
4.8. No Inconsistent Agreements......................................28
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September 9, 1999 (this
"Agreement"), by and among WORLDWIDE FIBER INC., a corporation incorporated
under the laws of Canada (the "Corporation"), DWF SRL, a Barbados company
("DLJ"), GSCP3 WWF (BARBADOS) SRL, a Barbados company, WWF (BARBADOS) SRL, a
Barbados company (collectively, the "GSCP Parties"), PROVIDENCE EQUITY FIBER,
L.P., a Delaware limited partnership, ("Providence"), and TYCO GROUP S.A.R.L., a
Luxembourg corporation ("Tyco") (each individually an "Investor", collectively
with DLJ, the GSCP Parties, and Providence, the "Investors").
W I T N E S S E T H:
WHEREAS, the Corporation and the Investors are parties to that certain
Preferred Share Purchase Agreement, dated as of September 7, 1999 (as amended
from time to time, the "Purchase Agreement"), pursuant to which the Corporation
has issued to the Investors, and the Investors have purchased from the
Corporation, shares of a newly created series of First Preference Shares (the
"Preferred Shares");
WHEREAS, the Corporation, the Investors, Worldwide Fiber Holdings Ltd., and
certain other parties named therein have entered into a Shareholders Agreement,
dated as of September 9, 1999 (as amended from time to time, the "Shareholders
Agreement"); and
WHEREAS, in connection with (i) the Corporation and the Investors entering
into the Purchase Agreement, and (ii) the Corporation, the Investors and the
parties entering into the Shareholders Agreement, the Corporation has agreed to
provide the registration rights set forth in this Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. Certain Definitions. (a) As used in this Agreement, the following terms
shall have the meanings assigned to them below:
1.1. "Affiliate" shall mean with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person.
1.2. "Canadian Prospectus" shall mean a prospectus prepared in accordance
with applicable Canadian Securities Laws for the purposes of qualifying
securities for distribution or distribution to the public, as the case may be,
in any province or territory of Canada.
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1.3. "Canadian Securities Laws" shall mean the statutes and regulations
applicable to the trading of securities in any province or territory of Canada
including applicable rules, policy statements and blanket rulings and orders
promulgated by Canadian securities regulatory authorities.
1.4. "Commission" or "SEC" shall mean the United States Securities and
Exchange Commission.
1.5. "Common Shares" shall mean the Class A Common Non-Voting Shares, Class
B Common Voting Shares, and Class S Common Super Voting Shares of the
Corporation, whether now or hereafter authorized, and any shares into which such
Common Shares may be exchanged.
1.6. "Common Share Equivalents" shall mean all options, warrants and other
securities convertible into, or exchangeable or exercisable for, at any time or
upon the occurrence of any event or contingency and without regard to any
vesting or other conditions to which such securities may be subject, Common
Shares.
1.7. "Dollars" and the symbols "$" or "US$" shall mean, unless otherwise
indicated, U.S. dollars, and the symbol "C$" shall mean Canadian dollars.
1.8. "Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended.
1.9. "Holder" or "Holders" shall mean any party who is a signatory to this
Agreement and any party who shall hereafter acquire and hold Registrable
Securities.
1.10. "IPO" shall mean the initial underwritten public offering of Common
Shares, Common Share Equivalents or other capital stock pursuant to (i) a
Canadian Prospectus (for which receipts have been obtained) under Canadian
Securities Laws or (ii) an effective registration statement filed under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act,"
collectively with the Canadian Securities Laws, the "Securities Laws").
1.11. "Person" shall mean any natural person, corporation, partnership,
limited liability company, firm, association, trust, government, governmental
agency or other entity, whether acting in an individual, fiduciary or other
capacity.
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1.12. "Preferred Shares" shall mean the Series A Non-Voting Preferred
Shares and Series B Voting Preferred Shares of the Corporation.
1.13. "Register" "Registered" and "Registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the U.S. Securities Act and the declaration or ordering of the
effectiveness of such registration statement. In addition, unless inconsistent
with the context: (i) the term "registration" and any references to the act of
registering include the qualification of a distribution or a distribution to the
public, as the case may be, of securities pursuant to a Canadian Prospectus
which has been filed and for which a receipt has been obtained under Canadian
Securities Laws; (ii) the term "registered" as applied to any securities
includes a distribution or distribution to the public, as the case may be, of
securities so qualified; (iii) the term "registration statement" includes a
Canadian Prospectus referred to in Section 1.13(i) above; (iv) any references to
a registration statement having become effective, or similar references, shall
include a Canadian Prospectus for which a final receipt has been obtained from
the relevant Canadian securities regulatory authorities; and (v) the provisions
of this Agreement shall be applied, mutatis mutandis, to any proposed
distribution of securities hereunder in any province or territory of Canada.
1.14. "Registrable Securities" shall mean (i) any Common Shares held as of
the date hereof by the Investors or hereafter acquired by any of the Investors
or their Investor Affiliates (as defined in the Shareholders Agreement); (ii)
any Common Shares issued or issuable, upon the conversion of the Preferred
Shares or the conversion, exercise or exchange of any other Common Share
Equivalents held as of the date hereof by any Investors or hereafter acquired by
any of the Investors or their Investor Affiliates (as defined in the
Shareholders Agreement); or (iii) any shares issued or issuable, directly or
indirectly, upon any subdivision, combination or reclassification of such shares
or share dividend in respect of the Common Shares referenced in clauses (i) and
(ii) above; provided, however, that with respect to a registration statement
pursuant to Section 2.1 or Section 2.2, Registrable Securities shall include all
Common Shares (including shares obtainable upon the exercise, exchange or
conversion of the Preferred Shares or any other Common Share Equivalents) owned
by each of the parties to this Agreement (other than the Corporation). As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have been declared effective under the applicable Securities
Laws and such securities shall have been disposed of in accordance with such
registration statement or (ii) such securities shall have been sold (other than
in a privately negotiated sale) pursuant to Rule 144 (or any successor or
comparable provision) under the U.S. Securities Act or applicable Canadian
securities laws and in compliance with the requirements of Rule 144 or
applicable Canadian securities laws.
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(b) Capitalized terms used but not otherwise defined herein shall have the
meaning assigned to such terms in the Purchase Agreement or the Shareholders
Agreement.
2. Registration Rights.
2.1. Demand Registrations.
(a) Subject to Sections 2.1(d) and 2.3 below, at any time and from time to
time after the earlier of occur of (i) September 7, 2001, and (ii) the closing
of an IPO, two or more holders of Preferred Shares who in the aggregate hold not
less than 35% of the Registrable Securities at such time shall have the right to
require the Corporation to file a registration statement under the Securities
Laws covering all or part of their respective Registrable Securities, by
delivering a written request therefor to the Corporation specifying the number
of Registrable Securities to be included in such registration by such holders of
Preferred Shares and the intended method of distribution thereof. All requests
pursuant to this Section 2.1 are referred to herein as "Demand Registration
Requests," and the registrations requested are referred to herein as "Demand
Registrations." With respect to any Demand Registration, the holders of a
majority of the Preferred Shares making such demand for registration shall be
referred to as the "Initiating Holders." As promptly as practicable, but no
later than ten days after receipt of a Demand Registration Request, the
Corporation shall give written notice (the "Demand Exercise Notice") of such
Demand Registration Request to all Holders of record of Registrable Securities.
(b) The Corporation, subject to Sections 2.3 and 2.7, shall include in a
Demand Registration (i) the number of Registrable Securities requested by the
Initiating Holders of the Common Shares into which the Preferred Shares have
been or may be converted from time to time (either directly or indirectly as
Common Share Equivalents) and not been registered pursuant to a Canadian
Prospectus, a registration statement, or sold pursuant to Rule 144 under the
U.S. Securities Act and (ii) the Registrable Securities of any other Holder who
shall have made a written request to the Corporation for inclusion in such
Demand Registration (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Holder) within 30 days
after the receipt of the Demand Exercise Notice.
(c) The Corporation shall, as expeditiously as possible following a Demand
Registration Request, use its best efforts to (i) effect such registration under
the Securities Laws of the Registrable Securities which the Corporation has been
so requested to register, for distribution in accordance with such intended
method of distribution and (ii) if requested by the Initiating Holders, obtain
acceleration of the effective date of the registration statement relating to
such registration.
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(d) The Demand Registration rights granted under Section 2.1 are subject to
the following limitations: (i) the Corporation shall not be required to cause a
registration pursuant to Section 2.1 to be declared effective within a period of
180 days after the effective date of any registration statement of the
Corporation filed pursuant to a Demand Registration Request; (ii) if the Board,
in its good faith judgment, determines that any registration of Registrable
Securities should not be made or continued because it would materially interfere
with any material financing, acquisition, corporate reorganization or merger or
other transaction involving the Corporation (a "Valid Business Reason"), (A) the
Corporation may postpone filing a registration statement relating to a Demand
Registration Request until such Valid Business Reason no longer exists, but in
no event for more than 120 days, and (B) in case a registration statement has
been filed relating to a Demand Registration Request, if the Valid Business
Reason has not resulted from actions taken by the Corporation, the Corporation
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration statement
until such Valid Business Reason no longer exists, but in no event for more than
120 days (such period of postponement or withdrawal under subclauses (A) or (B)
of this paragraph (d), (the "Postponement Period"); and the Corporation shall
give written notice of its determination to postpone or withdraw a registration
statement and of the fact that the Valid Business Reason for such postponement,
withdrawal or premature termination no longer exists, in each case, promptly
after the occurrence thereof; provided, however, that the Corporation shall not
be permitted to postpone, withdraw or prematurely terminate a registration
statement after the expiration of any Postponement Period until six months after
the expiration of such Postponement Period; and (iii) the Corporation shall not
be required to effect a registration pursuant to this Section 2.1 with respect
to more than two Demand Registration Requests by each Investor under this
Agreement.
If the Corporation shall give any notice of postponement or withdrawal of
any registration statement, the Corporation shall not, during the Postponement
Period or withdrawal, register any Common Shares, other than pursuant to a
registration statement on Form S-4 or S-8 (or an equivalent registration form
then in effect) under the U.S. Securities Act. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Corporation that the
Corporation has determined to withdraw any registration statement pursuant to
clause (ii) above, such party will discontinue its disposition of Registrable
Securities pursuant to such registration statement and, if so directed by the
Corporation, will deliver to the Corporation (at the Corporation's expense) all
copies, other than permanent file copies, then in such party's possession, of
the prospectus covering such Registrable Securities that was in effect at the
time of receipt of such notice. If the Corporation shall have withdrawn or
prematurely terminated a registration statement filed under Section 2.1 (whether
pursuant to this paragraph (d) or as a result of any stop order, injunction or
other order or requirement of the Commission or any other governmental agency or
court), the Corporation shall not be considered to have effected an effective
registration for the purposes of this Agreement until the
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Corporation shall have filed a new registration statement covering the
Registrable Securities covered by the withdrawn or prematurely terminated
registration statement and such subsequent registration statement shall have
been declared effective and shall not have been withdrawn or prematurely
terminated. If the Corporation shall give any notice of withdrawal or
postponement of a registration statement, the Corporation shall, at such time as
the Valid Business Reason that caused such withdrawal or postponement no longer
exists (but in no event later than 120 days after the date of the withdrawal or
postponement), use its best efforts to effect the registration under the
Securities Laws of the Registrable Securities covered by the withdrawn or
postponed registration statement in accordance with this Section 2.1 (unless the
Initiating Holders shall have withdrawn such request, in which case the
Corporation shall not be considered to have effected an effective registration
for the purposes of this Agreement).
(e) The Corporation, subject to Sections 2.3 and 2.7, may elect to include
in any registration statement and offering made pursuant to Section 2.1, (i)
authorized but unissued Common Shares or Common Shares held by the Corporation
as treasury shares and (ii) any other Common Shares which are requested to be
included in such registration (x) pursuant to the exercise of piggyback
registration rights granted by the Corporation after the date hereof in
accordance with the terms of this Agreement and the Shareholders Agreement, (y)
by Canadian National Railway Company ("CN") pursuant to the unanimous
shareholder agreement made as of May 28, 1999 between Worldwide Fiber Networks
Ltd., CN and WFI-CN Fiber Inc., or (z) by IC Fiber Holdings Inc. ("IC") pursuant
to the limited liability company agreement of Worldwide Fiber IC LLC effective
as of May 28, 1999, between Worldwide Fiber IC Holdings, Inc. and IC
(collectively, "Additional Piggyback Rights"); provided, however, that such
inclusion shall be permitted only to the extent that it is pursuant to, and
subject to, the terms of the underwriting agreement or arrangements entered into
by the Initiating Holders.
2.2. Piggyback Registrations.
(a) If at any time, the Corporation proposes or is required to register any
of its equity securities under the Securities Laws (other than equity securities
registered pursuant to registrations on Form S-4 or S-8 (or an equivalent
registration form for a domestic or foreign issuer then in effect) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation or a Demand Registration
under Section 2.1 of this Agreement), whether or not for its own account, the
Corporation shall give prompt written notice of its intention to do so to each
of the Holders of record of Registrable Securities. Upon the written request of
any Holder, made within 20 days following the receipt of any such written notice
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Holder and the intended method of
distribution thereof), the Corporation shall, subject to Sections 2.2(b), 2.3
and 2.7, use its best efforts to cause all such Registrable Securities, the
Holders of which have so requested
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the registration thereof, to be registered under the Securities Laws (with the
securities which the Corporation at the time proposes to register) to permit the
sale or other disposition by the Holders (in accordance with the intended method
of distribution thereof) of the Registrable Securities to be so registered. No
registration effected under this Section 2.2(a) shall relieve the Corporation of
its obligations to effect Demand Registrations under Section 2.1.
(b) If at any time after giving written notice of its intention to register
any equity securities and prior to the effective date of the registration
statement filed in connection with such registration, the Corporation shall
determine for any reason not to register or to delay registration of such equity
securities, the Corporation may, at its election, give written notice of such
determination to all Holders of Registrable Securities, and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such abandoned registration,
without prejudice, however, to the rights of Holders of Registrable Securities
under Section 2.1 and (ii) in the case of a determination to delay such
registration of its equity securities, shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities.
(c) Any Holder shall have the right to withdraw its request for inclusion
of its Registrable Securities in any registration statement pursuant to this
Section 2.2 by giving written notice to the Corporation of its request to
withdraw; provided, however, that (i) such request must be made in writing prior
to the execution of the underwriting agreement (or such other similar agreement)
with respect to such registration and (ii) such withdrawal shall be irrevocable
and, after making such withdrawal, a Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
was made.
2.3. Allocation of Securities Included in Registration Statement.
(a) If any requested registration pursuant to Section 2.1 involves an
underwritten offering and if the lead managing underwriter (the "Manager") shall
advise the Corporation that, in its view, the number of securities requested to
be included in such registration (including those securities requested by the
Corporation to be included in such registration) exceeds the largest number (the
"Section 2.1 Sale Number") that can be sold in an orderly manner in such
offering within a price range acceptable to the Initiating Holders, the
Corporation shall include in such registration:
(i) first, all Registrable Securities requested to be included
pursuant to Section 2.1(b)(i) and Section 2.2(a) in such registration
by the beneficial owners of the Common Shares into which the Preferred
Shares have been or may be converted from time to time (either directly
or indirectly as Common Share Equivalents) and have not been registered
pursuant to a Canadian Prospectus, a registration statement, or sold
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pursuant to Rule 144 under the U.S. Securities Act; provided, however,
that if the number of such Registrable Securities exceeds the Section
2.1 Sale Number, then the number of Registrable Securities (not to
exceed the Section 2.1 Sale Number) to be included in such registration
shall be reduced on a pro rata basis among all such holders, based on
the number of Registrable Securities owned by each such holder
requesting inclusion pursuant to Section 2.1(b)(i) and Section 2.2(a)
out of the total outstanding Common Shares of the Corporation;
provided, however, that such allocation shall not operate to reduce the
aggregate number of Registrable Securities to be included in such
registration, and if any Holder or other selling stockholder does not
request inclusion of the maximum number of shares of Registrable
Securities allocated to such Holder pursuant to the above-described
procedure, the remaining portion of such Holder's allocation shall be
reallocated among those requesting Holders and other selling
stockholders whose allocations did not satisfy their requests pro rata
on the basis of the number of shares of Registrable Securities which
would be held by such Holders and other selling stockholders, assuming
conversion, and this procedure shall be repeated until all of the
shares of Registrable Securities which may be included in the
registration on behalf of the Holders and other selling stockholders
have been so allocated;
(ii) second, to the extent that the number of Registrable
Securities to be included pursuant to Section 2.3(a)(i) is less than
the Section 2.1 Sale Number, securities that the Corporation proposes
to register; and
(iii) third, to the extent that the number of Registrable
Securities to be included by all Holders pursuant to Section 2.3(a)(i)
and the number of securities to be included by the Corporation pursuant
to Section 2.3(a)(ii) is less than the Section 2.1 Sale Number, any
other securities that the Holders thereof propose to register pursuant
to the exercise of Additional Piggyback Rights.
If, as a result of the proration provisions of this Section 2.3(a), any
Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested be included, such Holder may elect
to withdraw his request to include Registrable Securities in such registration
or may reduce the number requested to be included; provided, however, that (A)
such request must be made in writing prior to the execution of the underwriting
agreement with respect to such registration and (B) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder shall no longer have any
right to include such Registrable Securities in the registration as to which
such withdrawal was made.
(b) If any registration pursuant to Section 2.2 where the Corporation
initiated the registration involves an underwritten offering and the Manager
shall advise the Corporation that, in its view, the number of securities
requested to be included in such registration exceeds the number (the "Section
2.2 Sale Number") that can be sold in an orderly manner in
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such registration within a price range acceptable to the Corporation, the
Corporation shall include in such registration:
(i) first, all Common Shares that the Corporation proposes to
register for its own account ("Corporation Securities");
(ii) second, to the extent that the number of Corporation
Securities is less than the Section 2.2 Sale Number, all Registrable
Securities requested to be included by any Investors and Investor
Affiliates pursuant to Section 2.2(a) ("Investor Securities");
provided, however, that, if the number of such Investor Securities
exceeds the Section 2.2 Sale Number less the number of Corporation
Securities, then the number of Investor Securities included in such
registration shall be reduced on a pro rata basis, based on the number
of Registrable Securities owned by each Investor requesting inclusion
in such registration out of the number of Registrable Securities owned
by all Investors requesting inclusion; provided, however, that such
allocation shall not operate to reduce the aggregate number of
Registrable Securities to be included in such registration, and if any
Holder or other selling stockholder does not request inclusion of the
maximum number of shares of Registrable Securities allocated to such
Holder pursuant to the above-described procedure, the remaining portion
of such Holder's allocation shall be reallocated among those requesting
Holders and other selling stockholders whose allocations did not
satisfy their requests pro rata on the basis of the number of shares of
Registrable Securities which would be held by such Holders and other
selling stockholders, assuming conversion, and this procedure shall be
repeated until all of the shares of Registrable Securities which may be
included in the registration on behalf of the Holders and other selling
stockholders have been so allocated; and
(iii) third, to the extent the number of Corporation
Securities and Investor Securities is less than the Section 2.2 Sale
Number, all Registrable Securities requested to be included by all
other Holders; provided, however, if the number of such Registrable
Securities exceeds the Section 2.2 Sale Number less the number of (A)
Corporation Securities and (B) Investor Securities, then the number of
Registrable Securities included in such registration shall be reduced
on a pro rata basis, based on the number of Registrable Securities
owned by each Holder (but not Holders who are Investors or Investor
Affiliates) requesting inclusion to the number of Registrable
Securities owned by all Holders (but not Holders who are Investors or
Investor Affiliates) requesting inclusion; provided, however, that such
allocation shall not operate to reduce the aggregate number of
Registrable Securities to be included in such registration, and if any
Holder or other selling stockholder does not request inclusion of the
maximum number of shares of Registrable Securities allocated to such
Holder pursuant to the above-described procedure, the remaining portion
of such Holder's alloca-
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tion shall be reallocated among those requesting Holders and other
selling stockholders whose allocations did not satisfy their requests
pro rata on the basis of the number of shares of Registrable Securities
which would be held by such Holders and other selling stockholders,
assuming conversion, and this procedure shall be repeated until all of
the shares of Registrable Securities which may be included in the
registration on behalf of the Holders and other selling stockholders
have been so allocated.
2.4. Registration Procedures. If and whenever the Corporation is required
by the provisions of this Agreement to use its best efforts to effect or cause
the registration of any Registrable Securities under the U.S. Securities Act or
Canadian Securities Laws as provided in this Agreement, the Corporation shall,
as expeditiously as reasonably possible (but in any event, within 120 days after
a Demand Registration Request in the case of Section 2.4(a)):
(a) prepare and file with the Commission or Canadian securities regulatory
authorities a registration statement on an appropriate registration form of the
Commission or Canadian securities regulatory authorities for the disposition of
such Registrable Securities in accordance with the intended method of
disposition thereof, which form shall, in the case of a shelf registration, be
available for the sale of the Registrable Securities by the Holders thereof and
such registration statement shall comply in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission or Canadian securities regulatory authorities to be
filed therewith, and the Corporation shall use its best efforts to cause such
registration statement to become and, subject to 2.4(b), remain effective
(provided, however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, or comparable statements under securities
or "blue sky" laws of any United States jurisdiction, the Corporation will
furnish to counsel (in the case of a registration pursuant to Section 2.1,
selected by the Initiating Holders, and, in the case of a registration pursuant
to Section 2.2, the Holder that, together with its Affiliates, includes the
largest number of Registrable Securities in such registration (the "Major
Holder")) for the Holders of Registrable Securities participating in the planned
offering and the underwriters, if any, copies of all such documents proposed to
be filed (including all exhibits thereto), which documents will be subject to
the reasonable review and reasonable comment of such counsel, and the
Corporation shall not file any registration statement or amendment thereto or
any prospectus or supplement thereto to which the Initiating Holder, in the case
of a Demand Registration Request, or the underwriters, if any, shall reasonably
object in writing);
(b) prepare and file with the Commission or Canadian securities regulatory
authorities 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 for such period (which shall not be required to
exceed 120 days in the case of a registration pursuant to Sec-
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tion 2.1 or 90 days in the case of a registration pursuant to Section 2.2)
as any seller of Registrable Securities pursuant to such registration statement
may reasonably request and to comply with the provisions of the U.S. Securities
Act or Canadian Securities Laws with respect to the sale or other disposition of
all Registrable Securities covered by such registration statement in accordance
with the intended methods of disposition by the seller or sellers thereof set
forth in such registration statement;
(c) furnish, without charge, to each seller of such Registrable Securities
and each underwriter, if any, of the securities covered by such registration
statement such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits), and the prospectus
included in such registration statement (including each preliminary prospectus)
in conformity with the requirements of the U.S. Securities Act or Canadian
Securities Laws, and other documents, as such seller and underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller (the Corporation hereby
consenting to the use in accordance with all applicable laws of each such
registration statement (or amendment or post-effective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) by each
such seller of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such registration statement or prospectus);
(d) use its best efforts to register or qualify the Registrable Securities
covered by such registration statement under such other securities or "blue sky"
laws of such jurisdictions as any sellers of Registrable Securities or any
managing underwriter, if any, shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
sellers or underwriter, if any, to consummate the disposition of the Registrable
Securities in such jurisdictions, except that in no event shall the Corporation
be required to qualify to do business as a foreign corporation in any
jurisdiction where it would not, but for the requirements of this paragraph (d),
be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) promptly notify each seller of Registrable Securities covered by such
registration statement and each managing underwriter, if any: (i) when the
registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission, any United States state securities
authority or any Canadian securities regulatory authority for amendments or
supplements to the registration statement or the prospectus related thereto or
for additional information, (iii) of the issuance by the Commission or any
Canadian securities regulatory authority of any stop order suspending the
effectiveness of the registration statement or the initiation of any proceedings
for
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that purpose, (iv) of the receipt by the Corporation of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or "blue sky" laws of any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the existence of any fact
of which the Corporation becomes aware which results in the registration
statement, the prospectus related thereto 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 any
statement therein not misleading, and (vi) if at any time the representations
and warranties contemplated by any underwriting agreement, securities sales
agreement, or other similar agreement relating to the offering shall cease to be
true and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Corporation shall promptly prepare and
furnish to each such seller and each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(f) comply with all applicable rules and regulations of the Commission or
any Canadian securities regulatory authority, and make generally available to
its security holders, as soon as reasonably practicable after the effective date
of the registration statement (and in any event within 15 months thereafter), an
earnings statement (which need not be audited) covering the period of at least
twelve consecutive months beginning with the first day of the Corporation's
first calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
U.S. Securities Act and Rule 158 thereunder;
(g) (i) cause all such Registrable Securities covered by such registration
statement to be listed on the principal securities exchange on which similar
securities issued by the Corporation are then listed (if any), if the listing of
such Registrable Securities is then permitted under the rules of such exchange,
or (ii) if no similar securities are then so listed, cause all such Registrable
Securities to be listed on a United States national securities exchange or
secure designation of each such Registrable Security as a Nasdaq National Market
"national market system security" within the meaning of Rule 11Aa2-1 of the
Commission or secure National Association of Securities Dealers Automated
Quotation authorization for such shares and, without limiting the generality of
the foregoing, take all actions that may be required by the Corporation as the
issuer of such Registrable Securities in order to facilitate the arranging for
the registration of at least two market makers as such with respect to such
shares with the National Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and registrar for
all such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement;
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(i) enter into such customary agreements (including, if applicable, an
underwriting agreement) and take such other actions as the Major Holder (or the
Initiating Holders in the case of a Section 2.1 Demand Registration) shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities. The Holders of the Registrable Securities which are to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that the Corporation, and in such
case the Corporation will, make to, and for the benefit of, such Holders the
representations, warranties and covenants of the Corporation which are being
made to, and for the benefit of, such underwriters and which are of the type
customarily provided to institutional investors in secondary offerings;
(j) obtain an opinion from the Corporation's counsel and a "cold comfort"
letter from the Corporation's independent public accountants in customary form
and covering such matters as are customarily covered by such opinions and "cold
comfort" letters delivered to underwriters in underwritten public offerings,
which opinion and letter shall be reasonably satisfactory to the underwriter, if
any, and to the Major Holders participating in such offering, and furnish to
each Holder participating in the offering and to each underwriter, if any, a
copy of such opinion and letter addressed to such Holder or underwriter;
(k) deliver promptly to each Holder participating in the offering and each
underwriter, if any, copies of all correspondence between the Commission, any
Canadian securities regulatory authority and the Corporation, its counsel or
auditors and all memoranda relating to discussions with the Commission, its
staff, any Canadian securities regulatory authority with respect to the
registration statement, other than those portions of any such correspondence and
memoranda which contain information subject to attorney-client privilege with
respect to the Corporation, and, upon receipt of such confidentiality agreements
as the Corporation may reasonably request, make reasonably available for
inspection by any seller of such Registrable Securities covered by such
registration statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Corporation, and cause all of the Corporation's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(l) use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not later than
the effective date of the registration statement;
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(n) make reasonably available its employees and personnel and otherwise
provide reasonable assistance to the underwriters in the marketing of
Registrable Securities in any underwritten offering;
(o) promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of such
document to counsel to the sellers of Registrable Securities and to the managing
underwriter, if any, and make the Corporation's representatives reasonably
available for discussion of such document and make such changes in such document
concerning such sellers prior to the filing thereof as counsel for such sellers
or underwriters may reasonably request;
(p) furnish to each Holder participating in the offering and the managing
underwriter, without charge, at least one signed copy of the registration
statement and any post-effective amendments thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(q) cooperate with the sellers of Registrable Securities and the managing
underwriter, if any, to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the sellers of Registrable Securities at least three business
days prior to any sale of Registrable Securities;
(r) if a Canadian Prospectus is filed in the Province of Quebec, opinions
of Quebec counsel and of the auditors representing the Corporation for the
purposes of such registration relating to translation into the French language
of the applicable registration statement, in form and substance as is
customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities; and
(s) take all such other commercially reasonable actions as are necessary or
advisable in order to expedite or facilitate the disposition of such Registrable
Securities.
The Corporation may require as a condition precedent to the Corporation's
obligations under this Section 2.4 that each seller of Registrable Securities as
to which any registration is being effected furnish the Corporation such
information regarding such seller and the distribution of such securities as the
Corporation may from time to time reasonably request, provided that such
information shall be used only in connection with such registration.
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Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Corporation of the happening of any event of the kind described
in clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue
such Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(e) of this Section 2.4 and, if so directed by the Corporation, will deliver to
the Corporation (at the Corporation's expense) all copies, other than permanent
file copies, then in such Holder's possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
In the event the Corporation shall give any such notice, the applicable period
mentioned in paragraph (b) of this Section 2.4 shall be extended by the number
of days during such period from and including the date of the giving of such
notice to and including the date when each seller of any Registrable Securities
covered by such registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by paragraph (e) of this Section
2.4.
If any such registration statement or comparable statement under "blue sky"
laws refers to any Holder by name or otherwise as the Holder of any securities
of the Corporation, then such Holder shall have the right to require, acting
reasonably, (i) the insertion therein of language, in form and substance
satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation by such Holder of the
investment quality of the Corporation's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Corporation, or (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Corporation, as advised by counsel, required by the U.S. Securities Act or any
similar federal statute or any state "blue sky" or United States securities law
then in force, the deletion of the reference to such Holder.
2.5. Registration Expenses.
(a) "Expenses" shall mean any and all fees and expenses incident to the
Corporation's performance of or compliance with this Article 2, including,
without limitation: (i) Commission, Canadian securities regulatory authorities,
United States or Canadian stock exchange or NASD registration and filing fees
and all listing fees and fees with respect to the inclusion of securities in the
Nasdaq National Market; (ii) fees and expenses of compliance with Securities
Laws or United States "blue sky" laws and in connection with the preparation of
a "blue sky" survey, including, without limitation, reasonable fees and expenses
of blue sky counsel; (iii) printing and copying expenses; (iv) messenger and
delivery expenses; (v) expenses incurred in connection with any road show; (vi)
fees and disbursements of counsel for the Corporation; (vii) with respect to
each registration, the fees and disbursements of one counsel in each of Canada
and the United States, as required, for the sellers of Registrable
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Securities (selected by the Initiating Holders in the case of a registration
pursuant to Section 2.1, and selected by the Majority Holder in the case of a
registration pursuant to Section 2.2) as well as of one local counsel; (viii)
fees and disbursements of all independent public accountants (including the
expenses of any audit and/or "cold comfort" letter) and fees and expenses of
other persons, including special experts, retained by the Corporation and (ix)
any other reasonable fees and disbursements of underwriters, if any, customarily
paid by issuers.
(b) The Corporation shall pay all Expenses with respect to any Demand
Registration pursuant to Section 2.1 whether or not such Demand Registration
becomes effective or does not remain effective for the period contemplated by
Section 2.4(b). The Corporation shall pay all Expenses of each Investor with
respect to any registration effected under Section 2.2. Each Holder of
Registrable Securities (other than the Investors) shall pay the expenses
incurred by that Holder with respect to any registration effected pursuant to
Section 2.2 (such expenses shall be allocated among the Holders of Registrable
Securities (other than the Investors or the Investor Affiliates) on a pro rata
basis based on the number of Registrable Securities included in such offering by
a Holder relative to the number of Registrable Securities included in such
offering by all Holders, except to the extent Expenses are attributable to a
Holder or to securities included in an offering by a Holder (other than an
Investor or the Investor Affiliates)).
(c) Notwithstanding the foregoing, (i) the provisions of this Section 2.6
shall be deemed amended to the extent necessary to cause these expense
provisions to comply with United States "blue sky" laws of each state or the
Securities Laws of any other jurisdiction in which the offering is made and (ii)
in connection with any registration hereunder, each Holder of Registrable
Securities being registered shall pay all underwriting discounts and commissions
and any transfer taxes, if any, attributable to the Registrable Securities, pro
rata with respect to payments of discounts and commissions in accordance with
the number of shares included in the offering by such Holder, and (iii) the
Corporation shall be responsible for all of its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties).
2.6. Certain Limitations on Registration Rights. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or in the
case of a registration under Section 2.2 if the Corporation has determined to
enter into an underwriting agreement in connection therewith, all securities to
be included in such registration shall be subject to an underwriting agreement
and no Person may participate in such registration unless such Person agrees to
sell such Person's securities on the basis provided therein and completes and/or
executes all questionnaires and other documents which must be executed in
connection therewith, and provides such other information to the Corporation or
the underwriter as may be necessary to register such Person's securities.
-17-
2.7. Limitations on Sale or Distribution of Other Securities.
(a) If requested in writing by the managing underwriter(s), if any, of any
registration effected pursuant to Section 2.1 or 2.2, each Holder of Registrable
Securities agrees not to effect any public sale or distribution, including,
without limitation, any sale pursuant to Canadian Securities Laws or Rule 144
under the U.S. Securities Act, of any Registrable Securities, or of any other
equity security of the Corporation or of any security convertible into or
exchangeable or exercisable for any equity security of the Corporation (other
than as part of such underwritten public offering) during the time period
reasonably requested by the managing underwriter(s), if any, not to exceed 180
days (and the Corporation hereby also so agrees (except that the Corporation may
effect any sale or distribution of any such securities pursuant to a
registration on Form S-4 (if reasonably acceptable to the managing underwriter)
or Form S-8 under the U.S. Securities Act, or any successor or similar form for
a domestic or foreign issuer which is then in effect or upon the conversion,
exchange or exercise of any then outstanding Common Share Equivalent) to cause
each Holder of any equity security or of any security convertible into or
exchangeable or exercisable for any equity security of the Corporation purchased
from the Corporation at any time other than in a public offering so to agree).
(b) The Corporation hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 2.1 or 2.2, and if such
previous registration shall not have been withdrawn or abandoned, the
Corporation shall not sell, transfer, or otherwise dispose of, any Common
Shares, or any other equity security of the Corporation or any security
convertible into or exchangeable or exercisable for any equity security of the
Corporation (other than as part of such underwritten public offering, a
registration on Form S-4 or Form S-8 under the U.S. Securities Act or any
successor or similar form for a domestic or foreign issuer which is then in
effect or upon the conversion, exchange or exercise of any then outstanding
Common Share Equivalent), until a period of 90 days shall have elapsed from the
effective date of such previous registration; and the Corporation shall so
provide in any registration rights agreements hereafter entered into with
respect to any of its securities.
2.8. No Required Sale. Nothing in this Agreement shall be deemed to create
an independent obligation on the part of any Holder to sell any Registrable
Securities pursuant to any effective registration statement.
2.9. Indemnification for Registrations.
(a) In the event of any registration of any securities of the Corporation
under the U.S. Securities Act or Canadian Securities Laws pursuant to this
Article 2, the Corporation shall, and hereby does, indemnify and hold harmless,
to the fullest extent permitted by law, the Holder of any Registrable
Securities, its directors, officers, fiduciaries, employees and
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shareholders or general and limited partners (and the directors, officers,
employees and shareholders thereof), each other Person who participates as an
underwriter or a Qualified Independent Underwriter, if any, in the offering or
sale of such securities, each officer, director, employee, shareholder or
partner of such underwriter or Qualified Independent Underwriter, and each other
Person, if any, who controls such seller or any such underwriter within the
meaning of the U.S. Securities Act, or Canadian Securities Laws against any and
all losses, claims, damages or liabilities, joint or several, actions or
proceedings (whether commenced or threatened) in respect thereof and expenses
(including reasonable fees of counsel and any amounts paid in any settlement
effected with the Corporation's consent, which consent shall not be unreasonably
withheld or delayed) to which each such indemnified party may become subject
under the U.S. Securities Act, Canadian Securities Laws or otherwise ("Claims"),
insofar as such Claims arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Canadian
Prospectus or registration statement under which such securities were registered
under the U.S. Securities Act or 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, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final or summary
prospectus or any amendment or supplement thereto, together with the documents
incorporated by reference therein, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or (iii) any violation by the Corporation of any
federal, state, provincial, or common law rule or regulation applicable to the
Corporation and relating to action required or inaction of the Corporation in
connection with any such registration, and the Corporation will reimburse any
such indemnified party for any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
Claim as such expenses are incurred; provided, however, that the Corporation
shall not be liable to any such indemnified party in any such case to the extent
such Claim arises solely out of any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact made in
such registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary, final or summary prospectus in reliance
upon, and in conformity with, written information furnished to the Corporation
by, or on behalf of, such indemnified party specifically for use therein. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by, or on behalf of, such indemnified party
and shall survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 or 2.2 is being
effected (and, if required by the Corporation as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or Section 2.2, any underwriter or Qualified Independent
Underwriter, if any), shall, severally and not jointly, indemnify and hold
harmless (in
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the same manner and to the same extent as set forth in paragraph (a) of this
Section 2.9) to the extent permitted by law, the Corporation, its officers,
directors, fiduciaries, employees and shareholders or general and limited
partners (and the directors, officers, employees, and shareholders thereof),
each Person controlling the Corporation within the meaning of the U.S.
Securities Act and Canadian Securities Laws with respect to any untrue statement
or alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon, and in conformity with, written
information furnished to the Corporation or its representatives by, or on behalf
of, such Holder or underwriter or Qualified Independent Underwriter, if any,
specifically for use therein and shall reimburse such indemnified party for any
legal or other expenses reasonably incurred in connection with investigating or
defending any such Claim as such expenses are incurred; provided, however, that
the aggregate amount which any such Holder shall be required to pay pursuant to
this Section 2.9(b) and Sections 2.9(c) and (e) shall in no case be greater than
the amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the registration statement giving rise to
such Claim. Such indemnity and reimbursement of expenses shall remain in full
force and effect regardless of any investigation made by, or on behalf of, such
indemnified party and shall survive the transfer of such securities by such
Holder.
(c) Indemnification similar to that specified in the preceding paragraphs
(a) and (b) of this Section 2.9 (with appropriate modifications) shall be given
by the Corporation and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any state
securities and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement shall
promptly notify the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 2.9, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 2.9, except to the extent the
indemnifying party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Article 2. In case any action or proceeding is brought
against an indemnified party, it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, unless in the reasonable opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the written consent of the indemnified party,
be counsel to the indemnifying party), and after notice from the
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indemnifying party to such indemnified party that it so chooses, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that (i) if the indemnifying party fails to take reasonable steps
necessary to defend diligently the action or proceeding within 20 days after
receiving notice from such indemnified party that the indemnified party believes
it has failed to do so, (ii) if such indemnified party who is a defendant in any
action or proceeding which is also brought against the indemnifying party
reasonably shall have concluded that there may be one or more legal defenses
available to such indemnified party which are not available to the indemnifying
party, or (iii) if representation of both parties by the same counsel is
otherwise inappropriate under applicable standards of professional conduct,
then, in any such case, the indemnified party shall have the right to assume or
continue its own defense as set forth above (but with no more than one firm of
counsel for all indemnified parties in each jurisdiction, except to the extent
any indemnified party or parties reasonably shall have concluded that there may
be legal defenses available to such party or parties which are not available to
the other indemnified parties or to the extent representation of all indemnified
parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct) and the indemnifying party shall be liable
for any expenses therefor (including, without limitation, any such counsel's
fees). No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or Claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (B) does not include a statement as to, or an admission
of, fault, culpability or a failure to act, by, or on behalf of, any indemnified
party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.9(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Claim in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to such
offering of securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults, but also the relative benefits of the
indemnifying party and the indemnified party, as well as any other relevant eq-
-21-
uitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 2.9(e) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the preceding sentences
of this Section 2.9(e). The amount paid or payable in respect of any Claim shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Claim.
No person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the U.S. Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
anything in this Section 2.9(e) to the contrary, no indemnifying party (other
than the Corporation) shall be required pursuant to this Section 2.9(e) to
contribute any amount in excess of the net proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the losses, claims, damages or liabilities of the indemnified parties
relate, less the amount of any indemnification payment made pursuant to Sections
2.9(b) and (c).
(f) The indemnity agreements contained herein shall be in addition to any
other rights to indemnification or contribution which any indemnified party may
have pursuant to law or contract and shall remain operative and in full force
and effect regardless of any investigation made or omitted by, or on behalf of,
any indemnified party and shall survive the transfer of the Registrable
Securities by any such party.
(g) The indemnification and contribution required by this Section 2.9 shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
3. Underwritten Offerings.
3.1. Requested Underwritten Offerings. If requested by the underwriters for
any underwritten offering by the Holders pursuant to a registration requested
under Section 2.1, the Corporation shall enter into a customary underwriting
agreement with the underwriters. Such underwriting agreement shall be
satisfactory in form and substance to the Initiating Holders acting reasonably
and shall contain such representations and warranties by, and such other
agreements on the part of, the Corporation and such other terms as are generally
prevailing in agreements of that type, including, without limitation,
indemnities and contribution agreements. Any Holder participating in the
offering shall be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties made by, and the
other agreements on the part of, the Corporation to, and for the benefit of,
such underwriters shall also be made to, and for the benefit of, such Holder and
that any or all of the conditions precedent
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to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder; provided, however, that
the Corporation shall not be required to make any representations or warranties
with respect to information specifically provided by a selling Holder of
Registrable Securities for inclusion in the registration statement. Such
underwriting agreement shall also contain such representations and warranties by
the participating Holders as are customary in agreements of that type.
3.2. Piggyback Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Corporation shall have determined to
enter into any underwriting agreements in connection therewith, all of the
Holders' Registrable Securities to be included in such registration shall be
subject to such underwriting agreements. Any Holder participating in such
registration may, at its option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Corporation to,
and for the benefit of, such underwriters shall also be made to, and for the
benefit of, such Holder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holder. Such underwriting agreement shall
also contain such representations and warranties by the participating Holders as
are customary in agreements of that type.
3.3. Underwriting Services. If a Demand Registration pursuant to Section
2.1 involves an underwritten offering, then the Corporation shall select the
underwriter from underwriting firms of national reputation in the United States
or Canada, as the case may be, subject to the approval of the Initiating
Holders, such approval not to be unreasonably withheld.
4. General.
4.1. Adjustments Affecting Registrable Securities. The Corporation agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any Registrable
Securities to include such Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration. The Corporation agrees that it will take
all reasonable steps necessary to effect a subdivision of shares if in the
reasonable judgment of (a) the Initiating Holders in the case of a Demand
Registration Request, or (b) the Manager for the offering in respect of any such
registration requests, such subdivision would enhance the marketability of the
Registrable Securities. Each Holder agrees to vote all of its share capital in a
manner, and to take all other actions necessary, to permit the Corporation to
carry out the intent of the preceding sentence including, without limitation,
voting in favor of an amendment to the Corporation's Articles of Incorporation
in order to increase the number of authorized capital shares of the Corporation.
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4.2. Rule 144. If the Corporation shall have filed a registration statement
pursuant to the requirements of Section 12 of the U.S. Exchange Act or a
registration statement pursuant to the requirements of the U.S. Securities Act
in respect of the Common Shares or Common Shares Equivalents, the Corporation
covenants that (a) so long as it remains subject to the reporting provisions of
the Exchange Act, it will timely file the reports required to be filed by it
under the U.S. Securities Act or the Exchange Act (including, without
limitation, the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 under the U.S. Securities Act), and (b)
will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the U.S.
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the U.S. Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any Holder of Registrable Securities, the Corporation will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
4.3. Nominees for Beneficial Owners. If Registrable Securities are held by
a nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the Holder of such Registrable Securities for purposes
of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders of Registrable Securities contemplated by this Agreement); provided,
however, that the Corporation shall have received written assurances reasonably
satisfactory to it of such beneficial ownership.
4.4. Amendments. The terms and provisions of this Agreement may be modified
or amended, or any of the provisions hereof waived, temporarily or permanently,
pursuant to the prior written consent of the Corporation and the party adversely
affected by such modification or waiver.
4.5. Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
such party to the other parties:
(i) if to the Corporation, to:
Worldwide Fiber Inc.
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#0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxx Xxxx
with copies to:
Farris, Vaughan, Xxxxx & Xxxxxx
2600 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
and
Xxxxxx Xxxxxx & Xxxxxxx
Eighty Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
(ii) if to DLJ, to:
DWF SRL
Xxxxxxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx, Xxxx Xxxxxx
and
DWF SRL
c/o DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxx
with a copy to:
Xxxxxx & Xxxxxxx
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000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx Xxxxx
(iii) if to any of the GSCP Parties to:
c/o Ernst & Young Services, Ltd.
X.X. Xxx 000
Xxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
Attention: Xxxxx-Xxx Xxxxx
and
c/o GS Capital Partners III, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
with copies to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx
and
GS Capital Partners III, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxx
(iv) if to Providence, to:
Providence Equity Fiber, L.P.
00 Xxxxxxx Xxxxx
-00-
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx & Xxxxxx, LLP
0000 XxxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(v) if to Tyco, to
Tyco Group S.a.r.l.
0xx Xxxxx
0, Xxxxxx Xxxxx Xxxxxx
X-0000 Xxxxxxxxxx
Fax: 000-000-000
Attention: Managing Director
with a copy to:
Tyco Submarine Systems Ltd.
000 Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
Each Holder, by written notice given to the Corporation in accordance with
this Section 4.5, may change the address to which such notice or other
communications are to be sent to such Holder. All such notices, requests,
consents and other communications shall be deemed to have been given when
received.
4.6. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and the respective successors, personal
representatives and assigns of the parties hereto, whether so expressed or not.
No Person other than a Holder shall be entitled to any benefits under this
Agreement, except as otherwise expressly provided herein. This Agreement and the
rights of the parties hereunder may be assigned by any of the
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parties hereto to any transferee of Registrable Securities provided that
upon the consummation of, and as a condition to, any such assignment the
transferee assumes the obligations of the assignor under, and agrees to be bound
by the terms of, this Agreement.
(b) This Agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior and
contemplated arrangements and understandings with respect thereto, including but
not limited to, that certain letter of intent, dated as of August 5, 1999,
between the Corporation and the Investors.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
(d) The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this
Agreement.
(e) This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed an original instrument, but all such
counterparts together shall constitute but one instrument.
(f) Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid, but if any provision of
this Agreement is held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not render invalid or unenforceable any
other provision of this Agreement.
(g) It is hereby agreed and acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the event
of any such failure, an aggrieved person will be irreparably damaged and will
not have an adequate remedy at law. Any such person, therefore, shall be
entitled to injunctive relief, including specific performance, to enforce such
obligations, without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.
(h) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
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(i) Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
New York and of the United States of America, in each case located in the County
of New York, for any action, proceeding or investigation in any court or before
any governmental authority ("Litigation") arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any Litigation relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by registered mail to its
respective address set forth in this Agreement shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or the
United States of America, in each case located in the County of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Litigation brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
4.7. Prior Agreements. Each of the Holders and the Corporation hereby
agrees that any agreement previously entered into by it pursuant to which the
Corporation granted to it any registration rights shall be superseded by this
Agreement and each such agreement (and any rights such Holder has pursuant to
such agreement) shall be terminated, null and void and no longer in effect.
4.8. No Inconsistent Agreements. Without the prior written consent of the
majority of the Investors, neither the Corporation nor any Holder will, on or
after the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted in this Agreement or
otherwise conflicts with the provisions hereof, other than any lock-up agreement
with the underwriters in connection with any registered offering effected
hereunder, pursuant to which the Corporation shall agree not to register for
sale, and the Corporation shall agree not to sell or otherwise dispose of,
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares, for a specified period following the registered offering.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.
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CORPORATION:
WORLDWIDE FIBER INC.
By:________________________
Name:
Title:
DWF SRL
By:________________________
Name:
Title:
GSCP3 WWF (Barbados) SRL
By:________________________
Name:
Title:
WWF (Barbados) SRL
By:________________________
Name:
Title:
(Signature Page to Registration
Rights Agreement)
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PROVIDENCE EQUITY FIBER, L.P.
by its General Partner,
Providence Equity Partners III L.P.
by its General Partner,
Providence Equity Partners III L.P.
By:________________________
Name: Xxxxx X. Xxxxxxx
Title: Member and Manager Director
TYCO GROUP S.A.R.L.
By:________________________
Name:
Title:
(Signature Page to Registration
Rights Agreement)
