EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
__________, 1999, by and among EchoStar Communications Corporation, a Nevada
corporation, (the "Company"), MCI Telecommunications Corporation ("MCI") and
[insert name of MCI sub], a [state of incorporation] corporation and a wholly
owned subsidiary of MCI (collectively, the "MCI Holder") and American Sky
Broadcasting, LLC ("ASkyB") and [insert name of News sub], a [state of
incorporation] corporation, and a wholly owned subsidiary of The News
Corporation Limited ("News Corporation")(collectively, the "ASkyB Holder").
WHEREAS:
A. In connection with the Purchase Agreement, dated November 30, 1998,
by and among American Sky Broadcasting, LLC ("ASkyB"), MCI, News Corporation and
the Company (the "Purchase Agreement"), the Company has agreed, upon the terms
and subject to the conditions contained therein, to issue and sell to the
Holders an aggregate of 30,000,000, subject to adjustment, shares of the
Company's Class A Common Stock, par value $.01 per share (the "Common Stock"),
24,030,000, subject to adjustment, of such shares of Common Stock to be issued
and sold to the ASkyB Holder and 5,970,000, subject to adjustment, of such
shares of Common Stock to be issued and sold to the MCI Holder.
B. To induce News Corporation and MCI to execute and deliver the
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have
the following meanings:
(i) "Holders" means the ASkyB Holder and the MCI Holder or each of their
permitted transferees pursuant to Section 11 hereof who agree to be bound by the
provisions of this Agreement in accordance with such Section 11.
(ii) "register," "registered," and "registration" refer to a registration
effected by preparing and filing a Registration Statement in compliance with the
1933 Act and the declaration or ordering of effectiveness of such Registration
Statement by the United States Securities and Exchange Commission (the "SEC").
(iii) "Registrable Securities" means the shares of Common Stock issued or
issuable pursuant to the Purchase Agreement, or as a dividend on or in exchange
for or otherwise with respect to any of the foregoing which are held by the
Holders. As to any particular Registrable Securities, such securities will cease
to be Registrable Securities when they (i) have been distributed to the public
pursuant to an offering registered under the 1933 Act, (ii) are eligible to be
sold by the Holder thereof pursuant to Rule 144(k) under the 1933 Act (or any
similar rule then in force), (iii) are sold in compliance with Rule 144 or (iv)
shall have ceased to be outstanding.
(iv) "Registration Statement" means a registration statement of the Company
under the 1933 Act filed pursuant to Section 2 or 3(a) hereof.
(v) "Underwritten Offering" means a firm commitment underwritten public
offering pursuant to an effective Registration Statement under the 1933 Act,
covering the offer and sale of Common Stock to the general public.
b. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Purchase Agreement.
2. MANDATORY REGISTRATION.
a. Mandatory Registration. The Company shall prepare and file
with the SEC as soon as reasonably practicable after the date of this Agreement
pursuant to Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous basis ("Rule 415"), a Registration Statement
on Form S-3 (or, if Form S-3 is not then available, on such form of Registration
Statement as is then available to effect a registration of the Registrable
Securities) covering the resale of the Registrable Securities and thereafter use
its best efforts to cause such Registration Statement to become effective as
soon as reasonably practicable and, in any event, within ninety (90) days
following the date of this Agreement. Notwithstanding the foregoing, if the
Company shall fail to cause such Registration Statement to become effective
within ninety (90) days, the Company's failure shall not be deemed a breach of
this Section 2(a) provided that the Company shall have used its best efforts
during such ninety (90) day period.
b. Underwritten Offering. The Holders may determine to engage
the services of an underwriter in connection with an offering of Registrable
Securities. If such offering is an Underwritten Offering, the Holders shall have
the right to select one legal counsel and an investment banker or bankers and
manager or managers to administer the offering, which investment banker or
bankers or manager or managers shall be reasonably satisfactory to the Company.
c. Eligibility for Form S-3. The Company represents and
warrants that, as of the date hereof, it meets the registrant eligibility and
transaction requirements for the use of Form S-3 for registration of the sale of
the Registrable Securities by the Holders, and that the Company shall use its
best efforts to file all reports required to be filed by the Company with the
SEC in a timely manner so as to maintain such eligibility for the use of Form
S-3; provided, however, that, until the end of the Registration Period (as
hereinafter defined), in the event that the Company for any reason becomes
ineligible for the use of Form S-3, and shall remain ineligible for a period of
thirty (30) days, the Holders shall have the right to request that the Company,
at its own expense, effect the registration of Registrable Securities under the
1933 Act (a "Demand Registration"), in which case the Company shall use its best
efforts to cause a Registration Statement covering the resale of the Registrable
Securities of all Holders who desire to include Registrable Securities therein
to be filed and declared effective as soon as reasonably practicable and, in any
event, within ninety (90) days of the date of such request, and to cause such
Registration Statement to remain effective and supplemented for a period of not
less than ninety (90) days; and provided further that the Company shall be under
no obligation to effect more than one Demand Registration pursuant to this
Section during any twelve-month period. Notwithstanding the foregoing, if the
Company shall fail to cause such Registration Statement to become effective
within ninety (90) days, the Company's failure shall not be deemed a breach of
this Section 2(c) provided that the Company used its best efforts during such
ninety (90) day period. If and when the Company again becomes eligible to use
Form S-3 and it files and causes to become effective a Registration Statement on
Form S-3 pursuant to Rule 415 covering the resale of Registrable Securities, any
unexercised rights of the Holders to effect a Demand Registration pursuant to
this Section 2(c) shall terminate; provided, however, that the Holders right to
effect a Demand Registration pursuant to this Section 2(c) shall be reinstated
if the Company during the Registration Period again becomes ineligible to use
Form S-3 and remains ineligible for a period of thirty (30) days.
3. PIGGYBACK REGISTRATION.
a. Notice of Piggyback Registration and Inclusion of
Registrable Securities. Subject to the terms of this Agreement, for a period of
five years following the Closing Date in the event the Company decides to
register any of its equity securities (either for its own account or the account
of a security holder or holders) on an SEC form that would be suitable for a
registration involving Registrable Securities (other than any registration made
pursuant to Form S-4 or Form S-8), the Company will: (i) promptly give the
Holders written notice thereof (which shall include a list of the jurisdictions
in which the Company intends to qualify such securities under the applicable
Blue Sky or other state securities laws) and (ii) subject to Section 3(c) below,
use its best efforts to include in such registration (and in any related
qualification under Blue Sky laws or other state securities laws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request delivered to the Company by the Holders within twenty (20) days
after delivery of such written notice from the Company.
b. Notice of Underwriting in Piggyback Registration. If the
registration of which the Company gives notice pursuant to Section 3(a) is for a
registered public offering involving an underwriting, then the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
3(a). In such event, the right of the Holders to registration shall be
conditioned upon such underwriting and the inclusion of the Holders' Registrable
Securities in such underwriting to the extent provided in this Section 3. The
Holders, as holders of Registrable Securities proposing to distribute their
securities through such underwriting, shall (together with the Company and the
other holders distributing their securities through such underwriting) enter
into an underwriting agreement with the managing underwriter for such offering;
provided, however, that the Holders shall have no right to participate in the
selection of the underwriters for an offering pursuant to this Section 3.
c. Marketing Limitation in Piggyback Registration. In the
event the managing underwriter of an Underwritten Offering or, in the case of
any offering that is not underwritten, a recognized investment banking firm
shall advise the Company (and the Company shall in each case so advise each
Holder of Registrable Securities requesting registration of such advice in
writing) that, market factors (including, without limitation, the aggregate
number of shares requested to be registered, the general condition of the
market, and the status of the persons proposing to sell securities pursuant to
the registration) require a limitation of the number of shares to be
underwritten, then the Company will include in such registration, to the extent
of the number and type of securities which the Company is so advised can be sold
in (or during the time of) such offering, first, all securities of the Company
proposed by the Company to be sold for its own account, or, in the case of a
secondary offering made pursuant to demand registration rights granted to any
Person other than a Holder of Registrable Securities, all securities of the
Company that such Person proposes to sell; second, all securities of the Company
held by Persons that are entitled to priority piggyback registration rights
under agreements with the Company in existence on the date of the Purchase
Agreement; third, such Registrable Securities requested to be included in such
registration pursuant to this Agreement pro rata among (i) such Holders (based
on the number of Registrable Securities requested to be included by each Holder)
and (ii) Persons who hold the Company's securities that are entitled to
registration rights under agreements with the Company in existence on the date
of this Agreement; and fourth, all securities of the Company to be sold for the
account of a Person other than a Holder of Registrable Securities or a Person
covered by one of the foregoing clauses. No Registrable Securities or other
securities excluded from the underwriting by reason of this Section 3(c) shall
be included in the applicable Registration Statement.
d. Withdrawal in Piggyback Registration. If any Holder
disapproves of the terms of any such underwriting, then such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter
delivered at least ten (10) days prior to the effective date of the registration
statement. Any Registrable Securities or other securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
e. Limitation on Number of Piggyback Registrations. The
Holders will be entitled to an aggregate of four registrations pursuant to this
Section 3; provided, however, that in the event that the number of Registrable
Securities included in any registration pursuant to this Section 3 is less than
33-1/3% of the securities requested to be registered as a result of the
application of the provisions of subsection (c) above, such registration shall
not be counted towards the limitation set forth in this subsection (e).
4. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare and file a Registration Statement
and use its best efforts to cause such Registration Statement to become
effective, all as provided in Sections 2(a), 2(c) and 3(a) hereof, and, with
respect to registrations pursuant to Section 2(a), keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as is the
earlier of (i) the date on which all of the Registrable Securities covered by
the Registration Statement have been sold by the Holders, (ii) the date on which
all of the shares of Common Stock issued pursuant to the Purchase Agreement or
Section 2(c) hereof, or as a dividend on or in exchange for or otherwise with
respect to any of the foregoing, have ceased to be Registrable Securities and
(iii) the third anniversary following the Completion Date (as such term is
defined in Section 9(m) of the Purchase Agreement). The period from the filing
of the Registration Statement until the earlier of (i), (ii) and (iii) above
shall be referred to herein as the "Registration Period." Notwithstanding the
foregoing, if the Company shall fail to cause such Registration Statement to
become effective within ninety (90) days, the Company's failure shall not be
deemed a breach of this Section 4(a) provided that the Company used its best
efforts during such ninety-day (90) period.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement.
c. The Company shall furnish to the Holders (and the firm of
legal counsel designated pursuant to Section 4(g)) (i) promptly after the
Registration Statement is prepared and publicly distributed and filed with the
SEC, one copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment and supplement thereto,
and (ii) such number of copies of a prospectus and all amendments and
supplements thereto and such other documents as the Holders may reasonably
request in order to facilitate the disposition of the Registrable Securities
covered by the Registration Statement and owned by such Holders. The Company
shall immediately notify the Holders by facsimile of the effectiveness of the
Registration Statement or any post-effective amendment.
d. The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Holders reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be reasonably necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(d), (b) subject itself
to general taxation in any such jurisdiction, or (c) file a general consent to
service of process in any such jurisdiction or otherwise take any action that
would subject it to the general jurisdiction of the courts of any jurisdiction
in which it would not otherwise be so subject.
e. As promptly as practicable after becoming aware of such
event, the Company shall notify the Holders of the happening of any event of
which the Company has knowledge as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Company shall use its best efforts
to promptly prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver such number of copies of
such supplement or amendment to the Holders as such Holders may reasonably
request.
f. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of the
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify the
Holders (or, in the event of an Underwritten Offering, the managing
underwriters) of the issuance of such order and the resolution thereof.
g. The Company shall permit a single firm of legal counsel
designated by the Holders to review the Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) a reasonable period of time prior to their filing with
the SEC, and shall not file any document in a form to which such counsel
reasonably objects and will not request acceleration of the Registration
Statement without prior notice to such counsel. The sections of the Registration
Statement covering information with respect to the Holders, the Holders'
beneficial ownership of securities of the Company or the Holders' intended
method of disposition of Registrable Securities shall conform to the information
provided to the Company by the Holders.
h. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC, and make generally
available to its security holders as soon as reasonably practical, but not later
than ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Section 11(a) and Rule 158
under the 0000 Xxx) covering a period of at least twelve-months beginning with
the first day of the Company's first full calendar quarter following the date
the Registration Statement is declared effective by the SEC (the "Effective
Date").
i. The Company shall make available for inspection, at the
offices where normally kept and during reasonable business hours, by (i) the
Holders, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) any firm of legal counsel and any firm of
accountants or other agents retained by the Holders, and (iv) one firm of legal
counsel retained by all such underwriters (collectively, the "Inspectors"), all
pertinent financial and other records, corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably requested by such
person as being necessary in the reasonable opinion of such person to conduct a
reasonable investigation within the meaning of the 1933 Act in connection with
such Registration Statement, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure (except to a Holder
(subject to the limitations set forth in the last sentence of this subsection)
or agents of the Company) of any Record or other information obtained in
connection with any such inspection, unless (a) the disclosure of such Records
is necessary in connection with the Inspectors' or the Holders' assertion of any
claims or actions or with their establishment of any defense in any pending
administrative or judicial action or proceeding, (b) the release of such Records
is ordered pursuant to a subpoena or other order from a court or government body
of competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. Each of the Holders agree that it shall, and shall cause
each of its Inspectors to, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give notice of such request to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential. Notwithstanding the foregoing,
the Company may designate any such Records as being reviewable only by the
Inspectors, and not disclosable to the Holders if the Company reasonably
believes that such Records are of a competitively sensitive nature, and
disclosure to the Holders in accordance with this provision would be harmful to
the Company's competitive position.
j. The Company shall hold in confidence and not make any
disclosure of information concerning the Holders provided to the Company unless
(i) disclosure of such information is necessary in connection with the Company's
assertion of any claims or actions or with its establishment of any defense in
any pending administrative or judicial action or proceeding, (ii) disclosure of
such information is necessary to comply with federal or state securities laws,
(iii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission of material fact in the Registration Statement that
directly relates to the Holders, (iv) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction, or (v) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning the Holders is sought in or by a court or
governmental body of competent jurisdiction or through other means, give notice
of such request to the Holders and allow the Holders, at the Holders' expense,
to undertake appropriate action to prevent disclosure of the information deemed
confidential.
k. The Company shall (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure the designation and
quotation of all the Registrable Securities covered by the Registration
Statement on the NASDAQ National Market.
l. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
Effective Date.
m. The Company shall enter into such customary agreements
(including, in the case of an Underwritten Offering, underwriting agreements in
customary form as are reasonably satisfactory to the Company with customary
indemnification and contribution obligations) and take all such other
appropriate actions as the Holders or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities. The Holders holding 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 Company make to and for the benefit
of such holders the representations, warranties and covenants of the Company and
the Company may, at its option, require that the Holders make to and for the
benefit of the Company, the representations, warranties and covenants, of the
Holders, in each case, 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.
n. The Company shall use its best efforts to obtain an opinion
from the Company's counsel and a "cold comfort" letter from the Company'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 Holders, and
furnish to the Holders and to each underwriter, if any, a copy of such opinion
and letter addressed to the Holders or underwriter.
o. The Company shall cooperate with the Holders 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 Holders at least three business days prior to any sale of
Registrable Securities and instruct any transfer agent and registrar of
Registrable Securities to release any stop transfer orders in respect thereof.
p. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Holders of Registrable
Securities pursuant to the Registration Statement.
q. If any such registration statement or comparable statement
under "blue sky" laws refers to the Holders by name or otherwise as the holder
of any securities of the Company, then such Holders shall have the right to
require (i) the insertion therein of language, in form and substance
satisfactory to such Holders and the Company, to the effect that the holding by
such Holders of such securities is not to be construed as a recommendation by
such Holders of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holders will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holders by name or otherwise is not in the judgment
of the Company, as advised by counsel, required by the 1933 Act or any similar
federal statute or any state "blue sky" or securities law then in force, the
deletion of the reference to the Holders.
5. OBLIGATIONS OF THE HOLDERS.
In connection with the registration of the Registrable Securities, the
Holders shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of the Holders that each such Holder furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the registration of such Registrable
Securities and as are customarily provided by selling stockholders and shall
execute such documents in connection with such registration as the Company may
reasonably request and as are customarily executed by selling stockholders;
provided that any such information shall be used only in connection with such
registration. At least five (5) business days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify the Holders
or their counsel of the information the Company requires from the Holders in
accordance with this Section 5(a).
b. Each Holder, by its acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement, unless such Holder has notified the Company in writing of such
Holder's election to exclude all of such Holder's Registrable Securities from
the Registration Statement.
c. The Holders agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4(e) or
4(f), such Holders will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holders' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(e) or 4(f) and, if so directed by
the Company, such Holders shall, at their option, deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Holders' possession, of the prospectus covering
such Registrable Securities at the time of receipt of such notice.
d. The Holders may not participate in any underwritten
registration hereunder unless such Holders (i) agree to sell such Registrable
Securities on the basis provided in any underwriting arrangements entered into
by the Company, (ii) complete and execute all questionnaires, indemnities,
underwriting agreements and other documents (other than powers of attorney)
reasonably required under the terms of such underwriting arrangements, and (iii)
agree to pay their pro rata share of all underwriting discounts and commissions
and their own expenses (including, without limitation, counsel fees, except as
specifically provided herein).
6. EXPENSES OF REGISTRATION.
All expenses incident to the Company's performance of or compliance
with Sections 2(a) or 2(b) of this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, and all
reasonable fees and disbursements of counsel for the Company and all independent
certified public accountants, underwriters and other persons retained by the
Company (all such expenses being herein called "Registration Expenses"), will be
borne by the Holders on a pro rata basis (based on the number of Registrable
Securities to be registered by such Holder). In connection with any registration
pursuant to Section 2(c) of this Agreement, all Registration Expenses will be
borne by the Company. In connection with any registration pursuant to Section
3(a) of this Agreement, the Holders will bear their pro rata portion of the
Registration Expenses (based on the number of Registrable Securities to be
registered by such Holders as a portion of the total amount of securities of the
Company being registered). The Holders will also bear any transfer taxes and
underwriting discounts or commissions applicable to the Registrable Securities
sold by the Holders.
7. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will,
and hereby agrees to, indemnify, hold harmless and defend (i) the Holders who
hold such Registrable Securities, (ii) the directors, officers, partners,
employees, agents and each person who controls the Holders within the meaning of
the 1933 Act or the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, of any similar successor statute (the "1934 Act"),
if any, (iii) any underwriter (as defined in the 0000 Xxx) for the Holders, and
(iv) the directors, officers, partners, employees and each person who controls
any such underwriter within the meaning of the 1933 Act or the 1934 Act, if any
(each, an "Indemnified Person"), against any and all joint or several losses,
claims, damages, liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, in respect thereof, "Claims") to which any of
them may become subject insofar as such Claims arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement under which Registrable Securities were registered under
the 1933 Act or the omission or alleged omission to state therein a material
fact required to be stated or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the Effective Date, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading; or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to the restrictions
set forth in Section 7(c) hereof with respect to the retention of legal counsel
by an Indemnified Person or Indemnified Party (as defined below), the Company
shall reimburse the Indemnified Person, promptly as such expenses are incurred
and are due and payable, for any reasonable legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(a): (i) shall not apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; and (ii) with respect to any preliminary prospectus, shall
not inure to the benefit of any Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented, such
corrected prospectus was timely made available by the Company pursuant to
Section 4(c) hereof, and the Holders are promptly advised in writing not to use
the incorrect prospectus prior to the use giving rise to a Violation and such
Indemnified Person, notwithstanding such advice, used it. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Holders pursuant to Section 11 hereof.
b. In connection with any Registration Statement in which the
Holders are participating, the Holders agree severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 7(a) hereof, the Company, each of its directors, each of
its officers who signs the Registration Statement, to the fullest extent
permitted by law, each person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors, officers, agents or any person who controls such stockholder or
underwriter within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "Indemnified Party"), against any Claim
to which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation by
the Holders, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by the Holders expressly for use in connection with
such Registration Statement; and subject to Section 7(d) hereof with respect to
the retention of legal counsel by an Indemnified Person or Indemnified Party,
the Holders will reimburse the Indemnified Party any reasonable legal or other
expenses (promptly as such expenses are incurred and are due and payable)
incurred by them in connection with investigating or defending any such Claim;
provided, however, that the Holders shall be liable under this Agreement
(including this Section 7(b) and Section 8 hereof) for only that amount as does
not exceed the net proceeds from the sale of Registrable Securities by the
Holders pursuant to such Registration Statement. Such indemnity 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 the Registrable
Securities by the Holders pursuant to Section 11 hereof. Notwithstanding
anything herein to the contrary, the indemnification agreement contained in this
Section 7(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.
c. Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 7 (with appropriate modifications) shall
be given by the Company and the Holders selling 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 notify promptly 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 7, 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 7, 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 Section 7. In case any action or proceeding is brought
against an indemnified party and 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 consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the 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. 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 7(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
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 7(e) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding sentences
of this Section 7(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 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Notwithstanding anything in
this Section 7(e) to the contrary, no indemnifying party (other than the
Company) shall be required pursuant to this Section 7(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 7(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 7 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.
8. NO OBLIGATION TO SELL.
Nothing in this Agreement shall be deemed to create an independent
obligation on the part of the Holders to sell any Registrable Securities
pursuant to any effective Registration Statement.
9. COOPERATION AMONG THE PARTIES.
The Company agrees to reasonably cooperate with the Holders, ASkyB, MCI
and any Affiliate of News Corporation or MCI in any transaction whereby the
Holders, ASkyB, MCI or any Affiliate of News Corporation or MCI desire to sell
the Registrable Securities in a private transaction. Without limiting the
generality of the foregoing, the Company shall make available at reasonable
times and locations for inspection by any prospective purchasers of the Common
Stock, and any attorney, accountant or other agent retained by any such
prospective purchaser, all Records as shall be reasonably requested by such
prospective purchaser, and cause the Company's officers and employees to supply
all information which any such prospective purchaser may reasonably request;
provided, however, that the Company shall not be required to disclose to any
prospective purchaser information which the Company determines in good faith to
be confidential in such Records until and unless such prospective purchaser
shall have entered into a confidentiality agreement (in form and substance
satisfactory to the Company) with the Company with respect thereto. News
Corporation or MCI, as the case may be, shall reimburse the Company for any
reasonable out-of-pocket expenses incurred by the Company pursuant to this
Section 9.
10. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Holders to sell securities of the Company to
the public without registration ("Rule 144"), the Company agrees to use its best
efforts, during the term of this Agreement, to:
a. make and keep public information available, as
those terms are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and
c. furnish to the Holders so long as the Holders own
Registrable Securities, promptly upon written request, (i) a written statement
by the Company as to whether or not it has complied with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Holders to sell such securities pursuant to
Rule 144 without registration.
11. ASSIGNMENT.
The rights of the Holders under this Agreement may not be assigned;
provided, however, that each Holder may assign its rights hereunder to any
transferee of all or any portion of Registrable Securities held by such Holder
if the transferee (i) is a direct or indirect wholly-owned subsidiary of either
News Corporation or MCI and (ii) agrees in writing with the Company to be bound
by all of the provisions contained herein applicable to the transferor (such
agreement being evidenced by the execution of a Counterpart and Acknowledgment
substantially in the form attached hereto as Exhibit A). Subject to the
requirements of this Section 11, this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto.
12. AMENDMENT.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with written consent of the Company and the
Holders. Any amendment or waiver effected in accordance with this Section 12
shall be binding upon the Holders and the Company.
13. ABILITY OF COMPANY TO POSTPONE REGISTRATION.
The Company may postpone for a reasonable period of time, not to exceed
ninety (90) days, the filing or the effectiveness of any Registration Statement
if the Board of Directors of the Company in good faith determines that (A) such
registration might have a material adverse effect on any plan or proposal by the
Company with respect to any financing, acquisition, recapitalization,
reorganization or other material transaction, or (B) the Company is in
possession of material non-public information that, if publicly disclosed, could
result in a material disruption of a major corporate development or transaction
then pending or in progress or in other material adverse consequences to the
Company.
14. LOCK-UP AGREEMENT.
If requested by the managing underwriter or underwriters in an
Underwritten Offering, or by the initial purchaser or representative of the
initial purchasers in an offering under Rule 144A under the 1933 Act (a "Rule
144A Offering"), by the Company of its equity securities (including debt
securities convertible into or exchangeable or exercisable for equity securities
of the Company) or its debt securities that are not convertible into or
exchangeable or exercisable for equity securities of the Company
("Non-Convertible Debt Securities"), each Holder of Registrable Securities
agrees not to effect any public sale or distribution of any Registrable
Securities of the Company during the period commencing on the effective date of
such Underwritten Offering or, in the case of a Rule 144A Offering, the date of
the definitive offering memorandum for the Rule 144A Offering (or such earlier
date chosen by the managing underwriter or underwriters in an Underwritten
Offering or by the initial purchaser or representative of the initial purchasers
in a Rule 144A Offering) and continuing until ninety (90) days following either
(a) the effective date of such Underwritten Offering or, in the case of a Rule
144A Offering, the date of the definitive offering memorandum for the Rule 144A
Offering or (b) such earlier date, if applicable, except for any Registrable
Securities that are part of such Underwritten Offering or Rule 144A Offering, as
the case may be, or, unless otherwise permitted by such managing underwriter or
underwriters in the case of an Underwritten Offering or by the initial purchaser
or the representative of the initial purchasers in a Rule 144A Offering,
provided, however, that the Holders' obligation under this Section 14 with
respect to Non-Convertible Debt Securities shall apply to only one offering
during the term of this Agreement and only to the extent that the aggregate
principal amount of Non-Convertible Debt Securities in such offering is at least
$500 million.
15. MISCELLANEOUS.
a. Definition of Holder of Registrable Securities. A person or
entity is deemed to be the holder of Registrable Securities owned by such person
and its affiliates. 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 that the Company shall have
received assurances reasonably satisfactory to it of such beneficial ownership.
b. Notices. Any notices required or permitted to be given
under the terms hereof shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a nationally
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular U.S. mail, or
upon receipt, if delivered personally or by courier (including a nationally
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
EchoStar Communications Corporation
0000 Xxxxx Xxxxx Xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Senior Vice President, General
Counsel and Secretary
Facsimile: (000) 000-0000
If to the ASkyB Holder:
American Sky Broadcasting, LLC
c/o The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Senior Executive Vice President
and Group General Counsel
Facsimile: (000) 000-0000
If to the MCI Holder:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
General Counsel
Facsimile: (000) 000-0000
c. Remedies. Any person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
d. Governing Law; Severability. This Agreement shall be
enforced, governed by and construed in accordance with the laws of New York
applicable to agreements made and to be performed entirely within such State. In
the event that any provision of this Agreement is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
e. Merger Clause. This Agreement, the Purchase Agreement and
the other Collateral Agreements (as defined in the Purchase Agreement)
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings other than those
set forth or referred to herein and therein. This Agreement and the Purchase
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof. Notwithstanding
the foregoing, this Agreement shall have no effect on any other registration
rights agreement to which any Holder and the Company are a party.
f. Descriptive Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
g. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to any other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
h. Further Acts. Each party 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 may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
i. Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company and the Holders have caused this
Agreement to be duly executed as of the date first above written.
ECHOSTAR COMMUNICATIONS CORPORATION
By:
Title:
AMERICAN SKY BROADCASTING, LLC
By:
Title:
MCI TELECOMMUNICATIONS CORPORATION
By:
Title:
[WHOLLY OWNED SUBSIDIARY OF NEWS
CORPORATION]
By:
Title:
[WHOLLY OWNED SUBSIDIARY OF MCI]
By:
Title:
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGEMENT
TO: ECHOSTAR COMMUNICATIONS CORPORATION
RE: The Registration Rights Agreement (the "Agreement") dated as of
__________ __, 1998, by and among EchoStar Communications Corporation and
the Holders (as defined in the Agreement)
The undersigned hereby agrees to be bound by the terms of the
Agreement as a party to the Agreement, and shall be entitled to all benefits of
the Holders (as defined in the Agreement) and shall be subject to all
obligations and restrictions of the Holders pursuant to the Agreement, as fully
and effectively as though the undersigned had executed a counterpart of the
Agreement together with the other parties to the Agreement. The undersigned
hereby acknowledges having received and reviewed a copy of the Agreement.
DATED this _____ day of ____________, 199_.
By:
Title:
Number of Shares of
Registrable Securities:
