Exhibit 10.1
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 7, 2002 among Commonwealth Telephone
Enterprises, Inc., a Pennsylvania corporation (the "Company"), and Level 3
Communications, Inc., a Delaware corporation ("Level 3").
WHEREAS, Level 3 is the indirect beneficial owner of 9,639,326 issued and
outstanding shares of the Company's Common Stock, par value $1.00 per share (the
"Common Stock"), and 1,017,061 issued and outstanding shares of the Company's
Class B Common Stock, par value $1.00 per share (the "Class B Common Stock," and
together with the Common Stock, the "Capital Stock"), which are held of record
by Xxxxx 0 Xxxxxxxx Xxxxxxxx, Xxx., a Delaware corporation ("Delaware
Holdings").
WHEREAS, this Agreement is being entered into to memorialize the agreement
between the parties with respect to a Shareholder's right to have its shares of
Capital Stock registered pursuant to the Securities Act of 1933, as amended.
WHEREAS, it is intended by the Company and Level 3 that this Agreement
shall become effective immediately.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Commission" means the Securities and Exchange Commission.
"Company Expenses" means: (i) registration and filing fees with the
Commission and National Association of Securities Dealers, Inc., (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) printing expenses, (iv) fees and expenses
incurred in connection with the listing or quotation of the Registrable
Securities, (v) fees and expenses of counsel to the Company and the fees and
expenses of independent certified public accountants for the Company (including
fees and expenses associated with any special audits or the delivery of comfort
letters), (vi) the reasonable fees and expenses of any additional experts
retained by the Company in connection with such registration and (vii) the
reasonable fees and expenses of one counsel for all the Participating
Shareholders not in excess of $25,000.
"Demand Registration" means a Demand Registration as defined in Section
2.1.
"Participating Shareholders" means the Shareholders electing to sell
Registrable Securities pursuant to a Demand Registration or a Piggyback
Registration.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Piggyback Registration" means a Piggyback Registration as defined in
Section 2.2.
"Registrable Securities" means (i) all shares of Capital Stock held by
Level 3 on the date hereof, (ii) any shares of Capital Stock acquired after the
date hereof and (iii) any shares of Capital Stock or other securities
distributed as a dividend with respect to, or issued in exchange for or in
replacement of, such shares of Capital Stock.
"Shareholder" means a holder of Registrable Securities.
"Shareholder Expense Cap" means $500,000.
"Subsidiary" means each corporation, partnership, joint venture or other
legal entity of which a Shareholder beneficially owns, directly or indirectly,
more than 50% of the outstanding stock or other equity interests.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
ARTICLE 2
Registration Rights
Section 2.1. Demand Registration. (a) Shareholders holding Registrable
Securities may make an aggregate of up to three (3) written requests for
registration under the Securities Act (including the first request contained in
subsection 2.1(d) hereof) of all or any part of the Registrable Securities held
by such Shareholders (a "Demand Registration"); provided that (i) the first
Demand Registration must be in respect of not less than 2,500,000 Registrable
Securities (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like), (ii) the second and third Demand Registrations
must each be in respect of not less than either (x) 1,500,000 Registrable
Securities (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like) or (y) Registrable Securities representing the
right to cast at least 6,500,000 votes at a meeting of stockholders of the
Company (exclusive of cumulative voting rights) ("Votes"), (iii) the
Shareholders shall not request a Demand Registration within 150 days of the
effective date of a prior Demand Registration and (iv) the Shareholders shall
indicate the Registrable Securities to be registered (that is, Common Stock,
Class B Common Stock or a combination of both). In addition, such request will
specify the aggregate number of shares of Registrable Securities proposed to be
sold by the Shareholders and will also specify the intended method of
disposition thereof. A registration will not count as a Demand Registration
until the distribution contemplated by such Demand Registration has been
consummated. Should the
distribution contemplated by a Demand Registration not be consummated due to the
failure of the Participating Shareholders to perform their obligations under
this Agreement or the inability of the Participating Shareholders to reach
agreement with the Underwriters for the proposed sale on price or other
customary terms for such transaction, or in the event the Participating
Shareholders withdraw or do not pursue the request for the Demand Registration
(in each of the foregoing cases, provided that at such time the Company is in
compliance in all material respects with its obligations under this Agreement),
then such Demand Registration shall not be deemed to have been effected, but the
Participating Shareholders shall pay those expenses incurred by the Company in
connection with such request set forth in Section 3.2 hereof.
(b) If the Shareholders so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. The Participating Shareholders shall have the right
jointly to select the managing Underwriters and any additional investment
bankers and managers to be used in connection with such offering, subject to the
Company's approval, which approval shall not be unreasonably withheld,
conditioned or delayed.
(c) The Company will have the right to preempt any Demand Registration with
a primary registration by delivering written notice (within five business days
after the Company has received from the Participating Shareholders a request for
such Demand Registration) of such intention to the Participating Shareholders
indicating that the Company has identified a specific business need and use for
the proceeds of the sale of such securities and the Company shall use all
commercially reasonable efforts to effect a primary registration within 90 days
of such notice. In the ensuing primary registration, the Shareholders will have
such piggyback registration rights as are set forth in Section 2.2 hereof. Upon
the Company's preemption of a requested Demand Registration, such requested
registration will not count as a Demand Registration. The Company shall not be
entitled to exercise this right of preemption more than one (1) time in any 180
day period.
(d) Level 3 hereby requests the registration of a minimum of 2,500,000
Registrable Securities pursuant to subsection 2.1(a) above, and agrees to use
commercially reasonable efforts to cause such Registrable Securities to be sold
in an underwritten offering on or before May 30, 2002, subject to the provisions
of Section 2.1(a). The Company and Level 3 agree that the co-lead underwriters
of the offering will be Xxxxxx Xxxxxxx Xxxx Xxxxxx and Xxxxxxx, Xxxxx & Co.
Level 3 acknowledges that it will not have the right to sell less than 2,500,000
Registrable Securities in the offering without the prior written consent of the
Company.
Section 2.2. Piggyback Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering (a
"Proposed Offering") of common equity securities for the Company's own account
or for the account of other shareholders of the Company (other than a
registration statement on Form S-4 or S-8 or pursuant to Rule 415 (or any
substitute form or rule, respectively, that may be adopted by the Commission)),
the Company shall give written notice of such proposed filing to each
Shareholder as soon as reasonably practicable (but in no event less than ten
business days before the anticipated filing date), and such notice shall offer
each Shareholder the opportunity to
register such number of shares of Registrable Securities held by such
Shareholder as such Shareholder may request on the same terms and conditions as
the Company's Common Stock (a "Piggyback Registration"). Each Shareholder will
have five business days after receipt of any such notice to notify the Company
as to whether it wishes to participate in a Piggyback Registration and, if so,
the number of Registrable Securities proposed to be included in such offering;
provided that should any Shareholder fail to provide timely notice to the
Company, such Shareholder will forfeit any rights to participate in the
Piggyback Registration with respect to such proposed offering. If the Company
shall determine in its sole discretion not to register or to delay the Proposed
Offering, the Company may, at its election, provide written notice of such
determination to the Shareholders who have provided timely notice of their
intention to participate in the Piggyback Registration and (i) in the case of a
determination not to effect the Proposed Offering, shall thereupon be relieved
of the obligation to register such Shareholder's Registrable Securities in
connection therewith, and (ii) in the case of a determination to delay a
Proposed Offering, shall thereupon be permitted to delay registering such
Shareholder's Registrable Securities for the same period as the delay in respect
of Common Stock being registered for the Company's account; provided that such
delay will not prevent the Shareholder from exercising their right to request a
Demand Registration subject to the provisions of Section 2.1. The Company shall
be entitled to select the Underwriters in connection with any Piggyback
Registration.
Section 2.3. Reduction of Offering. Notwithstanding anything contained
herein, if the managing Underwriter of an offering described in Section 2.1 or
Section 2.2 advises the Company and the Participating Shareholders that
marketing factors require a limitation of the number of shares to be
underwritten, then the amount of Registrable Securities to be offered for the
account of the Shareholders and other selling persons exercising similar
piggy-back registration rights shall be reduced pro rata to the extent necessary
to reduce the total amount of securities to be included in such offering to the
amount recommended by such managing Underwriter and, as between the Shareholders
and other selling persons exercising similar piggy-back registration rights, the
number will be reduced pro rata based on the number of Registrable Securities
each Shareholder requests to have registered; provided that in the case of a
Demand Registration, the amount of Registrable Securities to be offered for the
account of the Shareholders making the Demand shall be reduced pro rata as to
those Shareholders making a Demand Registration only after the amount of
securities to be offered for the account of the Company and any other Persons
(other than any Persons having registration rights as of the date of this
Agreement) has been reduced to zero.
ARTICLE 3
Registration Procedures
Section 3.1. Filings; Information. Whenever the Shareholders request that
any Registrable Securities be registered pursuant to Section 2.1 hereof, the
Company will use all commercially reasonable efforts to effect the registration
of such Registrable Securities as promptly as is reasonably practicable, and in
connection with any such request:
(a) The Company will expeditiously prepare and file with the Commission a
registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use all commercially reasonable
efforts to cause such filed registration statement to become and remain
effective for such period, not to exceed 90 days, as may be reasonably necessary
to effect the sale of such securities; provided that if the Company shall
furnish to the Participating Shareholders a certificate signed by the Company's
Chairman or President stating that in the good faith judgment of the Company's
Board of Directors it would be seriously detrimental to the Company or its
shareholders for such a registration statement to be filed or become effective
as expeditiously as possible, the Company may postpone the filing or
effectiveness of a registration statement for a period of not more than 120 days
(provided that the Company may not defer such filing pursuant to this clause
more than once in any 12 month period); and provided further that if (i) the
effective date of any registration statement filed pursuant to a Demand
Registration would otherwise be at least 45 calendar days, but fewer than 90
calendar days, after the end of the Company's fiscal year, and (ii) the
Securities Act requires the Company to include audited financials as of the end
of such fiscal year, the Company may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year, although the
Company will use all commercially reasonable efforts to minimize the length of
such delay.
(b) The Company will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the Participating
Shareholders and each applicable managing Underwriter, if any, copies thereof,
and thereafter furnish to the Participating Shareholders and each such
Underwriter, if any, such number of copies of such registration statement,
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein) and the prospectus included in
such registration statement (including each preliminary prospectus) as the
Participating Shareholders or each such Underwriter may reasonably request in
order to facilitate the sale of the Registrable Securities.
(c) After the filing of the registration statement, the Company will
promptly notify the Participating Shareholders of any stop order issued or, to
the Company's knowledge, threatened to be issued by the Commission and take all
commercially reasonable actions required to prevent the entry of such stop order
or to remove it if entered.
(d) The Company will use all commercially reasonable efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Participating
Shareholders reasonably request; provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for
this paragraph 3.1(d), (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any such jurisdiction.
(e) The Company will as promptly as is practicable notify the Participating
Shareholders, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and promptly make available to the Participating
Shareholders and to the Underwriters any such supplement or amendment. Upon
receipt of any notice from the Company of the occurrence of any event of the
kind described in the preceding sentence, the Participating Shareholders will
forthwith discontinue the offer and sale of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until receipt by
the Participating Shareholders and the Underwriters of the copies of such
supplemented or amended prospectus and, if so directed by the Company, the
Participating Shareholders will deliver to the Company all copies, other than
permanent file copies then in the Participating Shareholders' possession, of the
most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event the Company shall give such notice, the
Company shall extend the period during which such registration statement shall
be maintained effective as provided in Section 3.1(a) hereof by the number of
days during the period from and including the date of the giving of such notice
to the date when the Company shall make available to the Participating
Shareholders such supplemented or amended prospectus.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
required in order to expedite or facilitate the sale of such Registrable
Securities.
(g) At the request of any Underwriter in connection with an underwritten
offering, the Company will furnish (i) an opinion of counsel, addressed to the
Underwriters, covering such customary matters as the managing Underwriter may
reasonably request and (ii) a comfort letter or comfort letters from the
Company's independent public accountants covering such customary matters as the
managing Underwriter may reasonably request.
(h) The Company will make generally available to its security holders, as
soon as reasonably practicable, an earning statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(i) The Company will use all commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange or quoted
on each inter-dealer quotation system on which the Common Stock is then listed
or quoted.
The Company may require the Participating Shareholders promptly to furnish
in writing to the Company such information regarding the Participating
Shareholders, the plan of distribution of the Registrable Securities and other
information as the Company may from time to time reasonably request or as may be
legally required in connection with such registration.
Section 3.2. Registration Expenses. Participating Shareholders shall bear
50% of the Company Expenses incurred in connection with any Demand Registration
(up to and including the Shareholder Expense Cap) and the Company shall bear the
balance of the Company Expenses. The Company shall bear all of the Company
Expenses incurred in connection with a Piggyback Registration. The Participating
Shareholders shall pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities and any out-of-pocket
expenses of the Participating Shareholders (other than the fees and expenses of
counsel described in clause (vii) of the definition of "Company Expenses" set
forth in Article 1 hereof). In the event that a distribution contemplated by a
Demand Registration is not consummated for any reason other than the failure by
the Company to perform its obligations under this Agreement, all reasonable
Company Expenses incurred in connection with such registration shall be borne by
the Participating Shareholders; provided that should the distribution
contemplated by the Demand Registration not be consummated due to the
Participating Shareholders withdrawing the Demand Registration as a result of
either (x) a material adverse change in the condition (financial or otherwise),
business, assets or results of operations of the Company and its Subsidiaries
taken as a whole or (y) a material adverse change in the United States financial
markets, in either case occurring subsequent to the date of the written request
made by the Participating Shareholders hereunder, the Participating Shareholders
and the Company shall each bear 50% of the Company Expenses incurred in
connection with such withdrawn Demand Registration.
(b) Notwithstanding any provision in this Agreement to the contrary, each
party to this Agreement shall bear its own expenses (including attorneys' fees
and expenses and the fees and expenses of any financial adviser) incurred by
that party in connection with the negotiation, review, preparation and execution
of this Agreement, and Level 3 shall have no responsibility for the payment of
any other expenses incurred by the Company related to the transactions
contemplated herein other than as set forth in Section 3.2(a) hereof.
ARTICLE 4
Indemnification and Contribution
Section 4.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder from and against any and all
losses, claims, damages and liabilities (including reasonable attorneys' fees)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by or contained in or
based upon any information furnished in writing to the Company by a Shareholder
or any Underwriter expressly for use therein. The Company also agrees to
indemnify any Underwriters of the Registrable Securities, their officers and
directors, and each person who controls such Underwriters, on substantially the
same basis as that of the indemnification of Shareholders provided in this
Section 4.1.
Section 4.2. Indemnification by Shareholders. Each Shareholder agrees to
indemnify and hold harmless the Company, its officers and directors, and each
Person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to the Shareholders, but only with
reference to information furnished in writing by or on behalf of such
Shareholders expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus or the failure to deliver a copy of such
registration statement or prospectus or any amendments or supplements thereto
due to the fault of such Shareholders. Each Shareholder also agrees to indemnify
and hold harmless any Underwriters of the Registrable Securities, their officers
and directors and each person who controls such Underwriters on substantially
the same basis as that of the indemnification of the Company provided in this
Section 4.2. The extent of each Shareholder's liability under this Section 4.2
shall be limited to the amount such Shareholder receives in the relevant
offering of Registrable Securities.
Section 4.3. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.1 or
Section 4.2, such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, which consent will not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment.
Section 4.4. Contribution. If the indemnification provided for in this
Article 4 is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Company and the Shareholders in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Shareholders 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 such party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Shareholders were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article 4, no Shareholder shall be
required to contribute any amount in excess of the amount by which the net
proceeds of the offering (before deducting expenses) received by such
Shareholder exceeds the amount of any damages which such Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE 5
Miscellaneous
Section 5.1. Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all customary and normal
questionnaires, powers of attorney, custody arrangements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement and (c) furnishes in
writing to the Company such information regarding such Person, the plan of
distribution of the Registrable Securities and other information
as the Company may from time to time request or as may be legally required in
connection with such registration.
Section 5.2. Rule 144. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Shareholders may reasonably request
to the extent required from time to time to enable the Shareholders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Upon the request of the Shareholders, the
Company will deliver to the Shareholders a written statement as to whether it
has complied with such reporting requirements. A Shareholder shall not be
entitled to a Demand Registration or a Piggyback Registration if the Company
provides to the Shareholder an opinion of recognized counsel to the effect that
based on the proposed plan of distribution, registration of such transaction
under the Securities Act is not required.
Section 5.3. Holdback Agreements. Each Shareholder agrees, if requested by
the Company and an underwriter of equity securities of the Company, not to
offer, sell, contract to sell or otherwise dispose of any Registrable
Securities, or any securities convertible into or exchangeable or exercisable
for such securities during the 90-day period beginning on the effective date of
the registration statement of the Company filed under the Securities Act with
respect to the offering of such equity securities (other than the Registrable
Securities to be sold pursuant to such registration statement); provided that
all executive officers and directors of the Company enter into similar
arrangements.
Section 5.4. Notices. All notices, requests and other communications to
either party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to the Company, to
Commonwealth Telephone Enterprises, Inc.
000 XXX Xxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
Telecopy:
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Shareholders to:
c/o Level 3 Communications Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the other party hereto. Each such notice, request
or other communication shall be effective when delivered at the address
specified in this Section 5.
Section 5.5. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by each Shareholder and the Company, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 5.6. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns;
provided that except as set forth in Section 5.6(b) of this Agreement, no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement, directly or indirectly, whether by operation of law or
otherwise, without the written consent of the other party hereto, and any
attempted assignment contrary to the terms hereof shall be null and void.
Neither this Agreement nor any provision hereof is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
(b) Notwithstanding the provisions of Section 5.6(a) hereof, a Shareholder
may transfer and assign its rights and obligations under this Agreement
(including the rights of a Shareholder with respect to both Demand Registrations
and Piggyback Registrations pursuant to Sections 2.1 and 2.2 hereof) without the
prior written consent of the Company under the following circumstances:
(i) the transfer by a deceased person to his or her executors or heirs or
by an incompetent person to his or her legal guardian;
(ii) the transfer by a Shareholder to any Person to whom such Shareholder
has sold in a bona fide private placement transaction either: (x) a minimum of
1,500,000 shares of Registrable Securities (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like) or (y) Registrable
Securities representing the right to cast at least 6,500,000 Votes;
provided that, as to both clauses (x) and (y) above, either: (A) an offering
pursuant to a Demand Registration in respect of not less than 2,500,000
Registrable Securities (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like) shall have been consummated hereunder or
(B) Level 3 or Delaware Holdings shall have sold in a bona fide private
placement transaction Registrable Securities representing the right to cast at
least 6,500,000 Votes; and
(iii) the transfer by a Shareholder to any Subsidiary of the Shareholder,
provided such entity continues as a Subsidiary to such transferring or assigning
Shareholder to and including the time such Subsidiary exercises any of its
rights hereunder.
(c) Prior to any transfer or assignment of rights under Section 5.6(b)
hereof, the transferring or assigning Shareholder shall provide the Company with
notice of the transferee's or assignee's name and address and of the Registrable
Securities with respect to which such rights are being transferred or assigned.
The transferee or assignee of rights under Section 5.6(b) hereof shall assume
the obligations of the transferring or assigning Shareholder under this
Agreement in a written instrument delivered to the Company, whereupon the
transferring and assigning Shareholder shall be released from all liability
under this Agreement other than, and solely with regard to, the provisions of
Section 3.2 of this Agreement.
Section 5.7. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other parties hereto.
Section 5.8. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements, understandings and negotiations, both
written and oral, between the parties hereto with respect thereto.
Section 5.9. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without regard to the
conflicts of law rules of such state.
Section 5.10. Jurisdiction. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Southern District of New
York or any New York State court sitting in the Borough of Manhattan, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 5.4 shall be
deemed effective service of process on such party.
Section 5.11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 5.12. Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning of
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused this Agreement to be duly executed by their respective authorized
officers, as of the day and year first above written.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President and CEO
XXXXX 0 COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Group Vice President and General Counsel
