EXHIBIT 10.24
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (the "AGREEMENT") dated as of August 27, 1999 among
XXXXXX XXXX, a resident of the State of New York, AT Econ Limited Partnership
and AT Econ LTD. Partnership No. 2 (collectively, "STOCKHOLDER"), VIATEL, INC.,
a Delaware corporation ("PARENT"), VIATEL ACQUISITION CORP., a Delaware
corporation and a wholly-owned subsidiary of Parent ("PARENT SUBSIDIARY"), and
DESTIA COMMUNICATIONS, INC., a Delaware corporation ("COMPANY").
W I T N E S S E T H:
WHEREAS, Parent, Company and Parent Subsidiary are entering into an
Agreement and Plan of Merger of even date herewith (the "MERGER AGREEMENT"),
pursuant to which Parent will acquire all of the outstanding shares of voting
common stock, $0.01 par value per share (the "VOTING SHARES"), and all of the
outstanding shares of non-voting common stock, $0.01 par value per share (the
"NON-VOTING SHARES," and together with the Voting Shares, the "COMMON STOCK"),
of the Company pursuant to a merger of Parent Subsidiary with and into Company
(the "MERGER");
WHEREAS, Stockholder collectively owns, as of the date hereof, 11,428,076
shares of Common Stock (the "EXISTING SHARES," and together with any shares of
Common Stock acquired by Stockholder after the date hereof and prior to the
termination hereof, the "SHARES");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, and in reliance upon Stockholder's representations, warranties,
covenants and agreements hereunder, Parent and Parent Subsidiary have requested
that Stockholder agree, and Stockholder has agreed, to enter into this
Agreement; and
WHEREAS, this Agreement is being entered into concurrently with the
execution of the Merger Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, it is agreed as follows. Capitalized terms
not otherwise defined herein shall have the meaning set forth in the Merger
Agreement.
1. AGREEMENT TO VOTE. Stockholder hereby agrees that, during the term this
Agreement, at any meeting of the stockholders of Company, however called, and in
any action by consent of the stockholders of Company, however taken, Stockholder
shall cause the Shares to be present for quorum purposes and to vote at such
meeting and shall cause the Shares to be voted in any such consent, and in
either case, shall: (a) vote the Shares in favor of the adoption of the Merger
Agreement; (b) vote the Shares against any action or agreement that would, or
could reasonably be expected to, result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Company under
the Merger Agreement or that would result in a failure to satisfy any condition
on the part of the Company or its stockholders to be satisfied
under the Merger Agreement; (c) vote the Shares against any action or agreement
that would, or could reasonably be expected to, impede, interfere with, delay,
postpone or attempt to discourage the Merger, including, but not limited to, (i)
any extraordinary corporate transaction (other than the Merger), such as a
merger, other business combination, recapitalization, reorganization or
liquidation, involving Company (a "BUSINESS COMBINATION TRANSACTION"), (ii) a
sale or transfer of a material amount of assets of Company or any of its
Subsidiaries (as defined in the Merger Agreement), (iii) any change in the
management or board of directors of Company, except as otherwise agreed to in
writing by Parent, (iv) any material change in the present capitalization of the
Company or (v) any other material change in the corporate structure or business
of Company; and (d) without limiting the foregoing, consult with Parent prior to
any such meeting or consent and, in either case, vote such Shares in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1. Stockholder acknowledges receipt and review of a copy of the Merger
Agreement. In furtherance of this Section 1, Stockholder hereby irrevocably
grants to, and appoints, Parent, and any individual designated in writing by it,
and each of them individually, as its proxy and attorney-in-fact (with full
power of substitution), for and in its name, place and stead, to vote the Shares
at any meeting of the stockholders of the Company called with respect to any of
the matters specified in this Agreement. The Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
Stockholder's execution and delivery of this Agreement. The Stockholder hereby
affirms that the irrevocable proxy set forth in this Section 1 is given in
connection with the execution of the Merger Agreement, and that such irrevocable
proxy is given to secure the performance of the duties of Stockholder under this
Agreement. Except as otherwise provided for herein, Stockholder hereby (i)
affirms that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked, (ii) ratifies and confirms all that the proxies
appointed hereunder may lawfully do or cause to be done by virtue hereof and
(iii) affirms that such irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of Section 212(e) of the Delaware
General Corporation Law (as defined in the Merger Agreement). Notwithstanding
any other provision of this Agreement, the irrevocable proxy granted hereunder
shall automatically terminate upon the termination of this Agreement pursuant to
Section 4.
2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Xxxxxx Xxxx, AT Econ Ltd.
Partnership and AT Econ Ltd. Partnership No. 2 represent and warrant to Parent
and Parent Subsidiary with respect to that part of the Existing Shares owned by
it as follows:
2.1 OWNERSHIP OF SHARES. On the date hereof, Stockholder is the sole record
and beneficial owner of the Existing Shares, except as set forth on Schedule 2.1
attached hereto. For purposes of this Agreement, beneficial ownership of
securities shall be determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). On the date
hereof and at the Closing Date (as defined in the Merger Agreement), neither
Stockholder nor any Affiliate (as defined in the Merger Agreement) of
Stockholder (other than Company) owns or will own, of record or beneficially,
solely or jointly with others, (i) any shares of Common Stock other than the
Existing Shares and shares of Common Stock acquired upon the exercise of
employee stock options granted by the Company and listed on Schedule 2.1
attached hereto or (ii) any securities convertible into or exchangeable or
exercisable for shares of Common Stock or any rights to acquire any shares of
Common Stock other than employee stock options granted by Company and listed on
Schedule 2.1 attached hereto. Except as set forth on Schedule 2.1 attached
hereto, Stockholder currently has with respect to the Existing Shares, and
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at Closing will have with respect to the Shares, good, valid and marketable
title, free and clear of all liens, encumbrances, restrictions, options,
warrants, rights to purchase, voting agreements or voting trusts, and claims of
every kind (other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable federal and state securities laws).
Stockholder has not and will not pledge more than 2,730,000 of the Existing
Shares.
2.2 POWER; BINDING AGREEMENT. Stockholder has the full legal right, power
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. The execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which Stockholder is a party
including, without limitation, any voting agreement, stockholder agreement or
voting trust. This Agreement has been duly executed and delivered by Stockholder
and constitutes a legal, valid and binding agreement of Stockholder, enforceable
in accordance with its terms. Neither the execution or delivery of this
Agreement nor the consummation by Stockholder of the transactions contemplated
hereby will (a) require any consent or approval of or filing with any third
party, including any governmental or other regulatory body, other than filings
required under the federal securities laws and consents or waivers listed on
Schedule 2.2 attached hereto, all of which have been obtained, or (b) constitute
a violation of, conflict with or constitute a default under, any material
contract, commitment, agreement, understanding, arrangement or other restriction
of any kind to which Stockholder is a party or by which Stockholder or his
material property is bound.
2.3 FINDER'S FEES. No person or entity is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PARENT. Each of Parent and Parent
Subsidiary represents and warrants to Stockholder as follows:
3.1 AUTHORITY. Each of Parent and Parent Subsidiary has the full legal
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by each of Parent and Parent Subsidiary will not violate or conflict with any
other agreement to which it is a party. This Agreement has been duly executed
and delivered by each of Parent and Parent Subsidiary and constitutes a legal,
valid and binding agreement of each of Parent and Parent Subsidiary, enforceable
against Parent and Parent Subsidiary in accordance with its terms. Neither the
execution or delivery of this Agreement nor the consummation of the transactions
contemplated hereby by each of Parent and Parent Subsidiary will (a) require any
consent or approval of or filing with any third party, including any
governmental or other regulatory body, other than filings required under the
federal securities laws, or (b) constitute a violation of, conflict with or
default under, any material contract (including any registration rights),
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Parent or Parent Subsidiary is a party or by which either of them
or their material property is bound.
3.2 FINDER'S FEES. No person or entity is, or will be, entitled to any
commission or finder's fee from Parent or Parent Subsidiary in connection with
this Agreement or the
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transactions contemplated hereby exclusive of any commission or finder's fees
referred to in the Merger Agreement.
4. TERMINATION. The term of this Agreement commences upon the execution and
delivery of this Agreement by all of the parties hereto and continues until it
is terminated in accordance with its terms. This Agreement shall terminate on
the earliest of (a) the Effective Time (as defined in the Merger Agreement) or
(b) the date 180 days after the termination of the Merger Agreement in
accordance with its terms; provided, however, the termination of this Agreement
shall be immediate if the Merger Agreement is terminated pursuant to Sections
7(a)(i), 7(a)(ii), 7(a)(iii), 7(a)(vi), 7(a)(vii) or 7(a)(ix); and, provided,
further, (i) the provisions of Sections 5 and 9 through 18 shall survive any
termination of this Agreement, (ii) the provisions of Sections 6.3, 6.4 and 7
shall survive the termination of this Agreement if this Agreement terminates
pursuant to clause (a) above and (iii) the provisions of Sections 2 and 3 shall
survive for a period of one year after any termination of this Agreement.
5. EXPENSES. Except as provided in Section 7, each party hereto will pay all of
its expenses in connection with the transactions contemplated by this Agreement,
including, without limitation, the fees and expenses of its counsel and other
advisers.
6. COVENANTS
6.1 Except in accordance with the provisions of this Agreement, Stockholder
(and the Company, pursuant to Section 6.8 hereof) agrees, prior to the
termination of this Agreement as provided in Section 4 above, not to, directly
or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise dispose of
(including by merger, testamentary disposition, interspousal disposition
pursuant to a domestic relations proceeding or otherwise or otherwise by
operation of law), or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares, provided, however, that
Stockholder may transfer Shares, with the prior written consent of Parent, which
shall not be unreasonably withheld, to a trust of which there are no
beneficiaries other than the parents, spouse or children of Stockholder, or
otherwise make transfers for estate planning purposes, so long as the trust and
the trustee(s), or other transferee, thereof deliver a written agreement to
Parent, reasonably acceptable to Parent, to be bound by the restrictions set
forth in this Agreement, and Parent receives an opinion of counsel reasonably
satisfactory to it that this Agreement is binding upon such trust and the
trustee(s), or other transferee, thereof, as if such trust and trustee(s), or
other transferee, were Stockholder. Any action taken in violation of this
Section 6.1(a) shall be void and of no effect;
(b) grant any proxies with respect to any Shares, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares;
or
(c) take any action to solicit, initiate or encourage any inquiries or
proposals that constitute, or could reasonably be expected to lead to, an
Acquisition Proposal (as defined in the Merger Agreement) or engage in
negotiations or discussions with any person or entity (or group of persons
and/or entities) other than Parent or its Affiliates concerning, or provide any
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non-public information to any person or entity relating, to an Acquisition
Proposal or otherwise assist or facilitate any effort or attempt by any person
or entity (other than Parent and Parent Subsidiary) to make or implement an
Acquisition Proposal. Stockholder will immediately cease and terminate any
existing solicitation, initiation, encouragement, activity, discussion or
negotiation on his part with any parties conducted heretofore with respect to
any proposed, potential or contemplated Acquisition Proposal, and will notify
Parent promptly if he becomes aware of any Acquisition Proposal or any request
for non-public information in connection with an Acquisition Proposal or for
access to the properties, books or records of the Company by any person or
entity that informs the Company (or its officers, directors, representatives,
agents, Affiliates or associates) that it is considering making or has made an
Acquisition Proposal. Such notice shall be made orally and in writing and shall
indicate the identity of the offeror and the terms and conditions of such
proposal, inquiry or contact. The foregoing provisions of this Section 6.1(c),
however, shall not restrict Stockholder, solely in his capacity as a member of
the Company Board (as defined in the Merger Agreement), from voting to take
actions permitted under Section 5(h) of the Merger Agreement, and shall not
restrict Stockholder, solely in his capacity as an executive officer of the
Company, from taking actions authorized and directed by the Company Board so
long as such actions will not cause the Company to breach or result in the
Company being in breach of any provisions of the Merger Agreement.
6.2 Stockholder agrees, during the term of this Agreement, to notify Parent
promptly of the number of any shares of Common Stock acquired by Stockholder
after the date hereof.
6.3 Stockholder agrees that neither he nor any of his Affiliates will,
directly or indirectly, unless in any such case specifically invited in writing
to do so by the board of directors of Parent, for a period of two years after
the Effective Time, except as otherwise expressly set forth in this Agreement or
in the Merger Agreement: (i) individually or together with one or more persons
or entities, acquire, offer to acquire or agree to acquire, or participate in
the financing of any acquisition of, beneficial ownership of any securities of
Parent entitled to vote in the general election of directors (other than
securities distributed generally to all holders of a class of securities, and
restricted stock distributed to Stockholder pursuant to his employment agreement
with Parent), or securities convertible into or exchangeable or exercisable for
such securities (other than stock options) (collectively, "SECURITIES"); (ii)
initiate, propose, engage or otherwise participate in the solicitation of
stockholders or their proxies for approval of one or more stockholder proposals
(including, without limitation, the election of directors, any amendment to the
charter or bylaws, or any Business Combination Transaction) with respect to
Parent; (iii) otherwise act alone or in concert with any other person or entity
to seek to influence or control the management, board of directors, policies or
affairs of Parent, or to solicit, propose or encourage any other person or
entity with respect to any form of Business Combination Transaction with Parent,
or to solicit, make or propose or encourage any other person or entity with
respect to, or announce an intent to make, any tender offer or exchange offer
for any Securities; (iv) request Parent or its board of directors, officers,
employees or agents, to amend or waive, or seek any modification to, any
provision of this Section 6.3; or (v) take any action designed to or which can
reasonably be expected to require Parent to make a public announcement regarding
any of the matters referred to in this Section 6.3. This Section 6.3 shall not
prohibit any action by Stockholder solely in his capacity as a director of
Parent, or solely in his capacity as an executive officer of the Company, from
taking actions authorized and directed by the Parent Board (as defined in the
Merger Agreement). Notwithstanding the
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provisions of Section 4, this Section 6.3 shall terminate immediately if
Stockholder ceases to be a director of the Parent Board because Parent has
breached its obligations under Section 6.7.
6.4 Stockholder agrees that for a period of one year following the
Effective Time (the "LOCK-UP PERIOD"), Stockholder will not, without the prior
written consent of Parent, directly or indirectly, offer, offer to sell, sell,
contract to sell, grant any option for the purchase of, assign, transfer,
pledge, hypothecate or otherwise encumber or dispose of any beneficial interest
in (including by merger, testamentary disposition, interspousal disposition
pursuant to a domestic relations proceeding or otherwise or otherwise by
operation of law) ("Transfer") any Parent common stock, par value $0.01 per
share ("PARENT COMMON STOCK"), or any securities convertible into or
exchangeable or exercisable for any shares of Parent Common Stock or any other
rights to acquire shares of Parent Common Stock (either pursuant to Rule 144 of
the regulations under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), or otherwise) either beneficially owned by Stockholder as of the
Effective Time or acquired by Stockholder during the Lock-up Period as a result
of the exercise of options. Notwithstanding the foregoing, the undersigned may
(i) Transfer shares of Parent Common Stock as a bona fide gift or gifts,
provided that Stockholder provides prior written notice of such gift or gifts to
Parent and the donee or donees thereof deliver a written agreement to Parent,
reasonably acceptable to Parent, to be bound by the restrictions set forth
herein as if such donee or donees were Stockholders; (ii) on one occasion,
Transfer up to 225,000 shares of Parent Common Stock; and (iii) Transfer shares
of Parent Common Stock, with the prior written consent of Parent, which shall
not be unreasonably withheld, to a trust of which there are no beneficiaries
other than the parents, spouse or children of Stockholder, or otherwise make
transfers for estate planning purposes, so long as the trust and the trustee(s),
or other transferee, thereof deliver a written agreement to Parent, reasonably
acceptable to Parent, to be bound by the restrictions set forth in this
Agreement, and Parent receives an opinion of counsel reasonably satisfactory to
it that this Agreement is binding upon such trust and the trustee(s), or other
transferee, thereof, as if such trust and trustee(s), or other transferee, were
Stockholder. Any Transfer of Parent Common Stock in violation of this Section
6.4 shall be void and of no effect.
6.5 Notwithstanding the provisions of Section 4, Sections 6.3 and 6.4 shall
terminate immediately upon any termination of Stockholder's employment agreement
with Parent by Stockholder for Good Reason or any termination of Stockholder's
employment agreement by Parent without Cause ("Good Reason" and "Cause" shall
have the meanings set forth in such employment agreement).
6.6 For purposes of clause (i) of the definition of "Change of Control" in
the Company's 1999 Flexible Incentive Plan, Stockholder hereby designates Parent
and Parent Subsidiary. From the date hereof through the termination of this
Agreement pursuant to Section 4, this designation shall be irrevocable.
6.7 Parent agrees that Stockholder and a Stockholder Nominee (as defined
below) will become members of the Parent Board as of the Effective Time.
Following the time when Stockholder and Stockholder Nominee, respectively,
become members of the Parent Board, and continuing for so long as Stockholder
directly owns at least 10% of the outstanding shares of Parent Common Stock,
Parent agrees to cause Parent Board to nominate Stockholder and Stockholder
Nominee, respectively, for election as members of the Parent Board at each
annual
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meeting of stockholders of Parent at which such director is up for re-election
and to recommend to its stockholders a vote in favor of, and to solicit proxies
from its stockholders voting in favor of, the election of Stockholder and
Stockholder Nominee as members of Parent Board, all in the same manner and to
the same extent, and in accordance with the same procedures applicable to the
election of members of the Parent Board generally. If at any time Stockholder
directly owns less than 10% of the outstanding shares of Parent Common Stock,
but at least 5% of the outstanding shares of Parent Common Stock, Parent's
obligations set forth above in this Section 6.7 shall apply to Stockholder (and
not Stockholder Nominee) unless, at the first such time or within 30 days
thereafter, Stockholder gives written notice to Parent that such obligations
shall thereafter apply to Stockholder Nominee (and not Stockholder). As used
herein, "STOCKHOLDER NOMINEE" shall mean such person designated by Stockholder,
who qualifies as an independent director of Parent for purposes of Rule
4200(a)(13) of the Rules of the National Association of Securities Dealers, Inc.
and is reasonably acceptable to the non-employee directors of Parent, to serve
on the Parent Board. Notwithstanding the foregoing, Parent's obligations under
this Section 6.7 as to Stockholder shall immediately cease upon the occurrence
of any of the following events: (i) Stockholder chooses not to serve as a member
of the Parent Board, (ii) the stockholders of Parent do not re-elect Stockholder
as a member of Parent Board at the annual meeting of stockholders of Parent at
which Stockholder is up for re-election or (iii) the Parent Board removes
Stockholder as a member of the Parent Board in accordance with the Parent
Board's fiduciary duties (provided, that no such removal shall be affected
without at least 15 days prior written notice to Stockholder stating with
specificity the grounds for such removal, and a reasonable opportunity for
Stockholder to be heard as to why such contemplated removal should not be
approved). Notwithstanding the foregoing, Parent's obligations under this
Section 6.7 as to Stockholder Nominee shall immediately cease upon the
occurrence of any of the following events: (i) Stockholder Nominee chooses not
to serve as a member of the Parent Board, (ii) the stockholders of Parent do not
re-elect Stockholder Nominee as a member of Parent Board at the annual meeting
of stockholders of Parent at which Stockholder Nominee is up for re-election or
(iii) the Parent Board removes Stockholder Nominee as a member of the Parent
Board in accordance with the Parent Board's fiduciary duties (provided, that no
such removal shall be affected without prior written notice to Stockholder
Nominee stating with specificity the grounds for such removal, and a reasonable
opportunity for Stockholder Nominee to be heard as to why such contemplated
removal should not be approved); provided, however, Stockholder shall be
entitled to designate a replacement Stockholder Nominee so long as Stockholder
continues to directly own at least 10% of the outstanding shares of Parent
Common Stock.
6.8 The Company recognizes and agrees to use commercially reasonable
efforts to enforce the Transfer restrictions placed on the Shares under this
Agreement.
7. REGISTRATION RIGHTS.
7.1 DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
"COMMISSION" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
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"REGISTRABLE SECURITIES" means all the shares of Parent Common Stock
received by Stockholder at the Effective Time, together with any additional
Parent Common Stock received by Stockholder as a result of any stock dividend,
extraordinary dividend or distribution, split-up, recapitalization, combination,
exchange of shares, exercise of stock options or the like and involving the
Parent Common Stock received by Stockholder at the Effective Time; provided,
however, such securities shall cease to be Registrable Securities when they
become freely saleable to the public under Rule 145(d) and Rule 144(k) under the
Securities Act, without volume limitation, as the case may be.
"REGISTRATION EXPENSES" means all expenses incurred by Parent incident
to Parent's performance of this Section 7, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all printing expenses, the fees and disbursements of
counsel for Parent and of Parent's independent public accountants, the fees and
disbursements of one counsel for Stockholder (provided that such expense shall
be limited to $3,500 for registration statements filed pursuant to Section 7.3,
and shall be available on only two occasions for registration statements filed
pursuant to Section 7.3), including the expenses of "comfort" letters, its
expenses incurred in connection with any "roadshow" presentations in which it
may participate and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities.
"SELLING EXPENSES" means all expenses incurred by Stockholder incident
to Stockholder's performance of this Section 7, including, without limitation,
all underwriting discounts and commissions, the fees and disbursements of its
advisors, including his counsel (other than the fees and expenses covered under
the defined term "Registration Expenses") and his accountants, and his expenses
incurred in connection with any "roadshow" presentations in which he may
participate.
"EFFECTIVE PERIOD" means the period Parent is required to maintain the
effectiveness of a registration statement pursuant to Section 7.2 or 7.3, as the
case may be.
7.2 REQUESTED REGISTRATION.
(a) Upon the written request (the "REQUEST") of Stockholder, on two
occasions, Parent shall promptly cause to be filed under the Securities Act a
registration statement on such form as selected by Stockholder (which form shall
be subject to the approval of Parent, which shall not be unreasonably withheld)
of all or such portion of the Registrable Securities so requested by
Stockholder, and Parent shall take reasonable actions to effect, as soon as
practicable, subject to the reasonable cooperation of Stockholder, within 90
days after the Request is received from Stockholder, the registration under the
Securities Act, of the Registrable Securities which Parent has been so requested
to register by Stockholder.
(b) EXPENSES. Parent shall pay the Registration Expenses in connection
with any registration effected pursuant to this Section 7.2 and Stockholder
shall pay the Selling Expenses in connection with any registration effected
pursuant to this Section 7.2.
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(c) EFFECTIVE REGISTRATION STATEMENT. Notwithstanding anything to the
contrary herein, a registration requested pursuant to this Section 7.2 shall not
be deemed to have been effected unless a registration statement with respect
thereto has become effective and remains effective, without interruption by any
stop order for a period of more than five days (whether or not contiguous),
until the earlier of (i) 120 days following the effective date of such
registration or (ii) the date when Parent Shares sought to be offered and sold
pursuant thereto are in fact offered and sold in accordance with the terms of
such offering. Notwithstanding the foregoing, a registration statement used in
connection with a non-underwritten offering shall not be deemed to have been
effected if (i) except during a Delay Period (as defined in Section 7.6), such
registration statement is not amended or supplemented within 10 business days
after the date on which it becomes necessary to amend or supplement it or (ii)
during a Delay Period, Stockholder elects, within 10 days after the commencement
of the Delay Period, to discontinue his resale participation in such
registration statement.
(d) PRIORITY OF RIGHTS. Whenever Parent shall effect a registration
pursuant to Section 7.2(a), holders of securities of Parent who have "piggyback"
registration rights may include all or a portion of such securities in such
registration statement; provided, however, that if such registration relates to
an underwritten offering, and the managing underwriter shall inform Parent by
letter of its belief that the number or type of securities of Parent requested
by holders of the securities of Parent other than Stockholder to be included in
such registration would materially and adversely affect the underwritten public
offering, then Parent shall include in such registration, to the extent of the
number and type of securities which Parent is so advised can be sold in such
Public Offering, first, all of the Registrable Securities specified by
Stockholder in the Request and second, for each holder of Parent's securities
other than Stockholder, the fraction of each holder's securities proposed to be
registered which is obtained by dividing (i) the number of the securities of
Parent that such holder proposes to include in such registration by (ii) the
total number of securities proposed to be included in such registration by all
holders other than Stockholder.
(e) SELECTION OF UNDERWRITERS. If Stockholder so requests, the
registration contemplated by Section 7.2(a) shall be for an underwritten public
offering. In connection with any such underwritten public offering, (a) Parent
shall promptly select the managing underwriter subject to the approval of
Stockholder (which approval shall not be unreasonably withheld, delayed or
conditioned by Stockholder), and (b) if he so desires, Stockholder may promptly
select the co-managing underwriter subject to the approval of Parent (which
approval shall not be unreasonably withheld, delayed or conditioned by Parent).
(f) LIMITATIONS ON REGISTRATION. Parent shall not be required to file
a registration statement pursuant to this Section 7.2 which would become
effective within 180 days following the effective date of a registration
statement (other than a registration statement filed on Form S-4 or S-8 or any
successor form of limited purpose) filed by Parent with the Commission
pertaining to any public offering of common stock, or securities convertible
into or exchangeable for common stock, for the account of Parent or an
underwritten offering of common stock, or securities convertible into or
exchangeable for common stock, for another holder of securities of Parent. In
addition, if, in the good faith determination of Parent's board of directors, a
registration would adversely affect certain activities of Parent to the material
detriment of Parent, then Parent may at its option direct that such registration
be delayed for a
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period not in excess of 90 days in the aggregate from the date of Parent's
receipt of the Request or from the first date upon which Parent is required to
effect the registration contemplated by Section 7.2, as applicable.
(g) REGISTRATION PROCEDURES. In connection with a registration
statement prepared by Parent pursuant to this Section 7.2, Parent (a) shall
furnish to Stockholder, a reasonable period of time prior to the filing thereof
with the Commission, a copy of the registration statement and each amendment
thereto or each amendment or supplement to the prospectus included therein, and
shall use its reasonable efforts to reflect in each such document, when so filed
with the Commission, such comments as Stockholder reasonably may propose; and
(b) if at any time the Commission shall issue any stop order suspending the
effectiveness of a registration statement, or any state securities commission or
other regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the sale of securities under state securities or
blue sky laws, Parent shall use commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
7.3 PIGGYBACK REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If Parent at any time
proposes to register any of its securities under the Securities Act by
registration on Forms X-0, X-0, X-0 or any successor or similar form(s) (except
registrations on such forms or similar forms solely for registration of
securities in connection with (i) an employee benefit plan or dividend
reinvestment plan or a merger or consolidation or (ii) debt securities which are
not convertible into Common Stock), whether or not for sale for its own account,
it shall each such time give written notice to Stockholder of its intention to
do so at least 20 days prior to the anticipated filing date of a registration
statement with respect to such registration with the Commission. Upon the
written request of Stockholder made as promptly as practicable and in any event
within 10 days after the receipt of any such notice, which request shall specify
the Registrable Securities intended to be disposed of by Stockholder, Parent
shall use reasonable efforts to effect the registration under the Securities Act
of all Registrable Securities which Parent has been so requested to register by
Stockholder; provided, however, that at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, Parent may
elect to delay or not proceed with such registration If Parent elects to delay
or not proceed with such registration, it shall give written notice of such
determination to Stockholder and Parent shall be relieved of its obligation to
register any Registrable Securities in connection with such registration. If
such registration relates to an underwritten offering, any right of Stockholder
to participate in such registration pursuant to this Section 7.3 shall be
conditioned upon his agreeing to offer and sell Registrable Securities in
accordance with the plan of distribution applicable to the other Parent Common
Stock sought to be offered and sold in such registration.
(b) EXPENSES. Parent shall pay the Registration Expenses in connection
with any registration effected pursuant to this Section 7.3 and Stockholder
shall pay the Selling Expenses in connection with any registration effected
pursuant to this Section 7.3.
(c) SELECTION OF UNDERWRITERS AND FORM OF REGISTRATION STATEMENT. In
connection with each public offering effected pursuant to this Section 7.3,
Parent (or, if the
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proposed registration by Parent is pursuant to a contractual demand registration
right, the persons or entities who caused such registration statement to be
filed) shall select the managing underwriters, if any, and the form of
registration statement to be used in connection with any such offering.
(d) PRIORITY IN PIGGYBACK REGISTRATIONS. Notwithstanding anything in
Section 7.3 above to the contrary, if the managing underwriter of any
underwritten public offering shall inform Parent by letter of its belief that
the number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such public offering, then
Parent shall promptly notify Stockholder of such fact. If the managing
underwriter does not agree to include all (or such lesser amount as Stockholder
shall, in his discretion, agree to) of the number of the Registrable Securities
initially requested by Stockholder to be included in such registration, then
Parent shall include in such registration, to the extent of the number and type
which Parent is so advised can be sold in such Public Offering, (i) first, the
Parent securities proposed to be sold by Parent or, if the proposed registration
by Parent is pursuant to a contractual demand registration right, the Parent
Common Stock proposed to be sold by the party making the demand and (ii) second,
to the extent additional Parent Shares may be included, that number of
Registrable Securities equal to the product of (x) the total number of such
additional Parent Shares to be included in such registration multiplied by (y)
the fraction whose numerator is the number of Registrable Securities sought to
be included in such registration by Stockholder and whose denominator is the
total number of Parent Shares sought to be included in such registration by all
persons or entities entitled to participate in such registration on a
"piggyback" basis.
(e) EFFECTIVE PERIOD. Parent shall use commercially reasonable efforts to
maintain the effectiveness of any registration pursuant to this Section 7.3
until the earlier (i) 90 days following the effective date of such registration
or (ii) the date when the securities sought to be offered and sold pursuant
thereto are in fact offered and sold in accordance with the terms of such
offering.
7.4 REGISTRATION PROCEDURES.
(a) In connection with the registration of any Registrable Securities
under the Securities Act as provided in Sections 7.2 or 7.3, and subject to the
provisions of this Section 7, Parent shall as promptly as practicable:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use reasonable
efforts to cause such registration statement to become and remain effective for
the applicable effective period;
(ii) use reasonable efforts to prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement for the applicable effective period;
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(iii) furnish to Stockholder such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act;
(iv) use reasonable efforts to register or qualify all
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such States of the United States of America where
an exemption is not available and as Stockholder shall reasonably request;
provided, however, that Parent shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not, but for the requirements of this paragraph (iv), be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(v) notify Stockholder when a prospectus relating thereto is
required to be delivered under the Securities Act and, upon discovery that there
has occurred any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of Stockholder use
its reasonable efforts to promptly prepare and furnish to Stockholder such
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the Parents of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
(vi) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission;
(vii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;
(viii) furnish to Stockholder, prior to the filing thereof with
the Commission, a copy of the registration statement and each amendment thereto
or each amendment or supplement to the prospectus included therein, and shall
use its reasonable efforts to reflect in each such document, when so filed with
the Commission, such comments as Stockholder reasonably may propose;
(ix) use reasonable efforts to list all Registrable Securities
covered by such registration statement on any national securities exchange or
over-the-counter market, if any, on which Registrable Securities of the same
class covered by such registration statement are then listed; and
(x) subject to customary confidentiality obligations, Parent
shall permit reasonable access to Stockholder and its counsel and other advisors
to its financial
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statements and its other books and records to permit Stockholder to perform
reasonable due diligence.
Stockholder agrees that upon receipt of any notice from Parent of the
happening of an event of the kind described in Section 7.4(v), Stockholder shall
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until
Stockholder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 7.4(v). Stockholder agrees to promptly provide such
information regarding himself and his Registrable Securities as Parent may from
time to time reasonably require for inclusion in any registration statement
under Section 7.2 or 7.3.
7.5 UNDERWRITTEN OFFERINGS. If requested by the underwriters for any
underwritten public offering by Stockholder pursuant to a registration requested
under Section 7.2, Parent shall enter into an underwriting agreement with such
underwriters for such public offering, such agreement to be reasonably
satisfactory in substance and form to Parent, Stockholder and the underwriters,
and to contain such representations and warranties by Parent and Stockholder and
such other terms as are generally prevailing in agreements of that type,
including, without limitation, customary indemnities and contribution provisions
generally prevailing in agreements of that type. Stockholder shall cooperate
with Parent in the negotiation of the underwriting agreement and shall give
consideration to the reasonable suggestions of Parent regarding the form and
substance thereof. Stockholder shall be a party to such underwriting agreement.
7.6 DELAY PERIODS. If at any time after the effectiveness of a registration
statement under Section 7.2 or 7.3 but prior to the expiration of the related
effectiveness period, counsel to Parent (which counsel shall be experienced in
securities laws matters) determines in good faith that it is reasonable to
conclude that the compliance by Parent with its disclosure obligations in
connection with such registration statement may require the disclosure of
information which the Board of Directors of Parent has identified as material
and which the Board of Directors has determined that Parent has a bona fide
business purpose for preserving as confidential, then Parent shall not be
required to maintain the effectiveness thereof or amend or supplement such
registration statement for a period (a "DELAY PERIOD") expiring three business
days after the earlier to occur of (A) the date on which such material
information is disclosed to the public or ceases to be material or Parent is
able to so comply with its disclosure obligations and Commission requirements or
(B) 90 days after Parent notifies Stockholder of such good faith determination.
The effectiveness period of such registration statement will be extended for a
period equal to the duration of such Delay Period. Parent will notify
Stockholder of such Delay Period as soon as practicable after the Board of
Directors makes such determination. Such notice shall state to the extent, if
any, as is practicable, an estimate of the duration of such Delay Period.
Stockholder agrees that (x) upon receipt of such notice of a Delay Period he
will forthwith discontinue disposition of securities pursuant to such
registration statement and (y) will not deliver any prospectus forming a part of
the registration statement in connection with any sale of Registrable Securities
until the expiration of such Delay Period.
7.7 HOLDBACK AGREEMENTS. Stockholder agrees that, upon the request of and
only to the extent required of other executive officers of Parent by the
underwriter(s) managing any registration of Parent Common Stock under the
Securities Act by Parent (except to the extent Stockholder is participating as a
selling securityholder pursuant to this Agreement), he will not,
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without the prior written consent of such underwriters, during the 7-day period
prior to, and during the 90-day period beginning on, the effective date of such
registration, sell, make any short sale of, pledge, grant any option for the
purchase of or otherwise dispose of, or enter into any other hedging or similar
transaction with respect to, any Parent Shares, or any securities convertible
into or exchangeable for Parent Shares.
7.8 INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY PARENT. In the event of any registration of any
securities of Parent under the Securities Act in which Stockholder is a selling
stockholder, Parent shall, and hereby does, indemnify and hold harmless, in the
case of any registration statement filed pursuant to this Section 7, Stockholder
and his agents and Affiliates and, to the extent required by any underwriting
agreement entered into by Parent, each other person or entity who participates
as an underwriter in the registration statement and each other person or entity
who controls any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities insofar as such
losses, claims, damages or liabilities (whether arising in connection with any
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any fact contained in any registration statement under which such securities
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a 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 Parent
shall reimburse Stockholder and each such agent or Affiliate and, to the extent
required by an underwriting agreement entered into by Parent, any underwriter
and controlling person for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
liability, action or proceeding described in this clause (a); provided that,
Parent shall be required to reimburse fees and expenses with respect to more
than one firm of attorneys (in addition to any local counsel) for all of the
indemnified parties only to the extent that any of the indemnified parties shall
have differing interests from any other indemnified party; and, provided,
further, that Parent shall not be liable in any such case to the extent that:
(i) any such loss, claim, damage or liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to Parent by or on behalf of Stockholder specifically
stating that it is for inclusion in such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement, (ii)
with respect to any preliminary prospectus or prospectus (if such prospectus has
then been amended or supplemented) to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon a sale of Registrable Securities to a person or entity
to whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the prospectus (or of the prospectus as then amended or
supplemented) if Parent has previously furnished copies thereof to Stockholder a
reasonable time in advance and the loss, claim, damage, liability or expense of
Stockholder results from an untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the preliminary
prospectus (or the prospectus) which was corrected in the prospectus (or the
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prospectus as amended or supplemented), or (iii) to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon any
action or failure to act by Stockholder that is found in a final judicial
determination (or a settlement tantamount thereto) to constitute bad faith,
willful misconduct or gross negligence on the part of Stockholder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of Stockholder or any such director, officer, agent or
Affiliate or controlling person and shall survive the transfer of such
securities by Stockholder.
(b) INDEMNIFICATION BY STOCKHOLDER. If any Registrable Securities are
included in any registration statement, Stockholder shall indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
7.8(a)) Parent, each director, officer and employee, agent and Affiliate of
Parent and, to the extent required by any underwriting agreement entered into by
Stockholder, each other person or entity who participates as an underwriter in
the registration statement or sale of such securities and each other person or
entity who controls any such underwriter within the meaning of the Securities
Act, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Parent by or on behalf of Stockholder specifically
stating that it is for inclusion in such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
provided, however, in no event shall the liability of Stockholder under this
Section 7.8(b) exceed the proceeds obtained by the sale of Stockholder's
Registrable Securities in any such registration.
(c) NOTICE OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding Sections 7.8(a) and (b), such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party, promptly give written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 7.8, except to the
extent that the indemnifying party is prejudiced by such failure. The
indemnified party shall be entitled to receive the indemnification payments
described herein after providing such written notice to the indemnifying party.
In case any such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. The indemnified
party shall be entitled to separate counsel to the extent contemplated in
Sections 7.8(a) and 7.8(b). Each indemnified party shall furnish such
information regarding itself or the claim in question as an indemnifying party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which shall not be unreasonably
withheld, delayed or conditioned, unless such indemnifying party shall not have
satisfied its current reimbursement obligations hereunder within 30 days after
the initial written
- 15 -
request by the indemnified party therefor. Notwithstanding the previous
sentence, the indemnifying party shall not be liable for any settlement unless
the indemnifying party receives an unconditional release from all liability on
claims that are the subject matter of such action, suit or proceeding. Consent
of the indemnified party shall be required for the entry of any judgment or to
enter into a settlement only when such judgment or settlement does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation or if such judgment or settlement includes an admission of fault by
the indemnified party.
(d) CONTRIBUTION. If the indemnification provided for in this Section
7.8 shall for any reason be held by a court to be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under Sections
7.8(a) and 7.8(b) hereof, the indemnified party and the indemnifying party shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same) in such proportion as is appropriate to reflect the relative fault of
Parent on one hand and Stockholder on the other that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or, to the extent both Parent and Stockholder
sell shares pursuant to such registration statement, and if the allocation
provided above is not permitted by applicable law, in such proportion as shall
be appropriate to reflect the relative benefits received by Parent on one hand
and Stockholder on the other. No person or entity guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any person or entity who was not guilty of such fraudulent
misrepresentation. In addition, no person or entity shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim, effected without such person's or entity's written consent, which consent
shall not be unreasonably withheld; provided, however, in no event shall the
liability of any Stockholder under this subsection exceed the proceeds obtained
by the sale of such Stockholder's Registrable Securities in any such
registration.
7.9 LIMITATION. Nothing in this Section 7 shall be construed to confer upon
Stockholder the right to sell Parent Common Stock in an amount exceeding that
allowed by Section 6.4 of this Agreement.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as expressly provided
otherwise, all representations, warranties, covenants and agreements made by
Stockholder or Parent in this Agreement shall survive the termination of this
Agreement as set forth in Section 4 and any investigation at any time made by or
on behalf of any party.
9. NOTICES. All notices or other communications required or permitted hereunder
shall be in writing (except as otherwise provided herein), given in the manner
provided in the Merger Agreement, and shall be deemed duly given when received,
addressed as follows:
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If to Parent or Parent Subsidiary:
Viatel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
Two Stamford Plaza
000 Xxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Stockholder:
Xxxxxx Xxxx
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Company:
Destia Communications, Inc.
00 Xxxxx 00 Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
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With a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
10. ENTIRE AGREEMENT: AMENDMENT. This Agreement, together with the documents
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by Parent, Parent
Subsidiary and Stockholder.
11. LEGEND. In addition to any other legend which may be required by applicable
law, each share certificate representing shares which are subject to this
Agreement shall have endorsed, to the extent appropriate, upon its face the
following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
ASSIGNED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT
TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES
LAW, RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING
RULE 144, PROVIDED AN OPINION OF COUNSEL IS FURNISHED TO THE
COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE
SECURITIES LAW IS AVAILABLE.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER
COMPLIES WITH THE PROVISIONS OF A STOCKHOLDER AGREEMENT
DATED AS OF AUGUST 27, 1999 (THE "STOCKHOLDER AGREEMENT"), A
COPY OF WHICH IS ON
- 18 -
FILE AND MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
COMPANY. NO TRANSFER OF THE SECURITIES WILL BE MADE ON THE
BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH STOCKHOLDER AGREEMENT. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT
TO OTHER RIGHTS AND OBLIGATIONS AS SET FORTH IN THE
STOCKHOLDER AGREEMENT.
12. ASSIGNS. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
13. GOVERNING LAW. EXCEPT AS EXPRESSLY SET FORTH BELOW, THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF. IN ADDITION, EACH OF STOCKHOLDER, PARENT, PARENT
SUBSIDIARY AND COMPANY HEREBY AGREE THAT ANY DISPUTE ARISING OUT OF THIS
AGREEMENT SHALL BE HEARD IN THE APPROPRIATE COURT OF THE STATE OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND, IN
CONNECTION THEREWITH, EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ANY SERVICE OF PROCESS IN CONNECTION
WITH ANY DISPUTE ARISING OUT OF THIS AGREEMENT MAY BE GIVEN TO ANY OTHER PARTY
HERETO BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT THE RESPECTIVE ADDRESSES
SET FORTH IN SECTION 9 ABOVE.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of any
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted and without having to prove actual damages, as
well as to obtain damages for breach of this Agreement. By seeking or obtaining
such relief, the aggrieved party will not be precluded from seeking or obtaining
any other relief to which it may be entitled.
15. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed,
including execution by facsimile, in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
- 19 -
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary or
desirable to consummate the transactions contemplated by this Agreement.
18. THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, expressed or implied,
shall be construed to give any person or entity other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
- 20 -
IN WITNESS WHEREOF, Parent, Parent Subsidiary, Stockholder and Company
have executed this Agreement or caused this Agreement to be executed by their
duly authorized officers, as the case may be, each as of the date and year first
above written.
XXXXXX XXXX
_____________________________________________
AT ECON LTD. PARTNERSHIP
By:_________________________________________
Name:
Title:
AT ECON LTD. PARTNERSHIP NO. 2
By:_________________________________________
Name:
Title:
VIATEL, INC.
By:_________________________________________
Name:
Title:
- 21 -
VIATEL ACQUISITION CORP.
By:_________________________________________
Name:
Title:
DESTIA COMMUNICATIONS, INC.
By:_________________________________________
Name:
Title:
- 22 -
SCHEDULES 2.1 AND 2.2
Xxxxxx and Xxxxxx Xxxx have entered into a Loan and Pledge Agreement with
Xxxxxx Xxxxxxx & Co., International Limited ("MSIL"), dated October 8, 1997 and
amended on May 3, 1999, pursuant to which Xx. Xxxx pledged 2,730,000 shares of
Destia Communications, Inc. as collateral for the loan. A waiver to enter into
this Agreement, to be effective as of the date hereof, is being obtained.
