EXHIBIT 10.1
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 27, 1997 (this
"Agreement"), among Esprit Telecom Group plc, a public limited company organized
under the laws of England and Wales (the "Company"), Apax Partners & Co.
Ventures Ltd. ("Apax Partners") as managers of Apax Ventures IV International
Partners, L.P., Apax Ventures IV, Apax UK V-A, L.P., Apax UK V-B, Warburg,
Xxxxxx Ventures, L.P., a Delaware limited partnership ("Warburg, Xxxxxx"),
Xxxxxxx International Private Equity Partners II - Direct Fund L.P. ("Xxxxxxx"),
Gold & Xxxxx Transfer, S.A. ("Gold & Xxxxx") and Abacus (C.I.) Limited
("Abacus"), as trustee of the Astro Trust. Each of Apax Partners, Warburg,
Pincus, Hancock, Gold & Xxxxx and Abacus is referred to herein as a
"Shareholder."
WHEREAS, the Company has determined that it is in the best interests of
the Company to offer Ordinary Shares, nominal value 1p per share, of the Company
(the "Ordinary Shares") in the form of American Depositary Shares ("ADSs") in
the United States (the "Offering") pursuant to the filing of a Form F-1
Registration Statement under the United States Securities Act of 1933, as
amended (the "Securities Act"); and
WHEREAS, the Company has determined that it is in the best interests of
the Company to enter into this Agreement with the Shareholders in connection
with the Offering.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties and conditions contained herein, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. As used in this Agreement, the following terms shall have
the following respective meanings:
"Commission" shall mean the United States Securities and
Exchange Commission, or any other United States federal agency at the
time administering the Securities Act or the Exchange Act (defined
below), as applicable, whichever is the relevant statute.
"Exchange Act" shall mean the United States Securities
Exchange Act of 1934, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be
amended from time to time.
"Holder" shall mean each Shareholder or any transferee or
assignee thereof to whom the rights under this Agreement are assigned
in accordance with the provisions of Section 4.06 hereof.
"person" shall mean a corporation, association, partnership,
organization, group (as such term is used in Rule 13d-5 under the
Exchange Act), business, individual, government or political
subdivision thereof, governmental agency or other entity.
"Registrable Shares" shall mean all Ordinary Shares held by or
on behalf of a Shareholder from time to time. For purposes of this
Agreement, any Registrable Shares shall cease to be Registrable Shares
when (x) a registration statement covering such Registrable
Shares has been declared effective and such Registrable Shares have
been disposed of pursuant to such effective registration statement or
(y) such Registrable Shares are sold freely in the public market by a
person in a transaction in which the rights under the provisions of
this Agreement are not assigned.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of the Shareholders. Each
Shareholder severally and not jointly hereby represents and warrants to the
Company that it has all requisite power and authority, and has received all
requisite approvals to complete the transactions contemplated hereby; this
Agreement has been duly authorized, executed and delivered by each Shareholder
and constitutes a valid and binding agreement enforceable against it in
accordance with its terms.
SECTION 2.02. Representations and Warranties of the Company. The
Company represents and warrants to each Shareholder that it has been duly
incorporated as a public limited company under the laws of England and Wales and
that (i) it has all requisite corporate power and authority, and has received
all requisite approvals (including any necessary approval of its board of
directors) to complete the transactions contemplated hereby and (ii) this
Agreement has been duly authorized, executed and delivered by it and constitutes
a valid and binding agreement enforceable by each Shareholder against it in
accordance with its terms.
ARTICLE III.
AGREEMENTS IN RESPECT OF THE REGISTRABLE SHARES
SECTION 3.01. Demand Registrations. Each Holder shall have the right
(the "Demand Right") on two (2) occasions during the term of this Agreement with
respect to such Holder to require the Company to file a registration statement
under the Securities Act in respect of all or some of the Registrable Shares
held by such Holder (but not less than a number of Registrable Shares that
represents at least 25% of the total number of Registrable Shares held by such
Holder at such time; provided, however, that if such Holder is exercising such
Demand Right together with any other Holders, then such Demand Right may be
exercised if the Registrable Shares subject to such Holder's Demand Right,
together with all other shares demanded by other Holders, shall exceed 10% of
the then outstanding Ordinary Shares of the Company). Subject to the provisions
of subsection (b) below, as promptly as practicable, but in no event later than
45 days after the Company receives a written request from such Holder demanding
that the Company so register the number of Registrable Shares specified in such
request, the Company shall file with the Commission and thereafter use its best
efforts to cause to be declared effective promptly a registration statement (a
"Demand Registration") providing for the registration of all Registrable Shares
as such Holder shall have demanded be registered. Holders may distribute the
Registrable Shares covered by such Demand Registration either by means of a firm
commitment underwriting or other than by means of an underwriting; provided
that, in the event of a distribution other than by means of an underwriting,
such distribution may only be made following the effective date of the
registration statement relating to such Demand Registration and so long as the
registration statement remains effective in accordance with the terms of Section
3.03(a) (iii) of this Agreement. All requests made pursuant to this Section
3.01(a) shall specify the amount of the Registrable Shares to be registered and
the intended method of distribution of such Registrable Shares.
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(b) Anything in this Agreement to the contrary notwithstanding, the
Company shall be entitled to postpone and delay the filing of any Demand
Registration until the earliest practicable time at which such Demand
Registration can be reasonably effected if (i) the Company is conducting or
about to conduct an underwritten public offering of securities in which the
Holder is entitled to join pursuant to Section 3.02 hereof, (ii) the Company is
subject to an existing contractual obligation not to engage in a public
offering, (iii) the financial statements of the Company for the fiscal period
most recently ended prior to such written request are not yet available, or (iv)
the Company shall determine that any such filing or the offering of any
Registrable Shares would (x) in the good faith judgment of the Board of
Directors of the Company, impede, delay or otherwise interfere with any pending
or contemplated acquisition, corporate reorganization or other similar
transaction or financing related thereto involving the Company, (y) based upon
advice from the Company's investment banker or financial advisor, adversely
affect any pending or contemplated offering or sale of any class of securities
by the Company, or (z) require disclosure of material nonpublic information
which, if disclosed at such time, would be materially harmful to the interests
of the Company and its shareholders. In the event of a decision by the Company
to postpone or delay the filing of any Demand Registration pursuant to this
Section 3.01(b), the Company shall notify all Holders (i) of such decision and
(ii) upon the expiration of any such postponement or delay. After the expiration
of any such postponement or delay and without any further request from a Holder,
the Company shall effect the filing of the relevant Demand Registration and
shall use its best efforts to cause any such Demand Registration to be declared
effective as promptly as practicable unless such Holder shall have, prior to the
effective date of such Demand Registration, withdrawn in writing its initial
request, in which case such withdrawn request shall not constitute a Demand
Registration for purposes of determining the number of Demand Registrations to
which such Holder is entitled to hereunder.
(c) Notwithstanding anything contained in this Section 3.01:
(i) the Company shall not be required to file a
registration statement within six (6) months of the effective date of a
prior registration statement filed as a result of a request for a
Demand Registration by such Holder or within six (6) months of the
effective date of a prior registration statement registering Ordinary
Shares;
(ii) a Holder shall not be entitled to request a
Demand Registration until after 180 days after the closing of the
Offering; and
(iii) no request for a Demand Registration may be
made by a Holder during the pendency of any lock-up period imposed in
connection with a public offering of securities of the Company, except
with the consent of the underwriters controlling the applicable lock-up
agreement.
(d) Notwithstanding anything contained in this Section 3.01, if the
lead underwriter of an offering involving a Demand Registration advises the
Holders that have requested such registration that the total number of
Registrable Shares that the Holders intend to include is such as (i) would
materially and adversely affect the price of the Ordinary Shares to be offered
or (ii) result in a greater number of Ordinary Shares being offered than the
market could reasonably absorb, then the number of Registrable Shares to be
registered in the Demand Registration shall be reduced to such number which, in
the opinion of such underwriters, can be sold without (y) materially and
adversely affecting the price of the Ordinary Shares to be offered or (z)
resulting in a greater number of Ordinary Shares being registered than the
market could absorb. Such Registrable Shares to be included in such registration
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shall be allocated pro rata among all requesting Holders on the basis of the
relative number of securities originally requested to be registered by each of
them.
(e) The Company shall be entitled to include newly issued Ordinary
Shares in any Demand Registration; provided, however, that if the lead
underwriter of an offering involving a Demand Registration advises the Holders
that have requested such registration that the number of Ordinary Shares that
the Company intends to include in addition to the total number of Registrable
Shares that the Holders intend to include is such as (i) would materially and
adversely affect the price of the Ordinary Shares to be offered or (ii) result
in a greater number of Ordinary Shares being offered than the market could
reasonably absorb, then the Holders will promptly so advise the Company and may
require that the newly issued Ordinary Shares be reduced to such number which,
in the opinion of such underwriters, when added to the number of Registrable
Shares that the Holders intend to be included, can be sold without (y)
materially and adversely affecting the price of the Ordinary Shares to be
offered or (z) resulting in a greater number of Ordinary Shares being registered
than the market could absorb.
SECTION 3.02. Piggyback Registration. (a) If, at any time following the
date of the Offering and during the term of the Agreement with respect to each
Holder, the Company proposes to file a registration statement under the
Securities Act with respect to an offering of its Ordinary Shares (i) for its
own account (other than a registration statement on Form S-4 or S-8 (or any
substitute form that may be adopted by the Commission)) or (ii) for the account
of any holders of its Ordinary Shares (including any pursuant to a Demand
Registration), on a form and in a manner that would permit registration of
Registrable Shares for sale to the public under the Securities Act, the Company
shall give written notice of such proposed filing to each Holder as soon as
practicable (but in any event not less than 30 days before the anticipated
filing date), and such notice shall offer each Holder the opportunity to
register such number of Registrable Shares as the Holder shall request. Upon the
written direction of any Holder, given within 20 days following the receipt by
such Holder of any such written notice (which direction shall specify the number
of Registrable Shares intended to be disposed of by such Holder), the Company
shall include in such registration statement (a "Piggyback Registration" and,
collectively with a Demand Registration, a "Registration") such number of
Registrable Shares as shall be set forth in such notice.
(b) Notwithstanding anything contained in this Section 3.02, if the
lead underwriter of an offering involving a Piggyback Registration advises the
Company that the inclusion of such Registrable Shares (i) would materially and
adversely affect the price of the Ordinary Shares to be offered or (ii) result
in a greater amount of Ordinary Shares being offered than the market could
reasonably absorb, then the number of Registrable Shares to be registered by
each party requesting Piggyback Registration shall be reduced such that the
total number of Registrable Shares being registered is not larger than such
number which, in the opinion of such underwriters, can be sold without (y)
materially and adversely affecting the price of the Ordinary Shares to be
offered or (z) resulting in a greater number of Ordinary Shares being registered
than the market could absorb. Such Registrable Shares to be included in such
registration shall be allocated pro rata among all requesting Holders on the
basis of the relative number of securities originally requested to be registered
by each of them. Nothing contained herein shall require the Company to reduce
the number of Ordinary Shares proposed to be issued by the Company.
(c) No Piggyback Registration effected under this Section 3.02 shall be
deemed to have been effected pursuant to Section 3.01 hereof or shall release
the Company of its obligations to effect any Demand Registration upon request as
provided under Section 3.01 hereof.
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(d) The Company shall not be obligated to effect any registration of
Registrable Shares under this Section 3.02 that is incidental to the
registration of any of its securities in connection with any merger,
acquisition, exchange offer, dividend reinvestment plan or stock option or other
employee benefit plan.
(e) Notwithstanding anything contained in this Section 3.02, if, at any
time after giving notice of its intention to register any of its securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such securities, the Company may, at its election, give written notice
of such determination to the Holders participating in such registration and
thereupon the Company shall be relieved of its obligation to register any
Registrable Shares in connection with such registration (but not from its
obligation to pay expenses incurred in connection with such registration to the
extent provided in Section 3.05).
(f) No Holder may participate in any underwritten registration pursuant
to Section 3.01 of this Agreement or this Section 3.02 unless such Holder (i)
agrees to sell such Holder's Registrable Shares on the basis provided in any
underwritten arrangements approved by the Company and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
SECTION 3.03. Registration Procedures. (a) In connection with each
Registration, and in accordance with the intended method or methods of
distribution of the Ordinary Shares as described in such Registration, the
Company shall, as soon as reasonably practicable (and, in any event, subject to
the terms of this Agreement, at or before the time required by applicable laws
and regulations):
(i) keep the Holders advised in writing as to the initiation
of each Registration and as to the completion thereof;
(ii) prepare and file with the Commission a registration
statement on an appropriate form with respect to such Registrable
Shares and use its best efforts to cause such registration statement to
become effective and 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 comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Shares covered by such registration
statement;
(iii) keep such Registration effective for a period of one
hundred and twenty (120) days or until the Holders, as applicable, have
completed the distribution described in the registration statement
relating thereto, whichever first occurs; provided, however, that (1)
such 120-day period shall be extended for a period of time equal to the
period during which the Holders refrain from selling any securities
included in such Registration at the request of the Company and its
underwriter; and (2) in the case of any registration of Registrable
Shares on Form F-3 (or any applicable successor to such form) which are
intended to be offered on a continuous or delayed basis, such 120-day
period shall be extended until all such Registrable Shares are sold,
provided that Rule 415 under the Securities Act, or any successor rule
thereunder, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permit, in
lieu of filing a post-effective amendment which (y) includes any
prospectus required by Section 10(a) of the Securities Act or (z)
reflects facts or events representing a material or fundamental change
in the information set forth in the registration
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statement, the incorporation by reference of information required to be
included in (y) and (z) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement;
(iv) furnish to each Holder participating in such
registration such numbers of copies of the registration statement and
the prospectus included therein (including each preliminary prospectus
and any amendments or supplements thereto), in conformity with the
requirements of the Securities Act and such other documents and
information as each Holder may reasonably request in order to
facilitate the sale or disposition of such Registrable Shares;
(v) use its reasonable best efforts to register or qualify
the Registrable Shares covered by such registration statement under
such other securities or blue sky laws of such jurisdiction within the
United States as shall be reasonably appropriate for the distribution
of the Registrable Shares covered by the registration statement;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business in or to
file a general consent to service of process in any jurisdiction
wherein it would not but for the requirements of this paragraph (d) be
obligated to do so; and provided, further, that the Company shall not
be required to qualify such Registrable Shares in any jurisdiction in
which the securities regulatory authority of such jurisdiction requires
that a Holder participating in such registration submit any of its
Registrable Shares to the terms, provisions and restrictions of any
escrow, lockup or similar agreement(s) for consent to sell Registrable
Shares in such jurisdiction unless such Holder agrees to do so;
(vi) promptly notify each Holder participating in such
registration, (1) when a prospectus or any prospectus supplement or
amendment has been filed, and, with respect to a registration statement
or any post-effective amendment to a registration statement, when the
same has become effective, (2) of any request by the Commission for
amendments or supplements to a registration statement or related
prospectus or for additional information or any receipt of Commission
comments, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of a registration statement or the
initiation of any proceedings for any such purpose, (4) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threat of any proceedings for such
purpose, and (5) at any time when a prospectus relating to the
Registrable Shares is required to be delivered under the Securities
Act, of the happening of 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 light of the circumstances under which they
were made, and at the request of any such Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers 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 light of the
circumstances under which they were made and shall otherwise comply in
all material respects with applicable law;
(vii) use its reasonable best efforts to furnish, at the
request of any Holder requesting Registration, if the method of
distribution is by means of an underwriting, on the date that the
Registrable Shares are delivered to the underwriters for sale pursuant
to such registration, or if such Registrable Shares are not being sold
through underwriters, on the date
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that the registration statement with respect to such Registrable Shares
becomes effective, (1) a signed opinion, dated such date, of the
independent legal counsel representing the Company for the purpose of
such registration, addressed to the underwriters, if any, and if such
Registrable Shares are not being sold through underwriters, then to the
Holders participating in such Registration, as to such matters as such
underwriters or the Holders may reasonably request, in form and
substance as would customarily be given to underwriters in such a
transaction and reasonably satisfactory to a majority-in-interest of
Holders participating in such Registration; and (2) letters dated such
date and the date the offering is priced, from the independent
certified public accountants of the Company, addressed to the
underwriters, if any, and if such Registrable Shares are not being sold
through underwriters, then to the Holders participating in such
Registration and, if such accountants refuse to deliver such letters to
such Holders pursuant to applicable accounting standards, then to the
Company (y) stating that they are independent certified public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other
financial data of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and (z) covering such other
financial matters with respect to the registration in respect of which
such letter is being given as such underwriters or the Holders, as the
case may be, may reasonably request, in form and substance as would
customarily be given to underwriters in such a transaction and
reasonably satisfactory to a majority-in-interest of the Holders
participating in such Registration;
(viii) enter into customary agreements (including if
the method of distribution is by means of an underwritten public
offering, an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Shares to be so included
in the registration statement;
(ix) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
but not later than fifteen (15) months after the effective date of the
registration statement, an earning statement covering the period of at
least twelve (12) months beginning with the first full month after the
"effective date" (as defined in Rule 158 under the Securities Act) of
the registration statement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(x) use its best efforts to list such securities on
each securities exchange on which Ordinary Shares or ADSs are then
listed, if such Registrable Shares are not already so listed and if
such listing is then permitted under the rules of such exchange.
(b) Each Holder requesting registration shall furnish to the Company in
writing such information regarding such Holder and its intended method of
distribution of the Registrable Shares as the Company may from time to time
reasonably request in writing and as shall be required by law or by the
Commission in connection therewith. Such Holder shall notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any event, in
either case as a result of which any prospectus relating to the Registrable
Shares contains or would contain an untrue statement of a material fact
regarding such Holder or its intended method of distribution of such Registrable
Shares or omits to state any material fact regarding such Holder or its intended
method of distribution of such Registrable Shares
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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 furnish to the Company any additional information required to correct
and update any previously furnished information, or required so that such
prospectus shall not contain, with respect to such Holder or the intended method
of distribution of the Registrable Shares, 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, in the light of the circumstances under which
they were made, not misleading and shall otherwise comply in all material
respects with applicable law.
(c) Each Holder participating in any registration pursuant to Section
3.01 or 3.02 shall enter into customary agreements (including if the method of
distribution is by means of an underwritten public offering, an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of the Registrable
Shares to be so included in the registration statement.
(d) Each Holder participating in any Registration shall, upon receipt
of notice of the occurrence of any of the events specified in Section
3.03(a)(vi)(2)-(5) hereof, forthwith discontinue disposition of such Registrable
Shares pursuant to the registration statement covering such Registrable Shares
until such Holder's receipt of notice from the Company that the use of the
applicable prospectus may be resumed or until such Holder's receipt of copies of
an amended or supplemented prospectus.
SECTION 3.04. Registration Expenses. (a) In the case of a registration
proposed by the Company pursuant to which the Company is registering Ordinary
Shares for its own account, all expenses, excluding underwriters' discounts and
commissions and any stamp or transfer tax or duty, but including, without
limitation, all registration, filing and qualification fees, word processing,
duplicating, printers' and accounting fees (including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance), fees of the National Association of Securities
Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws, and fees and
disbursements of counsel for the Company incurred in connection with each
registration shall be paid by the Company. In the case of such a registration,
each Holder participating in such registration shall bear and pay the
underwriting commissions and discounts and any stamp or transfer tax or duty and
the fees and disbursements of counsel for such Holder applicable to securities
offered for its account in connection with such registration.
(b) In the case of a Demand Registration, each Holder shall bear and
pay the underwriting commissions and discounts and any stamp or transfer tax or
duty and the fees and disbursements of counsel for such Holder applicable to
securities offered for its account in connection with such registration. All
other expenses, including without limitation all registration, filing and
qualification fees, word processing, duplicating, printers' and accounting fees
(including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance), fees of the National
Association of Securities Dealers, Inc. or listing fees, messenger and delivery
expenses, all fees and expenses of complying with state securities or blue sky
laws and fees and disbursements of counsel for the Company incurred in
connection with each registration shall be paid by the Company and each Holder
participating in such registration in proportion to the number of securities
registered for the account of the Company and each Holder.
SECTION 3.05. Indemnification; Contribution. (a) Indemnification by the
Company. The Company shall, and it hereby agrees to, indemnify and hold
harmless, in the case of any Registration
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registering Registrable Shares of a Holder, such Holder, each of such Holder's
officers, directors and partners, and each person controlling such Holder within
the meaning of the Securities Act (each, a "Holder Indemnified Party"), and each
person who participates as a placement or sales agent or as an underwriter and
each person controlling such agent or underwriter within the meaning of the
Securities Act, in any offering or sale of the Registrable Shares, from and
against any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) joint or several to which such Holder Indemnified Party or such
agent or underwriter or controlling person of such underwriter is or may become
subject, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or any other document incident thereto, including without
limitation, documents relating to qualification or compliance with respect to
the securities relating to the Registration (collectively, the "Registration
Documents"), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arise out of any violation by the
Company of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with such Registration (including, without
limitation, any qualification or compliance); and the Company shall, and it
hereby agrees to, reimburse each such Holder Indemnified Party or agent,
underwriter or controlling person of such underwriter for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage or liability (or action or proceeding in
respect thereof) as such expenses are incurred; provided, however, that the
Company shall not be liable to any such person in any such case to the extent
that any such loss, claim, damage or liability (or action or proceeding in
respect thereof) arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such Registration
Document, in reliance upon and in conformity with written information furnished
to the Company by such Holder Indemnified Party or any agent, underwriter or
controlling person of such underwriter or other representative of such Holder
expressly for use therein, or by such Holder's failure to furnish the Company,
upon request, with the information with respect to such Holder Indemnified Party
or any agent, underwriter or controlling person of such underwriter or other
representative of such Holder, or of such Holder's intended method of
distribution, that is the subject of the untrue statement or omission or if the
Company shall sustain the burden of proving that such Holder Indemnified Person
or such agent, underwriter or controlling person of such underwriter sold
securities to the person alleging such loss, claim, damage or liability (or
action or proceeding in respect thereof) without sending or giving, at or prior
to the written confirmation of such sale, a copy of the applicable prospectus
(excluding any documents incorporated by reference therein) or of the applicable
prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein) if the Company had previously furnished
copies thereof to such Holder or such agent or underwriter, and such prospectus
corrected such untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration. The indemnification by the Company
pursuant to this Section 3.05(a) shall not apply to the extent that such
indemnification is prohibited by Section 151 of the U.K. Companies Act.
(b) Indemnification by the Holder and Any Agent or Underwriters. Each
Holder requesting or joining in a Registration, if Registrable Securities held
by it are included in the Registration, severally and not jointly, shall
indemnify and hold harmless (i) the Company, each of its directors and officers,
each person, if any, who controls the Company within the meaning of the
Securities Act (each, a "Company Indemnified Party"), (ii) each agent and any
underwriter for the Company or controlling person of such underwriter (within
the meaning of the Securities Act) and (iii)
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each Holder Indemnified Party against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), joint or several, to
which any such Company Indemnified Party, agent, underwriter, controlling person
of such underwriter, or such other Holder Indemnified Party is or may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of any
material fact contained in any such Registration Document, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Registration Document, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder expressly
for use therein; and each such Holder shall reimburse any legal or other
expenses reasonably incurred by such Company Indemnified Party or any such
agent, underwriter, controlling person of such underwriter, or such other Holder
Indemnified Party in connection with investigating or defending any loss, claim,
damage or liability (or actions or proceedings in respect thereof) as such
expenses are incurred; provided, however, that (i) the obligations of each of
the Holders hereunder shall be limited to an amount equal to the net proceeds to
such Holder of the securities sold in connection with such Registration and (ii)
no Holder shall be liable to any such person in any such case to the extent of
any such loss, claim, damage or liability (or action or proceeding in respect
thereof), if such Holder shall sustain the burden of proving that such Company
Indemnified Party, agent or underwriter or controlling person of such
underwriter, or any other Holder Indemnified Party, as the case may be, sold
securities to the person alleging such loss, claim, damage or liability (or
action or proceeding in respect thereof), without sending or giving, at or prior
to the written confirmation of such sale, a copy of the applicable prospectus
(excluding any documents incorporated by reference therein) or the applicable
prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein), if such prospectus corrected such untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration.
(c) Notice of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions
of, or as contemplated by, this Section 3.05, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than pursuant to such provisions unless the
indemnifying party is materially prejudiced thereby. In case any such action or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be permitted to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(which shall not, except with the consent of the indemnified party, be counsel
to the indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
of other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
may participate in such defense at such indemnified party's expense, unless the
indemnified party shall have reasonably concluded that there may be a conflict
of interest between the indemnifying party and such indemnified party in such
action, in which case the fees and expenses of counsel shall be at the expense
of the indemnifying party. If the indemnifying party is not entitled to, or
elects not to, assume the defense of a claim, it will not be obligated to pay
the fees and expenses of more than one
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counsel (in addition to local counsel) for each indemnified party with respect
to such claim. The indemnifying party will not be subject to any liability for
any settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or behalf of any indemnified party.
(d) Contribution. Each Holder requesting or joining in a Registration,
if Registrable Securities held by it are included in the Registration; and the
Company agree that if, for any reason, the indemnification provisions
contemplated by Section 3.05(a) or Section 3.05(b) hereof are unavailable to or
are insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of, and benefits
derived by, the indemnifying party and the indemnified party, as well as any
other relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or by such indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section
3.05(d) were determined by pro rata allocation (even if the Holder or any agents
for, or underwriters of, the Registrable Shares, or all of them, were treated as
one entity for such purpose); or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section
3.05(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above shall be deemed to include (subject to the
limitations set forth in Section 3.05(c) hereof) any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. 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. Notwithstanding the foregoing, an indemnifying
party shall not be required to contribute under this Section 3.05(d) except
under such circumstances as such indemnifying party would have been liable
pursuant to Section 3.05(a) or (b) had such indemnification been enforceable
under applicable law.
(e) Beneficiaries of Indemnification. The obligations of the Company
under this Section 3.05 shall be in addition to any liability that it may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director and partner of each Holder requesting or joining in a
Registration, if Registrable Securities held by it are included in the
Registration; and each agent and underwriter of the Registrable Shares and each
person, if any, who controls such Holder or any such agent or underwriter within
the meaning of the Securities Act; and the obligations of such Holder and any
agents or underwriters contemplated by this Section 3.05 shall be in addition to
any liability that such Holder or its respective agent or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any registration statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Securities Act.
-11-
SECTION 3.06. Underwriters. If any of the Registrable Shares are to be
sold pursuant to an underwritten offering, the investment banker or bankers and
the managing underwriter or underwriters thereof shall be selected by the
Company except in the case of a Demand Registration, in which case the managing
underwriter or underwriters shall be selected by a majority-in-interest of the
Holders requesting such Registration after consultation with the Company and
taking into account the Company's reasonable requests, provided that such
managing underwriter or underwriters must be of recognized international
standing.
SECTION 3.07. Lockups. (a) Each Holder participating in any Demand
Registration pursuant to Section 3.01 or Section 3.02, or, in the event of any
registration of the Company's securities in which a Holder could exercise its
rights to a Piggyback Registration pursuant to Section 3.02 other than a Demand
Registration, then all Holders, upon the request of the Company or the
underwriters managing any underwritten offering of the Company's securities,
shall agree in writing not to effect any sale, disposition or distribution of
any Registrable Shares (other than that included in the Registration) without
the prior written consent of the Company or the representatives of such
underwriters, as the case may be, for such a period of time not to exceed 90
days from the effective date of such registration as the Company or the
underwriters may specify; provided, however, in connection with any registration
of the Company's securities other than a Demand Registration, no Holder shall be
obligated to enter into any such lock-up agreement unless each of the directors
and executive officers of the Company enter into a similar lock-up agreement;
provided, further, that each Holder agrees not to effect any sale, disposition
or distribution of any Registrable Shares for 180 days from the date of the
prospectus relating to the Offering.
(b) The Company shall, if so required by the managing underwriters
in connection with an underwritten offering of Registrable Shares pursuant to
Section 3.01 or 3.02, agree in writing not to effect any sale, disposition or
distribution of any Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares (other than that included in the
Registration) without the prior written consent of the representatives of such
underwriters for such period of time not to exceed 180 days from the effective
date of such registration as the underwriters may specify, except in connection
with a stock option plan, stock purchase plan, savings or similar plan, or an
acquisition, merger or exchange offer.
SECTION 3.08. Over-allotment Options. It is understood that in any
underwritten offering of Registrable Shares in addition to the shares (the
"initial shares") the underwriters have committed to purchase, the underwriting
agreement may grant the underwriters an option to purchase a number of
additional shares (the "option shares") equal to up to 15% of the initial shares
(or such other maximum amount as the National Association of Securities Dealers,
Inc. may then permit), solely to cover over-allotments, if any. In the absence
of agreement to the contrary, the number of initial shares and option shares to
be sold by the Company and the Holders participating in such offering shall be
allocated pro rata among such persons on the basis of the relative number of
Registrable Shares each person has requested to be included in such
registration.
SECTION 3.09. Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering
Registrable Shares under the Securities Act, the Company will give each Holder
and its underwriters, if any, and its counsel and accountants, the opportunity
to participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto, and will give it such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have issued a report on its
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financial statements as shall be necessary, in the opinion of such Holders and
such underwriters or their respective counsel to conduct a reasonable
investigation within the meaning of the Securities Act.
SECTION 3.10. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of restricted securities to the public without registration, the Company
agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144(c) under the Securities Act, at all times
from and after ninety (90) days following the effective date of the registration
statement relating to the Offering;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act at any time after it has become subject to such reporting
requirements; and
(c) so long as a Holder owns any Registrable Shares, furnish to such
Holder upon request a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 (at any time from and after ninety (90)
days following the effective date of the registration statement relating to the
Offering, and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such securities
without registration.
SECTION 3.11. Form F-3. Following the Offering, the Company shall use
its best efforts to qualify for registration on Form F-3.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01. Term of Agreement; Termination. The term of this
Agreement shall commence on the date hereof and such term and this Agreement
shall terminate with respect to a Holder on the earlier of: (i) ten (10) years
from the date of this Agreement; and (ii) when the Registrable Shares held by
such Holder no longer constitute at least 5% of the Company's then outstanding
Ordinary Shares and if such Holder can then sell Ordinary Shares in the United
States public market pursuant to an exemption from the registration requirements
of the Securities Act and without regard to holding period, volume or
manner-of-sale limitations.
SECTION 4.02. Specific Performance and Other Equitable Rights. Each of
the parties hereto recognizes and acknowledges that a breach by a party or by
any assignee thereof of any covenants or other commitments contained in this
Agreement will cause the other party to sustain injury for which it would not
have an adequate remedy at law for money damages. Therefore, each of the parties
hereto agrees that in the event of any such breach, the aggrieved party shall be
entitled to the remedy of specific performance of such covenants or commitments
and preliminary and permanent injunctive and other equitable relief in addition
to any other remedy to which it may be entitled, at law or in equity, and the
parties hereto hereby waive any requirement for the securing or posting of any
bond in connection with the obtaining of any such injunctive or other equitable
relief.
-13-
SECTION 4.03. Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given and made if in
writing and if served by personal delivery upon the party for whom it is
intended or delivered by registered or certified mail, return receipt requested,
or if sent by telecopier, upon receipt of oral confirmation that such
transmission has been received, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
(a) If to the Company, addressed as follows:
Esprit Telecom Group PLC
Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Attention: Xxx Xxxxxxx
Telecopier: 00-000-000-0000
with copies to:
Shearman & Sterling
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Attention: Xxxxxx X. Xxxxxx
Telecopier: 00-000-000-0000
Xxxx & Maw
00 Xxxxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX Xxxxxxx
Attention: Xxxxxx Xxxxxxxx
Telecopier: 00-000-000-0000
(b) If to Apax Partners & Co. Ventures Ltd., addressed as follows:
Apax Partners & Co. Ventures Ltd.
00 Xxxxxxxx Xxxxx
Xxxxxx X0X 0XX Xxxxxxx
Attention: Xxxxxxx Xxxxxx
Telecopier: 00-000-000-0000
(c) If to Warburg, Xxxxxx Ventures, L.P., addressed as follows:
X.X. Xxxxxxx, Xxxxxx Co. International L.T.D.
Xxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
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Attention: Xxxxxxx Italia
Telecopier: 00-000-000-0000
with a copy to:
Xxxxxx Xxxx & Xxxxxxxxx
00 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxxx X. Xxxx
Telecopier: 00-000-000-0000
(d) If to Xxxxxxx International Private Equity Partners II - Direct
Fund L.P., addressed as follows:
HVP Partners, L.L.C.
Xxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
XXX
Attention: Xxxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
(e) If to Gold and Xxxxx Transfer, S.A. addressed as follows:
c/o Xxxxxx Xxxxxxxx
0000 X. Xxxxxx X.X., Xxxxx 000
Xxxxxxxxxx X.X. 00000
Telecopier: (000) 000-0000
(f) If to Abacus (C.I.) Limited, addressed as follows:
La Xxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxxx
Xxxxxxx Xxxxxxx XX0 0XX
Attention: Xxxxxxx Xxxxxx
Telecopier: 00-0000 000000
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this Section 4.03. The date of receipt of
any such notice, request, consent, agreement or approval shall be deemed to be
the date of delivery thereof (if delivered by hand), on the third business day
following mailing (if delivered by mail), or when transmitted to the telecopier
number specified in this Section 4.03 (if delivered by telecopier).
SECTION 4.04. Survival. The several indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force
-15-
and effect regardless of any investigation (or statement as to the results
thereof) made by or on behalf of any party, any director, officer or partner of
such party, or any controlling person of any of the foregoing, and shall survive
the transfer of any Registrable Shares by each Shareholder, and the
indemnification and contribution provisions set forth in Section 3.05 hereof
shall survive termination of this Agreement.
SECTION 4.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 4.06. Transfer of Registration Rights. The registration rights
of each Shareholder in this Agreement with respect to any Registrable Shares may
be transferred to any person acquiring any of the Registrable Shares held by the
Holder; provided, however, that the Company may deny the transfer of such
registration rights in any such case if (i) such transfer relates to a sale or
other transfer of all of the Registrable Shares to a person who is a competitor
of the Company or its subsidiaries in the industry or (ii) any conditions in the
following sentence are not met. Each such transfer is contingent on such
Shareholder or the transferring person satisfying the following: (i) each
Shareholder or transferring person shall have given the Company written notice
at or prior to the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being transferred; (ii) such transferee shall have agreed in
writing, in form and substance reasonably satisfactory to the Company, to be
bound by the provisions of this Agreement; and (iii) immediately following such
transfer the further disposition of such securities by each transferee shall be
restricted under the Securities Act. Notwithstanding the foregoing, (x ) the
aggregate number of Demand Rights that can be exercised by any Shareholder,
together with any subsequent Holder of Demand Rights that were initially held by
such Shareholder, shall be limited to two; (y) the number of Demand Rights that
may be transferred by a Shareholder or any subsequent Holder shall be reduced by
one each time a Demand Right is exercised pursuant to Section 3.01 by such
Shareholder or such subsequent Holder; and (z) a Shareholder or any subsequent
Holder may not include any of its Registrable Shares in a Piggyback Registration
pursuant to Section 3.02 if it has transferred all of its Demand Rights but may
include its Registrable Shares in such a Piggyback Registration so long as such
Shareholder or Holder (1) holds one or two Demand Rights or (2) has exercised a
Demand Right pursuant to Section 3.01 of this Agreement.
SECTION 4.07. Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted assigns
of the parties hereto. Except as expressly provided in this Agreement, nothing
in this Agreement, express or implied, is intended to confer upon any person
other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement.
SECTION 4.08. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
-16-
SECTION 4.09. Entire Agreement; Amendments. This Agreement and the
other writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect is to its
subject matter. This Agreement supersedes all prior agreements and
understandings among the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by each of the
parties, which shall be binding on all of the parties.
SECTION 4.10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ESPRIT TELECOM GROUP PLC
By: /s/ Xxxxxxx Xxxxxx
-------------------
Name: Xxxxxxx Xxxxxx
Title: Director
WARBURG, XXXXXX VENTURES, L.P.
BY: Warburg, Xxxxxx & Co.
its general partner
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title:
APAX VENTURES IV INTERNATIONAL
PARTNERS, L.P.
APAX VENTURES IV APAX UK V-A, L.P
APAX UK V-B
BY: APAX PARTNERS & CO. VENTURES
LTD., as manager of Apax
Ventures IV International
Partners, L.P., Apax Ventures
IV, Apax UK V-A, L.P. and
Apax UK V-B
-17-
By: /s/ J.P. McMonigall
Name: J.P. McMonigall
Title: Director
Apax Partners & Co. Ventures
Ltd. is executing this
Agreement solely
as manager of Apax
Ventures IV, Apax
Ventures IV
International
Partners, L.P.,
Apax UK V-A, L.P.
and Apax UK V-B
and not as
principal
hereunder
XXXXXXX INTERNATIONAL PRIVATE
EQUITY PARTNERS II -
DIRECT FUND L.P.
BY: BACK BAY PARTNERS
XVI L.P., as general
partner of Xxxxxxx
International Private
Equity Partners II
- Direct Fund L.P.
BY: HVP PARTNERS, L.L.C.,
as managing general
partner of Back Bay
Partners XVI L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
GOLD AND XXXXX TRANSFER, S.A.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
and Secretary
ABACUS (C.I.) LIMITED
BY: Xxxxxxx Xxxxx Potter
pursuant to a power of
attorney granted by Abacus
(C.I.) Limited
By: /s/ Xxxxxxx Xxxxx Xxxxxx
Name: Xxxxxxx Xxxxx Potter
-18-
