REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), is made as of March
9, 2000 by and among Viatel, Inc. a Delaware corporation (the "Company"), and
the security holders listed on Schedule I to this Agreement.
WHEREAS, the Company and the Initial Holders (as herein defined) (or certain
Affiliates of the Initial Holders) entered into a Securities Purchase Agreement
dated February 1, 2000 (the "Securities Purchase Agreement");
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated in the Securities Purchase Agreement that the parties hereto
execute and deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and covenants
contained in this Agreement and intending to be legally bound, the parties
hereto hereby agree as follows:
Article I
Definitions
Section 1.01. Definitions. Terms defined in the Securities Purchase
Agreement are used herein as therein defined. In addition, the following terms,
as used herein, have the following meanings:
"Chase Holders" means the Initial Chase Holders and any direct or indirect
transferee of any Registrable Securities held by the Initial Chase Holders.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a registration under the Securities Act requested in
accordance with Section 2.01.
"HMTF Holders" means the Initial HMTF Holders and any direct or indirect
transferee of any Registrable Securities initially held by any of the Initial
HMTF Holders.
"Holders" means the collective reference to the HMTF Holders and the Chase
Holders.
"Initial Chase Holders" means Chase Equity Associates, LLC, a limited liability
company organized under the laws of the State of Delaware, or any of its
Affiliates.
"Initial HMTF Holders" means HMTF Bridge Viatel, LLC, HMEU Viatel I-EQ
Coinvestors, LLC, HMEU Viatel I-SBS Coinvestors, LLC, HM Viatel PG Europe, LLC,
HMEU Viatel Qualified Fund, LLC, and HMEU Viatel Private Fund, LLC.
"Initial Holders" means the Initial HMTF Holders and the Initial Chase Holders.
"Piggyback Registration" has the meaning set forth in Section 2.02.
"Registrable Common Stock" means the shares of Common Stock issued upon
conversion of the Registrable Series B-1 Preferred Stock or the Registrable
Series C Preferred Stock or upon exercise of the Warrants, plus any additional
shares of Common Stock issued in respect thereof in connection with any stock
split, stock dividend or similar event with respect to the Common Stock.
"Registrable Securities" means (a) the Registrable Series B Preferred Stock, (b)
the Registrable Series C Preferred Stock, (c) the Registrable Common Stock and
(d) any securities of the Company or any successor entity into which Registrable
Common Stock, Registrable Series B Preferred Stock or Registrable Series C
Preferred Stock may hereafter be converted or changed. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of under such registration statement, (ii) such securities
shall have been transferred pursuant to Rule 144, (iii) such securities shall
have been otherwise transferred or disposed of, and new certificates therefor
not bearing a legend restricting further transfer shall have been delivered by
the Company, and subsequent transfer or disposition of them shall not require
their registration or qualification under the Securities Act or any similar
state law then in force, or (iv) such securities shall have ceased to be
outstanding.
"Registrable Series B Preferred Stock" means the collective reference to the
Registrable Series B-1 Preferred Stock and Registrable Series B-2 Preferred
Stock.
"Registrable Series B-1 Preferred Stock" means the Series B-1 Preferred Stock
issued pursuant to the Securities Purchase Agreement, plus any additional shares
of Series B-1 Preferred Stock, if any, issued in respect thereof in connection
with any stock split, stock dividend or similar event with respect to the Series
B-1 Preferred Stock or the conversion of any shares of Series B-2 Preferred
Stock.
"Registrable Series B-2 Preferred Stock" means the Series B-2 Preferred Stock
issued pursuant to the Securities Purchase Agreement, plus any additional shares
of Series B-2 Preferred Stock, if any, issued in respect thereof in connection
with any stock split, stock dividend or similar event with respect to the Series
B-2 Preferred Stock or the conversion of any shares of Series B-1 Preferred
Stock.
"Registrable Series C Preferred Stock" means the shares of Series C Preferred
Stock, if any, issued upon conversion of the Registrable Series B-2 Preferred
Stock or exercise of the Warrants, plus any additional shares of Series C
Preferred Stock, if any, issued in respect thereof in connection with any stock
split, stock dividend or similar event with respect to the Series C Preferred
Stock or the conversion of any shares of Series B Preferred Stock or Common
Stock.
"Registration Expenses" has the meaning set forth in Section 3.02.
"Requesting Holders" means the Holders requesting a Demand Registration, and
shall include parties deemed "Requesting Holders" pursuant to Section
2.01(a)(iv) or Section 2.01(a)(v), as applicable.
"Rule 144" means Rule 144 (or any successor rule of similar effect) promulgated
under the Securities Act.
"Rule 415" means Rule 415 (or any successor rule of similar effect) promulgated
under the Securities Act.
"Selling Holder" means any Holder who is selling Registrable Securities pursuant
to a public offering registered hereunder.
"Series B Preferred Stock" means the Series B-1 Preferred Stock and the Series
B-2 Preferred Stock, par value $0.01 per share.
"Series B-1 Preferred Stock" means the Company's 7.50% Cumulative Convertible
Preferred Stock, Series B-1, par value $0.01 per share.
"Series B-2 Preferred Stock" means the Company's 7.50% Cumulative Convertible
Preferred Stock, Series B-2, par value $0.01 per share.
"Series C Preferred Stock" means the Company's Series C Preferred Stock, par
value $0.01 per share.
"Shelf Registration" has the meaning set forth in Section 2.03(a).
"Underwriter" means a securities dealer who purchases any Registrable Securities
as principal and not as part of such dealer's market-making activities.
"Warrants" means the A-1 Warrants, the A-2 Warrants, the B-1 Warrants and the
B-2 Warrants (each as defined in the Securities Purchase Agreement) to purchase
Common Stock.
Section 2.02. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to the Securities Purchase
Agreement.
Article III
Registration Rights
Section 3.01. Demand Registration. (a)(i) Holders of a majority of the
Registrable Securities held by the HMTF Holders may make up to two written
requests for a Demand Registration of all or any part of the Registrable
Securities held by such HMTF Holders; provided, that (A) each such Demand
Registration by the HMTF Holders must be in respect of Registrable Securities
with a fair market value of at least $50,000,000, and (B) the HMTF Holders shall
not be entitled to a Demand Registration if, during the 120 days preceding such
request, either the HMTF Holders had requested a Demand Registration (unless
such Demand Registration was preempted pursuant to Section 2.01(e)), or the HMTF
Holders were given the opportunity to participate in a Piggyback Registration in
accordance with Section 2.02 and either (1) failed to notify the Company of a
desire to participate in such Piggyback Registration or (2) notified the Company
of a desire to participate in such Piggyback Registration and were able to sell
in such Piggyback Registration at least 80% of the Registrable Securities
requested by the HMTF Holders to be included in such Piggyback Registration.
(ii) Holders of a majority of the Registrable Securities held by the Chase
Holders may make up to two written requests for a Demand Registration of all or
any part of the Registrable Securities held by such Chase Holders; provided,
that (A) each such Demand Registration by the Chase Holders must be in respect
of Registrable Securities with a fair market value of at least $50,000,000, and
(B) the Chase Holders shall not be entitled to a Demand Registration if, during
the 120 days preceding such request, either the Chase Holders had requested a
Demand Registration (unless such Demand Registration was preempted pursuant to
Section 2.01(e)), or the Chase Holders were given the opportunity to participate
in a Piggyback Registration in accordance with Section 2.02 and either (1)
failed to notify the Company of a desire to participate in such Piggyback
Registration or (2) notified the Company of a desire to participate in such
Piggyback Registration and were able to sell in such Piggyback Registration at
least 80% of the Registrable Securities requested by the Chase Holders to be
included in such Piggyback Registration.
(iii) Any request for a Demand Registration will specify the aggregate number of
shares of Registrable Securities proposed to be sold by the Requesting Holders
and will also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it has become
effective. Should a Demand Registration not become effective due to the failure
of a Requesting Holder to perform its obligations under this Agreement or the
inability of the Requesting Holders to reach agreement with the Underwriters for
the proposed sale on price or other customary terms for such transaction, or in
the event the Requesting Holders withdraw or do not pursue the request for the
Demand Registration (in each of the foregoing cases, provided that at such time
the Company is in compliance in all material respects with its obligations under
this Agreement), then, subject to Section 2.01(b), such Demand Registration
shall be deemed to have been effected (provided, that (i) if, the Demand
Registration does not become effective because a material adverse change has
occurred, or is reasonably likely to occur, in the condition (financial or
otherwise), business, assets or results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the written request made
by the Requesting Holders, (ii) if the Company withdraws the Demand Registration
for any reason, or (iii) if, after the Demand Registration has become effective,
an offering of Registrable Securities pursuant to a registration is interfered
with by any stop order, injunction, or other order or requirement of the
Commission or other governmental agency or court, then the Demand Registration
shall not be deemed to have been effected and will not count as a Demand
Registration).
(iv) Upon receipt of any request for a Demand Registration by holders of a
majority of the Registrable Securities held by the HMTF Holders, the Company
shall promptly (but in any event within ten (10) days) give written notice of
such proposed Demand Registration to all other HMTF Holders, and all such HMTF
Holders shall have the right, exercisable by written notice to the Company
within fifteen (15) days of their receipt of the Company's notice, to elect to
include in such Demand Registration such portion of their Registrable Securities
as they may request. All such HMTF Holders requesting to have their Registrable
Securities included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be "Requesting Holders" for purposes of this Section
2.01.
(v) Upon receipt of any request for a Demand Registration by holders of a
majority of the Registrable Securities held by the Chase Holders, the Company
shall promptly (but in any event within ten (10) days) give written notice of
such proposed Demand Registration to all other Chase Holders and all such
Holders shall have the right, exercisable by written notice to the Company
within fifteen (15) days of their receipt of the Company's notice, to elect to
include in such Demand Registration such portion of their Registrable Securities
as they may request. All such Holders requesting to have their Registrable
Securities included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be "Requesting Holders" for purposes of this Section
2.01.
(b) In the event that the Requesting Holders withdraw or do not pursue a
request for a Demand Registration and, pursuant to Section 2.01(a) hereof, such
Demand Registration is deemed to have been effected, the HMTF Holders or the
Chase Holders, as the case may be, may reacquire such Demand Registration (such
that the withdrawal or failure to pursue a request will not count as a Demand
Registration hereunder) if the Selling Holders reimburse the Company for any and
all Registration Expenses incurred by the Company in connection with such
request for a Demand Registration.
(c) If the Requesting Holders so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of a "firm
commitment" underwritten offering. A majority in interest of the Requesting
Holders shall have the right to select the managing Underwriters and any
additional investment bankers and managers to be used in connection with any
offering under this Section 2.01, subject to the Company's approval, which
approval shall not be unreasonably withheld.
(d) The Requesting Holders will inform the Company of the time and manner of
any disposition of Registrable Common Stock, and agree to reasonably cooperate
with the Company in effecting the disposition of the Registrable Common Stock in
a manner that does not unreasonably disrupt the public trading market for the
Common Stock; provided, however, that the Holders' only right to a shelf
registration statement shall be pursuant to Section 2.03.
(e) The Company will have the right to preempt any Demand Registration with a
primary registration by delivering written notice (within seven business days
after the Company has received a request for such Demand Registration) of such
intention to the Selling Holder indicating that the Company has identified a
specific business need and use for the proceeds of the sale of such securities
and the Company shall use commercially reasonable efforts to effect a primary
registration within 60 days of such notice. In the ensuing primary
registration, the Holders will have such piggyback registration rights as are
set forth in Section 2.02 hereof. Upon the Company's preemption of a requested
Demand Registration, such requested registration will not count as the Holders'
Demand Registration. The Company may exercise the right to preempt a Demand
Registration only twice in any 360-day period; provided, that during any 360-day
period the Company shall use its reasonable best efforts to permit a period of
at least 120 consecutive days during which the Selling Holders may effect a
Demand Registration.
(f) No securities to be sold for the account of any Person (including the
Company) other than a Requesting Holder shall be included in a Demand
Registration unless the managing Underwriter or Underwriters shall advise the
Company and the Requesting Holders in writing that the inclusion of such
securities will not materially and adversely affect the price of the offering (a
"Material Adverse Effect"). Furthermore, in the event the managing Underwriter
or Underwriters shall advise the Company or the Requesting Holders that even
after exclusion of all securities of other Persons (including the Company)
pursuant to the immediately preceding sentence, the amount of Registrable
Securities proposed to be included in such Demand Registration by Requesting
Holders is sufficiently large to cause a Material Adverse Effect, the
Registrable Securities of the Requesting Holders to be included in such Demand
Registration shall equal the number of shares which the Company and the
Requesting Holders are so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Requesting Holders on the basis of the number of Registrable Securities
requested to be included in such registration by each such Requesting Holder
(assuming that all convertible securities shall have been converted directly or
indirectly into Common Stock and such registration statement relates solely to
the Common Stock); provided, however, that if any Registrable Securities
requested to be registered pursuant to a Demand Registration under Section 2.01
are excluded from registration hereunder, then the Holder(s) having shares
excluded ("Excluded Holders") shall have the right to withdraw all, or any part,
of their shares from such requested registration. If any Requesting Holder
shall have withdrawn all of its shares from such requested registration, such
requested registration shall not count as a Demand Registration.
Section 3.02. Piggyback Registration. (a) If the Company proposes to file
a registration statement under the Securities Act with respect to an offering of
any securities for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8, or, except as provided for in
Section 2.03, pursuant to Rule 415 (or any substitute form or rule,
respectively, that may be adopted by the Commission)), the Company shall give
written notice of such proposed filing to the Holders at the address set forth
in the share register of the Company as soon as reasonably practicable (but in
no event less than fifteen days before the anticipated filing date), undertaking
to provide each Holder the opportunity to register on the same terms and
conditions such number of Registrable Securities as such Holder may request (a
"Piggyback Registration"). Each Holder will have seven business days after
receipt of any such notice to notify the Company as to whether it wishes to
participate in a Piggyback Registration (which notice shall not be deemed to be
a request for a Demand Registration); provided, that should a Holder fail to
provide timely notice to the Company, such Holder will forfeit any rights to
participate in the Piggyback Registration with respect to such proposed offering
other than as described in Section 2.01(a)(iv) or Section 2.01(a)(v), as
applicable. In the event that the registration statement is filed on behalf of
a Person other than the Company, the Company will use its best efforts to have
the Registrable Securities that the Holders wish to sell included in the
registration statement. If the Company or the Person for whose account such
offering is being made shall determine in its sole discretion not to register or
to delay the proposed offering, the Company may, at its election, provide
written notice of such determination to the Holders and (i) in the case of a
determination not to effect the proposed offering, shall thereupon be relieved
of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed offering,
shall thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering. As
between the Company and the Selling Holders, the Company shall be entitled to
select the Underwriters in connection with any Piggyback Registration.
(b) If the Registrable Securities requested to be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that due to such differences the inclusion of such Registrable Securities would
cause a Material Adverse Effect, then (i) the number of such Holders'
Registrable Securities to be included in the Piggyback Registration shall be
reduced to an amount which, in the opinion of the managing Underwriter, would
eliminate such Material Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback Registration, provided, that no other securities of such
type are included and offered for the account of any other Person in such
Piggyback Registration. Any partial reduction in number of Registrable
Securities of any Holder to be included in the Piggyback Registration pursuant
to clause (i) of the immediately preceding sentence shall be effected pro rata
based on the ratio (and calculated on an as converted basis) which such Holder's
requested shares bears to the total number of shares requested to be included in
such Piggyback Registration by all Persons other than the Company who have the
contractual right to request that their shares be included in such registration
statement and who have requested that their shares be included (assuming that
all convertible securities shall have been converted directly or indirectly into
Common Stock and such registration statement relates solely to the Common
Stock). If the Registrable Securities requested to be included in the Piggyback
Registration are of the same type as the securities being registered (which, for
this purpose, the Series C Preferred Stock shall be treated the same as Common
Stock) by the Company and the managing Underwriter advises the Company that the
inclusion of such Registrable Securities would cause a Material Adverse Effect,
the Company will be obligated to include in such registration, as to each
Holder, only a portion of the shares such Holder has requested be registered
equal to the ratio (and calculated on an as converted basis) which such Holder's
requested shares bears to the total number of shares requested to be included in
such registration statement by all Persons (other than the Person or Persons
initiating such registration request) who have the contractual right to request
that their shares be included in such registration statement and who have
requested their shares be included (assuming that all convertible securities
shall have been converted directly or indirectly into Common Stock and such
registration statement relates solely to the Common Stock). If the Company
initiated the registration, then the Company may include all of its securities
in such registration statement before any such Holder's requested shares are
included. If another security holder initiated the registration, then the
Company may not include any of its securities in such registration statement
unless all Registrable Securities requested to be included in the registration
statement by all Holders are included in such registration statement. If as a
result of the provisions of this Section 2.02(b) any Holder shall not be
entitled to include all Registrable Securities in a registration that such
Holder has requested to be so included, such Holder may withdraw such Holder's
request to include Registrable Securities in such registration statement prior
to its effectiveness.
Section 3.03. Shelf Registration. Holders of a majority of the
Registrable Securities may at any time make a written request that the Company
effect a shelf registration of a portion of the Registrable Securities held by
such Holders (the "Shelf Registration") pursuant to Rule 415. Upon receipt of a
request for the Shelf Registration, the Company shall promptly (but in any event
within ten (10) days) give written notice of the proposed Shelf Registration to
all other Holders, and each such other Holder shall have the right to include
for offer and sale in the Shelf Registration: (i) prior to the first anniversary
of the Closing Date (the "First Anniversary"), no more than 25% of the
Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock and the
exercise of all Warrants) (directly or indirectly in accordance with their
terms), (ii) from and after the First Anniversary and prior to the second
anniversary of the Closing Date (the "Second Anniversary"), no more than 50% of
the Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock and the
exercise of all Warrants) (directly or indirectly in accordance with their
terms), (iii) from and after the Second Anniversary and prior to the third
anniversary of the Closing Date (the "Third Anniversary"), no more than 75% of
the Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock) (directly
or indirectly in accordance with their terms), and (iv) from and after the Third
Anniversary, all Registrable Securities held by such Holder immediately after
the Closing (assuming the conversion of all Series B Preferred Stock after
giving effect to the accretion of dividends thereon and all Series C Preferred
Stock and the exercise of all Warrants) (directly or indirectly in accordance
with their terms). Any reference to the number of shares held by any Holder
shall be determined so as to adjust for any stock splits, dividends or similar
transactions.
Article IV
Registration Procedures
Section 4.01. Filings; Information. In connection with the registration
of Registrable Securities pursuant to Section 2.01, Section 2.02 and Section
2.03 hereof, the Company will use its reasonable best efforts to effect the
registration of such Registrable Securities as promptly as is reasonably
practicable, and in connection with any such request:
(a) The Company will expeditiously prepare and file with the Commission a
registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective (i) with
respect to any Demand Registration or Piggyback Registration, for such period,
not to exceed 60 days, as may be reasonably necessary to effect the sale of such
securities, (ii) with respect to the Shelf Registration, until the sale of all
Registrable Securities thereunder; provided, that if the Company shall furnish
to the Selling Holder a certificate signed by the Company's Chairman, Chief
Executive Officer, President or any Executive or Senior Vice-President stating
that the Company's Board of Directors has determined in good faith that it would
be detrimental or otherwise disadvantageous to the Company or its stockholders
for such a registration statement to be filed as expeditiously as possible
because the sale of Registrable Securities covered by such Registration
Statement or the disclosure of information in any related prospectus or
prospectus supplement would materially interfere with any acquisition, financing
or other material event or transaction which is then intended or the public
disclosure of which at the time would be materially prejudicial to the Company,
the Company may postpone the filing or effectiveness of a registration statement
for a period of not more than 120 days; provided, that during any 365-day period
the Company shall use its reasonable best efforts to permit a period of at least
120 consecutive days during which the Company will make a registration statement
available under this Agreement; and provided, further, that if (i) the effective
date of any registration statement filed pursuant to a Demand Registration would
otherwise be at least 45 calendar days, but fewer than 90 calendar days, after
the end of the Company's fiscal year, and (ii) the Securities Act requires the
Company to include audited financials as of the end of such fiscal year, the
Company may delay the effectiveness of such registration statement for such
period as is reasonably necessary to include therein its audited financial
statements for such fiscal year.
(b) Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that the Company shall not be required to keep any shelf
registration effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing, supplement or amendment at such time would interfere
with such transaction or purpose. The Company shall promptly give the Holders
of Registrable Securities written notice of such postponement containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay, which delay shall last no longer than 90 days, no more
than once during any 365-day period. Upon receipt by a Holder of Registrable
Securities of notice of an event of the kind described in this Section 3.01(b),
such Holder shall forthwith discontinue such Holder's disposition of Registrable
Securities until such Holder's receipt of notice from the Company that such
disposition may continue and of any supplemented or amended prospectus indicated
in such notice. The Company shall use its reasonable best efforts to permit
sales of Registrable Securities on such shelf registration statement for at
least 120 days during any 365-day period.
(c) The Company will, if requested, prior to filing such registration statement
or any amendment or supplement thereto, furnish to the Selling Holders, and each
applicable managing Underwriter, if any, copies thereof, and thereafter furnish
to the Selling Holders and each such Underwriter, if any, such number of copies
of such registration statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein)
and the prospectus included in such registration statement (including each
preliminary prospectus) as the Selling Holders or each such Underwriter may
reasonably request in order to facilitate the sale of the Registrable Securities
by the Selling Holders.
(d) After the filing of the registration statement, the Company will promptly
notify the Selling Holders of any stop order issued or, to the Company's
knowledge, threatened to be issued by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(e) The Company will use its commercially reasonable efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; keep each such registration or qualification (or exemption
therefrom) effective during the period in which such registration statement is
required to be kept effective; and do any and all other acts and things which
may be reasonably necessary or advisable to enable each Selling Holder to
consummate the disposition of the Registrable Securities owned by such Selling
Holder in such jurisdictions; provided, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.01(e), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(f) The Company will as promptly as is practicable notify the Selling Holders,
at any time when a prospectus relating to the sale of the Registrable Securities
is required by law to be delivered in connection with sales by an Underwriter or
dealer, of the occurrence of any event requiring the preparation of a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading and promptly
make available to the Selling Holders and to the Underwriters any such
supplement or amendment. Upon receipt of any notice of the occurrence of any
event of the kind described in the preceding sentence, Selling Holders will
forthwith discontinue the offer and sale of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until receipt by
the Selling Holders and the Underwriters of the copies of such supplemented or
amended prospectus and, if so directed by the Company, the Selling Holders will
deliver to the Company all copies, other than permanent file copies then in the
possession of Selling Holders, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective as provided in Section
3.01(a) hereof by the number of days during the period from and including the
date of the giving of such notice to the date when the Company shall make
available to the Selling Holders such supplemented or amended prospectus.
(g) The Company will enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are required in
order to expedite or facilitate the sale of such Registrable Securities.
(h) At the request of any managing Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters, covering such customary matters as the managing
Underwriter may reasonably request and (ii) a comfort letter or comfort letters
from the Company's independent public accountants covering such customary
matters as the managing Underwriter may reasonably request.
(i) If requested by the managing Underwriter or any Selling Holder, the Company
shall promptly incorporate in a prospectus supplement or post effective
amendment such information as the managing Underwriter or any Selling Holder
reasonably requests to be included therein, including without limitation, with
respect to the Registrable Securities being sold by such Selling Holder, the
purchase price being paid therefor by the Underwriters and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement or post effective amendment.
(j) The Company shall promptly make available for inspection by any Selling
Holder or Underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (j) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (2) the Company reasonably determines in good
faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (A) or
(B) such Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; provided, further, however, that each Holder of
Registrable Securities agrees that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
and to prevent disclosure of the Records deemed confidential.
(k) The Company shall cause the Registrable Securities included in any
registration statement to be (A) listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed, or (B)
authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq
National Market if the Registrable Securities so qualify.
(l) The Company shall provide a CUSIP number for the Registrable Securities
included in any registration statement not later than the effective date of such
registration statement.
(m) The Company shall cooperate with each Selling Holder and each Underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.
(n) The Company shall during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
(o) The Company will make generally available to its security holders, as soon
as reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
The Company may require Selling Holders promptly to furnish in writing to
the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
Section 4.02. Registration Expenses. In connection with any Registration
effected hereunder, the Company shall pay the following expenses incurred in
connection with such registration (the "Registration Expenses"): (i)
registration and filing fees with the Commission and the National Association of
Securities Dealers, Inc., (ii) fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
printing expenses, (iv) fees and expenses incurred in connection with the
listing or quotation of the Registrable Securities, (v) fees and expenses of
counsel to the Company and the reasonable fees and expenses of independent
certified public accountants for the Company (including fees and expenses
associated with the special audits or the delivery of comfort letters), (vi) the
reasonable fees and expenses of any additional experts retained by the Company
in connection with such registration, (vii) all roadshow costs and expenses not
paid by the Underwriters and (viii) the reasonable fees and expenses of one
counsel to Selling Holders.
Article V
Indemnification and Contribution
Section 5.01. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder and its Affiliates and their
respective officers, directors, partners, stockholders, members, employees,
agents and representatives and each Person (if any) which controls a Selling
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference in
any registration statement or prospectus relating to the Registrable Securities
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by or based
upon any information furnished in writing to the Company by or on behalf of such
Selling Holder expressly for use therein or by the Selling Holder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Selling Holder with
copies of the same; provided, however, that the Company shall have no obligation
to indemnify under this sentence to the extent any such losses, claims, damages
or liabilities have been finally and non-appealably determined by a court to
have resulted from such Selling Holder's willful misconduct or gross negligence.
The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.01, except insofar as such
losses, claims, damages or liabilities are caused by or based upon any
information furnished in writing to the Company by or on behalf of such
Underwriter expressly for use therein or by the Underwriter's failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Underwriter with copies
of the same; provided, however, that the Company shall have no obligation to
indemnify under this sentence to the extent any such losses, claims, damages or
liabilities have been finally and non-appealably determined by a court to have
resulted from any such Underwriter's willful misconduct or gross negligence.
Section 5.02. Indemnification by Selling Holders. Each Selling Holder
agrees to indemnify and hold harmless the Company, its officers and directors,
and each Person, if any, which controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Selling Holder, but
only with reference to information furnished in writing by or on behalf of such
Selling Holder expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.02, but only with reference to information furnished in writing by or
on behalf of such Selling Holder expressly for use in any registration statement
or prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each such Selling Holder's
liability under this Section 4.02 shall be limited to an amount equal to the net
proceeds (after deducting the underwriting discount and expenses) received by
such Selling Holder from the sale of such Registrable Securities by such Selling
Holder. The obligation of such Selling Holder to indemnify shall be several and
not joint.
Section 5.03. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.01 or
Section 4.02, such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party and, in the written opinion of counsel for the
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent (not to be unreasonably withheld), or
if there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.
Section 5.04. Contribution. If the indemnification provided for in this
Article IV is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of such party in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company, a
Selling Holder and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section 4.04 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Article VI
Miscellaneous
Section 6.01. Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of attorney, custody arrangements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement and (c) furnishes in writing to the Company such
information regarding such Person, the plan of distribution of the Registrable
Securities and other information as the Company may from time to time request or
as may be legally required in connection with such registration; provided,
however, that no such Person shall be required to make any representations or
warranties in connection with any such registration other than representations
and warranties as to (i) such Person's ownership of his or its Registrable
Securities to be sold or transferred free and clear of all liens, claims and
encumbrances, (ii) such Person's power and authority to effect such transfer and
(iii) such matters pertaining to compliance with securities laws as may be
reasonably requested; provided further, however, that the obligation of such
Person to indemnify pursuant to any such underwriting agreements shall be
several, not joint and several, among such Persons selling Registrable
Securities, and the liability of each such Person will be in proportion to, and
provided further that such liability will be limited to, the net amount received
by such Person from the sale of such Person's Registrable Securities pursuant to
such registration.
Section 6.02. Rule 144. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Holders may reasonably request to
the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such reporting requirements.
Section 6.03. Holdback Agreements. Each Holder agrees, in the event of an
underwritten offering by the Company (whether for the account of the Company or
otherwise) not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for such securities, including any sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten offering), during the 14
days prior to, and during the 90-day period (or such lesser period as the lead
or managing underwriters may require) beginning on, the effective date of the
registration statement for such underwritten offering (or, in the case of an
offering pursuant to an effective shelf registration statement pursuant to Rule
415, the pricing date for such underwritten offering).
Section 6.04. Termination. The registration rights granted under this
Agreement will terminate on March 9, 2015, or such earlier time as there shall
no longer be any Registrable Securities; provided, however, that if all shares
of Series B Preferred Stock outstanding on such date shall not have been
redeemed in full in accordance with Section 10 of the Certificate of
Designations, this Agreement shall remain in full force and effect with respect
to the Registrable Securities until such time as the shares of Series B
Preferred Stock have been so redeemed in full.
Section 6.05. Amendments, Waivers, Etc. This Agreement may not be amended,
waived or otherwise modified or terminated except by an instrument in writing
signed by the Company and (i) Holders of at least 50% of the Registrable
Securities (calculated on an as-converted basis) then held by all HMTF Holders,
if the amendment is to be effective against the HMTF Holders, (ii) Holders of at
least 50% of the Registrable Securities (calculated on an as-converted basis)
then held by all Chase Holders, if the amendment is to be effective against the
Chase Holders.
Section 6.06. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. Each
party need not sign the same counterpart.
Section 6.07. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 6.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
Section 6.09. Assignment of Registration Rights. Each Holder of the
Registrable Securities may assign all or any part of its rights under this
Agreement to any person to whom such Holder sells, transfers or assigns such
Registrable Securities. In the event that the Holder shall assign its rights
pursuant to this Agreement in connection with the transfer of less than all its
Registrable Securities, the Holder shall also retain his rights with respect to
its remaining Registrable Securities.
IN WITNESS WHEREOF, the Company and each Initial Holder has caused this
Agreement to be signed on its behalf by its officer thereunto duly authorized as
of the date first written above.
VIATEL, INC.,
By:
Name:
Title:
HMTF BRIDGE VIATEL, LLC
HMEU VIATEL I-EQ COINVESTORS, LLC
HMEU VIATEL I-SBS COINVESTORS, LLC
HM VIATEL PG EUROPE, LLC
HMEU VIATEL QUALIFIED FUND, LLC
HMEU VIATEL PRIVATE FUND, LLC
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
CHASE EQUITY ASSOCIATES, LLC
By: Chase Capital Partners
as Manager
By:
Name:
Title:
SCHEDULE I
PURCHASERS NUMBER OF SHARES PURCHASE PRICE OF
THE SHARES
CHASE EQUITY ASSOCIATES, LLC 162,500 $1,000
TOTAL 162,500 $162,500,000
HMTF BRIDGE VIATEL, LLC 81,250 $1,000
HMEU VIATEL I-EQ
COINVESTORS, LLC 1,297 $1,000
HMEU VIATEL I-SBS COINVESTORS, LLC 1,723 $1,000
HM VIATEL PG EUROPE 7,354 $1,000
HMEU VIATEL QUALIFIED FUND, LLC 70,462 $1,000
HMEU VIATEL PRIVATE FUND, LLC 414 $1,000
TOTAL 162,500 $162,500,000
