EXHIBIT 10.7
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REGISTRATION RIGHTS AGREEMENT
between
US UNWIRED INC.
and
THE 1818 FUND III, L.P.
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October 29, 1999
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TABLE OF CONTENTS
Page
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1. Background........................................................... 1
2. Registration......................................................... 1
2.1 Registration on Request......................................... 1
2.2 Incidental Registration......................................... 3
2.3 Shelf Registration.............................................. 5
2.4 Registration Procedures......................................... 5
2.5 Underwritten Offerings.......................................... 9
2.6 Preparation; Reasonable Investigation........................... 10
2.7 Limitations, Conditions and Qualifications to Obligations under
Registration Covenants.......................................... 10
2.8 Indemnification................................................. 11
3. Definitions.......................................................... 14
4. Rule 144 and Rule 144A............................................... 16
5. Amendments and Waivers............................................... 17
6. Nominees for Beneficial Owners....................................... 17
7. Notices.............................................................. 17
8. Assignment........................................................... 18
9. Calculation of Percentage Interests in Registrable Securities........ 18
10. No Inconsistent Agreements........................................... 18
11. Remedies............................................................. 18
12. Certain Distributions................................................ 18
13. Severability......................................................... 19
14. Entire Agreement..................................................... 19
15. Headings............................................................. 19
16. GOVERNING LAW........................................................ 19
17. Counterparts......................................................... 19
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REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of October
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29, 1999, between US UNWIRED INC., a Louisiana corporation (the "Company"), and
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THE 1818 FUND III, L.P., a Delaware limited partnership (the "Purchaser").
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1. Background. Pursuant to a Securities Purchase Agreement, dated
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as of October 29, 1999, by and among the Company and the Purchaser (the
"Securities Purchase Agreement"), the Purchaser has agreed to purchase from the
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Company, and the Company has agreed to issue to the Purchaser, 500,000 shares of
the Company's Senior Redeemable Convertible Preferred Stock, Series A, no par
value (the "Preferred Stock"). Capitalized terms used herein but not otherwise
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defined shall have the meanings given them in the Securities Purchase Agreement.
2. Registration
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2.1 Registration on Request.
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(a) Request. At any time, or from time to time
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following the earlier of (i) an Initial Public Offering and (ii) the fifth
anniversary of the Closing Date, one or more holders (the "Initiating Holders")
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of 20% or more of the total number of shares of Common Stock issued or issuable
upon conversion of the shares of Preferred Stock and upon exercise of the
Warrants, may, upon written request, require the Company to effect the
registration under the Securities Act of any Registrable Securities held by such
Initiating Holders. The Company promptly will give written notice of such
requested registration to all other holders of Registrable Securities who may
join in such registration, and thereupon the Company will use its best efforts
to effect, at the earliest possible date, the registration under the Securities
Act, of
(i) the Registrable Securities that the Company
has been so requested to register by such Initiating Holders, and
(ii) all other Registrable Securities that the
Company has been requested to register by the holders thereof (such holders
together with the Initiating Holders hereinafter are referred to as the
"Selling Holders") by written request given to the Company within 30 days
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after the giving of such written notice by the Company, all to the extent
requisite to permit the disposition of the Registrable Securities so to be
registered.
(b) Registration of Other Securities. Whenever the
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Company shall effect a registration pursuant to this Section 2.1, no securities
other than Registrable Securities shall be included among the securities covered
by such registration unless the Selling Holders of not less than 51% of all
Registrable Securities
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to be covered by such registration shall have consented in writing to the
inclusion of such other securities.
(c) Registration Statement Form. Registrations under this
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Section 2.1 shall be on such appropriate registration form of the Commission as
shall be reasonably selected by the Company.
(d) Effective Registration Statement. A registration
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requested pursuant to this Section 2.1 shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective
and remained effective in compliance with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by such
registration statement until the earlier of (x) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement and (y) 180 days after the effective date of such
registration statement, (ii) if after it has become effective, such registration
is interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason not
attributable to the Selling Holders and has not thereafter become effective, or
(iii) if the conditions to closing specified in the underwriting agreement, if
any, entered into in connection with such registration are not satisfied or
waived, other than by reason of a failure on the part of the Selling Holders.
(e) Selection of Underwriters. The underwriter or
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underwriters of each underwritten offering of the Registrable Securities so to
be registered shall be selected by the Selling Holders of not less than 51% of
the Registrable Securities to be covered by such registration and shall be
reasonably acceptable to the Company.
(f) Priority in Requested Registration. If the managing
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underwriter of any underwritten offering shall advise the Company in writing
(and the Company shall so advise each Selling Holder of Registrable Securities
requesting registration) that, in its opinion, the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering within a price range acceptable to the Selling Holders of
66-2/3% of the Registrable Securities requested to be included in such
registration, the Company, except as provided in the following sentence, will
include in such registration, to the extent of the number and type that the
Company is so advised can be sold in such offering, Registrable Securities
requested to be included in such registration, pro rata among the Selling
Holders requesting such registration on the basis of the estimated gross
proceeds from the sale thereof. If the total number of Registrable Securities
requested to be included in such registration cannot be included as provided in
the preceding sentence, holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1,
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representing not less than 33-1/3% of the Registrable Securities with respect to
which registration has been requested and constituting not less than 66-2/3% of
the Initiating Holders, shall have the right to withdraw the request for
registration by giving written notice to the Company within 20 days after
receipt of such notice by the Company and, in the event of such withdrawal, such
request shall not be counted for purposes of the requests for registration to
which holders of Registrable Securities are entitled pursuant to Section 2.1
hereof. In connection with any such registration to which this Section 2.1(f) is
applicable, no securities other than Registrable Securities shall be covered by
such registration.
(g) Limitations on Registration on Request. Notwithstanding
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anything in this Section 2.1 to the contrary, in no event will the Company be
required to (i) effect, in the aggregate, more than two registrations pursuant
to this Section 2.1 or (ii) effect more than one registration pursuant to this
Section 2.1 within the 12-month period occurring immediately subsequent to the
effectiveness (within the meaning of Section 2.1(d)) of a registration statement
filed pursuant to this Section 2.1.
(h) Listing. The Company shall list, if the Company meets
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the applicable listing requirements, the Registrable Securities subject to
Section 2.1(a) on the National Market System of the Nasdaq Stock Market, or
another of the national securities exchanges or automated quotation systems.
(i) Expenses. The Company will pay all Registration
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Expenses (except for any underwriting commissions or discounts) in connection
with any registration requested pursuant to this Section 2.1.
2.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the
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Company at any time following an Initial Public Offering proposes to register
any shares of Common Stock or any securities convertible into Common Stock under
the Securities Act by registration on any form other than Forms S-4 or S-8,
whether or not for sale for its own account, it will each such time give prompt
written notice to all registered holders of Registrable Securities of its
intention to do so and of such holders' rights under this Section 2.2. Upon the
written request of any such holder (a "Requesting Holder") made as promptly as
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practicable and in any event within 30 days after the receipt of any such
notice, the Company will use its best efforts to effect the registration under
the Securities Act of all Registrable Securities that the Company has been so
requested to register by the Requesting Holders thereof; provided, however, that
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prior to the effective date of the registration statement filed in connection
with such registration, immediately upon notification to the Company from the
managing underwriter of the price at which such securities are to be sold, if
such price is below
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the price that any Requesting Holder shall have indicated to be acceptable to
such Requesting Holder, the Company shall so advise such Requesting Holder of
such price, and such Requesting Holder shall then have the right to withdraw its
request to have its Registrable Securities included in such registration
statement; provided, further, however, that if, at any time after giving written
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notice of its intention to register any 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 or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each Requesting Holder of Registrable Securities
and (i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holder or holders of Registrable Securities entitled to do so to cause such
registration to be effected as a registration under Section 2.1, and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. Notwithstanding anything contained in this
Section 2.2(a), the Company shall not, if any Requesting Holder shall have
requested the registration of shares of Common Stock issuable upon exercise of
any Warrants in the registration, consummate the sale of the securities included
in the registration until such time as any applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Act shall have expired or early termination thereunder shall
have been granted if such Requesting Holder notifies the Company that it is
required to make a filing under the Xxxx-Xxxxx-Xxxxxx Act before it may exercise
its Warrants. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1.
(b) Priority in Incidental Registrations. If the managing
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underwriter of any underwritten offering shall inform the Company by letter of
its opinion that the number or type of securities requested to be included in
such registration would materially adversely affect such offering, and the
Company has so advised the Requesting Holders in writing, then the Company will
include in such registration, to the extent of the number and type that the
Company is so advised can be sold in (or during the time of) such offering,
first, all securities proposed by the Company to be sold for its own account,
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second the Registrable Securities requested to be included in such registration
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pursuant to this Section 2.2 and any other securities requested to be included
in such registration pursuant to the Shareholders Agreement, dated as of
September 24, 1999 among the Company and the shareholders who are signatories
thereto, pro rata among such Requesting Holders and such other shareholders, as
the case may be, on the basis of the estimated proceeds from the sale thereof,
and third, all other securities proposed to be registered.
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(c) Expenses. The Company will pay all Registration Expenses (except
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for any underwriting commissions or discounts) in connection with any
registration effected pursuant to this Section 2.2.
2.3 Shelf Registration
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(a) Filing and Effectiveness of Shelf Registration. Within 24 months
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of an Initial Public Offering, the Company shall file an "evergreen" shelf
registration statement solely with respect to the Registrable Securities and
pursuant to Rule 415 under the Securities Act (the "Shelf Registration") on Form
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S-3 (or any successor form). The Company shall use its best efforts to have the
Shelf Registration declared effective as soon as practicable after such filing,
and shall use its best efforts to keep the Shelf Registration effective and
updated, from the date such Shelf Registration is declared effective until such
time as all of the Registrable Securities shall cease to be Registrable
Securities.
(b) Supplements and Amendments; Expenses. The Company shall
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supplement or amend, if necessary, the Shelf Registration, as required by the
instructions applicable to such registration form or by the Securities Act or as
reasonably requested by the holders of (or any underwriter for) not less than
51% of the Registrable Securities and the Company shall furnish to the holders
of the Registrable Securities to which the Shelf Registration relates copies of
any such supplement or amendment prior to its being used and/or filed with the
Commission. The Company shall pay all Registration Expenses in connection with
the Shelf Registration, whether or not it becomes effective, and whether all,
none or some of the Registrable Securities are sold pursuant to the Shelf
Registration. In no event shall the Shelf Registration include securities other
than Registrable Securities.
(c) Effective Shelf Registration Statement. A Shelf Registration
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pursuant to this Section 2.3 shall not be deemed to have been effected (i)
unless a Shelf Registration has become effective and remained effective in
compliance with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities and until such time as all of such
Registrable Securities have been disposed of under the Shelf Registration or
(ii) if after it has become effective, the Shelf Registration is interfered with
by any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to the
holders of Registrable Securities and has not thereafter become effective.
2.4 Registration Procedures. If and whenever the Company is required to
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effect the registration of any Registrable Securities under the Securities Act
as provided in Sections 2.1, 2.2, and 2.3, the Company will, unless provided
otherwise in this Agreement, as expeditiously as possible:
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(i) prepare and (within 90 days after the end of the period
within which requests for registration may be given to the Company or in
any event as soon thereafter as practicable) file with the Commission the
requisite registration statement to effect such registration and thereafter
use its best efforts to cause such registration statement to become
effective; provided, however, that the Company may discontinue any
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registration of its securities that are not Registrable Securities (and,
under the circumstances specified in Section 2.2(a), its securities that
are Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such registration statement until the earlier of (a) such time as all of
such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth
in such registration statement and (b) 180 days after the effective date of
such registration statement, except with respect to any registration
statement filed pursuant to Rule 415 under the Securities Act (if the
Company is eligible to file a registration statement on Form S-3), in which
case the Company shall use its best efforts to keep the registration
statement effective and updated, from the date such registration statement
is declared effective until such time as all of the Registrable Securities
cease to be Registrable Securities;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act and each such amendment and
supplement thereto (in each case including all exhibits), in conformity
with the requirements of the Securities Act, and such other documents, as
such seller may reasonably request;
(iv) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such States of
the United States of America where an exemption is not available and as the
sellers of Registrable Securities covered by such registration statement
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration
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statement remains in effect and (z) to take any other action that may be
reasonably necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such
sellers, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other federal or state governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company and counsel to the
seller or sellers of Registrable Securities to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(vi) in the case of an underwritten or "best efforts" offering,
furnish at the effective date of such registration statement to each seller
of Registrable Securities, and each such seller's underwriters, if any, a
signed counterpart of:
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement and, if applicable, the
date of the closing under the underwriting agreement, and
(y) a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements
included or incorporated by reference in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' comfort letters delivered to the
underwriters in underwritten public offerings of securities and, in the
case of the accountants' comfort letter, such other financial matters, and,
in the case of the legal opinion, such other legal matters, in either case,
as the underwriters may reasonably request;
(vii) cause representatives of the Company to participate in any
"road show" or "road shows" reasonably requested by any underwriter of an
underwritten or "best efforts" offering of any Registrable Securities;
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(viii) notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that,
or upon the happening of any event (including those events referred to in
Section 2.7) 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 seller promptly prepare and furnish to it 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; provided, that the Company
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shall not be required, pursuant to this Section 2.4(viii), to disclose to
the sellers of Registrable Securities any non-public information that it is
not, whether pursuant to this Agreement or any other agreement, otherwise
obligated to disclose to such sellers;
(ix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and, if required, make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least 12 months, but not more
than 18 months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder;
(x) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration; and
(xi) use its best efforts to list, if the Company meets the
applicable listing requirements, all Registrable Securities covered by such
registration statement on the National Market System of the Nasdaq Stock
Market, or any national securities exchange or automated quotation system
and, in the case of an offering of shares of Preferred Stock, shall provide
for redesignation of the Registrable Securities to be offered into
denominations suitable for public trading by depositary share arrangements
or otherwise upon the request of Selling Holders of 51% of the Registrable
Securities requested to be included in such registration.
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The Company may require each seller of Registrable Securities as to
which any registration is being effected to promptly furnish the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing; provided, however,
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that any such information or questionnaires shall be given or made by a seller
of Registrable Securities without representation or warranty of any kind
whatsoever except representations with respect to the identity of such seller,
such seller's Registrable Securities and such seller's intended method of
distribution or any other representations required by applicable law.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (viii) of this
Section 2.4, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of this
Section 2.4 and Section 2.7 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
2.5 Underwritten Offerings.
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(a) Requested Underwritten Offerings. If requested by the
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underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 2.1 or 2.3, the Company will
use its best efforts to enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company, each such holder and the underwriters and to
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of that type, including, without
limitation, indemnities to the effect and to the extent provided in Section 2.8.
The holders of the Registrable Securities proposed to be sold by such
underwriters will reasonably cooperate with the Company in the negotiation of
the underwriting agreement. Such holders of Registrable Securities to be sold by
such underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. No
holder of Registrable Securities shall be required to make any representations
or warranties to, or agreements with, the Company other than representations,
warranties or agreements regarding the
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identity of such holder, such holder's Registrable Securities and such holder's
intended method of distribution or any other representations required by
applicable law.
(b) Incidental Underwritten Offerings. If the Company proposes to
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register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any Requesting Holder of
Registrable Securities, use its best efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such Requesting
Holder among the securities of the Company to be distributed by such
underwriters, subject to the provisions of Section 2.2(b). The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters and may,
at their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. No
holder of Registrable Securities shall be required to make any representations
or warranties to, or agreements with, the Company or the underwriters other than
representations, warranties or agreements regarding the identity of such holder,
such holder's Registrable Securities and such holder's intended method of
distribution or any other representations required by applicable law.
(c) Underwriting Discounts and Commission. The holders of Registrable
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Securities sold in any offering pursuant to Section 2.5(a) or Section 2.5(b)
shall pay all underwriting discounts and commissions of the underwriter or
underwriters with respect to the Registrable Securities sold thereby.
2.6 Preparation; Reasonable Investigation. In connection with the
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preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel 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 each of them such reasonable 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 certified its financial statements as
shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
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2.7 Limitations, Conditions and Qualifications to Obligations under
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Registration Covenants. Anything in this Agreement to the contrary
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notwithstanding, it is understood and agreed that the Company shall not be
required to file a registration statement, amendment or post-effective amendment
thereto or prospectus supplement or to supplement or amend any registration
statement if the Company is then involved in discussions concerning, or is
otherwise engaged in, any material financing, acquisition or investment
transaction, if the board of directors of the Company determines in good faith
that the making of such a filing, supplement or amendment at such time would
interfere with such transaction so long as the Company shall, as soon as
practicable thereafter make such filing, supplement, amendments or post-
effective amendment; provided, however, that the Company shall not postpone such
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filings, supplements, amendments or post-effective amendments for more than an
aggregate of 120 days in any 12-month period. 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. Upon receipt by a holder of Registrable
Securities of notice of an event of the kind described in this Section 2.7, 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. If the Company postpones the filing of a registration
statement, holders of Registrable Securities requesting registration thereof
pursuant to Section 2.1, representing not less than 33-1/3% of the Registrable
Securities with respect to which registration has been requested and
constituting not less than 66-2/3% of the Initiating Holders, shall have the
right to withdraw the request for registration by giving written notice to the
Company within 30 days after receipt of notice of postponement and, in the event
of such withdrawal, such request shall not be counted for purposes of the
requests for registration to which holders of Registrable Securities are
entitled pursuant to Section 2.1.
2.8 Indemnification.
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(a) Indemnification by the Company. The Company will, and hereby
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does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to Section 2.1, 2.2 or 2.3, each seller of any Registrable
Securities covered by such registration statement and each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, and their respective directors,
officers, partners, members, agents, representatives and affiliates against any
losses, claims, damages or liabilities, joint or several, to which such seller
or underwriter or any such director, officer, partner, member, agent,
representative, affiliate or controlling person may become subject under the
Securities Act or otherwise, including, without limitation, the fees and
expenses of legal counsel (including those incurred in connection with any claim
for
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indemnity hereunder), insofar as such losses, claims, damages or liabilities
(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and the Company will reimburse such seller or underwriter and each such
director, officer, partner, member, agent, representative, affiliate and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
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be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such seller or underwriter, as the case may be,
specifically stating that it is for use in the preparation thereof; provided,
--------
further, however, that the Company shall not be liable to any Person who
------- -------
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriter within the meaning of
the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director, officer,
partner, member, agent, representative, affiliate or controlling person and
shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As a condition to including any
------------------------------
Registrable Securities in any registration statement, the Company shall have
received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Securities, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 2.8(a)) the Company,
and each director of the Company, each officer of the Company and each other
Person, if any, who participates as an underwriter in the offering or sale of
such securities and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act, with respect to any untrue
statement or alleged untrue statement of any material
13
fact contained in any such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or with respect to any omission or alleged omission to state
a material fact therein required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which they
were made, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such seller specifically stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, that
-------- -------
the liability of such indemnifying party under this Section 2.8(b) shall be
limited to the amount of the net proceeds received by such indemnifying party in
the offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims; Counsel. Promptly after receipt by an
--------------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.8(a) or (b), such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
-------- -------
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.8, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that any indemnified
-------- -------
party may, at its own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action or proceeding in which
both the Company and an indemnified party is, or is reasonably likely to become,
a party, such indemnified party shall have the right to employ separate counsel
at the Company's expense and to control its own defense of such action or
proceeding if, in the reasonable opinion of counsel to such indemnified party,
(a) there are or may be legal defenses available to such indemnified party or to
other indemnified parties that are different from or additional to those
available to the Company or (b) any conflict or potential conflict exists
between the Company and such indemnified party that would make such separate
representation advisable; provided, further, however, that in no event shall the
-------- ------- -------
Company be required to pay fees and expenses under this Section 2.8 for more
than one firm of attorneys in any jurisdiction in any one legal action or group
of related legal actions. The indemnifying party shall not be liable for any
settlement of any action or proceeding effected without its written consent,
which consent shall not
14
be unreasonably withheld. The indemnifying party shall not, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation or which requires action other
than the payment of money by the indemnifying party.
(d) Contribution. If the indemnification provided for in this
------------
Section 2.8 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 2.8(a) or (b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, then, in lieu of the
amount paid or payable under Section 2.8(a) or (b), the indemnified party and
the indemnifying party under Section 2.8(a) or (b) shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same,
including those incurred in connection with any claim for indemnity hereunder),
(i) in such proportion as is appropriate to reflect the relative fault of the
Company and the prospective sellers of Registrable Securities covered by the
registration statement which resulted in such loss, claim, damage or liability,
or action or proceeding in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and such prospective
sellers from the offering of the securities covered by such registration
statement; provided, however, that for purposes of this clause (ii), the
-------- -------
relative benefits received by the prospective sellers shall be deemed not to
exceed the amount of proceeds received by such prospective sellers. 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. Such prospective sellers'
obligations to contribute as provided in this Section 2.8(d) are several in
proportion to the relative value of their respective Registrable Securities
covered by such registration statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and contribution similar
---------------------
to that specified in the preceding subdivisions of this Section 2.8 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
15
(f) Indemnification Payments. The indemnification and contribution
------------------------
required by this Section 2.8 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
3. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any other
----------
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" shall mean the Class A Common Stock, the Class B Common
------------
Stock and each other class of capital stock of the Company that does not have a
preference over any other class of capital stock of the Company as to dividends
or upon liquidation, dissolution or winding up of the Company and, in each case,
shall include any other class of capital stock of the Company into which such
stock is reclassified or reconstituted.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any other similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934, as amended,
shall include a reference to the comparable section, if any, of any such similar
federal statute.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
---------------------
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"Initial Public Offering" means the date on which the Company (a)
-----------------------
becomes a "reporting company" as defined under Section 12(g) of the Exchange
Act, with all of its filings with the Commission being current, and (b) has
completed one or more underwritten offerings of Common Stock registered under
the Securities Act with at least $50 million, in the aggregate, of gross
proceeds.
"Person" means any individual, firm, corporation, partnership, limited
------
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of any such entity.
"Registrable Securities" means any shares of Common Stock issued or
----------------------
issuable either upon conversion of the shares of Preferred Stock or upon
exercise of the Warrants, any shares of Preferred Stock, any Related Registrable
Securities and any
16
shares of Common Stock owned by the Purchaser. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (a) 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 in accordance with such registration
statement, (b) they shall have been sold as permitted by Rule 144 (or any
successor provision) under the Securities Act and the purchaser thereof does not
receive "restricted securities" as defined in Rule 144, (c) they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not, in the opinion of counsel for
the holders, require registration of them under the Securities Act or (d) they
shall have ceased to be outstanding. All references to percentages of
Registrable Securities shall be calculated pursuant to Section 9.
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Section 2, including, without limitation, all
registration and filing fees, all fees of the New York Stock Exchange, Inc.,
other national securities exchanges or automated quotation systems or the
National Association of Securities Dealers, Inc., all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of "cold comfort" letters required by or incident to such
performance and compliance, any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (excluding any underwriting
discounts or commissions with respect to the Registrable Securities) and the
reasonable fees and expenses of one counsel to the Selling Holders (selected by
Selling Holders representing not less than 51% of the Registrable Securities
covered by such registration). Notwithstanding the foregoing, in the event the
Company shall determine, in accordance with Section 2.2(a) or Section 2.7, not
to register any securities with respect to which it had given written notice of
its intention to so register to holders of Registrable Securities, all of the
costs of the type (and subject to any limitation to the extent) set forth in
this definition and incurred by the Selling Holders or the Requesting Holders,
as the case may be, in connection with such registration on or prior to the date
the Company notifies the Selling Holders or the Requesting Holders, as the case
may be, of such determination shall be deemed Registration Expenses.
"Related Registrable Securities" means with respect to the shares of
------------------------------
Preferred Stock and the shares of Common Stock issued or issuable either upon
conversion of the shares of Preferred Stock or upon exercise of the Warrants,
any securities of the Company issued or issuable with respect to such shares of
Common Stock or Preferred Stock by way of a dividend or stock split or in
connection with a
17
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such similar federal
statute.
"Warrants" means the warrants exercisable into shares of Common Stock,
--------
at an exercise price of $0.01 per warrant, in substantially the form attached as
Exhibit C to the Securities Purchase Agreement.
4. Rule 144 and Rule 144A. The Company shall take all actions
----------------------
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or (c) any similar rules or regulations
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended with the
----------------------
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of not less than 51% of the
Registrable Securities affected by such amendment, action or omission to act.
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 5, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any
------------------------------
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
18
7. Notices. All notices, demands and other communications provided
-------
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(i) if to the Purchaser, addressed to it in the manner set
forth in the Securities Purchase Agreement, or at such other address as it shall
have furnished to the Company in writing in the manner set forth herein;
(ii) if to any other holder of Registrable Securities, at
the address that such holder shall have furnished to the Company in writing in
the manner set forth herein, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company; or
(iii) if to the Company, addressed to it in the manner set
forth in the Securities Purchase Agreement, or at such other address as the
Company shall have furnished to each holder of Registrable Securities at the
time outstanding in the manner set forth herein.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered to a
courier, if delivered by overnight courier service; five Business Days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
8. Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of and be enforceable by the parties hereto and, with respect to the
Company, its respective successors and permitted assigns and, with respect to
the Purchaser, any holder of any Registrable Securities, subject to the
provisions respecting the minimum numbers of percentages of shares of
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein. Except by operation of law, this
Agreement may not be assigned by the Company without the prior written consent
of the holders of a majority in interest of the Registrable Securities
outstanding at the time such consent is requested.
9. Calculation of Percentage Interests in Registrable Securities.
-------------------------------------------------------------
For purposes of this Agreement, all references to a percentage of the
Registrable Securities shall be calculated based upon the number of shares of
Registrable Securities outstanding at the time such calculation is made,
assuming the conversion of all shares of Preferred Stock and the exercise of all
Warrants into shares of Common Stock.
10. No Inconsistent Agreements. The Company will not hereafter enter
--------------------------
into any agreement with respect to its securities that is inconsistent with the
rights
19
granted to the holders of Registrable Securities in this Agreement. Without
limiting the generality of the foregoing, the Company will not hereafter enter
into any agreement with respect to its securities that grants, or modifies any
existing agreement with respect to its securities to grant, to the holder of its
securities in connection with an incidental registration of such securities
higher priority to the rights granted to the Purchaser under Section 2.2(b).
11. Remedies. Each holder of Registrable Securities, in addition to
--------
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
12. Certain Distributions. The Company shall not at any time make a
---------------------
distribution on or with respect to the shares of Common Stock or the shares of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the resulting or surviving
corporation and such Registrable Securities are not changed or exchanged) of
securities of another issuer if holders of Registrable Securities are entitled
to receive such securities in such distribution as holders of Registrable
Securities and any of the securities so distributed are registered under the
Securities Act, unless the securities to be distributed to the holders of
Registrable Securities are also registered under the Securities Act.
13. Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Purchaser shall be enforceable to the fullest extent permitted by law.
14. Entire Agreement. This Agreement, together with the Securities
----------------
Purchase Agreement and the Shareholders Agreement and including the exhibits and
schedules thereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein and therein.
This Agreement and the Securities Purchase Agreement (including the exhibits and
schedules thereto) supersede all prior agreements and understandings between the
parties with respect to such subject matter.
20
15. Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
17. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which when so executed shall be deemed an original and all
of which taken together shall constitute one and the same instrument.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
US UNWIRED INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: President
THE 1818 FUND III, L.P.
By: Xxxxx Brothers Xxxxxxxx & Co.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title:
