REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June 24,
1999, by and among EchoStar Communications Corporation, a Nevada corporation,
(the "COMPANY"), MCI Telecommunications Corporation ("MCI" OR "MCI HOLDER")
American Sky Broadcasting, LLC ("ASKYB") and News America Incorporated, a
Delaware corporation, and a wholly owned subsidiary of The News Corporation
Limited ("NEWS CORPORATION")(collectively, the "ASKYB HOLDER").
WHEREAS:
A. In connection with the Purchase Agreement, dated November 30, 1998,
by and among ASkyB, MCI, News Corporation and the Company (the "PURCHASE
AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Holders an aggregate
of 30,000,000, subject to adjustment, shares of the Company's Class A Common
Stock, par value $.01 per share (the "COMMON STOCK"), 24,030,000, subject to
adjustment, of such shares of Common Stock to be issued and sold to the ASkyB
Holder and 5,970,000, subject to adjustment, of such shares of Common Stock
to be issued and sold to the MCI Holder.
B. To induce News Corporation and MCI to execute and deliver the
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have the
following meanings:
(i) "HOLDERS" means the ASkyB Holder and the MCI Holder or
each of their permitted transferees pursuant to Section 11 hereof who agree to
be bound by the provisions of this Agreement in accordance with such Section 11.
(ii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement in
compliance with the 1933 Act and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "REGISTRABLE SECURITIES" means the shares of Common Stock
issued or issuable pursuant to the Purchase Agreement, or as a dividend on or in
exchange for or otherwise
with respect to any of the foregoing which are held by the Holders. As to
any particular Registrable Securities, such securities will cease to be
Registrable Securities when they (i) have been distributed to the public
pursuant to an offering registered under the 1933 Act, (ii) are eligible to
be sold by the Holder thereof pursuant to Rule 144(k) under the 1933 Act (or
any similar rule then in force), (iii) are sold in compliance with Rule 144
or (iv) shall have ceased to be outstanding.
(iv) "REGISTRATION STATEMENT" means a registration statement of
the Company under the 1933 Act filed pursuant to Section 2 or 3(a) hereof.
(v) "UNDERWRITTEN OFFERING" means a firm commitment
underwritten public offering pursuant to an effective Registration Statement
under the 1933 Act, covering the offer and sale of Common Stock to the general
public.
b. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Purchase Agreement.
2. MANDATORY REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare and file
with the SEC as soon as reasonably practicable after the date of this
Agreement pursuant to Rule 415 under the 1933 Act or any successor rule
providing for offering securities on a continuous basis ("RULE 415"), a
Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such form of Registration Statement as is then available to effect a
registration of the Registrable Securities) covering the resale of the
Registrable Securities and thereafter use its best efforts to cause such
Registration Statement to become effective as soon as reasonably practicable
and, in any event, within ninety (90) days following the date of this
Agreement. Notwithstanding the foregoing, if the Company shall fail to cause
such Registration Statement to become effective within ninety (90) days, the
Company's failure shall not be deemed a breach of this Section 2(a) provided
that the Company shall have used its best efforts during such ninety (90) day
period.
b. UNDERWRITTEN OFFERING. The Holders may determine to engage
the services of an underwriter in connection with an offering of Registrable
Securities. If such offering is an Underwritten Offering, the Holders shall
have the right to select one legal counsel and an investment banker or
bankers and manager or managers to administer the offering, which investment
banker or bankers or manager or managers shall be reasonably satisfactory to
the Company.
c. ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that, as of the date hereof, it meets the registrant eligibility and
transaction requirements for the use of Form S-3 for registration of the sale
of the Registrable Securities by the Holders, and that the Company shall use
its best efforts to file all reports required to be filed by the Company with
the SEC in a timely manner so as to maintain such eligibility for the use of
Form S-3; PROVIDED, HOWEVER, that, until the end of the Registration Period
(as hereinafter defined), in the event that the Company for any reason
becomes ineligible for the use of Form S-3, and shall remain ineligible for a
period of thirty (30) days, the Holders shall have the right to request that
the Company, at its own expense, effect the registration of Registrable
Securities under the 1933 Act (a "Demand
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Registration"), in which case the Company shall use its best efforts to cause
a Registration Statement covering the resale of the Registrable Securities of
all Holders who desire to include Registrable Securities therein to be filed
and declared effective as soon as reasonably practicable and, in any event,
within ninety (90) days of the date of such request, and to cause such
Registration Statement to remain effective and supplemented for a period of
not less than ninety (90) days; and PROVIDED FURTHER that the Company shall
be under no obligation to effect more than one Demand Registration pursuant
to this Section during any twelve-month period. Notwithstanding the
foregoing, if the Company shall fail to cause such Registration Statement to
become effective within ninety (90) days, the Company's failure shall not be
deemed a breach of this Section 2(c) provided that the Company used its best
efforts during such ninety (90) day period. If and when the Company again
becomes eligible to use Form S-3 and it files and causes to become effective
a Registration Statement on Form S-3 pursuant to Rule 415 covering the resale
of Registrable Securities, any unexercised rights of the Holders to effect a
Demand Registration pursuant to this Section 2(c) shall terminate; PROVIDED,
HOWEVER, that the Holders right to effect a Demand Registration pursuant to
this Section 2(c) shall be reinstated if the Company during the Registration
Period again becomes ineligible to use Form S-3 and remains ineligible for a
period of thirty (30) days.
3. PIGGYBACK REGISTRATION.
a. NOTICE OF PIGGYBACK REGISTRATION AND INCLUSION OF REGISTRABLE
SECURITIES. Subject to the terms of this Agreement, for a period of five
years following the Closing Date in the event the Company decides to register
any of its equity securities (either for its own account or the account of a
security holder or holders) on an SEC form that would be suitable for a
registration involving Registrable Securities (other than any registration
made pursuant to Form S-4 or Form S-8), the Company will: (i) promptly give
the Holders written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to qualify such securities under
the applicable Blue Sky or other state securities laws) and (ii) subject to
Section 3(c) below, use its best efforts to include in such registration (and
in any related qualification under Blue Sky laws or other state securities
laws), and in any underwriting involved therein, all the Registrable
Securities specified in a written request delivered to the Company by the
Holders within twenty (20) days after delivery of such written notice from
the Company.
b. NOTICE OF UNDERWRITING IN PIGGYBACK REGISTRATION. If the
registration of which the Company gives notice pursuant to Section 3(a) is
for a registered public offering involving an underwriting, then the Company
shall so advise the Holders as a part of the written notice given pursuant to
Section 3(a). In such event, the right of the Holders to registration shall
be conditioned upon such underwriting and the inclusion of the Holders'
Registrable Securities in such underwriting to the extent provided in this
Section 3. The Holders, as holders of Registrable Securities proposing to
distribute their securities through such underwriting, shall (together with
the Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement with the managing
underwriter for such offering; PROVIDED, HOWEVER, that the Holders shall have
no right to participate in the selection of the underwriters for an offering
pursuant to this Section 3.
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c. MARKETING LIMITATION IN PIGGYBACK REGISTRATION. In the event
the managing underwriter of an Underwritten Offering or, in the case of any
offering that is not underwritten, a recognized investment banking firm shall
advise the Company (and the Company shall in each case so advise each Holder
of Registrable Securities requesting registration of such advice in writing)
that, market factors (including, without limitation, the aggregate number of
shares requested to be registered, the general condition of the market, and
the status of the persons proposing to sell securities pursuant to the
registration) require a limitation of the number of shares to be
underwritten, then the Company will include in such registration, to the
extent of the number and type of securities which the Company is so advised
can be sold in (or during the time of) such offering, FIRST, all securities
of the Company proposed by the Company to be sold for its own account, or, in
the case of a secondary offering made pursuant to demand registration rights
granted to any Person other than a Holder of Registrable Securities, all
securities of the Company that such Person proposes to sell; SECOND, all
securities of the Company held by Persons that are entitled to priority
piggyback registration rights under agreements with the Company in existence
on the date of the Purchase Agreement; THIRD, such Registrable Securities
requested to be included in such registration pursuant to this Agreement pro
rata among (i) such Holders (based on the number of Registrable Securities
requested to be included by each Holder) and (ii) Persons who hold the
Company's securities that are entitled to registration rights under
agreements with the Company in existence on the date of this Agreement; and
FOURTH, all securities of the Company to be sold for the account of a Person
other than a Holder of Registrable Securities or a Person covered by one of
the foregoing clauses. No Registrable Securities or other securities
excluded from the underwriting by reason of this Section 3(c) shall be
included in the applicable Registration Statement.
d. WITHDRAWAL IN PIGGYBACK REGISTRATION. If any Holder
disapproves of the terms of any such underwriting, then such Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter
delivered at least ten (10) days prior to the effective date of the
registration statement. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
e. LIMITATION ON NUMBER OF PIGGYBACK REGISTRATIONS. The Holders
will be entitled to an aggregate of four registrations pursuant to this
Section 3; PROVIDED, HOWEVER, that in the event that the number of
Registrable Securities included in any registration pursuant to this Section
3 is less than 33-1/3% of the securities requested to be registered as a
result of the application of the provisions of subsection (c) above, such
registration shall not be counted towards the limitation set forth in this
subsection (e).
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4. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare and file a Registration Statement
and use its best efforts to cause such Registration Statement to become
effective, all as provided in Sections 2(a), 2(c) and 3(a) hereof, and, with
respect to registrations pursuant to Section 2(a), keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as is
the earlier of (i) the date on which all of the Registrable Securities
covered by the Registration Statement have been sold by the Holders, (ii) the
date on which all of the shares of Common Stock issued pursuant to the
Purchase Agreement or Section 2(c) hereof, or as a dividend on or in exchange
for or otherwise with respect to any of the foregoing, have ceased to be
Registrable Securities and (iii) the third anniversary following the
Completion Date (as such term is defined in Section 9(m) of the Purchase
Agreement). The period from the filing of the Registration Statement until
the earlier of (i), (ii) and (iii) above shall be referred to herein as the
"REGISTRATION PERIOD." Notwithstanding the foregoing, if the Company shall
fail to cause such Registration Statement to become effective within ninety
(90) days, the Company's failure shall not be deemed a breach of this Section
4(a) provided that the Company used its best efforts during such ninety-day
(90) period.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such
period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statement until 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 as set forth in the Registration Statement.
c. The Company shall furnish to the Holders (and the firm of
legal counsel designated pursuant to Section 4(g)) (i) promptly after the
Registration Statement is prepared and publicly distributed and filed with
the SEC, one copy of the Registration Statement and any amendment thereto,
each preliminary prospectus and prospectus and each amendment and supplement
thereto, and (ii) such number of copies of a prospectus and all amendments
and supplements thereto and such other documents as the Holders may
reasonably request in order to facilitate the disposition of the Registrable
Securities covered by the Registration Statement and owned by such Holders.
The Company shall immediately notify the Holders by facsimile of the
effectiveness of the Registration Statement or any post-effective amendment.
d. The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Holders reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be
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reasonably necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; PROVIDED, HOWEVER, that the
Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(d), (b) subject
itself to general taxation in any such jurisdiction, or (c) file a general
consent to service of process in any such jurisdiction or otherwise take any
action that would subject it to the general jurisdiction of the courts of any
jurisdiction in which it would not otherwise be so subject.
e. As promptly as practicable after becoming aware of such event,
the Company shall notify the Holders of the happening of any event of which
the Company has knowledge as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the Company shall use its
best efforts to promptly prepare a supplement or amendment to the
Registration Statement to correct such untrue statement or omission, and
deliver such number of copies of such supplement or amendment to the Holders
as such Holders may reasonably request.
f. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of the Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such
order at the earliest possible moment and to notify the Holders (or, in the
event of an Underwritten Offering, the managing underwriters) of the issuance
of such order and the resolution thereof.
g. The Company shall permit a single firm of legal counsel
designated by the Holders to review the Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof) a reasonable period of time prior to their filing
with the SEC, and shall not file any document in a form to which such counsel
reasonably objects and will not request acceleration of the Registration
Statement without prior notice to such counsel. The sections of the
Registration Statement covering information with respect to the Holders, the
Holders' beneficial ownership of securities of the Company or the Holders'
intended method of disposition of Registrable Securities shall conform to the
information provided to the Company by the Holders.
h. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC, and make generally
available to its security holders as soon as reasonably practical, but not
later than ninety (90) days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Section 11(a)
and Rule 158 under the 0000 Xxx) covering a period of at least twelve-months
beginning with the first day of the Company's first full calendar quarter
following the date the Registration Statement is declared effective by the
SEC (the "EFFECTIVE DATE").
i. The Company shall make available for inspection, at the offices
where normally kept and during reasonable business hours, by (i) the Holders,
(ii) any underwriter
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participating in any disposition pursuant to the Registration Statement,
(iii) any firm of legal counsel and any firm of accountants or other agents
retained by the Holders, and (iv) one firm of legal counsel retained by all
such underwriters (collectively, the "INSPECTORS"), all pertinent financial
and other records, corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably requested by such
person as being necessary in the reasonable opinion of such person to conduct
a reasonable investigation within the meaning of the 1933 Act in connection
with such Registration Statement, and cause the Company's officers, directors
and employees to supply all information which any Inspector may reasonably
request for purposes of such due diligence; PROVIDED, HOWEVER, that each
Inspector shall hold in confidence and shall not make any disclosure (except
to a Holder (subject to the limitations set forth in the last sentence of
this subsection) or agents of the Company) of any Record or other information
obtained in connection with any such inspection, unless (a) the disclosure of
such Records is necessary in connection with the Inspectors' or the Holders'
assertion of any claims or actions or with their establishment of any defense
in any pending administrative or judicial action or proceeding, (b) the
release of such Records is ordered pursuant to a subpoena or other order from
a court or government body of competent jurisdiction, or (c) the information
in such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement. Each of the Holders
agree that it shall, and shall cause each of its Inspectors to, upon learning
that disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give notice of such
request to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential. Notwithstanding the foregoing, the Company may designate any
such Records as being reviewable only by the Inspectors, and not disclosable
to the Holders if the Company reasonably believes that such Records are of a
competitively sensitive nature, and disclosure to the Holders in accordance
with this provision would be harmful to the Company's competitive position.
j. The Company shall hold in confidence and not make any
disclosure of information concerning the Holders provided to the Company
unless (i) disclosure of such information is necessary in connection with the
Company's assertion of any claims or actions or with its establishment of any
defense in any pending administrative or judicial action or proceeding, (ii)
disclosure of such information is necessary to comply with federal or state
securities laws, (iii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission of material fact in the
Registration Statement that directly relates to the Holders, (iv) the release
of such information is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction, or (v) such information
has been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning the Holders is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give notice of such request to the Holders and allow the
Holders, at the Holders' expense, to undertake appropriate action to prevent
disclosure of the information deemed confidential.
k. The Company shall (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure the designation and
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quotation of all the Registrable Securities covered by the Registration
Statement on the NASDAQ National Market.
l. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than
the Effective Date.
m. The Company shall enter into such customary agreements
(including, in the case of an Underwritten Offering, underwriting agreements
in customary form as are reasonably satisfactory to the Company with
customary indemnification and contribution obligations) and take all such
other appropriate actions as the Holders or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities. The Holders holding Registrable Securities which are
to be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that the Company make to and for
the benefit of such holders the representations, warranties and covenants of
the Company and the Company may, at its option, require that the Holders make
to and for the benefit of the Company, the representations, warranties and
covenants, of the Holders, in each case, which are being made to and for the
benefit of such underwriters and which are of the type customarily provided
to institutional investors in secondary offerings.
n. The Company shall use its best efforts to obtain an opinion
from the Company's counsel and a "cold comfort" letter from the Company's
independent public accountants in customary form and covering such matters as
are customarily covered by such opinions and "cold comfort" letters delivered
to underwriters in underwritten public offerings, which opinion and letter
shall be reasonably satisfactory to the underwriter, if any, and to the
Holders, and furnish to the Holders and to each underwriter, if any, a copy
of such opinion and letter addressed to the Holders or underwriter.
o. The Company shall cooperate with the Holders and the managing
underwriter, if any, to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an Underwritten Offering, in accordance with the
instructions of the Holders at least three business days prior to any sale of
Registrable Securities and instruct any transfer agent and registrar of
Registrable Securities to release any stop transfer orders in respect thereof.
p. The Company shall take all other reasonable actions necessary
to expedite and facilitate disposition by the Holders of Registrable
Securities pursuant to the Registration Statement.
q. If any such registration statement or comparable statement
under "blue sky" laws refers to the Holders by name or otherwise as the
holder of any securities of the Company, then such Holders shall have the
right to require (i) the insertion therein of language, in form and substance
satisfactory to such Holders and the Company, to the effect that the holding
by such Holders of such securities is not to be construed as a recommendation
by such Holders of the
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investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holders will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such
reference to such Holders by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the 1933 Act or any similar
federal statute or any state "blue sky" or securities law then in force, the
deletion of the reference to the Holders.
5. OBLIGATIONS OF THE HOLDERS.
In connection with the registration of the Registrable Securities, the
Holders shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of the Holders that each such Holder furnish to
the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and as are customarily provided
by selling stockholders and shall execute such documents in connection with
such registration as the Company may reasonably request and as are
customarily executed by selling stockholders; PROVIDED that any such
information shall be used only in connection with such registration. At
least five (5) business days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify the Holders or their
counsel of the information the Company requires from the Holders in
accordance with this Section 5(a).
b. Each Holder, by its acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of the Registration Statement,
unless such Holder has notified the Company in writing of such Holder's
election to exclude all of such Holder's Registrable Securities from the
Registration Statement.
c. The Holders agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4(e)
or 4(f), such Holders will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holders' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(e) or 4(f) and, if so directed
by the Company, such Holders shall, at their option, deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Holders' possession, of the
prospectus covering such Registrable Securities at the time of receipt of
such notice.
d. The Holders may not participate in any underwritten
registration hereunder unless such Holders (i) agree to sell such Registrable
Securities on the basis provided in any underwriting arrangements entered
into by the Company, (ii) complete and execute all questionnaires,
indemnities, underwriting agreements and other documents (other than powers
of attorney) reasonably required under the terms of such underwriting
arrangements, and (iii) agree to pay their pro rata share of all underwriting
discounts and commissions and their own expenses (including, without
limitation, counsel fees, except as specifically provided herein).
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6. EXPENSES OF REGISTRATION.
All expenses incident to the Company's performance of or compliance with
Sections 2(a) or 2(b) of this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities
or blue sky laws, printing expenses, messenger and delivery expenses, and all
reasonable fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters and other persons
retained by the Company (all such expenses being herein called "Registration
Expenses"), will be borne by the Holders on a pro rata basis (based on the
number of Registrable Securities to be registered by such Holder). In
connection with any registration pursuant to Section 2(c) of this Agreement,
all Registration Expenses will be borne by the Company. In connection with
any registration pursuant to Section 3(a) of this Agreement, the Holders will
bear their pro rata portion of the Registration Expenses (based on the number
of Registrable Securities to be registered by such Holders as a portion of
the total amount of securities of the Company being registered). The Holders
will also bear any transfer taxes and underwriting discounts or commissions
applicable to the Registrable Securities sold by the Holders.
7. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and
hereby agrees to, indemnify, hold harmless and defend (i) the Holders who
hold such Registrable Securities, (ii) the directors, officers, partners,
employees, agents and each person who controls the Holders within the meaning
of the 1933 Act or the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, of any similar successor statute (the "1934
ACT"), if any, (iii) any underwriter (as defined in the 0000 Xxx) for the
Holders, and (iv) the directors, officers, partners, employees and each
person who controls any such underwriter within the meaning of the 1933 Act
or the 1934 Act, if any (each, an "INDEMNIFIED PERSON"), against any and all
joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened,
in respect thereof, "CLAIMS") to which any of them may become subject insofar
as such Claims arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement under
which Registrable Securities were registered under the 1933 Act or the
omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the Effective Date, or contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in
the foregoing clauses (i) through (iii) being, collectively,
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"VIOLATIONS"). Subject to the restrictions set forth in Section 7(c) hereof
with respect to the retention of legal counsel by an Indemnified Person or
Indemnified Party (as defined below), the Company shall reimburse the
Indemnified Person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(a): (i) shall not apply
to a Claim arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company
by or on behalf of any Indemnified Person expressly for use in connection
with the preparation of the Registration Statement or any such amendment
thereof or supplement thereto; and (ii) with respect to any preliminary
prospectus, shall not inure to the benefit of any Indemnified Person if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then amended
or supplemented, such corrected prospectus was timely made available by the
Company pursuant to Section 4(c) hereof, and the Holders are promptly advised
in writing not to use the incorrect prospectus prior to the use giving rise
to a Violation and such Indemnified Person, notwithstanding such advice, used
it. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Holders pursuant to
Section 11 hereof.
b. In connection with any Registration Statement in which the
Holders are participating, the Holders agree severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 7(a) hereof, the Company, each of its directors,
each of its officers who signs the Registration Statement, to the fullest
extent permitted by law, each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or any
of its directors, officers, agents or any person who controls such
stockholder or underwriter within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "INDEMNIFIED
PARTY"), against any Claim to which any of them may become subject, under the
1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out of or
is based upon any Violation by the Holders, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by the Holders
expressly for use in connection with such Registration Statement; and subject
to Section 7(d) hereof with respect to the retention of legal counsel by an
Indemnified Person or Indemnified Party, the Holders will reimburse the
Indemnified Party any reasonable legal or other expenses (promptly as such
expenses are incurred and are due and payable) incurred by them in connection
with investigating or defending any such Claim; PROVIDED, HOWEVER, that the
Holders shall be liable under this Agreement (including this Section 7(b) and
Section 8 hereof) for only that amount as does not exceed the net proceeds
from the sale of Registrable Securities by the Holders pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Holders pursuant to Section 11 hereof. Notwithstanding anything herein to
the contrary, the indemnification agreement contained in this Section 7(b)
with respect to any preliminary prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.
11
c. Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 7 (with appropriate modifications)
shall be given by the Company and the Holders selling Registrable Securities
with respect to any required registration or other qualification of
securities under any state securities and "blue sky" laws.
d. Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement
of any action or proceeding with respect to which a claim for indemnification
may be made pursuant to this Section 7, but the failure of any indemnified
party to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 7, except to the
extent the indemnifying party is materially prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 7. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, unless in the reasonable opinion of
outside counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other indemnifying party
similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party that it so
chooses, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED, HOWEVER, that (i) if the indemnifying party fails to
take reasonable steps necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; (ii) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party reasonably shall have concluded that there may
be one or more legal defenses available to such indemnified party which are
not available to the indemnifying party; or (iii) if representation of both
parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, then, in any such case, the indemnified
party shall have the right to assume or continue its own defense as set forth
above (but with no more than one firm of counsel for all indemnified parties
in each jurisdiction, except to the extent any indemnified party or parties
reasonably shall have concluded that there may be legal defenses available to
such party or parties which are not available to the other indemnified
parties or to the extent representation of all indemnified parties by the
same counsel is otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable for any
expenses therefor. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(A) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
12
e. If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 7(a), (b)
or (c), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any Claim in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and the indemnified party, on the other hand, with respect to
such offering of securities. The relative fault 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 the indemnifying party or
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. If, however, the allocation provided in the second preceding
sentence is not permitted by applicable law, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative faults
but also the relative benefits of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations. The parties
hereto agree that it would not be just and equitable if contributions
pursuant to this Section 7(e) were to be determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to in the preceding sentences of this
Section 7(e). The amount paid or payable in respect of any Claim shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
Claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Notwithstanding anything in this Section 7(e) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to
this Section 7(e) to contribute any amount in excess of the net proceeds
received by such indemnifying party from the sale of Registrable Securities
in the offering to which the losses, claims, damages or liabilities of the
indemnified parties relate, less the amount of any indemnification payment
made pursuant to Sections 7(b) and (c).
f. The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or
on behalf of any indemnified party and shall survive the transfer of the
Registrable Securities by any such party.
g. The indemnification and contribution required by this Section
7 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.
8. NO OBLIGATION TO SELL.
Nothing in this Agreement shall be deemed to create an independent
obligation on the part of the Holders to sell any Registrable Securities
pursuant to any effective Registration Statement.
9. COOPERATION AMONG THE PARTIES.
13
The Company agrees to reasonably cooperate with the Holders, ASkyB, MCI
and any Affiliate of News Corporation or MCI in any transaction whereby the
Holders, ASkyB, MCI or any Affiliate of News Corporation or MCI desire to
sell the Registrable Securities in a private transaction. Without limiting
the generality of the foregoing, the Company shall make available at
reasonable times and locations for inspection by any prospective purchasers
of the Common Stock, and any attorney, accountant or other agent retained by
any such prospective purchaser, all Records as shall be reasonably requested
by such prospective purchaser, and cause the Company's officers and employees
to supply all information which any such prospective purchaser may reasonably
request; PROVIDED, HOWEVER, that the Company shall not be required to
disclose to any prospective purchaser information which the Company
determines in good faith to be confidential in such Records until and unless
such prospective purchaser shall have entered into a confidentiality
agreement (in form and substance satisfactory to the Company) with the
Company with respect thereto. News Corporation or MCI, as the case may be,
shall reimburse the Company for any reasonable out-of-pocket expenses
incurred by the Company pursuant to this Section 9.
10. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Holders to sell securities of the Company
to the public without registration ("RULE 144"), the Company agrees to use
its best efforts, during the term of this Agreement, to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and
c. furnish to the Holders so long as the Holders own Registrable
Securities, promptly upon written request, (i) a written statement by the
Company as to whether or not it has complied with the reporting requirements
of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Holders to sell such securities pursuant
to Rule 144 without registration.
11. ASSIGNMENT.
The rights of the Holders under this Agreement may not be assigned;
PROVIDED, HOWEVER, that each Holder may assign its rights hereunder to any
transferee of all or any portion of Registrable Securities held by such
Holder if the transferee (i) is a direct or indirect wholly-owned subsidiary
of either News Corporation or MCI and (ii) agrees in writing with the Company
to be bound by all of the provisions contained herein applicable to the
transferor (such agreement being evidenced by the execution of a Counterpart
and Acknowledgment substantially in the form attached hereto as
14
EXHIBIT A). Subject to the requirements of this Section 11, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns
of each of the parties hereto.
12. AMENDMENT.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with written consent of the Company and
the Holders. Any amendment or waiver effected in accordance with this Section
12 shall be binding upon the Holders and the Company.
13. ABILITY OF COMPANY TO POSTPONE REGISTRATION.
The Company may postpone for a reasonable period of time, not to exceed
ninety (90) days, the filing or the effectiveness of any Registration
Statement if the Board of Directors of the Company in good faith determines
that (A) such registration might have a material adverse effect on any plan
or proposal by the Company with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction, or (B) the
Company is in possession of material non-public information that, if publicly
disclosed, could result in a material disruption of a major corporate
development or transaction then pending or in progress or in other material
adverse consequences to the Company.
15
14. LOCK-UP AGREEMENT.
If requested by the managing underwriter or underwriters in an
Underwritten Offering, or by the initial purchaser or representative of the
initial purchasers in an offering under Rule 144A under the 1933 Act (a "RULE
144A OFFERING"), by the Company of its equity securities (including debt
securities convertible into or exchangeable or exercisable for equity
securities of the Company) or its debt securities that are not convertible
into or exchangeable or exercisable for equity securities of the Company
("NON-CONVERTIBLE DEBT SECURITIES"), each Holder of Registrable Securities
agrees not to effect any public sale or distribution of any Registrable
Securities of the Company during the period commencing on the effective date
of such Underwritten Offering or, in the case of a Rule 144A Offering, the
date of the definitive offering memorandum for the Rule 144A Offering (or
such earlier date chosen by the managing underwriter or underwriters in an
Underwritten Offering or by the initial purchaser or representative of the
initial purchasers in a Rule 144A Offering) and continuing until ninety (90)
days following either (a) the effective date of such Underwritten Offering
or, in the case of a Rule 144A Offering, the date of the definitive offering
memorandum for the Rule 144A Offering or (b) such earlier date, if
applicable, except for any Registrable Securities that are part of such
Underwritten Offering or Rule 144A Offering, as the case may be, or, unless
otherwise permitted by such managing underwriter or underwriters in the case
of an Underwritten Offering or by the initial purchaser or the representative
of the initial purchasers in a Rule 144A Offering, PROVIDED, HOWEVER, that
the Holders' obligation under this Section 14 with respect to Non-Convertible
Debt Securities shall apply to only one offering during the term of this
Agreement and only to the extent that the aggregate principal amount of
Non-Convertible Debt Securities in such offering is at least $500 million.
15. MISCELLANEOUS.
a. DEFINITION OF HOLDER OF REGISTRABLE SECURITIES. A person or
entity is deemed to be the holder of Registrable Securities owned by such
person and its affiliates. If Registrable Securities are held by a nominee
for the beneficial owner thereof, the beneficial owner thereof may, at its
option, 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 constituting Registrable Securities held by any holder
or holders of Registrable Securities contemplated by this Agreement);
provided that the Company shall have received assurances reasonably
satisfactory to it of such beneficial ownership.
b. NOTICES. Any notices required or permitted to be given under
the terms hereof shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a
nationally recognized overnight delivery service) or by facsimile and shall
be effective five days after being placed in the mail, if mailed by regular
U.S. mail, or upon receipt, if delivered personally or by courier (including
a nationally recognized overnight delivery service) or by facsimile, in each
case addressed to a party. The addresses for such communications shall be:
16
If to the Company:
EchoStar Communications Corporation
0000 Xxxxx Xxxxx Xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Senior Vice President, General
Counsel and Secretary
Facsimile: (000) 000-0000
If to the ASkyB Holder:
American Sky Broadcasting, LLC
c/o The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Senior Executive Vice President
and Group General Counsel
Facsimile: (000) 000-0000
If to the MCI Holder:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
General Counsel
Facsimile: (000) 000-0000
c. REMEDIES. Any person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement. Failure of any party to
exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver
thereof.
d. GOVERNING LAW; SEVERABILITY. This Agreement shall be
enforced, governed by and construed in accordance with the laws of New York
applicable to agreements made and to
17
be performed entirely within such State. In the event that any provision of
this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.
e. MERGER CLAUSE. This Agreement, the Purchase Agreement and the
other Collateral Agreements (as defined in the Purchase Agreement) (including
all schedules and exhibits thereto) constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings other than those
set forth or referred to herein and therein. This Agreement and the Purchase
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
Notwithstanding the foregoing, this Agreement shall have no effect on any
other registration rights agreement to which any Holder and the Company are a
party.
f. DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
g. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed
by a party, may be delivered to any other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.
h. FURTHER ACTS. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents,
as any other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
i. CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
[SIGNATURE PAGE FOLLOWS]
18
IN WITNESS WHEREOF, the Company and the Holders have caused this
Agreement to be duly executed as of the date first above written.
ECHOSTAR COMMUNICATIONS CORPORATION
/s/ XXXXX X. XXXXXXXXX
--------------------------------
By: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President and
General Counsel
AMERICAN SKY BROADCASTING, LLC
/s/ XXXXXXXX X. XXXXXX
--------------------------------
By: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
MCI TELECOMMUNICATIONS CORPORATION
/s/ XXXXXXX X. XXXXXXXXX
--------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Title: General Counsel
NEWS AMERICA INCORPORATED
/s/ XXXXXXXX X. XXXXXX
--------------------------------
By: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGEMENT
TO: ECHOSTAR COMMUNICATIONS CORPORATION
RE: The Registration Rights Agreement (the "Agreement") dated as of
__________ __, 1998, by and among EchoStar Communications Corporation
and the Holders (as defined in the Agreement)
The undersigned hereby agrees to be bound by the terms of the
Agreement as a party to the Agreement, and shall be entitled to all benefits
of the Holders (as defined in the Agreement) and shall be subject to all
obligations and restrictions of the Holders pursuant to the Agreement, as
fully and effectively as though the undersigned had executed a counterpart of
the Agreement together with the other parties to the Agreement. The
undersigned hereby acknowledges having received and reviewed a copy of the
Agreement.
DATED this _____ day of ____________, 199_.
--------------------------------
By:
-----------------------------
Title:
--------------------------
Number of
Shares of
Registrable Securities:
--------
