EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement ("Agreement") is made and entered into
as of September 1, 1999, by and between Telemonde, Inc., a Nevada corporation
(the "Company") (as successor to Telemonde Investments Limited ("TIL")), and
Communications Collateral Limited, a British Virgin Islands company (the
"Purchaser").
This Agreement is made pursuant to Paragraph 8 of the Letter Agreement (the
"Letter Agreement") dated as of April 15, 1999 between Rhone Financial Indemnity
Re Limited, as sole member of TIL, and the Purchaser. In order to induce the
Purchaser to enter into that certain Facility Agreement, dated April 15, 1999,
by and between TIL and the Purchaser (the "Facility Agreement"), the Company has
agreed to provide the registration and other rights set forth in this Agreement
for the shares of Common Stock of the Company issuable under the Warrant (as
defined herein) and all other shares of Common Stock currently held by or
issuable under the terms of this Agreement to the Purchaser.
The parties hereby agree as follows:
ARTICLE 1.
Section 1.01 Definitions. Capitalized terms used and not otherwise
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defined herein have the meanings set forth in the Warrant made by the Company in
favor of the Purchaser (the "Warrant"). The terms set forth below are used
herein as so defined:
"Affiliates" means the original investors in the Purchaser and their
Affiliates, as such term is defined in the Exchange Act.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of common stock of the Company, $.001 par value
per share.
"Effectiveness Date" means November 11, 1999 or any extension thereof made
in accordance with Section 2.01(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means the record holder of any Registrable Security or any right
to receive a Registrable Security under the Warrant.
"IPO" means the consummation of an underwritten public offering of Common
Stock pursuant to an effective registration statement filed under the Securities
Act (other than any registration statement relating to warrants, options or
shares of capital stock of the Company granted or to be granted or sold
primarily to employees, directors, or officers of the Company, as a registration
statement filed pursuant to Rule 145 under the Securities Act or any successor
rule or a registration statement relating to employee benefit plans or interests
therein) and the listing of such Common Stock on a national securities exchange
or the quotation of prices therefor on NASDAQ (NMS) or on NASDAQ (SMALLCAP).
"Issued Share Capital" means (i) all shares of issued and outstanding
capital stock of the Company and (ii) all shares of capital stock of the Company
issuable upon the exercise of any right to subscribe for or convert any debt or
other instrument into or to exercise any option or warrant for such shares of
capital stock.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other
governmental entity.
"Registrable Securities" means (i) the shares of Common Stock and all other
securities receivable upon exercise of the Warrant, (ii) 4,170,000 shares of
Common Stock transferred to the Purchaser as part of the transactions entered
into by the Company pursuant to the terms of a Stock Purchase Agreement, dated
May 14, 1999, among the Company and certain other parties, and (iii) the shares
of Common Stock issuable to the Purchaser pursuant to Section 2.01(b) hereof,
until such time as such securities cease to be Registrable Securities pursuant
to Section 1.03 hereof.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement.
Section 1.02 Stock Splits, Dividends, Recapitalizations, etc. Any shares
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or other securities resulting from any stock split, stock dividend,
reclassification of the Common Stock of the Company, merger, consolidation or
reorganization of the Company which may be received by the Holder of a Warrant
upon exercise of such Warrant shall also be deemed to be Registrable Securities.
Section 1.03 Registrable Securities. Any Registrable Security will cease
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to be a Registrable Security when (i) a registration statement covering such
Registrable Security has been declared effective by the Commission and such
Registrable Security has been issued, sold or disposed of pursuant to such
effective registration statement or (ii) such Registrable Security is disposed
of pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or (iii) such Registrable Security is held by the Company or any
of its subsidiaries.
ARTICLE II
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Section 2.01 Registration in Connection with the IPO. (a) If at any time
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or from time to time, the Company shall determine to register any of its
securities in connection with an IPO, the Company shall:
(i) promptly give to each Holder written notice thereof,
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), the Registrable Securities, as so
specified in a written request or requests received within twenty (20) days
after receipt of such written notice from the Company by any Holder, and
(iii) to the extent there is an over-allotment option in connection
with the IPO, promptly give to each Holder written notice of such over-allotment
and include in such over-allotment option (and any related qualification under
blue sky laws or other compliance) only Registrable Securities and no other
securities of the Company, as so specified in a written request or requests
received within ten (10) days after receipt of such written notice from the
Company by any Holder.
(b) In the event that a registration involving an IPO, the Company shall so
advise the Holder of the IPO in accordance with the written notice procedures
given pursuant to (a) above. The right of Holder to registration pursuant to
this Section 2.01 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 2.01 and the inclusion of
such Holder's Registrable Securities in the underwriting, to the extent
requested, to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall together with the Company and the other holders distributing
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 in customary form with the managing underwriter
selected for such underwriting by the Company (or by the holders who have
demanded such registration). In connection with such underwriting agreement,
the Company shall negotiate in good faith with such underwriter to include a
provision in the underwriter's agreement in customary form to waive any lock-up
provisions relating to the Registrable Securities if market conditions so
warrant. The term of any lock-up provision relating to the Registrable
Securities shall not exeed the lesser of (a) 180 days after the closing date of
the IPO and (b) the lock up restriction applicable to any other director,
officer or shareholder of the Company. Notwithstanding any other provision of
this Section 2.01, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter, with the Company's permission, may reduce the Registrable
Securities to be included in such underwriting (but not the registration), pro
rata among the Holders; provided, however, that, other than the Registrable
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Securities registered connection with the over-allotment option, the Company's
shares shall be given priority, and, provided further, that in no event shall
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the underwriter reduce the
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number of Registrable Securities to be included in the underwriting below 20% of
the total number of securities offered in connection with the IPO; and provided
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further that no securities of other holders of the Company's securities may be
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included in the underwriting if any Registrable Securities are excluded by the
underwriter from the offering. Any Registrable Security excluded from the
underwriting by reason of the underwriter's marketing limitation shall
nevertheless be included in such registration. To facilitate the allocation of
shares in accordance with the above provisions, the Company or the underwriters
may round the number of shares allocated to Holder to the nearest 100 shares.
If the Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter. The Registrable Securities so withdrawn shall also be withdrawn
from registration. Such withdrawn Registrable Securities shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, and the Effectiveness Date shall be extended for 180 days.
The Purchaser shall be entitled to an additional one-half of one percent
(.5%) of the Issued Share Capital (exclusive of shares issued hereunder) as of
the end of each thirty day period following the Effectiveness Date that the
Registrable Securities have not been registered for resale with the Commission
pursuant to an effective registration statement filed under the Securities Act
or during which the effectiveness of a registration has lapsed in violation of
Section 2.04(g) hereof (the "Non- Registration Penalty"); provided, however,
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that if the Company has filed an IPO registration statement prior to or on the
Effectiveness Date, the Purchaser shall defer the Non-Registration Penalty for
90 days following the Effectiveness Date (the "Deferred Date"); provided,
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further, that (i) if the IPO registration statement has not been declared
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effective by the Effective Date, the Purchaser shall be entitled to an
additional one-half of one percent of the Issued Share Capital (as calculated on
the Effective Date), which shall become part of the Registrable Securities, and
(ii) if the IPO registration statement has not been declared effective by the
Deferred Date, the Purchaser shall be entitled to an additional 1 1/2% of the
Issued Share Capital (as calculated on the Deferred Date) and an additional one-
half of one percent (.5%) of the Issued Share Capital (as calculated as of the
beginning of each month) for each month that the Registrable Securities have not
been registered following the Deferred Date, which in each case shall become
part of the Registrable Securities. Notwithstanding anything herein to the
contrary, in no event shall the Purchaser receive in excess of six percent of
the Issued Share Capital outstanding as of November 11, 2000.
Section 2.02 Demand Registration. (a) Any time after the expiration of
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lock-up agreements signed by the Company's directors or executive officers in
connection with the IPO or 180 days after the closing date of the IPO, whichever
occurs first, the Purchaser may request the Company to register under the
Securities Act all of the Securities held by the Purchaser for sale in the
manner specified in such notice.
(b) Promptly, and in any event within 10 days, following receipt of any
notice under this Section 2.02, the Company shall immediately notify the
Purchaser of the receipt of notice under this Section 2.02 and shall use its
best efforts to register under the Securities Act, for public sale in
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accordance with the method of disposition specified in such notice from the
Purchaser, the Registrable Securities specified in the Purchaser's notice (and
in any notices received from other Holders no later than the 10th Business Day
after receipt of the notice sent by the Company) (such other Holders and the
Purchaser are hereinafter referred to as the "Requesting Holders"). If such
method of disposition shall be an underwritten public offering, the Company may
designate the managing underwriter of such offering, subject to the approval of
Requesting Holders holding a majority of the Registrable Securities to be
registered. Except as specified in the following sentence, the Company shall be
obligated to register Registrable Securities pursuant to this Section 2.02 on
one occasion only. A request pursuant to this Section 2.02 shall be counted only
when (i) all the Registrable Securities requested to be included in any such
registration have been so included, (ii) the corresponding registration
statement has become effective under the Securities Act, and (iii) the public
offering has been consummated and the Registrable Securities have been sold on
the terms and conditions specified therein. Notwithstanding anything to the
contrary contained herein, the Company may delay the filing or effectiveness of
a registration statement for up to 45 days after receipt of a request hereunder
if (i) at the time of such request the Company is engaged in a firm commitment
underwritten public offering of shares of its capital stock in which Holders may
include Registrable Securities or (ii) the Board of Directors of the Company
determines in its reasonable judgment and in good faith that the filing of such
a registration statement or the making of any required disclosure in connection
therewith would have a material adverse effect on the Company or substantially
interfere with a significant transaction in which the Company is then engaged.
(c) The Company shall be entitled to include in any registration statement
filed pursuant to this Section 2.02, for sale in accordance with the method of
disposition specified by the Requesting Holders, securities of the Company
entitled generally to vote in the election of directors (or any securities
convertible into or exchangeable for or exercisable for the purchase of
securities so entitled generally to vote in the election of directors).
Section 2.03 Piggy-Back Registration. If the Company proposes to
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register any securities under the Securities Act for sale to the public (other
than in an IPO), whether for its own account or for the account of other
security holders or both (except with respect to registration statements on
Forms S-4 or S-8 for purposes permissible under such forms as of the date
hereof, or any successor forms for comparable purposes that may be adopted by
the Commission), each such time it will give written notice to all Holders of
its intention to do so (but in any event no less than 15 Business Days before
the anticipated filing date). Upon the written request of any such Holder,
received by the Company no later than the 10th Business Day after receipt by
such Holder of the notice sent by the Company, to register, on the same terms
and conditions as the shares of securities otherwise being sold pursuant to such
registration, any of its Registrable Securities (which request shall state the
intended method of disposition thereof), the Company will use its best efforts
to cause the Registrable Securities as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company on the same terms and conditions
as any similar securities included therein, all to the extent requisite to
permit the sale or other disposition by each Holder (in accordance with its
written request) of such Registrable Securities so registered; provided,
however, that the Company may at any time prior to
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the effectiveness of any such registration statement, in its sole discretion and
without the consent of any Holder, abandon the proposed offering. The number of
Registrable Securities to be included in such a registration may be reduced or
eliminated if and to the extent the managing underwriter shall render to the
Company its opinion that such inclusion would jeopardize the successful
marketing of the securities (including the Registrable Securities) proposed to
be sold therein; provided, however, that such number of shares of Registrable
Securities shall not be reduced unless the shares to be included in such
underwriting for the account of any Person are also reduced on a pro rata basis.
Within 10 Business Days after receipt by each Person proposing to sell
Registrable Securities pursuant to the registered offering of the opinion of
such managing underwriter, all such Selling Holders may allocate among
themselves the number of shares of such Registrable Securities which such
opinion states may be distributed without adversely affecting the distribution
of the securities covered by the registration statement (or if such registered
holders are unable to agree among themselves with respect to such allocation,
such allocation shall be in proportion to the respective numbers of shares
specified in their respective written requests). Notwithstanding anything to the
contrary contained in this Section 2.03, in the event that there is a firm
underwriting commitment offer of securities of the Company pursuant to a
registration statement covering Registrable Securities and a Person does not
elect to sell its Registrable Securities to the underwriters of the Company=s
securities in connection with such offering, such Person shall not offer for
sale, sell, grant any option for the sale of, or otherwise dispose of, directly
or indirectly, any shares of Common Stock, or any securities convertible into or
exchangeable into or exercisable for any shares of Common Stock during the
period of distribution of the Company's securities by such underwriters, which
shall be specified in writing by the underwriters and shall not exceed 60 days
following the date of effectiveness under the Securities Act of the registration
statement relating thereto.
Section 2.04 Registration Procedures. If and whenever the Company is
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required pursuant to this Agreement to effect the registration of any of the
Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file as promptly as possible with the Commission a
registration statement in accordance with this Article II with respect to
such securities (which filing made pursuant to Section 2.02 shall be made
within 30 days after the receipt by the Company of a notice requesting such
registration) and use its best efforts to cause such registration statement
to become and remain effective for the period of the distribution
contemplated thereby (as determined below);
(b) 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 for the period specified below and as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement in
accordance with the sellers' intended method of disposition set forth in
such registration statement for such period;
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(c) furnish to each Selling Holder and to each underwriter such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus and each document
incorporated by reference therein prior to the filing with the Commission)
as such Persons may reasonably request in order to review such
documentation and to facilitate the public sale or other disposition of the
Registrable Securities covered by such registration statement;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as the Selling Holders or, in the case
of an underwritten public offering, the managing underwriter, shall
reasonably request;
(e) immediately notify each Selling Holder and each underwriter, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus contained 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 then
existing;
(f) furnish at the request of a Selling Holder, (i) on the date that
Registrable Securities are delivered to the underwriters for sale pursuant
to such registration statement (or on the effective date in the case of an
offering that is not underwritten), an opinion of counsel for the Company
dated as of such date and addressed to the underwriters, if any, and to the
Selling Holders, stating that such registration statement has become
effective under the Securities Act and that (A) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, (B) the registration
statement, the related prospectus, and each amendment or supplement
thereof, comply as to form in all material respects with the requirements
of the Securities Act and the applicable rules and regulations thereunder
of the Commission (except that such counsel need express no opinion as to
the financial statements or any engineering report contained or
incorporated therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters or by any such Selling Holder or
its counsel, and (ii) on the effective date of the registration statement
and on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration statement, a letter
dated such dates from the independent accountants retained by the Company,
addressed to the underwriters, if any, and to the Selling Holders, stating
that they are independent public accounts within the meaning of the
Securities Act and that, in the opinion of such accountings, the financial
statements of the Company and the schedules thereto that are included or
incorporated by reference in the registration statement or the prospectus,
or any amendment or supplement thereof, comply as to form in all material
respects with the applicable requirements of the Securities Act and the
published rules and regulations
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promulgated thereunder, and such letter shall additionally address such
other financial matters (including information as to the period ending no
more than five business days prior to the date of such letter) included in
the registration statement in respect to which such letter is being given
as the underwriters or any Selling Holder may reasonably request;
(g) use its best efforts to keep effective and maintain a
registration, qualification, approval or listing on a national securities
exchange or the quotation of prices thereof on NASDAQ (NMS) or NASDAQ
(SMALLCAP) obtained to cover the Registrable Securities as may be necessary
for the Selling Holders to dispose thereof, which, for the avoidance of
doubt, shall be until the earlier of the sale of such Registerable
Securities or until the expiration of the Warrant, and shall from time to
time amend or supplement any prospectus used in connection therewith to the
extent necessary in order to comply with applicable law;
(h) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the Selling Holders to consummate the disposition of
such Registrable Securities; and
(i) enter into customary agreements (including, if requested, an
underwriting agreement in the customary form) and take such other actions
as are reasonably requested by the Selling Holders or the underwriters, if
any, in order to expedite or facilitate the disposition of such Registrable
Securities.
The period of distribution of Registrable Securities in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the period
of distribution of Registrable Securities in any other registration shall be
deemed to extend until the earlier of the sale of all Registerable Securities
covered thereby or the fulfillment of the Company's obligations under subsection
(g) of this Section 2.04.
In connection with each registration hereunder, each Selling Holder will
furnish promptly to the Company in writing such information with respect to
itself and the proposed distribution by it as shall be reasonably necessary in
order to ensure compliance with federal and applicable state securities laws.
In connection with each registration hereunder with respect to an
underwritten public offering, each Selling Holder agrees to enter into a written
agreement with the managing underwriter or underwriters selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between underwriters and
companies of the Company's size and investment stature, provided that such
agreement shall not contain any such provision applicable to the Selling Holders
that is inconsistent with the provisions hereof; and further provided, that the
time and place of the closing under said agreement shall be as mutually agreed
upon among the Company, the Selling Holders and such managing underwriter.
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Section 2.05 Expenses. (a) All expenses incident to the Company's
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performance or compliance with this Agreement, including without limitation, all
registration and filing fees, blue sky fees and expenses, printing expenses,
listing fees, fees and disbursements of counsel and independent public
accountants for the Company, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, and costs
of insurance and reasonable out-of-pocket expenses of the Selling Holders, but
excluding any Selling Expenses (as defined below), are herein called
"Registration Expenses." All underwriting, discounts and selling commissions
attributable to the sale of the Registrable Securities are herein called
"Selling Expenses."
(b) The Company will pay all Registration Expenses with each
registration statement filed pursuant to this Agreement, whether or not the
registration becomes effective, and the Selling Holders shall pay Selling
Expenses in connection with any Registrable Securities registered pursuant to
this Agreement.
Section 2.06 Indemnification. (a) In the event of a registration of any
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Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless each Selling Holder thereunder and each
underwriter of Registrable Securities thereunder and each Person, if any, who
controls such Selling Holder or underwriter within the meaning of the Securities
Act and the Exchange Act, against any losses, claims, damages or liabilities
(including reasonable attorneys' fees) ("Losses"), joint or several, to which
such Selling Holder or underwriter or controlling Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Losses
(or actions 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 Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such Selling Holder,
each such underwriter and each such controlling Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Loss or actions; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Selling Holder, such underwriter or such
controlling Person in writing specifically for use in such registration
statement or prospectus.
(b) Each Selling Holder agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and each Person, if any,
who controls the Company within the meaning of the Securities Act or of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Selling Holder, but only with respect to information with respect to such
Selling Holder furnished in writing by or on behalf of such Selling Holder
expressly
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for inclusion in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 2.06. 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 in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 2.06 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that, (i) if the indemnifying party has failed to assume the defense
and employ counsel or (ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified
party shall have concluded that there may be reasonable defenses available to
the indemnified party that are different from or additional to those available
to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
(d) If the indemnification provided for in this Section 2.06 is
available to the Company or the Selling Holders or is insufficient to hold them
harmless in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each such indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
expenses as between the Company on the one hand and each Selling Holder on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and of each Selling Holder on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and each Selling Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statements of a material fact or the omission or
alleged omission to state a material fact has ben made by, or relates to,
information supplied by such party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. 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 is not guilty of such fraudulent misrepresentation.
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Section 2.07 Senior Registration Rights. The Company shall not grant or
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permit to exist any registration rights to any other person which registration
rights are senior to the registration rights of any Holder of Registrable
Securities ("Senior Registration Rights"), unless either (i) the Company shall
first obtain the written consent of the Holders of a majority of the Registrable
Securities or (ii) each Holder of Registrable Securities is also granted Senior
Registration Rights.
ARTICLE III
MISCELLANEOUS
Section 3.01 Communications. All notices and other communications
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provided for or permitted hereunder shall be made in writing by registered or
certified first-class mail, return receipt requested, telex, telegram, telecopy,
courier service or personal delivery:
(i) if to a Holder of Registrable Securities, at the most current
address given by such Holder of the Company in accordance with the
provisions of this Section 3.01, which address initially is, with respect
to the Purchaser, the address set forth in the Facility Agreement, and
(ii) if to the Company, initially at its address set forth in the
Warrant and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 3.01.
All such notices and communications shall be deemed to have been duly given
at the time delivered by hand, if personally delivered; four days after mailed
by certified mail, return receipt requested, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next Business Day
if timely delivered to an air courier guaranteeing overnight delivery.
Section 3.02 Counterparts. This Agreement may be executed in any number
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of counterparts and by different parties hereto in separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
Section 3.03 Headings. The headings in this Agreement are for
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convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.04 Governing Law. The laws of the State of New York shall
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govern this Agreement without regard to principles of conflict of laws.
Section 3.05 Severability of Provisions. Any provision of this Agreement
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which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
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Section 3.06 Attorneys' Fees. In any action or proceeding brought to
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enforce any provision of this Agreement, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to its costs and expenses and
any other available remedy.
Section 3.07 Amendment. This Agreement may be amended only by means of a
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written amendment signed by the Company and by the Holders of a majority of the
Registrable Securities.
Section 3.08 Registrable Securities Held by the Company or Its
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Affiliates. In determining whether the Holders of the required amount of
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Registrable Securities have concurred in any direction, amendment, supplement,
waiver or consent, Registrable Securities owned by the Company or its Affiliates
shall be disregarded.
Section 3.09 Assignment. The rights of the Holder under this Agreement
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shall be assignable only to Affiliates. Any prohibited assignment or attempted
assignment shall be void.
Section 3.10 Arbitration.
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(a) Binding Arbitration. On the request of either Company or
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Purchaser (whether made before or after the institution of any legal
proceeding), any action, dispute, claim or controversy of any kind now existing
or hereafter arising between any of the parties hereto in any way arising out
of, pertaining to or in connection with this Agreement (a "Dispute") shall be
resolved by binding arbitration in accordance with the terms hereof. Either
Company or Purchaser may, by summary proceedings, bring an action in court to
compel arbitration of any Dispute.
(b) Governing Rules. Any arbitration shall be administered by the
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American Arbitration Association (the "AAA") in accordance with the terms of
this Section, the Commercial Arbitration Rules of the AAA, and, to the maximum
extent applicable, the Federal Arbitration Act. Judgment on any award rendered
by an arbitrator may be entered in any court having jurisdiction.
(c) Arbitrators. Arbitration hereunder shall be before a three-person
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panel of neutral arbitrators, consisting of one person from each of the
following categories: (1) an attorney who has practiced in the area of
commercial law for at least 10 years or a retired judge at the United States
District Court or an appellate court level; (2) a person with at least 10 years
experience in capital financing or investment banking; and (3) a person with at
least 10 years experience in the telecommunications industry. The AAA shall
submit a list of persons meeting the criteria outlined above for each category
of arbitrator, and the parties shall select one person from each category in the
manner established by the AAA. If the parties cannot agree on an arbitrator
within 30 days after the request for an arbitration, then any party may request
the AAA to select an arbitrator. The arbitrators may engage engineers,
accountants or other consultants that the arbitrator deems necessary to render a
conclusion in the arbitration proceeding.
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(d) Conduct of Arbitration. To the maximum extent practicable, an
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arbitration proceeding hereunder shall be concluded within 180 days of the
filing of the Dispute with the AAA. Arbitration proceedings shall be conducted
in New York, New York. Arbitrators shall be empowered to impose sanctions and
to take such other actions as the arbitrators deem necessary to the same extent
a judge could impose sanctions or take such other actions pursuant to the
Federal Rules of Civil Procedure and applicable law. At the conclusion of any
arbitration proceeding, the arbitrator shall make specific written findings of
fact and conclusions of law. The arbitrators shall have the power to award
recovery of all costs and fees to the prevailing party. The Company and
Purchaser each agrees to keep all Disputes and arbitration proceedings strictly
confidential except for disclosure of information required by applicable law.
(e) Costs of Arbitration. All fees of the arbitrators and any
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engineer, accountant or other consultant engaged by the arbitrators, shall be
paid by the Company and Purchaser equally unless otherwise awarded by the
arbitrators.
Section 3.11 Facsimiles. This Agreement may be executed by a facsimile
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signature, which shall have the same force and effect as a manually executed
signature.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TELEMONDE, INC.
ATTEST:
By: /s/ Xxxx Xxxxxx
Secretary
Title: President
COMMUNICATIONS COLLATERAL LIMITED
ATTEST:
By: /s/ Xxxxxx Xxxxx
Title: Attorney in Fact
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