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EXHIBIT 4.3
REDBACK NETWORKS INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE APRIL 1, 2007
REGISTRATION RIGHTS AGREEMENT
March 29, 2000
Xxxxxxx, Xxxxx & Co.
FleetBoston Xxxxxxxxx Xxxxxxxx, Inc.
Xxxx Xxxxxxxx Incorporated
Xxxxxx Brothers Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Redback Networks Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its 5% Convertible Subordinated
Notes due April 1, 2007 (the "Securities"). As an inducement to the Purchasers
to enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers
for the benefit of Holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following defined terms shall have the following meanings:
"Act" or "Securities Act" means the United States Securities Act of
1933, as amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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"Closing Date" means the First Time of Delivery as defined in the
Purchase Agreement.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" means the Company's common stock, par value $0.0001 per
share.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Holder" means, any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of March 29, 2000, between the
Company and State Street Bank and Trust Company of California, N.A., as amended
and supplemented from time to time in accordance with its terms.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Appendix A
hereto.
The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act) included in the
Shelf Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Shelf Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
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"Purchase Agreement" means the purchase agreement, dated as of March 23,
2000, between the Purchasers and the Company relating to the Securities.
"Purchasers" means the Purchasers named in Schedule I to the Purchase
Agreement.
"Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture in registered form and the shares
of Common Stock issuable upon conversion of such Securities; provided, however,
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.
"Restricted Security" means any Security or share of Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock which (i) has been effectively registered under the Securities Act and
sold in a manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), or (iii) has otherwise been
transferred and a new Security or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 3.5 of the Indenture.
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
(b) Wherever there is a reference in this Agreement to a percentage of
the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, Common Stock shall be treated as representing the
principal amount of Securities which was surrendered for conversion or exchange
in order to receive such number of shares of Common Stock.
2. Shelf Registration.
(a) The Company shall no later than 90 calendar days following the
Closing Date, file with the Commission a Shelf Registration Statement relating
to the offer and sale of the
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Registrable Securities by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement and, thereafter, shall use its reasonable efforts to
cause such Shelf Registration Statement to be declared effective under the Act
no later than 180 calendar days following the Closing Date; provided, however,
that no Holder shall be entitled to be named as a selling securityholder in the
Shelf Registration Statement or to use the Prospectus forming a part thereof for
resales of Registrable Securities unless such Holder is an Electing Holder.
(b) The Company shall use its reasonable efforts:
(i) To keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof to be
usable by Electing Holders, subject to Section 3(d)(v), until the
earliest of (1) the sale of all Registrable Securities registered under
the Shelf Registration Statement; (2) the expiration of the period
referred to in Rule 144(k) of the Act with respect to all Registrable
Securities held by Electing Holders that are not Affiliates of the
Company; and (3) two years from the date (the "Effective Date") the
Securities are issued (such period being referred to herein as the
"Effectiveness Period");
(ii) After the Effective Time of the Shelf Registration
Statement, promptly upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, to take any action
reasonably necessary to enable such Holder to use the Prospectus forming
a part thereof for resales of Registrable Securities, including, without
limitation, any action necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement; provided, however,
that nothing in this subparagraph shall relieve such Holder of the
obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a) hereof; and
(iii) If at any time the Securities, pursuant to Article XII of
the Indenture, are convertible into securities other than Common Stock,
the Company shall, or shall cause any successor under the Indenture to,
cause such securities to be included in the Shelf Registration Statement
no later than the date on which the Securities may then be convertible
into such securities.
(c) The Company may suspend the use of the Prospectus for a period not
to exceed 60 days in any 90-day period or an aggregate of 120 days in any 365
day period if the Board of Directors of the Company shall have determined in
good faith that because of valid business reasons (not including avoidance of
the Company's obligations hereunder), including the acquisition or divestiture
of assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.
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3 Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the time the
Company intends in good faith to have the Shelf Registration Statement
declared effective, the Company shall mail the Notice and Questionnaire
to the Holders of Registrable Securities. No Holder shall be entitled to
be named as a selling securityholder in the Shelf Registration Statement
as of the Effective Time, and no Holder shall be entitled to use the
Prospectus forming a part thereof for resales of Registrable Securities
at any time, unless such Holder has returned a completed and signed
Notice and Questionnaire to the Company by the deadline for response set
forth therein; provided, however, Holders of Registrable Securities
shall have at least 28 calendar days from the date on which the Notice
and Questionnaire is first mailed to such Holders to return a completed
and signed Notice and Questionnaire to the Company.
(ii) After the Effective Time of the Shelf Registration
Statement, the Company shall, upon the request of any Holder of
Registrable Securities that is not then an Electing Holder, promptly
send a Notice and Questionnaire to such Holder. The Company shall not be
required to take any action to name such Holder as a selling
securityholder in the Shelf Registration Statement or to enable such
Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Holder has returned a completed and
signed Notice and Questionnaire to the Company.
(iii) The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice
and Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.
(b) The Company shall (i) promptly furnish to each Electing Holder who
so requests in writing, prior to the Effective Time, a copy of the Shelf
Registration Statement initially filed with the Commission, and shall furnish to
such Holders who so request in writing, prior to the filing thereof with the
Commission, copies of each amendment thereto and each amendment or supplement,
if any, to the Prospectus included therein, and shall use its reasonable efforts
to reflect in each such document, at the Effective Time or when so filed with
the Commission, as the case may be, such comments as such Holders and their
respective counsel reasonably may propose as being legally necessary with
respect to the due diligence obligation of such Holders, and (ii) after the
Effective Time promptly incorporate in a prospectus supplement or post-effective
amendment such information as is required by the applicable Rules and
Regulations as such Electing Holder specifies in its Notice and Questionnaire
should be included therein relating to the terms of the sale of Registrable
Securities of such Electing Holder.
(c) The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statement and any amendment thereto and
the Prospectus forming part thereof and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii)
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each of the Shelf Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) each of the Prospectus forming
part of the Shelf Registration Statement, and any amendment or supplement to
such Prospectus, does not during the Effectiveness Period include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such Holder:
(i) when a Shelf Registration Statement has been filed with the
Commission and when a Shelf Registration Statement or any post-effective
amendment thereto has become effective, in each case making a public
announcement thereof by release made to Reuters Economic Services and
Bloomberg Business News;
(ii) of any request by the Commission after the Effective Time
for amendments or supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
(v) of the happening of any event or the existence of any state
of facts that requires the making of any changes in the Shelf
Registration Statement or the Prospectus included therein so that, as of
such date, such Shelf Registration Statement and Prospectus do not
contain an untrue statement of a material fact and do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to such Holders to suspend the
use of the Prospectus until the requisite changes have been made).
(e) The Company shall use its reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.
(f) The Company shall, during the Effectiveness Period, deliver to each
Electing Holder, without charge, as many copies of the Prospectus (including
each preliminary
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Prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as such Electing Holder may reasonably request in writing;
and the Company consents (except during a suspension period pursuant to Section
2(c) hereof or during the continuance of any event described in Section 3(d)(v)
above) to the use of the Prospectus and any amendment or supplement thereto by
each of the Electing Holders in connection with the offering and sale of the
Registrable Securities covered by the Prospectus and any amendment or supplement
thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or "blue sky" laws of such jurisdictions within
the United States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement, and (iii)
take any and all other actions necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities; provided, however, that in
no event shall the Company be obligated to (A) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(g) or (B) file any general consent
to service of process in any jurisdiction where it is not as of the date hereof
so subject.
(h) Upon the occurrence of any fact or event contemplated by paragraph
3(d)(v) above, the Company shall promptly prepare a post-effective amendment to
any Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
notifies the Electing Holders of the occurrence of any event contemplated by
paragraph 3(d)(v) above, the Electing Holder shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(i) The Company shall use its reasonable efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after (i) the effective date (as defined in Rule 158(c) under the
Securities Act) of the Shelf Registration Statement, (ii) the effective date of
each post-effective amendment to the Shelf Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration Statement,
an earnings statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
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(j) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall cause the Indenture to be qualified under the Trust
Indenture Act; in connection with such qualification, the Company shall
cooperate with the Trustee under the Indenture and the Holders (as defined in
the Indenture) to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and the Company shall execute, and shall use all reasonable
efforts to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner.
In the event that any such amendment or modification referred to in this Section
3(j) involves the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
(k) The Company shall make reasonably available for inspection by
Electing Holders and any attorney, accountant or other agent retained by such
Holders all relevant financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries, and (B) cause the Company's
officers, directors and employees to supply all information reasonably requested
by such Holders or any such attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case, as is customary for similar due
diligence examinations; provided, however, that all records, information and
documents that are designated in writing by the Company, in good faith, as
confidential shall be kept confidential by such Holders and any such attorney,
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such records, information or documents become
available to the public generally or through a third party without an
accompanying obligation of confidentiality and provided further that, if the
foregoing inspection and information gathering would otherwise disrupt the
Company's conduct of its business, such inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of the Electing
Holders and the other parties entitled thereto by one counsel designated by and
on behalf of Electing Holders and other parties; in the event that any Holder,
attorney, accountant or agent is required to disclose confidential information
of the Company by law or in a court proceeding, such Holder, attorney,
accountant or agent will provide the Company with notice of such disclosure
requirement and copies of the information to be disclosed, if possible, and will
cooperate with the Company, to the extent reasonably practicable, to limit such
disclosure;
(l) The Company will use its reasonable efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed for quotation on
the Nasdaq National Market or other stock exchange or trading system on which
the Common Stock primarily trades on or prior to the Effective Time of the Shelf
Registration Statement hereunder.
(m) The Company shall use its reasonable efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.
4. Registration Expenses. Except as otherwise provided in Section 3, the
Company shall bear all fees and expenses incurred in connection with the
performance of its
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obligations under Sections 2 and 3 hereof and shall bear or reimburse the
Electing Holders for the reasonable fees and disbursements of a single counsel,
if any, selected by Electing Holders who own at least a majority in aggregate
principal amount of the Registrable Securities covered by the Shelf Registration
Statement to act as counsel therefore in connection therewith. Each Electing
Holder shall pay all commissions and transfer taxes and other fees and expenses
incurred by such Holder (other than those expenses specifically provided for
above in this Section 4), if any, relating to the sale or disposition of such
Electing Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder, and each of its officers and directors
and each person who controls such Electing Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (each such person
being sometimes referred to as an "Indemnified Person") against any losses,
claims, damages or liabilities, joint or several, to which such Indemnified
Person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Shelf Registration Statement under which such
Registrable Securities are to be registered under the Securities Act, or any
Prospectus contained therein or furnished by the Company to any Indemnified
Person, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
(in the case of the Prospectus, in light of the circumstances under which they
were made), and the Company hereby agrees to reimburse such Indemnified Person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable to any such
Indemnified Person in any such case 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 made in such Shelf
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by such
Indemnified Person expressly for use therein.
(b) Indemnification by the Holders. Each Electing Holder agrees, as a
consequence of the inclusion of any of such Holder's Registrable Securities in
such Shelf Registration Statement, severally and not jointly, to (i) indemnify
and hold harmless the Company, its directors, officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company or such other persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Shelf Registration
Statement or Prospectus, or any amendment or supplement, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
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required to be stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus, in light of the circumstances under
which they were made), in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use therein, and (ii)
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel 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 of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. 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 (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the
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parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 5(d)
were determined by pro rata allocation (even if the Electing Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 5(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Electing Holders in this
Section 5(d) to contribute shall be several in proportion to the percentage of
principal amount of Registrable Securities registered or underwritten, as the
case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any Electing Holder be required to undertake liability to any person under
this Section 5 for any amounts in excess of the dollar amount of the proceeds
received by such Holder from the sale of such Holder's Registrable Securities
(after deducting any fees, discounts and commissions applicable thereto)
pursuant to any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act.
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
6. Liquidated Damages.
(a) If (i) on or prior to the 90th day following the Closing Date, a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the 180th day following the Closing Date, such Shelf Registration
Statement is not declared effective by the Commission (each, a "Registration
Default"), the Company shall be required to pay liquidated damages ("Liquidated
Damages"), from and including the day following such Registration Default until
such Shelf Registration Statement is either so filed or so filed and
subsequently declared effective, as applicable. Such Liquidated Damages shall be
paid semi-annually in arrears, with the first semi-annual payment due on the
first Interest Payment Date (as defined in the Indenture), following the date of
such Registration Default, at a rate per annum equal to an additional
one-quarter of one percent (0.25%) of the principal amount of Registrable
Securities, to and including the 90th day following such Registration Default
and one-half of one percent (0.5%) thereof from and after the 91st day following
such Registration Default.
(b) In the event that the Shelf Registration Statement ceases to be
effective (or the Holders of Registrable Securities are otherwise prevented or
restricted by the Company from
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effecting sales pursuant thereto) (an "Effective Failure") for more than 60
days, whether or not consecutive, in any 90-day period, or more than 120 days,
whether or not consecutive, during any 365 day period, then the Company shall
pay Liquidated Damages at a rate per annum equal to an additional one-half of
one percent (0.5%) from the first day that the 60 day or 120 day period is
exceeded, whichever occurs first, until the earlier of (i) the time the Shelf
Registration Statement again becomes effective or the Holders of Registrable
Securities are again able to make sales under the Shelf Registration Statement
or (2) the time the Effectiveness Period expires. For the purpose of determining
an Effective Failure, days on which the Company has been obligated to pay
Liquidated Damages in accordance with the foregoing in respect of a prior
Effective Failure within the applicable 90-day or 12-month period, as the case
may be, shall not be included.
(c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a) or (b) of this Section 6 shall be paid semi-annually in arrears, with the
first semi-annual payment due on the first Interest Payment Date (as defined in
the Indenture), as applicable, following the date of such Registration Default.
Such Liquidated Damages will accrue (1) in respect of the Securities at the
rates set forth in paragraphs (a) or (b) of this Section 6, as applicable, on
the principal amount of the Securities and (2) in respect of the Common Stock
issued upon conversion of the Securities, at the rates set forth in paragraphs
(a) or (b) of this Section 6, as applicable, applied to the Conversion Price (as
defined in the Indenture) at that time.
(d) Except as provided in Section 7(b) hereof, the Liquidated Damages as
set forth in this Section 6 shall be the exclusive monetary remedy available to
the Holders of Registrable Securities for such Registration Default or Effective
Failure.
7. Miscellaneous.
(a) Other Registration Rights. The Company may not grant registration
rights that would be inconsistent with the registration rights granted
hereunder.
(b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the Holders from time to time
may be irreparably harmed by any such failure, and accordingly agree that the
Purchasers and such Holders, in addition to any other remedy to which they may
be entitled at law or in equity and without limiting the remedies available to
the Electing Holders under Section 6 hereof, shall be entitled to compel
specific performance of the obligations of the Company under this Registration
Rights Agreement in accordance with the terms and conditions of this
Registration Rights Agreement, in any court of the United States or any State
thereof having jurisdiction.
(c) Entire Agreement; Amendments and Waivers. This Agreement and the
other writings referred to herein (including the Indenture and the form of
Securities) or delivered pursuant hereto which form a part hereof contain the
entire understanding of the parties with respect to its subject matter. This
Agreement, including this Section 7(c), may be amended, and waivers or consents
to departures from the provisions hereof may be given, only by a written
instrument duly executed by the Company and the holders of a majority in
aggregate
13
principal amount of Registrable Securities then outstanding. Each Holder of
Registrable Securities outstanding at the time of any such amendment, waiver or
consent or thereafter shall be bound by any amendment, waiver or consent
effected pursuant to this Section 7(c), whether or not any notice, writing or
marking indicating such amendment, waiver or consent appears on the Registrable
Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.
(e) Parties in Interest. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Holder, or
14
any controlling person of such Holder, and shall survive the transfer and
registration of the Registrable Securities of such Holder.
15
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
Redback Networks Inc.
By:
-------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxx Xxxxxxxx Incorporated
Xxxxxx Brothers Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
By:
---------------------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Purchasers
16
APPENDIX A
REDBACK NETWORKS INC.
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITYHOLDER QUESTIONNAIRE
(DATE)
Redback Networks Inc. (the "Company") has filed or intends shortly to
file with the United States Securities and Exchange Commission (the
"Commission") a preliminary registration statement on Form S-3 (the "Shelf
Registration Statement") for the registration and resale under the United States
Securities Act of 1933, as amended (the "Securities Act"), of the Company's 5%
Convertible Subordinated Notes due April 1, 2007 (CUSIP No. 000000XX0) (the
"Notes"), and common stock issuable upon conversion thereof, in accordance with
the terms of the Registration Rights Agreement, dated as of March 29, 2000 (the
"Registration Rights Agreement"), between the Company and the purchasers named
therein (the "Purchasers"). A copy of the Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [insert date that is 30 days
from the Notice Date] (the "Questionnaire Deadline"). Unless the Company
otherwise consents, beneficial owners of the Registrable Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i) will
not be named as selling securityholders in the Shelf Registration Statement (or
a supplement or amendment thereto) and related Prospectus and (ii) may not sell
their Registrable Securities pursuant thereto. Beneficial owners of Registrable
Securities not having returned a Notice and Questionnaire by the Questionnaire
Deadline may, however, receive another Notice and Questionnaire from the Company
upon request. Following its receipt of a completed and signed Notice and
Questionnaire in return, the Company will promptly include the Registrable
Securities covered thereby in the Shelf Registration Statement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration Rights
Agreement to mean all or any portion of the Notes issued under the Trust
Indenture and the common stock issuable upon conversion of such Notes, provided,
however, that a security ceases to be a Registrable Security when it is no
longer a Restricted Security.
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Note or common stock issuable upon conversion thereof
except any such Note or common stock which (i) has been registered pursuant to
an effective registration statement under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or (iii) has otherwise been transferred and a new
Note or share of common stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with the Indenture.
17
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3)
(unless otherwise specified under Item 3). The undersigned, by signing and
returning this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 attached to this Notice and Questionnaire and hereby
undertakes to do so.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
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QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
-----------------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Registrable Securities Listed in (3) Below:
-----------------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) Through Which Registrable Securities Listed in (3) Below
are Held:
-----------------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Telephone:
-------------------------------------------------------------
Fax:
-------------------------------------------------------------------
Contact:
---------------------------------------------------------------
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below, the undersigned Selling Securityholder does
not beneficially own any Notes or common stock previously issued upon
conversion, repurchase or redemption of any Note.
Principal amount of Notes beneficially owned:__________________________
Number of shares of common stock beneficially owned and issued to date
upon conversion, repurchase or redemption of Notes (if any):___________
___________________
Number of shares of common stock (if any) issued upon conversion,
repurchase or redemption of Registrable Securities which are to be
included in the Shelf Registration Statement:
-----------------------------------------------------------------------
(4) Other shares of common stock or other Notes of the Company owned by the
Selling Securityholder:
Except as set forth below, and under item (3) above, the undersigned
Selling Securityholder is not the beneficial or registered owner of any
shares of common stock or any other securities of the Company.
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19
State any exception here:
-----------------------------------------------------------------------
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, director or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
State any exceptions here:
------------------------------------------------------------------------
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be sold
from time to time directly by the undersigned Selling Securityholder or,
alternatively, through broker-dealers or agents. Such Registrable
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated prices. Such sales may
be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchanges or U.S.
inter-dealer quotation system of a registered national securities
association on which the Registrable Securities may be listed or quoted
at the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or otherwise, the
Selling Securityholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholders may also sell Registrable Securities
short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.
State any exceptions here:
------------------------------------------------------------------------
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and Exchange Act
and the respective rules and regulations thereunder, particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (6)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
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20
In accordance with the Selling Securityholder's obligation under the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing by hand delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
To the Company:
Redback Networks Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated:
--------------------------------------------------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable
Securities)
By:
----------------------------------------------------------------------
Name:
--------------------------------------------------------------------
Title:
-------------------------------------------------------------------
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR
RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:
Redback Networks Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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21
EXHIBIT 1
TO APPENDIX A
NOTICE TO TRANSFER PURSUANT TO REGISTRATION STATEMENT
Norwest Bank Minnesota, National Association
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Department
Redback Networks Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Re: 5% Convertible Subordinated Notes due April 1, 2007 (the
"Notes")
Dear Sirs:
Please be advised that has transferred $ aggregate principal amount of
the above-referenced Notes or shares of the Company's common stock, issued on
conversion, repurchase or redemption of Notes, pursuant to the Registration
Statement Form S-3 (File No. 333- ) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus dated or
in amendments or supplements thereto, and that the aggregate principal amount of
the Notes or number of common stock transferred are [a portion of] the Notes or
common stock listed in such Prospectus as amended or supplemented opposite such
owner's name.
Dated: Very truly yours,
--------------------
---------------------------------
(Name)
By:
------------------------------
(Authorized Signature)
A-5
