Exhibit 4
EXECUTION COPY
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SHAREHOLDERS AGREEMENT
among
AT&T LATIN AMERICA CORP.,
ATTLA HOLDING CORP.,
XXXXXXXX XXXXX XXXXXXX,
XXXXXXXXX XXXXXXX XXXXX,
XXXXXX XXXXXXX XXXXXX xx XXXXXXX
and
AT&T CORP.
dated
June 30, 2000
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................1
1.1 Definitions......................................................1
ARTICLE II RESTRICTIONS ON TRANSFER.........................................5
2.1 General..........................................................5
2.2 Legend on Share Certificates.....................................6
2.3 Improper Transfer................................................6
ARTICLE III TAG ALONG RIGHT; RIGHT OF FIRST REFUSAL; PUT RIGHTS..............7
3.1 Kevtech Shareholders Tag Along Right.............................7
3.2 Controlling Shareholder First Refusal Right......................8
3.3 Change of Control Put Right.....................................10
3.4 Keytech Shareholder Put Right...................................11
3.5 Termination of Article III Provisions...........................12
ARTICLE IV REGISTRATION RIGHTS.............................................12
4.1 Definitions.....................................................12
4.2 Securities Subject to this Agreement............................14
4.3 Piggy-Back Registration Rights..................................14
4.4 Demand Registration Rights......................................16
4.5 Selection of Underwriters.......................................17
4.6 Blackout Periods; Holdback......................................17
4.7 Registration Procedures.........................................18
4.8 Registration Expenses...........................................22
4.9 Reports under the Exchange Act..................................22
4.10 Indemnification; Contribution...................................22
4.11 Participation in Underwritten Offerings.........................25
4.12 Mergers, etc....................................................25
4.13 Assignment of Registration Rights...............................26
4.14 No Inconsistent Agreements......................................26
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................26
5.1 Presentations and Warranties....................................26
5.2 No Other Shareholders Agreements................................27
ARTICLE VI CERTAIN COVENANTS...............................................27
6.1 Other Shareholders Agreements...................................27
6.2 Access to Financial Information.................................27
6.3 AT&T Consultation with Keytech Shareholders.....................27
6.4 Termination of Article VI Provisions............................27
ARTICLE VII MISCELLANEOUS...................................................27
7.1 Further Assurances..............................................28
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7.2 Confidentiality.................................................28
7.3 Entire Agreement................................................28
7.4 Binding Effect; Benefit.........................................28
7.5 Assignability...................................................29
7.6 Amendment; Waiver...............................................29
7.7 Effect of Share Ownership.......................................29
7.8 Notices.........................................................29
7.9 Headings........................................................31
7.10 Counterparts....................................................31
7.11 Governing Law...................................................31
7.12 Consent to Jurisdiction.........................................32
7.13 Termination.....................................................32
7.14 Specific Performance............................................32
7.15 Severability....................................................33
ii
THIS SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of June 30,
2000, is among AT&T LATIN AMERICA CORP., a corporation organized under the
laws of Delaware (the "Company"), ATTLA Holding Corp., a corporation organized
under the laws of Delaware (formerly known as BENTIS, Inc.) ("AT&T
Shareholder"), Xxxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx Xxxxxxx Xxxxx and Xxxxxx
Xxxxxxx Xxxxxx xx Xxxxxxx (together with their Permitted Transferees, the
"Keytech Shareholders"), and solely for purposes of Section 3.3, 3.4 and 6.3,
AT&T CORP., a corporation organized under the laws of New York ("AT&T")
(certain capitalized terms to have the respective meanings specified therefor
in Sections 1.1 and 4.1):
W I T N E S S E T H:
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of February
23, 2000 (the "Stock Purchase Agreement") by and between the Company and the
Keytech Shareholders, the Keytech Shareholders have agreed to sell all of the
issued and outstanding shares of common stock of Keytech LD, S.A., an
Argentine corporation, and receive a purchase price that includes shares of
Class A Common Stock of the Common Stock of the Company (the "Class A Common
Stock");
WHEREAS, after the closing under the Stock Purchase Agreement (the
"Closing"), the Keytech Shareholders will own shares of Class A Common Stock
and AT&T will indirectly own shares of Class B Common Stock of the Company
(the "Class B Common Stock" and together with the Class A Common Stock, the
"Common Stock");
WHEREAS, the execution of this Agreement is a condition to the
consummation of the transactions contemplated by the Stock Purchase Agreement;
and
WHEREAS, the Company, AT&T Shareholder and the Keytech Shareholders
desire to enter into this Agreement to govern certain of their rights, duties
and obligations with respect to the Company and the shares of Common Stock
owned by them;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the sufficiency of which is hereby
acknowledged, intending to be legally bound, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. (a) The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, at any time, any other
Person that, alone or together with any other Person, directly or indirectly
controls, or is controlled by, or is under common control with such Person,
provided that no shareholder of the Company shall be deemed an Affiliate of
any other shareholder solely by reason of any investment in the Company. For
purposes of this definition, the term "control" (including with correlative
meanings, "controlling" "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Asset Purchaser" has the meaning set forth in Section 3.3(a).
"AT&T Group" means AT&T and each wholly owned direct or indirect
subsidiary of AT&T.
"AT&T Merger" means the merger under the Agreement and Plan of Merger,
among AT&T, the Company, Frantis, Inc. and FirstCom Corporation, dated
November 1, 1999.
"Beneficial ownership" and "beneficially own" have the meanings set
forth in Rule 13d-3 under the Exchange Act as in effect on the date hereof.
"BT" means British Telecommunications plc or any Affiliate thereof.
"Business Day" in the case of determining a date on which any payment is
due, means a date other than Saturday, Sunday or any day on which banks
located in the City of New York are authorized or obligated by law to close,
and for purposes of Article IV other than for determining a date on which any
payment is due, a day on which the principal offices of the SEC in Washington,
D. C. are open to accept filings.
"Change of Control" has the meaning set forth in Section 3.3(a).
"Change of Control Put Right" has the meaning set forth in Section
3.3(a).
"Class A Common Stock" has the meaning set forth in the Recitals to this
Agreement.
"Class B Common Stock" has the meaning set forth in the Recitals to this
Agreement.
"Closing Date" has the meaning set forth in the Stock Purchase
Agreement.
"Closing Shares" means the Shares received by the Keytech Shareholders
on the Closing Date, and Shares subsequently released to the Keytech
Shareholders by the Escrow Agent pursuant to the Escrow Agreement. Shares held
in escrow pursuant to the Escrow Agreement are not Closing Shares for the
purposes of this Agreement.
"Common Stock" has the meaning set forth in the Recitals to this
Agreement.
"Confidential Information" has the meaning set forth in Section 7.2(b).
"Controlling Group" has the meaning set forth in Section 3.3(a).
"Controlling Shareholders" means AT&T Shareholder and its Permitted
Transferees that hold Shares and "Controlling Shareholder" means each such
Person.
"Controlling Shareholders First Refusal Rights" has the meaning set
forth in Section 3.2(b).
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"Dollars" or "$" means United States dollars.
"Escrow Agreement" means the Escrow Agreement among the Company, the
Keytech Shareholders and Citicorp, as Escrow Agent, dated___ 2000.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, and any successor act and the rules and regulations thereunder or
under any successor act.
"Governmental Authority" means any national or local government,
governmental, regulatory or administrative authority, agency or commission or
any court, tribunal or judicial body of the United States, Argentina or any
other country which has jurisdiction over the Company or any of its
Subsidiaries.
"Keytech Put Price" means a price per Share of $21.21 as adjusted for
any stock split, stock dividend, combination or consolidation, or other
recapitalization of the Company or similar transaction, plus interest accrued
thereon at the LIBOR Rate from and after the Closing Date through and
including the date on which AT&T pays the put price pursuant to Section 3.4
compounded annually.
"Keytech Shareholders Put Right" has the meaning set forth in Section
3.4(a).
"Keytech Shareholders Put Termination Date" has the meaning set forth in
Section 3.4(a).
"LIBOR Rate" means the rate per annum determined on the basis of the
offered rates for a $25,000,000 deposit for a period of 12 months which appear
on the Reuters Screen LIBO page as of 11:00 a.m. (London time) on the Closing
Date (provided that, if at least two such offered rates appear on the Reuters
Screen LIBO Page on the Closing Date or any anniversary thereof, the rate will
be the arithmetic mean of such offered rates). For purposes of this
definition, "Reuters Screen LIBO Page" means the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks).
"Lien" means any mortgage, pledge, deed of trust, hypothecation, right
of others, claim, security interest, encumbrance, burden, title defeat, title
retention agreement, lease, sublease, license, occupancy agreement, easement,
covenant, condition, encroachment, voting trust agreement, interest, option,
right of first offer, negotiation or refusal, proxy, lien, charge or other
restrictions or limitations of any nature whatsoever, including, but not
limited to, such Liens as may arise under any contract, agreement, instrument,
obligation, arrangement or understanding, written or oral.
"Notice Period" has the meaning set forth in Section 3.1(b).
"Offered Shares" has the meaning set forth in Section 3.1(a).
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"Permitted Transferee" means:
(i) with respect to any Transfer of Shares by a Keytech Shareholder,
(a) any partnership, corporation, limited liability company, trust or
other entity which is controlled by any Keytech Shareholder, (b) any
other Keytech Shareholder, (c)(x) the spouse or children of any Keytech
Shareholder, (y) one or more of any Keytech Shareholder's lineal
descendants and (z) any trust of which any Keytech Shareholder is the
sole trustee or is a trustee together solely with his or her spouse or
children or one or more of his or her lineal descendants and the
beneficiaries of which are his or her spouse or children or one or more
of his or her lineal descendants; or
(ii) with respect to any Transfer of Shares by AT&T Shareholder or
another Controlling Shareholder, any Affiliate of AT&T Shareholder;
provided, that each Permitted Transferee shall have agreed in writing to be
bound by this Agreement and to become a Shareholder for purposes of this
Agreement.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Proposed Transferee" has the meaning set forth in Section 3.1(a).
"Pro Rata Portion" has the meaning set forth in Section 3.1(b).
"Public Market Date" means the date on which the Company consummates an
underwritten primary public offering of the Class A Common Stock pursuant to
an effective registration statement under the Securities Act, provided that
such registered Shares are listed for trading on the New York Stock Exchange,
Inc., the Nasdaq National Market, or any successor thereto.
"Region" means Antigua and Barbuda, Argentina, Bahamas, Barbados,
Bolivia, Brazil, Chile, Colombia, Dominica, Dominican Republic, Ecuador,
Grenada, Guyana, Haiti, Jamaica, Panama, Paraguay, Peru, Saint Lucia, Saint
Xxxxxxx and the Grenadines, Suriname, St. Kitts and Nevis, Trinidad and Tobago
and Uruguay.
"Representatives" has the meaning set forth in Section 7.2(b).
"SEC" means the United States Securities and Exchange Commission.
"Sale Offer" has the meaning act forth in Section 3.1(a).
"Securities Act" means the United States Securities Act of 1933, as
amended, and any successor act and the rules and regulations thereunder or
under any successor act.
"Shareholder" means each holder of Shares who is a party to this
Agreement, whether on or after the date hereof.
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"Shares" means shares of Common Stock. With respect to the Keytech
Shareholders, "Shares" means only (i) Closing Shares and (ii) any Shares of
Common Stock paid, issued, or distributed in respect of Closing Shares
referred to in clause (i) by way of stock dividend or distribution or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or otherwise.
"Stock Purchase Agreement" has the meaning set forth in the Recitals to
this Agreement.
"Strategic Investor" means BT or another major international
telecommunications company with which AT&T or the Company determines to have a
major joint venture or strategic alliance.
"Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect at least a majority of the
board of directors, managers or trustees or other persons performing similar
functions are at the time directly or indirectly owned by the Company.
"Tag Along Right" has the meaning set forth in Section 3. 1 (b).
"Transfer" means any direct or indirect sale, assignment, transfer,
grant of a participation or other interest in, pledge or other dispositions of
Shares, provided that a Transfer does not include a release of Shares from
escrow to the Company in accordance with the Escrow Agreement.
"Transfer Consideration" has the meaning sat forth is Section 3.1(a).
"Transferring Controlling Shareholder" has the meaning set forth in
Section 3.1(a).
"Transferring Keytech Shareholder" has the meaning set forth in Section
3.2(a).
"Voting Securities" means the Common Stock and any other securities
(including voting preferred stock) issued by the Company which are entitled to
vote generally for the election of directors of the Company, whether currently
outstanding or hereafter issued (other than securities having such powers only
upon the occurrence of a contingency).
ARTICLE II
RESTRICTIONS ON TRANSFER
2.1 General. (a) A Controlling Shareholder may Transfer any of its
Shares only if the Keytech Shareholders are offered the Tag Along Right in
respect of such Transfer in accordance with the provisions of Section 3.1(a)
through (e), unless such Transfer is of the type referred to in Section
3.1(f).
(b) Until the Public Market Date has occurred, a Keytech Shareholder may
Transfer any of his or her Shares only if the Controlling Shareholders are
offered the Controlling Shareholder First Refusal Right in respect of such
Transfer in accordance with the provisions of Section 3.2(a) through (e),
unless such Transfer is of the type referred to in Section 3.2(f);
5
provided, however, that on or before the first anniversary of the Closing
Date, the Keytech Shareholders may only Transfer Shares to a Permitted
Transferee or pursuant to Sections 3.1, 3.2(f)(vi) or 3.3.
(c) Except to the extent provided in Section 4.13 and Section 7.5, only
transferees of Shares that are Permitted Transferees shall become bound by,
and entitled to rights under, this Agreement and to become Shareholders for
purposes of this Agreement.
(d) No Shareholder may Transfer any of its Shares at any time except in
compliance with all applicable securities laws of the United States and other
jurisdictions, the terms of all licenses, permits and authorizations then held
by the Company or its Subsidiaries, and any requirements for the prior
approval of any Governmental Authority that may be required under such
applicable laws, licenses or authorizations.
2.2 Legend on Share Certificates. (a) In addition to any other legend
that may be required, each certificate for Shares shall bear a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT")
OR UNDER ANY STATE SECURITIES LAWS AND SHALL NOT BE TRANSFERRED,
SOLD, ASSIGNED OR HYPOTHECATED UNTIL EITHER (I) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER THE
1933 ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) THE COMPANY
RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO
THE HOLDER OF SUCH SHARES, WHICH OPINION IS SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH SHARES MAY BE SOLD, ASSIGNED OR
HYPOTHECATED WITHOUT REGISTRATION UNDER THE 1933 ACT OR APPLICABLE
STATE SECURITIES LAWS.
THESE SHARES MAY BE SUBJECT TO FURTHER RESTRICTIONS ON TRANSFER
PURSUANT TO THE SHAREHOLDERS' AGREEMENT DATED [THE CLOSING DATE],
A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICES OF THE
COMPANY.
(b) If any Shares shall cease to be subject to the restrictions referred
to in the first sentence of the legend required by Section 2.2(a), the Company
shall, upon the written request of the holder thereof and the receipt of any
appropriate legal opinions, issue to such holder a new certificate evidencing
such Shares without the first sentence of the legend required by section
2.2(a) endorsed thereon. If any Shares cease to be subject to any restrictions
on transfer set forth in this Agreement, the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate
evidencing such Shares without the second sentence of the legend required by
Section 2.2(a) endorsed thereon.
2.3 Improper Transfer. Any attempt to Transfer any Shares not in
compliance with this Agreement shall be null and void, and neither the Company
nor any transfer agent for the Shares shall give any effect in the Company's
stock records to such attempted Transfer.
6
ARTICLE III
TAG ALONG RIGHT; RIGHT OF FIRST REFUSAL; PUT RIGHTS
3.1 Keytech Shareholders Tag Along Right. (a) If any Controlling
Shareholder (the "Transferring Controlling Shareholder") wishes to Transfer
all or part of its Shares to any Person other than as provided in paragraph
(f) of this Section 3.1, the Transferring Controlling Shareholder shall, prior
to consummating any such Transfer, give a written notice (a "Sale Offer") to
the Keytech Shareholders. The Sale Offer shall set forth (i) the number of
Shares proposed to be transferred (the "Offered Shares"), (ii) the name and
address of the proposed transferee of the Offered Shares (the "Proposed
Transferee"), (iii) the proposed price, payment terms (including form of
consideration (the "Transfer Consideration")) and other material terms and
conditions of the proposed Transfer and, if in existence, a copy of the
Proposed Transferee's offer and (iv) an offer to include the Closing Shares
held by the Keytech Shareholders in the proposed Transfer by the Transferring
Controlling Shareholder as provided herein. If the Transfer Consideration
specified in the Sale Offer includes any property other than cash, such
Transfer Consideration shall be deemed to be the amount of any cash included
in the Transfer Consideration plus the value (as jointly determined by a
nationally recognized investment banking firm selected by the Transferring
Controlling Shareholder and a nationally recognized investment banking firm
selected by the Keytech Shareholders) of such other property included in such
Transfer Consideration. For this purpose, the Transferring Controlling
Shareholder and the Keytech Shareholders shall use their reasonable best
efforts to cause any determination of the value of any such other property
included in the Transfer Consideration to be made within 15 days after the
date of delivery of the Sale Offer. If the investment banking firms selected
by such parties are unable to agree upon the value of any such other property
within such 15-day period, such firms shall promptly select a third nationally
recognized investment banking firm whose determination as to such value shall
be conclusive.
(b) The Keytech Shareholders shall have a period of 30 days after their
receipt of the Sale Offer (the "Notice Period") to give written notice to the
Transferring Controlling Shareholder of exercise of their right to include in
the proposed Transfer Closing Shares held by the Keytech Shareholders (the
"Tag Along Right"). The Keytech Shareholders shall be entitled to include in
the proposed Transfer up to the Pro Rata Portion of the Closing Shares of
Keytech Shareholders; provided that, if as a result of the proposed Transfer,
the Keytech Shareholders would hold fewer than 100,000 Shares, then the
Keytech Shareholders shall be entitled to include in the proposed Transfer all
of their Shares. The "Pro Rata Portion" of Shares held by the Keytech
Shareholders shall be equal to the product of (x) the total number of Closing
Shares then owned by the Keytech Shareholders as a group and (y) a fraction,
the denominator of which shall be the total number of Shares then owned by the
Transferring Controlling Shareholder, and the numerator of which shall be the
number of Offered Shares. The Closing Shares to be transferred pursuant to
exercise of the Tag Along Right shall be allocated among the exercising
Keytech Shareholders on a pro rata basis based on the relative number of
Closing Shares owned by each such Keytech Shareholders.
(c) In the event the Keytech Shareholders shall have notified the
Transferring Controlling Shareholder within the Notice Period that they wish
to exercise the Tag Along Right, the Transferring Controlling Shareholder
shall have 60 days from the last day of the Notice
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Period or, if the prior approval by any Governmental Authority shall be
required for the Transfer of the Offered Shares, 30 days from the date of such
approval, in which to Transfer the Offered Shares at a price not lower than
that contained in the Sale Offer and on terms and conditions not more
favorable than those contained in the Sale Offer, provided that in the event
of any such Transfer, the Transferring Controlling Shareholder shall (i)
Transfer the Offered Shares to the Proposed Transferee identified in the Sale
Offer and (ii) include any such Transfer, upon the same terms and conditions
as the Offered Shares, the number of Shares held by the Keytech Shareholders
indicated in their notice to the Transferring Controlling Shareholder in
accordance with the terms herein. No Keytech Shareholder shall be required to
make any representation or warranty in connection with the proposed Transfer
other than representations comparable to those contained in Sections 3.1, 3.2
and 3.3 of the Stock Purchase Agreement.
(d) If within the Notice Period the Keytech Shareholders have not given
written notice to the Transferring Controlling Shareholder of their decision
to exercise the Tag Along Right, the Transferring Controlling Shareholder
shall have 60 days from the last day of the Notice Period or, if the prior
approval by any Governmental Authority shall be required for the Transfer of
the Offered Shares, 30 days from the date of such approval, in which to
Transfer the Offered Shares at a price not lower than that contained in the
Sale Offer and on terms and conditions not more favorable than those contained
in the Sale Offer. The Transferring Controlling Shareholder shall Transfer the
Offered Shares solely to such Proposed Transferee or its Affiliates.
(e) If at the end of the applicable period provided for in Section
3.1(c) or 3.1(d), the Transferring Controlling Shareholder has not completed
the Transfer of the Offered Shares or, if the prior approval by any
Governmental Authority shall be required for the Transfer of the Offered
Shares, the Transferring Shareholder shall not have filed or caused to be
filed with such Governmental Authority a request for any such approval within
15 days from the last day of the Notice Period, the Transferring Controlling
Shareholder may not Transfer the Offered Shares without again complying with
this Section 3.1.
(f) A Controlling Shareholder may Transfer any of its Shares as set
forth below, without complying with the provisions of paragraphs (a) through
(e) of this Section 3.1:
(i) to a Permitted Transferee;
(ii) to BT in connection with a strategic investment by BT is the
Company;
(iii) pursuant to a bona fide public offering registered under the
Securities Act; and
(iv) to the Company.
3.2 Controlling Shareholder First Refusal Right. (a) If any Keytech
Shareholder (the "Transferring Keytech Shareholder") wishes to Transfer al1 or
part of its Shares other than as provided in paragraph (f) of this Section
3.2, the Transferring Keytech Shareholder shall, prior to consummating any
such Transfer, give a Sale Offer to the Controlling Shareholders. The Sale
Offer shall set forth (i) the number of Offered Shares, (ii) the name and
address of the Proposed Transferee, if any, (iii) the proposed price, payment
terms (including the Transfer Consideration) and other material terms and
conditions of the proposed Transfer and, if in existence, a copy of the
Proposed Transferee's offer and (iv) an offer to sell to the Controlling
Shareholders the
8
Offered Shares at the same price and on the same terms and conditions as those
set forth in the Sale Offer. If the Transfer Consideration specified in the
Sale Offer includes any property other than cash, such Transfer Consideration
shall be deemed to be the amount of any cash included in the Transfer
Consideration plus the value (as jointly determined by a nationally recognized
investment banking firm selected by the Transferring Keytech Shareholder and a
nationally recognized investment banking firm selected by the Controlling
Shareholders) of such other property included in such Transfer Consideration.
For this purpose, the Transferring Keytech Shareholder and the Controlling
Shareholders shall use their reasonable best efforts to cause any
determination of the value of any such other property included in the Transfer
Consideration to be made within 15 days after the date of delivery of the Sale
Offer. If the investment banking firms selected by such parties are unable to
agree upon the value of any such other property within such 15-day period,
such firms shall promptly select a third nationally recognized investment
banking firm whose determination as to such value shall be conclusive.
(b) The Controlling Shareholders shall have the right, during the Notice
Period, to give written notice to the Transferring Keytech Shareholder of
exercise of their right to purchase the Offering Shares in whole but not in
part on the terms and conditions set forth in the Sale Offer (the "Controlling
Shareholder First Refusal Right"). The Shares to be purchased pursuant to
exercise of the Controlling Shareholder First Refusal Right shall be allocated
among the exercising Controlling Shareholders as specified by them in the
written notice given pursuant to this Section 3.2(b).
(c) In the event the Controlling Shareholders shall have notified the
Transferring Keytech Shareholder within the Notice Period that they wish to
exercise the Controlling Shareholder First Refusal Right, the Controlling
Shareholders shall have 60 days from the last day of the Notice Period to
complete their purchase of the Offered Shares. In the event the Controlling
Shareholders shall not have completed such purchase within such 60-day period,
or, if the prior approval of any Governmental Authority shall be required for
the sale of the Offered Shares to the Controlling Shareholders, they shall not
have filed or caused to be filed a request for such approval within 15 days of
the last day of the Notice Period or shall not have completed the purchase of
the Offered Shares pursuant to an approval by such Governmental Authority
within 30 days of the date of such approval, in any such case other than as a
result of actions or omission by any Keytech Shareholder, the Transferring
Keytech Shareholder shall have the right to Transfer its Shares not subject to
any of the restrictions set forth in this Section 3.2.
(d) If within the Notice Period the Controlling Shareholders have not
given written notice to the Transferring Keytech Shareholder of their decision
to exercise the Controlling Shareholder First Refusal Right, the Transferring
Keytech Shareholder shall have 60 days from the last day of the Notice Period
or, if the prior approval by any Governmental Authority shall be required for
the Transfer of the Offered Shares, 30 days from the date of such approval, in
which to Transfer the Offered Shares at a price not lower than that contained
in the Sale Offer and on terms and conditions not more favorable than those
contained in the Sale Offer. If a Proposed Transferee is identified in the
Sale Offer, the Transferring Keytech Shareholder shall Transfer the Offered
Shares solely to such Proposed Transferee.
(e) If at the end of the applicable period provided for in Section
3.2(c) or 3.2(d), the Transferring Keytech Shareholder has not completed the
Transfer of the Offered Shares or, if the
9
prior approval by any Governmental Authority shall be required for the
Transfer of the Offered Shares, the Transferring Keytech Shareholder shall not
have filed or caused to be filed with such Governmental Authority a request
for any such approval within 15 days from the last day of the Notice Period,
the Transferring Keytech Shareholder may not Transfer the Offered Shares
without again complying with this Section 3.2.
(f) A Keytech Shareholder may Transfer any of its Shares as set forth
below without complying with the provisions of paragraphs (a) through (e) of
this Section 3.2:
(i) to a Permitted Transferee, provided that, until the Public
Market Date, there shall not be more than ten Keytech Shareholders at any
one time;
(ii) pursuant to Section 3.1, 3.3 or 3.4;
(iii) to the Company;
(iv) pursuant to Section 4.3 or 4.4;
(v) pursuant to Rule 144 under the Securities Act;
(vi) pursuant to a bona fide pledge of the Shares as security for
indebtedness for borrowed money of any Keytech Shareholder;
(vii) pursuant to a merger or consolidation of the Company or a
plan of liquidation of the Company if such merger, consolidation or
liquidation has been approved by the affirmative vote of a majority of
the members of the Board of Directors of the Company then in office; and
(viii) pursuant to a tender offer or exchange offer that the Board
of Directors of the Company, by action taken by the affirmative vote of a
majority of the directors then in office, has approved or determined not
to oppose.
3.3 Change of Control Put Right. (a) If the Controlling Shareholder
shall, through one or more transactions with one or more Persons, directly or
indirectly, transfer, or cease to hold, control of the Company as defined
herein or all or substantially all of the assets of the Company shall be
transferred through one or more transactions to a Person (the "Asset
Purchaser") that is not, directly or indirectly, controlled by the Company as
defined herein (a "Change of Control"), each Keytech Shareholder shall have
the right, subject to this Section 3.3 (the "Change of Control Put Right"), to
cause AT&T to purchase or cause its designee to purchase, and upon exercise by
such Keytech Shareholder of the Change of Control Put Right, AT&T shall
purchase or cause its designee to purchase, all of the Shares then held by
such Keytech Shareholder and specified in Section 3.3(e) at a price per Share
to be determined in accordance with Section 3.3(c). For purposes of this
Section 3.3, the Controlling Shareholder shall be deemed to control the
Company so long as (i) the Controlling Shareholders and BT as a group (the
"Controlling Group") beneficially own at least a majority of the
then-outstanding Voting Securities and (ii) no Person or Persons other than
the members of the Controlling Group shall have the right to (a) elect a
majority of the Board of Directors of the Company, or (b) contractually or
otherwise, directly or indirectly, to direct or cause the direction of the
10
management and policies of the Company; provided that the Controlling Group
beneficially owns at least 25% of the then-outstanding Voting Securities. The
Company shall notify the Keytech Shareholders of the existence of a Change of
Control not later than the third Business Day after the occurrence of a Change
of Control. Such notice shall set forth the relevant price, payment terms and
other materiel terms and conditions of the Transfer constituting the Change of
Control.
(b) If a Keytech Shareholder elects to exercise the Change of Control
Put Right, such Keytech Shareholder shall provide AT&T and the Company with
written notice of such exercise at any time within 30 days after the date of
such Keytech Shareholder's receipt of notice of occurrence of the Change of
Control pursuant to Section 3.3(a). Such Keytech Shareholder shall state is
such notice its exercise of the Change of Control Put Right and the number of
Shares owned by it.
(c) The price per Share at which the Shares held by a Keytech
Shareholder may be put pursuant to this Section 3.3 shall be equal, at the
option of such Keytech Shareholder, to (x) the price specified in Section
3.4(b) payable upon exercise of the Keytech Shareholders Put Right or (y) the
price per Share at which the Transfer that constitutes a Change of Control is
consummated (including, for purposes of this calculation, all forms of
consideration received by the Controlling Group in connection therewith). AT&T
shall pay or cause to be paid to such Keytech Shareholder the put price in
immediately available funds in Dollars if the price specified in clause (x) of
this subparagraph (c) is selected by the Keytech Shareholders and in the same
form or forms as the consideration received by the Controlling Group if the
price specified is clause (y) is selected by the Keytech Shareholders, against
delivery of the Shares held by such Keytech Shareholder to AT&T or its
designee free and clear of any Lien, not later than 30 days after such Keytech
Shareholder provides written notice of exercise of its Change of Control Put
Right in accordance with Section 3.3(b) (and, if such 30th day is not a
Business Day, not later than the next preceding Business Day).
(d) The Change of Control Put Right with respect to a Keytech
Shareholder shall terminate upon the expiration of the notice period provided
for in Section 3.3(b) without exercise by such Keytech Shareholder of the
Change of Control Put Right.
(e) The only Shares which may be put pursuant to this Section 3.3 are
the Closing Shares and any Shares paid, issued or distributed in respect of
any Closing Shares by way of stock dividend or distribution or stock split or
in connection with a combination of Shares, recapitalization, reorganization,
merger, consolidation or otherwise.
3.4 Keytech Shareholder Put Right. (a) if the AT&T Merger shall not have
occurred by the first anniversary of the Closing Date, each Keytech
Shareholder shall have the right, subject to this Section 3.4 (the "Keytech
Shareholders Put Right"), to cause AT&T to purchase or cause its designee to
purchase, and upon exercise by such Keytech Shareholder of the Keytech
Shareholders Put Right, AT&T shall purchase or cause its designee to purchase,
the portion of the Shares then held by such Keytech Shareholder and specified
in Section 3.4(d) which is designated by such Keytech Shareholder in the
notice of exercise at the price per Share provided in Section 3.4(b). To
exercise the Keytech Shareholders Put Right, he or she must provide AT&T and
the Company with written notice of such exercise on any date during the period
11
beginning on the first anniversary of the Closing Date and ending 90 days
thereafter (the "Keytech Shareholders Put Termination Date").
(b) The price per Share payable by AT&T or its designee to a Keytech
Shareholder upon exercise by such Keytech Shareholder of its Keytech
Shareholders Put Right shall be the Keytech Put Price. AT&T shall pay or cause
to be paid to an exercising Keytech Shareholder such put price in immediately
available funds in Dollars, against delivery of the Shares held by such
Keytech Shareholder to AT&T or its designee free and clear of any Lien, not
later than 34 days after the date the Keytech Shareholder provides written
notice of exercise of its Keytech Shareholders Put Right in accordance with
Section 3.4(a) (and, if such 30th day is not a Business Day, not later than
the next preceding Business Day).
(c) Except to the extent a Keytech Shareholder has provided prior
written notice of exercise of its Keytech Put Right, the Keytech Shareholders
Put Right shall terminate on the Keytech Shareholders Put Termination Date.
(d) The only Shares which may be put pursuant to this Section 3.4 are
the Closing Shares and any Shares paid, issued or distributed in respect of
any Closing Shares by way of stock dividend or distribution or stock split or
in connection with a combination of Shares, recapitalization, reorganization,
merger, consolidation or otherwise.
(e) After the Keytech Shareholders Put Termination Date, the Keytech
Shareholders shall have the right to cause AT&T to purchase or cause its
designee to purchase, and upon exercise by the Keytech Shareholders of such
right, AT&T shall purchase or cause its designee to purchase, at the Keytech
Put Price, Shares (the "Released Shares") released from the Escrow Account to
the Keytech Shareholders under the Escrow Agreement, if (a) the Keytech
Shareholders exercised the Keytech Put Right with respect to the Closing
Shares in accordance with this Section prior to the Keytech Shareholders Put
Termination Date, (b) as of the date the Released Shares are released from the
Escrow Account neither the AT&T Merger nor the Public Market Date shall have
yet occurred, and (c) the Keytech Shareholders shall have provided AT&T and
the Company with written notice of such exercise on any date during the period
beginning on the date such Released Shares are released from the Escrow
Account under the Escrow Agreement and ending on the 90th day thereafter. The
right of the Keytech Shareholders to cause AT&T to purchase or cause its
designees to purchase a Released Share pursuant to this Section shall
terminate on the 90th day following the date of release of such Released Share
from the Escrow Account.
3.5 Termination of Article III Provisions. The provisions of Sections
3.1, 3.2, 3.3 and 3.4 shall terminate on the public Market Date.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Definitions For purposes of this Article IV, the following terms
shall have the following meanings:
"Black out Period" has the meaning specified in Section 4.6(a).
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"Counsel to the Holders" means the single law firm from time to time
representing the Holders, as appointed by the Holders of a majority in number
of Registrable Securities.
"Effective Period" means, with respect to any Holder, a period (i)
commencing for the purposes of Section 4.3, on the date of this Agreement and
for purposes of Section 4.4, 180 days after the Public Market Date and (ii)
ending on the first date as of which all Registrable Securities cease to be
Registrable Securities.
"Holder" means each Keytech Shareholder that is a holder of Registrable
Securities and any other Person to whom a Keytech Shareholder has transferred
its rights under this Article IV pursuant to Section 4.13.
"Initiating Holding" has the meaning specified in Section 4.3(a).
"Inspectors" has the meaning specified in Section 4.7(1).
"NASD" means the National Association of Securities Dealers, Inc.
"Prospectus" means the prospectus included in any 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 any Registration Statement, and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Records" has the meaning specified in Section 4.7(1).
"Registrable Securities" means, collectively, (i) the Closing Shares and
(ii) any shares of Common Stock paid, issued or distributed in respect of any
shares referred to in clause (i) by way of stock dividend or distribution or
stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. Securities will cease to
be Registrable Securities in accordance with Section 4.2.
"Registration Expenses" means any and all out-of-pocket expenses
incident to the Company's performance of or compliance with this Agreement,
including without limitation, (i) all SEC, NASD and securities exchange
registration and filing fees, (ii) all fees and expenses of complying with
state securities or blue sky laws (including reasonable fees and disbursements
of counsel for any underwriters in connection with blue sky qualifications of
the Registrable Securities), (iii) all printing, messenger and delivery
expenses, (iv) all fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange or automated
quotation system pursuant to Section 5.7(h), (v) the fees and disbursements
and (vi) out-of-pocket expenses for underwriters customarily paid by the
issuer to the extent provided for in any underwriting agreement, but excluding
(x) underwriting discounts and commissions, transfer taxes, if any, and
documentary stamp taxes, if any, and (y) any fees or disbursements of counsel
to the Holders or any Holder.
"Registration Statement" means any registration statement of the Company
referred to in Section 4.3 or 4.4, including any Prospectus, amendments and
supplements to any such
13
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in any such registration statement.
"Registration Hold Period" means a Section 4.7(e) Period or a Section
4.7(m) Period.
"Related Securities" means any securities of the Company similar or
identical to any of the Registrable Securities, including, without limitation,
Common Stock and all options, warrants, rights and other securities
convertible into, or exchangeable or exercisable for, Common Stock.
"Requesting Holder" has the meaning specified in Section 4.3(a).
"Section 4.7(e) Period" has the meaning specified in Section 4.7(e).
"Section 4.7(m) Period" has the meaning specified in Section 4.7(m).
"Shelf Registration" means a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act (or any
successor rule that may be adopted by the SEC).
"Underwritten Registration or Underwritten Offering" means an
underwritten offering in which securities of the Company are sold to an
underwriter for reoffering to the public.
4.2 Securities Subject to this Agreement. The securities entitled to the
benefits of this Article IV are the Registrable Securities. For the purposes
of this Agreement, any particular Registrable Securities will cease to be
Registrable Securities when and to the extent that (i) a Registration
Statement covering such Registrable Securities has been declared effective
under the Securities Act and such Registrable Securities have been disposed of
pursuant to such effective Registration Statement, (ii) such Registrable
Securities are distributed to the public pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, (iii) such Registrable
Securities shall have been otherwise transferred or disposed of, new
certificates therefor not bearing a legend restricting further transfer shall
have been delivered by the Company and, at such time, subsequent transfer or
disposition of such securities shall not require registration or qualification
of such securities under the Securities Act or any similar state law then in
force or (iv) such Registrable Securities have ceased to be outstanding.
4.3 Piggy-Back Registration Rights. (a) Except in the case of an initial
public offering of securities in which the only securities offered are for the
Company's own account, whenever during the Effective Period the Company shall
propose to file a registration statement under the Securities Act relating to
the public offering of Common Stock for the Company's own account (other than
pursuant to a registration statement on Form S-4 or Form S-8 or any successor
forms, or filed in connection with an exchange offer or an offering of
securities solely to existing stockholders or employees of the Company) or for
the account of any holder of Common Stock (the "Initiating Holder") and on a
form in a manner that would permit registration of Registrable Securities for
sale to the public under the Securities Act, the Company shall (i) give
written notice at least 20 Business Days prior to the filing thereof to each
Holder of Registrable Securities then outstanding, specifying the approximate
date on which the Company proposes to file such registration statement and
advising such Holder of its right to have any or
14
all of the Registrable Securities then held by such Holder included among the
securities to be covered thereby and (ii) at the written request of any such
Holder given to the Company within 15 days after such Holder's receipt of
written notice from the Company, include among the securities covered by such
registration statement the number of Registrable Securities which such Holder
(the "Requesting Holder") shall have requested be so included (subject,
however, to reduction in accordance with paragraph (b) of this Section),
provided that if the offering covered by such registration statement is not
underwritten and the Initiating Holder is a party or parties exercising demand
registration rights pursuant to the Shareholders Agreement, dated December 8,
1999, among the Company, AT&T, SL Participacoes S.A. and AT&T Shareholder, the
Company will not include such Registrable Securities without the prior written
consent of the holders of a majority of the shares of such Initiating Holder
covered by such registration statement.
(b) Each Holder of Registrable Securities desiring to participate in an
offering pursuant to Section 4.3(a) may include shares of Common Stock in any
Registration Statement relating to such offering to the extent that the
inclusion of such shares of Common Stock shall not reduce the number of shares
of Common Stock to be offered and sold by the Company or any Initiating Holder
pursuant thereto. If the lead managing underwriter selected by the Company for
an underwritten offering pursuant to Section 4.3(a) determines that marketing
factors require a limitation on the number of shares of Common Stock to be
offered and sold by Requesting Holders in such offering, there shall be
included in the offering only that number of shares of Common Stock; if any,
that such lead managing underwriter reasonably and in good faith believes will
not jeopardize the success of the offering of all the shares of Common Stock
that the Company desires to sell for its own account or that the Initiating
Holder desires to sell for its own account, as the case may be. In such event,
and provided the lead managing underwriter has so notified the Company in
writing, the shares of Common Stock to be included in such offering shall
consist of (i) first, any securities the Company or the Initiating Holder, as
the case may be, proposes to sell, and (ii) second, the number, if any, of
Registrable Securities the Requesting Holders requested to be included in such
registration that, in the opinion of such lead managing underwriter can be
sold without jeopardizing the success of the offering of all the securities
that the Company or the Initiating Holder, as the case may be, desires to sell
for its own account, such amount to be allocated on a pro rata basis among the
Holders of Registrable Securities who have requested their securities be so
included based on the number of Registrable Securities that each Holder
thereof has requested to be so included; provided that, in the event another
Person has duly requested pursuant to an agreement with the Company that the
Company register other securities of the Company and such request has not been
withdrawn, the Requesting Holders and such other Person shall be included in
such registration pro rata based on the number of securities the Requesting
Holders and such other Person have requested to be so included.
(c) Nothing in this Section 4.3 shall create any liability on the part
of the Company to the Holders of Registrable Securities if the Company for any
reason should decide not to file a registration statement proposed to be filed
under Section 4.3(a) or to withdraw such registration statement subsequent to
its filing, regardless of any action whatsoever that a Holder may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
15
(d) A request by Holders to include Registrable Securities in a proposed
underwritten offering pursuant to Section 4.3(a) shall not be deemed to be a
request for a demand registration pursuant to Section 4.4.
4.4 Demand Registration Rights. (a) Upon the written request during the
Effective Period of Holders holding at least a majority in number of the
Registrable Securities held by the Holders that the Company effect the
registration with the SEC under and in accordance with the provisions of the
Securities Act of all or part of such Holders' Registrable Securities (which
written request shall specify the aggregate number of shares of Registrable
Securities requested -to be registered and the means of distribution), the
Company shall use its reasonable best efforts to file a Registration Statement
covering such Holders' Registrable Securities requested to be registered
within 30 Business Days after receipt of each request; provided, however, that
the Company shall not be required to take any action pursuant to this Section
4.4:
(i) if prior to the date of such request the Company shall
previously have effected a registration pursuant to this Section 4.4;
(ii) if the Company has effected a registration within the 180-day
period next preceding such request which permitted Holders holding
Registrable Securities to register Registrable Securities and has agreed
with the underwriters in connection with such prior registration not to
offer its securities publicly for such 180-day period;
(iii) if the Company shall at the time have effective a Shelf
Registration pursuant to which the Holders that requested registration
could effect the disposition of such Holders' Registrable Securities in
the manner requested;
(iv) if the Registrable Securities which the Company shall have
been requested to register shall have a then current market value of less
than $20,000,000, unless such registration request is for all remaining
Registrable Securities held by the Holders; or
(v) during the pendency of any Blackout Period;
provided, however, that the Company shall be permitted to satisfy its
obligations under this Section 4.4(a) by amending (to the extent permitted by
applicable law) within 15 Business Days after a written request for
registration, any Registration Statement previously filed by the Company under
the Securities Act so that such Registration Statement (as amended) shall
permit the disposition (in accordance with the intended methods of disposition
specified as aforesaid) of all of the Registrable Securities for which a
demand for registration has been made under this Section 4.4(a). If the
Company shall so amend a previously filed Registration Statement, it shall be
deemed to have effected a registration for purposes of this Section 4.4.
(b) The Holders delivering such request may distribute the Registrable
Securities covered by such request by means of an underwritten offering or any
other means, as determined by the Holders holding a majority of Registrable
Securities so requested to be registered.
(c) Subject to Section 4.4(d); a registration requested pursuant to this
Section 4.4 shall not be deemed to be effected for purposes of this Section
4.4 if it has not been declared effective
16
by the SEC or become effective in accordance with the Securities Act and the
rules and regulations thereunder.
(d) Holders holding a majority in number of the Registrable Securities
held by Holders to be included in a Registration Statement pursuant to this
Section 4.4 may, at any time prior to the effective date of the Registration
Statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request. If a Registration
Statement is so revoked, the Holders holding Registrable Securities requesting
the filing of such Registration Statement shall reimburse the Company for all
its out-of-pocket expenses incurred in the preparation, fling and processing
of the Registration Statement. In the case of any such revocation other than
the first such revocation, the Company shall be deemed to have effected a
registration pursuant to this Section 4.4.
(e) In the event the Company wishes, or any holder of Common Stock has
the right, to include shares of Common Stock in a Registration Statement
pursuant to this Section 4.4, there shall be included in such Registration
Statement only that number of such shares of Common Stock, if any, that the
lead managing underwriter (if the offering is covered by such Registration
Statement is an underwritten offering) reasonably and in good faith believes
will not jeopardize the success of the offering of all the shares of Common
Stock that the Holders desire to all for their own account. In such event and
provided the lead managing underwriter has not notified the Company in
writing, the shares of Common Stock to be included in such offering shall
consist of (i) first, the securities the Holders proposed to sell, (ii)
second, the securities the Company proposes to sell for its own account and
(iii) third, the number, if any, of securities requested to be included in
such registration, that in the opinion of such lead managing underwriter, can
be sold without jeopardizing the success of the offering of all the securities
that each Holder or the Company, as the case may be, desires to sell for its
own account, such amount to be allocated on a pro rata basis among the holders
of securities who have requested their securities be so included based on the
number of securities that each holder thereof has requested to be so included.
4.5 Selection of Underwriters. In connection with any underwritten
offering pursuant to a Registration Statement filed pursuant to a demand made
pursuant to Section 4.4, the Company shall have the right to select a lead
managing underwriter or underwriters to administer the offering, which lead
managing underwriter or underwriters shall be reasonably satisfactory to the
Holders holding a majority in number of the Registrable Securities to be
included in the Registration Statement.
4.6 Blackout Periods; Holdback. (a) If the Company determines in good
faith that the registration and distribution of Registrable Securities (i)
would materially impede, delay, interfere with or otherwise adversely affect
any pending financing, registration of securities, acquisition, corporate
reorganization or other significant transaction involving the Company or (ii)
would require disclosure of non-public material information that the Company
has a bona fide business purpose for preserving as confidential, as determined
by the Board of Directors of the Company in good faith, the Company shall
promptly give the Holders notice of such determination and shall be entitled
to postpone the filing or effectiveness of a Registration Statement for the
shortest period of time reasonably required, but in any event not to exceed
120 days with respect to matters covered by clause (i) above, and not to
exceed 90 days with respect
17
to matters covered by clause (ii) above (a "Blackout Period"); provided that a
Blackout Period with respect to a registration of securities proposed by the
Company may, at the election of the Company, commence on the date that is 30
days prior to the date the Company in good faith estimates will be the date of
filing of, and end no later than the date following the effective date of,
such registration, specified in the form of underwriting agreement relating to
such registration during which the Company shall be prohibited from selling,
offering or otherwise disposing of Common Stock, but in no event to exceed 90
days, provided further, that the Company shall not obtain any deferrals under
this Section 4.6(a) aggregating in excess of 180 days in any twelve-month
period. The Company shall promptly notify each Holder of the expiration or
earlier termination of a Blackout Period.
(b) Each Holder of Common Stock agrees by acquisition of the Registrable
Securities, if so requested in writing by any managing underwriter, not to
effect any public sale or distribution of such securities or Related
Securities during the seven days prior to and the 90 days (or 180 days, in the
case of the Company's initial public offering) after the effective time of any
underwritten registration by the Company (either for its own account, or for
the benefit of the Holders of any securities of the Company, including
Registrable Securities, in each case as to which the Holders are entitled to
request to be included pursuant to Section 4.3) has become effective or such
period of time shorter than 90 days (or 180 days, as applicable) that is
sufficient and appropriate, in the opinion of the managing underwriter, in
order to complete the sale and distribution of securities included in such
registration. No Holder of Common Stock shall be required pursuant to this
Section 4.6(b) to enter into any agreement that would delay or otherwise
adversely affect the exercise by the Keytech Shareholders of their rights
under Section 3.3 or 3.4.
4.7 Registration Procedures. If and whenever the Company is required to
use reasonable best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company shall:
(a) prepare and file with the SEC a Registration Statement with respect
to such Registrable Securities on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate, and which
form shall be available for the sale of the Registrable Securities in
accordance with the intended methods of distribution thereof (including, if so
requested by the Holders, distributions under Rule 415 under the Securities
Act pursuant to a Shelf Registration Statement), and use its reasonable best
efforts to cause such Registration Statement to become and remain effective;
(b) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement (including any Shelf Registration
referred to in Section 4.4(a)) and such amendments and supplements to the
Prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration or as may be required by the rules,
regulations or instructions applicable to the registration form utilized by
the Company or by the Securities Act or rules and regulations thereunder
necessary to keep such Registration Statement effective (i) in the case of a
firm commitment underwritten public offering, until each underwriter has
completed the distribution of all securities purchased by it and (ii) in the
case of any other registration, for up to 90 days (or longer period in the
event of a Registration Hold Period during such offering, as provided in this
Section 4.7) and cause the Prospectus as so supplemented to be filed pursuant
to Rule 424 under the Securities Act, and otherwise to comply
18
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement until the earlier of (x)
such 90th day (or longer period) and (y) such time as all Registrable
Securities covered by such Registration Statement have ceased to be
Registrable Securities.
(c) furnish to each Holder of such Registrable Securities such number of
copies of such Registration Statement and of each amendment and post-effective
amendment thereto, any Prospectus or Prospectus supplement and such other
documents as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities by such Holder (the Company hereby
consenting to the use (subject to the limitations set forth in the last
paragraph of this Section 4.7) of the Prospectus or any amendment or
supplement thereto in connection with such disposition);
(d) use its reasonable best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and do any and all other acts and things which may be
reasonably necessary to enable such Holder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such Holder, except
that the Company shall not be required for any such purpose to qualify
generally to do business as a foreign corporation in any jurisdiction where,
but for the requirements of this Section 4.7(d), it would not be obligated to
be so qualified, to subject itself to taxation in any such jurisdiction, or to
consent to general service of process of any such jurisdiction;
(e) notify each Holder of any such Registrable Securities covered by
such Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act within the appropriate
period mentioned in Section 4.7(b), of the Company's becoming aware that the
Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing (the period
during which the Holders are required to refrain from effecting public sales
or distributions in such case being referred to as a "Section 4.7(e) Period"),
and prepare and furnish to such Holder a reasonable number of copies of an
amendment to such Registration Statement or supplement to such related
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include
an untrue statement of a material fact or make the statements therein not
misleading in the light of the circumstances then existing, and the time
during which such Registration Statement shall remain effective pursuant to
Section 4.7(b) shall be extended by the number of days in the Section 4.7(e)
Period;
(f) notify each Holder of Registrable Securities covered by such
Registration Statement at any time:
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
have become effective;
19
(ii) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional information;
(iii) of the issuance by tile SEC of any stop order of which the
Company or its counsel is aware or should be aware suspending the
effectiveness of the Registration Statement or any order preventing the
use of a related Prospectus, or the initiation of any threats of any
proceedings for such purposes; and
(iv) of the receipt by the Company of any written notification of
the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction or the initiation of any threats of any
proceeding for that purpose;
(g) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
stockholders an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act provided that the Company shall be deemed
to have complied with this paragraph if it has complied with Rule 158 under
the Securities Act;
(h) use its reasonable best efforts to cause all such Registrable
Securities to be listed on any securities exchange or automated quotation
system on which the Common Stock is then listed, if such Registrable
Securities are not already so listed and if such listing is then permitted
under the rules of such exchange or automated quotation system, and to provide
a transfer agent and registrar for such Registrable Securities covered by such
Registration Statement no later than the effective date of such Registration
Statement:
(i) if the registration is an underwritten registration, enter
into a customary underwriting agreement and in connection therewith:
(i) make such representations, and warranties to the underwriters
in form, substance and scope as are customarily made by issuers to
underwriters in comparable underwritten offerings;
(ii) obtain opinions of counsel to the Company (in form, scope and
substance reasonably satisfactory to the managing underwriters),
addressed to the underwriters, and covering the matters customarily
covered in opinions requested in comparable underwritten offerings;
(iii) obtain "cold comfort" letters and bring-downs thereof from the
Company's independent ratified public accountants addressed to the
underwriters, such letters to be in customary form and covering matters
of the type customarily covered is "cold comfort" letters by independent
accountants in connection with underwritten offerings;
(iv) if requested, provide indemnification in accordance with the
provisions and procedures of Section 4.10 to all parties to be
indemnified pursuant to such Section; and
(v) deliver such documents and certificates as may be reasonably
requested by the managing underwriters to evidence compliance with
paragraph (f) above and with any customary conditions contained in the
underwriting agreement;
20
(j) cooperate with the Holders of Registrable Securities covered by such
Registration Statement and the managing underwriter or underwriters or agents,
if any, to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing the securities to be sold under
such Registration Statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters or agents, if any, or such Holders may request;
(k) if reasonably requested by the managing underwriter or underwriters
or a Holder of Registrable Securities being sold in connection with an
underwritten offering, incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and the
Holders of a majority in number of the Registrable Securities being sold
reasonably agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities including, without
limitation, information with respect to the principal amount of Registrable
Securities being sold to such underwriters, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
underwritten offering of the Registrable Securities to be sold in such
offering and make all required filings of such Prospectus supplement or
post-effective amendment as promptly as practicable upon being notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(l) provide any Holder of Registrable Securities included in such
Registration Statement, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
agent retained by any such Holder or underwriter (collectively, the
"Inspectors") with reasonable access during normal business hours to
appropriate officers of the Company and the Company's subsidiaries to ask
questions and to obtain information reasonably requested by airy such
Inspector and make available for inspection all financial and other records
and other information, pertinent corporate documents and properties of any of
the Company and its subs and affiliates (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility; provided, however, that the Records that the Company
determines, in good faith, to be confidential shall not be disclosed to any
inspector unless such Inspector signs or is otherwise bound by a
confidentiality agreement reasonably satisfactory to the Company; and
(m) in the event of the issuance of any stop order of which the Company
or its counsel is aware suspending the effectiveness of the Registration
Statement, or of any order suspending or preventing the use of any related
Prospectus or suspending the qualification of any Registrable Securities
included in the Registration Statement far sale in any jurisdiction, the
Company shall use its reasonable best efforts promptly to obtain its
withdrawal; and the period for which the Registration Statement shall be kept
effective shall be extended by a number of days equal to the number of days
between the issuance and withdrawal of any stop orders (a "Section 4.7(m)
Period").
The Company may require each Holder of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such Holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request.
21
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4.7(e) or 4.7(m), such Holder shall forthwith discontinue disposition
of Registrable Securities pursuant to the Prospectus or Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 4.7(e) or
the withdrawal of any stop order contemplated by Section 4.7(m), and, if so
directed by the Company, such Holder shall deliver to the Company all copies,
other than permanent files copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice.
4.8 Registration Expenses. The Company shall pay all Registration
Expenses in connection with all registrations of Registrable Securities
pursuant to Sections 4.3 and 4.4, and each Holder shall pay (i) any fees or
disbursements of counsel to such Holder and (ii) all underwriting discounts
and commissions and transfer taxes, if any, and documentary stamp taxes, if
any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Registration Statement.
4.9 Reports under the Exchange Act. The Company agrees, from and after
the Public Market Date, to:
(a) file with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and
(b) furnish to any Holder, during the Effective Period and from and
after the Public Market Date, forthwith upon request (A) a written statement
by the Company that it has complied with the current public information and
reporting requirements of Rule 144 under the Securities Act and the Exchange
Act and (B) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company with the
SEC under the Exchange Act.
4.10 Indemnification; Contribution. (a) The Company agrees to indemnify
and hold harmless each Holder of Registrable Securities, its officers,
directors, agents, trustees, stockholders and each Person who controls such
Holder (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act), against all losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees, disbursements and expenses, as
incurred) incurred by such party pursuant to any actual or threatened action,
suit, proceeding or investigation arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in the Registration
Statement, any Prospectus or preliminary Prospectus, or any amendment or
supplement to any of the foregoing, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a Prospectus or a preliminary
Prospectus, in the light of the circumstances then existing) not misleading,
except in each case insofar as the same arise out of or are based upon (i) any
such untrue statement or omission made in reliance on and in conformity with
information with respect to such indemnified party furnished in writing to the
Company by such indemnified party or its counsel expressly for use therein,
(ii) the use of any Prospectus after such time as the obligation of the
Company to keep such Prospectus effective has expired or (iii) the use of any
Prospectus after such time as the Company has advised the Holders that the
filing
22
of a post-effective amendment or supplement thereto is required, except such
Prospectus as so amended or supplemented. In connection with an underwritten
offering, the Company shall indemnify the underwriters thereof, their
officers, directors, agents, trustees, stockholders and each Person who
controls such underwriters (within the meaning of Section 14 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Holders of Registrable Securities.
Notwithstanding the foregoing provisions of this Section 4.10(a), the Company
shall not be liable to any Person who participates as an underwriter in the
offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act), under the indemnity agreement in this
Section 4.10(a) for any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense that arises out of any of the
matters specified in clause (ii) or (iii) above or such Person's failure to
send or deliver a copy of the final Prospectus to the Person asserting an
untrue statement or alleged untrue statement or omission or alleged omission
at or prior to the written confirmation of the sale of the Registrable
Securities to such Person if such statement or omission wars corrected in such
final Prospectus and the Company has previously furnished copies thereof to
such Holder or other Person in accordance with this Agreement.
(b) In connection with any Registration Statement filed pursuant hereto,
each Holder of Registrable Securities to be covered thereby shall furnish to
the Company in writing such information with respect to such Holder, including
the name, address and the amount of Registrable Securities held by such
Holder, as the Company reasonably requests for use in such Registration
Statement or the related Prospectus and agrees, (i) in the case of Xxxxxxxx
Xxxxx Xxxxxxx and Permitted Transferees that hold Shares originally held by
him, jointly and severally with all other Holders that are Keytech
Shareholders (and, otherwise, severally and not jointly with all other
Holders), (ii) and in the case of all other Keytech Shareholders and Permitted
Transferees that hold Shares originally held by them, severally and not
jointly with all other Holders, to indemnify and hold harmless the Company,
all other Holders or any underwriter, as the case may be, and their respective
directors, officers, agents, trustees, stockholders and controlling Persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees, disbursements and expenses, as
incurred), incurred by such party pursuant to any actual or threatened action,
suit, proceeding or investigation arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in, or any omission or
alleged omission of a material fact required to be stated in, such
Registration Statement Prospectus or preliminary Prospectus or any amendment
or supplement to any of the foregoing or necessary to make the statements
therein (in case of a Prospectus or preliminary Prospectus, in the light of
the circumstances then existing) not misleading, but only to the extent that
any such untrue statement or omission is made in reliance on and in conformity
with information with respect to such Holder furnished in writing to the
Company by such Holder or its counsel specifically for inclusion therein;
provided, however, that the liability of each Holder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or
expense that is equal to the proportion that the net proceeds from the sale of
shares sold by such Holder under such registration statement bears to the
total net proceeds from the sale of all securities sold thereunder, but not in
any event to exceed the net proceeds (after deduction of underwriting
discounts and commissions and offering expenses payable by such Holder)
received by such Holder from the sale of Registrable Securities covered by
such Registration Statement.
23
(c) Any Person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt by such
indemnified party of any written notice of the commencement of any action,
suit, proceeding or investigation or threat thereof made in writing for which
such indemnified party may claim indemnification or contribution pursuant to
this Agreement, provided that failure to give such notification shall not
affect the obligations of the indemnifying party pursuant to this Section 4.10
except to the extent the indemnifying party shall have been actually
prejudiced as a result of such failure. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume 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 the defense thereof; the indemnifying party shall not be liable
to such indemnified party under these indemnification provisions 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, unless in the reasonable
judgment of any indemnified party a conflict of interest is likely to exist,
based on the written opinion of counsel, between such indemnified party and
any other of such indemnified parties with respect to such claim, in which
event the indemnifying party shall not be liable for the fees and expenses of
(i) more than one counsel for all Holders of Registrable Securities who are
indemnified parties, selected by a majority of the Holders of Registrable
Securities who are indemnified parties (which choice shall be reasonably
satisfactory to the Company), (ii) more than one counsel for the underwriters
or (iii) more than one counsel for the Company in connection with any one
action or separate but similar or related actions. An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim shall not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claims,
unless in the reasonable judgment of any indemnified party based on the
written opinion of counsel a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim, in which event the indemnifying party shall be obligated to pay
the fees and expenses of such additional counsel or counsels, provided that
the indemnifying party shall not be liable for the fees and expenses of (i)
more than one counsel for all Holders of Registrable Securities who are
indemnified parties (which choice shall be reasonably satisfactory to the
Company), (ii) more than one counsel for the underwriters or (iii) more than
one counsel for the Company in connection with any one action or separate but
similar or related actions. No indemnifying party, in defense of any such
action, suit, proceeding or investigation, shall, except with the consent of
each indemnified party, consent to the entry of any judgment or entry into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such action, suit, proceeding or investigation to the
extent the same is covered by the indemnity obligations set forth in this
Section 4.10. No indemnified party shall consent to entry of any judgment or
enter into any settlement without the consent of each indemnifying party.
(d) If the indemnification from the indemnifying party provided for in
this Section 4.10 is unavailable to an indemnified party hereunder in respect
to any losses, claims, damages, liabilities or expenses referred to herein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
24
as a result of such losses, claims, damages, liabilities and expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that the liability of
each Holder hereunder shall be limited to the proportion of any such loss,
claim, damage, liability or expense that is equal to the proportion that the
net proceeds from the sale of shares sold by such Holder under such
Registration Statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
(after deduction of underwriting discounts and commissions and offering
expenses payable by such Holder) received by such Holder from the sale of
Registrable Securities covered by such Registration Statement. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 4.10(c), any legal or other fees and expenses reasonably incurred by
such indemnified party in connection with any investigation or proceeding.
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.
If indemnification is available under this Section 4.10, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 4.10(a) or (b), as the case may be, without regard to the
relative fault of such indemnifying parties or indemnified party or any other
equitable consideration provided for in this Section 4.10(d).
(e) The provisions of this Section 4.10 shall be in addition to any
liability which any indemnifying party may have to any indemnified party and
shall survive the termination of this Agreement.
4.11 Participation in Underwritten Offerings. No Holder of Registrable
Securities may participate in any underwritten offering pursuant to Section
4.3 unless such Holder (i) agrees to sell such Holder's securities on the
basis provided in any underwriting arrangements approved by the Company in its
reasonable discretion and (ii) completes and executes all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements.
4.12 Mergers, etc. The Company agrees that, as a condition to any
merger, consolidation or the sale of all or substantially all of its assets in
exchange for securities of another company, it shall use its reasonable best
efforts in light of the circumstances then existing to require the surviving,
consolidated or purchasing corporation to enter into an agreement to register
the securities of such surviving, consolidated or purchasing corporation, to
25
be received by the Holders, on substantially the same terms and provisions as
are provided in this Agreement.
4.13 Assignment of Registration Rights. The right to cause the Company
to register Registrable Securities pursuant to this Article IV may be assigned
(but only with all related obligations) by a Holder to any transferee or
assignee permitted under Article II and III, provided that such assignment or
transfer shall be effective only if immediately thereafter the further
disposition of such securities by such transferee or assignee is restricted
under the Securities Act.
4.14 No Inconsistent Agreements. The Company shall not hereafter enter into
any agreement with respect to its securities which is inconsistent with or in
any way shall limit the rights granted to the Holders in this Article IV.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Presentations and Warranties. Each party hereto represents and
warrants to the other parties as follows:
(a) Such party has all requisite right, power and authority and full
legal capacity to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by such party and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary action on the part of such party. This Agreement has been duly
executed and delivered by such party and constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
applications affecting enforcement of creditors' rights and (ii) laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
(b) Neither the execution and delivery by such party of this Agreement,
nor the consummation or performance by such party of the transactions,
contemplated hereby to be consummated or performed by it, will, directly or
indirectly (with or without notice or lapse of time), (i) violate any
provision of such party's charter, bylaws or other constituent instruments,
(ii) constitute or result in a breach or default by such party, or give rise
to a right of termination on the part of any other party, or result in the
creation or imposition of any lien, claim or encumbrance on such party's
assets, under any agreement or instrument to which such party is a party or by
which it is bound or (iii) constitute a violation by such party of any law,
rule, regulation, order, judgment or decree applicable to it.
(c) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any Governmental
Authority on the part of such party is required in connection with the
consummation or performance by such party of the transactions contemplated
hereby to be consummated or performed by it, except for such consents,
approvals, authorizations or orders which have been obtained or made and are
in full force and effect of the date hereof.
26
5.2 No Other Shareholders Agreements. The Company represents and
warrants to the Keytech Shareholders that, other than this Agreement, the
Stock Purchase Agreement and agreements executed in connection with the
acquisition of Netstream Telecom. Ltda. and FirstCom Corporation, as of the
date of the Stock Purchase Agreement there are no agreements, arrangements or
understandings (whether oral or written) between any Shareholder and the
Company with respect to the ownership, holding, voting or Transfer of any
securities of the Company.
ARTICLE VI
CERTAIN COVENANTS
6.1 Other Shareholders Agreements. Neither the Company nor any
Shareholder who is or may become a party to this Agreement shall enter into
any other agreement or arrangement with respect to the ownership, holding,
voting or Transfer of any securities of the Company that would adversely
affect in any material respect the rights of the Keytech Shareholders under
this Agreement.
6.2 Access to Financial Information. (a) The Company shall provide the
Keytech Shareholders with the following financial information to the extent
such information is available to management of the Company: (i) within 30 days
after the end of each month, monthly unaudited consolidated financial
statements for such month; (ii) within the first 45 days after the end of each
quarter, quarterly unaudited consolidated financial statements for such
quarter; (iii) within 90 days after the end of each fiscal year, annual
audited consolidated financial statements for such fiscal year, including
comments thereon of the Company's management; and (iv) if prepared, and as
soon as reasonably practicable after its adoption by the Board of Directors of
the Company, an annual budget prepared by the Company's management for
each-fiscal year, including comments thereon of management.
(b) The Keytech Shareholders and their respective accountants,
attorneys, financial advisers and other representatives, at the sole cost and
expense of the Keytech Shareholders, may, from time to time and during normal
business hours, visit and inspect the facilities of the Company and examine
and, subject to Section 7.2 make copies of the Company's books and records.
6.3 AT&T Consultation with Keytech Shareholders. The Company shall cause
senior representatives of AT&T's, Latin American business unit to, on a
quarterly basis and otherwise upon the Keytech Shareholders' reasonable
request, discuss with them AT&T's progress in developing the Company,
including matters relating to strategic initiatives by the Company in the
Region.
6.4 Termination of Article VI Provisions. The provisions of Section 6.2
and 6.3 shall terminate as of the earlier of the occurrence of the AT&T Merger
and the Public Market Date.
ARTICLE VII
MISCELLANEOUS
27
7.1 Further Assurances. Each party shall promptly and duly execute and
deliver such documents and take, and each Shareholder shall cause the Company
to take, such further action which may be required from time to time under
applicable law or otherwise to carry out effectively and accomplish the intent
and purpose of this Agreement and to establish and protect the rights and
remedies created or intended to be created hereby.
7.2 Confidentiality. (a) Each Shareholder hereby acknowledges that
Confidential Information has been and will be made available to such
Shareholder in connection with such Shareholder's investment in the Company.
Each Shareholder agrees that, without the prior authorization of the Board of
Directors of the Company, such Shareholder shall not disclose any Confidential
Information to any Person, except (i) to the extent required by applicable
law, rule or regulation (which may include compliance with any oral or written
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process to which a Shareholder is
subject) or generally accepted accounting principles, or (ii) to any third
party to whom such Shareholder is contemplating a Transfer of its Shares,
provided that such Transfer would not violate this Agreement and such third
party is advised of the confidential nature of such information and agrees to
be bound by a confidentiality agreement in form and substance satisfactory to
the Company. Nothing contained herein shall prevent the use of Confidential
Information by any Shareholder or its Representatives in connection with the
assertion or defense of any claim by or against the Company or any
Shareholder.
(b) For purposes of this Section 7.2, "Confidential Information" means
any information concerning the Company, its financial condition, business,
Subsidiaries, operations or prospects in the possession of or to be furnished
to any Shareholder in its capacity as a Shareholder; provided that the term
"Confidential Information" does not include information which (i) was in the
public domain on the date hereof or comes into the public domain hereafter
other than as a result of a disclosure by a Shareholder or its partners,
directors, officers, employees, agents, counsel, financial advisers,
consultants or representatives (such persons collectively, the
"Representatives") in violation of the Stock Purchase Agreement or this
Agreement, (ii) was independently developed by such Shareholder or such
Shareholder's Representative without making use of proprietary information of
the Company, (iii) is or was available to such Shareholder on a
non-confidential basis prior to its disclosure by the Company to such
Shareholder or such Shareholder's Representatives or (iv) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Company, a Shareholder or a Shareholder's Representatives, provided
that such source is or was (at the time of receipt of such information) not,
to such Shareholder's knowledge, bound by a confidentiality agreement with (or
other confidentiality obligation to) the Company or another Person.
7.3 Entire Agreement. This Agreement and the Stock Purchase Agreement
and their respective exhibits and schedules constitute the entire agreement
among the parties hereto and thereto with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings, both oral
and written, among all of the parties hereto and thereto with respect to such
subject matter.
7.4 Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors,
permitted assigns, heirs and legal representatives. Nothing in this Agreement,
expressed or implied, is intended to confer on any
28
Person other than the parties hereto, and their respective successors,
permitted assigns, heirs and legal representatives, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
7.5 Assignability. Except as expressly provided herein, the benefits of
this Agreement shall not be assignable or otherwise transferable by any party
hereto without the prior written consent of the other parties hereto,
provided, however, that any Person acquiring Shares who is required by the
terms of this Agreement to become a party hereto shall execute and deliver to
the Company and the Shareholders an agreement to be bound by this Agreement
and shall thenceforth be a "Shareholder" for purposes of this Agreement with
such rights and obligations hereunder as are consistent with the rights and
obligations hereunder applicable to the transferor of such Shares, except as
otherwise provided in this Agreement, provided, further, that the benefits of
this Agreement may be assigned to a pledgee of Shares upon a bona fide
foreclosure on such Shares if the pledging Shareholder has not breached this
agreement and the pledgee enters into an agreement that complies with the
foregoing proviso.
7.6 Amendment; Waiver. No provision of this Agreement may be waived
except by an instrument in writing executed by the party against whom the
waiver is to be effective. No provision of this Agreement may be amended or
otherwise modified except by an instrument in writing executed by the Company,
AT&T and all Keytech Shareholders for all purposes and by any other party
hereto who would be materially adversely affected by any such amendment or
other modification.
7.7 Effect of Share Ownership. The parties agree that no Keytech
Shareholder or any Affiliate thereof shall be restricted or limited in any
manner whatsoever in the conduct of its business activities solely by reason
of the ownership of Shares by such Keytech Shareholder.
7.8 Notices. All notices and other communications given or made pursuant
hereto or pursuant to any other agreement among the parties, unless otherwise
specified, shall be in writing and shall be deemed to be effectively given as
follows: (i) upon personal delivery to the party to be notified; or (ii) when
sent by confirmed telex or facsimile if sent during normal business hours of
the recipient, if not, then on the next business day, or (iii) two days after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be
sent to the parties hereto at the respective addresses set forth below, or as
notified by such party from time to time at least ten days prior to the
effectiveness of such notice:
If to the Company:
AT&T Latin America Corp.
0000 Xxxxx xx Xxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
Attn: Chief Executive Officer
Tel.: (000) 000-0000
Fax: (000) 000-0000
29
with a copy (which shall not constitute notice) to:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Tel.: (000) 000-0000
Fax: (000)000-0000
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Xx.
Xxxxx X.X. Xxxxx
Tel: (000) 000-0000
Fax: (000)000-0000
and
Xxxxx & XxXxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000)000-0000
If to AT&T and AT&T Shareholder:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Tel.: (000) 000-0000
Fax: (000)000-0000
with a copy (which shall not constitute notice) to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Xx.
Xxxxx X.X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
30
If to the Keytech Shareholders
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxxx xx Xxxxxxx
Anchorena 398, CP (1636) Xx Xxxxxx
Xxxxxxxxx xx Xxxxxx Xxxxx, Xxxxxxxxx
and
Xxxxxxxxx Xxxxx
Xx. Xxxxxxxxxx 0000, piso 6, CP (1425)
Buenos Aires, Argentina
with a copy (which shall not constitute notice) to:
White & Case LLP
First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx-Xxxxx
and
Bruchou, Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Xxxxxxxxxxx 000, 0xx Xxxxx
(0000) Xxxxxx Xxxxx, Xxxxxxxxx
Tel: 000-0000-0000-0000
Fax: 000-0000-0000-0000
Attn: Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx X. Xxxxx
Any Person who becomes a Shareholder shall provide its address and
facsimile transmission number to the Company, which shall promptly provide
such information to each other Shareholder.
7.9 Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
7.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICT OF LAWS
31
TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.
7.12 Consent to Jurisdiction. (a) Any legal action or other legal
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement may be brought or otherwise commenced in the courts of the
State of New York or federal courts of the United States for the Southern
District of New York. Each party to this Agreement:
(i) expressly and irrevocably consents and submits to the
non-exclusive jurisdiction of each court of the State of New York and
federal court of the United States for the Southern District of New York
(and each appellate court located in the State of New York) in connection
with any such legal action or other legal proceeding including any such
action or proceeding to enforce any settlement, order or award;
(ii) agrees that each court of the State of New York and federal
court of the United States for the Southern District of New York shall be
deemed to be a convenient forum; and
(iii) waives and agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal action or other legal proceeding
commenced in any court of the State of New York or federal court of the
United States for the Southern District of New York, any claim that such
party is not subject personally to the jurisdiction of such court, that
such legal action or legal proceeding has been brought in an inconvenient
forum, that the venue of such action or proceeding is improper that this
Agreement or the subject matter of this Agreement may not be enforced in
or by such court.
(b) Each Keytech Shareholder irrevocably designates CT Corporation
System, which currently maintains an office at 0000 Xxxxxxxx, Xxx Xxxx, XX
00000, U.S.A., as its agent to receive service of process hereunder, and the
above named is authorized and directed to accept service of process hereunder
on behalf of each Keytech Shareholder in any legal action or legal proceeding
relating to this Agreement or the enforcement of any provision of this
Agreement.
(c) Each party to this Agreement hereby knowingly, voluntarily and
intentionally waives the right to a trial by jury in respect of any legal
action or legal proceeding arising out of, under or in connection with this
Agreement; this waiver being a material inducement for each such party to
enter into this Agreement.
7.13 Termination. No termination of any provision of this Agreement,
whether because of the occurrence of the Public Market Date or otherwise,
shall relieve any party of any liability for any breach of such provision
occurring prior to such termination.
7.14 Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for any other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and
that each of them, respectively, to the extent permitted by applicable law,
shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
32
7.15 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 parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be in any way impaired thereby, it being intended that all of the rights
and privileges of the parties hereto shall be enforceable to the fullest
extent permitted by law.
[rest of page left intentionally blank; signature page follows]
33
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in the first paragraph hereof
AT&T LATIN AMERICA CORP.
By:/s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: President - AT&T Latin America Corp.
ATTLA HOLDING CORP.
By:/s/ Xxxx X. Xxxxx
---------------------------------
Name:
Title:
/s/ Xxxxxxx Xxxxx Xxxxxxx
------------------------------------
Xxxxxxxx Xxxxx Xxxxxxx
/s/ Xxxxxxxxx Xxxxxxx Xxxxx
------------------------------------
Xxxxxxxxx Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxxx Xxxxxx xx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx Xxxxxx xx Xxxxxxx
AT&T CORP., solely for purposes of
Sections 3.3 and 6.3 of this
Agreement
By:/s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: President AT&T International Ventures
