EXHIBIT 4.10
EXECUTION COPY
NOTES REGISTRATION RIGHTS AGREEMENT
Dated as of April 3, 2001
among
EARTHWATCH INCORPORATED,
THE BANK OF NEW YORK,
as Trustee,
and
XXXXXX XXXXXXX & CO. INCORPORATED
NOTES REGISTRATION RIGHTS AGREEMENT
This NOTES REGISTRATION RIGHTS AGREEMENT dated as of April 3, 2001
(the "Agreement"), is among EARTHWATCH INCORPORATED, a Delaware corporation (the
"Company"), THE BANK OF NEW YORK, as TRUSTEE (the "Trustee") under the
Indenture, dated as of July 12, 1999, as amended (the "Indenture") for the
Company's 13% Senior Discount Notes due 2007 (the "13% Notes") and XXXXXX
XXXXXXX & CO. INCORPORATED, a Delaware corporation ("MS&Co").
This Agreement is made pursuant to the Recapitalization Agreement and
Consent, dated as of April 2, 2001, among the Company and the other parties
thereto (the "Recapitalization Agreement"), pursuant to which certain holders
(the "Remaining Noteholders") of the Company's 13% Senior Discount Notes due
2007 (the "13% Notes") agreed not to tender their 13% Notes into the Company's
Offer to Purchase for Cash dated February 28, 2001 (the "Tender Offer"). In
order to induce the Remaining Noteholders to enter into the Recapitalization
Agreement, the Company has agreed to provide to the Remaining Noteholders and
their direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Recapitalization Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
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to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
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from time to time.
"Closing Date" shall mean the Tender Payment Date as defined in the
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Recapitalization Agreement.
"Company" shall have the meaning set forth in the preamble and shall
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also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of
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Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
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Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Exchange Notes" shall mean notes issued by the Company under the
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Indenture containing terms identical to the 13% Notes (except that the Exchange
Notes will not contain restrictions on transfer) and to be offered to Holders of
13% Notes in exchange for 13% Notes pursuant to the Exchange Offer.
"Holder" shall mean the Remaining Noteholders, for so long as they own
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any Registrable Notes, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Notes under the
Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the
term "Holder" shall include Participating Broker-Dealers (as defined in Section
4(a)).
"Majority Holders" shall mean the Holders of a majority of the
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aggregate principal amount at maturity of outstanding Registrable Notes;
provided that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable Notes held by
the Company or any of its affiliates (as such term is defined in Rule 405 under
the 0000 Xxx) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount.
"Person" shall mean an individual, partnership, limited liability
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company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
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Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to such prospectus, and in each case including all
material incorporated by reference therein.
"Registrable Notes" shall mean any 13% Notes outstanding that bear the
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Private Placement Legend (as defined in the Indenture); provided, however, that
the 13% Notes shall cease to be Registrable Notes (i) when a Registration
Statement with respect to such 13% Notes shall have been declared effective
under the 1933 Act and such 13% Notes shall have been disposed of pursuant to
such Registration Statement, (ii) when such 13% Notes have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the 1933 Act or (iii) when such 13% Notes shall have ceased to
be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Notes or Registrable Notes), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing,
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printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements
relating to the qualification of the Indenture under applicable securities laws,
(vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees
and disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders) and (viii) the
fees and disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, but excluding fees and
expenses of counsel to the underwriters (other than fees and expenses set forth
in clause (ii) above) or the Holders and underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of Registrable
Notes by a Holder.
"Registration Statement" shall mean any registration statement of the
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Company that covers any of the Exchange Notes or Registrable Notes pursuant to
the provisions of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
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"Shelf Registration" shall mean a registration effected pursuant to
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Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
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statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Notes (but no other securities
unless approved by the Holders whose Registrable Notes are covered by such Shelf
Registration Statement) on an appropriate form under Rule 415 under the 1933
Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the 13% Notes under
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the Indenture.
"Underwriter" shall have the meaning set forth in Section 3 hereof.
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"Underwritten Registration" or "Underwritten Offering" shall mean a
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registration in which Registrable Notes are sold to an Underwriter for
reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall use its best efforts
to cause to be filed an Exchange Offer Registration Statement covering the offer
by the Company to the Holders to exchange all of the Registrable Notes for
Exchange Notes and to have such Registration
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Statement remain effective until the closing of the Exchange Offer. The Company
shall commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC and use its best efforts to
have the Exchange Offer consummated not later than 60 days after such effective
date. The Company shall commence the Exchange Offer by mailing the related
exchange offer Prospectus and accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Notes validly
tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period
of at least 20 business days from the date such notice is mailed) (the
"Exchange Dates");
(iii) that any Registrable Note not tendered will remain outstanding
and continue to accrete in value until July 15, 2002 and thereafter will
accrue interest, but will not retain any rights under this Registration
Rights Agreement;
(iv) that Holders electing to have a Registrable Note exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Note, together with the enclosed letters of transmittal, to the
institution and at the address (located in the Borough of Manhattan, The
City of New York) specified in the notice prior to the close of business on
the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last Exchange Date, by sending to
the institution and at the address (located in the Borough of Manhattan,
The City of New York) specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount at maturity of Registrable Notes delivered for exchange and a
statement that such Holder is withdrawing his election to have such 13%
Notes exchanged.
As soon as practicable after the last Exchange Date, the Company
shall:
(i) accept for exchange Registrable Notes or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for
exchange by the Company and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Note equal in principal
amount at maturity to the principal amount at maturity of the Registrable
Notes surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the Staff of the SEC. The Company shall inform
MS&Co. of the names and addresses of the Holders to whom the Exchange Offer is
made, and MS&Co. shall
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have the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Notes in the Exchange Offer.
(b) In the event that (i) the Company determines that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be consummated as soon as practicable after the last Exchange Date because
it would violate applicable law or the applicable interpretations of the Staff
of the SEC, (ii) the Exchange Offer is not for any other reason consummated by
October 15, 2001 or (iii) the Exchange Offer has been completed and in the
opinion of counsel for MS&Co. a Registration Statement must be filed and a
Prospectus must be delivered by MS&Co. in connection with any offering or sale
of Registrable Notes, the Company shall use its best efforts to cause to be
filed as soon as practicable after such determination, date or notice of such
opinion of counsel is given to the Company, as the case may be, a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Notes and to have such Shelf Registration Statement declared
effective by the SEC. In the event the Company is required to file a Shelf
Registration Statement solely as a result of the matters referred to in clause
(iii) of the preceding sentence, the Company shall use its best efforts to file
and have declared effective by the SEC both an Exchange Offer Registration
Statement pursuant to Section 2(a) with respect to all Registrable Notes and a
Shelf Registration Statement (which may be a combined Registration Statement
with the Exchange Offer Registration Statement) with respect to offers and sales
of Registrable Notes held by MS&Co. after completion of the Exchange Offer. The
Company agrees to use its best efforts to keep the Shelf Registration Statement
continuously effective until the expiration of the period referred to in Rule
144(k) with respect to the Registrable Notes or such shorter period that will
terminate when all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement. The
Company further agrees to supplement or amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the 1933 Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder with respect to information
relating to such Holder, and to use its best efforts to cause any such amendment
to become effective and such Shelf Registration Statement to become usable as
soon as thereafter practicable. The Company agrees to furnish to the Holders of
Registrable Notes copies of any such supplement or amendment promptly after its
being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or Section 2(b). Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Notes pursuant
to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if, after it has been declared effective, the
offering of Registrable Notes pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume. In
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the event the Exchange Offer is not consummated and the Shelf Registration
Statement is not declared effective on or prior to October 15, 2001, the Company
shall pay liquidated damages to the Holders of the Registrable Notes (in
addition to the accrual of interest (or original issue discount) otherwise due
on the 13% Notes), at a rate of 0.5% per annum semi-annually, with accrual
commencing October 15, 2001, and payment commencing January 15, 2002, until the
Exchange Offer is consummated or the Shelf Registration Statement is declared
effective by the SEC.
(e) Without limiting the remedies available to the Holders of
Registrable Notes and MS&Co., the Company acknowledges that any failure by the
Company to comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Holders of Registrable
Notes and MS&Co. for which there is no adequate remedy at law, that it will not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any such Holder or MS&Co. may obtain such relief as
may be required to specifically enforce the Company's obligations under Section
2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and (y) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and (z) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use its best efforts to
cause such Registration Statement to become effective and remain effective
in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to
keep each Prospectus current during the period described under Section 4(3)
and Rule 174 under the 1933 Act, if any, that is applicable to transactions
by brokers or dealers with respect to the Registrable Notes or Exchange
Notes;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, to counsel for MS&Co., to counsel for the Holders and to
each Underwriter of an Underwritten Offering of Registrable Notes, if any,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder or Underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the Registrable
Notes; and the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each
of the
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selling Holders of Registrable Notes and any such Underwriters in
connection with the offering and sale of the Registrable Notes covered by
and in the manner described in such Prospectus or any amendment or
supplement thereto in accordance with applicable law;
(d) use its best efforts to register or qualify the Registrable Notes
under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Notes covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with
such Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in each such jurisdiction of such
Registrable Notes owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general
consent to service of process or (iii) subject itself to taxation in any
such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes, counsel for the Holders and counsel for MS&Co. promptly
and, if requested by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become effective and when any
post-effective amendment thereto has been filed and becomes effective, (ii)
of any request by the SEC or any state securities authority for amendments
and supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if,
between the effective date of a Registration Statement and the closing of
any sale of Registrable Notes covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all material respects or if
the Company receives any notification with respect to the suspension of the
qualification of the Registrable Notes for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the happening of any
event during the period a Shelf Registration Statement is effective which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires the making of
any changes in such Registration Statement or Prospectus in order to make
the statements therein not misleading and (vi) of any determination by the
Company that a post-effective amendment to a Registration Statement would
be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide immediate notice to each Holder of the
withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, without charge, at least one conformed copy of each
Registration Statement and
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any post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and not
bearing any restrictive legends and enable such Registrable Notes to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders may reasonably request at
least one business day prior to the closing of any sale of Registrable
Notes;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to
prepare and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes,
such Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company agrees to notify the Holders to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and the
Holders hereby agree to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or
omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to MS&Co. and its counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel) and make such of the
representatives of the Company as shall be reasonably requested by MS&Co.
or its counsel (and, in the case of a Shelf Registration Statement, the
Holders or their counsel) available for discussion of such document, and
shall not at any time file or make any amendment to the Registration
Statement, any Prospectus or any amendment of or supplement to a
Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which MS&Co. and its counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) shall not have previously been
advised and furnished a copy or to which MS&Co. or its counsel (and, in the
case of a Shelf Registration Statement, the Holders or their counsel) shall
object;
(k) obtain a CUSIP number for all Exchange Notes or Registrable
Notes, as the case may be, not later than the effective date of a
Registration Statement, to the extent an existing CUSIP number is not
already available for such Exchange Notes or Registrable Notes;
(l) to the extent required, cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with
the registration of the Exchange Notes or Registrable Notes, as the case
may be, cooperate with the Trustee and
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the Holders to effect such changes to the Indenture as may be required for
the Indenture to be so qualified in accordance with the terms of the TIA
and execute, and use its best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be
so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable Notes, any
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all financial and
other records, pertinent documents and properties of the Company, and cause
the respective officers, directors and employees of the Company to supply
all information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with a Shelf Registration
Statement;
(n) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Notes to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the
Company are then listed if requested by the Majority Holders, to the extent
such Registrable Notes satisfy applicable listing requirements;
(o) use its best efforts to cause the Exchange Notes to continue to
be rated by two nationally recognized statistical rating organizations (as
such term is defined in Rule 436(g)(2) under the 1933 Act), if the
Registrable Notes have been rated;
(p) if reasonably requested by any Holder of Registrable Notes
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such filing; and
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith
(including those requested by the Holders of a majority of the Registrable
Notes being sold) in order to expedite or facilitate the disposition of
such Registrable Notes including, but not limited to, an Underwritten
Offering and in such connection, (i) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of such
Registrable Notes with respect to the business of the Company and its
subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, in
each case, in form, substance and scope as are customarily made by issuers
to underwriters in underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company (which counsel
and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective
counsel) addressed to each selling Holder and Underwriter of Registrable
Notes, covering the matters customarily covered in opinions requested in
underwritten offerings, (iii) obtain "cold comfort" letters from the
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independent certified public accountants of the Company (and, if necessary,
any other certified public accountant of any subsidiary of the Company, or
of any business acquired by the Company for which financial statements and
financial data are or are required to be included in the Registration
Statement) addressed to each selling Holder and Underwriter of Registrable
Notes, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in principal
amount of the Registrable Notes being sold or the Underwriters, and which
are customarily delivered in underwritten offerings, to evidence the
continued validity of the representations and warranties of the Company
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may require
each Holder of Registrable Notes to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Notes as the Company may from time to time reasonably request in
writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(e)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Notes pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by
the Company, such Holder will deliver to the Company (at its expense) all copies
in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Notes current at the
time of receipt of such notice. If the Company shall give any such notice to
suspend the disposition of Registrable Notes pursuant to a Registration
Statement, the Company shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such
notice to and including the date when the Holders shall have received copies of
the supplemented or amended Prospectus necessary to resume such dispositions.
The Company may give any such notice only twice during any 365 day period and
any such suspensions may not exceed 30 days for each suspension and there may
not be more than two suspensions in effect during any 365 day period.
The Holders of Registrable Notes covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Notes in an Underwritten
Offering. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders of the
Registrable Notes included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
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(a) The Staff of the SEC has taken the position that any broker-
dealer that receives Exchange Notes for its own account in the Exchange Offer in
exchange for 13% Notes that were acquired by such broker-dealer as a result of
market-making or other trading activities (a "Participating Broker-Dealer"), may
be deemed to be an "underwriter" within the meaning of
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the 1933 Act and must deliver a prospectus meeting the requirements of the 1933
Act in connection with any resale of such Exchange Notes.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Notes, without naming
the Participating Broker-Dealers or specifying the amount of Exchange Notes
owned by them, such Prospectus may be delivered by Participating Broker-Dealers
to satisfy their prospectus delivery obligation under the 1933 Act in connection
with resales of Exchange Notes for their own accounts, so long as the Prospectus
otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by MS&Co. or by one or more Participating Broker-
Dealers, in each case as provided in clause (ii) below, in order to expedite or
facilitate the disposition of any Exchange Notes by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above;
provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 3(i), for a period exceeding 180 days
after the last Exchange Date (as such period may be extended pursuant to
the penultimate paragraph of Section 3 of this Agreement) and Participating
Broker-Dealers shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection with the
resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the Staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in conformity with
the reasonable request to the Company by MS&Co. or with the reasonable
request in writing to the Company by one or more broker-dealers who certify
to MS&Co. and the Company in writing that they anticipate that they will be
Participating Broker-Dealers; and provided further that, in connection with
such application of the Shelf Registration procedures set forth in Section
3 to an Exchange Offer Registration, the Company shall be obligated (x) to
deal only with one entity representing the Participating Broker-Dealers,
which shall be MS&Co. unless it elects not to act as such representative,
(y) to pay the fees and expenses of only one counsel representing the
Participating Broker-Dealers, which shall be counsel to MS&Co. unless such
counsel elects not to so act and (z) to cause to be delivered only one, if
any, "cold comfort" letter with respect to the Prospectus in the form
existing on the last Exchange Date and with respect to each subsequent
amendment or supplement, if any, effected during the period specified in
clause (i) above.
(c) MS&Co. shall have no liability to the Company or any Holder with
respect to any request that it may make pursuant to Section 4(b) above.
11
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless MS&Co., each
Holder of Registrable Notes and each Person, if any, who controls MS&Co. or any
Holder of Registrable Notes within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, MS&Co. or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by MS&Co., any Holder or any such controlling or
affiliated Person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
pursuant to which Exchange Notes or Registrable Notes were registered under the
1933 Act, including all documents incorporated therein by reference, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to MS&Co. or any Holder of Registrable
Notes furnished to the Company in writing by MS&Co. or any selling Holder
expressly for use therein. In connection with any Underwritten Offering
permitted by Section 3, the Company will also indemnify the Underwriters, if
any, selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of the 1933 Act and the 0000 Xxx)
to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Each Holder of Registrable Notes agrees, severally and not
jointly, to indemnify and hold harmless the Company, MS&Co. and the other
selling Holders, and each of their respective directors, officers who sign the
Registration Statement and each Person, if any, who controls the Company, MS&Co.
and any other selling Holder within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity
from the Company to MS&Co. and the Holders of Registrable Notes, but only with
reference to information relating to such Holder furnished to the Company in
writing by such Holder expressly for use in any Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such
12
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. In such case involving MS&Co. and
Persons who control MS&Co., such firm shall be designated in writing by MS&Co.
In such case involving the Holders and such Persons who control Holders, such
firm shall be designated in writing by the Majority Holders. In all other cases,
such firm shall be designated by the Company. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but, if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party for such fees and expenses of
counsel in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which such indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and Holders of Registrable Notes, on the other hand,
from the Recapitalization Agreement or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Holders
of Registrable Notes on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to contribute
13
pursuant to this Section 5(d) are several in proportion to the respective
principal amount of Registrable Notes of such Holder that were registered
pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Notes were
sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
MS&Co., any Holder of Registrable Notes or any Person controlling MS&Co. or any
Holder, or by or on behalf of the Company, its officers or directors or any
Person controlling the Company, (iii) acceptance of any of the Exchange Notes
and (iv) any sale of Registrable Notes pursuant to a Shelf Registration
Statement.
The Company agrees to indemnify the Trustee in accordance with Section
7.7 of the Indenture in connection with the Trustee's acceptance and
administration of this Agreement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into, and
--------------------------
on or after the date of this Agreement will not enter into, any agreement which
is inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement, waiver
or consent; provided, however, that no amendment, modification, supplement,
waiver or consent to any departure from the provisions of Section 5 hereof shall
be effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder.
14
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder of Registrable Notes, initially at the address set forth for
such Holder in the Recapitalization Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Recapitalization Agreement,
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Notes in
violation of the terms of the Indenture. If any transferee of any Holder shall
acquire Registrable Notes, in any manner, whether by operation of law or
otherwise, such Registrable Notes shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable Notes such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof. Neither MS&Co. nor the Trustee shall have any
liability or obligation to the Company with respect to any failure by any Holder
(or, with respect to MS&Co., any other Holder) to comply with, or any breach by
any Holder (or, with respect to MS&Co., any other Holder) of, any of the
obligations of such Holder under this Agreement.
(e) Third Party Beneficiary. The Holders and MS&Co. shall be third
-----------------------
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Trustee, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
15
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Market-Making.
-------------
(i) The Company hereby agrees after the consummation of an
Exchange Offer or the effectiveness of a Shelf Registration Statement
and for so long as the 13% Notes are outstanding, if, in the judgment
of MS&Co., it or any of its affiliates (as such term is defined in the
rules and regulations under the 0000 Xxx) is required to deliver a
prospectus in connection with sales of, or market-making activities
with respect to, such securities, (A) to periodically amend the
applicable registration statement so that the information contained
therein complies with the requirements of Xxxxxxx 00(x) xx xxx 0000
Xxx, (X) within 45 days following the end of the Company's most recent
fiscal quarter, other than the last fiscal quarter of any fiscal year,
to file a supplement to the prospectus included in the applicable
registration statement which sets forth the financial results of the
Company for the previous quarter, (C) within 90 days following the end
of the Company's most recent fiscal year, to file an amendment to the
applicable registration statement which sets forth the financial
results of the Company for the previous year, (D) to amend the
applicable registration statement or supplement, the related
prospectus or the documents incorporated therein when necessary to
reflect any material changes in the information provided therein so
that the registration statement and the prospectus will not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of
the circumstances existing as of the date the prospectus is so
delivered, not misleading and (E) to provide MS&Co. with copies of
each such amendment or supplement as MS&Co. may request.
(ii) The Company hereby agrees that notwithstanding clause (i)
above, (A) prior to filing any post-effective amendment to any
registration statement or to supplementing any related prospectus, to
furnish to MS&Co. and its counsel, copies of all such documents
proposed to be amended, filed or supplemented, and (B) it will not
issue any post-effective amendment to a registration statement or any
supplement to a prospectus to which MS&Co. or its counsel shall
object.
(iii) The Company hereby agrees that it will notify MS&Co. and
its counsel and (if requested by any such person) confirm such advice
16
in writing, (A) when any prospectus supplement or amendment or post-
effective amendment has been filed, and, with respect to any post-
effective amendment, when the same has become effective, (B) of any
request by the SEC for any post-effective amendment or supplement to a
registration statement, any supplement or amendment to a prospectus or
for additional information, (C) the issuance by the SEC of any stop
order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (D) of the receipt by
it of any notification with respect to the suspension of the
qualification of the 13% Notes for sale in any jurisdiction or the
initiation or threatening of any proceedings for such purpose and (E)
of the happening of any event which makes any statement made in a
registration statement, a prospectus or any amendment or supplement
thereto untrue or which requires the making of any change in the
registration statement, a prospectus or any amendment or supplement
thereto, in order to make the statements therein not misleading.
(iv) The Company hereby agrees that it consents to the use of any
prospectus referred to in this paragraph (j) or any amendment or
supplement thereto by MS&Co. and its affiliates in connection with the
offering and sale of the 13% Notes; provided that upon receipt of any
--------
notice from the Company of the happening of any event of the kind
described in clause (iii)(E) of this paragraph (j), MS&Co. and its
affiliates will forthwith discontinue disposition of such 13% Notes
pursuant to any such prospectus until MS&Co. and its affiliates
receive copies of a supplemented or amended prospectus referred to in
this paragraph (j); any such suspensions may not exceed 60 days in any
365-day period; any notices to MS&Co. pursuant to this clause (v)
shall be sent to Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx
Xxxx, XX, 00000, Attention: Xxxxxxx Xxxxxxx, facsimile number: (212)
761-0392, with copies to the Law Division, Attention: Xxxxx
Xxxxxxx/Xxxxx XxXxxxxx, facsimile number (000) 000-0000, and shall be
deemed to have been duly given or made only upon receipt.
(v) In connection with the effectiveness of the Shelf
Registration Statement or any amendment thereto or supplemental
prospectus, in each case including any Form 10-K or Form 10-Q that is
incorporated by reference in such Shelf Registration Statement
required by this paragraph (j), if requested by MS&Co., it will cause
to be provided to MS&Co. a "cold comfort" letter from the Company's
independent public accountants (covering matters customarily covered
in "cold comfort" letters delivered in underwritten offerings) and
such documents and certificates as may be reasonably requested by
MS&Co. In addition, in connection with the effectiveness of the Shelf
Registration Statement or any amendment thereto, or in connection with
the filing of any Form 10-K that is incorporated by reference in such
Shelf Registration Statement required by this paragraph (j), if
requested by MS&Co., the Company will
17
cause to be provided to MS&Co. an opinion of counsel (covering matters
customarily covered in opinions delivered in underwritten offerings).
(vi) The Company hereby agrees that it will comply with the
provisions of this paragraph (j) at its own expense and will reimburse
MS&Co. for its expenses associated with this paragraph (j) (including
reasonable fees of counsel).
(vii) The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Section 5 of this
Agreement shall be specifically applicable and relate to each
registration statement, prospectus, amendment or supplement referred
to in this paragraph (j) except with respect to losses, claims or
liabilities resulting from the delivery of any prospectus to the
extent that it is established that such prospectus was delivered by
MS&Co. after it received notice to discontinue using it in accordance
with clause (iv) of this paragraph (j).
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
EARTHWATCH INCORPORATED
By /s/ Xxxxxxx X. Xxxxxxxxx, III
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, III
Title: Chief Executive Officer,
Director and President
Agreed, as of the date first above written:
THE BANK OF NEW YORK, as Trustee
By /s/ Van X. Xxxxx
-----------------------------------
Name: Van X. Xxxxx
Title: Vice President
XXXXXX XXXXXXX & CO. INCORPORATED
By /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
19
