REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into this 16th day of July, 1998, by and among CapRock Communications
Corp., a Texas corporation (the "COMPANY"), CapRock Telecommunications Corp., a
Texas corporation ("TELECOMMUNICATIONS"), and CapRock Fiber Network, Ltd., a
Texas limited partnership (the "PARTNERSHIP"), and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation and Banc One Capital Markets, Inc. (each, an "INITIAL PURCHASER" and
collectively, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement, dated
July 10, 1998, by and among the Company, Telecommunications, the Partnership,
IWL Communications, Incorporated ("IWL") and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company,
Telecommunications and the Partnership to the Initial Purchasers of an aggregate
of $150 million aggregate principal amount of their 12% Senior Notes due 2008,
Series A (the "SECURITIES"). In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Company, Telecommunications and the Partnership
have agreed to provide to the Initial Purchasers 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 under the Purchase 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
to time, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
"ADDITIONAL INTEREST" shall have the meaning set forth in Section
2.5(a).
"CLOSING DATE" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMBINATION" shall have the meaning set forth for such term in the
Purchase Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Issuer; PROVIDED, HOWEVER, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"EVENT DATE " shall have the meaning set forth in Section 2.5(c).
"EXCHANGE OFFER" shall mean the exchange offer by the Issuer of
Exchange Securities for Registrable Securities pursuant to Section 2.1
hereof
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, including the Prospectus contained therein, all exhibits thereto
and all documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section
2.1(b)(ii) hereof.
"EXCHANGE SECURITIES" shall mean the 12% Senior Notes due 2008, Series
B issued by the Issuer under the Indenture containing terms identical to
the Securities in all material respects (except for references to certain
interest rate provisions, restrictions on transfers and restrictive
legends), to be offered to Holders of Securities in exchange for
Registrable Securities pursuant to the Exchange Offer.
"HOLDER" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture and each Participating Broker-Dealer that holds
Exchange Securities for so long as such Participating Broker-Dealer is
required to deliver a Prospectus
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meeting the requirements of the 1933 Act in connection with any resale of
such Exchange Securities.
"INDENTURE" shall mean the Indenture relating to the Securities, dated
as of July 16, 1998 among the Company, Telecommunications, the Partnership,
IWL and PNC Bank, National Association, as Trustee, as the same may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"INITIAL PURCHASER" or "INITIAL PURCHASERS" shall have the meaning set
forth in the preamble.
"ISSUER" shall initially mean, collectively, the Company,
Telecommunications and the Partnership and shall mean (i) the Company,
after the Combination is consummated, or (ii) Telecommunications and the
Partnership after the payment of all Securities tendered pursuant to the
offer to purchase contemplated by Section 10.21 of the Indenture has been
made, if any Securities remain outstanding.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; PROVIDED
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Issuer and other obligors on the Securities or any Affiliate
(as defined in the Indenture) of the Issuer shall be disregarded in
determining whether such consent or approval was given by the Holders of
such required percentage amount.
"PARTICIPATING BROKER-DEALER" shall mean any of ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation and Banc One Capital Markets, Inc. and any other broker-dealer
which makes a market in the Securities and exchanges Registrable Securities
in the Exchange Offer for Exchange Securities.
"PARTNERSHIP" shall mean CapRock Fiber Network, Ltd., a Texas limited
partnership, and shall also include its successors.
"PERSON" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section 2.1(c)
hereof.
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"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
Section 2.1(c) hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"REGISTRABLE SECURITIES" shall mean the Securities and, if issued, the
Private Exchange Securities; PROVIDED, HOWEVER, that Securities and, if
issued, the Private Exchange Securities, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities have been sold to the public pursuant to
Rule 144 (or any similar provision then in force, but not Rule 144A) under
the 1933 Act, (iii) such Securities shall have ceased to be outstanding or
(iv) the Exchange Offer is consummated (except in the case of Securities
purchased from the Issuer and continued to be held by any one of the
Initial Purchasers and except for Private Exchange Securities).
"REGISTRATION DEFAULT " shall have the meaning set forth in Section
2.5(a).
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Issuer with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees,
including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be retained
by any holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws and compliance with
the rules of the NASD (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities
and any filings with the NASD), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Registration
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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
fees and expenses incurred in connection with the listing, if any, of any
of the Registrable Securities on any securities exchange or exchanges, (v)
all rating agency fees, (vi) the fees and disbursements of counsel for the
Issuer and of the independent public accountants of the Issuer including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (vii) the fees and expenses of
the Trustee, including its counsel, and any escrow agent or custodian,
(viii) the reasonable fees and expenses of the Initial Purchasers in
connection with the Exchange Offer, including the reasonable fees and
expenses of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the Initial
Purchasers in connection therewith, (ix) the reasonable fees and
disbursements of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP special counsel
representing the Holders of Registrable Securities and the Initial
Purchasers and (x) any fees and disbursements of the underwriters
customarily required to be paid by issuers or sellers of securities and the
fees and expenses of any special experts retained by the Issuer in
connection with any Registration Statement, but excluding underwriting
discounts and commissions and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Issuer which covers any of the Exchange Securities or Registrable
Securities 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 or any
successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2.2 hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Issuer pursuant to the provisions of Section 2.2 of this
Agreement which covers all of the Registrable Securities or all of the
Private Exchange Securities 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
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registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TELECOMMUNICATIONS" means CapRock Telecommunications Corp, a Texas
corporation, and shall also include its successors.
"TIA " shall have the meaning set forth in Section 2.1(d).
"TRANSFER RESTRICTED SECURITIES" shall mean each Security and each
Private Exchange Security until:
(i) the date on which such Security has been exchanged by a
Person other than a broker-dealer for an Exchange Security in the
Exchange Offer;
(ii) following the exchange by a broker-dealer in the
Exchange Offer of a Security for an Exchange Security, the date on
which such Exchange Security is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement;
(iii) the date on which such Security or Private Exchange
Security has been effectively registered under the 1933 Act and
disposed of in accordance with the Shelf Registration Statement;
(iv) the date on which such Security or Private Exchange
Security is distributed to the public pursuant to Rule 144(k) under
the 1933 Act (or any similar provision then in force, but not Rule
144A under the 1933 Act);
(v) such Security or Private Exchange Security shall have
been otherwise transferred by the holder thereof and a new Security
not bearing a legend restricting further transfer shall have been
delivered by the Issuer and subsequent disposition of such Security
shall not require registration or qualification under the 1933 Act or
any similar state law then in force; or
(vi) such Security or Private Exchange Security ceases to be
outstanding.
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"TRUSTEE" shall mean the trustee with respect to the Securities and
the Exchange Securities under the Indenture.
"UNDERWRITER " shall have the meaning set forth in Section 4(a).
2. REGISTRATION UNDER THE 1933 ACT.
2.1 EXCHANGE OFFER. (a) To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the Issuer
shall, for the benefit of the Holders, at the Issuer's cost, (i) prepare and, as
soon as practicable but not later than 120 days after the date of this
Agreement, file with the SEC an Exchange Offer Registration Statement on an
appropriate form under the 1933 Act with respect to a proposed Exchange Offer
and the issuance and delivery to the Holders, in exchange for the Registrable
Securities (other than Securities purchased from the Issuer and continued to be
held by any one of the Initial Purchasers and except for Private Exchange
Securities), of a like principal amount of Exchange Securities, (ii) use its
best efforts to cause the Exchange Offer Registration Statement to be declared
effective under the 1933 Act within 180 days after the date of this Agreement,
(iii) use its best efforts to keep the Exchange Offer Registration Statement
effective until the closing of the Exchange Offer or (iv) use its best efforts
to cause the Exchange Offer to be consummated not later than 215 days after the
date of this Agreement. The Exchange Securities will be issued under the
Indenture. Upon the effectiveness of the Exchange Offer Registration Statement,
the Issuer shall promptly commence the Exchange Offer, it being the objective of
such Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder (i) is
not an affiliate of the Issuer within the meaning of Rule 405 under the 1933
Act, (ii) is not a broker-dealer tendering Registrable Securities acquired
directly from the Issuer or an affiliate of the Issuer for its own account,
(iii) acquired the Exchange Securities in the ordinary course of such Holder's
business and (iv) has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the 1933 Act and under state
securities or blue sky laws.
(b) In connection with the Exchange Offer, the Issuer shall:
(i) mail as promptly as practicable to each Holder a copy
of the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a
period of not less than 20 business days after the date notice thereof is mailed
to the Holders (or
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longer if required by applicable law) (such period referred to herein as the
"EXCHANGE PERIOD");
(iii) utilize the services of the Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Registrable
Securities at any time prior to 5.00 p.m. (Eastern Time), on the last business
day of the Exchange Period, by sending to the institution specified in the
notice, a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Securities delivered
for exchange, and a statement that such Holder is withdrawing such Holder's
election to have such Securities exchanged;
(v) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
(c) If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them that have the status of an
unsold allotment in the initial distribution, the Issuer upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "PRIVATE EXCHANGE") for the Securities held by such Initial
Purchaser, a like principal amount of debt securities of the Issuer on a senior
basis, that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the "PRIVATE EXCHANGE
SECURITIES").
(d) The Exchange Securities and the Private Exchange Securities
shall be issued under (i) the Indenture or (ii) an indenture identical in all
material respects to the Indenture and which, in either case, has been qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from
such qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions set forth in the Indenture but that the
Private Exchange Securities shall be subject to such transfer restrictions. The
Indenture or such indenture shall provide that the Exchange Securities, the
Private Exchange Securities and the Securities shall vote and consent together
on all matters as one class and that none of the Exchange Securities, the
Private Exchange Securities or the Securities will have the right to vote or
consent as a separate class on any matter. The Private Exchange Securities
shall be of the same series as the Exchange
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Securities and the Issuer shall use all commercially reasonable efforts to have
the Private Exchange Securities bear the same CUSIP number as the Exchange
Securities. The Issuer shall not have any liability under this Agreement solely
as a result of such Private Exchange Securities not bearing the same CUSIP
number as the Exchange Securities.
(e) As soon as practicable after the close of the Exchange Offer
and/or the Private Exchange, as the case may be (to the extent not prohibited by
any applicable law or applicable interpretation of the staff of the SEC, the
Issuer shall use its best efforts to issue, on or prior to the 35th day
following the date the Exchange Offer Registration Statement is declared
effective by the SEC), the Issuer shall:
(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement and
the letter of transmittal which shall be an exhibit thereto;
(ii) accept for exchange all Securities properly tendered
pursuant to the Private Exchange;
(iii) deliver to the Trustee for cancellation all Registrable
Securities so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and deliver
Exchange Securities or Private Exchange Securities, as the case may be, to
each Holder of Registrable Securities so accepted for exchange in a
principal amount equal to the principal amount of the Registrable
Securities of such Holder so accepted for exchange.
(f) Interest on each Exchange Security and Private Exchange
Security will accrue from the last date on which interest was paid on the
Registrable Securities surrendered in exchange therefor or, if no interest has
been paid on the Registrable Securities, from the date of original issuance.
The Exchange Offer and the Private Exchange shall not be subject to any
conditions, other than (i) that the Exchange Offer or the Private Exchange, or
the making of any exchange by a Holder, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) the due tendering of
Registrable Securities in accordance with the Exchange Offer and the Private
Exchange, (iii) that each Holder of Registrable Securities exchanged in the
Exchange Offer shall have represented that it is not an affiliate (as defined in
Rule 405 promulgated under the ▇▇▇▇ ▇▇▇) of the Issuer or if it is an affiliate,
it will comply with the registration and prospectus delivery requirements of the
1933 Act to the extent applicable, that all Exchange Securities to be received
by it shall be acquired in the ordinary course of its business and that at the
time of the consummation of the Exchange Offer it shall have no
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arrangement or understanding with any person to participate in the distribution
(within the meaning of the ▇▇▇▇ ▇▇▇) of the Exchange Securities and shall have
made such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer or the Private
Exchange which, in the Issuer's judgment, would reasonably be expected to impair
the ability of the Issuer to proceed with the Exchange Offer or the Private
Exchange. To the extent permitted by law and ascertainable by the Issuer, the
Issuer shall inform the Initial Purchasers of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
2.2 SHELF REGISTRATION. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Issuer is not permitted to effect the Exchange Offer as contemplated by
Section 2.1 hereof, (ii) if for any other reason the Exchange Offer Registration
Statement is not declared effective within 180 days following the date of this
Agreement or the Exchange Offer is not consummated within 215 days after the
date of this Agreement, (iii) any Holder of Securities notifies the Issuer
within a specified time period that (a) due to a change in law or policy it is
not entitled to participate in the Exchange Offer, (b) due to a change in law or
policy it may not resell the Exchange Securities acquired by it in the Exchange
Offer to the public without delivering a prospectus and (x) the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such holder and (y) such Prospectus is not
promptly amended or modified in order to be suitable for use in connection with
such resales for such holder and all similarly situated holders or (c) it is a
broker-dealer and owns Securities acquired directly from the Issuer or an
affiliate of the Issuer for its own account or (iv) the holders of a majority of
the Securities may not resell the Exchange Securities acquired or that would be
acquired by them in the Exchange Offer to the public without restriction under
the 1933 Act and without restriction under applicable blue sky or state
securities laws, the Issuer will file with the Commission the Shelf Registration
Statement to cover resales of the Transfer Restricted Securities by the holders
thereof.
(x) As promptly as practicable, but in any event prior to
the later of (1) 120 days after the date of this Agreement or (2) 30 days
after the obligation to file the Shelf Registration Statement arises, file
with the SEC, and thereafter shall use its best efforts to cause to be
declared effective as promptly as practicable but no later than 60 days
after such filing obligation arises, a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders
from time to time in accordance with the methods of distribution elected by
the Majority Holders participating in the Shelf Registration and set
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forth in such Shelf Registration Statement; provided that, with respect to
Exchange Securities received by a broker-dealer in exchange for any
securities that were acquired by such broker-dealer as a result of market
making or other trading activities, the Issuer may, if permitted by current
interpretations by the Commission's staff, file a post-effective amendment
to the Exchange Offer Registration Statement containing the information
required by Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of its obligations under this Section solely with respect to
broker-dealers who acquired their Securities as a result of market making
or other trading activities, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and governed by
the provisions herein applicable to, a Shelf Registration Statement. In
the event that the Issuer is required to file a Shelf Registration
Statement upon the request of any Holder (including an Initial Purchaser)
not eligible to participate in the Exchange Offer pursuant to clause (iii)
or (iv) above, the Issuer shall file and use its best efforts to have
declared effective by the SEC both an Exchange Offer Registration Statement
pursuant to Section 2.1 with respect to all Registrable Securities 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 Securities held by such Holder or such
Initial Purchaser, as applicable, after completion of the Exchange Offer.
(y) Use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming
part thereof to be usable by Holders for a period of two years from the
date the Shelf Registration Statement is declared effective by the SEC, or
for such shorter period that will terminate when all Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement or cease to be outstanding or otherwise to be
Registrable Securities (the "EFFECTIVENESS PERIOD"); PROVIDED, HOWEVER,
that the Effectiveness Period in respect of the Shelf Registration
Statement shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174
under the 1933 Act and as otherwise provided herein; and
(z) Notwithstanding any other provisions hereof, use its
best efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any
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Shelf Registration Statement, and any supplement to such Prospectus (as
amended or supplemented from time to time), does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in light of the circumstances under which
they were made, not misleading.
The Issuer shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement. The Issuer
further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, as required by Section 3(b) below, and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
2.3 EXPENSES. The Issuer shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. 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 Securities
pursuant to the Shelf Registration Statement and the fees and expenses of
counsel other than the one counsel set forth in the definition of Registration
Expenses.
2.4 EFFECTIVENESS.
(a) The Issuer will be deemed not to have used its best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if the Issuer voluntarily takes any action that
would, or omits to take any action which omission would, result in any such
Registration Statement not being declared effective or in the Holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless (i) such action is required by applicable law or
(ii) such action is taken by the Issuer in good faith pursuant to Section
2.4(c).
(b) An Exchange Offer Registration Statement pursuant to
Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2
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 Securities pursuant to an Exchange Offer
Registration Statement or 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 Securities pursuant to such Registration Statement may legally
resume.
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(c) During any 365-day period, the Issuer may suspend the
availability of a Shelf Registration Statement and the use of the related
Prospectus, should an event or discovery occur as described in Section 3(h)(v)
or (vi), for up to two periods of up to 45 consecutive days (except for the
consecutive 45-day period immediately prior to maturity of the Security), but no
more than an aggregate 60 days during any 365-day period, if any event shall
occur as a result of which it shall be necessary, in the good faith
determination of the board of directors of the Issuer, to amend the Shelf
Registration Statement or amend or supplement any Prospectus or prospectus
supplement thereunder in order that each such document not include any untrue
statement of fact or omit the state a material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.
2.5 INTEREST. (a) The Indenture executed in connection with the
Securities provides that in the event that either (i) the Exchange Offer
Registration Statement is not filed with the SEC on or prior to the 120th
calendar day after the date of this Agreement, (ii) the Exchange Offer
Registration Statement has not been declared effective on or prior to the 180th
calendar day after the date of this Agreement, (iii) the Exchange Offer is not
consummated or, if required, a Shelf Registration Statement is not declared
effective, in either case, on or prior to the 215th calendar day after the date
of this Agreement or (iv) the Exchange Offer Registration Statement is declared
effective but thereafter ceased to be effective or usable (each such event
referred to in clauses (i) through (iv) above, a "REGISTRATION DEFAULT"), the
interest rate borne by the Securities shall be increased ("ADDITIONAL INTEREST")
by one-half of one percent (0.50%) per annum upon the occurrence of each
Registration Default, which rate will increase by one half of one percent each
90-day period that such Additional Interest continues to accrue under any such
circumstance; PROVIDED that the maximum aggregate increase in the interest rate
will in no event exceed one percent (1%) per annum. Upon (w) the filing of the
Exchange Offer Registration Statement after the 120-day period described in
clause (i) above, (x) the effectiveness of the Exchange Offer Registration
Statement after the 180-day period described in clause (ii) above, (y) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 215-day period described in clause
(iii) above, or (z) the cure of any Registration Default described in clause
(iv) above, such additional interest shall cease to accrue from date of such
filing, effectiveness, consummation or cure, as the case may be, if the Issuer
is otherwise in compliance with this paragraph; provided, however, that if,
after any such additional interest ceases to accrue, a different event specified
in clause (i), (ii), (iii) or (iv) above occurs, such additional interest will
again accrue pursuant to the foregoing provision.
(b) The Issuer shall notify the Trustee within five business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Additional
Interest shall be paid by depositing
-13-
with the Trustee, in trust, for the benefit of the Holders of Registrable
Securities before the applicable semiannual interest payment date, immediately
available funds in sums sufficient to pay the Additional Interest then due. The
Additional Interest due shall be payable on each interest payment date to the
record Holder of Securities entitled to receive the interest payment to be paid
on such date as set forth in the Indenture. Each obligation to pay Additional
Interest shall be deemed to accrue from and including the day following the
applicable Event Date.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Issuer with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Issuer
shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Issuer, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and (iv) shall comply in
all respects with the requirements of Regulation S-T under the 1933 Act, 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
under applicable law 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
(or any similar provision then in force) under the 1933 Act and comply with the
provisions of the 1933 Act, the 1934 Act and the rules and regulations
thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Holders thereof (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of
-14-
each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to the third from
the last paragraph of this Section 3, hereby consent to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
of Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
(d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; PROVIDED, HOWEVER, that the Issuer
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), or (ii) take any action which would subject
it to general service of process or taxation in any such jurisdiction where it
is not then so subject;
(e) if, following the date hereof there has been announced a change
in SEC policy with respect to exchange offers such as the Exchange Offer, that
in the reasonable opinion of counsel to the Issuer raises a substantial question
as to whether the Exchange Offer is permitted by applicable federal law, the
Issuer hereby agrees to seek a no-action letter or other favorable decision from
the SEC allowing the Issuer to consummate an Exchange Offer for such Registrable
Securities. The Issuer hereby agrees to pursue the issuance of such a decision
to the SEC staff level. In connection with and subject to the foregoing, the
Issuer hereby agrees to take all such other actions as may be reasonably
requested by the SEC or otherwise required in connection with the issuance of
such decision, including, without limitation, (A) participating in telephonic
conferences with the SEC, (B) delivering to the SEC staff an analysis prepared
by counsel to the Issuer setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted and (C)
diligently pursuing a resolution (which need not be favorable) by the SEC staff;
(f) as a condition to its participation in the Exchange Offer, each
Holder of Registrable Securities (including, without limitation, any Holder who
is a Participating Broker-Dealer) shall furnish, upon the request of the Issuer,
prior to the consummation of the Exchange Offer, a written representation to the
Issuer (which may
-15-
be contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of the
Issuer, (B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a distribution
of the Exchange Securities to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Securities in its ordinary course of business. In
addition, all such Holders of Registrable Securities shall otherwise reasonably
cooperate to the extent necessary in the Issuer's preparations for the Exchange
Offer. Each Holder using the Exchange Offer to participate in a distribution of
the Exchange Securities hereby acknowledges and agrees that, if the resales are
of Exchange Securities obtained by such Holder in exchange for Securities
acquired directly from the Issuer or an affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement, rely on the
position of the SEC enunciated in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AND CO., INC. (available June
5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as
interpreted in the SEC's letter to SHEARMAN & STERLING dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action letter
obtained pursuant to clause (e) above), and (2) must comply with the
registration and prospectus delivery requirements of the 1933 Act in connection
with a secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K;
(g) prior to effectiveness of the Exchange Offer Registration
Statement, the Issuer shall, to the extent requested or required by the SEC,
provide a supplemental letter to the SEC (A) stating that the Issuer is
registering the Exchange Offer in reliance on the position of the SEC enunciated
in EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AND CO., INC. (available June 5, 1991) as interpreted in the SEC's letter to
SHEARMAN & STERLING dated July 2, 1993, and, if applicable, any no-action letter
obtained pursuant to clause (e) above, (B) including a representation that the
Issuer has not entered into any arrangement or understanding with any Person to
distribute the Exchange Securities to be received in the Exchange Offer, and to
the extent that the Issuer is capable of so representing, to the best of the
Issuer's information and belief, each Holder participating in the Exchange Offer
is acquiring the Exchange Securities in its ordinary course of business and has
no arrangement or understanding with any Person to participate in the
distribution of the Exchange Securities received in the Exchange Offer and (C)
any other undertaking or representation required by the SEC as set forth in any
no-action letter obtained pursuant to clause (e) above, if applicable;
(h) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Issuer that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) above and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in
-16-
writing promptly (i) when a Registration Statement has become effective and when
any post-effective amendments and supplements thereto become effective, (ii) of
any request by the SEC or any state securities authority for post-effective
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) in the case of a Shelf Registration,
if, between the effective date of a Registration Statement and the closing of
any sale of Registrable Securities covered thereby, the representations and
warranties of the Issuer 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, (v) of the happening of
any event or the discovery of any facts 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, (vi) of the receipt by
the Issuer of any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities, as the
case may be, for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (vii) of any determination by the Issuer
that a post-effective amendment to such Registration Statement would be
appropriate;
(i) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ on
behalf of the Participating Broker-Dealers, and which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that holds
Registrable Securities acquired for its own account as a result of market-making
activities or other trading activities and that will be the beneficial owner (as
defined in Rule l3d-3 under the ▇▇▇▇ ▇▇▇) of Exchange Securities to be received
by such broker-dealer in the Exchange Offer, whether such positions or policies
have been publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the
Participating Broker-Dealers, and its counsel, represent the prevailing views of
the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the Exchange
Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Issuer the notice referred to in Section 3(c), without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably
-17-
request, (iii) hereby consent to the use of the Prospectus forming part of the
Exchange Offer Registration Statement or any amendment or supplement thereto, by
any Person subject to the prospectus delivery requirements of the SEC, including
all Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:
"If the exchange offeree is not a broker-dealer, it hereby represents
that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities. If the exchange offeree is a
broker-dealer that will receive Exchange Securities for its own
account in exchange for Registrable Securities that were acquired as a
result of market-making activities or other trading activities, it
will deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of Exchange Securities received in respect
of such Registrable Securities pursuant to the Exchange Offer;" and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act;
(j) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Issuer agrees to deliver to the Initial Purchasers on
behalf of the Participating Broker-Dealers upon the effectiveness of the
Exchange Offer Registration Statement, (i) officers' certificates substantially
in the form customarily delivered in a public offering of debt securities and
(ii) a comfort letter or comfort letters in customary form to the extent
permitted by Statement on Auditing Standards No. 72 of the American Institute of
Certified Public Accountants (or if such a comfort letter is not permitted, an
agreed upon procedures letter in customary form) from the Issuer's independent
certified public accountants (and, if necessary, any other independent certified
public accountants of any subsidiary of the Issuer or of any business acquired
by the Issuer for which financial statements are, or are required to be,
included in the Registration Statement) at least as broad in scope and coverage
as the comfort letter or comfort letters delivered to the Initial Purchasers in
connection with the initial sale of the Securities to the Initial Purchasers;
(k) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities, copies of any comment letters
received from the SEC or any other
-18-
request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement and Prospectus or for additional
information;
(l) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(m) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);
(n) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any, may
reasonably request at least three business days prior to the closing of any sale
of Registrable Securities;
(o) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(h)(v)
and 3(h)(vi) hereof, as promptly as practicable after the occurrence of such an
event, use its best efforts to prepare a supplement or post-effective amendment
to the 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 Securities or
Participating Broker-Dealers, such Prospectus will not contain at the time of
such delivery 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. At such time as such
public disclosure is otherwise made or the Issuer determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the Issuer agrees
promptly to notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
(p) in the case of a Shelf Registration, 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 the Initial Purchasers on behalf of such Holders; and make
such representatives of the Issuer as shall be reasonably
-19-
requested by the Holders of Registrable Securities, or the Initial Purchasers,
on behalf of such Holders, available for discussion of such document;
(q) obtain a CUSIP number for all Exchange Securities, Private
Exchange Securities or Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities, Private Exchange Securities or the
Securities, as the case may be, in a form eligible for deposit with the
Depositary;
(r) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and 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 (iii) 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;
(s) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and appropriate
actions in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to the Holders
of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Issuer and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and the
holders of a majority in principal amount of the Registrable Securities
being sold) addressed to each selling Holder and the underwriters, if any,
covering the matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Issuer's independent certified public accountants (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Issuer or of any business acquired by the Issuer for which financial
statements are, or are required
-20-
to be, included in the Registration Statement) addressed to the
underwriters, if any, and use reasonable efforts to have such letter
addressed to the selling Holders of Registrable Securities (to the extent
consistent with Statement on Auditing Standards No. 72 of the American
Institute of Certified Public Accounts), such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the
Holders and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement shall be in
form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 4 hereof with respect to the underwriters and all other parties to
be indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar offerings
to the Holders of a majority in principal amount of the Registrable
Securities being sold and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(t) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of an
Exchange Offer, make available for inspection by representatives of the Holders
of the Registrable Securities, any underwriters participating in any disposition
pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and
any counsel or accountant retained by any of the foregoing, all financial and
other records, pertinent corporate documents and properties of the Issuer
reasonably requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Issuer to supply all
information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Registration Statement, and
make such representatives of the Issuer available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers; provided
that any such records, documents, properties and such
-21-
information that is designated in writing by the Issuer, in good faith, as
confidential at the time of delivery of such records, documents, properties or
information shall be kept confidential by any such representative, underwriter,
special counsel or accountant and shall be used only in connection with such
Shelf Registration Statement, unless disclosure thereof is made in connection
with a court proceeding or required by law, or such information has become
available (not in violation of this agreement) to the public generally or
through a third party without an accompanying obligation of confidentiality, and
the Issuer shall be entitled to request that such representative, underwriter,
special counsel or accountant sign a confidentiality agreement to the foregoing
effect;
(u) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to counsel to the
Holders of Registrable Securities and make such changes in any such document
prior to the filing thereof as the Initial Purchasers or counsel to the Holders
of Registrable Securities may reasonably request and, except as otherwise
required by applicable law, not file any such document in a form to which the
Initial Purchasers on behalf of the Holders of Registrable Securities and
counsel to the Holders of Registrable Securities shall not have previously been
advised and furnished a copy of or to which the Initial Purchasers on behalf of
the Holders of Registrable Securities or counsel to the Holders of Registrable
Securities shall reasonably object, and make the representatives of the Issuer
available for discussion of such documents as shall be reasonably requested by
the Initial Purchasers, and
(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchasers, to counsel for the Holders
and to the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such document prior to
the filing thereof as the Initial Purchasers, the counsel to the Holders or the
underwriter or underwriters reasonably request and not file any such document in
a form to which the Majority Holders, the Initial Purchasers on behalf of the
Holders of Registrable Securities, counsel for the Holders of Registrable
Securities or any underwriter shall not have previously been advised and
furnished a copy of or to which the Majority Holders, the Initial Purchasers of
behalf of the Holders of Registrable Securities, counsel to the Holders of
Registrable Securities or any underwriter shall reasonably object, and make the
representatives of the Issuer available for discussion of such document as shall
be reasonably requested by the Holders of Registrable Securities, the Initial
Purchasers on behalf of such Holders, counsel for the Holders of Registrable
Securities or any underwriter;
-22-
(v) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Issuer are then listed if requested
by the Majority Holders, or if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(w) in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rated by the appropriate rating agencies,
if so requested by the Majority Holders, or if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any;
(x) otherwise comply with all applicable rules and regulations of
the SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
and
(y) cooperate and assist in any filings required to be made with
the NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and its counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD).
In the case of a Shelf Registration Statement, the Issuer may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to furnish to the Issuer such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Issuer 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 Issuer of the happening of any event
or the discovery of any facts, each of the kind described in Section 3(h)(v)
hereof, such Holder will keep such information confidential and will forthwith
discontinue disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(o) hereof, and, if so directed by
the Issuer, such Holder will deliver to the Issuer (at its expense) all copies
in such Holder's possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
In the event that the Issuer fails to effect the Exchange Offer or
file any Shelf Registration Statement and maintain the effectiveness of any
Shelf Registration Statement as provided herein, the Issuer shall not file any
Registration Statement with
-23-
respect to any securities (within the meaning of Section 2(l) of the ▇▇▇▇ ▇▇▇)
of the Issuer other than Registrable Securities.
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Majority Holders of such Registrable Securities included in such
offering and shall be acceptable to the Issuer. No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
4. INDEMNIFICATION; CONTRIBUTION.
(a) The Issuer agrees to indemnify and hold harmless the Initial
Purchasers, each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an "UNDERWRITER") and each
Person, if any, who controls any Holder or Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims,
damages and expenses whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto) pursuant to
which Exchange Securities or Registrable Securities were registered under
the 1933 Act, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims,
damages and expenses whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; PROVIDED that
(subject to Section 4(d) below) any such settlement is effected with the
written consent of the Issuer; and
-24-
(iii) against any and all expenses whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (A) to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Issuer by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) or
(B) result from the use of the Prospectus during a period when the use of the
Prospectus has been suspended in accordance with Section 2.4(c); provided, in
each case, that Holders received reasonable prior notice of such suspension.
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Issuer, the Initial Purchasers, each Underwriter and the other
selling Holders, and each of their respective directors and officers, and each
Person, if any, who controls the Issuer, the Initial Purchasers, any
Underwriter or any other selling Holder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Shelf Registration Statement
(or any amendment thereto) or any Prospectus included therein (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information with respect to such Holder furnished to the Issuer by such Holder
expressly for use in the Shelf Registration Statement (or any amendment thereto)
or such Prospectus (or any amendment or supplement thereto); PROVIDED, HOWEVER,
that no such Holder shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice in writing as promptly
as reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on
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account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action; PROVIDED, HOWEVER, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Issuer on the one hand and the Holders and the Initial
Purchasers on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative fault of the Issuer on the one hand and the Holders and
the Initial Purchasers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Issuer,
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the Holders or the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Issuer, the Holders and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Issuer, and each Person,
if any, who controls the Issuer within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Issuer. The Initial Purchasers' respective obligations to contribute pursuant
to this Section 4 are several in proportion to the principal amount of
Securities set forth opposite their respective names in Schedule A to the
Purchase Agreement and not joint.
5. MISCELLANEOUS.
5.1 RULE 144 AND RULE 144A. For so long as the Issuer is subject
to the reporting requirements of Section 13 or 15 of the 1934 Act, the Issuer
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Issuer ceases to be so
required to file such reports, the Issuer covenants that it will upon
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the request of any Holder of Registrable Securities (a) make publicly available
such information as is necessary to permit sales pursuant to Rule 144 under the
1933 Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will
take such further action as any Holder of Registrable Securities may reasonably
request, and (c) take such further action that is reasonable in the
circumstances in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (i) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A
under the 1933 Act, as such Rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Issuer will deliver to such Holder a
written statement as to whether it has complied with such requirements.
5.2 TERMINATION OF CERTAIN PARTIES' OBLIGATIONS UNDER THIS
AGREEMENT. Upon the consummation of the Combination, Telecommunications and the
Partnership will automatically, and without any further action by any person, be
released from their obligations under this Agreement. In the event the offer to
purchase referred to in Section 10.21 of the Indenture is made and Securities
remain outstanding thereafter, the Company will automatically, and without any
further action by any person, be released from its obligations under this
Agreement.
5.3 NO INCONSISTENT AGREEMENTS. The Issuer has not entered into
and the Issuer will not after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not and will
not for the term of this Agreement in any way conflict with the rights granted
to the holders of the Issuer's other issued and outstanding securities under any
such agreements.
5.4 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 Issuer has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
5.5 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 (a) if to a Holder, at the most current address given by such Holder to
the Issuer by means of a notice given in accordance with the provisions of this
Section 5.5, which address initially is the address
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set forth in the Purchase Agreement with respect to the Initial Purchasers; and
(b) if to the Issuer, initially at the Issuer's address set forth in the
Purchase Agreement, and thereafter at such other address of which notice is
given in accordance with the provisions of this Section 5.5.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two 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 under the
Indenture, at the address specified in such Indenture.
5.6 SUCCESSOR 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
Securities in violation of the terms of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities 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, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.
5.7 THIRD PARTY BENEFICIARIES. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Issuer, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Issuer, on the one
hand, and the Initial Purchasers, 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 hereunder.
5.8 SPECIFIC ENFORCEMENT. Without limiting the remedies available
to the Initial Purchasers and the Holders, the Issuer acknowledges that any
failure by the Issuer to comply with its obligations under Sections 2.1 through
2.4 hereof may result in
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material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it would not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Issuer's obligations under Sections 2.1 through 2.4
hereof
5.9 RESTRICTION ON RESALES. Until the expiration of two years
after the original issuance of the Securities, the Issuer will not, and will
cause its "affiliates" (as such term is defined in Rule 144(a)(1) under the ▇▇▇▇
▇▇▇) not to, resell any Securities which are "restricted securities" (as such
term is defined under Rule 144(a)(3) under the ▇▇▇▇ ▇▇▇) that have been
reacquired by any of them and shall immediately upon any purchase of any such
Securities submit such Securities to the Trustee for cancellation.
5.10 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.
5.11 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
5.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.13 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CAPROCK COMMUNICATIONS CORP.
By:
-----------------------------
Name:
Title:
CAPROCK TELECOMMUNICATIONS CORP.
By:
-----------------------------
Name:
Title:
CAPROCK FIBER NETWORK, LTD.
By: CapRock Systems, Inc., its general partner
By:
-----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
BANC ONE CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-------------------------
Name:
Title:
For itself and as Representative of the other Initial Purchasers named in this
Agreement.