1
EXHIBIT 10.24
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of March 25, 1998
by and among
VERIO INC.
and
SALOMON BROTHERS INC,
LAZARD FRERES & CO. LLC,
CHASE SECURITIES INC.
and
BANCBOSTON SECURITIES INC.
as Initial Purchasers
================================================================================
2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of March 25, 1998 by and among VERIO INC., a Delaware
corporation (the "Company"), and SALOMON BROTHERS INC ("Salomon"), LAZARD
FRERES & CO. LLC ("Lazard"), CHASE SECURITIES INC. ("Chase") and BANCBOSTON
SECURITIES INC. ("BancBoston" and, together with Salomon, Lazard and Chase, the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated as of March 19, 1998 by and among the Company and the Initial Purchasers
(the "Purchase Agreement"), which provides for, among other things, the sale by
the Company to the Initial Purchasers of an aggregate of $175,000,000 principal
amount of the Company's 10-3/8% Senior Notes Due 2005 (the "Notes"). In order
to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery 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:
"Additional Interest" see Section 2(e) hereof.
"Advice" see the last paragraph Section 3 hereof.
"Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Applicable Period" see Section 3(s) hereof.
"BancBoston" shall have the meaning set forth in the preamble
to this Agreement.
Business Day" shall mean a day that is not a Saturday, a
Sunday, or a day on which banking institutions in New York, New York
are required to be closed.
3
-2-
"Chase" shall have the meaning set forth in the preamble to
this Agreement.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and
permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company; provided, however, that
such depositary must have an address in the Borough of Manhattan, in
The City of New York.
"Effectiveness Period" see Section 2(b) hereof.
"Effectiveness Target Date" see Section 2(e) hereof.
"Event Date" see Section 2(e) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Notes" shall mean the 10-3/8% Senior Notes Due 2005,
Series B issued by the Company under the Indenture containing terms
identical to the Notes (except that (i) interest thereon shall accrue
from the last date on which interest was paid on the Notes or, if no
such interest has been paid, from ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) the transfer
restrictions with respect to the Notes and all registration rights in
respect thereof shall be eliminated and (iii) the provisions relating
to Additional Interest shall be eliminated) to be offered to Holders
of Notes in exchange for Notes pursuant to the Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Notes for Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form ▇- ▇, ▇-▇ or S-4 (or, if
applicable, on another appropriate form), and all amendments and
supplements to such registration state-
4
-3-
ment, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Period" see Section 2(a) hereof.
"Holders" shall mean the Initial Purchasers, for so long as
they own any Transfer Restricted Notes, each of their direct and
indirect successors, assigns and transferees who become registered
owners of Transfer Restricted Notes under the Indenture and each
Participating Broker-Dealer that holds Exchange Notes for so long as
such Participating Broker-Dealer is required to deliver a prospectus
meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes.
"Indenture" shall mean the Indenture relating to the Notes
dated as of March 25, 1998 between the Company, and First Trust
National Association, as trustee, as the same may be amended from time
to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" see Section 3(m) hereof.
"Issue Date" shall mean the date on which the Notes are
originally issued.
"Lazard" shall have the meaning set forth in the preamble to
this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Transfer Restricted Notes.
"Notes" shall have the meaning set forth in the preamble to
this Agreement.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(s) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Private Exchange" see Section 2(a) hereof.
5
-4-
"Private Exchange Notes" see Section 2(a) 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 a prospectus supplement with respect to the
terms of the offering of any portion of the Transfer Restricted Notes
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 to this Agreement.
"Records" see Section 3(m) hereof.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all applicable SEC,
stock exchange or National Association of Securities Dealers, Inc.
(the "NASD") 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 one counsel
for Holders that are Initial Purchasers in connection with blue sky
qualification of any of the Exchange Notes or Transfer Restricted
Notes) and compliance with the rules of the NASD, (iii) all applicable
expenses incurred by the Company in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto,
and in preparing or assisting in preparing any other documents
relating to the performance of and compliance with this Agreement,
(iv) all rating agency fees, if any, (v) the fees and disbursements of
counsel for the Company, (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Transfer Restricted
Notes on any securities exchange or exchanges, if the Company, in its
discretion, elects to make any such listing; but excluding fees of
counsel to the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of
Transfer Restricted Notes by a Holder.
"Registration Statement" shall mean any registration statement
(including, without limitation, the Exchange Of-
6
-5-
fer Registration Statement and the Shelf Registration Statement) of
the Company which covers any of the Exchange Notes or Transfer
Restricted 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.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event Date" see Section 2(b).
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(b) hereof which covers all of the Transfer Restricted Notes
or all of the Private Exchange Notes, as the case may be, on an
appropriate form under Rule 415 under the Securities 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.
"Target Consummation Date" see Section 2(a).
"Target Effectiveness Date" see Section 2(a).
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"Transfer Restricted Notes" means each Note until (i) the date
on which such has been exchanged by a person other than a
broker-dealer for an Exchange Note in the Exchange Offer, (ii)
following the exchange by a broker-dealer in the Exchange Offer of a
Note for an Exchange Note, the date on which such Exchange Note 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,
7
-6-
(iii) the date on which such Note has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (iv) the date on which such Note is
distributed to the public pursuant to Rule 144(k) under the Securities
Act (or any similar provision then in force, but not Rule 144A under
the Securities Act), (v) such Note shall have been otherwise
transferred by the holder thereof and a new Note not bearing a legend
restricting further transfer shall have been delivered by the Company
and subsequent disposition of such Note shall not require registration
or qualification under the Securities Act or any similar state law
then in force or (vi) such Note ceases to be outstanding.
"Trustee" shall mean the trustee with respect to the Notes
under the Indenture.
2. Registration Under the Securities Act.
(a) Exchange Offer. The Company shall, for the benefit of
the Holders, at the Company's cost, (i) unless the Exchange Offer would not be
permitted by applicable law or SEC policy, file with the SEC within 90 days
after the Closing Time an Exchange Offer Registration Statement on an
appropriate form under the Securities Act covering the offer by the Company to
the Holders to exchange all of the Transfer Restricted Notes (other than
Private Exchange Notes (as defined below)) for a like principal amount of
Exchange Notes, (ii) unless the Exchange Offer would not be permitted by
applicable law or SEC policy, use its best efforts to have such Exchange Offer
Registration Statement declared effective under the Securities Act by the SEC
not later than the date which is 150 days after the Closing Time (the "Target
Effectiveness Date"), (iii) have such Registration Statement remain effective
until the closing of the Exchange Offer and (iv) unless the Exchange Offer
would not be permitted by applicable law or SEC policy, commence the Exchange
Offer and use its best efforts to issue, on or prior to the date which is 30
days after the date on which the Exchange Offer Registration Statement was
declared effective by the SEC (the "Target Consummation Date"), Exchange Notes
in exchange for all Notes tendered prior thereto in the Exchange Offer. Upon
the effectiveness of the Exchange Offer Registration Statement, the Company
shall promptly commence the Exchange Offer, it being the objective of such
Exchange Offer to enable each Holder eligible and electing to exchange Transfer
Restricted Notes for Exchange Notes (assuming that such Holder is not an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act and is not a broker-dealer tendering
8
-7-
Transfer Restricted Notes acquired directly from the Company for its own
account, acquires the Exchange Notes in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing (within the
meaning of the Securities Act) the Exchange Notes) and to transfer such
Exchange Notes from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue sky
laws.
In connection with the Exchange Offer, the Company shall:
(i) mail 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 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 Notes at any time
prior to the close of business, New York 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 Notes
delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Notes exchanged; and
(v) otherwise comply in all material respects with all
applicable laws relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer the Initial
Purchasers hold any Notes acquired by them and having the status of an unsold
allotment in the initial distribution, the Company upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange Notes
in the Exchange Offer, issue and deliver to such Initial Purchaser in exchange
(the "Private Exchange") for the Notes held by such Initial Purchaser, a like
principal amount of debt securities of the Company that are identical (except
that such securities
9
-8-
shall bear appropriate transfer restrictions) to the Exchange Notes (the
"Private Exchange Notes").
The Exchange Notes and the Private Exchange Notes shall be
issued under (i) the Indenture or (ii) an indenture identical to all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture. The Indenture or such indenture shall provide that the Exchange
Notes, the Private Exchange Notes and the Notes shall vote and consent together
on all matters as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a
separate class on any matter. The Private Exchange Notes shall be of the same
series as and the Company shall use all commercially reasonable efforts to have
the Private Exchange Notes bear the same CUSIP number as the Exchange Notes.
The Company shall not have any liability under this Agreement solely as a
result of such Private Exchange Notes not bearing the same CUSIP number as the
Exchange Notes.
The Exchange Offer and the Private Exchange shall not be
subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Company to proceed with the Exchange
Offer or the Private Exchange, and no material adverse development shall have
occurred in any existing action or proceeding with respect to the Company and
(iii) all governmental approvals shall have been obtained, which approvals the
Company deems necessary for the consummation of the Exchange Offer or Private
Exchange. As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Transfer Restricted Notes or
portions thereof properly 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 is an
exhibit thereto;
(ii) accept for exchange all Notes properly tendered
pursuant to the Private Exchange; and
10
-9-
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Transfer Restricted Notes or portions thereof so
accepted for exchange by the Company, and issue, and cause the Trustee
under the Indenture to promptly authenticate and deliver to each
Holder, a new Exchange Note or Private Exchange Note, as the case may
be, equal in principal amount to the principal amount of the Transfer
Restricted Notes surrendered by such Holder and accepted for exchange.
To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company shall use its best efforts
to complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than those set forth in the
immediately preceding paragraph. Each Holder of Transfer Restricted Notes who
wishes to exchange such Transfer Restricted Notes for Exchange Notes in the
Exchange Offer will be required to make certain customary representations in
connection therewith, including representations that such Holder is not an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act, that any Exchange Notes to be received by it will be acquired in the
ordinary course of business and that at the time of the commencement of the
Exchange Offer it has no arrangement with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes.
The Company 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 Transfer Restricted Notes in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Transfer Restricted Notes that are
Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers,
and the Company shall have no further obligation to register Transfer
Restricted Notes (other than Private Exchange Notes) pursuant to Section 2(b)
hereof.
(b) Shelf Registration. If (i) the Company is not permitted
to file the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or SEC
policy, (ii) the Ex-
11
-10-
change Offer is not for any other reason consummated by the Target Consummation
Date, (iii) any holder of Notes notifies the Company within a specified time
period that (a) due to a change in law or policy, in the opinion of counsel, it
is not entitled to participate in the Exchange Offer, (b) due to a change in
law or policy, in the opinion of counsel, it may not resell the Exchange Notes
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 Notes acquired directly
from the Company or an affiliate of the Company, (iv) the holders of a majority
of the Notes may not resell the Exchange Notes acquired by them in the Exchange
Offer to the public without restriction under the Securities Act and without
restriction under applicable blue sky or state securities laws or (v) the
Exchange Offer shall not have been consummated within 150 days after the Issue
Date (the date of any of (i)-(v), the "Shelf Registration Event Date"), then
the Company shall, at its cost, use its best efforts to cause to be filed a
Shelf Registration Statement prior to the later of (A) 30 days after the Shelf
Registration Event Date or (B) 150 days after the Issue Date and use its best
efforts to cause the Shelf Registration Statement to be declared effective by
the SEC on or prior to 90 days after such obligation arises. Each Holder as to
which any Shelf Registration is being effected agrees to furnish to the Company
all information with respect to such Holder necessary to make any information
previously furnished to the Company by such Holder not materially misleading.
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for a period of two years from
the Issue Date (subject to extension pursuant to the last paragraph of Section
3 hereof) (or such shorter period that will terminate when all of the Transfer
Restricted Notes covered by such Shelf Registration Statement have been sold
pursuant thereto) or cease to be outstanding (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 Securities Act and as otherwise provided herein. The Company
shall not permit any securities other than Transfer Restricted Notes to be
included in the Shelf Registration. The Company further agrees, if necessary,
to supplement
12
-11-
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 Securities Act or by
any other rules and regulations thereunder for shelf registrations, and the
Company agrees to furnish to the Holders of Transfer Restricted Notes copies of
any such supplement or amendment promptly after its being used or filed with
the SEC.
(c) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) or 2(b)
hereof and the reasonable fees and expenses of one counsel, if any, designated
in writing by the Majority Holders to act as counsel for the Holders of the
Transfer Restricted Notes in connection with a Shelf Registration Statement.
Except as provided in the preceding sentence, each Holder shall pay all
expenses of its counsel, underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Transfer
Restricted Notes pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. 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 Transfer
Restricted 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 been effective during the period of such interference, until the
offering of Transfer Restricted Notes may legally resume. The Company 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 it
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Transfer Restricted
Notes covered thereby not being able to exchange or offer and sell such
Transfer Restricted Notes during that period, unless such action is required by
applicable law and except as otherwise provided in the second paragraph of
Section 2(e) below.
(e) Additional Interest. In the event that (i) the
applicable Registration Statement is not filed with the SEC on or prior to the
date specified herein for such filing, (ii) the
13
-12-
applicable Registration Statement is not declared effective on or prior to the
date specified herein for such effectiveness after such obligation arises (the
"Effectiveness Target Date"), (iii) if the Exchange Offer is required to be
consummated hereunder, the Company fails to consummate the Exchange Offer
within 30 days of the date on which the Exchange Offer Registration Statement
is declared effective or (iv) the applicable Registration Statement is filed
and declared effective during the period effectiveness is required by Section
2(e) and 3(a) but shall thereafter cease to be effective or usable without
being succeeded immediately by an additional Registration Statement covering
the Transfer Restricted Notes which has been filed and declared effective (each
such event referred to in clauses (i) through (iv), a "Registration Default"),
then the interest rate on the Transfer Restricted Notes as to which such
Registration Default relates will increase ("Additional Interest"), with
respect to the first 90-day period (or portion thereof) while a Registration
Default is continuing immediately following the occurrence of such Registration
Default in an amount equal to 0.50% per annum of the principal amount of the
Notes. The rate of additional Interest will increase by an additional 0.50%
per annum of the principal amount of the Notes for each subsequent 90-day
period (or portion thereof) while a Registration Default is continuing until
all Registration Defaults have been cured, up to a maximum amount of 1.50% of
the principal amount of the Notes. Additional Interest shall be computed based
on the actual number of days elapsed during which any such Registration
Defaults exist. Following the cure of a Registration Default, the accrual of
Additional Interest with respect to such Registration Default will cease.
If the Company issues a notice that the Shelf Registration
Statement is unusable due to the pendency of an announcement of a material
corporate transaction, or such notice is required under applicable securities
laws to be issued by the Company, and the aggregate number of days in any
consecutive twelve-month period for which the Shelf Registration Statement
shall not be usable due to all such notices issued or required to be issued
exceeds 30 days in the aggregate, then the interest rate borne by the Notes
will be increased by 0.50% per annum of the principal amount of the Notes for
the first 90-day period (or portion thereof) beginning on the 31st such date
that such Shelf Registration Statement ceases to be usable, which rate shall be
increased by an additional 0.50% per annum of the principal amount of the Notes
at the beginning of each subsequent 90-day period, up to a maximum amount of
1.50% of the principal amount of the Notes. Upon the Shelf Registration
Statement once again becoming usable, the interest rate
14
-13-
borne by the Notes will be reduced to the original interest rate if the Company
is otherwise in compliance with this Agreement at such time. Additional
Interest shall be computed based on the actual number of days elapsed in each
90-day period in which the Shelf Registration Statement is unusable.
The Company shall notify the Trustee within three 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 with the Trustee, in trust, for the
benefit of the Holders of Transfer Restricted Notes, on or 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 Notes 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 Company with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration
Statement or Registration Statements as prescribed by Sections 2(a)
and 2(b) hereof within the relevant time period specified in Section 2
hereof on the appropriate form under the Securities Act, which form
(i) shall be selected by the Company, (ii) shall, in the case of a
Shelf Registration, be available for the sale of the Transfer
Restricted Notes by the selling Holders thereof and (iii) 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 their best efforts to cause such
Registration Statement to become effective and remain effective in
accordance with Section 2 hereof. The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must provide information for
inclusion therein without the Holders being afforded an opportunity to
review such documentation a reasonable time prior to the filing of
such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their
15
-14-
counsel or the managing underwriters, if any, shall reasonably object;
(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
Effectiveness Period or the Applicable Period, as the case may be; 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 Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder applicable to it with
respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Transfer Restricted Notes, at least three Business Days
prior to filing, that a Shelf Registration Statement with respect to
the Transfer Restricted Notes is being filed and advising such Holder
that the distribution of Transfer Restricted Notes will be made in
accordance with the method selected by the Majority Holders; and (ii)
furnish to each Holder of Transfer Restricted Notes, without charge,
as many copies of each Prospectus, and any amendment or supplement
thereto and such other documents as such Holder may reasonably
request, in order to facilitate the disposition of the Transfer
Restricted Notes; and (iii) subject to the last paragraph of Section 3
hereof, hereby consent to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of Transfer
Restricted Notes in connection with the offering and sale of the
Transfer Restricted Notes covered by such Prospectus or any amendment
or supplement thereto subject to the limitations on the use thereof
provided in Sections 2(b) and 2(c);
(d) in the case of a Shelf Registration, use its best
efforts to register or qualify, as may be required by applicable law,
the Transfer Restricted Notes under all applicable state securities or
"blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder
of
16
-15-
Transfer Restricted Notes covered by a Registration Statement shall
reasonably request in advance of such date of effectiveness, 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 Transfer Restricted Notes owned by such
Holder; provided, however, that the Company shall not be required to
(i) qualify as a foreign corporation or as a broker or 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 (1) a Shelf Registration or (2)
Participating Broker-Dealers who have notified the Company that they
will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, notify each
Holder of Transfer Restricted Notes, or such Participating
Broker-Dealers, as the case may be, their counsel, if any, promptly
and confirm such notice in writing (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 amendments and supplements to a
Registration Statement or 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 the Company
receives any notification with respect to the suspension of the
qualification of the Transfer Restricted Notes or the Exchange Notes
to be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v)
of the happening of any event or the failure of any event to occur or
the discovery of any facts or otherwise, 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 causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading and (vi) the Company's reasonable
determination that a post-effective
17
-16-
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement
as soon as practicable;
(g) in the case of a Shelf Registration, furnish to each
Holder of Transfer Restricted Notes, without charge, at least one
conformed copy of each Registration Statement relating to such Shelf
Registration and 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 Transfer Restricted Notes to facilitate the
timely preparation and delivery of certificates not bearing any
restrictive legends representing Notes covered by such Shelf
Registration to be sold and relating to the subsequent transfer of
such Notes; and cause such Transfer Restricted 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 two Business Days prior to the closing of any sale of
Transfer Restricted Notes;
(i) in the case of a Shelf Registration or an Exchange
Offer Registration, upon the occurrence of any circumstance
contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or
3(e)(vi) hereof, use their best efforts to prepare 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 Transfer Restricted 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 the light
of the circumstances under which they were made, not misleading; and
to notify each Holder to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or
omission;
(j) obtain a CUSIP number for all Exchange Notes or
Transfer Restricted Notes, as the case may be, not later than the
effective date of a Registration Statement, and
18
-17-
provide the Trustee with certificates for the Exchange Notes or the
Transfer Restricted Notes, as the case may be, in a form eligible for
deposit with the Depositary;
(k) 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 Transfer Restricted Notes, as
the case may be, 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 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;
(l) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) and take all such other
appropriate actions as are reasonably requested in order to expedite
or facilitate the registration or the disposition of such Transfer
Restricted Notes, and in such connection, (i) make such
representations and warranties to Holders of such Transfer Restricted
Notes with respect to the business of the Company and its subsidiaries
as then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, 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 and
updates thereof in form and substance reasonably satisfactory to the
Holders of a majority in principal amount of the Transfer Restricted
Notes being sold, addressed to each selling Holder covering the
matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such Holders; (iii) obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants 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
the selling Holders of Transfer Restricted 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
19
-18-
and such other matters as reasonably requested by such selling
Holders; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to the Company and the Holders of
a majority in aggregate principal amount of Transfer Restricted Notes
covered by such Registration with respect to all parties to be
indemnified pursuant to said Section (including, without limitation,
such selling Holders). The above shall be done at each closing in
respect of the sale of Transfer Restricted Notes, or as and to the
extent required thereunder;
(m) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to
be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, make available for inspection by each such person who would be
an "underwriter" as a result of either (i) the sale by such person of
Notes covered by such Shelf Registration Statement or (ii) the sale
during the Applicable Period by a Participating Broker-Dealer of
Exchange Notes (provided that a Participating Broker- Dealer shall not
be deemed to be an underwriter solely as a result of it being required
to deliver a prospectus in connection with any resale of Exchange
Notes) and any attorney, accountant or other agent retained by any
such person (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Company and its subsidiaries to supply all
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement. Records which the
Company determines, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records
is necessary to avoid or correct a material misstatement or omission
in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) the information in such
20
-19-
Records has been made generally available to the public. Each selling
Holder of such Transfer Restricted Notes and each such Participating
Broker-Dealer will be required to agree that information obtained by
it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in
the securities of the Company unless and until such is made generally
available to the public. Each selling Holder of such Transfer
Restricted Notes and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company at its expense to
undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(n) comply with all applicable rules and regulations of
the SEC and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 60 days after the
end of any 12-month period (or 135 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Transfer Restricted Notes are sold to
underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(o) upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company addressed to the
Trustee for the benefit of all Holders of Transfer Restricted Notes
participating in the Exchange Offer or the Private Exchange, as the
case may be, and which includes an opinion that (i) the Company has
duly authorized, executed and delivered the Exchange Notes and Private
Exchange Notes, and (ii) each of the Exchange Notes or the Private
Exchange Notes, as the case may be, constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its respective terms (in each case, with customary
exceptions);
(p) if an Exchange Offer or a Private Exchange is to be
consummated, upon proper delivery of the Transfer Re-
21
-20-
stricted Notes by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be, the Company shall ▇▇▇▇, or
cause to be marked, on such Transfer Restricted Notes and on the books
of the Trustee, the Transfer Agent, the Registrar and the Depositary
delivered by such Holders that such Transfer Restricted Notes are
being canceled in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be; but in no event shall such
Transfer Restricted Notes be marked as paid or otherwise satisfied
solely as a result of being exchanged for Exchange Notes or Private
Exchange Notes in the Exchange Offer or the Private Exchange, as the
case may be;
(q) cooperate with each seller of Transfer Restricted
Notes covered by any Registration Statement participating in the
disposition of such Transfer Restricted Notes and one counsel acting
on behalf of all such sellers in connection with the filings, if any,
required to be made with the NASD;
(r) use its best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Notes
covered by a Registration Statement contemplated hereby; and
(s) (A) 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 Salomon, as representative of the Initial
Purchasers, 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 (a
"Participating Broker-Dealer") that holds Transfer Restricted Notes
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 13d-3 under the Exchange Act) of Exchange Notes 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
Salomon, as representative of the Initial Purchasers or such other
representative, represent the prevailing views of the staff of the
SEC, including a statement that any such broker-dealer who receives
Exchange Notes for Transfer Restricted Notes pursuant to the
22
-21-
Exchange Offer may be deemed a statutory underwriter and must deliver
a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes, (ii) furnish to
each Participating Broker-Dealer who has delivered to the Company the
notice referred to in Section 3(e), without charge, as many copies of
each Prospectus included in the Exchange Offer Registration Statement,
and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably 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 Notes covered by the Prospectus or any
amendment or supplement thereto, (iv) use their best efforts to keep
the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period
of time as such Persons must comply with such requirements in order to
resell the Exchange Notes; provided, however, that such period shall
not be required to exceed 90 days (or such longer period if extended
pursuant to the last sentence of Section 3 hereof) (the "Applicable
Period"), 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 a broker-dealer holding Transfer
Restricted Notes acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of Exchange Notes
received in respect of such Transfer Restricted Notes 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 Transfer Restricted Notes, such
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
23
-22-
(B) in the case of any Exchange Offer Registration Statement,
the Company agrees to deliver, upon request, to the Trustee or to
Participating Broker-Dealers upon consummation of the Exchange Offer
(i) an opinion of counsel substantially in the form attached hereto as
Exhibit A, and (ii) an officers' certificate containing certifications
substantially similar to those set forth in Section 6(c) of the
Purchase Agreement.
The Company may require each seller of Transfer Restricted
Notes as to which any registration is being effected to furnish to the Company
such information regarding such seller and the proposed distribution of such
Transfer Restricted Notes, as the Company may from time to time reasonably
request in writing. The Company may exclude from such registration the
Transfer Restricted Notes of any seller who fails to furnish such information
within a reasonable time (not to exceed 10 Business Days) after receiving such
request and shall be under no obligation to compensate any such seller for any
lost income, interest or other opportunity forgone, or any liability incurred,
as a result of the Company's decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(t) hereof, that are seeking to sell Exchange Notes and
are required to deliver Prospectuses, 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)(ii), 3(e)(iii), 3(e)(v), 3(e)(vi) or 3(e)(vii) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted 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
or until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed, and, if so directed by the Company,
such Holder will deliver to the Company (at the Company's expense) all copies
in such Holder's possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted Notes
or Exchange Notes, as the case may be, current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition
of Transfer Restricted Notes or Exchange Notes, as the case may be, pursuant to
a Registration Statement, the Company shall use its best efforts to file and
have declared effective (if an amendment) as soon as practicable an
24
-23-
amendment or supplement to the Registration Statement and, in the case of an
amendment, have such amendment declared effective as soon as practicable and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and
including the date when the Company shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder, each
Participating Broker-Dealer, each underwriter who participates in an offering
of Transfer Restricted Notes, their respective affiliates, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, 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), covering Transfer Restricted Notes or Exchange
Notes, 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 loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, to the extent
of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or 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 Sections 4(c) and
4(d) below) any such settlement is effected with the prior written
consent of the Company; and
25
-24-
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of one counsel (in
addition to any local counsel) chosen by Salomon, such Holder, such
Participating Broker-Dealer or any underwriter (except to the extent
otherwise expressly provided in Section 4(c) hereof)), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any court or
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) of this Section
4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished in writing to the Company by
or on behalf of such Initial Purchaser, such Holder, such Participating
Broker-Dealer or any underwriter with respect to such Initial Purchaser,
Holder, Participating Broker-Dealer or underwriter, as the case may be,
expressly for use in the Registration Statement (or any amendment or supplement
thereto) or any Prospectus (or any amendment or supplement thereto) or (ii)
contained in any preliminary prospectus if such Initial Purchaser, such Holder,
such Participating Broker-Dealer or such underwriter failed to send or deliver
a copy of the Prospectus (in the form it was first provided to such parties for
confirmation of sales) to the Person asserting such losses, claims, damages or
liabilities on or prior to the delivery of written confirmation of any sale of
securities covered thereby to such Person in any case where the Company shall
have previously furnished copies thereof to such Initial Purchaser, such
Holder, such Participating Broker-Dealer or such underwriter, as the case may
be, in accordance with this Agreement, at or prior to the written confirmation
of the sale of such Notes to such Person and the untrue statement contained in
or the omission from the preliminary prospectus was corrected in the Final
Prospectus (or any amendment or supplement thereto). Any amounts advanced by
the Company to an indemnified party pursuant to this Section 4 as a result of
such losses shall be returned to the Company if it shall be finally determined
by a court of competent jurisdiction in a judgment not subject to appeal or
final review that such indemnified party was not entitled to indemnification by
the Company.
26
-25-
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, each Initial Purchaser, each
underwriter who participates in an offering of Transfer Restricted Notes and
the other selling Holders and each of their respective directors and each
Person, if any, who controls any of the Company, any Initial Purchaser, any
underwriter or any other selling Holder within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, against any and all loss, liability,
claim, damage and expense whatsoever 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 Registration
Statement (or any amendment or supplement thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such selling
Holder with respect to such Holder expressly for use in the Registration
Statement (or any supplement thereto), or any such Prospectus (or any amendment
thereto); provided, however, that, in the case of the Shelf Registration
Statement, 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 Transfer
Restricted Notes pursuant to the Shelf Registration Statement; provided,
further, however, that for purposes of Section 4(a)(iii), such counsel shall
(subject to Section 4(c) hereof) be chosen by the Company.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so 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 account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 4(a) above, one counsel to all the
indemnified parties shall be selected by Salomon, and, in the case of parties
indemnified pursuant to Section 4(b) above, counsel to all the indemnified
parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any 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.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such ac-
27
-26-
tion with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for 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 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 a full and unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim
and the offer and sale of any Notes 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 reasonable fees
and expenses of counsel pursuant to Section 4(a)(iii) above, then 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) In order to provide for just and equitable contribution
in circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applica-
28
-27-
ble in accordance with its terms, the Company, the Initial Purchasers and the
Holders, as applicable, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company, the Initial Purchasers and the Holders;
provided, however, that no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company and the Initial Purchasers and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company on the one hand and of the Holder of Transfer Restricted
Notes, the Participating Broker-Dealer or Initial Purchaser, as the case may
be, 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 Company on the one hand and the
Holder of Transfer Restricted Notes, the Participating Broker-Dealer or the
Initial Purchasers, as the case may be, on the other hand 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 Holder
of Transfer Restricted Notes, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Holders of the Transfer Restricted Notes
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
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 4.
For purposes of this Section 4, each affiliate of any Person,
if any, who controls a Holder of Transfer Restricted Notes, an Initial
Purchaser or a Participating Broker-Dealer within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such other Person, and each director of the Company, each
affiliate of the Company, each executive officer of
29
-28-
the Company who signed the Registration Statement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
the Company.
5. [Intentionally Omitted]
6. [Intentionally Omitted]
7. Miscellaneous.
(a) Rule 144 and Rule 144A. The Company shall provide to
each Holder such reports as are required under Section 10.23 of the Indenture
and, upon the request of any Holder of Transfer Restricted Notes (a) make
publicly available such information as is necessary to permit sales pursuant to
Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the Securities Act and it will take such further action as any Holder of
Transfer Restricted Notes may reasonably request, and (c) take such further
action, if any, that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Transfer
Restricted Notes without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, (ii) Rule 144A under the
Securities 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 reasonable
request of any Holder of Transfer Restricted Notes, the Company will deliver to
such Holder a written statement as to whether they have complied with such
requirements.
(b) No Inconsistent Agreements. The rights granted to the
Holders hereunder do not, and will not for the term of this Agreement in any
way conflict with and are not, and will not during the term of this Agreement
be inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any other agreements entered into by
the Company.
(c) Amendments and Waivers. The provisions of this
Agreement, including 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, otherwise than with the prior written consent of the
Company and the Majority Holders; provided, however, that no amendment, modifi-
30
-29-
cation, or supplement or waiver or consent to the departure with respect to the
provisions of Section 4 hereof shall be effective as against any Holder of
Transfer Restricted Notes or the Company unless consented to in writing by such
Holder of Transfer Restricted Notes or the Company, as the case may be.
(d) 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, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to
the Initial Purchasers, the address set forth in the Purchase Agreement; and
(ii) if to the Company, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
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.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchasers, including, without limitation and without the need for
an express assignment, subsequent Holders; provided, however, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Notes in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Transfer Restricted Notes, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Transfer Restricted
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.
31
-30-
(f) Third Party Beneficiary. Each of the Initial Purchasers
and each Holder shall be a third party beneficiary of the agreements made
hereunder between the Company, 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 or the rights of Holders hereunder.
(g) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
(j) 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.
(k) Notes Held by the Company or any of its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Notes is required hereunder, Transfer Restricted Notes held
by the Company or any of their affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
[Signature Page Follows]
32
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
VERIO INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President & General
Counsel
Confirmed and accepted as of
the date first above written:
SALOMON BROTHERS INC
LAZARD FRERES & CO. LLC
CHASE SECURITIES INC.
BANCBOSTON SECURITIES INC.
By: SALOMON BROTHERS INC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-fact
