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 $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(b).
"EXCHANGE OFFER" shall mean the exchange offer by the Issuer of
Exchange Securities for certain 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 certain
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 meeting the requirements of the 1933 Act
in connection with any resale of such Exchange Securities.
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"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.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
Section 2.1(c) hereof.
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"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 or Private Exchange Securities shall have been declared
effective under the 1933 Act and such Securities or Private Exchange
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities or Private Exchange 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 or
Private Exchange 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 Private Exchange Securities issued in exchange therefor).
"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 Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales
agreements and other documents
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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 or Exchange
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 (including a Shelf
Registration Statement and an Exchange Offer Registration Statement), 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 United States 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, each
Exchange Security obtained by a broker-dealer in the Exchange Offer 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, Exchange Security or
Private Exchange Security has been effectively registered under the
1933 Act and disposed of in accordance with a Shelf Registration
Statement;
(iv) the date on which such Security, Exchange Security or
Private Exchange Security is distributed to the public pursuant to
Rule 144 under the 1933 Act (or any similar provision then in force,
but not Rule 144A under the 1933 Act);
(v) such Security, Exchange Security or Private Exchange
Security shall have been otherwise transferred by the holder thereof
and a new Security, Exchange Security or Private Exchange Security not
bearing a legend restricting further transfer shall have been
delivered by the Issuer and subsequent disposition of such Security,
Exchange Security or Private Exchange Security shall not require
registration or qualification under the 1933 Act or any similar state
law then in force; or
(vi) such Security, Exchange Security or Private Exchange
Security ceases to be outstanding.
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"TRUSTEE" shall mean the trustee with respect to the Securities, the
Private Exchange 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
Private Exchange Securities issued in exchange therefor), 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 and (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;
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(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 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
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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 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, on or prior to the 35th day following
the date the Exchange Offer Registration Statement is declared effective by
the SEC, to:
(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 duly 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
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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 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, (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 and (v) compliance with Section 3(f) hereof.
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) if within 120 days
after the Closing Time (as defined in the Purchase Agreement) any Holder of
Securities notifies the Issuer 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 Shall, at its
cost:
(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
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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 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 SEC 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 pursuant to clause (iii) or (iv) above
to participate in the Exchange Offer, 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
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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 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 included in such Shelf Registration Statement
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
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deemed not to be effective during the period of such interference, until the
offering of Registrable Securities pursuant to such Registration Statement
may legally resume.
(c) During any 365-day period, the Issuer may suspend the
availability of a Shelf Registration Statement and the use of the related
Prospectus, for up to two periods of up to 45 consecutive days each (except
for the consecutive 45-day period immediately prior to maturity of the
Security), but no more than an aggregate of 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 material fact or omit to 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 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
ceases 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 the date of such filing,
effectiveness, consummation or cure, as the case may be, if the Issuer is
otherwise in compliance with this section; 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.
-13-
(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 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
-14-
method selected by the Majority Holders participating in the Shelf
Registration; (ii) furnish to each Holder of Registrable Securities included
in the Shelf Registration Statement and to each underwriter of an
underwritten offering of Registrable Securities included in the Shelf
Registration Statement, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, 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 included in the Shelf
Registration Statement; 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 included in the Shelf Registration Statement 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 Registrable Securities contemplated hereby. 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;
-15-
(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 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 SEC 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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;
-16-
(h) notify promptly each Holder of Registrable Securities included
in 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 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, included in the Registration
Statement 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
-17-
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 2.2(iii)(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 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 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
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
-18-
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 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 included therein, 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 included therein 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 included therein or by 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
such Holder of such determination and to furnish each such Holder such number
of copies of the Prospectus as amended or supplemented, as such Holder may
reasonably request;
-19-
(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 the Holders whose
Registrable Securities are included therein; and make such representatives of
the Issuer as shall be reasonably requested by the Holders of Registrable
Securities included therein, 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 the Registrable
Securities included therein 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
the Registrable Securities included therein 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
-20-
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 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 selling
Holders and an agent of the selling Holders providing for, among other
things, the appointment of such agent for the selling Holders for the
purpose of soliciting purchases of Registrable Securities included therein,
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 in the case of an
Exchange Offer, if a Prospectus is required to be delivered by any Participating
Broker-Dealer, make available for inspection by representatives of the Holders
of the Registrable Securities included therein, any underwriters participating
in any disposition pursuant to a Shelf Registration Statement, any such
Participating Broker-Dealer and any counsel or
-21-
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 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 such 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 included or to be included in such Shelf Registration, to
the Initial Purchasers, to counsel for such 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 such Holders or the underwriter or underwriters
reasonably request and not file any such document in a form to which the
-22-
Majority Holders, the Initial Purchasers on behalf of such 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 such Holders of
Registrable Securities, counsel to such 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
such Holders of Registrable Securities, the Initial Purchasers on behalf of such
Holders, counsel for such Holders of Registrable Securities or any underwriter;
(v) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities included therein 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 whose securities are included therein, 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 included therein to be rated by the appropriate
rating agencies, if so requested by the Majority Holders whose securities are
included therein, or if requested by the underwriter or underwriters of an
underwritten offering of Registrable Securities included therein, 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) or
3(h)(vi) hereof, such Holder
-23-
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 all Prospectuses covering such Registrable Securities
in effect at or prior to 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 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
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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
(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),
(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 or
(c) result from the use of the Prospectus in violation of the third to last
paragraph of Section 3.
(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
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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 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
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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, 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
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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 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.
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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 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
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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 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 to anyone other than the Issuer 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
after payment therefor by the Issuer (if the Securities are being submitted by
an affiliate of the Issuer).
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
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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: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
CAPROCK TELECOMMUNICATIONS CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
CAPROCK FIBER NETWORK, LTD.
By: CapRock Systems, Inc., its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: President
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: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
For itself and as Representative of the other Initial Purchasers named in this
Agreement.