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EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
BETWEEN
HERMES EUROPE RAILTEL B.V.
AND
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.,
BT ALEX. ▇▇▇▇▇ INCORPORATED
AND
▇▇▇▇▇▇ BROTHERS INC.
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of January
4, 1999, by and between HERMES EUROPE RAILTEL B.V., a company incorporated under
the laws of the Netherlands (the "Company"), and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION, ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED,
BEAR, ▇▇▇▇▇▇▇ & CO. INC., BT ALEX. ▇▇▇▇▇ INCORPORATED and ▇▇▇▇▇▇ BROTHERS INC.
(the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase Agreement,
dated as of December 21, 1998, between the Company and the Initial Purchasers
and certain of their affiliates (the "Purchase Agreement") relating to the sale
by the Company to the Initial Purchasers of $200,000,000 aggregate principal
amount of its 10-3/8% Senior Notes due 2009 (the "Notes"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement for the
equal benefit of the Initial Purchasers and its direct and indirect transferees.
The execution and delivery of this Agreement is a condition to the Initial
Purchasers' obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
Additional Interest: See Section 4(a).
Advice: See the last paragraph of Section 5.
Applicable Period: See Section 2(b).
Commission: The Securities and Exchange Commission.
Company: See the introductory paragraph to this Agreement.
Effectiveness Date: The 135th day after the Issue Date; provided, however,
that, with respect to the Initial Shelf Registration Statement, (i) if the
Filing Date in respect thereof is fewer than 60 days prior to the 135th day
after the Issue Date, then the Effectiveness Date in respect thereof shall be
the 60th day after such Filing Date and (ii) if the Filing Date is after the
filing of the Exchange Offer Registration Statement with the Commission, then
the Effectiveness Date in respect thereof shall be the 60th day after such
Filing Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Offer Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Expiration Date: See Section 2(a).
Filing Date: The 90th day after the Issue Date; provided, however, that,
with respect to the Initial Shelf Registration Statement, (i) if a Shelf
Registration Event shall have occurred fewer than 30 days prior to the 30th day
after the Issue Date, then the Filing Date in respect thereof shall be the 30th
day after such Shelf Registration Event and (ii) if a Shelf Registration Event
shall have occurred after the filing of the Exchange Offer Registration
Statement with the Commission, then the Filing Date in respect thereof shall be
the 30th day after such Shelf Registration Event.
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Guarantors: See Section 10(d).
Holder: Any record holder of Registrable Securities.
Indemnified Person: See the third paragraph of Section 7.
Indemnifying Person: See the third paragraph of Section 7.
Indenture: The Indenture, dated as of January 4, 1999, between the Company
and The Bank of New York, as trustee, pursuant to which the Notes are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
Initial Shelf Registration Statement: See Section 3(a).
Inspectors: See Section 5(o).
Issue Date: The date of original issuance of the Notes.
NASD: See Section 5(t).
Notes: See the second introductory paragraph to this Agreement.
Participant: See the first paragraph of Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph to this
Agreement.
Records: See Section 5(o).
Registrable Securities: The Notes upon original issuance thereof and at all
times subsequent thereto, each Exchange Security as to which Section 2(c)(v)
hereof is applicable upon original issuance and at all times subsequent thereto
and, if issued, the Private Exchange Securities, until in the case of any such
Notes, Exchange Securities or Private Exchange Securities, as the case may be,
(i) a Registration Statement (other than, with respect to any Exchange Security
as to which Section 2(c)(v) hereof is applicable, the Exchange Offer
Registration Statement) covering such Notes, Exchange Securities or Private
Exchange Securities has been declared effective by the Commission and such
Notes, Exchange Securities or Private Exchange Securities, as the case may be,
have been disposed of in accordance with such effective Registration Statement,
(ii) such Notes, Exchange Securities or Private Exchange Securities, as the case
may be, are sold in compliance with Rule 144, (iii) such Note has been exchanged
for an Exchange Note pursuant to the Exchange Offer and Section 2(c)(v) is not
applicable thereto, or (iv) such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Offer Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
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Shelf Notice: See Section 2(c).
Shelf Registration Statement: See Section 3(b).
Shelf Registration Event: See Section 2(c).
Subsequent Shelf Registration Statement: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if applicable, the trustee
under any indenture governing the Exchange Securities and Private Exchange
Securities (if any).
Underwritten registration or underwritten offering: A registration in which
securities of the Company are sold to an underwriter for reoffering to the
public.
2. EXCHANGE OFFER
(a) The Company agrees to file with the Commission on or before the Filing
Date an offer to exchange (the "Exchange Offer") any and all of the Registrable
Securities for a like aggregate principal amount of senior debt securities of
the Company that are identical to the Notes (the "Exchange Securities") (and
that are entitled to the benefits of the Indenture or a trust indenture that is
substantially identical to the Indenture (other than such changes as are
necessary to comply with any requirements of the Commission to effect or
maintain the qualification of such trust indenture under the TIA) and that has
been qualified under the TIA), except that the Exchange Securities shall have
been registered pursuant to an effective Registration Statement under the
Securities Act and shall contain no restrictive legend thereon. The Exchange
Offer will be registered under the Securities Act on the appropriate form (the
"Exchange Offer Registration Statement") and will comply with all applicable
tender offer rules and regulations under the Exchange Act. The Company agrees to
use its reasonable best efforts (i) to cause the Exchange Offer Registration
Statement to become effective and to commence the Exchange Offer on or prior to
the Effectiveness Date, (ii) to keep the Exchange Offer open for 30 days (or
longer if required by applicable law) (the last day of such period, the
"Expiration Date") and (iii) to exchange Exchange Securities for all Notes
validly tendered and not withdrawn pursuant to the Exchange Offer on or prior to
the fifth day following the Expiration Date.
Each Holder who participates in the Exchange Offer will be deemed to
represent that any Exchange Securities received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement with any person to
participate in the distribution of the Exchange Securities in violation of the
provisions of the Securities Act, and that such Holder is not an affiliate of
the Company within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this Section 2,
the provisions of this Agreement shall continue to apply, mutatis mutandis,
solely with respect to Registrable Securities that are Private Exchange
Securities, Exchange Securities to which Section 2(c)(v) is applicable and
Exchange Securities held by Participating Broker-Dealers, and the Company shall
have no further obligation to register Registrable Securities (other than
Private Exchange Securities and other than Exchange Securities as to which
Section 2(c)(v) hereof applies) pursuant to Section 3 of this Agreement. No
Securities other than the Exchange Securities shall be included in the Exchange
Offer Registration Statement.
(b) The Company shall include within the Prospectus contained in the
Exchange Offer Registration Statement a Section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the Commission
(and publicly disseminated) with respect to the potential "underwriter" status
of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Securities received by such broker-dealer in
the Exchange Offer (a "Participating Broker-Dealer"). Such "Plan of
Distribution" section shall also allow the use of the prospectus by all persons
subject to the prospectus delivery requirements of the Securities Act, including
all Participating Broker-Dealers, and include a statement describing the means
by which Participating Broker-Dealers may resell the Exchange Securities.
The Company shall use its reasonable 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, whether as a result of market-making activities or other trading
activities or otherwise, for at least 180 days following the first bona fide
offering of securities under such Registration Statement (or such shorter time
during which such persons must comply with such requirements in order to resell
the Exchange Securities) (the "Applicable Period").
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If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them and having, or which are reasonably likely to be
determined to have, the status of an unsold allotment in the initial
distribution, the Company upon the request of the Initial Purchasers shall,
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer, issue and deliver to the Initial Purchasers, in exchange (the "Private
Exchange") for the Notes held by the Initial Purchasers, a like principal amount
of debt securities of the Company that are identical to the Exchange Securities
(the "Private Exchange Securities") (and which are issued pursuant to the same
indenture as the Exchange Securities) (except for the placement of a restrictive
legend on such Private Exchange Securities). The Private Exchange Securities
shall bear the same CUSIP number as the Exchange Securities. Interest on the
Exchange Securities and Private Exchange Securities will accrue from the last
interest payment date on which interest was paid on the Notes surrendered in
exchange therefor or, if no interest has been paid on the Notes, from the Issue
Date.
Any indenture under which the Exchange Securities or the Private Exchange
Securities will be issued shall provide that the holders of any of the Exchange
Securities and the Private Exchange Securities will vote and consent together on
all matters to which such holders are entitled to vote or consent as one class
and that none of the holders of the Exchange Securities and the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the Commission, the Company is not permitted to
effect the Exchange Offer, (ii) the Exchange Offer is not commenced on or prior
to the Effectiveness Date, (iii) the Exchange Offer is, for any reason, not
consummated on or prior to the 165th day after the Issue Date, (iv) any Holder
of Private Exchange Securities so requests, (v) in the case of any Holder
entitled to participate in the Exchange Offer, such Holder reasonably believes
that it would not receive Exchange Securities on the date of the exchange that
would be permitted to be sold without restriction under state and federal
securities laws and such Holder so requests or (vi) any Initial Purchaser or any
affiliate (within the meaning of the Securities Act) thereof is required to
deliver a prospectus in connection with sales of Notes or Exchange Securities
(the occurrence of any such event, a "Shelf Registration Event"), then, in the
case of each of clauses (i) to and including (v) of this sentence, the Company
shall promptly deliver to the Holders and the Trustee notice thereof (the "Shelf
Notice") and shall thereafter file an Initial Shelf Registration Statement
pursuant to Section 3.
3. SHELF REGISTRATION
If a Shelf Registration Event has occurred (and whether or not an Exchange
Offer Registration Statement has been filed with the Commission or has become
effective, or the Exchange Offer has been consummated), then:
(a) Initial Shelf Registration Statement. The Company shall promptly
prepare and file with the Commission a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Securities (the "Initial Shelf Registration Statement"). The Company
shall file with the Commission the Initial Shelf Registration Statement on or
prior to the Filing Date. The Initial Shelf Registration Statement shall be on
Form S-1 or another appropriate form, if available, permitting registration of
such Registrable Securities for resale by such holders in the manner designated
by them (including, without limitation, in one or more underwritten offerings).
The Company shall not permit any securities other than the Registrable
Securities to be included in the Initial Shelf Registration Statement or any
Subsequent Shelf Registration Statement. The Company shall use its reasonable
best efforts to cause the Initial Shelf Registration Statement to be declared
effective under the Securities Act on or prior to the Effectiveness Date, and to
keep the Initial Shelf Registration Statement continuously effective under the
Securities Act for as long as any Notes or Exchange Securities are outstanding
and for as long as any Initial Purchaser or any affiliate (within the meaning of
the Securities Act) thereof is required to deliver a prospectus in connection
with sales of Notes or Exchange Securities (such period, the "Effectiveness
Period").
(b) Subsequent Shelf Registration Statements. If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company shall use its reasonable best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event the Company
shall within 45 days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities (a "Subsequent Shelf Registration Statement"). If a Subsequent Shelf
Registration Statement is filed, the Company shall use its reasonable best
efforts to cause the Subsequent Shelf Registration Statement to be declared
effective as soon as reasonably practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period. As used herein the term "Shelf Registration Statement" means the Initial
Shelf Registration Statement and any Subsequent Shelf Registration Statement.
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(c) Supplements and Amendments. The Company shall promptly supplement and
amend the Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration Statement to permit the sale of the Registrable Securities by the
Holders thereof, if required by the Securities Act, or if reasonably requested
by the Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement or by any underwriter of such
Registrable Securities.
(d) Hold-Back Agreements.
(i) Restrictions on Public Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities whose Registrable Securities are
covered by a Shelf Registration Statement (which Registrable Securities are
not being sold in the underwritten offering described below) agrees, if
requested (pursuant to a timely written notice) by the Company or by the
managing underwriter or underwriters in an underwritten offering of
Registrable Securities, not to effect any public sale or distribution of
any securities within the class of securities covered by such Shelf
Registration Statement or any similar class of securities of the Company,
including a sale pursuant to Rule 144 or Rule 144A (except as part of such
underwritten offering), during the period beginning 10 days prior to, and
ending 60 days after, the Issue Date of each underwritten offering made
pursuant to each Shelf Registration Statement, to the extent timely
notified in writing by the Company or by the managing underwriter or
underwriters; provided, however, that each holder of Registrable Securities
shall be subject to the hold-back restrictions of this Section 3(d)(i) only
once during the term of this Agreement.
The foregoing provisions shall not apply to any Holder of Registrable
Securities if such Holder is prevented by applicable statute or regulation
from entering into any such agreement; provided, however, that any such
Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of the
class of securities covered by such Shelf Registration Statement (except as
part of such underwritten offering) during such period unless it has
provided 45 days' prior written notice of such sale or distribution to the
Company or the managing underwriter or underwriters, as the case may be.
(ii) Restrictions on the Company and Others. The Company agrees (A)
not to effect any public or private sale or distribution (including,
without limitation, a sale pursuant to Regulation D under the Securities
Act) of any securities the same as or similar to those covered by a Shelf
Registration Statement or any securities convertible into or exchangeable
or exercisable for such securities, during the 10 days prior to, and during
the 60-day period beginning on, the commencement of an underwritten public
distribution of Registrable Securities, where the managing underwriter or
underwriters so requests pursuant to timely written notice; (B) to include
in any agreements entered into by the Company on or after the date of this
Agreement (other than any underwriting agreement relating to a public
offering registered under the Securities Act) pursuant to which the Company
issues or agrees to issue securities the same as or similar to the Notes a
provision substantially identical to Section 3(d)(i); and (C) not to grant
or agree to grant any "piggy-back registration" or other similar rights to
any holder of the Company's or any of its subsidiaries' securities issued
on or after the date of this Agreement with respect to any Registration
Statement.
4. ADDITIONAL INTEREST
(a) The Company and the Initial Purchasers agree that the Holders of Notes
will suffer damages if the Company fails to fulfill its obligations under
Section 2 or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, the Company agrees to pay,
as liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if either the Exchange Offer Registration Statement or the Initial
Shelf Registration Statement has not been filed on or prior to the Filing
Date (unless, with respect to the Exchange Offer Registration Statement, a
Shelf Registration Event described in Section 2(c)(i) shall have occurred
prior to the Filing Date), Additional Interest shall accrue on the Notes
over and above the stated interest on the principal of a rate equal to 50
basis points for the first 90 days (or any part thereof) immediately
following such date, such Additional Interest rate increasing by an
additional 50 basis points for each subsequent 90-day period (or any part
thereof);
(ii) if either the Exchange Offer Registration Statement or the
Initial Shelf Registration Statement is not declared effective by the
Commission on or prior to the Effectiveness Date (unless, with respect to
the Exchange Offer Registration Statement, a Shelf Registration Event
described in Section 2(c)(i) shall have occurred), Additional Interest
shall accrue on the Notes included or which should have been included in
such Registration Statement over and above the stated interest on the
principal at a rate equal
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to 50 basis points for the first 90 days (or any part thereof) immediately
following the day after such date, such Additional Interest rate increasing
by an additional 50 basis points for each subsequent 90-day period (or any
part thereof); and
(iii) if (A) the Company has not exchanged Exchange Securities for all
Notes validly tendered and not withdrawn in accordance with the terms of
the Exchange Offer on or prior to the fifth day after the Expiration Date,
or (B) the Exchange Offer Registration Statement ceases to be effective at
any time prior to the Expiration Date, or (C) if applicable, any Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall accrue on the Notes
(over and above any interest otherwise payable on principal of the Notes)
at a rate equal to 50 basis points for the first 90 days (or any part
thereof) commencing on (x) the sixth day after the Expiration Date, in the
case of (A) above, or (y) the day the Exchange Offer Registration Statement
ceases to be effective in the case of (B) above, or (z) the day such Shelf
Registration Statement ceases to be effective in the case of (C) above,
such Additional Interest rate increasing by an additional 50 basis points
for each such subsequent 90-day period (or any part thereof); provided,
however, that the Additional Interest rate on the Notes may not exceed at
any one time in the aggregate 150 basis points; provided, further, that (1)
upon the filing of the Exchange Offer Registration Statement or a Shelf
Registration Statement as required hereunder (in the case of clause (i) of
this Section 4(a)), (2) upon the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement as required
hereunder (in the case of clause (ii) of this Section 4(a)) or (3) upon the
exchange of Exchange Securities for all Notes validly tendered and not
withdrawn (in the case of clause (iii)(A) of this Section 4(a)), or upon
the effectiveness of the Exchange Offer Registration Statement which had
ceased to remain effective (in the case of clause (iii)(B) of this Section
4(a)), or upon the effectiveness of the Shelf Registration Statement which
had ceased to remain effective (in the case of clause (iii)(C) of this
Section 4(a)), Additional Interest on the Notes as a result of such clause
(or the relevant subclause thereof), as the case may be, shall cease to
accrue (but any accrued amount shall be payable).
(b) The Company shall notify the Trustee within one business day after each
and every date on which an event occurs in respect of which Additional Interest
is required to be paid (an "Event Date"). The Company shall pay the Additional
Interest due on the Registrable Securities by depositing with the Trustee, in
trust, for the benefit of the Holders thereof, on or before the applicable
semi-annual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due to Holders of Registrable
Securities. Each obligation to pay Additional Interest shall be deemed to accrue
immediately following the occurrence of the applicable Event Date. Any accrued
Additional Interest amount shall be due and payable on each interest payment
date immediately after the applicable Event Date to the record Holder of
Registrable Securities entitled to receive the interest payment to be made on
such date as set forth in the Indenture. The parties hereto agree that the
Additional Interest provided for in this Section 4 constitutes a reasonable
estimate of the damages that may be incurred by Holders of Registrable
Securities by reason of the failure of a Shelf Registration Statement or
Exchange Offer Registration Statement to be filed or declared effective, or a
Shelf Registration Statement to remain effective, as the case may be, in
accordance with this Section 4.
5. REGISTRATION PROCEDURES
In connection with the registration of any Registrable Securities pursuant
to Sections 2 or 3 hereof, the Company shall use its reasonable best efforts to
effect such registrations to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall:
(a) prepare and file with the Commission on or before the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section 2 or
3, and to use its reasonable best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; provided,
however, that, if (1) such filing is pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the Applicable
Period, before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Company shall furnish to and afford the Holders of
the Registrable Securities and each such Participating Broker-Dealer, as the
case may be, covered by such Registration Statement, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein) proposed to be filed; the Company shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded a reasonable opportunity to review
prior to the filing of such document, if the Holders of a majority in aggregate
principal amount of the Registrable Securities covered by such Registration
Statement, or such Participating Broker-Dealer, as the case may be, their
counsel, or the managing underwriters, if any, shall not have been afforded such
opportunity or shall reasonably object, except for any amendment or supplement
or document that counsel to the Company shall advise the Company in writing is
required in order to comply with applicable law;
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(b) prepare and file with the Commission such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period, in the case of a
Shelf Registration Statement, or until the later of the Expiration Date and the
Applicable Period (if applicable), in the case of the Exchange Offer
Registration Statement; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations of the Commission promulgated thereunder applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus;
(c) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, notify the selling Holders of Registrable Securities, or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly, and confirm such notice in writing, (i)
when a Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, but without documents incorporated
or deemed to be incorporated by reference or exhibits unless specifically
requested); (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose; (iii) if at any time when a prospectus is required
by the Securities Act to be delivered in connection with sales of the
Registrable Securities the representations and warranties of the Company
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(n) below cease to be true and correct; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose; (v) of the
happening of any event or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that such notification need not
specifically identify such event if notification of the occurrence thereof would
in the Company's reasonable judgment, involve the disclosure of confidential
non-public information; and (vi) of the Company's reasonable determination that
a post-effective amendments to the Registration Statement would be appropriate;
(d) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities or the Exchange Securities to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued,
to use its reasonable best efforts to obtain the withdrawal of any such order at
the earliest possible moment;
(e) if a Shelf Registration Statement is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Registrable Securities being sold in
connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, or such Holders or their respective counsel
reasonably request to be included therein; and (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;
(f) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, furnish to each selling Holder of Registrable Securities and
to each
9
such Participating Broker-Dealer who so requests and upon request to their
respective counsel and each managing underwriter, if any, without charge,
one conformed copy of the Registration Statement or Statements and each
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated or deemed to be incorporated therein by reference and
all exhibits;
(g) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, deliver to each selling Holder of Registrable Securities, or
each such Participating Broker-Dealer, as the case may be, their counsel, and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of preliminary prospectus) and each amendment
or supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of this
Section 5, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling holders of Registrable
Securities or each such Participating Broker-Dealer, as the case may be, and the
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Securities covered by or the sale by
Participating Broker-Dealers of the Exchange Securities pursuant to such
Prospectus and any amendment or supplement thereto provided such use complies
with all applicable laws and regulations;
(h) prior to any public offering of Registrable Securities or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, use its reasonable best efforts to register or qualify, and
to cooperate with the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriters reasonably request in writing;
provided, however, that where Exchange Securities held by Participating
Broker-Dealers or Registrable Securities are offered other than through an
underwritten offering, the Company shall cause its counsel to (i) perform Blue
Sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h); (ii) use its reasonable best efforts to
keep each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective;
and (iii) do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Exchange Securities held by
Participating Broker-Dealers or the Registrable Securities covered by the
applicable Registration Statement; provided, further, that the Company shall not
in any case be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject, (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction;
(i) if a Shelf Registration Statement is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company; and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or Holders may reasonably request;
(j) use its reasonable best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Securities, except as may be required solely as
a consequence of the nature of such selling Holder's business, in which case the
Company will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals; provided, further,
that the Company shall not in any case be required to (A) qualify generally to
do business in any jurisdiction where it is not then so qualified, (B) take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject, (C) subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction;
(k) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) above, as promptly as practicable prepare and (subject to
Section 5(a) above) file with the Commission, solely at the expense of the
Company, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder or to the purchasers of the Exchange Securities to whom
such Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to
10
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Company agrees
to notify the Holders to suspend use of any such Prospectus as promptly as
practicable after the occurrence of such event, and the Holders agree, upon
receipt of such notice, to suspend use of any such Prospectus until the Company
has amended or supplemented such Prospectus to correct such misstatement or
omission;
(l) use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement or the Exchange Securities, as the case may
be, to be rated with the appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement or the Exchange Securities, as the case
may be, or the managing underwriters, if any;
(m) prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company; and (ii) provide a CUSIP number for the
Registrable Securities;
(n) in connection with an underwritten offering of Registrable Securities
pursuant to a Shelf Registration Statement, enter into an underwriting agreement
as is customary in underwritten offerings, provided such agreement is reasonably
acceptable to the Company and provided that the underwriters are reasonably
acceptable to the Company, and take all such other actions as are reasonably
requested by the managing underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in such
connection if reasonably requested, (i) make such representations and warranties
to the underwriters, with respect to the business of the Company and its
subsidiaries 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 reasonably requested; (ii) use its reasonable best
efforts to obtain opinions of counsel to the Company and updates thereof in form
and substance reasonably satisfactory to the managing underwriters, addressed to
the underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by underwriters; (iii) use its reasonable best efforts to obtain "cold comfort"
letters and updates thereof in form and substance reasonably satisfactory to the
managing underwriters 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 or
any of its subsidiaries for which financial statements and financial data are,
or are required to be, included in the Registration Statement), addressed to
each of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably requested by
underwriters; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures comparable to those set
forth in Section 7 hereof (or such other provisions and procedures reasonably
acceptable to the Company and the Holders of a majority in aggregate principal
amount of Registrable Securities covered by such Registration Statement and the
managing underwriters or agents) with respect to all parties to be indemnified
pursuant to said section, all of which shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(o) if (1) a Shelf Registration Statement is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, subject to the prior receipt by the Company of undertakings
to use commercially reasonable best efforts to preserve the confidentiality of
any information disclosed by the Company pursuant hereto in form and substance
reasonably satisfactory to the Company, make available for inspection by any
selling Holder of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter participating
in any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling holder or each such
Participating Broker-Dealer, as the case may be, or underwriter (collectively,
the "Inspectors"), at the offices where normally kept, during reasonable
business hours, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries (collectively, the
"Records") as shall be 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
requested by any such Inspector in connection with such Registration Statement;
however, records which the Company determines, in good faith, to be confidential
and any Records which the Company 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 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; (iii) the information in
such Records has been made generally available to the public; or (iv) release
thereof is necessary or advisable in connection with any action, suit or
proceeding involving any Holder or other Inspector;
11
(p) provide for an indenture trustee for the Registrable Securities or the
Exchange Securities, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a), as the case may be, to be qualified
under the TIA not later than the effective date of the Exchange Offer or the
first Registration Statement relating to the Registrable Securities; and in
connection therewith, cooperate with the trustee under any such indenture and
the holders of the Registrable Securities, to effect such changes to such
indenture as may be required for such indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its reasonable best efforts to
cause such 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
Commission to enable such indenture to be so qualified in a timely manner;
(q) comply with all applicable rules and regulations of the Commission to
the extent and so long as they are applicable to the Exchange Offer Registration
Statement or the Shelf Registration Statement and make generally available to
their Securityholders earning 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 45 days after the end of any
12-month period (or 90 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
Registrable Securities 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;
(r) upon consummation of an Exchange Offer or a Private Exchange, obtain an
opinion of counsel to the Company in customary form, relating to the Exchange
Securities or the Private Exchange Securities, as the case may be, addressed to
the Trustee for the benefit of all Holders of Registrable Securities
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 Securities and Private Exchange Securities and the
related indenture; and (ii) each of the Exchange Securities or the Private
Exchange Securities, as the case may be, and related indenture constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms (with customary exceptions);
(s) if an Exchange Offer or a Private Exchange is to be consummated, upon
delivery of the Registrable Securities by Holders to the Company (or to such
other Person as directed by the Company) in exchange for the Exchange Securities
or the Private Exchange Securities, as the case may be, ▇▇▇▇, or caused to be
marked, on such Registrable Securities that such Registrable Securities are
being canceled in exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be; in no event shall such Registrable Securities be
marked as paid or otherwise satisfied;
(t) cooperate with each seller of Registrable Securities covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD"); and
(u) use its reasonable best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as the Company may, from time to time, reasonably request. The Company may
exclude from such registration the Registrable Securities of any seller or
Participating Broker-Dealer who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
Each Holder of Registrable Securities and each Participating Broker-Dealer
agrees by acquisition of such Registrable Securities or Exchange Securities to
be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder will
forthwith discontinue disposition of such Registrable Securities covered by such
Registration Statement or Prospectus or Exchange Securities to be sold by such
Participating Broker-Dealer, as the case may be, until such holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
5(k), or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not the
Exchange Offer Registration Statement or a Shelf Registration Statement is filed
or becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel) in
such jurisdictions (x) where the holders of Registrable Securities are located,
12
in the case of the Exchange Securities, or (y) as provided in Section 5(h), in
the case of Registrable Securities to be sold in a public offering or Exchange
Securities to be sold by a Participating Broker-Dealer during the Applicable
Period)); (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities or Exchange Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or, in respect of Registrable Securities or Exchange
Securities to be sold by any Participating Broker-Dealer during the Applicable
Period, by the Holders of a majority in aggregate principal amount of the
Registrable Securities included in any Registration Statement or of such
Exchange Securities, as the case may be); (iii) messenger, telephone and
delivery expenses incurred by the Company; (iv) fees and disbursements of
counsel for the Company and all documentation related thereto, including any
underwriting agreement and all related documentation (subject to the provisions
of Section 6(b)); (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(n)(iii) (including, without limitation, the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance); (vi) the reasonable fees and expenses of any "qualified
independent underwriter" or other independent appraiser participating in an
offering pursuant to the Conduct Rules of the NASD; (vii) rating agency fees;
(viii) Securities Act liability insurance, if the Company desires such
insurance; (ix) fees and expenses of all other Persons retained by the Company;
(x) internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees of the Company performing legal
or accounting duties); (xi) the expense of any annual audit of the Company;
(xii) the fees and expenses incurred by the Company in connection with the
listing of the Registrable Securities on any Securities exchange; and (xiii) the
expenses relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement. Anything
contained herein to the contrary notwithstanding, the Company shall not have any
obligation whatsoever in respect of any fees or expenses of counsel to any
underwriters, underwriters' discounts or commissions, brokerage commissions,
dealers' selling concessions, transfer taxes or any other selling expenses
(other than those expressly enumerated in clauses (i) through (xiii) above)
incurred in connection with the underwriting, offering or sale of Registrable
Securities or Exchange Securities by or on behalf of any Person.
(b) In connection with any Shelf Registration Statement hereunder, the
Company shall reimburse the Holders of the Registrable Securities being
registered in such registration for the reasonable fees and disbursements of not
more than one counsel (in addition to appropriate local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Registrable
Securities to be included in such Registration Statement and other reasonable
out-of-pocket expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
7. INDEMNIFICATION
The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities and each Participating Broker-Dealer selling Exchange
Securities during the Applicable Period, the officers and directors of each such
person, and each person, if any, who controls any such person within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a "Participant"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, the reasonable legal fees and
other expenses incurred in connection with any suit, action or proceeding or any
claim asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to such Participant furnished to the
Company in writing by such Participant (or, if such Participant is not a Holder
or a Participating Broker-Dealer, furnished in writing by the Holder or
Participating Broker-Dealer in respect of which such person is a Participant
relating to such Participant) expressly for use therein; provided, however, that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any Participant (or, if such Participant is not a Holder
or a Participating Broker-Dealer, furnished in writing by the Holder or
Participating Broker-Dealer in respect of which such person is a Participant
relating to such Participant) from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities to the extent
that such untrue statement or omission or alleged untrue statement or omission
made in such preliminary prospectus is eliminated or remedied in the related
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and a copy of the related Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the sale of such Registrable Securities or Exchange Securities, as the
case may be, to such person .
13
Each Participant will be required to agree, severally and not jointly, to
indemnify and hold harmless each of the Company, its directors, its officers who
sign the Registration Statement and each person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to each
Participant, but only with reference to information relating to such Participant
furnished to the Company in writing by such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus. The liability of any Participant under this
paragraph shall in no event exceed the proceeds received by such Participant
from sales of Registrable Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding; and shall pay the
reasonable fees and expenses incurred by such counsel related to such
proceeding, provided, however, that the failure to so notify the Indemnifying
Person shall not relieve it of any obligation or liability which it may have
hereunder or otherwise (unless and only to the extent that such failure actually
prejudices the Indemnifying Person). In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but, other than in
circumstances involving a conflict among Indemnified Persons, the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have agreed
to the contrary; (ii) the Indemnifying Person has failed within a reasonable
time to retain counsel reasonably satisfactory to the Indemnified Person; or
(iii) the named parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to
an actual or potential conflict of interest. It is understood that, other than
in circumstances involving a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities sold by all such Participants and any such separate firm for the
Company, its directors, its officers and such control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses incurred by counsel as contemplated by
the third sentence of this paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 60 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party, unless such
settlement includes an unconditional written release of such Indemnified Person
in form and substance satisfactory to the Indemnified Persons from all liability
on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the
14
relative benefits received by the Indemnifying Person or Persons on the one hand
and the Indemnified Person or Persons on the other from the initial offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Participants on the other shall be deemed to be
in the same proportion as the total proceeds from the initial offering (net of
discounts and commissions but before deducting expenses) of the Notes received
by the Company bears to the total proceeds received by such Participant from the
sale of Registrable Securities. The relative fault of the parties 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, on the one hand,
or such Participant or such other Indemnified Person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Securities
exceeds the amount of any damages that such Participant 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section 7 will
be in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
8. RULE 144 AND RULE 144A
The Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the request of any
Holder of Registrable Securities, make publicly available other information so
long as necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will take such further
action as any Holder of Registrable Securities may reasonably request, to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act.
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering and reasonably acceptable to
the Company.
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 (however
the terms applicable to each Holder shall be identical in all respects) and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements applicable to all Holders.
10. MISCELLANEOUS
(a) Remedies. In the event of a breach by the Company of any of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights
15
provided herein, in the Indenture or, in the case of the Initial Purchasers, in
the Purchase Agreement or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company has not, as of the date hereof,
entered into and shall not, after the date of this Agreement, enter into any
agreement with respect to any of its Securities that is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not entered into
and will not enter into any agreement with respect to any of its securities
which will grant to any Person "piggy-back" rights with respect to a
Registration Statement.
(c) Adjustments Affecting Registrable Securities. The Company shall not,
directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
(e) Amendments and Waivers. Except as provided in paragraph (d) above, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
otherwise than by an instrument executed and delivered by (A) the Holders of not
less than a majority in aggregate principal amount of the then outstanding
Registrable Securities and (B) in circumstances that would adversely affect the
Participating Broker-Dealers, the Participating Broker-Dealers holding not less
than a majority in aggregate principal amount of the Exchange Securities held by
all Participating Broker-Dealers; provided, however, that Section 7 and this
Section 10(e) may not be amended, modified or supplemented except by an
instrument executed and delivered by each Holder and each Participating
Broker-Dealer (including any person who was a Holder or Participating
Broker-Dealer of Registrable Securities or Exchange Securities, as the case may
be, disposed of pursuant to any Registration Statement) affected by any such
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
Securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Securities may be given pursuant to an instrument
executed and delivered by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement.
(f) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) if to a Holder of Registrable Securities, at the most current
address given by the Trustee to the Company; and
(ii) if to the Company, at Hermes Europe Railtel ▇.▇.,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Attention: Chief Financial
Officer with a copy to Global TeleSystems Group, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied. 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.
(g) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Registrable Securities.
(h) 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.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(k) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the
16
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their commercially reasonable best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(l) Entire Agreement. This Agreement, together with the Purchase Agreement,
is intended by the parties as a final expression of their agreement, and is
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
(m) Securities Held by the Company or Its Affiliates. Whenever the consent
or approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
deemed to be not outstanding for purposes of determining whether such consent or
approval was given by the Holders of such required percentage.
(n) Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By
the execution and delivery of this Agreement, the Company (i) acknowledges that
it has, by separate written instruments, designated and appointed CT Corporation
System, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("CT Corporation System") (and any
successor entity), as its authorized agent upon which process may be served in
any suit or proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the Borough of Manhattan, City of
New York, State of New York or brought under federal or state securities laws,
and represent and warrant that CT Corporation System has accepted such
designation, (ii) submit to the jurisdiction of any such court in any such suit
or proceeding and (iii) agree that service of process upon CT Corporation System
and written notice of said service to the Company in accordance with the
provisions of this Agreement shall be deemed in every respect effective service
of process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of CT Corporation System in full force and effect
for as long as any of the Notes remain outstanding (subject to the limitation
set forth in clause (i)); provided, however, that the Company may, and to the
extent CT Corporation System ceases to be able to be served on the basis
contemplated herein shall, by written notice to the Initial Purchasers,
designate such additional or alternative agent for service of process that (i)
maintains an office located in the Borough of Manhattan, City of New York, State
of New York, and (ii) is either (x) United States counsel for the Company or (y)
a corporate service company which acts as agent for service of process for other
persons in the ordinary course of its business. Such written notice shall
identify the name of such agent for service of process and the address of the
office of such agent for service of process in the Borough of Manhattan, City of
New York, State of New York.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court of (i) any jurisdiction in which the Company owns
or leases property or assets, (ii) the United States or the State of New York or
(iii) the Netherlands or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property and assets or this
Agreement or any of the Notes or actions to enforce judgments in respect of any
thereof, the Company hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents, to the extent permitted by
law.
(o) Judgment Currency. The Company hereby agrees to indemnify each
Participant against any loss incurred by such person as a result of any judgment
or order being given or made against the Company for any U.S. dollar amount due
under this Agreement and such judgment or order being expressed and paid in a
currency (the "Judgment Currency") other than United States dollars and as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange in The City of New
York at which such party on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment Currency
actually received by such party. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
HERMES EUROPE RAILTEL B.V.
By: /s/ FRANCOIS NOTE
Name: Francois Note
Title:Corporate Financial Director
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ BROTHERS INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Managing Director