1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into this 18th day of May, 1999, by and among CapRock Communications
Corp., a Texas corporation (the "Company") and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxx Securities Inc., Bear, Xxxxxxx & Co.
Inc., Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxxx, Sachs &
Co. (each, an "Initial Purchaser" and collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement,
dated May 13, 1999, by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $210 million aggregate principal amount of its 11 1/2% Senior
Notes due 2009, Series A (the "Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution 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.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
2
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company; provided, however, that such
depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Event Date " shall have the meaning set forth in Section
2.5(b).
"Exchange Offer" shall mean the exchange offer by the Company
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 11 1/2% Senior Notes due
2009, Series B issued by the Company 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.
"Indenture" shall mean the Indenture relating to the
Securities, dated as of May 18, 1999 between the Company and Chase
Manhattan Trust Company, 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.
-2-
3
"Initial Purchaser" or "Initial Purchasers" shall have the
meaning set forth in the preamble.
"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 Company and other obligors on the
Securities or any Affiliate (as defined in the Indenture) of the
Company 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 broker-dealer
which makes a market in the Securities and exchanges Registrable
Securities in the Exchange Offer for Exchange Securities.
"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.
"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
-3-
4
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 Company 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 Company 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 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 Company
and of the independent public accountants of the Company including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (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, Xxxxxxxx & Xxxxxx LLP,
counsel to the Initial Purchasers in connection therewith, (ix) the
reasonable fees and disbursements of Paul, Hastings, Xxxxxxxx & Xxxxxx
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 Company 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.
-4-
5
"Registration Statement" shall mean any registration statement
of the Company 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 Company 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
registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"TIA " shall have the meaning set forth in Section 2.1(d).
"Transfer Restricted Notes" 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;
-5-
6
(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 Company 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.
"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
Company shall, for the benefit of the Holders, at the Company's cost, (i)
prepare and, as soon as practicable but not later than 90 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 Company 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 150 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) commence
the Exchange Offer and use its best efforts to issue, on or prior to 35 days
after the date on which the Exchange Offer Registration Statement was declared
effective by the SEC, the Exchange Securities in exchange for all Securities
tendered prior thereto in the Exchange Offer. The Exchange Securities will be
issued
-6-
7
under the Indenture. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Registrable Securities for Exchange Securities (assuming that such
Holder (i) is not an affiliate of the Company within the meaning of Rule 405
under the 1933 Act, (ii) is not a broker-dealer tendering Registrable Securities
acquired directly from the Company or an affiliate of the Company 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) and 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 Company
shall:
(i) mail as promptly as practicable to each
Holder a copy of the Prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and related
documents;
(ii) keep the Exchange Offer open for acceptance
for a period of not less than 20 business days after the date notice thereof is
mailed to the Holders (or 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.
-7-
8
(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 Company 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 Company on a senior
basis, that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the "Private Exchange
Securities").
(d) The Exchange Securities and the Private Exchange
Securities shall be issued under (i) the Indenture or (ii) an indenture
identical in all material respects to the Indenture and which, in either case,
has been qualified under the Trust Indenture Act of 1939, as amended (the
"TIA"), or is exempt from such qualification and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture but that the Private Exchange Securities shall be subject to such
transfer restrictions. The Indenture or such indenture shall provide that the
Exchange Securities, the Private Exchange Securities and the Securities shall
vote and consent together on all matters as one class and that none of the
Exchange Securities, the Private Exchange Securities or the Securities will have
the right to vote or consent as a separate class on any matter. The Private
Exchange Securities shall be of the same series as the Exchange Securities and
the Company shall use all commercially reasonable efforts to have the Private
Exchange Securities bear the same CUSIP number as the Exchange Securities. The
Company 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 Company 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
-8-
9
(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 0000 Xxx) of the Company or, if it is an
affiliate, it will comply with the registration and prospectus delivery
requirements of the 1933 Act to the extent applicable, that all Exchange
Securities to be received by it shall be acquired in the ordinary course of its
business and that at the time of the consummation of the Exchange Offer it shall
have no arrangement or understanding with any Person to participate in the
distribution (within the meaning of the 0000 Xxx) 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 Company's judgment, would reasonably be expected to
impair the ability of the Company 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 Company, the Company shall inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of 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 Company 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 150 days following
the date of this Agreement or the Exchange Offer is not consummated within 185
days after the date of this Agreement, (iii) if within 90 days after the Closing
Date any Holder of Securities notifies the Company 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
-9-
10
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 Company or an
affiliate of the Company 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 Company shall, at its cost:
(x) As promptly as practicable, but in any event prior to
the later of (1) 90 days after the date of this Agreement or (2) 30
days after the obligation to file the Shelf Registration Statement
arises, file with the SEC, and thereafter shall use its best efforts to
cause to be declared effective as promptly as practicable but no later
than 60 days after such filing obligation arises, a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities
by the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders participating in the Shelf
Registration and set 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 Company 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 Company 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 Company 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
-10-
11
Statement is declared effective by the SEC, or for such shorter period
that will terminate when all Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding or otherwise to be
Registrable Securities (the "Effectiveness Period"); provided, however,
that the Effectiveness Period in respect of the Shelf Registration
Statement shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174
under the 1933 Act and as otherwise provided herein; and
(z) Notwithstanding any other provisions hereof, use its
best efforts to ensure that (i) any Shelf Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act
and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus
forming part of any 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 Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement. The Company
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 Company 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 Company will be deemed not to have used its best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if the Company voluntarily takes any action that
would, or omits to take any action
-11-
12
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 Company in good
faith pursuant to Section 2.4(c).
(b) An Exchange Offer Registration Statement pursuant to
Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to an Exchange Offer
Registration Statement or a Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
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 Company 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 Company, 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) If (i) the Company fails to file any of the
registration statements required by this Agreement on or before the date
specified for such filing, (ii) any of such registration statements are not
declared effective by the SEC on or prior to the date specified for such
effectiveness (the "Effectiveness Target Date"), (iii) the Company fails to
consummate the Exchange Offer within 35 days of the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement, or (iv) the Shelf
Registration Statement or the Exchange Offer Registration Statement is declared
effective but thereafter, subject to Section 2.4(c) above, ceases to be
effective or usable in connection with the Exchange Offer or resales of Transfer
Restricted Notes, as the case may be, during the periods specified in this
Agreement (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
-12-
13
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. Following the cure of a particular Registration Default, the accrual of
Additional Interest with respect to such Registration Default will cease;
provided, however, that if, after any such Additional Interest ceases to accrue,
a different event specified in clause (i), (ii), (iii) or (iv) above occurs,
such Additional Interest will again accrue pursuant to the foregoing provision.
(b) The Company 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 Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company
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 Company, (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
-13-
14
securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling
Holders thereof (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities 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 Company
shall not be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), 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 Company raises a substantial
question as to whether the Exchange Offer is permitted by applicable federal
law, the Company hereby agrees to seek a no-action letter or other favorable
decision from the SEC allowing the Company to consummate an Exchange Offer for
Registrable Securities contemplated hereby. The Company hereby agrees to pursue
the issuance of such a decision to the SEC staff level. In connection with and
subject to the foregoing, the Company hereby agrees to take all
-14-
15
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 Company
setting forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the SEC staff;
(f) as a condition to its participation in the Exchange Offer,
each Holder of Registrable Securities (including, without limitation, any Holder
who is a Participating Broker-Dealer) shall furnish, upon the request of the
Company, prior to the consummation of the Exchange Offer, a written
representation to the Company (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 Company, (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
Company'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 Company 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 Xxxxxx
Xxxxxxx 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 Company shall, to the extent requested or required by the SEC,
provide a supplemental letter to the SEC (A) stating that the Company is
registering the Exchange Offer in reliance on the position of the SEC enunciated
in Exxon Capital Holdings Corporation (available May 13, 1988), and Xxxxxx
Xxxxxxx 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 Company 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 Company is capable of
so representing, to the best of the Company's information and belief, each
Holder participating in the Exchange Offer is
-15-
16
acquiring the Exchange Securities in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the distribution
of the Exchange Securities received in the Exchange Offer and (C) any other
undertaking or representation required by the SEC as set forth in any no-action
letter obtained pursuant to clause (e) above, if applicable;
(h) notify promptly each Holder of Registrable Securities included
in a Shelf Registration or any Participating Broker-Dealer who has notified the
Company 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 Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (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 Company 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 Company 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 Xxxxxxx Xxxxx 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 0000 Xxx) 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 Xxxxxxx Xxxxx, on behalf of the
-16-
17
Participating Broker-Dealers, and its counsel, represent the prevailing views of
the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the Exchange
Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company 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 Company 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 Company's independent
certified public accountants (and, if necessary, any other independent certified
public
-17-
18
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements are, or are required to be, included in
the Registration Statement) at least as broad in scope and coverage as the
comfort letter or comfort letters delivered to the Initial Purchasers in
connection with the initial sale of the Securities to the Initial Purchasers;
(k) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities, copies of any comment letters
received from the SEC or any other 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 Company 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 Company agrees
promptly to notify each such Holder of such determination and to
-18-
19
furnish each such Holder such number of copies of the Prospectus as amended or
supplemented, as such Holder may reasonably request;
(p) in the case of a Shelf Registration, a reasonable time prior
to the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide copies
of such document to the Initial Purchasers on behalf of the Holders whose
Registrable Securities are included therein; and make such representatives of
the Company 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 Company 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
-19-
20
each selling Holder and the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements 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
-20-
21
Registration Statement, any such Participating Broker-Dealer and any counsel or
accountant retained by any of the foregoing, all financial and other records,
pertinent corporate documents and properties of the Company reasonably requested
by any such persons, and cause the respective officers, directors, employees,
and any other agents of the Company 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 Company 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 Company, 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 Company 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 Company
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
-21-
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 Company
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 Company 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 Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Section 3(h)(v) or
3(h)(vi) hereof, such Holder will keep such information confidential and will
forthwith discontinue
-22-
23
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 Company, such
Holder will deliver to the Company (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 Company 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 Company shall not file any
Registration Statement with respect to any securities (within the meaning of
Section 2(l) of the 0000 Xxx) of the Company 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 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 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 Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an "Underwriter") and each
Person, if any, who controls any Holder or Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims,
damages and expenses whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material
-23-
24
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 Company; 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 Company 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 Company, 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 Company, 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 Company by such Holder
expressly for use in the Shelf Registration Statement (or any amendment thereto)
or such Prospectus (or any amendment or supplement thereto); provided, however,
that no such
-24-
25
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 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
-25-
26
appropriate to reflect the relative fault of the Company 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 Company 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 Company, 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 Company, 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 0000 Xxx) 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
Company, and each Person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. 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.
-26-
27
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company 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 Company ceases to be so
required to file such reports, the Company 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 Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
5.2 No Inconsistent Agreements. The Company has not
entered into and the Company 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 Company's other issued and outstanding securities under
any such agreements.
5.3 Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure.
5.4 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 Company by means of a notice given in accordance with the
provisions of this Section 5.4, which address initially is the address set forth
in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to
the Company, initially at the Company's address set forth in the Purchase
Agreement, and
-27-
28
thereafter at such other address of which notice is given in accordance with the
provisions of this Section 5.4.
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.
5.5 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.
5.6 Third Party Beneficiaries. The Initial Purchasers
(even if the Initial Purchasers are not Holders of Registrable Securities) shall
be third party beneficiaries to the agreements made hereunder between the
Company, 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 Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.
5.7 Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company 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
-28-
29
Holder may obtain such relief as may be required to specifically enforce the
Company's obligations under Sections 2.1 through 2.4 hereof
5.8 Restriction on Resales. Until the expiration of two
years after the original issuance of the Securities, the Company will not, and
will cause its "affiliates" (as such term is defined in Rule 144(a)(1) under the
0000 Xxx) not to, resell to anyone other than the Company any Securities which
are "restricted securities" (as such term is defined under Rule 144(a)(3) under
the 0000 Xxx) 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 Company (if the Securities are
being submitted by an affiliate of the Company).
5.9 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.
5.10 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
5.11 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.
5.12 Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
-29-
30
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CAPROCK COMMUNICATIONS CORP.
By: /s/ XXXX X. XXXXXXXX, XX.
-----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CHASE SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ XXXXXXX X. XXXXXXXXX
----------------------------
Name:
Title:
For itself and as Representative of the other Initial Purchasers named in this
Agreement.
-30-
