Exhibit 10.2
Execution Copy
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October
6, 2003, is made among ITC/\DeltaCom, Inc., a Delaware corporation (the
"Company"), and each Person listed on the signature pages hereof under the
heading "WCAS Securityholders" (collectively, "W").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
July 2, 2003, by and among the Company, BTI Telecom, Inc., 8DBC1 Corp., WCAS
Capital Partners III, L.P., Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P., WCAS
Information Partners, L.P. and certain individual investors and trusts listed on
the signature pages thereto (as amended, the "Merger Agreement"), the Company
has issued to W on the date hereof (i) 6,950,000 shares of the common stock, par
value $0.01 per share, of the Company (the "Common Stock") and (ii) 350,000
shares of the 8% Series B Convertible Redeemable Preferred Stock, par value
$0.01 per share, of the Company (the "Series B Preferred Stock");
WHEREAS, pursuant to the Merger Agreement and the Warrant Agreement,
dated as of the date hereof, between the Company and the warrant agent
thereunder (the "Warrant Agreement"), the Company has issued to W on the date
hereof warrants to purchase 3,000,000 shares of the Common Stock; and
WHEREAS, in connection with and pursuant to the Merger Agreement, the
Company has agreed to grant to W and other permitted holders the registration
rights described in this Agreement with respect to the securities referred to
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
"Adverse Offering Effect" has the meaning specified in Section 6(a).
"Affiliate" has the meaning specified in Rule 12b-2 under the Exchange
Act.
"Amendment" has the meaning specified in Section 18.
"Blackout Period" has the meaning specified in Section 8(a).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
or the State of Georgia are authorized or obligated by law or other governmental
actions to close.
"Closing Date" means the date on which the Effective Time occurs.
"Common Stock" has the meaning specified in the recitals to this
Agreement.
"Company" has the meaning specified in the first paragraph of this
Agreement.
"Company Shelf Response" has the meaning specified in Section 3(b).
"Cutback Notice" has the meaning specified in Section 6(a).
"Effective Time" has the meaning specified in the Merger Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, as the same shall be in effect from time to
time. Reference to a particular section of the Securities Exchange Act of 1934,
as amended, shall include reference to the comparable section, if any, of any
such successor federal statute.
"Excluded Registration" means a registration of Common Stock under the
Securities Act pursuant to a registration statement filed (i) on Form S-4 or
Form S-8 or any successor registration forms that may be adopted by the SEC or
(ii) in connection with an exchange offer or an offering of securities solely to
existing stockholders of the Company or employees of the Company or its
subsidiaries.
"Governance Agreement" has the meaning specified in the Merger
Agreement.
"Holders" means, collectively, W and, subject to Section 17, each
other Person to whom W has transferred Registrable Securities and who has agreed
to become bound by the provisions of this Agreement in accordance
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with Section 16, but only so long as such other Person holds Registrable
Securities.
"Initiating Demand Holders" has the meaning specified in Section 4(a).
"Initiating Securityholder" has the meaning specified in Section 5(a).
"Initiating Shelf Demand Holders" has the meaning specified in Section
4(b).
"Losses" has the meaning specified in Section 12(a).
"Majority of the Registrable Securities" means, as of any date of
determination with respect to the designated Holders, a majority of the shares
of Common Stock that are Registrable Securities held by such Holders on an
as-converted basis, assuming that all of such Holder's Registrable Securities
that are convertible into or exercisable for Common Stock are converted into or
exercised for Common Stock as of such date of determination.
"Merger Agreement" has the meaning specified in the recitals to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Registrable Securities" means, with respect to any offering
hereunder, the securities that any Person is entitled to request be included in
such offering pursuant to any registration rights agreement other than this
Agreement or the Series A Registration Rights Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or a political subdivision or an agency or instrumentality thereof.
"PIK Dividend Shares" means any shares of the Series B Preferred Stock
that have been issued as dividends on shares of the Series B Preferred Stock.
"Plan of Distribution" has the meaning specified in Section 3(c).
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"Preferred Shares" means (i) the shares of Series B Preferred Stock
issued by the Company on or after the Closing Date pursuant to the Merger
Agreement and (ii) any other shares of Series B Preferred Stock issued as a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares of Series B Preferred Stock described in clause (i)
above, including PIK Dividend Shares.
"Prospectus" means the prospectus included in any Registration
Statement, 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 any Registration Statement, and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registrable Securities" means, collectively, (i) the shares of Common
Stock held by the Holders immediately prior to the Closing Date plus the shares
of Common Stock acquired by the Holders on or after the Closing Date (including,
without limitation, the shares of Common Stock issued or issuable upon
conversion of the Preferred Shares or upon exercise of the Warrants) in
accordance with the Governance Agreement (or otherwise following the expiration
of the Governance Agreement), (ii) the Preferred Shares, (iii) the Warrants and
(iv) any securities paid, issued or distributed in respect of any shares of
Common Stock referred to in clause (i) by way of stock dividend or distribution
or stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. Securities shall cease to be
Registrable Securities in accordance with Section 2.
"Registration Expenses" means any and all out-of-pocket expenses
incident to the Company's performance of its registration obligations under this
Agreement, including, without limitation, (i) all SEC registration and filing
fees and expenses incurred in connection with the preparation, printing and
distribution of the Registration Statement and Prospectus and any other document
or amendment thereto and the mailing and delivery of copies thereof to the
Holders and any dealers or underwriters, (ii) fees and disbursements of the
Company, including, without limitation, fees and disbursements of counsel for
the Company and of independent public accountants and other experts of the
Company, (iii) fees and expenses in connection with the qualification of
Registrable Securities for offering and sale under state securities laws
(including fees and expenses incurred in connection with blue sky qualifications
of the Registrable Securities and including all reasonable fees and
disbursements of counsel in connection with any survey of state securities or
blue sky laws and the preparation of any memorandum thereon), (iv) fees and
expenses incident to any filing with
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the NASD or to securing any required review by NASD of the terms of the sale of
Registrable Securities, (v) all fees and expenses incurred in connection with
the listing of Registrable Securities on each securities exchange or automated
quotation system on which the Common Stock is then listed, (vi) the internal
expenses of the Company (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties and
expenses incurred by the Company in connection with any "road show" or marketing
presentation), (vii) with respect to each registration, up to $35,000 (or up to
$50,000 in the case of each Underwritten Offering) of the reasonable fees and
disbursements of a single counsel selected by the Holders of a Majority of the
Registrable Securities being registered incurred in connection with the
preparation and review of the Registration Statement relating to such
registration, and (viii) with respect to each registration, the reasonable fees
and disbursements of all independent public accountants (including the expenses
of any audit and/or "cold comfort" letter) and the reasonable fees and expenses
of other persons, including special experts, retained by the Company, but
excluding (x) any underwriting discounts and fees, brokerage and sales
commissions, and transfer and documentary stamp taxes, if any, relating to the
sale or disposition of the Registrable Securities and (y) any fees or
disbursements of counsel for the Holders or any Holder, other than the fees and
disbursements referred to in clause (vii) above.
"Registration Rights Period" means the period commencing on the date
of this Agreement and ending on the eighth anniversary thereof.
"Registration Statement" means any registration statement of the
Company referred to in Section 3, 4 or 5, including any Prospectus, amendments
and supplements to any such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in any
such registration statement.
"Requesting Holder" has the meaning specified in Section 5(a).
"Rule 144" means Rule 144 (or any similar provisions then in effect)
promulgated by the SEC under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Section 9(e) Period" has the meaning specified in Section 9(e).
"Section 9(k) Period" has the meaning specified in Section 9(k).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, as the same shall be in effect from time to
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time. Reference to a particular section of the Securities Act of 1933, as
amended, shall include reference to the comparable section, if any, of any such
successor federal statute.
"Series A Preferred Stockholder" means any holder of Series A
Registrable Securities.
"Series A Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 29, 2002, as amended and in effect as of the date
hereof, among the Company and the other Persons listed on the signature pages
thereof.
"Series A Registrable Securities" means, with respect to any offering
hereunder, the "Registrable Securities" (as defined in the Series A Registration
Rights Agreement) that the Holders (as defined in the Series A Registration
Rights Agreement) are entitled to request be included in such offering pursuant
to the Series A Registration Rights Agreement as in effect on the date hereof.
"Series B Preferred Stock" has the meaning specified in the recitals
to this Agreement.
"Shelf Registration" means the registration of Registrable Securities
effected pursuant to Section 3.
"Shelf Registration Statement" means a shelf registration statement of
the Company filed pursuant to Section 3 which covers Registrable Securities on
an appropriate form under Rule 415 of the Securities Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Shelf Resale Notice" has the meaning specified in Section 3(b).
"Similar Securities" means, in connection with any registration of
securities of the Company under the Securities Act, all securities of the
Company which are (i) the same as or similar to the securities being registered,
(ii) convertible into or exchangeable or exercisable for the securities being
registered or (iii) the same as or similar to the securities into or for which
the securities being registered are convertible or exchangeable or exercisable.
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"Suspension Period" means any period during which the offering of
Registrable Securities by any Holder under the Shelf Registration Statement
shall be suspended as a result of the occurrence of a Blackout Period, a Section
9(e) Period or a Section 9(k) Period.
"Suspension Period Notice" means a notice provided by the Company
pursuant to Section 3(b) in which the Company states that, as of the date of
such notice, there exists a Blackout Period, a Section 9(e) Period or a Section
9(k) Period.
"Underwritten Offering" means an underwritten offering in which
securities are sold to an underwriter or underwriters, on a firm commitment
basis, for reoffering to the public.
"Warrant Agreement" has the meaning specified in the recitals to this
Agreement.
"Warrants" means the warrants to purchase shares of the Common Stock
issued pursuant to the Warrant Agreement and any warrants issued in exchange,
substitution or replacement thereof.
"W" has the meaning specified in the first paragraph of this
Agreement.
"WCAS Securityholder" has the meaning specified in the first paragraph
of this Agreement.
2. Securities Subject to this Agreement. The Registrable Securities are the
sole securities entitled to the benefits of this Agreement. For the purposes of
this Agreement, Registrable Securities held by any Holder shall cease to be
Registrable Securities (and such Holder shall cease to have any registration
rights with respect to such securities under this Agreement) on the date and to
the extent that (i) a Registration Statement covering such Registrable
Securities has been declared effective under the Securities Act and such
Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities have been sold or
transferred in accordance with the requirements of Rule 144, (iii) such
Registrable Securities have been otherwise transferred or disposed of,
certificates therefor not bearing a legend restricting further transfer or
disposition thereof shall have been delivered by the Company and, at such time,
subsequent transfer or disposition of such securities shall not require
registration of such securities under the Securities Act, (iv) all Registrable
Securities then owned by such Holder may be sold or transferred by such Holder
without holding period, volume or manner of offering
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limitations under the Securities Act and the rules and regulations thereunder,
provided that such Registrable Securities, on an as-converted basis assuming
that all of such Registrable Securities that are convertible into or exercisable
for Common Stock are converted into or exercised for Common Stock, do not exceed
2% of the total number of shares of Common Stock then outstanding, (v) all
Registrable Securities then owned by such Holder may be sold or transferred by
such Holder within any three-month period in accordance with the requirements of
Rule 144 or (vi) such Registrable Securities have ceased to be outstanding.
3. Shelf Registration Statement.
(a) Within 30 Business Days after the Company files with the SEC the
financial statements required under Item 7 of SEC Form 8-K in connection with
the consummation of the transactions contemplated by the Merger Agreement, the
Company shall file with the SEC a Shelf Registration Statement relating to the
offer and sale, by the Holders from time to time, of the Registrable Securities
then outstanding or otherwise then registrable under SEC regulations, and shall
use its reasonable best efforts to cause the Shelf Registration Statement to be
declared effective by the SEC as soon as reasonably practicable after filing.
Notwithstanding any provision of this Agreement to the contrary, the Shelf
Registration Statement may also register the offering of the securities that
have shelf registration rights pursuant to the Series A Registration Rights
Agreement. The Company shall notify each Holder of the date on which the Shelf
Registration Statement is declared effective.
(b) If a Holder wishes to sell, transfer or otherwise dispose of
Registrable Securities pursuant to the Shelf Registration Statement, such Holder
shall deliver to the designated representative of the Company a written notice
(a "Shelf Resale Notice") of such Holder's good-faith present intention to sell,
transfer or otherwise dispose of some or all of such Holder's Registrable
Securities, and the number and type of Registrable Securities such Holder
proposes to sell, transfer or otherwise dispose of. Upon receipt of each Shelf
Resale Notice, the Company shall, no later than the second Business Day after
such Shelf Resale Notice has been given, either (i) provide a Suspension Period
Notice or (ii) give written notice (a "Company Shelf Response") to the Holder
who gave such Shelf Resale Notice stating that the prospectus relating to the
Registration Statement is current and that the Registrable Securities covered by
the Shelf Resale Notice may be resold within ten Business Days after receipt of
such Company Shelf Response. If the Company does not respond within such two
Business Days, it shall be deemed to have given a Company Shelf Response. Any
Holder who receives or is deemed to have received a Company Shelf Response shall
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then have ten Business Days after receipt of such Company Shelf Response in
which to sell, transfer or otherwise dispose of the shares subject to the Shelf
Resale Notice. If such Holder does not sell, transfer or otherwise dispose of
such Registrable Securities within such period, the Holder shall be required to
deliver another Shelf Resale Notice and comply again with the other requirements
of this Section 3(b) before selling, transferring or otherwise disposing of
Registrable Securities pursuant to the Shelf Registration Statement. All notices
pursuant to this Section 3(b) shall be provided by facsimile transmission or
electronic mail delivery and confirmed by direct telephonic communication with
the Company's designated representative referred to in Section 19.
(c) The Shelf Registration Statement shall cover the offering and sale
of the Registrable Securities only in accordance with the methods of
distribution described in Exhibit A attached to this Agreement (the "Plan of
Distribution"), which shall be included in the Prospectus forming part of the
Shelf Registration Statement. Notwithstanding the foregoing, if any Holder
wishes to effect an Underwritten Offering of Registrable Securities pursuant to
the Shelf Registration Statement, such Holder shall be required to exercise a
demand registration right pursuant to, and shall have the rights and obligations
of a Holder under, Section 4.
4. Demand Registration Rights.
(a) During the Registration Rights Period, upon the written request of
Holders holding at least a Majority of the Registrable Securities held by all
Holders (the "Initiating Demand Holders") that the Company effect the
registration under the Securities Act of all or part of such Initiating Demand
Holders' Registrable Securities (which written request shall specify the
aggregate number of Registrable Securities requested to be registered and the
proposed method of distribution thereof), the Company shall (i) as soon as
reasonably practicable, but no later than 30 days, after its receipt of such
request (or, if the Company shall be legally prohibited from making such a
filing, as soon thereafter as is legally permissible), file with the SEC a
Registration Statement with respect to such requested registration and (ii)
within five Business Days after its receipt of such request, notify in writing
all other Holders of such request and indicate in such notice the planned
initial filing date of such Registration Statement. Subject to reduction
pursuant to Section 6(a), such Registration Statement shall cover the
Registrable Securities requested by the Initiating Demand Holders to be
registered and such other Registrable Securities as the Holders other than the
Initiating Demand Holders shall request, by written notice to the Company given
no later than five Business Days prior to such planned initial filing date, to
be registered.
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(b) Upon the written request of Holders holding a Majority of the
Registrable Securities held by all Holders (the "Initiating Shelf Demand
Holders") that the Company effect the registration of all or part of such
Initiating Shelf Demand Holders' Registrable Securities for offer and sale in an
Underwritten Offering under the Shelf Registration Statement after it has been
declared effective by the SEC (which written request shall specify the aggregate
number of Registrable Securities requested to be so registered), the Company
shall (i) as soon as reasonably practicable, but no later than 30 days, after
its receipt of such request (or, if the Company shall be legally prohibited from
making such a filing, as soon thereafter as is legally permissible), prepare and
file with the SEC post-effective amendments to the Shelf Registration Statement
and such amendments and supplements to the Prospectus used in connection
therewith as are reasonably required to effect such Underwritten Offering
pursuant to the Shelf Registration Statement and (ii) within five Business Days
after its receipt of such request, notify in writing all other Holders of such
request and indicate in such notice the planned initial filing date of such
amendments or supplements. Subject to reduction pursuant to Section 6(a), such
Registration Statement shall cover the Registrable Securities requested by the
Initiating Shelf Demand Holders to be registered and such other Registrable
Securities as the Holders other than the Initiating Shelf Demand Holders shall
request, by written notice to the Company given no later than five Business Days
prior to such planned initial filing date, to be registered.
(c) Notwithstanding the provisions of Section 4(a) and Section 4(b),
the Company shall not be required to take any action pursuant to this Section 4:
(i) if at the date of such request (other than a request for an
Underwritten Offering made in accordance with this Section 4) the
Company shall have effective a Shelf Registration pursuant to which
the Holders could effect the disposition of their Registrable
Securities according to their proposed method of distribution;
(ii) if prior to the date of a request pursuant to Section 4(a),
the Company shall have effected three registrations (or, if prior to
such date the Company shall not have effected an Underwritten Offering
pursuant to Section 4(b), four registrations) pursuant to Section
4(a);
(iii) if prior to the date of a request pursuant to Section 4(b),
the Company shall have effected either (x) one registration
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pursuant to Section 4(b) or (y) four registrations pursuant to Section
4(a);
(iv) if the Company shall have effected a registration pursuant
to this Section 4 within the 120-day period immediately preceding the
date of such request which permitted Holders to register Registrable
Securities;
(v) if the Registrable Securities which the Company shall have
been requested to register shall have an aggregate offering price of
less than $5,000,000, unless such registration request is for all
remaining Registrable Securities held by the Holders; or
(vi) during the pendency of any Blackout Period;
provided, however, that the Company shall be permitted to satisfy its
obligations under Section 4(a) by amending (to the extent permitted by
applicable law) within 30 days after a written request for registration, any
Registration Statement previously filed by the Company under the Securities Act
so that such Registration Statement (as amended) shall permit the disposition
(in accordance with the intended methods of disposition, including, without
limitation, an Underwritten Offering, specified by the Holders as aforesaid) of
all of the Registrable Securities for which a demand for registration has been
made under Section 4(a). If the Company shall so amend a previously filed
Registration Statement, it shall be deemed to have effected a registration for
purposes of this Section 4.
(d) Subject to the requirement that a request pursuant to Section 4(b)
shall only be made for an Underwritten Offering pursuant to the Shelf
Registration Statement, the Holders delivering a request pursuant to Section
4(a) or Section 4(b) may distribute the Registrable Securities covered by such
demand by means of an Underwritten Offering or any other method of distribution,
as determined by the Holders holding a Majority of the Registrable Securities so
requested to be registered by all Holders.
(e) Subject to Section 4(f), a registration requested pursuant to this
Section 4 shall not be deemed to be effected for purposes of this Section 4: (i)
if the Registration Statement for such registration has not been declared
effective by the SEC or become effective in accordance with the Securities Act
and the rules and regulations thereunder; (ii) in the case of a Registration
Statement which does not contemplate an Underwritten Offering, if such
Registration Statement does not remain effective for at least 120 days (or such
shorter period that will terminate when all Registrable
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Securities covered by such Registration Statement have been sold or withdrawn);
or (iii) in the case of a Registration Statement which contemplates an
Underwritten Offering, if (A) such Registration Statement does not remain
effective for at least 120 days plus such longer period (not to exceed 90 days
after the 120th day) as, in the opinion of counsel for the underwriter or
underwriters, is required by law for the delivery of a Prospectus in connection
with the sale of Registrable Securities by an underwriter or dealer, or (B) the
conditions to closing specified in the applicable underwriting agreement are not
satisfied by reason of a violation or breach of such underwriting agreement or
this Agreement by the Company.
(f) Holders holding a Majority of the Registrable Securities held by
all Holders to be included in a Registration Statement to be filed pursuant to
Section 4(a) or Section 4(b) may, at any time prior to the effective date of the
Registration Statement relating to such registration, revoke such request by
providing a written notice to the Company revoking such request. The Company
shall be deemed to have effected a registration pursuant to Section 4(a) in the
case of any such revocation of an offering initiated by the Initiating Demand
Holders and the Company shall be deemed to have effected a registration pursuant
to Section 4(b) in the case of any such revocation of an offering initiated by
the Initiating Shelf Demand Holders, unless (i) the revocation is based on a
reasonable determination, made by Holders holding a Majority of the Registrable
Securities held by all Holders to be included in such Registration Statement,
that there has been, since the date of the applicable request pursuant to
Section 4(a) or Section 4(b), a material adverse change in the business,
financial condition, results of operations or prospects of the Company, in
general market conditions or in market conditions for businesses in the
Company's industry generally or (ii) the Holders requesting that Registrable
Securities be included in such registration reimburse the Company for all
Registration Expenses incurred by the Company with respect to such revoked
request. Except as otherwise contemplated by clause (ii) of the immediately
preceding sentence, no revocation pursuant to this Section 4(f) shall relieve
the Company of its obligation hereunder to pay the Registration Expenses in
connection with any such request.
5. Piggy-Back Registration Rights.
(a) If, during the Registration Rights Period, the Company shall
propose to file a Registration Statement under the Securities Act relating to a
public offering of Common Stock or other securities (other than in connection
with an Excluded Registration or a Registration Statement filed pursuant to
Section 3 of the Series A Registration Rights Agreement
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that does not involve an Underwritten Offering) for the Company's own account or
for the account of any holder or holders of Common Stock or other securities
(including, without limitation, any Holder or any Series A Preferred
Stockholder) pursuant to the exercise of registration rights (each such Person
or Persons for whose account such a Registration Statement is proposed to be
filed, an "Initiating Securityholder"), in each case, on a registration form and
in a manner that would permit the registration of Registrable Securities for
sale to the public under the Securities Act, the Company shall (x) give written
notice at least 15 Business Days prior to the filing thereof to each Holder,
specifying the approximate date on which the Company proposes to file such
Registration Statement and advising such Holder of its right to have any or all
of the Registrable Securities of such Holder included among the securities to be
covered thereby, and (y) at the written request of any such Holder given to the
Company within 15 Business Days after written notice from the Company has been
given to the Holder, include among the securities covered by such Registration
Statement the number of Registrable Securities which such Holder (a "Requesting
Holder") shall have requested be so included (subject, however, to reduction, in
accordance with the applicable provisions of Section 6).
(b) Nothing in this Section 5 shall create any liability on the part
of the Company to any Holder of Registrable Securities if for any reason the
Company shall decide not to file, or to delay the filing of, a Registration
Statement proposed to be filed under Section 5(a) or to withdraw such
Registration Statement subsequent to its filing, regardless of any action
whatsoever that a Holder may have taken, whether as a result of the issuance by
the Company of any notice hereunder or otherwise, provided, however, that the
Company shall not be relieved of its obligation hereunder to pay the
Registration Expenses in connection with any such filing or proposed filing.
(c) Any Holder participating in an Underwritten Offering by the
Company for its own account may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of the underwriters of such Underwritten Offering
shall also be made to and for the benefit of such Holder and that any or all of
the conditions precedent to the obligations of such underwriters under the
underwriting agreement for such Underwritten Offering shall also be conditions
precedent to the obligations of such Holder, in each case to the extent that
such agreements and conditions precedent shall reasonably be applicable to
selling securityholders in addition to such underwriters.
6. Cutbacks.
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(a) Offerings by the Holders or Series A Preferred Stockholders. In
connection with any offering covered by a Registration Statement filed pursuant
to Section 4 or pursuant to Section 4 of the Series A Registration Rights
Agreement, if the lead managing underwriter (if the offering shall be an
Underwritten Offering) or the Holders or Series A Preferred Stockholders who
have exercised a demand registration to initiate such offering (if the offering
shall not be an Underwritten Offering) give written notice to the Company (it
being understood that the Company shall as soon as reasonably practicable
deliver copies of such notice to all Holders and Series A Preferred Stockholders
who have requested to include Registrable Securities or Series A Registrable
Securities in such offering) (a "Cutback Notice") that, in its or their
reasonable and good faith opinion, the Registrable Securities and Series A
Registrable Securities requested to be included in such offering exceed the
number which can be sold in such offering without being likely to have a
significant adverse effect on the offering price, timing or distribution of the
class of securities offered or the market for the securities offered or for the
Common Stock (an "Adverse Offering Effect"), then the Company shall include in
such offering only the number of Registrable Securities and Series A Registrable
Securities which, in the good faith opinion of such underwriter or (if the
offering shall not be an Underwritten Offering) the Holders holding a Majority
of the Registrable Securities held by Holders who have exercised a demand
registration to initiate such offering or Series A Preferred Stockholders
holding a majority of the registrable securities held by Series A Preferred
Stockholders who have exercised a demand registration to initiate such offering,
as the case may be, can be included without having an Adverse Offering Effect.
In such event, the shares of Common Stock and other securities to be included in
such offering shall consist of (i) first, all of the Registrable Securities that
the Holders propose to sell pursuant to Section 4 or 5 and all of the Series A
Registrable Securities that the Series A Preferred Stockholders propose to sell
pursuant to Section 4 or 5 of the Series A Registration Rights Agreement (with
any reduction in such number being allocated among the Holders and the Series A
Preferred Stockholders pro-rata based on the number, as of the date of delivery
of the first Cutback Notice delivered to the Holders and Series A Preferred
Stockholders in connection with such offering, of shares of Common Stock
represented by Registrable Securities or Series A Registrable Securities, as the
case may be, requested by each Holder and each Series A Preferred Stockholder to
be included in such offering, calculated on an as-converted basis assuming that
all of such Registrable Securities of such Holder and all of such Series A
Registrable Securities of such Series A Preferred Stockholder requested to be so
included that are convertible into or exercisable for Common Stock are converted
into or exercised for Common Stock as of such date), (ii) second, the number, if
any, of shares of Common
-14-
Stock or other securities the Company proposes to sell for its own account that,
in the reasonable and good faith opinion of such lead managing underwriter or
the Holders or Series A Preferred Stockholders who have exercised a demand
registration to initiate such offering (if the offering shall not be an
Underwritten Offering) can be sold without adversely affecting the success of
the offering of all the Registrable Securities that each Holder, and all of the
Series A Registrable Securities that each Series A Preferred Stockholder,
desires to sell for its own account, and (iii) third, the number, if any, of
other shares of Common Stock and other securities requested to be included in
such offering that, in the reasonable and good faith opinion of such lead
managing underwriter or the Holders or Series A Preferred Stockholders who have
exercised a demand registration to initiate such offering (if the offering shall
not be an Underwritten Offering) can be sold without having an Adverse Offering
Effect or adversely affecting the success of the offering of all the Registrable
Securities, Series A Registrable Securities and other securities that each
Holder, each Series A Preferred Stockholder and the Company, as the case may be,
desires to sell for its own account, such other shares of Common Stock and other
securities to be allocated among the holders thereof who have requested that
their shares and other securities be so included in accordance with the
provisions of their registration rights agreements with the Company.
(b) Offerings by the Company. Each Holder wishing to include
Registrable Securities pursuant to Section 5(a) in any offering covered by a
Registration Statement filed by the Company relating to a public offering of
Common Stock or other securities for its own account (other than in connection
with an Excluded Registration) shall have the right to include such Registrable
Securities in any such offering only to the extent that the inclusion of such
Registrable Securities shall not reduce the number of shares of Common Stock or
other securities to be offered and sold therein by the Company for its own
account. In connection with the inclusion of Registrable Securities pursuant to
Section 5(a) in any such offering by the Company, if the lead managing
underwriter in an Underwritten Offering or the Company (if the offering shall
not be an Underwritten Offering) delivers a Cutback Notice to the Holders and
the Series A Preferred Stockholders, then the Company shall include in such
offering, in addition to the securities the Company proposes to sell for its own
account, only the aggregate number of securities that, in the reasonable and
good faith opinion of such lead managing underwriter or the Company (if the
offering shall not be an Underwritten Offering), can be included without
adversely affecting the offering of all of the securities that the Company
wishes to sell for its own account. Such aggregate number of securities to be
included in such offering shall be allocated on a pro rata basis among (i) the
Holders who have requested that
-15-
their Registrable Securities be so included and (ii) the Series A Preferred
Stockholders who have requested that their Series A Registrable Securities be so
included, based on the as-converted number, as of the date of delivery of the
Cutback Notice to such Holders and Series A Preferred Stockholders, of shares of
Common Stock represented by Registrable Securities or Series A Registrable
Securities, as the case may be, that each Holder and each Series A Preferred
Stockholder has requested to be so included, assuming that all of such Holder's
Registrable Securities and all of such Series A Preferred Stockholder's Series A
Registrable Securities requested to be so included that are convertible into or
exercisable for Common Stock are converted into or exercised for Common Stock as
of such date. No other securities shall be included in such offering except to
the extent that, in the reasonable and good faith opinion of such lead managing
underwriter or (if the offering shall not be an Underwritten Offering) the
Company, such securities can be included without adversely affecting the
offering of all of the securities that the Company, all of the Registrable
Securities that each Holder, and all of the Series A Registrable Securities that
each Series A Preferred Stockholder proposes to sell for its own account in such
offering.
(c) Other Offerings In connection with any offering described in
Section 5(a), other than an offering covered by a Registration Statement filed
pursuant to Section 4 of this Agreement or pursuant to Section 4 of the Series A
Registration Rights Agreement, or an offering by the Company for its own
account, if the lead managing underwriter (if the offering shall be an
Underwritten Offering) or the Initiating Securityholder (if the offering shall
not be an Underwritten Offering) delivers a Cutback Notice to all Holders and
Series A Preferred Stockholders who have requested to include Registrable
Securities or Series A Registrable Securities in such offering, then the Company
shall include in such offering only the number of Registrable Securities, Series
A Registrable Securities and Other Registrable Securities which, in the good
faith opinion of such underwriter or the Initiating Securityholders holding a
majority of the registrable securities held by the Initiating Securityholders,
as the case may be, can be included without having an Adverse Offering Effect.
In such event, the shares of Common Stock and other securities to be included in
such offering shall consist of (i) first, all of the Registrable Securities that
the Holders propose to sell pursuant to Section 5, all of the Series A
Registrable Securities that the Series A Preferred Stockholders propose to sell
pursuant to Section 5 of the Series A Registration Rights Agreement and all
Other Registrable Securities that the Initiating Securityholders propose to sell
(with any reduction in such number being allocated among the Holders, the Series
A Preferred Stockholders and the Initiating Securityholders pro-rata based on
the number of shares of Common Stock represented by Registrable Securities,
-16-
Series A Registrable Securities or Other Registrable Securities, as the case may
be, requested by each Holder, each Series A Preferred Stockholder and each
Initiating Securityholder to be included in such offering, in each case,
calculated on an as-converted basis assuming that all of such Holder's
Registrable Securities, all of such Series A Preferred Stockholder's Series A
Registrable Securities and all of such Initiating Securityholder's Other
Registrable Securities requested to be so included that are convertible into or
exercisable for Common Stock are converted into or exercised for Common Stock,
as of the date of delivery of the first Cutback Notice delivered to the Holders
and Series A Preferred Stockholders in connection with such offering), (ii)
second, the number, if any, of shares of Common Stock or other securities the
Company proposes to sell for its own account that, in the reasonable and good
faith opinion of such lead managing underwriter or the Initiating
Securityholders, as applicable, can be sold without having an Adverse Offering
Effect or adversely affecting the success of the offering of all the Registrable
Securities that each Holder, all of the Series A Registrable Securities that
each Series A Preferred Stockholder and all of the Other Registrable Securities
that each Initiating Securityholder desires to sell for its own account, and
(iii) third, the number, if any, of other shares of Common Stock and other
securities requested to be included in such offering that, in the reasonable and
good faith opinion of such lead managing underwriter or the Initiating
Securityholders, as applicable, can be sold without having an Adverse Offering
Effect or adversely affecting the success of the offering of all the Registrable
Securities, Series A Registrable Securities and Other Registrable Securities
that each Holder, each Series A Preferred Stockholder, each Initiating
Securityholder and the Company, as the case may be, desires to sell for its own
account, such other shares of Common Stock and other securities to be allocated
among the holders thereof who have requested that their shares and other
securities be so included in accordance with the provisions of their
registration rights agreements with the Company.
7. Selection of Underwriters. In connection with any Underwritten Offering
pursuant to a Registration Statement filed pursuant to Section 4(a) or 4(b), the
Holders holding a Majority of the Registrable Securities held by all Holders to
be included in such Registration Statement shall have the right to select a lead
managing underwriter or underwriters to administer such offering, which lead
managing underwriter or underwriters shall be reasonably satisfactory to the
Company; provided, however, that the Company shall have the right to select a
co-managing underwriter or underwriters for such offering, which co-managing
underwriter or underwriters shall be reasonably satisfactory to the Holders
holding a
-17-
Majority of the Registrable Securities held by all Holders to be included in
such Registration Statement.
8. Blackout Periods; Holdback.
(a) If the Company determines that the registration and distribution
of Registrable Securities (i) would materially impede, delay, interfere with or
otherwise adversely affect any pending financing, registration of securities by
the Company in a primary offering for its own account, acquisition, corporate
reorganization or other significant transaction involving the Company or (ii)
would require disclosure of non-public material information that the Company has
a bona fide business purpose for preserving as confidential, as determined by
the Company's Board of Directors in good faith, the Company shall be entitled to
defer the filing or effectiveness of a Registration Statement, or to suspend the
use of an effective Registration Statement, for the shortest period of time
reasonably required (each such period, a "Blackout Period"); provided that the
Company shall not be entitled to obtain deferrals or suspensions under (x)
clause (i) of this Section 8(a), for more than an aggregate of 90 days in any
12-month period or (y) clause (ii) of this Section 8(a), for more than 30 days
on any one occasion, on more than two occasions in any 12-month period or for
more than an aggregate of 60 days in any 12-month period. The Company shall
notify each Holder of the expiration or earlier termination of a Blackout Period
and, as soon as reasonably practicable after such expiration or termination,
shall amend or supplement any effective Registration Statement to the extent
necessary to permit the Holders to resume use thereof in connection with the
offer and sale of their Registrable Securities in accordance with applicable
law.
(b) In the case of an Underwritten Offering of securities of the
Company, each Holder agrees, if requested by the lead managing underwriter of
such Underwritten Offering, that it shall not effect any public sale or
distribution, including any sale pursuant to Rule 144, of any Registrable
Securities or Similar Securities held by such Holder during the period beginning
seven days before, and ending 90 days (or such shorter period as may be
permitted by such lead managing underwriter) after, the effective date of the
Registration Statement filed in connection with such registration, except for
Registrable Securities included in such registration; provided, however, that
the foregoing shall not prohibit any Holder at any time from distributing
Registrable Securities to any of its Affiliates, members, partners or other
equity holders. If requested by such managing underwriter, each Holder shall
enter, and shall use commercially reasonable efforts to ensure that all
Affiliates (other than any Affiliates of such Holder that are portfolio
companies of Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P.
-18-
or of any investment funds that are Affiliates of Welsh, Carson, Xxxxxxxx &
Xxxxx VIII, L.P.) of such Holder holding Registrable Securities or Similar
Securities enter, into a lock-up agreement with the applicable underwriters that
is consistent with the agreement in the preceding sentence.
(c) Notwithstanding any provision of Section 8(a) or 8(b) to the
contrary, the cumulative period of any Blackout Periods pursuant to Section 8(a)
and of any holdbacks pursuant to Section 8(b) shall not exceed, in the
aggregate, 97 days in any 12-month period.
(d) In the case of any Underwritten Offering of Registrable Securities
initiated by a Holder pursuant to Section 4, the Company agrees, if requested by
the lead managing underwriter of such Underwritten Offering, not to effect (or
register for sale) any public sale or distribution of any securities which are
Similar Securities for the Company's own account during the period beginning
seven days before, and ending 90 days (or such lesser period as may be permitted
by such lead managing underwriter) after, the effective date of the Registration
Statement filed in connection with such registration, except for securities of
the Company to be offered for the Company's account in such Underwritten
Offering. Notwithstanding the foregoing, the Company may effect a public sale or
distribution of Common Stock and other securities which are Similar Securities
for the Company's own account during the period described above (A) pursuant to
registrations on Forms S-4 or S-8 or any successor registration forms or (B) as
part of any registration of securities for offering and sale to employees,
directors or consultants of the Company pursuant to any stock plan or other
benefit plan arrangement. The Company agrees to use commercially reasonable best
efforts to obtain from each director or executive officer of the Company who
holds Similar Securities an agreement not to effect any public sale or
distribution of such Similar Securities (other than any sale under Rule 144) for
the account of such director or executive officer during any period referred to
in this Section 8(d), except as part of any Underwritten Offering contemplated
in this Section 8(d).
(e) Notwithstanding any provision of Section 8(d) to the contrary, the
Company shall not be required to comply with the provisions of Section 8(d) in
connection with more than one Underwritten Offering of Registrable Securities
under the Shelf Registration Statement in any 12-month period; provided,
however, that the limitations in this Section 8(e) shall not apply to any
Underwritten Offering pursuant to a request that is treated as the exercise of a
demand registration under Section 4(a) or Section 4(b).
-19-
9. Registration Procedures. In connection with the registration obligations
of the Company under Sections 3, 4 and 5, the Company shall:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on any registration form adopted by the
SEC for which the Company then qualifies or which counsel for the Company shall
deem appropriate, and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of distribution
thereof, and use reasonable best efforts to cause such Registration Statement to
become and remain effective; provided that, at least five Business Days prior to
filing a Registration Statement or Prospectus or any amendment or supplement
thereto, the Company shall furnish to a single counsel selected by the Holders
of a Majority of the Registrable Securities included or to be included in such
Registration Statement copies of such Registration Statement or Prospectus (or
amendment or supplement) as proposed to be filed (including, upon the request of
such counsel, documents to be incorporated by reference therein) which documents
shall be subject to the reasonable review and comments of such counsel and the
Holders of the Registrable Securities included or to be included in such
Registration Statement during such five-Business-Day period, and the Company
shall not file any Registration Statement, any Prospectus or any amendment or
supplement thereto (or any such documents incorporated by reference) containing
any statements with respect to any such Holder to which such Holder shall
reasonably object in writing;
(b) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement and such amendments and supplements to
the Prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration or as may be required by the rules,
regulations or instructions applicable to the registration form utilized by the
Company or by the Securities Act or rules and regulations thereunder necessary
to keep such Registration Statement effective until the earlier of (i) the date
on which the Registrable Securities covered by such Registration Statement cease
to be Registrable Securities or have been sold or withdrawn and (ii) subject to
Sections 9(e) and 9(k), (x) in the case of the Shelf Registration, until the
third anniversary of the date of initial effectiveness of the Shelf Registration
Statement, plus any Suspension Periods (which shall be added to such three-year
period), or (y) in the case of a Registration Statement filed pursuant to
Section 4 which does not contemplate an Underwritten Offering, for at least 120
days or (z) in the case of a Registration Statement filed pursuant to Section 4
which contemplates an Underwritten Offering, for at least 120 days plus such
longer period (not to exceed 90 days after the 120th day) as, in the opinion of
counsel for the underwriter or underwriters of such Underwritten Offering, is
required by
-20-
law for the delivery of a Prospectus in connection with the sale of Registrable
Securities by an underwriter or dealer, and cause the Prospectus as so amended
and supplemented to be filed pursuant to Rule 424 under the Securities Act, and
otherwise use reasonable best efforts to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement until such time as is specified in clause (i) or (ii)
above, as the case may be;
(c) furnish to each Holder of such Registrable Securities such number
of copies of such Registration Statement and of each amendment and
post-effective amendment thereto, any Prospectus or Prospectus supplement and
such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities by such Holder (the
Company hereby consenting to the use (subject to the limitations set forth in
Section 10(b)) of the Prospectus or any amendment or supplement thereto in
connection with such disposition);
(d) use reasonable best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and to do any and all other acts and things which may be
reasonably necessary to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder, except that
the Company shall not be required for any such purpose to qualify generally to
do business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 9(d), it would not be obligated to be so qualified,
to subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(e) promptly notify each Holder of any such Registrable Securities
covered by such Registration Statement, at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act within the
applicable period referred to in Section 9(b), that the Company has become aware
that the Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing (the period during
which the Holders are required in such case pursuant to Section 10(b) to refrain
from effecting public sales or distributions of Registrable Securities referred
to herein as a "Section 9(e) Period"), and prepare and furnish to such Holder,
as soon as reasonably practicable, without charge to such Holder, a reasonable
number of copies of an amendment to such Registration Statement or supplement to
such related Prospectus as may be necessary so that, as thereafter delivered to
the
-21-
purchasers of such Registrable Securities, such Prospectus shall not include 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 in
the light of the circumstances then existing; provided that if the Company gives
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective (including the periods referred to in
Section 9(b)) by the number of days in the Section 9(e) Period;
(f) promptly notify each Holder of Registrable Securities covered by
such Registration Statement at any time,
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed and, with respect to the
Registration Statement or any post-effective amendment, when the
Registration Statement or such post-effective amendment has become
effective;
(ii) of the issuance by the SEC of any stop order of which the
Company is aware suspending the effectiveness of the Registration Statement
or any order preventing the use of a related Prospectus, or the initiation
of any proceedings for such purposes; and
(iii) of the receipt of the Company of any written notification
of the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction or the initiation of any proceeding for such
purpose;
(g) make available to its stockholders, as soon as reasonably
practicable, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act, provided that the Company shall be deemed to have
complied with this Section 9(g) if it has complied with Rule 158 under the
Securities Act;
(h) if the registration involves an Underwritten Offering, enter into
a customary underwriting agreement and in connection therewith:
(i) make such representations and warranties to the underwriters
in form, substance and scope as are customarily made by issuers to
underwriters in comparable Underwritten Offerings;
(ii) use reasonable best efforts to obtain opinions of counsel to
the Company (in form, scope and substance reasonably satisfactory to the
managing underwriters), addressed to the
-22-
underwriters, and covering the matters customarily covered in opinions
requested in comparable Underwritten Offerings;
(iii) use reasonable best efforts to obtain "cold comfort"
letters and bring-downs thereof from the Company's independent certified
public accountants addressed to the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters by independent accountants in connection with
Underwritten Offerings; and
(iv) deliver such documents and certificates as may be reasonably
requested by the managing underwriters to evidence compliance with any
customary conditions contained in the underwriting agreement;
(i) cooperate with the Holders of Registrable Securities covered by
such Registration Statement and the managing underwriter or underwriters or
agents, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the securities
to be sold under such Registration Statement, and enable such securities to be
in such denominations and registered in such names as the managing underwriter
or underwriters or agents, if any, or such Holders, may request;
(j) if reasonably requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in connection with
an Underwritten Offering, incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
managing underwriters and the Holders of a Majority of the Registrable
Securities being sold by all Holders agree should be included therein relating
to the plan of distribution with respect to such Registrable Securities,
including, without limitation, information with respect to the principal amount
of Registrable Securities being sold to such underwriters, the purchase price
being paid therefor by such underwriters and any other terms of the Underwritten
Offering of the Registrable Securities to be sold in such offering and make all
required filings of such Prospectus supplement or post-effective amendment upon
being notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
(k) in the event of the issuance of any stop order of which the
Company is aware suspending the effectiveness of the Registration Statement, or
of any order suspending or preventing the use of any related Prospectus or
suspending the qualification of any Registrable Securities included in the
Registration Statement for sale in any jurisdiction, use
-23-
reasonable best efforts to obtain at the earliest practicable time the
withdrawal of such stop order or other order (the period between the issuance
and withdrawal of any stop order or other order referred to herein as a "Section
9(k) Period"); provided that the Company shall extend the period during which
such Registration Statement will be maintained effective (including the periods
referred to in Section 9(b)) by the number of days in the Section 9(k) Period;
(l) use reasonable best efforts to cause all Common Stock covered by
such Registration Statement to be listed on any securities exchange or automated
quotation system on which the Common Stock is then listed, if such Common Stock
is not already so listed and if such listing is then permitted under the rules
of such securities exchange or automated quotation system;
(m) in the case of an Underwritten Offering, cause the senior
executive officers of the Company to participate in the customary "road show"
presentations that may be reasonably requested by the lead managing underwriter
in any such Underwritten Offering and otherwise to cooperate with and
participate in customary selling efforts related thereto;
(n) upon the request of any Holder, promptly amend any Shelf
Registration Statement or take such other action as may be necessary to
de-register, remove or withdraw all or any portion of the Holder's Registrable
Securities from a Shelf Registration Statement, as requested by such Holder;
(o) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities and, unless
such Registrable Securities shall be registered in book-entry form, provide the
applicable transfer agent and registrar for such Registrable Securities with
printed certificates for the Registrable Securities, which certificates shall be
in a form eligible for deposit with The Depository Trust Company;
(p) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by the applicable Registration Statement
from and after a date not later than the effective date of such Registration
Statement;
(q) make available upon reasonable notice at reasonable times and for
reasonable periods for inspection by one representative appointed by the Holders
of a Majority of the Registrable Securities covered by the applicable
Registration Statement, by any managing underwriter or
-24-
underwriters participating in any Underwritten Offering to be effected pursuant
to such Registration Statement, and by any attorney, accountant or other agent
retained by such Holders or any such managing underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and employees and
the independent public accountants who have certified its financial statements
to make themselves available during normal business hours to discuss the
business of the Company and to supply all information reasonably requested by
any such Holders or managing underwriter or agent thereof in connection with
such Registration Statement as shall be necessary to enable such Persons to
exercise their due diligence responsibility (subject to the entry by each Person
referred to in this Section 9(q) into customary confidentiality agreements in a
form reasonably acceptable to the Company);
(r) if requested in writing by Holders holding a Majority of the
Registrable Securities included in such Registration Statement, prepare and file
with the SEC amendments and post-effective amendments to such Registration
Statement and amendments and supplements to the Prospectus used in connection
with such Registration Statement as shall be necessary to enable any transferee
of Registrable Securities included in such Registration Statement who becomes a
Holder under this Agreement to resell such Holder's Registrable Securities
pursuant to such Registration Statement, to the extent that such amendments,
post-effective amendments and supplements shall be required for such transferee-
Holders to be named as selling securityholders in such Registration Statement
and Prospectus; and
(s) use reasonable best efforts to take all other steps necessary to
effect the registration of the Registrable Securities contemplated hereby.
10. Agreements of Holders.
(a) As a condition to the Company's obligation under this Agreement to
cause Registrable Securities of any Holder to be included in a Registration
Statement, such Holder shall timely provide the Company with all of the
information required to be provided in the Registration Statement with respect
to such Holder pursuant to Items 507 and 508 of Regulation S-K under the
Securities Act and such other information as otherwise may reasonably be
requested by the Company in connection with the Registration Statement.
(b) Each Holder shall comply with the prospectus delivery requirements
of the Securities Act in connection with the offer and sale of Registrable
Securities made by such Holder pursuant to any Registration
-25-
Statement. Upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 9(e) or Section 9(k), each Holder of
Registrable Securities shall forthwith discontinue the disposition of
Registrable Securities pursuant to the Prospectus or Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 9(e) or the
withdrawal of any stop order or other order referred to in Section 9(k), and, if
so directed by the Company, shall deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities at the time of receipt of such notice.
(c) Each Holder shall effect all sales and distributions of such
Holder's Registrable Securities made pursuant to the Shelf Registration
Statement in a manner consistent with the terms of the Plan of Distribution.
(d) To the extent required by the Securities Act or rules or
regulations thereunder, as reasonably determined by the Company, a Holder shall
consent to disclosure in any Registration Statement to the effect that such
Holder is or may be deemed to be an underwriter for purposes of the Securities
Act in connection with the offering of Registrable Securities of such Holder
included in such Registration Statement.
(e) Each Holder shall comply with Regulation M under the Exchange Act
in connection with the offer and sale of Registrable Securities made by such
Holder pursuant to any Registration Statement. Each Holder shall provide the
Company with such information about such Holder's offer and sale of Registrable
Securities pursuant to any Registration Statement as the Company shall
reasonably request to enable the Company and its Affiliates to comply with
Regulation M under the Exchange Act in connection with any such offer and sale.
11. Registration Expenses. The Company shall pay all Registration Expenses
in connection with all registrations pursuant to this Agreement to the extent
provided herein. In connection with all such registrations, each Holder shall
pay all underwriting discounts and fees, brokerage and sales commissions, and
transfer and documentary stamp taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Registration
Statement, and, except as provided in clause (vii) of the definition of
Registration Expenses, all fees and expenses of counsel to such Holder.
12. Indemnification; Contribution.
-26-
(a) The Company shall indemnify and hold harmless, to the fullest
extent permitted by law, each Holder in any offering or sale of Registrable
Securities, each Person, if any, who participates as an underwriter in any
offering and sale of Registrable Securities, and each Person, if any, who
controls such Holder or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and their respective directors,
trustees, officers, partners, agents, employees and affiliates against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees, disbursements and expenses, as incurred, and any amounts paid
in any settlement effected with the Company's consent, which consent shall not
be unreasonably withheld or delayed) (collectively, "Losses") incurred by such
party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon: (i) any untrue or alleged untrue
statement of a material fact contained in, or any omission or alleged omission
of a material fact required to be stated in, the Registration Statement,
Prospectus or preliminary Prospectus or any amendment or supplement to any of
the foregoing or necessary to make the statements therein (in the case of a
Prospectus or a preliminary Prospectus, in the light of the circumstances then
existing) not misleading, except in each case insofar as such statements or
omissions arise out of or are based upon (A) any such untrue statement or
alleged untrue statement or omission or alleged omission made in reliance on and
in conformity with information with respect to such Holder furnished in writing
to the Company by such Holder or its counsel expressly for use therein, (B) the
use of any Prospectus after such time as the obligation of the Company to keep
effective the Registration Statement of which such Prospectus forms a part has
expired or (C) the use of any Prospectus after such time as the Company has
advised the Holders that the filing of an amendment or supplement thereto is
required, except such Prospectus as so amended or supplemented; or (ii) any
violation by the Company of any other federal or state securities laws or
regulations applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration.
Notwithstanding the foregoing provisions of this Section 12(a), the Company
shall not be liable to any such Holder or underwriter or to any other
indemnified party under the indemnity agreement in this Section 12(a) for any
Losses that arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Prospectus if either (i)
(A) such Holder or underwriter failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale of
Registrable Securities by such Holder or underwriter to the Person asserting the
claim from which such Losses arise and (B) the Prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged
omission, or (ii) (x) such
-27-
untrue statement or alleged untrue statement or omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented as required hereunder, such Holder or
underwriter thereafter fails to deliver such Prospectus, as so amended or
supplemented, with or prior to the delivery of written confirmation of the sale
of Registrable Securities by such Holder or underwriter to the Person asserting
the claim from which such Losses arise. Such rights to indemnity and
reimbursement of expenses shall survive the transfer of the Registrable
Securities by such indemnified party.
(b) In connection with any Registration Statement filed pursuant
hereto, each Holder of Registrable Securities to be covered thereby shall,
severally and not jointly with any other Holders, indemnify and hold harmless,
to the fullest extent permitted by law, the Company, each Person, if any, who
participates as an underwriter in any offering and sale of Registrable
Securities and each Person, if any, who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and their respective directors, trustees, officers, partners,
agents, employees and affiliates, against all Losses incurred by such party
pursuant to any actual action, suit, proceeding or investigation arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in, or any omission or alleged omission of a material fact required to
be stated in, the Registration Statement, Prospectus or preliminary Prospectus
or any amendment or supplement to any of the foregoing or necessary to make the
statements therein (in case of a Prospectus or preliminary Prospectus, in the
light of the circumstances then existing) not misleading, but only to the extent
that any such untrue statement or omission is made in reliance on and in
conformity with information with respect to such Holder furnished in writing to
the Company by such Holder or its counsel specifically for use therein;
provided, however, that no Holder shall be required to indemnify the Company or
any other indemnified party under this Section 12(b) with respect to any amount
in excess of the amount of the total net proceeds received by such Holder from
sales of the Registrable Securities of such Holder under such Registration
Statement.
(c) Any Person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt by such
indemnified party of any written notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for which such
indemnified party may claim indemnification or contribution pursuant to this
Agreement, provided that failure to give such notification shall not affect the
obligations of the indemnifying party pursuant to this
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Section 12 except to the extent the indemnifying party shall have been actually
and materially prejudiced as a result of such failure. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgment of any indemnified party, based
on the opinion of counsel, a conflict of interest is likely to exist between the
indemnifying party and such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
not be liable for the fees and expenses of (i) more than one counsel for all
Holders of Registrable Securities who are indemnified parties, selected by the
Holders of a Majority of the Registrable Securities who are indemnified parties
(which selection shall be reasonably satisfactory to the Company), (ii) more
than one counsel for the underwriters in an Underwritten Offering or (iii) more
than one counsel for the Company, in each case in connection with any one action
or separate but similar or related actions. An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party, based on the opinion of counsel, a
conflict of interest is likely to exist between an indemnified party and any
other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel, provided that the indemnifying party shall not be liable for
the fees and expenses of (i) more than one counsel for all Holders of
Registrable Securities who are indemnified parties, selected by the Holders of a
Majority of the Registrable Securities who are indemnified parties (which
selection shall be reasonably satisfactory to the Company), (ii) more than one
counsel for the underwriters in an Underwritten Offering or (iii) more than one
counsel for the Company, in each case in connection with any one action or
separate but similar or related actions. No indemnifying party, in defense of
any such action, suit, proceeding or investigation, shall, except with the
consent of each indemnified party, consent to the entry of any judgment or entry
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a
-29-
release from all liability in respect to such action, suit, proceeding or
investigation to the extent such liability is covered by the indemnity
obligations set forth in this Section 12. No indemnified party shall consent to
entry of any judgment or entry into any settlement without the consent of each
indemnifying party.
(d) If the indemnification from the indemnifying party provided for in
this Section 12 is unavailable to an indemnified party hereunder in respect to
any Losses, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations; provided, however, that
no Holder shall be required to contribute any amount in excess of the amount of
the total net proceeds received by such Holder from sales of the Registrable
Securities of the Holder under the applicable Registration Statement. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the Losses referred to above shall be deemed to include,
subject to the limitations set forth in Section 12(c), any legal or other fees
and expenses reasonably incurred by such indemnified party in connection with
any investigation or proceeding. 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 parties agree that it would not be just and
equitable if contribution pursuant to this Section 12(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the consideration referred to in this Section 12(d). If indemnification
is available under this Section 12, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in Section 12(a) or 12(b), as
the case may be, without regard to the relative fault of such indemnifying
parties or indemnified party or any other equitable consideration provided for
in this Section 12(d).
(e) The provisions of this Section 12 shall be in addition to any
liability which any indemnifying party may have to any indemnified party and
shall survive the termination of this Agreement.
-30-
(f) The indemnification and contribution required by this Section 12
shall be made by periodic payments of the amount thereof during the course of
any action, suit, proceeding or investigation, as and when invoices are received
or Losses are incurred.
13. Participation in Underwritten Offerings. No Holder of Registrable
Securities may participate in any Underwritten Offering pursuant to this
Agreement unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Company, which approval shall not be unreasonably withheld or delayed, and
(ii) completes and executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
14. Reports Under the Exchange Act. For so long as any Registrable
Securities remain outstanding, the Company shall use best efforts to file with
the SEC in a timely manner all reports required to be filed by the Company
pursuant to Section 13 or 15(d) of the Exchange Act and shall furnish to any
Holder, upon request by such Holder, a written statement by the Company as to
whether it has complied with the current public information requirements of Rule
144(c) under the Securities Act.
15. No Inconsistent Agreements; Most Favorable Provisions. The Company is
not currently a party to, and after the date hereof shall not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities by this Agreement. The Holders agree for purposes of this
Section 15 that the Series A Registration Rights Agreement, as in effect on the
date hereof, is not inconsistent with the rights of the Holders hereunder. If
the Company shall amend the Series A Registration Rights Agreement or enter into
any agreement after the date hereof with any other Person pursuant to which the
Series A Preferred Stockholders under the Series A Registration Rights Agreement
or such other Person under such other agreement, as the case may be, shall have
registration rights with respect to any security of the Company that are
materially more favorable to the Series A Preferred Stockholders or such other
Person, as the case may be, than those set forth in this Agreement, this
Agreement shall thereupon, and without any further action on the part of any
Holder or the Company, be deemed to be, and shall be, automatically amended to
provide such materially more favorable rights to the Holders.
16. Assignment of Registration Rights. The right to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned (but
only with all related obligations hereunder) by any Holder
-31-
in connection with a transfer of such Registrable Securities to any transferee
who, immediately following such transfer, holds at least 5% of then-outstanding
Registrable Securities (calculated on an as-converted basis, assuming that all
outstanding Registrable Securities that are convertible into or exercisable for
Common Stock are converted into or exercised for Common Stock); provided that,
as a condition to the effectiveness of such assignment, such transferee shall be
required to execute a counterpart of this Agreement. Upon such transferee's
execution of such counterpart, such transferee shall be deemed to be a Holder
for all purposes of this Agreement and shall be entitled to the benefits of, and
shall be subject to the restrictions contained in, this Agreement as a Holder
hereunder to the same extent as if such transferee had originally been included
in the definition of a Holder and had originally been a party hereto.
Notwithstanding the foregoing, a Permitted Transferee (as defined in the
Governance Agreement) who otherwise would become entitled to registration rights
in accordance with the foregoing provisions of this Section 16 in connection
with a Distribution In Kind (as defined in the Governance Agreement) of
Registrable Securities shall not become entitled to any such registration rights
under this Agreement unless such Permitted Transferee becomes bound by the
Governance Agreement.
17. Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, any Holder and any successor, permitted
assign, heir and legal representative thereof; provided, however, that, except
as provided in Section 16, this Agreement and the provisions of this Agreement
that are for the benefit of the Holders shall not be assignable by any Holder,
and any such purported assignment shall be null and void. Except to the extent
provided in Section 12, nothing in this Agreement, expressed or implied, is
intended to confer upon any Person other than the Company, the Holders and their
respective successors, permitted assigns, heirs and legal representatives any
rights, remedies, obligations or liabilities under or by reason of this
Agreement. No purchaser of Registrable Securities from a Holder shall be deemed
to be a successor or assignee of such Holder merely by reason of such purchase.
18. 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 (each such
amendment, modification, supplement, waiver or consent, an "Amendment") may not
be given, unless the Company has obtained the written consent thereto of Holders
of a Majority of the Registrable Securities; provided that if any Amendment
would materially and adversely affect any Holder disproportionately relative to
any other Holder or Holders, then such Amendment shall also require the written
consent of Holders holding a Majority of the Registrable Securities held by all
Holders so
-32-
disproportionately affected. Notwithstanding the foregoing, an Amendment with
respect to a matter that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being included in a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders of Registrable Securities shall be effective if consented to by Holders
of at least a Majority of the Registrable Securities being included in such
Registration Statement; provided that the provisions of this sentence may not be
amended, modified or supplemented, nor may waivers or departures from the
provisions thereof be given, except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such Amendment thereafter shall be bound by any
such Amendment effected pursuant to this Section 18, whether or not any notice,
writing or marking indicating such Amendment appears on the Registrable
Securities or is delivered to such Holder.
19. Notices; Designated Representative. All notices, demands, requests,
consents or other communications to be given or delivered under or by reason of
the provisions of this Agreement shall be in writing and shall be deemed to have
been given when (i) delivered personally to the recipient, (ii) sent by
confirmed facsimile or confirmed electronic mail transmission before 5:00 p.m.
New York City time on a Business Day, and otherwise on the next Business Day, or
(iii) one Business Day after being sent to the recipient by reputable overnight
courier service (charges prepaid). Such notices, demands, requests, consents and
other communications shall be sent (i) if to the Company, to ITC/\DeltaCom,
Inc., 0000 X.X. Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention: General
Counsel, telecopy no.: (000) 000-0000, or to such other address as the Company
shall designate in writing to the Holders from time to time, and (ii) if to any
Holder, to such Holder at the address of such Holder set forth on the signature
pages hereto, or to such other address of any Holder as such Holder shall
designate in writing to the Company from time to time. The designated
representative of the Company shall be its General Counsel or such other Person
as the Company shall designate in writing to the Holders from time to time.
20. Headings. The headings contained in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this Agreement.
21. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument. This
Agreement shall become effective as between the Company and any Holder when the
Company and such Holder shall have received a copy of counterparts hereof signed
by the other.
-33-
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES
WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK FOR ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY ACTION OR PROCEEDING
RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY
PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE
ADDRESS SET FORTH IN SECTION 19 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY
ACTION OR PROCEEDING BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING
OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
23. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
24. Termination. This Agreement shall terminate with respect to any Holder
upon the earlier to occur of (i) the expiration of the Registration Rights
Period or (ii) the date on which such Holder no longer holds any Registrable
Securities, except for any liabilities or obligations under Sections 11 and 12,
which shall remain in effect in accordance with their terms. No termination of
any provision of this Agreement shall relieve any party of any liability for any
breach of such provision occurring prior to such termination.
25. Entire Agreement. This Agreement is intended by the parties to be a
complete and exclusive statement of the agreement and understanding
-34-
of the parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Merger Agreement, the Governance Agreement
(as defined in the Merger Agreement), the Warrant Agreement and the instruments
authorizing or evidencing the Registrable Securities, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the Registrable Securities. This Agreement supersedes all prior
agreements and undertakings among the parties with respect to such registration
rights. No party hereto shall have any rights, duties or obligations other than
those specifically set forth in this Agreement.
26. Specific Performance. Without limiting the rights of each party hereto
to pursue all other legal and equitable rights available to such party for any
other parties' failure to perform their obligations under this Agreement, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, to the extent permitted by applicable law, shall be entitled to
specific performance, injunctive relief or other equitable remedies in the event
of any such failure, without bond or other security being required.
27. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
[Signature pages follow]
-35-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth in the first paragraph hereof.
COMPANY:
ITC/\DELTACOM, INC.
By: /s/ J. Xxxxxx Xxxxxx
------------------------------------
Name: J. Xxxxxx Xxxxxx
Title: Senior Vice President
[signatures of WCAS Securityholders on
following pages]
Signature Page to WCAS
Registration Rights Agreement
-36-
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates
L.L.C., General Partner
By: /s/ Xxxxxxxx X. Rather
------------------------------------
Name: Xxxxxxxx X. Rather
Title: Managing Member
WELSH, CARSON, XXXXXXXX
& XXXXX VIII, L.P.
By: WCAS VIII Associates LLC,
General Partner
By: /s/ Xxxxxxxx X. Rather
------------------------------------
Name: Xxxxxxxx X. Rather
Title: Managing Member
WCAS INFORMATION PARTNERS, L.P.
By: WCAS Info Partners, General Partner
By: /s/ Xxxxxxxx X. Rather
------------------------------------
Name: Xxxxxxxx X. Rather
Title: Attorney-in-fact
Signature Page to WCAS
Registration Rights Agreement
-37-
Individual investors and trusts:
By: /s/ Xxxxxxxx X. Rather
------------------------------------
Xxxxxxxx X. Rather, as
Attorney-in-fact for the individual
investors listed below:
Xxxxxxx X.Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxx
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. xx Xxxxxx
Xxxx X. Xxxxxxx
D. Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxxxx
Xxxxx XxxXxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxx X. Xxx
Xxxxxxxx X. Rather
XXX - f/b/o Xxxxx Xxxxxxxx
XXX f/b/o Xxxxxxxx X. Rather
Address of each of the WCAS Securityholders
Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Signature Page to WCAS
Registration Rights Agreement
-38-
Exhibit A
PLAN OF DISTRIBUTION
Securities may be sold or distributed from time to time by the selling
securityholders named in this prospectus and, to the extent permitted by their
registration rights agreement with the Company, by their donees or transferees
and their other successors in interest. The selling securityholders may sell
their securities at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed. Each selling securityholder reserves the right to
accept or reject, in whole or in part, any proposed purchase of securities,
whether the purchase is to be made directly or through agents.
The selling securityholders may offer their securities at various times in
one or more of the following transactions, which may include an underwritten
offering:
. in ordinary brokers' transactions and transactions in which the
broker solicits purchasers;
. in transactions involving cross or block trades or otherwise on the
NASDAQ National Market or any national securities exchange on which the Common
Stock is listed;
. in transactions "at the market" to or through market makers in the
common stock or into an existing market for the common stock;
. in other ways not involving market makers or established trading
markets, including direct sales of the securities to purchasers or sales of the
securities effected through agents;
. through transactions in options, swaps or other derivatives which
may or may not be listed on an exchange;
. in privately negotiated transactions; or
. in a combination of any of the foregoing transactions.
The selling securityholders also may sell their securities in
accordance with Rule 144 under the Securities Act.
From time to time, one or more of the selling securityholders may pledge or
grant a security interest in some or all of the securities owned by them. If the
selling securityholders default in performance of their secured obligations, the
pledgees or secured parties may offer and sell the securities from time to time
by
1
this prospectus. The selling securityholders also may transfer and donate
securities in other circumstances. The amount of securities beneficially owned
by selling securityholders will decrease as and when the selling securityholders
transfer or donate their securities or default in performing obligations secured
by their securities. The plan of distribution for the securities offered and
sold under this prospectus will otherwise remain unchanged, except that the
transferees, donees, pledgees, other secured parties or other successors in
interest will be selling securityholders for purposes of this prospectus.
The selling securityholders may also enter into hedging transactions. For
example, a selling securityholder may:
. enter into transactions with a broker-dealer, affiliate thereof
or other third party in connection with which such other party
may engage in sales of their securities pursuant to this
prospectus, in which case such other party may use shares of the
securities received from the selling securityholder to close out
any short positions created;
. sell their securities short itself pursuant to this prospectus
and use shares of their securities to close out its short
positions;
. enter into option or other types of transactions that require the
selling securityholder to deliver their securities to a
broker-dealer or an affiliate thereof or other third party, who
may then resell or transfer the securities pursuant to this
prospectus; or
. loan or pledge their securities to a broker-dealer or an
affiliate thereof or other third party, who may sell the loaned
securities or, in an event of default in the case of a pledge,
sell the pledged securities pursuant to this prospectus.
The selling securityholders may use brokers, dealers, underwriters or
agents to sell their securities. The persons acting as agents may receive
compensation in the form of commissions, discounts or concessions. This
compensation may be paid by the selling securityholders or the purchasers of the
securities of whom such persons may act as agent, or to whom they may sell as
principal, or both. The compensation as to a particular person may be less than
or in excess of customary commissions. Any agents or broker-dealers that
participate in the offer and sale of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act. Any commissions they
receive and any profit they realize on the resale of the securities by them may
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither we nor any selling securityholders can presently estimate the amount of
such compensation.
If a selling securityholder sells securities in an underwritten offering,
the underwriters may acquire the securities for their own account and resell the
2
securities from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. In such event, we will set forth in a supplement to this
prospectus the names of the underwriters and the terms of the transactions,
including any underwriting discounts, concessions or commissions and other items
constituting compensation of the underwriters and broker-dealers. The
underwriters from time to time may change any public offering price and any
discounts, concessions or commissions allowed or reallowed or paid to
broker-dealers. Unless otherwise set forth in a supplement, the obligations of
the underwriters to purchase the securities will be subject to certain
conditions, and the underwriters will be obligated to purchase all of the
securities specified in the supplement if they purchase any of the securities.
We have informed the selling securityholders that during such time as they
may be engaged in a distribution of the securities, they are required to comply
with Regulation M under the Securities Exchange Act. With exceptions, Regulation
M prohibits any selling securityholder, any affiliated purchasers and other
persons who participate in such a distribution from bidding for or purchasing,
or attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
This offering by any selling securityholder will terminate on the date
specified in the selling securityholder's registration rights agreement with the
Company, or, if earlier, on the date on which the selling securityholder has
sold all of such selling securityholder's securities.
3
