Exhibit 2
CONFORMED COPY
IXC COMMUNICATIONS, INC.
7 1/4% JUNIOR CONVERTIBLE PREFERRED STOCK DUE 2007
(LIQUIDATION PREFERENCE $100 PER SHARE)
REGISTRATION RIGHTS AGREEMENT
March 25, 1997
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
IXC Communications, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Credit Suisse First Boston Corporation and Xxxxxx,
Read & Co. Inc. (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement of even date herewith (the "Purchase Agreement"), 1,000,000
shares of its 7 1/4% Junior Convertible Preferred Stock Due 2007 (liquidation
preference $100 per share) (the "Convertible Preferred Stock"). The Convertible
Preferred Stock will be convertible into shares of Common Stock, par value $0.01
per share, of the Company (the "Common Stock") at the conversion price set forth
in the Offering Circular dated March 25, 1997, subject to adjustment in
accordance with the Certificate of Designation of the Convertible Preferred
Stock (the "Certificate of Designation"). The Convertible Preferred Stock and
the Common Stock issuable upon conversion of the Convertible Preferred Stock are
collectively herein referred to as the "Securities" and each of them as held
singularly is herein referred to as a "Security". As an inducement to the
Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the Initial Purchasers' obligations thereunder, the Company agrees
with the Initial Purchasers, (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders of the Securities from time to time (each of
the foregoing a "Holder" and together the "Holders"), as follows:
PAGE 72 OF 86 PAGES
1. SHELF REGISTRATION. So long as any Transfer Restricted
Security exists, the Company shall take the following actions:
(a) The Company shall, at its cost, prepare and, as promptly as
practicable, file with the Securities and Exchange Commission (the "Commission")
and thereafter shall use its best efforts to cause to be declared effective as
soon as practicable a registration statement on the appropriate form (the "Shelf
Registration Statement") covering the offer and sale of the Transfer Restricted
Securities (as defined in Section 5 hereof) by the Holders thereof from time to
time in accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act of 1933 (the
"Securities Act") (hereinafter, the "Shelf Registration").
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective, in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the relevant
Securities, until such time as all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto or may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor rule thereof),
assuming for this purpose that the Holders thereof are not affiliates of the
Company (in any such case, such period being called the "Shelf Registration
Period"). The Company shall be deemed not to have used its best efforts to keep
the Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Securities covered
thereby not being able to offer and sell such Securities during that period,
unless (i) such action is required by applicable law or (ii) upon the occurrence
of any event contemplated by paragraph 2(b)(v) below, such action is taken by
the Company in good faith and for valid business reasons and the Company
thereafter promptly complies with the requirements of paragraph 2(h) below if
the Company has determined in good faith that there are no material legal or
commercial impediments in so doing.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause (other than information required to be
supplied by the selling Holders pursuant to this Agreement) (i) the Shelf
Registration Statement and the related prospectus and any amendment or
supplement thereto to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (ii) the Shelf Registration Statement and any amendment
thereto not to contain, when it becomes effective, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming a part of the Shelf Registration Statement, and any amendment or
supplement to such prospectus, not to contain, as of the date of such prospectus
or amendment or supplement, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
PAGE 73 OF 86 PAGES
(d) The Company shall, from time to time, cause the Shelf
Registration Statement to be amended to cover additional shares of Convertible
Preferred Stock issued in payment of dividends, if any, as permitted in
accordance with the terms of the Convertible Preferred Stock.
2. REGISTRATION PROCEDURES. In connection with the Shelf
Registration contemplated by Section 1 hereof the following provisions shall
apply so long as any Transfer Restricted Security exists:
(a) The Company shall (i) furnish, without charge, to the Initial
Purchasers, prior to the filing thereof with the Commission, a copy of the Shelf
Registration Statement and each amendment thereof and each amendment or
supplement, if any, to the prospectus included therein and, in the event that
the Initial Purchasers (with respect to any portion of an unsold allotment from
the original offering) are participating in the Shelf Registration Statement,
shall use its best efforts to reflect in each such document, when so filed with
the Commission, such comments as such Initial Purchasers reasonably may propose,
(ii) include in each such document the names of the Holders who propose to sell
Transfer Restricted Securities pursuant to the Shelf Registration Statement as
selling security holders and (iii) file pursuant to Rule 424(b) under the
Securities Act an amendment to the Shelf Registration Statement or amend the
prospectus to cover new Holders of Securities upon written notice by such new
Holders to the effect.
(b) The Company shall give written notice to the Initial
Purchasers and the Holders (which notice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction, if applicable, to suspend the use of the
prospectus until the requisite changes have been made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Shelf Registration Statement or the prospectus in order that
the Shelf
PAGE 74 OF 86 PAGES
Registration Statement and the prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the prospectus, in light of the circumstances under which they were made) not
misleading, which written notice need not provide any detail as to the nature of
such event.
(c) The Company shall use reasonable commercial efforts to obtain
the withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Transfer
Restricted Securities included within the coverage of the Shelf Registration,
without charge, one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits thereto (other than
those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such person
may reasonably request. The Company consents, subject to the provisions of this
Agreement, to the use of the then current prospectus or any amendment thereto,
together with any supplement thereto, by each of the selling Holders in
connection with the offering and sale of the Transfer Restricted Securities
covered by the prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement.
(f) Prior to any public offering of the Securities pursuant to
the Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of the Transfer Restricted Securities included
therein and their respective counsel in connection with the registration or
qualification of such Securities for offer and sale under the securities or
"blue sky" laws of such states of the United States as any such Holder
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by the Shelf Registration Statement; PROVIDED, HOWEVER, that
the Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then otherwise required to be so qualified or (ii)
take any action which would subject it to general service of process or to
taxation in any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the Transfer
Restricted Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders may request a reasonable period of
time prior to sales of the Securities pursuant to the Shelf Registration
Statement.
PAGE 75 OF 86 PAGES
(h) Upon the occurrence of any event contemplated by paragraphs
(ii) through (v) of Section 2(b) above during the period for which the Company
is required to maintain an effective Shelf Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the Shelf
Registration Statement or an amendment or supplement to the related prospectus
and any other required document so that, as thereafter delivered to Holders or
purchasers of Securities, the prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Initial
Purchasers or the Holders, in accordance with paragraphs (ii) through (v) of
Section 2(b) above, to suspend the use of the prospectus until the requisite
changes to the prospectus have been made, then the Initial Purchasers and the
Holders shall suspend use of such prospectus.
(i) Not later than the effective date of the Shelf Registration
Statement, the Company will provide CUSIP numbers for the Convertible Preferred
Stock and the Common Stock issuable upon conversion thereof registered under the
Shelf Registration Statement, and provide printed certificates for such
Convertible Preferred Stock or Common Stock, in form eligible for deposit with
The Depository Trust Company.
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period.
(k) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities by such
Holder as the Company may from time to time reasonably require for inclusion in
the Shelf Registration Statement, and the Company may exclude from such
registration the Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(l) The Company shall (i) make reasonably available for
inspection by the Holders of the Transfer Restricted Securities and any
attorney, accountant or other agent retained by the Holders of the Securities
all relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers, directors,
employees, accountants and auditors to supply all relevant information
reasonably requested by the Holders of the Securities or any such attorney,
accountant or agent in connection with the Shelf Registration Statement, in
PAGE 76 OF 86 PAGES
each case, as shall be reasonably necessary to enable such persons to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;
PROVIDED, HOWEVER, that the foregoing inspection and information gathering (i)
shall be coordinated by you and, on behalf of the other parties, by one counsel
(the "Designated Counsel") designated by the Holders of a majority in principal
amount of the Securities covered by the Shelf Registration Statement (PROVIDED
that Holders of Common Stock issued upon the conversion of the Convertible
Preferred Stock shall be deemed to be Holders of the aggregate number of
Convertible Preferred Stock from which such Common Stock was converted) and (ii)
shall not be available for any such Holder that is a competitor of the Company,
and PROVIDED FURTHER that such Holders shall keep the information so received
confidential.
(m) The Company, if requested by the Designated Counsel, shall
cause (i) its counsel to deliver an opinion and updates thereof relating to the
Transfer Restricted Securities in customary form, with customary limitations,
qualifications and exceptions, addressed to such Holders, and dated, in the case
of the initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such opinion shall include
the due incorporation and good standing of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations; the due authorization, execution and issuance, and the
validity and enforceability, of the applicable Securities; other than as
disclosed, the absence of material legal or governmental proceedings involving
the Company and its subsidiaries; other than as disclosed, the absence of
governmental approvals required to be obtained in connection with the Shelf
Registration Statement, or the offering and sale of the applicable Securities;
the compliance as to form of such Shelf Registration Statement and any documents
incorporated by reference therein; and, as of the date of the opinion and as of
the effective date of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the prospectus included therein, as then
amended or supplemented, and from any documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any such documents, in the
light of the circumstances existing at the time that such documents were filed
with the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"))), (ii) its officers to execute and deliver all customary
documents and certificates and updates thereof requested by the Designated
Counsel and (iii) its independent public accountants and the independent public
accountants with respect to any other entity for which financial information is
provided in the Shelf Registration Statement to provide to the selling Holders
of the applicable Securities a comfort letter in customary form and covering
matters of the type customarily covered in comfort letters in connection with
primary underwritten offerings, subject to receipt of appropriate documentation
as contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
PAGE 77 OF 86 PAGES
(n) The Company will use its best efforts to cause the Common
Stock relating to such Shelf Registration Statement to be listed on each
securities exchange, if any, on which any shares of Common Stock are then
listed.
(o) The Company shall use reasonable commercial efforts to take
all other steps necessary to effect the registration of the Transfer Restricted
Securities covered by the Shelf Registration Statement contemplated hereby.
3. REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 1 through 2 hereof, whether or not the Shelf Registration Statement is
filed or becomes effective, and shall bear or reimburse the Holders of the
Securities covered by the Shelf Registration for the reasonable fees and
disbursements of the Designated Counsel (PROVIDED that Holders of Common Stock
issued upon the conversion of the Convertible Preferred Stock shall be deemed to
be Holders of the aggregate number of Convertible Preferred Stock from which
such Common Stock was converted) to act as counsel for the Holders in connection
therewith.
4. INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Securities Act or the Exchange Act (each Holder and such
controlling persons are referred to collectively as the "Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof (including any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Securities) to
which each Indemnified Party becomes subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and subject to subsection (c) below, shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; PROVIDED, HOWEVER, that
the Company shall not be liable in any such case to the extent that such loss,
claim, damage, liability, or action in respect thereof arises out of or is based
upon (x) the use of any prospectus in violation of the last sentence of Section
2(h), or (y) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or prospectus or in
any amendment or supplement thereto or in any preliminary prospectus relating to
the Shelf Registration in reliance upon, and in conformity with, written
information pertaining to such Holder and furnished to the Company by or on
behalf of such Holder specifically for inclusion therein; PROVIDED FURTHER,
HOWEVER, that this indemnity agreement will be separate from any liability which
the Company may otherwise have to such Indemnified Party; PROVIDED FURTHER,
HOWEVER, that with respect to any untrue statement
PAGE 78 OF 86 PAGES
or alleged untrue statement in or omission or alleged omission from any
prospectus, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Holder that sold the Securities concerned to the
person asserting any such losses, claims, damages or liabilities, to the extent
that any such loss, claim, damage or liability of such Holder results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Securities to such person, a copy of the
prospectus if the Company had previously furnished copies thereof to such Holder
and such prospectus corrected such untrue statement or omission or alleged
untrue statement or omission.
(b) Each Holder, severally and not jointly, will indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act from and against
any losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company or any such controlling person becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a Shelf
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of, or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, and to subsection (c)
below, shall reimburse, as incurred, the Company for any legal or other expenses
reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof; PROVIDED, however, that such Holder shall not have any
liability under this clause (b) in excess of the aggregate purchase price paid
by such Holder for the shares of Convertible Preferred Stock purchased by such
Holder. This indemnity agreement will be separate from any liability which such
Holder may otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in subsections (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with
PAGE 79 OF 86 PAGES
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof the indemnifying party will not
be liable to such indemnified party under this Section 4 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsections (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the registration of the
Securities, pursuant to the Shelf Registration, or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other, in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
subsection (d), the Holders shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from the
sale of the Securities pursuant to the Shelf Registration Statement exceeds the
amount of damages which such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls such indemnified
PAGE 80 OF 86 PAGES
party within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as such indemnified party and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall survive the
sale of the Securities pursuant to the Shelf Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.
5. ADDITIONAL DIVIDENDS UNDER CERTAIN CIRCUMSTANCES. (a)
Additional dividends (the "Additional Dividends") with respect to the shares of
Convertible Preferred Stock which are Transfer Restricted Securities shall
accrue as follows if any of the following events occur (each such event in
clauses (i) and (ii) below being herein called a "Registration Default"):
(i) if by August 31, 1997, the Shelf Registration Statement has
not been declared effective by the Commission; or
(ii) if after the Shelf Registration Statement is declared
effective (A) the Shelf Registration Statement thereafter ceases to be
effective; or (B) the Shelf Registration Statement or the related prospectus
ceases to be usable (in each case except as permitted in paragraph (b) below) in
connection with resales of Transfer Restricted Securities in accordance with and
during the periods specified herein because either (1) any event occurs as a
result of which the related prospectus forming part of such Shelf Registration
Statement would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or (2) it shall be
necessary to amend such Shelf Registration Statement or supplement the related
prospectus, to comply with the Securities Act or the Exchange Act or the
respective rules thereunder.
Additional Dividends shall accrue on the shares of Convertible
Preferred Stock which are Transfer Restricted Securities from and including the
date on which any such Registration Default shall occur, to but excluding the
date on which all such Registration Defaults have been cured, at a rate of 7
3/4% per annum.
(b) A Registration Default referred to in Section 5(a)(ii) shall
be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to the Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Company that would need to be described in the Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
PAGE 81 OF 86 PAGES
Company proceeds promptly and in good faith to amend or supplement the Shelf
Registration Statement and related prospectus to describe such events if the
Company has determined in good faith that there are no material legal or
commercial impediments in so doing; PROVIDED, HOWEVER, that in any case if such
Registration Default occurs for a continuous period in excess of 45 days,
Additional Dividends shall be payable in accordance with the above paragraph
from the day such Registration Default initially occurs until such Registration
Default is cured.
(c) Any amounts of Additional Dividends due pursuant to clause
(a)(i) or (a)(ii) of this Section 5 or pursuant to the proviso contained in
Section 5(b) will be payable on the regular dividend payment dates with respect
to the Convertible Preferred Stock on the same terms and conditions and subject
to the same limitations as pertain at such time for the payment of regular
dividends. The amount of Additional Dividends will be determined by multiplying
the applicable Additional Dividends rate by the aggregate liquidation preference
of the outstanding shares of Convertible Preferred Stock, multiplied by a
fraction, the numerator of which is the number of days such Additional Dividend
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months), and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security
(including additional shares of Convertible Preferred Stock issued in payment of
dividends on the Convertible Preferred Securities, if any, as permitted in
accordance with the terms of the Convertible Preferred Stock) until (i) the date
on which such Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (ii) the
date on which such Security is distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act (or any successor rule thereof) or would be saleable pursuant to
Rule 144(k) under the Securities Act had it not been held by, or had never been
held by, an affiliate of the Company.
6. RULES 144 AND 144A. So long as any Transfer Restricted
Security exists, the Company shall use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Transfer Restricted
Securities, make publicly available other information so long as necessary to
permit sales of its securities pursuant to Rules 144 and 144A. The Company
covenants that, if in the event the Company is no longer subject to Sections 13
or 15(d) of the Exchange Act, it will take such further action as any Holder of
Transfer Restricted Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Transfer Restricted
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Securities identified to the Company by the Initial
Purchasers upon request.
PAGE 82 OF 86 PAGES
Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
7. MISCELLANEOUS. (a) AMENDMENTS AND WAIVERS. The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, except by
the Company and the written consent of the Holders of a majority of the Transfer
Restricted Securities (provided that Holders of Common Stock issued upon
conversion of Convertible Preferred Stock shall be deemed to be Holders of the
aggregate number of Convertible Preferred Stock from which such Common Stock was
converted) affected by such amendment, modification, supplement, waiver or
consents.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to the Holders, at the most current address given by the
Holders of record to the Company in accordance with the provisions of this
Section 7(b), which address initially is, with respect to each Holder, the
address of such Holder to which confirmation of the sale of the Convertible
Preferred Stock to such Holder was first sent by the Initial Purchasers, with a
copy in like manner to you as follows:
Credit Suisse First Boston Corporation
Xxxxxx, Read & Co. Inc.
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Transactions Advisory Group
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
(2) if to the Company, at its address as follows:
IXC Communications, Inc.
0000 Xxxxx xx xxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Chief Financial Officer
PAGE 83 OF 86 PAGES
with a copy to:
Xxxxxxx & XxXxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) NO INCONSISTENT AGREEMENTS; DAMAGES. The Company has not, as
of the date hereof, entered into, nor shall it, on or after the date hereof,
enter into, any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof. Notwithstanding anything to the contrary contained in this
Agreement, it is hereby acknowledged and agreed that the Company shall have no
liability for monetary damages to the Initial Purchasers or any Holder for any
breaches, failures to comply or violations by it of Section 1 or 2 of this
Agreement except as expressly provided in Section 4 or 5 hereof; PROVIDED,
HOWEVER, in the event that the Company breaches, fails to comply or violates the
provisions of Section 1 or 2 hereof, the Holders shall be entitled to, and the
Company shall not oppose the granting of, equitable relief, including injunction
and specific performance.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Transfer Restricted Securities. The
Company hereby agrees to extend the benefits of this Agreement to any Holder of
Transfer Restricted Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
PAGE 84 OF 86 PAGES
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the Company
submits to the nonexclusive jurisdiction of any federal or state court in the
State of New York.
(h) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(i) SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Holders of a specified percentage of Transfer Restricted Securities
is required hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Transfer Restricted Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such
Securities and other than the Trustees of General Electric Pension Trust and
other than certain individuals that purchased in the aggregate 24,000 shares of
Convertible Preferred Stock directly from the Initial Purchasers) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
PAGE 85 OF 86 PAGES
If the foregoing is in accordance with your understanding of our
agreement, lease sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
IXC COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxx X. Wllingham
Title: Senior Vice
President and
Chief Financial
Officer
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as f the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ J. Xxxxx Xxxxxxx
-----------------------------
Name: J. Xxxxx Xxxxxxx
Title: Director
XXXXXX, READ & CO. INC.
By: /s/ Xxxx Xxxxxxxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxxxx Xxxxxxx
Title: Vice President
PAGE 86 OF 86 PAGES
