TEL-SAVE HOLDINGS, INC.
4.5% Convertible Subordinated Notes Due 2002
REGISTRATION AGREEMENT
New York, New York
September 3, 1997
Salomon Brothers Inc
Deutsche Xxxxxx Xxxxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxx Xxxxxx Inc.
Xxxxxxxxx, Xxxxxxxx & Company LLC
First Union Capital Markets Corp.
As Representatives of the Initial Purchasers Named in
Schedule I to the Purchase Agreement (as defined below)
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Tel-Save Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell (such issuance and sale, the "Initial Placement") to
you (the "Initial Purchasers"), upon the terms set forth in a purchase agreement
of even date herewith (the "Purchase Agreement"), $250,000,000 principal amount
(plus an additional $50,000,000 principal amount to cover over-allotments, if
any) of its 4.5% Convertible Subordinated Notes Due 2002 (the "Securities"). The
Securities will be convertible into shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company at the conversion price set forth in
the Final Memorandum. As an inducement to you to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with you, (i) for your benefit and (ii) for the benefit of the
holders from time to time of the Securities or the Common Stock issuable upon
conversion of the Securities (including you) (each of the foregoing, a "Holder"
and together, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following capitalized terms shall have the following
meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person
whether by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Final Memorandum" has the meaning set forth in the Purchase Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities dated as of
September 9, 1997, between the Company and First Trust of New York, National
Association, as trustee, as the same may be amended from time to time in
accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Securities registered under a Shelf
Registration Statement; provided that Holders of Common Stock issued upon
conversion of Securities shall be deemed to be Holders of the aggregate
principal amount of Securities from which such Common Stock was converted.
"Managing Underwriters" means the Underwriter or Underwriters that
shall administer an Underwritten Offering.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or Common Stock issuable upon
conversion thereof, covered by such Shelf Registration Statement, and all
amendments and supplements to such prospectus, including post-effective
amendments.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
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"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to the provisions of Section 2 hereof which covers some
or all of the Securities and the Common Stock issuable upon conversion thereof,
as applicable, on an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission, 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.
"Trustee" means the trustee with respect to the Securities under the
Indenture.
"Underwriter" means any underwriter of Securities or Common Stock
issuable upon conversion thereof in connection with an offering thereof under a
Shelf Registration Statement.
"Underwritten Offering" means an offering in which the Securities or
Common Stock are sold to an Underwriter or with the assistance of an Underwriter
for reoffering to the public.
2. Shelf Registration; Suspension of Use of Prospectus.
(a) The Company shall prepare and, not later than 120 days following
the Closing Date, shall file with the Commission and thereafter, but no later
than 180 days following the Closing Date, shall cause to be declared effective
under the Act a Shelf Registration Statement relating to the offer and sale of
the Securities and the Common Stock issuable upon conversion thereof by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders until the earliest of (i) the
second anniversary of the Closing Date, (ii) the date on which the Securities or
Common Stock issuable upon conversion thereof may be sold pursuant to paragraph
(k) of Rule 144 (or any successor provision) promulgated by the Commission under
the Act and (iii) such date as of which all the Securities or the Common Stock
issuable upon conversion thereof have been sold pursuant to the Shelf
Registration Statement (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 such action is required (x) by applicable law or (y)
pursuant to Section 2(c)
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hereof, and, in either case, so long as the Company promptly thereafter complies
with the requirements of Section 3(i) hereof, if applicable.
(c) The Company may suspend the use of the Prospectus for a period not
to exceed 30 days in any three-month period or for three periods not to exceed
an aggregate of 90 days in any twelve-month period for valid business reasons,
to be determined by the Company in its sole reasonable judgment (not including
avoidance of the Company's obligations hereunder), including, without
limitation, the acquisition or divestiture of assets, public filings with the
Commission, pending corporate developments and similar events; provided that the
Company promptly thereafter complies with the requirements of Section 3(i)
hereof, if applicable.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing thereof with
the Commission, a copy of any Shelf Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to the Prospectus included
therein and shall use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as Salomon Brothers Inc reasonably may
propose.
(b) The Company shall ensure that (i) any Shelf Registration Statement
and any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto comply in all material respects with the Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement and
any amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided that no representation or agreement is made
hereby with respect to information with respect to you, any Underwriter or any
Holder required to be included in any Shelf Registration or Prospectus pursuant
to the Act or the rules and regulations thereunder.
(c) (1) The Company shall advise you and the Holders and, if requested
by you or any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
and
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(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.
(2) The Company shall advise you and the Holders and, if requested by
you or any such Holder, confirm such advice in writing:
(i) 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;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities
included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation or threat of any proceeding for such
purpose; and
(iii) of the suspension of the use of the Prospectus pursuant to
Section 2(c) hereof or of the happening of any event that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the statements therein are not
misleading 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 advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite
changes have been made).
(d) The Company shall use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of any Shelf Registration Statement at
the earliest possible time.
(e) The Company shall furnish to each Holder of Securities or the
Common Stock issued upon conversion thereof included within the coverage of any
Shelf Registration Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Securities or the Common Stock issued upon conversion thereof
included within the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company consents to the
use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the
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offering and sale of the Securities or the Common Stock issued upon conversion
thereof covered by the Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Securities or the Common Stock issued upon
conversion thereof pursuant to any Shelf Registration Statement, the Company
shall register or qualify or cooperate with the Holders of Securities or the
Common Stock issued upon conversion thereof included therein and their
respective counsel in connection with the registration or qualification of such
Securities or Common Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as any such Holders reasonably request 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 and the Common Stock issued
upon conversion thereof covered by such Shelf Registration Statement; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Securities or the
Common Stock issued upon conversion thereof to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as Holders may request prior to sales of Securities
or the Common Stock issued upon conversion thereof pursuant to such Shelf
Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective amendment
to any Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Securities or the Common Stock issued upon conversion
thereof included therein, the Prospectus will not include an 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.
(j) The Company shall use its best efforts to cause The Depository
Trust Company ("DTC") on the first Business Day following the effective date of
any Shelf Registration Statement hereunder or as soon as possible thereafter to
remove (i) from any existing CUSIP number assigned to the Securities any
designation indicating that the Securities are "restricted securities", which
efforts shall include delivery to DTC of a letter executed by the Company
substantially in the form of Exhibit A hereto and (ii) any other stop or
restriction on DTC's system with respect to the Securities. In the event the
Company is unable to cause DTC to take actions described in the immediately
preceding sentence, the Company shall take such actions as Salomon Brothers Inc
may reasonably request to provide, as soon as practicable, a CUSIP number for
the Securities registered under such Shelf Registration Statement and to cause
such CUSIP number to be assigned to the Securities (or to the maximum aggregate
principal amount
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of the securities to which such number may be assigned). Upon compliance with
the foregoing requirements of this Section 3(j), the Company shall provide the
Trustee with global certificates for such Securities, in a form eligible for
deposit with The Depository Trust Company.
(k) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act and Rule 158 promulgated
by the Commission thereunder.
(l) The Company shall use its best efforts to cause the Indenture to be
qualified under the Trust Indenture Act in a timely manner.
(m) The Company may require each Holder of Securities or the Common
Stock issued upon conversion thereof to be sold pursuant to any Shelf
Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of such Securities or Common Stock as may, from time
to time, be required by the Act and the rules and regulations promulgated
thereunder, and the obligations of the Company to any Holder hereunder shall be
expressly conditioned on the compliance of such Holder with such request.
(n) The Company shall, if requested, use its best efforts to promptly
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement (i) such information as the Majority Holders provide or,
if the Securities or Common Stock are being sold in an Underwritten Offering, as
the Managing Underwriters and the Majority Holders reasonably agree should be
included therein and provide to the Company in writing for inclusion in the
Shelf Registration Statement or Prospectus, and (ii) such information as a
Holder may provide from time to time to the Company in writing for inclusion in
a Prospectus or any Shelf Registration Statement concerning such Holder and the
distribution of such Holder's Securities and Common Stock and, in either case,
shall make all required filings of such Prospectus supplement or post-effective
amendment as soon as practible after being notified in writing of the matters to
be incorporated in such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such agreements (including
underwriting agreements) and take all other appropriate actions as may be
reasonably requested in order to expedite or facilitate the registration or the
disposition of the Securities or the Common Stock issuable upon conversion
thereof, and in connection therewith, if an underwriting agreement is entered
into, cause the same to contain indemnification provisions and procedures no
less favorable than those set forth in Section 5 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing Underwriters, if
any, with respect to all parties to be indemnified pursuant to Section 5
7
from Holders of Securities or the Common Stock issuable upon conversion thereof
to the Company).
(p) The Company shall (i) make reasonably available for inspection by
the Holders of Securities or the Common Stock issued upon conversion thereof to
be registered under a Shelf Registration Statement, any Underwriter
participating in any disposition pursuant to such Shelf Registration Statement,
and any attorney, accountant or other agent retained by the Holders or any such
Underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries; (ii) cause the
Company's officers, directors and employees to supply all relevant information
reasonably requested by the Holders or any such Underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement as
is customary for similar due diligence examinations; provided, however, that any
information that is designated in writing by the Company, in its sole
discretion, as confidential at the time of delivery of such information shall be
kept confidential by the Holders or any such Underwriter, attorney, accountant
or agent, unless disclosure thereof is made in connection with a court
proceeding or required by law, or such information has become available to the
public generally through the Company or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations and
warranties to the Holders of Securities or the Common Stock issued upon
conversion thereof registered thereunder and the Underwriters, if any, in form,
substance and scope as are customarily made by issuers to Underwriters and
covering matters including, but not limited to, those set forth in the Purchase
Agreement; (iv) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each selling
Holder and the Underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Holders and Underwriters; (v) obtain
"cold comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to each
selling Holder of Securities or the Common Stock issued upon conversion thereof
registered thereunder (provided such Holder furnishes the accountants with such
representations as the accountants customarily require in similar situations)
and the Underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and certificates as may
be reasonably requested by the Majority Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 3(i) and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company. The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 3 (p) shall be performed at (A) the
effectiveness of such Shelf Registration
8
Statement and each post-effective amendment thereto and (B) each closing under
any underwriting or similar agreement as and to the extent required thereunder.
4. Registration Expenses. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 2 and 3
hereof and shall reimburse the Holders for the reasonable fees and disbursements
of one firm or counsel designated by the Majority Holders to act as counsel for
the Holders in connection therewith. Notwithstanding the provisions of this
Section 4, each Holder shall bear the expense of any broker's commission, agency
fee or Underwriter's discount or commission.
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5. Indemnification and Contribution.
(a) (i) In connection with any Shelf Registration Statement, the
Company agrees to indemnify and hold harmless each Holder of Securities or
Common Stock issued upon conversion thereof covered thereby (including the
Initial Purchasers), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement as originally filed or in any amendment
thereof, or in any preliminary Prospectus or Prospectus, or in any amendment
thereof or supplement thereto, 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 agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon (A) any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder or any Initial
Purchaser specifically for inclusion therein, (B) use of a Shelf Registration
Statement or the related Prospectus during a period when a stop order has been
issued in respect of such Shelf Registration or any proceedings for that purpose
have been initiated or use of a Prospectus when use of such Prospectus has been
suspended pursuant to Section 2(c); provided, further, in each case, that
Holders received prior notice of such stop order, initiation of proceedings or
suspension or (C) if the Holder fails to deliver a Prospectus or the then
current Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(ii) The Company also agrees to indemnify or contribute to Losses, as
provided in Section 5(d), of any Underwriters of Securities or the Common Stock
issued upon conversion thereof registered under a Shelf Registration Statement,
their officers and directors and each person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 5(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 3(o) hereof.
(b) Each Holder of Securities or Common Stock issued upon conversion
thereof covered by a Shelf Registration Statement (including the Initial
Purchasers)
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severally agrees to indemnify and hold harmless (i) the Company, (ii) each of
its directors, (iii) each of its officers who signs such Shelf Registration
Statement and (iv) each person who controls the Company within the meaning of
either the Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to written
information relating to such Holder furnished to the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel (and local
counsel) if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party; provided further, that the indemnifying party shall
not be responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) representing all the indemnified
parties under paragraph (a)(i), paragraph (a)(ii) or paragraph (b) above. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in
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respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 5 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several obligation
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; provided, however,
that in no case shall the Initial Purchasers be responsible, in the aggregate,
for any amount in excess of the purchase discount or commission applicable to
such Security, as set forth on the cover page of the Final Memorandum, nor shall
any Underwriter be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities and Common Stock issued upon
conversion thereof purchased by such Underwriter under the Shelf Registration
Statement which resulted in such Losses. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the indemnifying
party and the indemnified party shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of such indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the sum of (x) the total
net proceeds from the Initial Placement (before deducting expenses) as set forth
on the cover page of the Final Memorandum and (y) the total amount of additional
interest which the Company was not required to pay as a result of registering
the Securities and Common Stock issued upon conversion thereof covered by the
Shelf Registration Statement which resulted in such Losses. Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Securities or the Common Stock issuable upon
conversion thereof registered under the Act. Benefits received by any
Underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Shelf Registration Statement which resulted in such Losses. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the indemnifying party, on the one
hand, or by the indemnified party, on the other hand. The parties agree that it
would not be just and
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equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 5,
each person who controls a Holder within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of such Holder shall
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Shelf Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred to
in Section 5 hereof, and will survive the sale by a Holder of Securities covered
by a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. 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.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders; provided that with respect to any matter that directly or
indirectly affects the rights of the Initial Purchasers hereunder, the Company
shall obtain the written consent of the Initial Purchasers against which such
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities being sold rather than registered
under such Shelf Registration Statement.
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(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to you, initially at the address set forth in the
Purchase Agreement;
(2) if to any other Holder, at the most current address given
by such Holder to the Company in accordance with the provisions of
this Section 6(c), which address initially is, with respect to
each Holder, the address of such Holder maintained by the
Registrar under the Indenture, with a copy in like manner to
Salomon Brothers Inc; and
(3) if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail, telex or telecopier.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(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. The Company
hereby agrees to extend the benefits of this Agreement to any Holder
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 of New York
applicable to agreements made and to be performed in said State,
without regard to the conflicts of law rules thereof.
(h) Severability. In the event that any one of 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 validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof
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shall not be in any way impaired or affected thereby, it being intended
that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities or the Common Stock issuable upon conversion thereof is
required hereunder, Securities or the Common Stock issued upon
conversion thereof held by the Company or its Affiliates (other than
subsequent Holders of Securities or the Common Stock issued upon
conversion thereof if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities) shall
not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
TEL-SAVE HOLDINGS, INC.
-----------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
SALOMON BROTHERS INC
DEUTSCHE XXXXXX XXXXXXXX INC.
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXXX INC.
XXXXXXXXX, XXXXXXXX & COMPANY, LLC
FIRST UNION CAPITAL MARKETS CORP.
For themselves and the other Initial
Purchasers named in Schedule I to the
Purchase Agreement.
BY: SALOMON BROTHERS INC
By _________________________
Name:
Title:
EXHIBIT A
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: 4.5% Subordinated Convertible Notes Due 2002 (the "Securities")
of Tel-Save Holdings, Inc.
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission has
declared effective a Registration Statement on Form S-3 under the Securities Act
of 1933, as amended, with regard to all of the Securities referenced above.
Accordingly, there is no longer any restriction as to whom such Securities may
be sold and any restrictions on the CUSIP designation are no longer appropriate
and may be removed. I understand that upon receipt of this letter, DTC will
remove any stop or restriction on its system with respect to this issue.
As always, please do not hesitate to call if we can of further
assistance.
Very truly yours,
Authorized Officer
