Exhibit 4.2
NORTEL NETWORKS CORPORATION
$1,500,000,000
4.25% Convertible Senior Notes due 2008
fully and unconditionally guaranteed by
NORTEL NETWORKS LIMITED
REGISTRATION AGREEMENT
New York, New York
August 15, 2001
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
As Representatives of the Initial Purchasers Named in
Schedule A to the Purchase Agreement (as defined below)
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Nortel Networks Corporation, a Canadian corporation (the "Company"), and
Nortel Networks Limited, a Canadian corporation (the "Guarantor"), propose to
issue and sell (such issuance and sale, the "Initial Placement") to the several
parties named in Schedule A to the Purchase Agreement (the "Initial Purchasers")
for whom you (the "Representatives") are acting as representative, upon the
terms set forth in a purchase agreement dated August 9, 2001 (the "Purchase
Agreement"), $1,500,000,000 aggregate principal amount (plus up to an additional
$300,000,000 aggregate principal amount to cover exercises of the option granted
to the Initial Purchasers, if any) of its 4.25% Convertible Senior Notes due
2008 (the "Notes") fully and unconditionally guaranteed (the "Guarantee") by the
Guarantor (the Notes together with the Guarantee, the "Securities"). The Notes
will be convertible into Common Shares (as defined herein), at the conversion
price set forth in the Indenture (as defined herein), as the same may be
adjusted from time to time pursuant to the Indenture. As an inducement to you to
enter into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Company and the Guarantor agree with you, (i) for
your benefit and (ii) for the benefit of the holders from time to time of the
Securities and the Common Shares issuable upon conversion of the Notes
(including you), 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 U.S. Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
"Additional Interest" has the meaning set forth in Section 2(e) hereof.
"Additional Interest Payment Date" means, with respect to the Notes, each
Interest Payment Date; and in the event that any Note, or portion thereof, is
called for redemption, the relevant redemption date shall also be an Additional
Interest Payment Date with respect to such Note, or portion thereof, unless the
Indenture provides that accrued and unpaid interest on the Note (or portion
thereof) to be redeemed is to be paid to the person who was the Record Holder
thereof on a record date prior to such redemption date, in which case the
relevant Additional Interest Payment Date shall be the date on which interest is
payable to such Record Holder.
"Affiliate" means, when used with reference to any person, any other
person directly or indirectly, controlling, controlled by or under direct or
indirect common control of, the referent person. For the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct or cause the direction of management and policies of the
referent person, directly or indirectly, whether through the ownership of voting
securities, by contract, or otherwise. The term "controlling" and "controlled"
have meanings correlative of the foregoing.
"Broker-Dealer" means any broker or dealer registered as such under the
Exchange Act.
"Business Day" has the meaning set forth in the Indenture.
"Closing Date" means August 15, 2001.
"Common Shares" means the common shares, without nominal or par value of
the Company, as they exist on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such common shares
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Notes.
"Company" has the meaning set forth in the preamble hereto.
"Default Rate" means the rate of interest payable with respect to overdue
amounts on the Notes pursuant to Section 4.01 of the Indenture.
"DTC" has the meaning set forth in Section 3(k) hereof.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Final Maturity Date" means September 1, 2008.
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"Guarantor" has the meaning set forth in the preamble hereto.
"Holder" means a person who is a holder or beneficial owner (including
the Initial Purchasers) of any Securities or shares of Common Shares issuable
upon conversion of Notes; provided that, unless otherwise expressly stated
herein, only registered holders of Securities or Common Shares issuable on
conversion of the Notes shall be counted for purposes of calculating any
proportion of holders entitled to take any action or give notice pursuant to
this Agreement.
"Indenture" means the Indenture relating to the Securities dated as of
August 15, 2001, among the Company, the Guarantor and Bankers Trust Company, 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.
"Interest Payment Date" shall mean March 1 and September 1.
"Losses" has the meaning set forth in Section 5(d) hereof.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Notes registered under a Shelf
Registration Statement; provided that Holders of Common Shares issuable upon
conversion of Notes shall be deemed to be Holders of the aggregate principal
amount of Notes from which such Common Shares were converted; and provided,
further, that Notes or Common Shares which have been sold or otherwise
transferred pursuant to the Shelf Registration Statement shall not be included
in the calculation of Majority Holders.
"Majority Underwriting Holders" means, with respect to any Underwritten
Offering, the Holders of a majority of the then outstanding aggregate principal
amount of Notes registered under any Shelf Registration Statement whose Notes
are or are to be included in such Underwritten Offering; provided that Holders
of Common Shares issuable upon conversion of Notes shall be deemed to be Holders
of the aggregate principal amount of Notes from which such Common Shares were
converted.
"Managing Underwriters" means the Underwriter or Underwriters that shall
administer an Underwritten Offering.
"NASD" has the meaning set forth in Section 3(i) hereof.
"Notes" has the meaning set forth in the preamble hereto
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"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form attached as Annex
A to the Offering Circular, a copy of which is attached as Exhibit A hereto.
"Notice Holder" shall mean, on any date, any Holder of Transfer
Restricted Securities that has delivered a completed and signed Notice and
Questionnaire to the Company on or prior to such date.
"Offering Circular" means the Offering Circular as defined in the
Purchase Agreement.
"Person" has the meaning set forth in the Indenture.
"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 Shares issuable upon
conversion of the Notes covered by such Shelf Registration Statement, and all
amendments and supplements to such prospectus, including all documents
incorporated or deemed to be incorporated by reference in such prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Record Holder" means with respect to any Additional Interest Payment
Date which occurs on an Interest Payment Date, each person who is registered on
the books of the registrar as the holder of Notes at the close of business on
the record date with respect to such Interest Payment Date.
"Registration Default" has the meaning set forth in Section 2(e) hereof.
"Representative" has the meaning set forth in the preamble hereto.
"Rule 144" means Rule 144 (or any successor provision) under the Act.
"SEC" means the U.S. Securities and Exchange Commission. ---
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(c)
hereof.
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"Shelf Registration Statement" means a "shelf" registration statement of
the Company and the Guarantor filed pursuant to the provisions of Section 2
hereof which covers some or all of the Securities and the Common Shares issuable
upon conversion of the Notes, as applicable, on Form S-3 or on another
appropriate form for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 under the 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 documents incorporated or deemed
to be incorporated by reference therein.
"Suspension Period" has the meaning set forth in Section 2(d) hereof.
"Transfer Restricted Securities" means each Security and each Common
Share issuable upon conversion of the Notes until the date on which such
Security or Common Share, as the case may be, (i) has been transferred pursuant
to the Shelf Registration Statement or another registration statement covering
such Security or Common Share which has been filed with the SEC pursuant to the
Act, in either case after such registration statement has become effective and
while such registration statement is effective under the Act, (ii) has been
transferred pursuant to Rule 144 under the Act (or any similar provision then in
force) or (iii) may be sold or transferred pursuant to Rule 144(k) under the Act
(or any successor provision then in force).
"Trustee" means the collective trustees with respect to the Securities
under the Indenture.
"Underwriter" means any underwriter or any qualified independent
underwriter of the Securities or Common Shares issuable upon conversion of the
Notes in connection with an offering thereof under a Shelf Registration
Statement.
"Underwritten Offering" means an offering in which the Securities or
Common Shares issuable upon conversion of the Notes are sold to an Underwriter
or with the assistance of an Underwriter for reoffering to the public.
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included", or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
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2. Shelf Registration Statement.
(a) The Company and the Guarantor shall prepare and file with the SEC as
promptly as practicable (but in no event more than 90 days following the Closing
Date) a Shelf Registration Statement with respect to resales by the Holders of
the Transfer Restricted Securities from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement and thereafter shall use their respective reasonable best
efforts to cause such Shelf Registration Statement to be declared effective
under the Act within 180 days after the Closing Date; provided that if any
Securities are issued upon exercise of the option granted to the Initial
Purchasers in the Purchase Agreement and the date on which such Securities are
issued occurs after the Closing Date, the Company and/or the Guarantor, as the
case may be, will take such steps, prior to the effective date of the Shelf
Registration Statement, to ensure that such Securities and Common Shares
issuable upon conversion of the Notes are included in the Shelf Registration
Statement on the same terms as the Securities issued on the Closing Date. The
Company and the Guarantor shall supplement or amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company and the Guarantor for the Shelf
Registration Statement, or by the Act, the Exchange Act or the SEC.
(b) (1) Not less than 20 days prior to the effectiveness of the Shelf
Registration Statement, the Company shall mail the Notice and Questionnaire to
the Holders of Transfer Restricted Securities. The Company shall take action to
name each Holder that is a Notice Holder as of the date that is 10 days prior to
the effectiveness of the Shelf Registration Statement so that such Holder is
named as a selling securityholder in the Shelf Registration Statement at the
time of its effectiveness and is permitted to deliver the Prospectus forming a
part thereof as of such time to purchasers of such Holder's Transfer Restricted
Securities in accordance with applicable law. The Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling security
holder in the Shelf Registration Statement.
(2) After the Shelf Registration Statement has become effective,
the Company shall, upon the request of any Holder of Transfer Restricted
Securities, promptly send a Notice and Questionnaire to such Holder. From and
after the date on which the Shelf Registration Statement has become effective,
the Company and the Guarantor shall (i) as promptly as is practicable after the
date a completed and signed Notice and Questionnaire is delivered to the
Company, and in any event within 10 Business Days after such date, prepare and
file with the SEC (x) a supplement to the Prospectus or, if required by
applicable law, a post-effective amendment to the Shelf Registration Statement
and (y) any other document required by applicable law, so that the Holder
delivering such Notice and Questionnaire is named as a selling securityholder in
the Shelf Registration Statement and is permitted to deliver the Prospectus to
purchasers of such Holder's Transfer Restricted Securities in accordance
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with applicable law, and (ii) if the Company and the Guarantor shall file a
post-effective amendment to the Shelf Registration Statement, use their
reasonable best efforts to cause such post-effective amendment to become
effective under the Act as promptly as is practicable; provided, however, that
if a Notice and Questionnaire is delivered to the Company during a Suspension
Period, the Company and the Guarantor shall not be obligated to take the actions
set forth in clauses (i) and (ii) until the termination of such Suspension
Period.
(c) The Company and the Guarantor shall use their reasonable best efforts
to keep the Shelf Registration Statement continuously effective under the Act in
order to permit the Prospectus forming a part thereof to be usable by all Notice
Holders until the earliest of (i) the second anniversary of the Closing Date or,
if later, the second anniversary of the last date on which any Securities are
issued upon exercise of the Initial Purchasers' option, (ii) the date on which
all the Securities and Common Shares issuable upon conversion of the Notes may
be sold by non-affiliates ("affiliates" for such purpose having the meaning set
forth in Rule 144) of the Company or the Guarantor, as the case may be, pursuant
to paragraph (k) of Rule 144 (or any successor provision) promulgated by the SEC
under the Act, (iii) the date as of which all the Securities and Common Shares
issuable upon conversion of the Notes have been transferred pursuant to Rule 144
under the Securities Act (or any similar provision then in force) and (iv) such
date as of which all the Securities and the Common Shares issuable upon
conversion of the Notes have been sold pursuant to the Shelf Registration
Statement (in any such case, such period being called the "Shelf Registration
Period"). The Company and the Guarantor will, (x) subject to Section 2(d),
prepare and file with the SEC such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement continuously effective for the Shelf Registration Period,
(y) subject to Section 2(d), cause the related Prospectus to be supplemented by
any required supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Act and (z) comply in all
material respects with the provisions of the Act with respect to the disposition
of all securities covered by the Shelf Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Shelf Registration Statement as so amended or
such Prospectus as so supplemented.
(d) The Company and the Guarantor shall have the right to suspend the use
of the Prospectus, without penalty hereunder, for a period of up to 90
consecutive days or for an aggregate of 120 days in any twelve-month period (the
"Suspension Period") for valid business reasons, to be determined by the Company
and the Guarantor in their sole judgment (not including avoidance of obligations
of the Company and the Guarantor hereunder), including, without limitation, the
acquisition or divestiture of assets, public filings with the SEC, pending
corporate developments and similar events; provided, that the Company and the
Guarantor promptly thereafter comply with the requirements of Section 3(j)
hereof, if applicable; provided, further, that the existence of a Suspension
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Period will not prevent the occurrence of a Registration Default or otherwise
limit the obligation of the Company and the Guarantor to pay Additional
Interest.
(e) If (i) the Shelf Registration Statement is not filed with the SEC on
or prior to 90 days after the Closing Date, (ii) the Shelf Registration
Statement has not been declared effective by the SEC within 180 days after the
Closing Date; or (iii) the Shelf Registration Statement is filed and declared
effective but shall thereafter cease to be effective (without being succeeded
immediately by a replacement shelf registration statement filed and declared
effective) or usable (including as a result of a Suspension Period) for the
offer and sale of Transfer Restricted Securities for a period of time (including
any Suspension Period) which shall exceed 90 consecutive days or 120 days in the
aggregate in any 12-month period during the period beginning on the Closing Date
and ending on the second anniversary of the Closing Date or, if later, the
second anniversary of the last date on which any Securities are issued upon
exercise of the Initial Purchasers' option (each such event referred to in
clauses (i) through (iii), a "Registration Default"), the Company and the
Guarantor will pay additional interest ("Additional Interest") to each Holder of
Notes constituting Transfer Restricted Securities who has complied with such
Holder's obligations under this Agreement; provided, however, that a failure of
the Shelf Registration Statement to be declared effective within the required
180 day period shall not constitute a Registration Default if such failure
arises from a delay in effectiveness based upon the advice of legal counsel to
the Company and legal counsel to the Initial Purchasers unless such failure
shall continue after the first anniversary of the Closing Date. The amount of
Additional Interest payable during any period in which a Registration Default
has occurred and is continuing is the amount which is equal to one-quarter of
one percent (25 basis points) per annum per $1,000 principal amount of
Securities constituting Transfer Restricted Securities for the first 90 days
during which a Registration Default has occurred and is continuing and one-half
of one percent (50 basis points) per annum per $1,000 principal amount of
Securities constituting Transfer Restricted Securities for any additional days
during which a Registration Default has occurred and is continuing (in each case
subject to further adjustment from time to time in the event of a stock split,
stock recombination, stock dividend and the like), it being understood that all
calculations pursuant to this and the preceding sentence shall be carried out to
five decimals. Following the cure of all Registration Defaults, Additional
Interest will cease to accrue with respect to such Registration Default. All
accrued Additional Interest shall be paid by wire transfer of immediately
available funds or by check by the Company or the Guarantor on each Additional
Interest Payment Date and Additional Interest will be calculated on the basis of
a 360-day year consisting of twelve 30-day months. In the event that any
Additional Interest is not paid when due, then to the extent permitted by law,
such overdue Additional Interest, if any, shall bear interest until paid at the
Default Rate, compounded semi-annually. The parties hereto agree that the
Additional Interest provided for in this Section 2(e) constitutes a reasonable
estimate of the damages that may be incurred by Holders by reason of a
Registration Default.
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(f) All obligations of the Company and the Guarantor (including, without
limitation, the obligation to pay Additional Interest) set forth in the
preceding paragraph which are outstanding or exist with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such security shall have been satisfied in full.
(g) Immediately upon the occurrence or the termination of a Registration
Default, the Company or the Guarantor, as the case may be, shall give the
Trustee, notice of such commencement or termination, of the obligation to pay
Additional Interest with regard to the Notes and the amount thereof and of the
event giving rise to such commencement or termination (such notice to be
contained in an Officers' Certificate (as such term is defined in the
Indenture)), and prior to receipt of such Officers' Certificate the Trustee and
such transfer and paying agent shall be entitled to assume that no such
commencement or termination has occurred, as the case may be.
(h) All Securities which are redeemed, purchased or otherwise acquired by
the Company, the Guarantor or any of their subsidiaries or affiliates (as
defined in Rule 144 (or any successor provision) under the Act) prior to the
Final Maturity Date shall be delivered to the Trustee for cancellation and
neither the Company nor the Guarantor may hold or resell such Securities or
issue any new Securities to replace any such Securities or any Notes that any
Holder has converted pursuant to the Indenture. All Common Shares issuable upon
conversion of the Notes which are repurchased or otherwise acquired by the
Company or any of its subsidiaries or affiliates (as defined in Rule 144 (or any
successor provision) under the Act) at any time while such shares are
"restricted securities" within the meaning of Rule 144 shall not be resold or
otherwise transferred except pursuant to a registration statement which has been
declared effective under the Act.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company and the Guarantor shall (i) furnish to the
Representatives, prior to the filing thereof with the SEC, a copy of any Shelf
Registration Statement, and each amendment thereof filed with the SEC pursuant
to the Act, and a copy of any Prospectus, and each amendment or supplement
thereto, and shall use its reasonable efforts to reflect in each such document,
when so filed with the SEC, such comments as the Representatives reasonably may
propose; and (ii) include information regarding the Notice Holders and the
methods of distribution they have elected for their Transfer Restricted
Securities provided to the Company in Notice and Questionnaires as necessary to
permit such distribution by the methods specified therein.
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(b) The Company and the Guarantor shall ensure that (i) any Shelf
Registration Statement and any amendment thereto and any Prospectus forming a
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 a 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 the
Company makes no representation with respect to information with respect to any
Underwriter or any Holder required to be included in any Shelf Registration
Statement or Prospectus pursuant to the Act or the rules and regulations
thereunder and which information is included therein in reliance upon and in
conformity with information furnished to the Company in writing by such
Underwriter or Holder.
(c) The Company, as promptly as reasonably practicable, shall advise the
Representatives and each Notice Holder and, if requested by you or any such
Holder, confirm such advice in writing:
(i) when the Shelf Registration Statement and any amendment thereto has
been filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to the Shelf
Registration Statement or the Prospectus or for additional information;
(iii) of the determination by the Company or the Guarantor that a
post-effective amendment to the Shelf Registration Statement would be
appropriate;
(iv) of the commencement or termination of any Suspension Period;
(v) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose;
(vi) of the receipt by the Company or the Guarantor of any notification
with respect to the suspension of the qualification of the Transfer Restricted
Securities included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose;
(vii) 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 the Shelf Registration
Statement or the Prospectus, as the case may be, does not include an untrue
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statement of a material fact or 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; and
(viii) of suspension by the Company or the Guarantor of the use of the
Prospectus as a result of any of the events or circumstances described in
paragraphs (ii) through (vii) above, and of the termination of any such
suspension.
(d) The Company and the Guarantor shall use their reasonable best efforts
to obtain the withdrawal, at the earliest possible time, of any order suspending
the effectiveness of any Shelf Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Transfer Restricted Securities for offer or sale in any jurisdiction at the
earliest possible time.
(e) The Company shall furnish to each Notice Holder, without charge, at
least one copy of any 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 Initial Purchaser, each Notice Holder and any sales or placement agent or
underwriters acting on their behalf, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement, and any amendment or supplement to such Prospectus, as
such person may reasonably request; and, except as provided in Section 3(s)
hereof, the Company and the Guarantor each consent to the use of the Prospectus
or any amendment or 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.
(g) Prior to any offering of Transfer Restricted Securities pursuant to
any Shelf Registration Statement, the Company and the Guarantor shall cooperate
with the Notice Holders and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale, under
the securities or blue sky laws of such jurisdictions in the United States as
any such Notice Holders reasonably request and shall maintain such qualification
in effect so long as required and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the Transfer
Restricted Securities covered by such Shelf Registration Statement; provided,
however, that the Company and the Guarantor will not be required to (A) qualify
generally to do business as a foreign corporation or as a dealer in securities
in any jurisdiction where they are not then so qualified or to (B) take any
action which would subject them to general service of process or taxation in any
such jurisdiction where they are not then so subject.
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(h) The Company and the Guarantor shall cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities 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 concurrent with sales of
Transfer Restricted Securities pursuant to such Shelf Registration Statement.
(i) Subject to the exceptions contained in (A) and (B) of Section 3(g)
hereof, the Company and the Guarantor shall use reasonable efforts to cause the
Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or approved by such other federal, state and
local governmental agencies or authorities, and self-regulatory organizations in
the United States, as may be necessary to enable the Holders to consummate the
disposition of such Transfer Restricted Securities as contemplated by the Shelf
Registration Statement; without limitation to the foregoing, the Company and the
Guarantor shall make all filings and provide all such information as may be
required by the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the offering under the Shelf Registration Statement of the
Transfer Restricted Securities (including, without limitation, such as may be
required by NASD Rule 2710 or 2720), and shall cooperate with each Holder in
connection with any filings required to be made with the NASD by such Holder in
that regard.
(j) Upon the occurrence of any event described in Section 3(c)(vii)
hereof, the Company and the Guarantor shall promptly prepare and file with the
SEC a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or any document incorporated
therein by reference or file a document which is incorporated or deemed to be
incorporated by reference in such Shelf Registration Statement or Prospectus, as
the case may be, so that, as thereafter delivered to purchasers of the Transfer
Restricted Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading and, in the case of a post-effective amendment, use its
reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the obligations of the Company and the Guarantor
under this paragraph (j) shall be suspended if the Company has suspended the use
of the Prospectus in accordance with Section 2(d) hereof and given notice of
such suspension to Notice Holders, it being understood that the obligations of
the Company and the Guarantor under this Section 3(j) shall be automatically
reinstated at the end of such Suspension Period.
(k) The Company shall use its reasonable 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
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possible thereafter to remove (i) from any existing CUSIP number assigned to the
Transfer Restricted Securities covered by such Shelf Registration Statement any
designation indicating that such Transfer Restricted Securities are "restricted
securities", which efforts shall include delivery to DTC of a letter executed by
the Company substantially in the form of Exhibit B hereto and (ii) any other
stop or restriction on DTC's system with respect to such Transfer Restricted
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 the Representatives may reasonably request to provide, as soon as
practicable, a CUSIP number for the Transfer Restricted Securities registered
under such Shelf Registration Statement and to cause such CUSIP number to be
assigned to such Transfer Restricted Securities (or to the maximum aggregate
principal amount of such Transfer Restricted Securities to which such number may
be assigned). Upon compliance with the foregoing requirements of this Section
3(k), the Company shall provide the Trustee with global certificates for such
Transfer Restricted Securities in a form eligible for deposit with DTC.
(l) The Company and the Guarantor shall use their reasonable best efforts
to comply with all applicable rules and regulations of the SEC and shall make
generally available to its security holders as soon as practicable but in any
event not later than 15 months after (i) the effective date of the applicable
Shelf Registration Statement, (ii) the effective date of each post-effective
amendment to any Shelf Registration Statement, and (iii) the date of each filing
by the Company and the Guarantor with the SEC of Annual Reports on Form 10-K
that are incorporated by reference or deemed to be incorporated by reference in
the Shelf Registration Statement, earnings statements satisfying the provisions
of Section 11(a) of the Act and Rule 158 promulgated by the SEC thereunder.
(m) The Company and the Guarantor shall use reasonable efforts to cause
the Indenture to be qualified under the TIA (as defined in the Indenture) in a
timely manner.
(n) The Company shall cause all Common Shares issuable upon conversion of
the Notes to be listed on each securities exchange or quotation system on which
the Common Shares are then listed no later than the date the applicable Shelf
Registration Statement is declared effective and, in connection therewith, to
make such filings as may be required under the Exchange Act and to have such
filings declared effective as and when required thereunder.
(o) The Company and the Guarantor may require each Holder of Transfer
Restricted Securities to be sold pursuant to any Shelf Registration Statement to
furnish to the Company such information regarding the Holder and the
distribution of such Transfer Restricted Securities sought by the Notice and
Questionnaire and such additional information as may, from time to time, be
required by the Act and the rules and regulations promulgated thereunder, and
13
the obligations of the Company and the Guarantor to any Holder hereunder shall
be expressly conditioned on the compliance of such Holder with such request.
(p) The Company and the Guarantor shall, if reasonably requested, use
their reasonable 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 Transfer Restricted
Securities are being sold in an Underwritten Offering, as the Managing
Underwriters or the Majority Underwriting 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 Transfer Restricted Securities and, in either
case, shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified in writing
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment, provided that neither the Company nor the Guarantor
shall be required to take any action under this Section 3(p) that is not, in the
reasonable opinion of counsel to the Company or the Guarantor, in compliance
with applicable law.
(q) The Company and the Guarantor shall, to the extent the Company and
the Guarantor deem appropriate in their sole discretion, enter into such
customary agreements (including underwriting agreements) and take all other
appropriate actions as may be reasonably requested by the Majority Holders in
order to expedite or facilitate the registration or the disposition of the
Transfer Restricted Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification and
contribution provisions and procedures no less favorable than those set forth in
Section 5 (or such other reasonable and customary provisions and procedures
acceptable to the Majority Underwriting Holders and the Managing Underwriters,
if any, with respect to all parties to be indemnified pursuant to Section 5).
The plan of distribution in the Shelf Registration Statement and the Prospectus
included therein shall permit resales of Transfer Restricted Securities to be
made by selling securityholders through underwriters, brokers and dealers, and
shall also include such other information as the Representatives may reasonably
request.
(r) The Company and the Guarantor shall, if reasonably requested in
writing by the Majority Underwriting Holders:
(i) make reasonably available for inspection by any Underwriter
participating in any disposition pursuant to the Shelf Registration Statement,
and any attorney, accountant or other agent retained by any such Underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company, the Guarantor and their respective subsidiaries as is
customary for due diligence examinations in connection with public offerings;
14
(ii) cause the officers, directors and employees of the Company and of
the Guarantor, and request their accountants and auditors, in accordance with
such accountants' and auditors' customary practice in such transactions, to
supply all relevant information reasonably requested by any such Underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that each such Underwriter shall execute a confidentiality
agreement with customary terms and satisfactory to the Company and shall agree
that such information shall be kept confidential by any attorney, accountant or
agent retained by such Underwriter; provided, further, that the Company or the
Guarantor shall have the right to elect that inspections and information
gathering be coordinated on behalf of the Holders and the other parties entitled
thereto by one counsel designated by or on behalf of the Majority Holders (or,
in the case of an Underwritten Offering, the Majority Underwriting Holders and
the Managing Underwriters);
(iii) obtain opinions of counsel to the Company and the Guarantor (which
may in each case be in-house counsel), 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 public offerings;
(iv) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company and the Guarantor (and,
if necessary, any other independent certified public accountants of any
subsidiary of the Company or the Guarantor or of any business acquired by the
Company or the Guarantor for which financial statements and financial data are,
or are required to be, included in the Shelf Registration Statement), addressed
to each selling Holder (provided such Holder furnishes the accountants, prior to
the date such "cold comfort" letter is required to be delivered, 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;
(v) cause its officers to execute and deliver such documents and
certificates as may be reasonably requested by the Majority Holders or, in the
case of an Underwritten Offering, the Majority Underwriting Holders, and the
Managing Underwriters, if any, including those to evidence compliance with
Section 3(j) hereof and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company or the
Guarantor;
The foregoing actions set forth in clauses (iii), (iv) and (v) of this
Section 3(r) shall only be required to be performed at (A) the effectiveness of
a Shelf Registration Statement and each post-effective amendment thereto and (B)
15
each closing under any underwriting or similar agreement as and to the extent
required thereunder; and
(s) Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vii) hereof, each Holder shall forthwith discontinue (and shall cause its
agents and representatives to discontinue) disposition of Transfer Restricted
Securities and will not resume disposition of Transfer Restricted Securities
until such Holder has received copies of an amended or supplemented Prospectus
contemplated by Section 3(j) hereof, or until such Holder is advised in writing
by the Company that the use of the Prospectus may be resumed or that the
relevant Suspension Period has been terminated, as the case may be, provided
that, the foregoing shall not prevent the sale, transfer or other disposition of
Transfer Restricted Securities by a Notice Holder in a transaction which is
exempt from, or not subject to, the registration requirements of the Act, so
long as such Notice Holder does not and is not required to deliver the
applicable Prospectus or Shelf Registration Statement in connection with such
sale, transfer or other disposition, as the case may be; and provided, further,
that the provisions of this Section 3(s) shall not prevent the occurrence of a
Registration Default or otherwise limit the obligation of the Company or the
Guarantor to pay Additional Interest.
4. Registration Expenses. Each of the Company and the Guarantor shall
bear its respective proportion of the expenses incurred in connection with the
performance of their obligations under Sections 2 and 3 hereof (including all
registration and filing fees, all fees and reasonable expenses of compliance
with federal securities and state "blue sky" or securities laws, all reasonable
expenses of printing incurred by the Company or Guarantor, all application and
filing fees in connection with listing the Securities on a national securities
exchange or automated quotation system pursuant to the requirements hereof, all
fees and disbursements of independent certified public accountants of the
Company and the Guarantor (including the expenses of any special audit and
comfort letters required by or incident to such performance)) and any fees and
expenses incurred in connection with any necessary filing with the NASD and
shall reimburse the Holders for the reasonable fees and disbursements of one
Canadian and one U.S. 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 including fees if
required of any qualified independent underwriter as may be required by NASD
rules.
5. Indemnification and Contribution.
(a) The Company and the Guarantor agree to indemnify and hold harmless
each Holder of Transfer Restricted Securities covered by the Shelf Registration
Statement (including each of the Initial Purchasers), the directors, officers,
employees and agents of each such Holder and each person who controls any
16
such Holder within the meaning of either the Act or the Exchange Act from and
against any loss, claim, damage or liability, joint or several, or any actions
in respect thereof to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is 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 final 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, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that neither the Company nor the
Guarantor will be liable in any such 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 (i) made
therein in reliance upon and in conformity with written information furnished to
the Company or the Guarantor by or on behalf of any such Holder or any Initial
Purchaser or any underwriter specifically for inclusion therein; or (ii)
contained in that part of a Shelf Registration Statement constituting the
Statement of Eligibility and Qualification under the Trust Indenture Act (Form
T-1) of the Trustee, (B) use of a Shelf Registration Statement or the related
Prospectus during a period when use of such Prospectus has been suspended
pursuant to Section 2(d) or Section 3(s) hereof, provided, further, in each
case, that Holders received prior notice of such suspension, or (C) if the
Holder fails to deliver a Prospectus, as then amended or supplemented, provided
that the Company shall have delivered to such Holder such Prospectus, as then
amended or supplemented; and provided, further, that neither the Company nor the
Guarantor shall be liable for the amount of any settlement of any claim made
without its consent, which consent will not be unreasonably withheld. This
indemnity agreement will be in addition to any liability which the Company and
the Guarantor may otherwise have to such indemnified parties.
(b) Each Holder of Transfer Restricted Securities covered by a Shelf
Registration Statement (including the Initial Purchasers) severally and not
jointly agrees to indemnify and hold harmless (i) the Company, (ii) the
Guarantor, (iii) each of their respective directors, (iv) each of their
respective officers and (v) each person who controls the Company or the
Guarantor within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Guarantor 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 shall be in addition to any liability which any such Holder
may otherwise have to such indemnified parties. The Company shall also indemnify
the Underwriters, their officers and directors and each person who controls such
17
Underwriters within the meaning of the Act or the Exchange Act to the same
extent as provided above with respect to the indemnification of the Holders of
the Securities if requested by such Holders.
(c) Promptly after receipt by an indemnified party under Sections 5(a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under either such paragraph, notify the indemnifying party in
writing of the claim or the commencement of that action, provided that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under this Section 5. If
any action shall be brought against an 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 may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there are likely to be substantial legal defenses available to it and the
other indemnified parties which are different from and additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party shall not
be liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless: (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall bear only the reasonable fees and
disbursements of separate counsel and shall not be liable for the expenses of
more than one separate counsel, approved by the Representatives in the case of
Section 5(a), representing the indemnified parties under such paragraph who are
parties to such action); (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action; or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(d) To provide for just and equitable contribution in circumstances in
which the indemnity provided in paragraph (a) or (b) of this Section 5 is due in
accordance with its terms but is for any reason other than as specified in this
18
Section 5 held by a court to be unavailable on the grounds of policy or
otherwise, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall have an 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"), as incurred, 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 any sales of Transfer
Restricted Securities under the Shelf Registration Statement; provided, however,
that (i) 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 the Securities, as set forth in the Purchase Agreement and (ii) 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. Benefits received by the Company
and the Guarantor shall be deemed to be equal to the sum of the total net
proceeds from the Initial Placement (before deducting expenses). Benefits
received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions received in connection with the Initial
Placement, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Transfer Restricted Securities 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. The parties agree that it would not be just and 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. 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 or the
Guarantor within the meaning of either the Act or the Exchange Act, each officer
of the Company or the Guarantor who signed the Shelf Registration Statement and
each director of the Company or the Guarantor shall have the same rights to
contribution as the Company or the Guarantor, and each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
officer and director of each Underwriter shall have the same rights to
contribution as such Underwriter, 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, any
Underwriter, the Company, the Guarantor or any of the officers, directors or
controlling persons referred to in Section 5 hereof and will survive the sale by
a Holder of Transfer Restricted Securities covered by a Shelf Registration
Statement.
19
6. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company nor the Guarantor
has, 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 and the Guarantor have 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 and the Guarantor shall obtain the written consent of each 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
Transfer Restricted 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 the
Transfer Restricted Securities being sold rather than registered under such
Shelf Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to the Representatives, initially at the address of Credit Suisse
First Boston Corporation set forth in the Purchase Agreement;
(2) if to any other Holder, at the most current address of such Holder
maintained by the Registrar under the Indenture, or, in the case of the Notice
Holder, the address set for in its Notice and Questionnaire; and
(3) if to the Company or the Guarantor, initially at their 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 or telecopier.
The Initial Purchasers, the Company or the Guarantor 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,
20
including, without the need for an express assignment or any consent by the
Company or the Guarantor thereto, subsequent Holders. The Company and the
Guarantor hereby agree to extend the benefits of this Agreement to any Holder
and Underwriter and any such Holder and Underwriter may specifically enforce the
provisions of this Agreement as if an original party hereto. In the event that
any other person shall succeed to the Company or the Guarantor under the
Indenture, then such successor shall enter into an agreement, in form and
substance reasonably satisfactory to the Representatives, whereby such successor
shall assume all of the obligations of the Company or the Guarantor, as the case
may be, under this Agreement, except that such an agreement will not be
necessary in the event of any consolidation or amalgamation of the Company with
the Guarantor.
(e) Counterparts/Facsimile Signature. 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. The
transmission by facsimile of a copy of the execution page hereof reflecting the
execution of this Agreement by any party hereto shall be effective to evidence
the party's intention to be bound by this Agreement and that party's agreement
to the terms, provisions and conditions hereof, all without the necessity of
having to produce an original copy of such execution page.
(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.
(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 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.
(i) Securities Held by the Company, etc. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Notes or the Common
Shares issuable upon conversion of the Notes is required hereunder, the Notes or
the Common Shares issuable upon conversion of the Notes held by the Company, the
Guarantor or its or their respective Affiliates (other than subsequent Holders
of the Notes or the Common Shares issuable upon conversion of the Notes if such
subsequent Holders are deemed to be Affiliates solely by reason of their
21
holdings of such Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(j) Agent for Service; Submission to Jurisdiction. By execution and
delivery of this Agreement, each of the Company and the Guarantor acknowledge
that it has appointed CT Corporation System with offices at 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 as its authorized agent (the "Authorized
Agent") upon whom all writs, process and summonses may be served in any suit,
action or proceeding arising out of or based upon this Agreement which may be
instituted in any state or U.S. federal court in the City of New York, New York.
The Company and the Guarantor hereby represent and warrant that the Authorized
Agent has accepted such appointment and has agreed to act as said agent for
service of process, and the Company and the Guarantor agree to take any and all
action, including the filing of any and all documents, that may be reasonably
necessary to continue each such appointment in full force and effect until the
end of the Shelf Registration Period. The Company and the Guarantor agree that
the appointment of the Authorized Agent shall be irrevocable until the end of
the Shelf Registration Period or until the irrevocable appointment by the
Company and the Guarantor of a successor agent in the City of New York, New York
as each of their authorized agent for such purpose and the acceptance of such
appointment by such successor. Service of process upon the Authorized Agent
shall be deemed, in every respect, effective service of process upon the Company
and the Guarantor.
Each of the Company and the Guarantor hereby:
(1) agrees that any suit, action or proceeding against it
arising out of or relating to this Agreement may be
instituted in any U.S. federal or state court sitting in
the City of New York,
(2) waives to the extent permitted by applicable law, any
objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding, and any
claim that any suit, action or proceeding in such a court
has been brought in an inconvenient forum,
(3) irrevocably submits to the non-exclusive jurisdiction of
such courts in any suit, action or proceeding, and
(4) agrees that service of process by mail to the addresses
specified herein shall constitute personal service of such
process on it in any such suit, action or proceeding.
(k) Rules 144 and 144A. The Company and the Guarantor shall use their
reasonable best efforts to file the reports required to be filed by them under
the Act and the Exchange Act in a timely manner and, if at any time the Company
22
or the Guarantor is not required to file such reports, it will, upon the
reasonable request of any Holder, make publicly available other information so
long as necessary to permit sales of their securities pursuant to Rules 144 and
144A. The Company and the Guarantor covenant that they will take such further
action as any Holder 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 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.
Upon the reasonable request of any Holder, the Company and the Guarantor shall
deliver to such Holder a written statement as to whether they have complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 6(k)
shall be deemed to require the Company or the Guarantor to register any of its
securities pursuant to the Exchange Act.
(l) Underwritten Registrations. If any of the Transfer Restricted
Securities covered by the Shelf Registration Statement are to be sold in an
Underwritten Offering, the Managing Underwriter will, subject to the consent of
the Company (which consent shall not be unreasonably withheld), be selected by
the holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering (provided that holders of
Common Shares issued upon conversion of the Securities shall not be deemed
holders of Common Shares, but shall be deemed to be holders of the aggregate
principal amount of Securities from which such Common Shares were converted).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
23
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantor and you.
Very truly yours,
NORTEL NETWORKS CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer
NORTEL NETWORKS LIMITED
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer
24
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
X.X. XXXXXX SECURITIES INC.,
as Representatives and for the other Initial Purchasers named in Schedule A to
the Purchase Agreement.
By: Credit Suisse First Boston Corporation
By: /s/ Xxxxx X. Host
------------------------------------------------
Name: Xxxxx X. Host
Title: Director
25
EXHIBIT A
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 4.25% Convertible Senior Notes due
2008 (the "Notes") of Nortel Networks Corporation (the "Company") as fully and
unconditionally guaranteed by Nortel Networks Limited (the "Guarantor"), or the
Company Common Shares issuable upon conversion of the Notes (together with the
Notes, the "Transfer Restricted Securities") understands that the Company and
the Guarantor have filed or intend to file with the United States Securities and
Exchange Commission (the "Commission") a registration statement (the "Shelf
Registration Statement") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"), of the Transfer
Restricted Securities in accordance with the terms of the Registration Agreement
(the "Registration Agreement") dated as of August 15, 2001 among the Company,
the Guarantor and the Initial Purchasers named therein. The Registration
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Registration Agreement.
In order to sell or otherwise dispose of any Transfer Restricted
Securities pursuant to the Shelf Registration Statement, a beneficial owner of
Transfer Restricted Securities generally will be required to be named as a
selling securityholder in the related prospectus, deliver a prospectus to
purchasers of Transfer Restricted Securities and be bound by those provisions of
the Registration Agreement applicable to such beneficial owner (including
certain indemnification and contribution provisions as described below).
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness.
Certain legal consequences may arise from being named as selling
securityholders in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Transfer Restricted Securities hereby gives notice to the Company of its
intention to sell or otherwise dispose of Transfer Restricted Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by
signing and returning this Notice and Questionnaire, understands that it will be
bound by the terms and conditions of this Notice and Questionnaire and the
Registration Agreement.
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The undersigned hereby provides the following information to the
Company and the Guarantor and represents and warrants that such information is
accurate and complete:
QUESTIONNAIRE
1. (a) Full legal name of Selling Securityholder:
______________________________________________________________
(b) Full legal name of registered holder (if not the same as (a)
above) through which Transfer Restricted Securities listed in
(3) below are held (if the Transfer Restricted Securities are
held through a broker-dealer or other third party and, as a
result, you do not know the legal name of the registered
holder, please complete item (1)(c) below):
______________________________________________________________
(c) Full legal name of broker-dealer or other third party through
which Transfer Restricted Securities listed in Item (3) below
are held:
______________________________________________________________
(d) Full legal name of DTC Participant (if applicable and if not
the same as (b) or (c) above) through which Transfer
Restricted Securities listed in (3) below are held:
______________________________________________________________
2. Address for Notices to Selling Securityholder:
_______________________________________________________________________
_______________________________________________________________________
Telephone:_____________________________________________________________
Fax:___________________________________________________________________
Contact person:________________________________________________________
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3. Beneficial ownership of Transfer Restricted Securities:
(a) Type and principal amount (or number of shares) of Transfer
Restricted Securities beneficially owned:
______________________________________________________________
______________________________________________________________
(b) CUSIP No(s). of such Transfer Restricted Securities
beneficially owned:
______________________________________________________________
______________________________________________________________
Unless otherwise indicated in the space provided below, all
Notes and all common shares listed in response to Item (3)(a)
above, and all common shares issuable upon conversion of the
Notes listed in response to Item (3)(a)above, will be included
in the Shelf Registration Statement. If the undersigned does
not wish all such Notes or common shares to be so included,
please indicate below the principal amount or the number of
shares to be included:
______________________________________________________________
______________________________________________________________
4. Beneficial ownership of other securities of the Company or the
Guarantor owned by the Selling Securityholder:
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company or the
Guarantor other than the Transfer Restricted Securities listed above in
Item (3).
(a) Type and Amount of other securities of the Company or the
Guarantor beneficially owned by the Selling Securityholder:
______________________________________________________________
______________________________________________________________
(b) CUSIP No(s). of such other securities of the Company or the
Guarantor beneficially owned:
______________________________________________________________
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______________________________________________________________
5. Relationship with the Company or the Guarantor:
Except as set forth below, neither the undersigned nor any of its
affiliates, directors or principal equity holder (5% or more) has held
any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three
years.
State any exceptions here:
_______________________________________________________________________
_______________________________________________________________________
6. Plan of Distribution
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement
only as follows (if at all): Such Transfer Restricted Securities may be
sold from time to time directly by the undersigned or alternatively
through underwriters or broker-dealers or agents. If the Transfer
Restricted Securities are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible for underwriting
discounts or commissions or agent's commissions. Such Transfer
Restricted Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve block
transactions) (i) on any national securities exchange or quotation
service on which the Transfer Restricted Securities may be listed or
quoted at the time of sale, (ii) in the over-the-counter market, (iii)
in transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Transfer Restricted Securities or
otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities, short and deliver Transfer Restricted Securities
to close out such short positions, or loan or pledge Transfer
Restricted Securities to broker-dealers that in turn may sell such
securities. The Selling Securityholder may pledge or grant security
interests in some or all of the Transfer Restricted Securities owned by
it and, if it defaults in the performance of its secured obligations,
the pledgees or secured parties may offer and sale the Transfer
Restricted Securities from time to time pursuant to the Prospectus. The
Selling Securityholder also may transfer and donate Transfer Restricted
Securities in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling
securityholder for purposes of the Prospectus.
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State any exceptions here:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Note: In no event will such method(s) of distribution take the form
of an underwritten offering of the Transfer Restricted
Securities without the prior agreement of the Company and the
Guarantor.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the U.S. Securities Exchange Act of 1934, as
amended, and the rules thereunder relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules or regulations) and the
provisions of the U.S. Securities Act of 1933, as amended, relating to
prospectus delivery, in connection with any offering of Transfer Restricted
Securities pursuant to the Shelf Registration Statement. The undersigned agrees
that neither it nor any person acting on its behalf will engage in any
transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Agreement to indemnify and hold harmless certain persons set
forth therein or contribute to certain payments as also set forth therein.
Pursuant to the Registration Agreement, the Company and the Guarantor
have agreed under certain circumstances indemnify the Selling Securityholders as
set forth therein or contribute to certain payments as also set forth therein.
In accordance with the undersigned's obligation under the Registration
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company and the Guarantor of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Agreement shall be made in writing at the address
set forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company and the Guarantor in connection with the preparation
or amendment of the Shelf Registration Statement and the related prospectus.
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IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Beneficial Owner
By:__________________________________
Name:
Title:
Dated:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE
TO THE COMPANY:
NORTEL NETWORKS CORPORATION
0000 XXXXX XXXX, XXXXX 000
XXXXXXXX, XXXXXXX X0X 0X0
FACSIMILE: (000) 000-0000
ATTENTION: ASSISTANT SECRETARY
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EXHIBIT B
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
The Depository Trust Company
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: 4.25% Convertible Senior Notes due 2008 of Nortel Networks
Corporation as fully and unconditionally guaranteed by Nortel
Networks Limited (the "Securities")
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 the Securities referenced above. Any
restrictions on the CUSIP designation are no longer appropriate and may be
removed. We 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 be of further
assistance.
Very truly yours,
By: ______________________________________
Authorized Officer
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