EXHIBIT 4.3
VERIZON GLOBAL FUNDING CORP.
$5,442,079,000 Zero Coupon Convertible Notes due 2021
REGISTRATION RIGHTS AGREEMENT
May 15, 2001
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Verizon Global Funding Corp., a Delaware corporation (the "Company"),
proposes to issue and sell to Xxxxxxx, Sachs & Co. and Credit Suisse First
Boston Corporation (the "Initial Purchasers"), upon the terms and subject to the
conditions set forth in a purchase agreement, dated May 9, 2001 (the "Purchase
Agreement"), $5,442,079,000 aggregate principal amount at maturity of its Zero
Coupon Convertible Notes due 2021 (the "Securities") to be supported by Verizon
Communizations Inc. (the "Support Provider") pursuant to the Support Agreement,
dated as of October 31, 2000, between the Company and the Support Provider and
the Share Contribution Agreement, dated as of May 15, 2001, between the Company
and the Support Provider. Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company and the Support Provider agree with the
Initial Purchasers, for the benefit of the holders (including the Initial
Purchasers) of the Securities and the beneficial owners from time to time of
Underlying Shares into which the Securities are convertible or issued upon any
such conversion (collectively, the "Holders"), as follows:
I. SHELF REGISTRATION.
A. The Company and the Support Provider shall use their reasonable
best efforts to file as promptly as practicable (but in no event more than 90
days after the earliest date of original issuance of any of the Notes (the
"Issue Date")) with the Commission (the "Shelf Filing Deadline Date"), and
thereafter shall use their reasonable best efforts to cause to be declared
effective as promptly as practicable (but in no event more than 210 days after
the Issue Date (the "Effectiveness Deadline Date")), a shelf registration
statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 under the Act on an appropriate form relating to the offer and sale
of the Registrable Securities (as defined below) by the Holders thereof from
time to time in accordance with the methods of distribution elected by the
Holders and set forth in such registration statement (hereafter, the "Initial
Shelf Registration Statement", and together with any Subsequent Shelf
Registration Statement (as defined below), a "Shelf Registration Statement");
provided that in no event will such method(s) of distribution take the form of
an underwritten offering of Registrable Securities without the prior agreement
of the Company and the Support Provider. At the time any Shelf Registration
Statement is declared effective, each Holder that became a Notice Holder on or
prior to the deadline for response set forth in the Notice and Questionnaire (as
defined below) shall be named as a selling securityholder in the Shelf
Registration Statement and the related prospectus in such a manner as to permit
such Holder to deliver such prospectus to purchasers of Registrable Securities
in accordance with applicable law. None of the securityholders of either of the
Company or the Support Provider (other than the Holders of Registrable
Securities) shall have the right to include any of the securities of any of the
Company or the Support Provider in the Shelf Registration Statement. The term
"Notice Holder" means on any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date. The term "Business Day"
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York are authorized or obligated
by law or executive order to close. The term "Registrable Securities" means the
Securities and the Underlying Shares, until such securities have been converted,
and, at all times subsequent to any such conversion, any securities into or for
which such securities have been converted, and any security issued with respect
thereto upon any stock dividend, split or similar event until, in the case of
any such security, the earliest of (i) its effective registration under the Act
and resale in accordance with the Shelf Registration Statement covering it, (ii)
expiration of the holding period that would be applicable thereto under Rule
144(k) under the Act were it not held by an Affiliate of the Company or the
Support Provider or (iii) its sale to the public pursuant to Rule 144 under the
Act.
B. The Company and the Support Provider shall use their reasonable
best efforts to keep the Shelf Registration Statement continuously effective in
order to permit the prospectus forming part thereof to be used by Holders of
Registrable Securities for a period of two years from the last date of original
issuance of any of the Notes or such shorter period that will terminate when all
the Registrable Securities become eligible for resale without volume
restrictions pursuant to Rule 144 under the Act (in any such case, such period
being called the "Shelf Registration Period"). If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases to
be effective for any reason at any time during the Shelf Registration Period,
the Company and the Support Provider shall use all reasonable efforts to obtain
the prompt withdrawal of any order suspending the effectiveness thereof, and in
any event shall amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the
securities that as of the date of such filing are Registrable Securities (a
"Subsequent Shelf Registration Statement"). If a Subsequent Shelf Registration
Statement is filed, the Company and Support Provider shall use all reasonable
efforts to cause the Subsequent Shelf Registration Statement to become effective
as promptly as is practicable after such filing and to keep such Shelf
Registration Statement (or subsequent Shelf Registration Statement) continuously
effective until the end of the Shelf Registration Period.
C. Notwithstanding any other provisions hereof, the Company and the
Support Provider will ensure that (i) any Shelf Registration Statement and any
amendment thereto and any prospectus forming part thereof and any supplement
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thereto complies in all material respects with the Act and the rules and
regulations of the Commission thereunder, (ii) any Shelf Registration Statement
and any amendment thereto (in either case, other than with respect to
information included therein in reliance upon or in conformity with written
information furnished to the Company by or on behalf of any Holder specifically
for use therein (the "Holders' Information")) does not 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 the Shelf Registration Statement, and any
supplement to such prospectus (in either case, other than with respect to
Holders' Information), 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 the light of the circumstances under which they were made, not
misleading.
D. Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related prospectus, it will do so only in accordance with this Section and
Section III. Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related prospectus
agrees to deliver a Notice and Questionnaire to the Company on or prior to the
deadline for response set forth in the Notice and Questionnaire. The term
"Notice and Questionnaire" means a written notice mailed by the Company to the
holders of Registrable Securities not less than 30 calendar days prior to the
date Company intends in good faith to have the Shelf Registration Statement
declared effective. From and after the date the Initial Shelf Registration
Statement is declared effective, the Company and Support Provider shall, as
promptly as is practicable after the date a Notice and Questionnaire is
delivered, (i) if required by applicable law, file with the U.S. Securities and
Exchange Commission a post-effective amendment to the Shelf Registration
Statement or prepare and, if required by applicable law, file a supplement to
the related prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other document required by the U.S. Securities
and Exchange Commission so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related prospectus in such a manner as to permit such Holder
to deliver such prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company and Support Provider shall
file a post-effective amendment to the Shelf Registration Statement, use
reasonable efforts to cause such post-effective amendment to be declared
effective under the Securities Act as promptly as is practicable; (ii) provide
such Holder copies of any documents filed pursuant to this Section; and (iii)
notify such Holder as promptly as practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to this Section;
provided that if such Notice and Questionnaire is delivered during a Deferral
Period, (as defined below) the Company shall so inform the Holder delivering
such Notice and Questionnaire and shall take the actions set forth in clauses
(i), (ii) and (iii) above upon expiration of the Deferral Period in accordance
with Section III(B); provided, further, that if under applicable law the
Companies have more than one option as to the type or manner of making any such
filing, as set forth in an opinion of nationally recognized counsel experienced
in such matters delivered by the Holder to the Company and Support Provider,
they will make the required filing or filings in the manner or of a type that is
reasonably expected to result in the earliest availability of the prospectus for
effecting resales of Registrable Securities. The term "Deferral Period" means
the period during which the availability of the Shelf Registration Statement and
any prospectus is suspended. Notwithstanding anything contained herein to the
contrary, the Company and Support Provider shall be under no obligation to
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name any Holder that is not a Notice Holder as a selling securityholder in the
Shelf Registration Statement (or any Subsequent Shelf Registration Statement) or
related prospectus; provided, however, that any Holder that becomes a Notice
Holder pursuant to the provisions of this Section of this Agreement (whether or
not such Holder was a Notice Holder at the time the Shelf Registration Statement
was initially declared effective) shall be named as a selling securityholder in
the Shelf Registration Statement (or any Subsequent Shelf Registration
Statement) or related prospectus subject to and in accordance with the
requirements of this Section.
II. LIQUIDATED DAMAGES.
A. The parties hereto agree that the Holders of Registrable
Securities will suffer damages if the Company and the Support Provider fail to
fulfill their obligations under Section I, and that it would not be feasible to
ascertain the extent of such damages. Accordingly, if (i) the Initial Shelf
Registration Statement is not filed with the Commission on or prior to the Shelf
Filing Deadline Date, (ii) the Initial Shelf Registration Statement is not
declared effective on or prior to the Effectiveness Deadline Date, or (iii) the
aggregate duration of Deferral Periods in any period exceeds the number of days
permitted in respect of such period pursuant to Section III(B) hereof (each such
event referred to in clauses (i) through (iii), a "Registration Default"), the
Company and the Support Provider will be jointly and severally obligated to pay
as liquidated damages and not as a penalty an amount payable on each May 15 and
November 15 (each a "Damages Payment Date") to each Record Holder (as defined
below) of Registrable Securities accruing during the period of one or more such
Registration Defaults at a rate per annum equal to .25% of the Applicable
Principal Amount of such Securities and the Applicable Conversion Price (as
defined below) of such shares of Underlying Shares that have been issued upon
conversion of the Securities and are outstanding and held by such Holder until
(i) the Initial Shelf Registration Statement is filed, (ii) the Initial Shelf
Registration Statement becomes effective or (iii) the Deferral Period that
caused the limit on the aggregate duration of Deferral Periods in a period as
set forth in Section III(B) to be exceeded is terminated; provided that any
liquidated damages accrued with respect to any Security or portion thereof
called for redemption on a redemption date or converted into underlying common
shares on a conversion date prior to the Damages Payment Date shall, in any
event, be paid instead to the Holder who submitted such Security or portion
thereof for redemption or conversion. Liquidated damages shall only accrue while
there exists one or more Registration Defaults. As used herein, the following
terms shall have the following meanings: "Applicable Conversion Price" means, as
of any date of determination, the Applicable Principal Amount as of such date of
determination divided by the Conversion Rate in effect as of such date of
determination or, if no Securities are then outstanding, the Conversion Rate
that would be in effect were Securities then outstanding.
"Applicable Principal Amount" means, as of any date of determination, with
respect to each Security the sum of the initial issue price of such Security
($551.26) plus accrued interest plus accrued and unpaid cash interest, if any,
as of (i) May 15 preceding any date of determination between May 15 and November
15 of the same calendar year or (ii) as of November 15 preceding any date of
determination prior to May 15 of the following calendar year or (iii) as of such
date of determination if a date of determination is May 15 or November 15;
provided if no Securities are then outstanding, such sum shall be calculated as
if such Securities were then outstanding. "Conversion Rate" shall have the
meaning assigned such term in the Indenture. "Record Holder" means the Holder
of Registrable Securities on the 1st day of May or November, as the case may be,
immediately preceding a Damages Payment Date or, in the event that a
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Registration Default is cured, the registered Holder on the date of such cure.
Notwithstanding anything to the contrary in this Section II(A), neither the
Company nor the Support Provider shall be required to pay liquidated damages to
a Holder of Registrable Securities if such Holder failed to provide the
information required to be provided by it in the Notice and Questionnaire and,
if any, pursuant to Section IV(M).
B. The Company shall notify the Trustee and the Conversion Agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company and the Support Provider shall pay the liquidated damages
due on the Registrable Securities by depositing with the Conversion Agent (which
may not be the Company for these purposes), in trust, for the benefit of the
Holders thereof, prior to 10:00 a.m., New York City time, on each Damages
Payment Date, sums sufficient to pay the liquidated damages then due. Each
obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.
C. The parties hereto agree that the liquidated damages provided for in
this Section II constitutes a reasonable estimate of and is intended to
constitute the sole damages that will be suffered by Holders of Registrable
Securities by reason of the failure of (i) the Shelf Registration Statement to
be filed, (ii) the Shelf Registration Statement to remain effective or (iii) an
Additional Registration Statement to be filed and remain effective, in each case
to the extent required by this Agreement.
III. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
A. The Company shall furnish to counsel for the Initial Purchasers,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement and each amendment thereof and each supplement, if any,
to the prospectus included therein and shall use its reasonable best efforts to
reflect in each such document, when so filed with the Commission, such comments
as such counsel may reasonably propose.
B. The Company shall advise counsel for the Initial Purchasers and the
Notice Holders (if applicable) and, if requested by any such person, confirm
such advice in writing (which advice pursuant to clauses (i)-(v) hereof shall be
accompanied by an instruction to suspend the use of the prospectus (a "Deferral
Notice") until the requisite changes have been made):
i. when any Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when such Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
ii. of any request by the Commission for amendments or supplements to
any Shelf Registration Statement or the prospectus included
therein or for additional information;
iii. of the issuance by the Commission of any stop order suspending the
effectiveness of any Shelf Registration Statement or the
initiation of any proceedings for that purpose;
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iv. of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and
v. of the happening of any event that requires the making of any
changes in any Shelf Registration Statement or the prospectus
included therein in order that 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 not
misleading.
A Deferral Period shall, without the Company and the Support Provider incurring
any obligation to pay liquidated damages, not exceed forty-five (45) days in any
three (3) month period or more than one hundred twenty (120) days in any twelve
(12) month period.
C. The Company and the Support Provider will make every reasonable
effort to obtain the withdrawal at the earliest possible time of any order
suspending the effectiveness of any Shelf Registration Statement.
D. The Company will furnish to each Holder of Registrable Securities
included within the coverage of any Shelf Registration Statement, without
charge, at least one conformed copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any such Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).
E. The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Registrable Securities 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 such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offer and sale of the Registrable
Securities covered by such prospectus or any amendment or supplement thereto.
F. The Company will, during the Shelf Registration Period, promptly
deliver to the Initial Purchasers, and such other persons that are required to
deliver a prospectus, without charge, as many copies of the final prospectus
included in any Shelf Registration Statement and any amendment or supplement
thereto as the Initial Purchasers, or other persons may reasonably request; and
the Company and the Support Provider consent to the use of such prospectus or
any amendment or supplement thereto by the Initial Purchasers, or other persons,
as applicable, as aforesaid.
G. Prior to the effective date of any Shelf Registration Statement, the
Company and the Support Provider will use their reasonable best efforts to
register or qualify, or cooperate with the Holders of Registrable Securities
included therein and their respective counsel in connection with the
registration or qualification of, such Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holder reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Registrable
Securities covered by such Shelf Registration Statement; provided that neither
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the Company nor the Support Provider will 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 and the Support Provider will cooperate with the Holders
of Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable 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 the Holders thereof may request in
writing prior to sales of Registrable Securities pursuant to such Shelf
Registration Statement.
I. If any event contemplated by Section III(B)(ii) through (v) occurs
during the period for which the Company and the Support Provider are required to
maintain an effective Shelf Registration Statement, the Company will promptly
prepare and file with the Commission a post-effective amendment to the Shelf
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities from a Holder, the prospectus will 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 the light of the circumstances under which
they were made, not misleading; provided that in the case of any event
contemplated by Section III(B)(v) the Company and the Support Provider may in
their discretion defer taking such action subject to the liquidated damage
provisions set forth in Section II hereof in the event that the aggregate
duration of the Deferral Period exceeds the limit on the aggregate duration of a
Deferral Period in a period set forth in Section III(B).
J. Not later than the effective date of the applicable Shelf
Registration Statement, the Company will provide a CUSIP number for each of the
Registrable Securities and provide the applicable trustee with printed
certificates for each series of Securities in a form eligible for deposit with
The Depository Trust Company.
K. The Company and the Support Provider will comply with all applicable
rules and regulations of the Commission and will make generally available to its
security holders as soon as practicable after the effective date of the
applicable Shelf Registration Statement an earning statement satisfying the
provisions of Section 11(a) of the Securities Act; provided that in no event
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shall such earning statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Shelf Registration Statement, which statement shall cover
such 12-month period.
L. The Company and the Support Provider will cause the Indenture to be
qualified under the Trust Indenture Act as required by applicable law in a
timely manner.
M. The Company may require each Holder of Registrable Securities to be
registered pursuant to any Shelf Registration Statement to furnish to the
Company such information concerning the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably require
for inclusion in such Shelf Registration Statement, and the Company may exclude
from such registration the Registrable Securities of any Holder that fails to
furnish such information within a reasonable time after receiving such request.
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N. Each Holder of Registrable Securities to be registered pursuant to a
Shelf Registration Statement agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company pursuant to Section
III(B)(ii) through (v), such Holder will discontinue disposition of such
Registrable Securities until such Holder's receipt of copies of the supplemental
or amended prospectus contemplated by Section III(I) or until advised in writing
(the "Advice") by the Company that the use of the applicable prospectus may be
resumed.
O. The Company and the Support Provider shall enter into such customary
agreements (including, if requested, an underwriting agreement in customary
form) and take all such other action, if any, as Holders of a majority in
aggregate principal amount of the Registrable Securities being sold or the
managing underwriters (if any) shall reasonably request in order to facilitate
any disposition of Registrable Securities pursuant to a Shelf Registration
Statement.
P. The Company and the Support Provider shall use their reasonable
efforts to cause the shares of Verizon Common Stock issuable upon conversion of
the Notes to be listed on the New York Stock Exchange.
Q. Upon (i) the filing of the Initial Shelf Registration Statement and
(ii) the effectiveness of the Initial Shelf Registration Statement, the Company
and the Support Provider shall announce the same, in each case by release to
Reuters Economic Service and Bloomberg Business News.
R. The Company and Support Provider shall (i) make reasonably available
for inspection by a representative of, and Special Counsel (as defined below)
acting for, Holders of a majority in aggregate principal amount of the
Registrable Securities being sold and any underwriter participating in any
disposition of Registrable Securities pursuant to a Shelf Registration
Statement, all relevant financial and other records, pertinent corporate
documents and properties of the Company and Support Provider and each of their
respective subsidiaries to the same extent the Company and Support Provider
would customarily make such information available in the context of due
diligence for an underwritten public offering and (ii) use its reasonable best
efforts to have its officers, directors, employees, accountants and counsel
supply all relevant information reasonably requested by such representative,
Special Counsel or any such underwriter (an "Inspector") in connection with the
preparation of such Shelf Registration Statement.
S. The Company shall if requested by Holders of a majority in aggregate
principal amount of the Registrable Securities being sold, their Special Counsel
or the managing underwriters (if any) in connection with any Shelf Registration
Statement, use its reasonable best efforts to cause (i) its counsel to deliver
an opinion relating to such Shelf Registration Statement, the Registrable
Securities, if any, in customary form, (ii) its officers to execute and deliver
all customary documents and certificates requested by Holders of a majority in
aggregate principal amount of the Registrable Securities being sold, their
Special Counsel or the managing underwriters (if any) and (iii) its independent
public accountants to provide a comfort letter or letters in customary form,
subject to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
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IV. Registration Expenses
. The Company and the Support Provider will bear all expenses
incurred in connection with the performance of its obligations under Sections I,
II, and III, including the expenses of counsel to the Company. The Initial
Purchasers will bear expenses of counsel to the Initial Purchasers and the
Holders will bear the expenses of counsel to the Holders, which may be the same
firm that is acting as counsel to the Initial Purchasers (the "Special
Counsel").
V. Indemnification.
A. The Company and the Support Provider shall jointly and severally
indemnify and hold harmless each Holder (including, without limitation, the
Initial Purchasers), its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
such Holder within the meaning of the Act or the Exchange Act (collectively
referred to for purposes of this Section V and Section VI as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of Registrable Securities),
to which that Holder may become subject, whether commenced or threatened, under
the Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Shelf
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Holder promptly
upon demand for any legal or other expenses reasonably incurred by that Holder
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Support Provider shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with any Holders' Information; and provided, further, that with
respect to any such untrue statement in or omission from any related preliminary
prospectus, the indemnity agreement contained in this Section V(A) shall not
inure to the benefit of any Holder from whom the person asserting any such loss,
claim, damage, liability or action received Registrable Securities to the extent
that such loss, claim, damage, liability or action of or with respect to such
Holder results from the fact that both (A) a copy of the final prospectus was
not sent or given to such person at or prior to the written confirmation of the
sale of such Registrable Securities to such person and (B) the untrue statement
in or omission from the related preliminary prospectus was corrected in the
final prospectus unless, in either case, such failure to deliver the final
prospectus was a result of non-compliance by the Company with Section III(D),
III(E), III(F) or III(G).
B. Each Holder shall indemnify and hold harmless the Company, the
Support Provider and their respective affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Company or the Support Provider within the meaning of the Act or
the Exchange Act (collectively referred to for purposes of this Section V(B) and
Section VI as the "Company"), from and against any loss, claim, damage or
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liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Shelf Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities,
pursuant to such Shelf Registration Statement.
C. Promptly after receipt by an indemnified party under this Section V
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 pursuant to Section V(A) or V(B), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section V except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section V. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section V for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
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expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections V(A) and V(B), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
VI. Contribution. If the indemnification provided for in Section V is
unavailable or insufficient to hold harmless an indemnified party under Section
V(A) or V(B), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Support Provider from the offering and
sale of the Securities, on the one hand, and a Holder with respect to the sale
by such Holder of Registrable Securities, on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Support Provider on the one hand and such Holder on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Support
Provider on the one hand and a Holder on the other with respect to such offering
and such sale shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (before deducting expenses),
received by or on behalf of the Company, on the one hand, bear to the total
proceeds received by such Holder with respect to its sale of Registrable
Securities, on the other. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to the Company and the Support Provider or information supplied by the
Company and the Support Provider on the one hand or to any Holders' Information
supplied by such Holder on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section VI were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VI shall be deemed to include, for purposes of this Section VI, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
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action or claim. Notwithstanding the provisions of this Section VI, an
indemnifying party that is a Holder of Registrable Securities shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party to any
purchaser exceeds the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
VII. Rules 144 and 144A. The Support Provider shall use its reasonable best
efforts to file the reports required to be filed by it under the Act and the
Exchange Act in a timely manner and, if at any time the Support Provider is not
required to file such reports, it will, upon the written request of any Holder
of Registrable Securities, make publicly available other information so long as
necessary to permit sales of such Holder's securities pursuant to Rules 144 and
144A. The Company and the Support Provider covenant that they will take such
further action as any Holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Act within the limitation
of the exemptions provided by Rules 144 and 144A (including, without limitation,
the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of
Registrable Securities, the Company and the Support Provider shall deliver to
such Holder a written statement as to whether they have complied with such
requirements. Notwithstanding the foregoing, nothing in this Section VII shall
be deemed to require the Company to register any of its securities pursuant to
the Exchange Act.
VIII. Miscellaneous.
A. Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given as to the Registrable Securities
unless the Company has obtained the written consent of Holders of a majority in
aggregate principal amount of the Registrable Securities, taken as a single
class. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Registrable 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 Holders of a majority in aggregate
principal amount of the Registrable Securities, being sold by such Holders
pursuant to such Shelf Registration Statement.
B. 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 next-day delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
IX(B), 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 the Initial Purchasers;
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(2) if to Xxxxxxx, Xxxxx & Co., initially at 00 Xxxxx Xxxxxx Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx;
(3) if to Credit Suisse First Boston Corporation, initially at 00
Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Fashino;
(4) if to the Company, initially at Verizon Global Funding Corp.,
Attention Xxxxx X. Xxxxxxx, President and Treasurer, 0000 Xxxxxxxxxx
Xxxxxx0xx Xxxxx, Xxxxxxxxxx, XX 00000; and
(5) if to the Support Provider, initially at Verizon Communications
Inc., Attention Xxxxxxx X. Xxxxxxxx, Senior Vice President and Treasurer,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
C. Successors And Assigns. This Agreement shall be binding upon the
Company, the Support Provider and their respective successors and assigns.
D. Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) 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.
E. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Act and (c) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Act.
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.
H. Remedies. In the event of a breach by the Company or the Support
Provider or by any Holder of any of their respective obligations under this
Agreement, each Holder or the Company or the Support Provider, as the case may
be, in addition to being entitled to exercise all rights granted by law,
including recovery of damages (other than the recovery of damages for a breach
by the Company or the Support Provider of their obligations under Section I
hereof for which liquidated damages have been paid pursuant to Section II
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company, the Support Provider and each Holder agree that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
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agree that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
I. No Inconsistent Agreements. Each of the Company and the Support
Provider represents, warrants and agrees that (i) it has not entered into, shall
not, on or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii)
without limiting the generality of the foregoing, without the written consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Registrable Securities, it shall not grant to any person the right to request
the Company to register any debt securities of the Company under the Act unless
the rights so granted are not in conflict or inconsistent with the provisions of
this Agreement.
J. No Piggyback on Registrations. No security holders of the Company
(other than the Holders of Registrable Securities in such capacity) shall have
the right to include any securities of the Company in any Shelf Registration
Statement other than Registrable Securities.
K. Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Support Provider and the Initial Purchasers.
Very truly yours,
VERIZON GLOBAL FUNDING CORP.
By /s/ Xxxxx X. Xxxxxxx
_______________________________________
Name: Xxxxx X. Xxxxxxx
Title President and Treasurer
VERIZON COMMUNICATIONS INC.
By /s/ Xxxxxxx X. Xxxxxxx
_______________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and
Treasurer
Accepted:
XXXXXXX, XXXXX & CO.
By /s/ Xxxxxxx, Sachs & Co.
__________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
__________________________________
Name: Xxxxxxx Xxxxxxxx
Title: Director
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