EXHIBIT
10.14
REGISTRATION RIGHTS AGREEMENT
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Dated as of September 30, 1997
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relating to
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$25,000,000 Aggregate Principal Amount
of 8% Convertible Subordinated
Notes due 2005
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by and between
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Telegroup, Inc.
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and
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Smith Barney Inc.
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This Registration Rights Agreement (this "Agreement") is made and entered
into as of September 30, 1997, by and between Telegroup, Inc., an Iowa
corporation (the "Company"), and Smith Barney Inc., (the "Initial Purchaser"),
who has purchased $25,000,000 aggregate principal amount of 8% Convertible
Subordinated Notes due 2005 (such $25,000,000 aggregate principal amount of
Convertible Subordinated Notes and any additional Convertible Subordinated Notes
issued in the future to pay interest on any Convertible Subordinated Notes are
referred to herein as the "Notes") of the Company pursuant to the Purchase
Agreement, dated September 30, 1997 (the "Purchase Agreement"), between the
Company and the Initial Purchaser. In order to induce the Initial Purchaser to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to closing under the Purchase Agreement. All
defined terms used but not defined herein shall have the meanings ascribed to
them in the Indenture (as defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Black-out Period: The period beginning on the date which any Holder is
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prohibited from selling or distributing Common Stock pursuant to Section 3(h)
and ending on the earlier to occur of the expiration of the period specified in
such Section 3(h) and the waiver by any managing underwriter of such Holder's
obligation not to sell or distribute Common Stock pursuant to such Section 3(h);
provided that such period will not exceed 90 days unless the Holder requests
that such managing underwriter waive such Holder's obligation not to sell or
distribute Common Stock pursuant to such Section 3(h).
Closing Date: The date on which the Notes are sold by the Company to the
Initial Purchaser pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
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Common Stock: The Common Stock, no par value, of the Company.
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Damages Payment Date: With respect to the Notes or the Common Stock, as
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applicable, each Interest Payment Date (as defined in the Indenture) as of which
Liquidated Damages shall have accrued and shall not yet have been paid under the
provisions of Section 4 of this Agreement.
Effectiveness Target Date: As defined in Section 4 hereof.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
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Exempt Resales: The transactions in which the Initial Purchaser proposes
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to sell the Notes to certain "qualified institutional buyers" (as such term is
defined in Rule 144A under the Securities Act) or institutional "accredited
investors" (as defined in Rule 501(a)1,2,3 or 7 under the Securities Act.
Greenwich Street Registration Rights Agreement: That certain Registration
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Rights Agreement among Telegroup, Inc., Greenwich Street Capital Partners, L.P.,
Greenwich Street Capital Offshore Fund, Ltd., TRV Employees Fund, L.P., The
Travelers Insurance Company and The Travelers Life and Annuity Company, dated as
of November 27, 1996.
Holders: As defined in Section 2(b) hereof.
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Indenture: The Indenture, dated as of September 30, 1997, between the
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Company and State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture.
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NASD: National Association of Securities Dealers, Inc.
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Offering Memorandum: The Offering Memorandum, dated September 30, 1997,
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and all amendments and supplements thereto, relating to the Notes and prepared
by the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or unincorporated
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organization, or a government or agency or political subdivision thereof.
Preliminary Prospectus: As defined in Section 3(g) hereof.
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Prospectus: The prospectus included in the Shelf Registration Statement
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(as defined herein), as amended or supplemented by any Prospectus Supplement
with respect to the terms of the offering of any portion of the Transfer
Restricted Securities (as defined herein) covered by the Shelf Registration
Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments, and all documents which may be incorporated
by reference into such prospectus.
Prospectus Supplement: As defined in Section 5(b) hereof.
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Record Holder: (i) With respect to any Damages Payment Date relating to
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the Notes, each Person who is registered on the books of the Registrar as the
holder of Notes on the record date with respect to the Interest Payment Date on
which such Damages Payment Date shall occur and (ii) with respect to any Damages
Payment Date relating to the Common Stock, each Person who is a holder of record
of such Common Stock fifteen days prior to the Damages Payment Date.
Registration Expenses: As defined in Section 6(a) hereof.
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Securities Act: The Securities Act of 1933, as amended.
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Shelf Registration Statement: As defined in Section 3(a) hereof.
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TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb), as
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amended through the date of the Indenture.
Transfer Restricted Securities: Each share of Common Stock of the Company
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issuable upon conversion of a Note, until such share (i) has been transferred
pursuant to the Shelf Registration Statement or another registration statement
covering it which has been filed with the Commission pursuant to the Securities
Act, in either case after such registration statement has become effective under
the Securities Act, (ii) has been transferred pursuant to Rule 144 under the
Securities Act or (iii) may be sold or transferred pursuant to Rule 144(k) under
the Securities Act (or any similar provisions then in force) under the
Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling broker, dealer
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manager, qualified independent underwriter or similar securities industry
professional.
Underwritten Offering: An offering in which Transfer Restricted Securities
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are sold to an Underwriter or with the assistance of an Underwriter for
reoffering to the public on a firm commitment or best efforts basis pursuant to
the Shelf Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Securities Subject to this Agreement. The only securities entitled to
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the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
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holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
is a "beneficial owner" (as that term is used in Rule 13d-3 under the Exchange
Act) of Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission on or prior to
90 days after the Closing Date, a shelf registration statement pursuant to Rule
415 under the Securities Act (as may then be amended, the "Shelf Registration
Statement") on Form S-1 or, at the option of the Company, on Form S-3, if the
use of such form is then available to the Company, to cover resales of Transfer
Restricted Securities by the Holders who satisfy the provisions of Section 3(g)
hereof relating to the provision of information in connection with the Shelf
Registration Statement. The Company shall use its best efforts to cause the
Shelf Registration Statement to be declared effective by the Commission
on or prior to 180 days after the Closing Date. The Company shall use its best
efforts to keep the Shelf Registration Statement continuously effective for a
period ending two years from the Closing Date or such shorter period that will
terminate when each of the Transfer Restricted Securities covered by the Shelf
Registration Statement shall cease to be a Transfer Restricted Security.
Upon the occurrence of any event that would cause the Shelf Registration
Statement (i) to contain any 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 or (ii) to be not effective and usable for
resale of Transfer Restricted Securities during the period the Shelf
Registration Statement is required to be effective and usable, the Company shall
as promptly as reasonably practicable file an amendment to the Shelf
Registration Statement, in the case of an event described in clause (i),
correcting any such misstatement or omission, and in the case of an event
described in either clause (i) or (ii), use its reasonable best efforts to cause
such amendment to be declared effective and the Shelf Registration Statement to
become usable as soon as reasonably practicable thereafter.
Notwithstanding anything to the contrary in this Section 3, subject to
compliance with Section 4 hereof, if applicable, the Company may prohibit offers
and sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement at any time if (A)(i) it is in possession of material non-public
information, (ii) the Board of Directors of the Company or the Executive
Committee thereof determines that such prohibition is necessary in order to
avoid a requirement to disclose such material non-public information and (iii)
the Board of Directors of the Company or the Executive Committee thereof
determines in good faith that disclosure of such material non-public information
would be materially adverse to the interests of the Company and its shareholders
or (B) the Company has made a public announcement relating to an acquisition or
business combination transaction including the Company and/or one or more of its
subsidiaries (i) that is material to the Company and its subsidiaries taken as a
whole and (ii) the Board of Directors of the Company or the Executive Committee
thereof determines in good faith that offers and sales of Transfer Restricted
Securities pursuant to the Shelf Registration Statement prior to the
consummation of such transaction (or such earlier date as the Board of Directors
or the Executive Committee thereof shall determine) is materially adverse to the
interests of the Company and its shareholders (the period during which any such
prohibition of offers and sales of Transfer Restricted Securities pursuant to
the Shelf Registration Statement is in effect pursuant to clause (A) or (B) of
this subparagraph (a) is referred to herein as a "Suspension Period"). A
Suspension Period shall commence on and include the date specified as such in
the written notice to Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement (but shall not commence on any day prior to the
date on which the Company provides such written notice that offers and sales of
Transfer Restricted Securities cannot be made under the Shelf Registration
Statement in accordance with this Section 3) and shall end on the date on which
each Holder of Transfer Restricted Securities covered by the Shelf Registration
Statement either receives copies of a Prospectus Supplement contemplated by
Section 5(b) hereof or is advised in writing by the Company that offers and
sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement and use of the Prospectus may be resumed.
(b) Except to the extent otherwise required by the Greenwich Street
Registration Rights Agreement as in effect on the date hereof, none of the
Company nor any of its security holders (other than the Holders in such
capacity) shall have the right to include any of the Company's securities in the
Shelf Registration Statement.
(c) Subject to clause (g) below, if Holders of a majority of the shares of
Common Stock to be registered in the Shelf Registration Statement so elect, one
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement may be effected in the form of an Underwritten Offering; provided,
that, such Underwritten Offering shall be required to be consummated as promptly
as reasonably practicable and in no event later than 30 days following the
commencement of the marketing of such Underwritten Offering. In such event, if
(A) the only securities to be sold pursuant to such Underwritten Offering are
Transfer Restricted Securities and the Underwriter for such Underwritten
Offering advises the Company and the Holders electing to participate in that
Underwritten Offering (the "Selling Holders") in writing that in that
Underwriters opinion the amount or number of Transfer Restricted Securities
proposed to be sold in that Underwritten Offering exceeds the amount or number
of Transfer Restricted Securities which can be sold in that Underwritten
Offering without materially and adversely affecting the offering price, there
shall be included in that Underwritten Offering the amount of such Transfer
Restricted Securities which in the opinion of such
Underwriter can be sold therein without such material adverse effect, and such
amount or number of shares shall be allocated pro rata among the Selling Holders
on the basis of the number of shares of Transfer Restricted Securities requested
to be included by such Holders and (B) if the securities to be sold pursuant to
such Underwritten Offering are Transfer Restricted Securities and securities
offered for the account of other persons as contemplated by the foregoing clause
(b), and the Underwriter for such Underwritten Offering advises the Company and
such Selling Holders in writing that in that Underwriter's opinion the amount of
Transfer Restricted Securities and securities offered for the account of other
persons exceeds the amount or number of Transfer Restricted Securities and such
other securities which can be sold in that Underwritten Offering without
materially and adversely affecting the offering price, there shall be included
in that Underwritten Offering the amount of such Transfer Restricted Securities
and such other securities which in the opinion of such Underwriter can be sold
therein without such material adverse effect and such amount or number of shares
shall be allocated pro rata among such holders of such Transfer Restricted
Securities and other securities on the basis of the number of Transfer
Restricted Securities and other securities to be included therein. The Selling
Holders shall pay all underwriting discounts and commissions of the Underwriters
with respect to any Transfer Restricted Securities sold in such Underwritten
Offering. Notwithstanding anything herein to the contrary, holders of Transfer
Restricted Securities shall be entitled to only one Underwritten Offering.
(d) If any of the Transfer Restricted Securities covered by the Shelf
Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Selling
Holders of a majority of the Transfer Restricted Securities to be covered by the
Shelf Registration Statement; provided, however, that such Underwriter(s) shall
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be reasonably satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are covered by the
Shelf Registration Statement filed pursuant to this Section 3 agrees, upon the
request of the Underwriter(s) in an Underwritten Offering, not to effect any
sale or distribution of securities of the Company of the same class as the
securities included in such Shelf Registration Statement, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
registration), during the 10-day period prior to, and during the 180-day period
beginning on, the date of the underwriting agreement entered into in connection
with that Underwritten Offering.
The foregoing provisions of this Section 3(e) shall not apply to any Holder
of Transfer Restricted Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement; provided, however,
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that any such Holder shall undertake, in its request to participate in any
Underwritten Offering, not to effect any sale or distribution of any of its
Transfer Restricted Securities commencing on the date of sale of such Transfer
Restricted Securities unless it has provided 180 days prior written notice of
such sale or distribution to the Underwriter(s).
(f) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in the Shelf Registration Statement pursuant to
this Agreement unless such Holder first furnishes to the Company in writing (i)
such Holder's name and mailing address (which may be used for purposes of
providing written notices and other communications contemplated by this
Agreement) and (ii) within 10 business days after receipt of a request therefor,
such information as the Company may reasonably request for use in connection
with any Shelf Registration Statement or Prospectus or preliminary Prospectus (a
"Preliminary Prospectus") included in the Shelf Registration Statement.
(g) Notwithstanding anything to the contrary set forth in this Section 3,
the Holders shall not have the right to sell Transfer Restricted Securities in
an Underwritten Offering (i) at any time during which the Company is engaged in
a registration of securities for its own account which are to be sold pursuant
to an underwritten offering with respect to which an underwriter has been
selected, to the extent so requested by such underwriter, or, to the extent
that, prior to or as of the date of any request for an Underwritten Offering,
the Company has engaged (and continues to be engaged as of the date of such
request) in discussions with an underwriter, so long as, no later than 30 days
after such request, the Company is in registration, and (ii) during any
customary "lock-up" period thereafter (not to last beyond the 180-day period
beginning on the closing date of such underwritten offering) required by such
underwriter in connection with such underwritten offering.
(h) Each Holder agrees by acquisition of any Transfer Restricted Securities
not to effect any public sale or
distribution of Common Stock or securities convertible into or exchangeable or
exercisable for any of such securities, other than any such securities acquired
in a public offering, within seven days prior to and 90 days (unless advised in
writing by the managing underwriter that a longer period, not to exceed 180
days, is required, or such shorter period as the managing underwriter for any
underwritten offering may agree) after the effective date of any registration
statement (except as part of any such registration) covering Registrable
Securities (as defined in the Greenwich Street Registration Rights Agreement).
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with the Commission
on or prior to 90 days after the Closing Date, (ii) the Shelf Registration
Statement has not been declared effective by the Commission within 180 days
after the Closing Date (the "Effectiveness Target 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 for the
offer and sale of Transfer Restricted Securities for a period of time (including
any Suspension Period) which shall exceed 60 days in the aggregate in any of the
one-year periods ending on the first or second anniversaries of the Closing
Date, or which shall exceed 30 days in any calendar quarter within any of such
one-year periods (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay liquidated damages ("Ordinary
Liquidated Damages") to each Holder who has furnished the information requested
of him pursuant to Section 3(f) of this Agreement and who has otherwise complied
with his respective obligations under this Agreement. The amount of Ordinary
Liquidated Damages payable during any period in which any Registration Default
shall have occurred and be continuing is that amount which is equal to one-
quarter of one percent (25 basis points) per annum per $1,000 principal amount
of the Notes, if such Notes have not yet been converted into Transfer Restricted
Securities, or $2.50 per annum per 83.333 shares of Common Stock (subject to
adjustment in the event of a stock split, stock re-combination, stock dividend
and the like) which have been so converted into Transfer Restricted Securities
for each 90-day period until the applicable registration statement is filed and
the applicable registration statement is declared effective or the Shelf
Registration Statement again becomes effective or usable, as the case may be, up
to a maximum of one and one-quarter percent (125 basis points) per annum per
$1,000 principal amount of such Notes or $12.50 per annum per 83.333 shares of
Common Stock (subject to adjustment as aforesaid) constituting Transfer
Restricted Securities. Following the cure of a Registration Default, Ordinary
Liquidated Damages will cease to accrue with respect to such Registration
Default. In addition to any Ordinary Liquidated Damages that may become
payable, the Company will pay during the continuation of any Black-out Period
liquidated damages ("Special Liquidated Damages" and collectively with any
Ordinary Liquidated Damages, "Liquidated Damages") to each Holder who has
furnished the information requested of him pursuant to Section 3(f) of this
Agreement and who has otherwise complied with his respective obligations under
this Agreement. The amount of Special Liquidated Damages payable during any
period in which any Black-out Period shall have occurred and be continuing is
that amount which is equal to one percent (100 basis points) per annum per
$1,000 principal amount of the Notes, if such Notes have not yet been converted
into Transfer Restricted Securities, or $10.00 per annum per 83.333 shares of
Common Stock (subject to adjustment in the event of a stock split, stock re-
combination, stock dividend and the like) which have been so converted into
Transfer Restricted Securities. The Company shall notify the Trustee, the
Initial Purchaser and Holders of Transfer Restricted Securities within three
business days after each and every date on which a Registration Default or
Black-out Period first occurs. All accrued Liquidated Damages shall be paid to
Record Holders entitled thereto pursuant to the foregoing provisions by wire
transfer of immediately available funds or by federal funds check by the Company
on each Damages Payment Date. No Liquidated Damages shall be payable with
respect to any week commencing two years or more after the Closing Date (or
commencing after the expiration of such shorter period as may hereafter become
applicable as the holding period for restricted securities under Rule 144(k)
under the Securities Act).
All of the Company's obligations set forth in the preceding paragraph which
are outstanding 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.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company will use its
reasonable best efforts to effect
such registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution or
disposition thereof, and pursuant thereto the Company will:
(a) on or prior to the date 90 days after the Closing Date, prepare and file
with the Commission the Shelf Registration Statement, including all financial
statements required to be included or incorporated by reference therein pursuant
to the provisions of the Securities Act and the rules and regulations
thereunder; cooperate and assist in any filings required to be made with the
NASD with respect to the offers and sales to be made under the Shelf
Registration Statement; and use its reasonable best efforts to cause the Shelf
Registration Statement to become effective under the Securities Act on or prior
to the date 180 days after the Closing Date and approved on or prior to such
date by such governmental agencies or authorities as may be necessary under the
state securities laws to enable the Selling Holders to consummate the
disposition of such Transfer Restricted Securities; provided, however, that
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before filing the Shelf Registration Statement or any Prospectus, or any
amendments or supplements thereto, the Company will furnish to the Holders of
Transfer Restricted Securities included in the Shelf Registration Statement and
the Underwriters), if any, copies of all such documents proposed to be filed
(except that the Company shall not be required to furnish any exhibits to such
documents, including those incorporated by reference, unless so requested by
such a Holder in writing), and the Company will not file any Shelf Registration
Statement or amendment thereto or any Prospectus or any supplement thereto to
which (i) the Underwriter(s), if any, shall reasonably object or (ii) if there
are no Underwriter(s) and the Holders of a majority of the shares of Common
Stock so registered in the Shelf Registration Statement shall reasonably object,
in each such case within five business days after the receipt thereof. A Holder
or Underwriter, if any, shall be deemed to have reasonably objected to such
filing if the Shelf Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading which misstatement or
omission is specifically identified by that Holder or Underwriter, as the case
may be, to the Company in writing within such five business days;
(b) subject to the provisions of Section 3(a) hereof, prepare and file with
the Commission such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep the Shelf Registration
Statement effective for the applicable period set forth in Section 3(a) hereof,
or such shorter period terminating when all Transfer Restricted Securities
covered by the Shelf Registration Statement have been sold or when, for any
other reason, there are no remaining Transfer Restricted Securities; cause the
Prospectus to be supplemented by any required supplement thereto (a "Prospectus
Supplement"), and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with the applicable provisions of Rules 424
and 430A under the Securities Act in a timely manner; and comply with the
provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by the Shelf Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Shelf Registration
Statement, the Prospectus or such Prospectus Supplement as applicable;
(c) if requested by the Holders of Transfer Restricted Securities included
in the Shelf Registration Statement or, if the Transfer Restricted Securities
are being sold in an Underwritten Offering, the Underwriter(s) of such
Underwritten Offering, promptly incorporate in the Prospectus, any Prospectus
Supplement or post-effective amendment to the Shelf Registration Statement such
appropriate information as the Underwriter(s) and/or the Holders of Transfer
Restricted Securities being sold agree in writing should be included therein
relating to the plan of distribution of the Transfer Restricted Securities,
including, without limitation, information with respect to the amount of
Transfer Restricted Securities being sold to such Underwriter(s), the purchase
price being paid therefor and any other terms with respect to the offering of
the Transfer Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus, Prospectus Supplement or post-effective
amendment as soon as practicable after the Company is notified of the matters to
be incorporated in such Prospectus, Prospectus Supplement or post-effective
amendment;
(d) advise the Underwriter(s), if any, and the Holders of Transfer
Restricted Securities included in the Shelf Registration Statement promptly and,
if requested by such Persons, confirm such advice in writing, (i) when the
Prospectus or any Prospectus Supplement or post-effective amendment to the Shelf
Registration Statement has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment thereto, when the same
has
become effective, (ii) of any request by the Commission to the Company for
amendments to the Shelf Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Shelf Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of those purposes and (iv) if at any time the representations
and warranties of the Company contemplated by paragraph (l)(i) below cease to be
true and correct and (v) of the existence of any fact and the happening of any
event that makes any statement of a material fact made or incorporated by
reference in the Shelf Registration Statement, the Prospectus, any amendment or
supplement thereto untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Shelf Registration Statement,
or any state securities commission or other regulatory authority, shall issue an
order suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Company shall use its reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest practicable time;
(e) promptly following the filing of any document that is to be incorporated
by reference into the Shelf Registration Statement or the Prospectus subsequent
to the initial filing of the Shelf Registration Statement, provide copies of
such document (excluding exhibits, unless requested by a Holder in writing) to
the Holders of Transfer Restricted Securities included in the Shelf Registration
Statement;
(f) furnish to each Holder and each of the Underwriter(s), if any, without
charge, at least one copy of the Shelf Registration Statement, as first filed
with the Commission, and of each amendment thereto (excluding exhibits thereto
and documents incorporated by reference therein unless requested by such Holder
in writing or by such Underwriter);
(g) deliver to each Holder of Transfer Restricted Securities included in the
Shelf Registration Statement and each of the Underwriter(s), if any, without
charge, as many copies of any Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto as such Persons may reasonably request; the
Company consents to the use of any Preliminary Prospectus and the Prospectus and
any amendments or supplements thereto by each Holder of Transfer Restricted
Securities included in the Shelf Registration Statement and each of the
Underwriter(s), if any, in connection with the public offering and the sale of
the Transfer Restricted Securities covered by any Preliminary Prospectus and the
Prospectus or any amendments or supplements thereto;
(h) prior to any public offering of Transfer Restricted Securities,
cooperate with the Holders of Transfer Restricted Securities included in the
Shelf Registration Statement, the Underwriter(s), if any, and their respective
counsel in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as those Holders or Underwriter(s) may reasonably request and do
any and all other acts or things reasonably necessary or appropriate to enable
the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that the Company
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shall not be required (i) to register or qualify as a foreign corporation where
it is not now so qualified, (ii) to take any action that would subject it to the
service of process in suits, other than as to matters and transactions relating
to the Shelf Registration Statement, in any jurisdiction where it is not now so
subject, or (iii) to take any action that would subject it to taxation in any
jurisdiction in an amount greater than it would be so subject without having
taken such action;
(i) cooperate with the Holders of Transfer Restricted Securities included in
the Shelf Registration Statement and the Underwriter(s), if any, to facilitate
the timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold under the Shelf Registration Statement and not
bearing any restrictive legends; and, enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders of
Transfer Restricted Securities included in the Shelf Registration Statement or
the Underwriter(s), if any, may request at least two full business days prior to
any sale of Transfer Restricted Securities under the Shelf Registration
Statement;
(j) if any fact or event contemplated by clause (d)(v) above shall exist or
have occurred, prepare a post-effective amendment or supplement to the Shelf
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(k) provide a CUSIP number for all Transfer Restricted Securities not later
than the effective date of the Shelf Registration Statement and provide the
transfer agent for the Common Stock with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(l) enter into such agreements (including an underwriting agreement) and
take all such other actions in connection therewith as may reasonably be
requested in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to the Shelf Registration Agreement, in
connection with an Underwritten Offering, and in connection therewith, (i) make
such representations and warranties to the Underwriter(s), in form, substance
and scope as they may reasonably request and as are customarily made by issuers
to Underwriters in primary underwritten offerings; (ii) obtain opinions of
counsel to the Company and updates thereof in customary form and covering
matters reasonably requested by the Underwriter(s) of the type customarily
covered in legal opinions to Underwriter(s) in connection with primary
underwritten offerings addressed to each selling Holder and the Underwriter(s)
requesting the same and covering the matters as may be reasonably requested by
such Holders and Underwriter(s); (iii) obtain, to the extent permitted by
Statement on Auditing Standards No. 72 or any successor Statement thereto, "cold
comfort" letters and updates thereof from the Company's independent certified
public accountants addressed to the selling Holders of Transfer Restricted
Securities and the Underwriter(s) requesting the same, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters to Underwriter(s) in connection with primary underwritten
offerings; and (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of the Transfer Restricted Securities being sold or the
Underwriter(s) of such Underwritten Offering to evidence compliance with clause
(i) above and with any customary conditions contained in the underwriting
agreement entered into by the Company pursuant to this clause (l). The above
shall be done at or prior to each closing under such underwriting agreement, as
and to the extent required thereunder;
(m) make available at reasonable times and in a reasonable manner for
inspection by a representative of the Holders of Transfer Restricted Securities
covered by the Shelf Registration Statement, any Underwriter participating in
any disposition pursuant to the Shelf Registration Statement, and any attorney
or accountant retained by such Holders or any of the Underwriter(s), all
financial and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, Underwriter, attorney or
accountant in connection with such Shelf Registration Statement prior to its
effectiveness, provided, however, that such representatives, attorneys or
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accountants shall agree to keep confidential (which agreement shall be confirmed
in writing in advance to the Company if the Company shall so request) all
information, records or documents made available to such persons which are not
otherwise available to the general public unless disclosure of such records,
information or documents is required by court or administrative order (of which
the Company shall have been given prior notice and an opportunity to defend)
after the exhaustion of all appeals therefrom, and to use such information
obtained pursuant to this provision only in connection with the transaction for
which such information was obtained, and not for any other purpose;
(n) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders, as soon as practicable, a consolidated earnings statement,
which consolidated earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act, for the twelve-month period (i) commencing at the
end of any fiscal quarter in which Transfer Restricted Securities are sold to
Underwriter(s) in a firm commitment or best efforts Underwritten Offering or
(ii) if not sold to Underwriter(s) in such an offering, beginning with the first
month of the Company's first fiscal quarter commencing after the effective date
of the Shelf Registration Statement;
(o) cause all Transfer Restricted Securities covered by the Shelf
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issues by the Company are then listed if
requested by the Selling Holders of a majority of the outstanding Transfer
Restricted Securities or the Underwriter(s), if any;
(p) cooperate and assist in any filings required to be made with the NASD
and in the performance of any due diligence investigation by any Underwriter
(including any "qualified independent Underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD);
(q) use its reasonable best efforts to cause the Transfer Restricted
Securities covered by the Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or seller thereof or the Underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (h) above; and
(r) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at the earliest
possible moment.
Each Holder agrees to furnish promptly to the Company all information
required to be disclosed in the Shelf Registration Statement in order to make
the information previously furnished to the Company by such Holder for that
purpose not materially misleading or necessary to cause the Shelf Registration
Statement not to omit a material fact with respect to such Holder necessary in
order to make the statements therein not misleading.
Each Holder agrees by acquisition of any Transfer Restricted Securities that,
upon receipt of any notice from the Company contemplated by Section 5(d)(iii) or
(v) hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof, or until
it is advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings with respect to the Prospectus. If so directed by the
Company, each Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the Prospectus covering such Transfer Restricted Securities current at the time
of receipt of such notice. In the event the Company shall give any such notice,
the time period regarding the effectiveness of the Shelf Registration Statement
set forth in Section 3(a) hereof shall be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 5(d)(iii) or (v) hereof to and including the date when each Holder of
Transfer Restricted Securities covered by such Shelf Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by Section 5(j) hereof or shall have received the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance with
this Agreement (the "Registration Expenses") will be borne by the Company,
regardless of whether a Shelf Registration Statement becomes effective,
including without limitation:
(i) all registration and filing fees (including NASD filing fees, and
if applicable, the fees and expenses of any "qualified independent
Underwriter" (and its counsel) that is required to be retained in accordance
with the rules and regulations of the NASD);
(ii) fees and expenses of the Company's compliance with federal
securities, state or foreign blue sky laws;
(iii) expenses of printing or engraving certificates for the Transfer
Restricted Securities in a form eligible for deposit with Depository Trust
Company and
of printing the Prospectus and any Preliminary Prospectus;
(iv) reasonable fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"cold comfort" letters required by or incidental to the preparation and
filing of a Shelf Registration Statement and Prospectus and the disposition
of Transfer Restricted Securities); and
(vi) fees and expenses of listing the Transfer Restricted Securities
on any securities exchange or quotation system in accordance with Section
5(q) hereof.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company. Notwithstanding any other provisions herein to the
contrary, the Holders of Transfer Restricted Securities shall bear the expense
of any broker's commission, agency fee or Underwriter's discount or commission
and the fees and expenses of counsel to the Holders and any Underwriter.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder who offers
Transfer Restricted Securities pursuant to the Shelf Registration Statement
(each such Holder an "Indemnified Holder"), each agent, representative,
employee, officer and director of any Indemnified Holder and each person, if
any, that controls each Indemnified Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, and agents,
representatives, employees, officers and directors or any such controlling
person of any Indemnified Holder from and against any and all losses, claims,
damages, judgments, liabilities and expenses (including the reasonable fees and
expenses of counsel and other expenses in connection with investigating or,
subject to the provisions of Section 7(b), defending or settling any such action
or claim) as they are incurred which arise out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or the Prospectus or any amendment or supplement thereto
or any Preliminary Prospectus or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except (i) the
Company shall not be liable to any Indemnified Holder in any such case insofar
as such losses, claims, damages, judgments, liabilities or expenses arise out
of, or are based upon, any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Indemnified Holder
furnished in writing by any Indemnified Holder to the Company expressly for use
therein and (ii) the Company shall not be liable to any Indemnified Holder under
the indemnity agreement in this Section 7(a) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage, judgment, liability
or expense results from the fact that any Indemnified Holder sold Transfer
Restricted Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus as then
amended or supplemented, if the Company has previously furnished sufficient
copies thereof to the Indemnified Holder. The foregoing indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) If any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any
Indemnified Holder with respect to which indemnity may be sought against the
Company pursuant to this Section 7, such Indemnified Holder shall promptly
notify the Company in writing, and the
Company shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Holder and
payment of all fees and expenses; provided, however, that the omission so to
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notify the Company shall not relieve the Company from any liability that they
may have to any Indemnified Holder (except to the extent that the Company is
materially prejudiced or otherwise forfeits substantive rights or defenses by
reason of such failure). An Indemnified Holder shall have the right to employ
separate counsel in any such action or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder unless (i) the Company agrees in writing to
pay such fees and expenses, (ii) the Company has failed promptly to assume the
defense and employ counsel reasonably satisfactory to the Indemnified Holder or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both the Indemnified Holder and the Company and such
Indemnified Holder shall have been advised in writing by its counsel that
representation of such Indemnified Party and the Company by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation has been proposed) due to actual or
potential differing interests between them (in which case the Company shall not
have the right to assume the defense of such action on behalf of such
Indemnified Holder). It is understood that the Company shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all
Indemnified Holders, which firm shall be designated in writing by the
Indemnified Holders of the majority of the outstanding Transfer Restricted
Securities held by Indemnified Holders and that all such fees and expenses shall
be reimbursed on a monthly basis. The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company, but if settled with the written consent of the Company, or if there is
a final judgment with respect thereto, the Company agrees to indemnify and hold
harmless each Indemnified Holder from and against any loss or liability by
reason of such settlement or judgment. The Company shall not, without the prior
written consent of each Indemnified Holder affected thereby, effect any
settlement of any pending or threatened proceeding in which such Indemnified
Holder has sought indemnity hereunder, unless such settlement includes an
unconditional release of such Indemnified Holder from all liability arising out
of such action, claim, litigation or proceeding.
(c) Each Indemnified Holder agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the "Company
Indemnified Parties") to the same extent as the foregoing indemnity from the
Company to any Indemnified Holder, but only with respect to information relating
to each Indemnified Holder furnished to the Company in writing by each
Indemnified Holder, expressly for use in the Registration Statement, Prospectus
(or any amendment or supplement thereto), or any Preliminary Prospectus. In
case any action shall be brought against any Company Indemnified Party based on
the Registration Statement, Prospectus (or any amendment or supplement thereto),
or any Preliminary Prospectus and in respect of which indemnification may be
sought against each Indemnified Holder pursuant to this Section 7(c), each
Indemnified Holder shall have the rights and duties given to the Company by
Section 7(b) hereof (except that if the Company shall have assumed the defense
thereof, each Indemnified Holder may, but shall not be required to, employ
separate counsel therein and participate in the defense thereof and the fees and
expenses of such counsel shall be at the expense of the Indemnified Holder) and
the Company Indemnified Parties shall have the rights and duties given to the
Indemnified Holders by Section 7(b) hereof. The foregoing indemnity agreement
shall be in addition to any liability which the Indemnified Holders may
otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to
any party entitled to indemnification pursuant to Section 7(a) or 7(c) hereof,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, judgments, liabilities and expenses (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Indemnified Holders on the other from the
offering of the Transfer Restricted Securities 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 on the one
hand and the Indemnified Holders on the other in connection with the statements
or omissions which resulted in such losses, claims, damages, judgments,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Indemnified Holders on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total net proceeds from the
offering (before deducting expenses) received by the Indemnified Holders. The
relative fault of the Company on the one hand and the Indemnified Holders on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or by any of the Indemnified Holders on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and each Indemnified Holder agree that it would not be just
and equitable if contribution pursuant to Section 7(d) hereof were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d) hereof. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution hereunder
from any other person.
(f) The Company shall also indemnify each Underwriter participating in the
distribution (as described in such registration statement), their officers and
directors and each person who controls such persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Holders.
(g) The indemnity and contribution agreements contained in this Section 7,
(i) are in addition to any liability that any indemnifying party may otherwise
have to any indemnified party and (ii) shall apply to any Underwritten Offering
under the Shelf Registration Statement except to the extent the same are
explicitly stated not to apply in an underwriting agreement to which the Selling
Holders in such Underwritten Offering are parties.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, to make
available to the Holders in connection with any sale of Transfer Restricted
Securities and any prospective purchaser (identified as such in a written notice
to the Company from the Selling Holder) of such Transfer Restricted Securities,
the information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN OFFERINGS
No Holder may participate in any Underwritten Offering hereunder unless such
Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the
basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(c) furnishes the Company in writing all information reasonably requested in
accordance with Section 3(f) hereof and agrees in writing to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, any underwriter and any person controlling the Company or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the extent contemplated by Section 7(c) hereof.
SECTION 10. SELECTION OF UNDERWRITERS
Subject to the other provisions of this Agreement, the Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the Underwriter(s) that will administer the
offering will be selected by
the Holders of the Transfer Restricted Securities included in such offering in
the manner specified in Section 3(c) hereof, provided, however, that such
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Underwriter(s) must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted Securities, in addition to
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being entitled to exercise all rights provided herein, and as provided in the
Purchase Agreement (for any Holders who are parties thereto) and granted by
applicable law, including recovery of damages, will be entitled to specific
performance of such Holder's rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the date
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of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any other
agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including the
----------------------
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of Holders of a majority of
Transfer Restricted Securities affected by such amendment, modification,
supplement, waiver or departure. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are being
sold pursuant to the Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders shall be valid only with the
written consent of Holders of at least 66-2/3% of Transfer Restricted Securities
being sold, calculated as aforesaid.
(d) Notices. All notices and other communications provided for or permitted
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hereunder shall be made in writing by hand delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities,
initially at the address set forth on the records of the Registrar under
the Indenture or Transfer Agent for Common Stock and thereafter at such
address or at any address provided by such Holder to the Company
pursuant to the provisions of Section 3(g) hereof, with a copy to the
Registrar; and
(ii) if to the Company or the Initial Purchaser, initially at
its address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the
provisions of this Section.
All such notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
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and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, however, that this Agreement shall not inure to the benefit
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of or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder; and provided further that nothing herein shall be deemed to permit any
assignment, transfer or any disposition of Transfer Restricted Securities in
violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement and by taking and holding such
Transfer Restricted Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any number of
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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.
(g) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. Each of this Agreement and, to the extent specified
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in Section 3 hereof, the Greenwich Street Registration Rights Agreement, is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or to the extent specified in Section 3 hereof, the
Greenwich Street Registration Rights Agreement, with respect to the registration
rights granted by the Company with respect to the securities sold pursuant to
the Purchase Agreement. Each of this Agreement and, to the extent specified in
Section 3 hereof, the Greenwich Street Registration Rights Agreement, supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TELEGROUP, INC.
By:
SMITH BARNEY INC.
By: