Exhibit 4.10
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REGISTRATION RIGHTS AGREEMENT
DATED MARCH 5, 1998
AMONG
WAM!NET INC.
AND
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
CREDIT SUISSE FIRST BOSTON CORPORATION
AND
FIRST CHICAGO CAPITAL MARKETS, INC.
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into this 5th day of March, 1998, by and among WAM!NET Inc., a Minnesota
corporation (the "Company"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Credit Suisse First Boston Corporation and First Chicago Capital
Markets, Inc. (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated February
26, 1998, among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of 208,530 Units. The Units include $208,530,000
principal face amount of the Company's 13 1/4% Senior Discount Notes due 2005,
Series A (the "Notes"). In order to induce the Initial Purchasers to enter into
the Purchase Agreement, the Company has agreed to provide to the Initial
Purchasers and their direct and indirect transferees of Notes the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings
specified below:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"CLOSING DATE" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"DEPOSITARY" shall mean The Depository Trust Company and its nominees and
successors.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of Exchange
Notes for Registrable Notes pursuant to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933 Act
effected pursuant to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2.1 hereof.
"EXCHANGE NOTES" shall mean the 13 1/4% Senior Discount Notes due 2005,
Series B, issued by the Company under the Indenture containing terms identical
to the Notes in all material respects (except for references to certain
liquidated damages interest rate provisions, restrictions on transfers and
trading as unit with warrants of the Company and restrictive legends), to be
offered to Holders of Securities in exchange for Registrable Notes pursuant to
the Exchange Offer.
"HOLDER" shall mean an Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Notes under the
Indenture and each Participating Broker-Dealer that holds Exchange Notes for so
long as such Participating Broker-Dealer is required to deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Notes.
"INDENTURE" shall mean the Indenture relating to the Notes, dated as of
March 5, 1998, among the Company, the Subsidiary Guarantors that become parties
thereto from time to time, and First Trust National Association, as trustee, as
the same may be amended, supplemented, waived or otherwise modified from time to
time in accordance with the terms thereof.
"INITIAL PURCHASER" or "INITIAL PURCHASERS" shall have the meaning set
forth in the preamble and their successors.
"MAJORITY HOLDERS" shall mean (i), with respect to actions in respect of
the Exchange Registration Statement, the Holders of a majority of the aggregate
principal amount of Outstanding (as defined in the Indenture) Registrable Notes
that are eligible to participate in the Exchange Offer and (ii), with respect to
actions in respect of a Shelf Registration Statement, the Holders of a majority
of the aggregate principal amount of Outstanding Registrable Notes that are
covered by such Shelf Registration Statement. Whenever the consent or approval
of Holders of a specified percentage of Registrable Notes is required hereunder,
Notes held by the Company, any Subsidiary Guarantor or any other obligor on the
Notes or any Affiliate (as defined in the Indenture) of the Company shall be
disregarded in determining whether such consent or approval was given by the
Holders of such required percentage amount.
"PARTICIPATING BROKER-DEALER" shall mean any of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Credit Suisse First Boston Corporation and First
Chicago Capital Markets, Inc. and any other broker-dealer which makes a market
in the Notes and exchanges Registrable Notes in the Exchange Offer for Exchange
Notes.
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"PERSON" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section 2.1 hereof.
"PRIVATE EXCHANGE NOTES" shall have the meaning set forth in Section 2.1
hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Notes covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"REGISTRABLE NOTES" shall mean the Notes and, if issued, the Private
Exchange Notes; provided, however, that any Note and, if issued, any Private
Exchange Note shall cease to be a Registrable Note on (i) the date on which such
Note is exchanged by a Person, other than a Participating Broker-Dealer, for an
Exchange Note in the Exchange Offer, (ii) as to any Exchange Note received by a
Participating Broker-Dealer in the Exchange Offer, the date on which such
Exchange Note is sold to a purchaser who receives from such Participating
Broker-Dealer on or prior to the date of such sale a copy of the Prospectus
contained in the Exchange Offer Registration Statement, as amended or
supplemented, (iii) the date on which the offer and sale of such Note or Private
Exchange Note, as the case may be, has been effectively registered under the
1933 Act, and such Note or Private Exchange Note has been disposed of under the
Shelf Registration Statement, (iv) the date on which such Note or Private
Exchange Note, as the case may be, is eligible for distribution to the public
pursuant to Rule 144(k) under the 1933 Act (or any similar provision then in
effect, but not Rule 144A), (v) the date on which such Note or Private Exchange
Note, as the case may be, shall have otherwise been sold by the holder thereof
and a new Note, executed by the Company and authenticated by the Trustee and not
containing a legend restricting further transfer, shall have been delivered to
the purchaser and subsequent sales of such Note to the public shall not require
registration or qualification under the 1933 Act or any similar state law then
in effect, or (vi) such Note or Private Exchange Note, as the case may be,
ceases to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and compliance with the rules of the NASD (including reasonable
fees and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Exchange Notes or Registrable Notes
and any filings with the NASD), (iii) all expenses of any
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Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Notes on any securities exchange or exchanges,
(v) all rating agency fees, (vi) the fees and disbursements of counsel for the
Company and of the independent public accountants of the Company, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, (vii) the fees and expenses of the Trustee,
and any escrow agent or custodian, (viii) the reasonable fees and expenses of
the Initial Purchasers in connection with the Exchange Offer, including the
reasonable fees and expenses of counsel to the Initial Purchasers in connection
therewith, (ix) the reasonable fees and disbursements of special counsel
selected by Merrill Lynch to represent the Holders of Registrable Notes in
connection with any Shelf Registration and (x) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of securities
and the fees and expenses of any special experts retained by the Company in
connection with any Registration Statement, but excluding underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Notes by a Holder pursuant to a Shelf Registration Statement.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes pursuant to
the provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency or government body performing the functions currently performed by the
United States Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to Section
2.2 hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2.2 of this Agreement which
covers all of the Registrable Notes or all of the Private Exchange Notes on an
appropriate form under Rule 415 under the 1933 Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SUBSIDIARY GUARANTORS" shall have the meaning assigned thereto in the
Indenture.
"TRUSTEE" shall mean the trustee with respect to the Notes and the Exchange
Notes under the Indenture.
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2. REGISTRATION UNDER THE 1933 ACT.
2.1 EXCHANGE OFFER. The Company shall, for the benefit of the Holders, at
the Company's cost, (A) prepare and, as soon as practicable but not later than
90 days following the Closing Date, file with the SEC under the 1933 Act an
Exchange Offer Registration Statement on an appropriate form with respect to the
offer of the Company to the Holders to exchange all of the Registrable Notes
(other than Private Exchange Notes) for a like principal amount of Exchange
Notes, (B) use its best efforts to cause the Exchange Offer Registration
Statement to be declared effective under the 1933 Act within 150 days of the
Closing Date, (C) use its best efforts to keep the Exchange Offer Registration
Statement effective until the closing of the Exchange Offer and (D) use its best
efforts to cause the Exchange Offer to be consummated not later than 30 days
following the date on which the Exchange Offer Registration Statement is
declared effective. The Exchange Notes will be issued under the Indenture. Upon
the effectiveness of the Exchange Offer Registration Statement, the Company
shall promptly commence the Exchange Offer, it being the objective of such
Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Notes for Exchange Notes (assuming that such Holder (a) is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b)
is not a broker-dealer tendering Registrable Notes acquired directly from the
Company for its own account, (c) acquired the Exchange Notes in the ordinary
course of such Holder's business and (d) has no arrangements or understandings
with any Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Notes) to transfer such Exchange Notes from and after
their receipt without any limitations or restrictions under the 1933 Act and
under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period of not
less than 30 calendar days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange Offer;
(d) permit Holders to withdraw tendered Registrable Notes at any time
prior to 5:00 p.m. (Eastern Time) on the last business day of the Exchange
Period, by sending to the institution specified in the Prospectus forming
part of the Exchange Offer Registration Statement and in the letter of
transmittal, a telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Registrable Notes
delivered for exchange, and a statement that such Holder is withdrawing
such Holder's election to have such Securities exchanged;
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(e) notify each Holder that any Registrable Security not tendered will
remain outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of the Initial Purchasers
and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Securities acquired by them and having the status of an unsold
allotment in the initial distribution, the Company, upon the request of any
Initial Purchaser, shall simultaneously with the delivery of the Exchange Notes
in the Exchange Offer issue and deliver to such Initial Purchaser in exchange
(the "Private Exchange") for the Notes held by such Initial Purchaser, a like
principal amount of debt securities of the Company, on a senior basis, that are
identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Notes (the "Private Exchange Notes").
The Exchange Notes and the Private Exchange Notes shall be issued under (i)
the Indenture or (ii) an indenture identical in all material respects to the
Indenture and which, in either case, has been qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and which does not place the
transfer restrictions (or similar restrictions) set forth in Section 3.17 of the
Indenture or on the face of the Notes on the Exchange Notes; provided, however,
the Private Exchange Notes shall be subject to such transfer restrictions. The
Indenture or such indenture shall provide that the Exchange Notes, the Private
Exchange Notes and the Notes shall vote and consent together on all matters as
one class and that none of the Exchange Notes, the Private Exchange Notes or the
Notes will have the right to vote or consent as a separate class on any matter.
The Private Exchange Notes shall be of the same series as, and the Company shall
use its best efforts to have the Private Exchange Notes bear the same CUSIP
number as, the Exchange Notes.
As soon as practicable after the close of the Exchange Offer and/or the
Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Registrable Notes properly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement;
(ii) accept for exchange all Notes properly tendered pursuant to the
Private Exchange;
(iii) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and deliver Exchange
Notes or Private Exchange Notes, as the case may be, to each Holder of
Registrable Notes so accepted
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for exchange in a principal face amount equal to the principal face amount
of the Registrable Notes of such Holder so accepted for exchange.
The Accreted Value of each Exchange Note and Private Exchange Note shall be
equal to the Accreted Value of the Registrable Note surrendered in exchange
therefor, and interest on each Exchange Note and Private Exchange Note will
accrue from March 1, 2002 or, if later, the date on which interest was last paid
on the Registrable Note surrendered in exchange therefor. The Exchange Offer and
the Private Exchange shall not be subject to any conditions, other than (i) that
the Exchange Offer or the Private Exchange, or the making of any exchange by a
Holder, does not violate applicable law or any applicable interpretation of the
staff of the SEC, (ii) the due tendering of Registrable Notes in accordance with
the Exchange Offer and the Private Exchange, (iii) that each Holder of
Registrable Notes exchanged in the Exchange Offer shall have represented that
all Exchange Notes to be received by it shall be acquired in the ordinary course
of its business and that at the time of the consummation of the Exchange Offer
it shall have no arrangement or understanding with any person to participate in
the distribution (within the meaning of the 1933 Act) of the Exchange Notes and
shall have made such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to render the use of Form
S-4 or other appropriate form under the 1933 Act available and (iv) that no
action or proceeding shall have been instituted or threatened in any court or by
or before any governmental agency with respect to the Exchange Offer or the
Private Exchange which, in the Company's judgment, would reasonably be expected
to impair the ability of the Company to proceed with the Exchange Offer or the
Private Exchange. The Company shall inform the Initial Purchasers of the names
and addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Notes in the Exchange Offer.
2.2 SHELF REGISTRATION. If (i) the Company is not permitted to file the
Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or SEC policy,
(ii) the Exchange Offer is not for any other reason consummated within 180 days
after the Closing Date, (iii) any Holder of Registrable Notes notifies the
Company within 30 days after the commencement of the Exchange Offer that (a) due
to a change in law or policy it is not entitled to participate in the Exchange
Offer, (b) due to a change in law or policy it may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (c)
it is a broker-dealer and owns Registrable Notes acquired directly from the
Company or an affiliate of the Company or (iv) the Holders of a majority in
aggregate principal amount of the Registrable Notes may not resell the Exchange
Notes acquired by them in the Exchange Offer to the public without restriction
under the Securities Act and under applicable blue sky or state securities laws,
then the Company will, at its cost:
(A) Use its best efforts to, prior to the later of (x) the 90th day
after the Closing Date or (y) the 60th day after such filing obligation
arises, file with the SEC a Shelf
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Registration Statement relating to the offer and sale of the Registrable Notes
by the Holders from time to time in accordance with the methods of distribution
elected by the Majority Holders participating in the Shelf Registration and set
forth in such Shelf Registration Statement, and thereafter shall use its best
efforts to cause such Shelf Registration Statement to be declared effective as
promptly as practicable but no later than 60 days after the obligation to file
the Shelf Registration Statement arises; provided, that if the Company has not
consummated the Exchange Offer within 180 days after the Closing Date, than the
Issuer will file the Shelf Registration Statement with the SEC on or prior to
the 30th day after such date.
(B) Use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of two
years from the date the Shelf Registration Statement is declared effective
by the SEC, or for such shorter period that will terminate when all
Registrable Notes covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be
outstanding or otherwise to be Registrable Notes (the "Effectiveness
Period");
(C) Notwithstanding any other provisions hereof, use its best efforts
to ensure that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any supplement thereto
complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Shelf Registration
Statement, and any supplement to such Prospectus (as amended or
supplemented from time to time), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements, in light of the circumstances under which they were made,
not misleading.
The Company shall not permit any securities other than Registrable Notes to
be included in the Shelf Registration Statement. The Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement, as required
by Section 3(b) below, and to furnish to the Holders of Registrable Notes copies
of any such supplement or amendment promptly after its being used or filed with
the SEC.
2.3 EXPENSES. The Company shall pay all Registration Expenses in connection
with a registration pursuant to Section 2.1 or 2.2. Each Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Notes pursuant to the Shelf
Registration Statement.
2.4 EFFECTIVENESS. (a) The Company will be deemed not have used its best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case
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may be, to become, or to remain, effective during the requisite period set forth
in Section 2.1 or 2.2 if the Company voluntarily takes any action that would, or
omits to take any action which omission would, result in any such Registration
Statement not being declared effective or in the Holders of Registrable Notes
covered thereby not being able to exchange or offer and sell such Registrable
Notes during such period as and to the extent contemplated hereby, unless such
action is required by applicable law.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1 hereof
or a Shelf Registration Statement pursuant to Section 2.2 hereof will not be
deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Exchange Notes pursuant to an Exchange Offer Registration Statement
or Registrable Notes pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have become effective during the period of such interference,
until the offering of Exchange Notes or Registrable Notes, as the case may be,
pursuant to such Registration Statement may legally resume.
2.5 INTEREST. The Indenture executed in connection with the Notes will
provide that in the event that either (a) the Exchange Offer Registration
Statement is not filed with the Commission on or prior to the 90th calendar day
following the Closing Date, (b) the Exchange Offer Registration Statement has
not been declared effective on or prior to the 150th calendar day following the
Closing Date or (c) the Exchange Offer is not consummated on or prior to the
180th calendar day following the Closing Date or a Shelf Registration Statement
is not declared effective within the period specified in Section 2.2(A), (each
such event referred to in clauses (a) through (c) above, a "Registration
Default"), the Registrable Notes shall accrue interest, as liquidated damages
("Additional Interest"), at a rate of one-half of one percent per annum of the
Accreted Value of the Registrable Notes upon the occurrence of each Registration
Default, which rate will increase by one-half of one percent each 90-day period
that such Additional Interest continues to accrue as a result of such
Registration Default, provided that the maximum aggregate interest rate that
accrues on the Accreted Value of the Registrable Notes will in no event exceed
one and one-half percent (1.5%) per annum. Following the cure of a Registration
Default the accrual of Additional Interest on the Registrable Notes will respect
to such Registration Default shall cease.
If the Shelf Registration Statement is declared effective but becomes
unusable by the Holders of Notes covered by such Shelf Registration Statement
("Shelf Registered Notes") for any reason, and the aggregate number of days in
any consecutive twelve-month period for which the Shelf Registration Statement
shall not be usable exceeds 30 days in the aggregate, then commencing on such
30th day the Shelf Registered Notes shall accrue Additional Interest (in
addition to any interest then accruing in accordance with the immediately
preceding paragraph), as liquidated damages, at a rate of one-half of one
percent per annum of the Accreted Value of the Shelf Registered Notes, which
rate will increase by one-half of one percent at the end of each 90-day period
in which such Shelf Registration Statement is not usable, provided that the
maximum aggregate interest rate that accrues on the Accreted Value of the Shelf
Registered Notes as a result
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of a Shelf Registration Statement being unusable (inclusive of any interest that
accrues on such Shelf Registered Notes pursuant to the first paragraph of this
Section 2.5) will in no event exceed one and one-half percent (1.5%) per annum.
Upon the Shelf Registration Statement once again becoming usable, the accrual of
Additional Interest on the Shelf Registered Notes due to such Shelf Registration
Statement not being usable will cease.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:
(a) prepare and file with the SEC a Registration Statement or Registration
Statements, within the relevant time period specified in Section 2.1 or 2.2, as
applicable, on the appropriate form under the 1933 Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders thereof,
and (iii) shall comply as to form in all material respects with the requirements
of the applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith or incorporated by
reference therein;
(b) use its best efforts to cause such Registration Statement(s) to become
effective and remain effective within the time periods specified in Section 2.1
or Section 2.2 hereof, as the case may be, and prepare and file with the SEC
such post-effective amendments to each Registration Statement as may be
necessary under applicable law to keep such Registration Statement effective for
the applicable period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the 1933 Act and comply
with the provisions of the 1933 Act, the 1934 Act and the rules and regulations
thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Holders thereof (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Notes, at least five business days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Notes is being filed and
advising such Holder that the distribution of Registrable Notes will be made in
accordance with the method selected by the Majority Holders participating in the
Shelf Registration; (ii) furnish to each Holder of Registrable Notes and to each
underwriter of an underwritten offering of Registrable Notes, if any, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, including financial
statements and schedules and, if the Holder so requests, all exhibits in order
to facilitate the public sale or other disposition of the Registrable Notes, and
(iii) hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable
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Notes in connection with the offering and sale of the Registrable Notes covered
by the Prospectus or any amendment or supplement thereto;
(d) use its best efforts to register or qualify the Registrable Notes under
all applicable state securities or "blue sky" laws of such jurisdictions as any
Holder of Registrable Notes covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Notes shall reasonably
request by the time the applicable Registration Statement is declared effective
by the SEC, and do any and all other acts and things which may be reasonably
necessary or advisable to enable each such Holder and underwriter to consummate
the disposition in each such jurisdiction of such Registrable Notes owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), or (ii) take any action which would subject it to general service
of process or taxation in any such jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Notes under a Shelf
Registration or any Participating Broker-Dealer who has notified the Company
that it utilizing the Exchange Offer Registration Statement as provided in
paragraph (f) below and, if requested by such Holder or Participating
Broker-Dealer, confirm such advice in writing promptly (i) when a Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any request by the SEC or any
state securities authority for post-effective amendments or supplements to a
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose,
(iv) in the case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Notes covered
thereby, the representations and warranties of the Company contained in any
underwriting agreement, securities sales agreement or other similar agreement,
if any, relating to the offering cease to be true and correct in all material
respects, (v) of the happening of any event or the discovery of any facts during
the period a Shelf Registration Statement is effective which makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading, (vi) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Notes or the Exchange
Notes, as the case may be, for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vii) of any determination by
the Company that a post-effective amendment to such Registration Statement would
be appropriate,
(f) (A) in the case of the Exchange Offer Registration Statement, (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to Merrill Lynch on
behalf of the Participating Broker-Dealers, and which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that holds
Registrable
11
Notes acquired for its own account as a result of market-making activities or
other trading activities and that will be the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of Exchange Notes to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies have
been publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of Merrill Lynch on behalf of the
Participating Broker-Dealers and its counsel, represent the prevailing views of
the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Notes for Registrable Notes pursuant to the Exchange Offer may
be deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Notes, (ii) furnish to each Participating Broker-Dealer who has delivered to the
Company the notice referred to in Section 3(e), without charge, as many copies
of each Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement thereto,
as such Participating Broker-Dealer may reasonably request, (iii) hereby consent
to the use of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto, by any Person subject to the
prospectus delivery requirements of the SEC, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange Notes
covered by the Prospectus or any amendment or supplement thereto, and (iv)
include in the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the following
provision:
"If the exchange offeree is a broker-dealer holding Registrable Notes
acquired for its own account as a result of market-making activities or
other trading activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of Exchange
Notes received in respect of such Registrable Notes pursuant to the
Exchange Offer"
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Notes, the broker-dealer will not be
deemed to admit that it is an underwriter within the meaning of the 1933 Act;
and
(B) in the case of any Exchange Offer Registration Statement involving
Participating Broker-Dealers, if in the opinion of counsel to the Initial
Purchasers such Participating Broker-Dealers would have liability under the 1933
Act or the 1934 Act with respect to any untrue statement of a material fact
contained in such Exchange Offer Registration Statement or the related
Prospectus, or with respect to any omission to state a material fact therein
necessary (in the case of the Prospectus, in light of the circumstances under
which they were made) to make the statements made therein not misleading, the
Company shall cause to be delivered to the Initial Purchasers, on behalf of the
Participating Broker-Dealers, upon the effectiveness of the Exchange Offer
Registration Statement: (i) an opinion of counsel or opinions of counsel
substantially in the form attached hereto as Exhibit A, (ii) officers'
certificates substantially in the form customarily delivered in a public
offering of debt securities and (iii) a comfort letter or comfort letters in
customary form to the extent permitted by Statement on Auditing Standards No. 72
of the American Institute of Certified Public
12
Accountants (or if such a comfort letter is not permitted, an agreed upon
procedures letter in customary form) from the Company's independent certified
public accountants (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired or
proposed to be acquired by the Company for which financial statements are, or
are required to be, included in the Registration Statement) at least as broad in
scope and coverage as the comfort letter or comfort letters delivered to the
Initial Purchasers in connection with the initial sale of the Notes to the
Initial Purchasers;
(g) (i) in the case of an Exchange Offer, furnish counsel for the Initial
Purchasers and (ii) in the case of a Shelf Registration, furnish special counsel
for the Holders of Registrable Notes participating in such Shelf Registration
copies of any comment letters received from the SEC or any other request by the
SEC or any state securities authority for amendments or supplements to any
Registration Statement or Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, and each underwriter, if any, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto, including financial statements and schedules (but without documents
incorporated therein by reference or exhibits, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling Holders
of Registrable Notes to facilitate the timely preparation and delivery of
physical certificates representing Registrable Notes to be sold and not bearing
any restrictive legends; and enable such Registrable Notes to be in such
denominations (consistent with the provisions of the Indenture) and registered
in such names as the selling Holders or the underwriters, if any, may reasonably
request at least one business day prior to the closing of any sale of
Registrable Notes;
(k) in the case of a Shelf Registration, upon the occurrence of any event
or the discovery of any facts, each as contemplated by Sections 3(e)(v) and
3(e)(vii) hereof, as promptly as practicable after the occurrence of such an
event, use its best efforts to prepare a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or amend any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Notes or
Participating Broker-Dealers, such Prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. At such time as such
public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the Company agrees
promptly to notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
13
(l) in the case of a Shelf Registration, a reasonable time prior to the
filing of any Shelf Registration Statement, any Prospectus contained therein,
any amendment (including any post-effective amendment) to such Shelf
Registration Statement or any supplement to such Prospectus or any filing of, or
amendment to, any document which is to be incorporated by reference into such
Registration Statement or Prospectus after the initial filing of such
Registration Statement, provide copies of such documents to the Initial
Purchasers on behalf of the Holders of Registrable Notes participating in such
Shelf Registration; and make representatives of the Company as shall be
reasonably requested by Holders of Registrable Notes, or the Initial Purchasers
on behalf of such Holders, available for discussion of such documents;
(m) obtain a CUSIP number for all Exchange Notes, Private Exchange Notes or
Registrable Notes, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates for
the Exchange Notes, Private Exchange Notes or the Registrable Notes, as the case
may be, in a form eligible for deposit with the Depositary;
(n) (i) cause the Indenture to be qualified under the TIA in connection
with the registration pursuant to Section 2.1 or Section 2.2 of the offer of the
Exchange Notes, the Private Exchange Notes or the Registrable Notes , as the
case may be, (ii) cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for the Indenture to be so qualified
in accordance with the terms of the TIA and (iii) execute, and use its best
efforts to cause any Subsidiary Guarantor and the Trustee to execute, all
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(o) in the case of a Shelf Registration, enter into agreements (including
underwriting agreements) and take all other customary and appropriate actions in
order to expedite or facilitate the disposition of the Registrable Notes of the
Holders participating therein, and in such connection, and whether or not the
offering is an underwritten offering:
(i) make such representations and warranties to the Holders of such
Registrable Notes and the underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in similar
underwritten offerings as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and the
Majority Holders participating in such Shelf Registration, addressed to
each selling Holder and the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters, if any;
14
(iii) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants (and any other
independent certified public accountants of any subsidiary of the Company
or of any business acquired or proposed to be acquired by the Company for
which financial statements are, or are required to be, included in the
Registration Statement) addressed to the underwriters, if any, and use
reasonable efforts to have such letter addressed to the selling Holders of
Registrable Notes (to the extent consistent with Statement on Auditing
Standards No. 72 of the American Institute of Certified Public Accounts),
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in connection
with similar underwritten offerings;
(iv) if requested by the Majority Holders, enter into a securities
sales agreement with the selling Holders of Registrable Notes and an agent
of such Holders providing for, among other things, the appointment of such
agent for the selling Holders for the purpose of soliciting purchases of
Registrable Notes, which agreement shall be in form, substance and scope
customary for similar offerings;
(v) if an underwriting agreement is to be entered into, cause the same
to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 4 hereof with respect to the underwriters and all other parties to
be indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings to the
Holders of a majority in principal amount of the Registrable Notes being
sold and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(p) in the case of a Shelf Registration or if a Prospectus is required to
be delivered by any Participating Broker-Dealer in the case of an Exchange
Offer, make available for inspection by representatives of the Holders of the
Registrable Notes, any underwriters participating in any disposition pursuant to
a Shelf Registration Statement, any Participating Broker-Dealer and any counsel
or accountant retained by any of the foregoing, all financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries
reasonably requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Company and such subsidiaries
to supply all information reasonably requested by any such representative,
underwriter, special counsel or accountant in connection with any such
Registration Statement, and make such representatives of the Company available
for discussion of such documents as shall be reasonably requested by the Initial
Purchasers;
15
(q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such documents to the Initial Purchasers and its counsel and
make such changes in any such document prior to the filing thereof as the
Initial Purchasers or its counsel may reasonably request and, except as
otherwise required by applicable law, not file any such document in a form to
which the Initial Purchasers or its counsel shall not have previously been
advised and furnished a copy of or to which the Initial Purchasers or its
counsel shall reasonably object, and make representatives of the Company and its
counsel available for discussion of such documents as shall be reasonably
requested by the Initial Purchasers (all such actions being taken by the Initial
Purchasers for the benefit of the Holders of Registrable Securities); and
(ii) in the case of a Shelf Registration, a reasonable time prior to filing
any Shelf Registration Statement, any Prospectus forming a part thereof, any
amendment to such Shelf Registration Statement (including any post-effective
amendment) or any supplement to such Prospectus, provide copies of such document
to the Holders of Registrable Notes to be registered thereon, to the Initial
Purchasers, to special counsel for the Holders (who shall be appointed by the
Majority Holders participating in such Shelf Registration) and to the
underwriter or underwriters of an underwritten offering of Registrable Notes, if
any; make such changes in any such document prior to the filing thereof as the
Initial Purchasers, special counsel to such Holders or the underwriter or
underwriters reasonably request and not file any such document in a form to
which the Majority Holders, the Initial Purchasers, special counsel for the
Holders of Registrable Notes or any underwriter shall not have previously been
advised and furnished a copy of or to which the Majority Holders, the Initial
Purchasers, special counsel to the Holders of Registrable Notes or any
underwriter shall reasonably object, and make the representatives of the Company
and its subsidiaries available for discussion of such document as shall be
reasonably requested by the Holders of Registrable Notes, the Initial
Purchasers, special counsel for the Holders of Registrable Notes or any
underwriter (all actions by the Initial Purchasers pursuant to clause (ii) being
taken by the Initial Purchasers for the benefit of the Holders of Registrable
Notes).
(r) in the case of a Shelf Registration, use its best efforts to cause all
Registrable Notes to be listed on any securities exchange on which similar debt
securities issued by the Company are then listed, or if not then listed, on any
national securities exchange requested by the underwriter or underwriters of an
underwritten offering of Registrable Notes, if any;
(s) in the case of a Shelf Registration, use its best efforts to cause the
Registrable Notes to be rated by the appropriate rating agencies;
(t) otherwise comply with all applicable rules and regulations of the SEC
and make available to its security holders an earnings statement which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder
(or any similar rule of the SEC then in effect) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12 month period if
such period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which
16
Registrable Notes are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement;
(u) cooperate and assist in any filings required to be made with the NASD
and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and its counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD);
(v) upon consummation of an Exchange Offer or a Private Exchange, obtain a
customary opinion of counsel to the Company addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or Private Exchange, and which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Notes and/or Private Exchange
Notes, as applicable, and the related indenture, and (ii) each of the Exchange
Notes and related indenture constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its respective
terms (with customary exceptions); and
(w) use its best efforts to take all other steps necessary to effect the
registration of the Registrable Notes and the Exchange Notes covered by a
Registration Statement contemplated hereby.
In the case of a Shelf Registration Statement, the Company may require each
Holder of Registrable Notes (as a condition to such Holder's participation in
the Shelf Registration) to furnish to the Company such information regarding the
Holder and the proposed distribution by such Holder of such Registrable Notes as
the Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Section 3(e)(v) hereof,
such Holder will forthwith discontinue disposition of Registrable Notes pursuant
to a Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in such Holder's possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes current at the time of receipt of such notice.
In the event that the Company falls to effect the Exchange Offer or file
any Shelf Registration Statement and maintain the effectiveness of any Shelf
Registration Statement as provided herein, the Company shall not file any
Registration Statement with respect to any securities (within the meaning of
Section 2(l) of the 1933 Act) of the Company other than Registrable Notes.
17
If any of the Registrable Notes covered by any Shelf Registration Statement
are to be sold in an underwritten offering, the underwriter or underwriters and
manager or managers that will manage such offering will be selected by the
Majority Holders participating in such Shelf Registration. No Holder of
Registrable Notes may participate in any underwritten registration hereunder
unless such Holder (a) agrees to sell such Holder's Registrable Notes on the
basis provided in any underwriting arrangements approved by the Majority Holders
participating in the Shelf Registration and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
4. INDEMNIFICATION, CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an "Underwriter") and each
Person, if any, who controls any Holder or Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment or supplement thereto) pursuant to which the offer or
sale of Exchange Notes or Registrable Notes were registered under the 1933
Act, including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
4(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue
18
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(b) Each Holder by participating in the Exchange Offer or a Shelf
Registration severally, but not jointly, agrees to indemnify and hold harmless
the Company, the Initial Purchasers, each Underwriter and the other selling
Holders, and each of their respective directors and officers, and each Person,
if any, who controls the Company, any Initial Purchaser, any Underwriter or any
other selling Holder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Holder furnished to the Company by such Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); provided, however, that no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Notes pursuant
to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out
19
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Holders and the Initial Purchasers
on the other hand in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders and the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, the Holders or the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Holders and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 4 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
4. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 4 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes sold by it were offered exceeds the amount of any
damages which such Initial Purchaser has
20
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company, and each Person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company. The Initial Purchasers' respective obligations to contribute
pursuant to this Section 4 are several in proportion to the principal amount of
Securities set forth opposite their respective names in Schedule A to the
Purchase Agreement and not joint.
5. MISCELLANEOUS.
5.1 RULE 144 AND RULE 144A. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Notes (a) make publicly available such
information as is necessary to permit sales pursuant to Rule 144 under the 1933
Act, (b) deliver such information to a prospective purchaser as is necessary to
permit sales pursuant to Rule 144A under the 1933 Act, and (c) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable Notes
without registration under the 1933 Act within the limitation of the exemptions
provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended
from time to time, or (iii) any similar rules or regulations hereafter adopted
by the SEC. Upon the request of any Holder of Registrable Notes, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
5.2 NO INCONSISTENT AGREEMENTS. The Company has not entered into and the
Company will not after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or which otherwise conflicts with the provisions hereof. The
Company covenants and agrees that the rights granted to the Holders hereunder do
not, and will not for the term of this Agreement, in any way conflict with the
rights (including registration rights) granted to the holders of the Company's
other issued and outstanding securities.
21
5.3 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 at least a
majority in aggregate principal amount of the outstanding Registrable Notes
affected by such amendment, modification, supplement, waiver or departure.
5.4 NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if
to a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 5.4,
which address initially is the address set forth in the Purchase Agreement with
respect to the Initial Purchasers; and (b) if to the Company, initially at the
Company's address set forth in the Purchase Agreement, and thereafter at such
other address of which notice is given in accordance with the provisions of this
Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.5 SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit of and
be binding upon the successors, assigns and transferees of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Notes in violation of
the terms of the Purchase Agreement or the Indenture. If any transferee of any
Holder shall acquire Registrable Notes, in any manner, whether by operation of
law or otherwise, such Registrable Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Notes 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 applicable to Holders of
Registrable Notes, and such person shall be entitled to receive the benefits
hereof.
5.6 THIRD PARTY BENEFICIARIES. The Initial Purchasers (even if the Initial
Purchasers are not Holders of Registrable Notes) shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Holders, on the other hand, and shall have the right to enforce
such agreements directly to the extent they deem such enforcement necessary or
advisable to protect their rights or the rights of Holders hereunder. Each
Holder of Registrable Notes shall be a third party beneficiary to the agreements
made hereunder between the Company, on the one hand, and the Initial Purchasers,
on the other hand, and shall have the right to
22
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.
5.7 SPECIFIC ENFORCEMENT. Without limiting the remedies available to the
Initial Purchasers and the Holders, the Company acknowledges that any failure by
the Company to comply with its obligations under Sections 2.1 through 2.4 hereof
may result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Sections 2.1 through 2.4 hereof.
5.8 RESTRICTION ON RESALES. Until the expiration of two years after the
original issuance of the Notes, the Company will not, and will cause its
"affiliates" (as such Term is defined in Rule 144(a)(1) under the 1933 Act) not
to, resell any Notes which are "restricted securities" (as such term is defined
under Rule 144(a)(3) under the 1933 Act) that have been reacquired by any the
Company or any of its affiliates and shall immediately upon any purchase of any
such Notes submit such the same to the Trustee for cancellation.
5.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 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.
5.13 SUBSIDIARY GUARANTORS. If any Subsidiary (as such term is defined in
the Indenture) become a Subsidiary Guarantor pursuant to Section10.22 of the
Indenture, the Company shall cause such Subsidiary to take all actions that may
be required under applicable law and SEC policy to cause the guarantee of such
Subsidiary to be registered under the 1933 Act as part of the Exchange Offer
Registration Statement and any Shelf Registration Statement. Any actions by a
Subsidiary taken in compliance with this Section 5.13 shall be taken within the
periods required for actions to be taken by the Company hereunder (including
without limitation within the periods
23
specified in Sections 2.1 and 2.2 hereof). At the request of any Initial
Purchaser, the Company shall cause each Subsidiary Guarantor to execute,
acknowledge and deliver such instruments and documents, and take all such other
actions, as may be reasonably required in order to effectuate the purposes of
this Agreement (including, without limitation, the joining by such Subsidiary
Guarantor with the Company, on a joint and several basis, in all of the
obligations of the Company hereunder).
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
WAM!NET INC
By: /s/ Edward J. Driscoll III
-----------------------------
Name: Edward J. Driscoll III
Title: President and CEO
Confirmed and accepted as
of the date first above
written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
FIRST CHICAGO CAPITAL MARKETS, INC.
BY: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
/s/ Barbara Daniel
-------------------------
Name: Barbara Daniel
Title: Vice President
25
EXHIBIT A
FORM OF OPINION OF COUNSEL
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Credit Suisse First Boston Corporation
First Chicago Capital Markets, Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
We have acted as counsel for WAM!NET Inc., a Minnesota corporation (the
"Company"), in connection with the sale by the Company to you (the "Initial
Purchasers") of $___________ aggregate principal amount at maturity of ___%
Senior Discount Notes due 2005 (the "Notes") of the Company pursuant to the
Purchase Agreement dated February 26, 1998 (the "Purchase Agreement") among the
Company and the Initial Purchasers and the filing by the Company of an Exchange
Offer Registration Statement (the "Registration Statement") in connection with
an Exchange Offer to be effected pursuant to the Registration Rights Agreement
(the "Registration Rights Agreement"), dated March ___, 1998 between the Company
and the Initial Purchasers. This opinion is furnished to you pursuant to Section
3(f)(B) of the Registration Rights Agreement. Unless otherwise defined herein,
capitalized terms used in this opinion that are defined in the Registration
Rights Agreement are used herein as so defined.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. In rendering this opinion, as to
all matters of fact relevant to this opinion, we have assumed the completeness
and accuracy of, and are relying solely upon, the representations and warranties
of the Company set forth in the Purchase Agreement and the statements set forth
in certificates of public officials and officers of the Company, without making
any independent investigation or inquiry with respect to the completeness or
accuracy of such representations, warranties or statements, other than a review
of the certificate of incorporation, by-laws and relevant minute books of the
Company.
Based on and subject to the foregoing, we are of the opinion that:
1. The Exchange Offer Registration Statement and the Prospectus (other than
the financial statements, notes or schedules thereto and other financial data
and supplemental
26
schedules included or incorporated by reference therein or omitted therefrom and
the Form T-1, as to which such counsel need express no opinion), comply as to
form in all material respects with the requirements of the 1933 Act and the
applicable rules and regulations promulgated under the 1933 Act.
2. We have participated in the preparation of the Registration Statement
and the Prospectus and in the course thereof have had discussions with
representatives of the Underwriters, officers and other representatives of the
Company and Ernest & Young, the Company's independent public accountants, during
which the contents of the Registration Statement and the Prospectus were
discussed. We have not, however, independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus. Based on our participation as described above, nothing has come to
our attention that would lead us to believe that the Registration Statement
(except for financial statements and schedules and other financial data included
therein as to which we make no statement) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein, as to which
such counsel need make no statement), at the time the Prospectus was issued, at
the time any such amended or supplemented Prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits 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.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement, and may not be used for any other purpose or relied upon by any
person other than you. Except with our prior written consent, the opinions
herein expressed are not to be used, circulated, quoted or otherwise referred to
in connection with any transactions other than those contemplated by the
Registration Rights Agreement by or to any other person.
Very truly yours,
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