Exhibit 4.16
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REGISTRATION RIGHTS AGREEMENT
Dated March 11, 1997
among
ICG COMMUNICATIONS, INC.,
ICG HOLDINGS, INC.
and
MORGAN STANLEY & CO. INCORPORATED
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made and entered into March 11, 1997, among ICG HOLDINGS, INC., a
Colorado corporation ("Holdings"), ICG COMMUNICATIONS, INC., a
Delaware corporation ("ICG"), and MORGAN STANLEY & CO.
INCORPORATED (the "Placement Agent").
This Agreement is made pursuant to the Placement
Agreement dated March 6, 1997, among Holdings, ICG and the
Placement Agent (the "Placement Agreement"), which provides for
the sale by Holdings and ICG to the Placement Agent
of (i) 100,000 shares of Holdings' 14% Exchangeable Preferred
Stock, which will be mandatorily redeemable in 2008 (the
"Shares"), as set forth in the Second Amended and Restated
Articles of Incorporation of Holdings and will be exchangeable,
at the option of Holdings, in whole but not in part, into Senior
Subordinated Exchange Debentures due 2008 (the "Exchange
Debentures") to be issued, if applicable, pursuant to an
Indenture to be dated as of the date of such exchange (the
"Exchange Indenture") and (ii) $176,000,000 million aggregate
principal amount at maturity of 11 % Senior Discount Notes due
2007 of Holdings (the "Notes") issued pursuant to the provisions
of an Indenture to be dated as of the date hereof (the
"Indenture") among Holdings, ICG and Norwest Bank Colorado,
National Association, as trustee (in such capacity, the
"Trustee"). The obligations of Holdings under the Notes and the
Indenture, and under the Exchange Debentures and the Exchange
Indenture when issued, will be guaranteed by ICG on a senior
unsecured basis and a senior subordinated unsecured basis,
respectively, pursuant to the terms of the Indenture (the "Note
Guarantee") and the Exchange Indenture, respectively. In order
to induce the Placement Agent to enter into the Placement
Agreement, Holdings and ICG have agreed to provide to the
Placement Agent and its direct and indirect transferees the
registration rights with respect to the Notes and the Note
Guarantee set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Placement
Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions.
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As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as
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amended from time to time.
"1934 Act" shall mean the Securities Exchange Act of
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1934, as amended from time to time.
"Accreted Value" shall have the meaning set forth in
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the Indenture.
"Closing Date" hall mean the Closing Date as defined in
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the Placement Agreement.
"Exchange Offer" shall mean the exchange offer by
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Holdings of Exchange Notes for Registrable Notes pursuant to
Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration
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under the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an
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exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form) and all amendments
and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Exchange Notes" shall mean securities issued by
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Holdings and guaranteed by ICG under the Indenture
containing terms identical to the Notes (except that
(i) interest thereon shall accrue from the last date on
which interest was paid on the Notes or, if no such interest
has been paid, from March 15, 2002 and (ii) the Exchange
Notes will not provide for an increase in the rate of
interest and will not contain terms with respect to transfer
restrictions) and to be offered to Holders of Notes in
exchange for Notes pursuant to the Exchange Offer.
"Holder" shall mean the Placement Agent, for so long as
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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;
provided that for purposes of Sections 4 and 5 of this
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Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Holdings" shall have the meaning set forth in the
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preamble and shall also include Holdings' successors.
"ICG" shall have the meaning set forth in the preamble
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and shall also include ICG's successors.
"Indenture" shall have the meaning set forth in the
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preamble.
"Majority Holders" shall mean the Holders of a majority
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of the aggregate principal amount of outstanding Registrable
Notes; provided that whenever the consent or approval of
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Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by Holdings or
any of its affiliates (as such term is defined in Rule 405
under the 1933 Act) (other than the Placement Agent or
subsequent holders of Registrable Notes if such subsequent
holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Notes) shall not be
counted in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"Person" shall mean an individual, partnership,
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corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Placement Agent" shall have the meaning set forth in
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the preamble.
"Placement Agreement" shall have the meaning set forth
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in the preamble.
"Prospectus" shall mean the prospectus included in a
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Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including a
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 such prospectus, and in each case
including all material incorporated by reference therein.
"Registrable Notes" shall mean the Notes; provided,
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however, that the Notes shall cease to be Registrable Notes
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(i) when a Registration Statement with respect to such Notes
shall have been declared effective under the 1933 Act and
such Notes shall have been disposed of pursuant to such
Registration Statement, (ii) when such Notes have been sold
to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the 1933
Act or (iii) when such Notes shall have ceased to be
outstanding.
"Registration Expenses" shall mean any and all expenses
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incident to performance of or compliance by Holdings and ICG
with this Agreement, including without limitation: (i) all
SEC, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees
and expenses incurred in connection with compliance with
state securities or blue sky laws (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), (iii) all expenses of
any 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 rating
agency fees, if any, (v) all fees and disbursements relating
to the qualification of the Indenture under applicable
securities laws, (vi) the fees and disbursements of the
Trustee and its counsel, (vii) the fees and disbursements of
counsel for Holdings and ICG and, in the case of a Shelf
Registration Statement, the fees and disbursements of one
counsel for the Holders (which counsel shall be selected by
the Majority Holders and which counsel may also be counsel
for the Placement Agent) and (viii) the fees and
disbursements of the independent public accountants of
Holdings and ICG, including the expenses of any special
audits or "cold comfort" letters required by or incident to
such performance and compliance, but excluding fees and
expenses of counsel to the Underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of Registrable
Notes by a Holder.
"Registration Statement" shall mean any registration
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statement of Holdings and ICG that 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
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Commission.
"Shelf Registration" shall mean a registration effected
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pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
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registration statement of Holdings and ICG pursuant to the
provisions of Section 2(b) of this Agreement which covers
all of the Registrable 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.
"Trustee" shall have the meaning set forth in the
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preamble.
"Underwriters" shall have the meaning set forth in
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Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering"
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shall mean a registered offering in which Registrable Notes
are sold to an Underwriter for reoffering to the public.
2. Registration Under the 1933 Act.
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(a) To the extent not prohibited by any applicable law
or applicable interpretation of the Staff of the SEC, Holdings
and ICG shall cause to be filed an Exchange Offer Registration
Statement covering the offer by Holdings and ICG to the Holders
to exchange all of the Registrable Notes for Exchange Notes, to
have such Registration Statement declared effective by the SEC
and remain effective until the closing of the Exchange Offer and
to consummate the Exchange Offer on or prior to September 11,
1997. Holdings and ICG shall commence the Exchange Offer
promptly after the Exchange Offer Registration Statement has been
declared effective by the SEC and use their best efforts to have
the Exchange Offer consummated on or prior to September 11, 1997.
Holdings and ICG shall commence the Exchange Offer by mailing the
related exchange offer Prospectus and accompanying documents to
each Holder stating, in addition to such other disclosures as are
required by applicable law:
(i) that the Exchange Offer is being made pursuant to
this Agreement and that all Registrable Notes validly
tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall
be a period of at least 30 days from the date such notice is
mailed) (the "Exchange Dates");
(iii) that any Registrable Note not tendered will
remain outstanding and continue to accrete in value (until
March 15, 2002 and thereafter will accrue interest), but
will not retain any rights under this Agreement;
(iv) that Holders electing to have a Registrable Note
exchanged pursuant to the Exchange Offer will be required to
surrender such Registrable Note, together with the enclosed
letters of transmittal, to the institution and at the
address (located in the Borough of Manhattan, The City of
New York) specified in the notice prior to the close of
business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their
election, not later than the close of business on the last
Exchange Date, by sending to the institution and at the
address (located in the Borough of Manhattan, The City of
New York) specified in the notice 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 his election to have such Notes exchanged.
As soon as practicable after the last Exchange Date,
Holdings shall:
(i) accept for exchange Registrable Notes or portions
thereof tendered and not validly withdrawn pursuant to the
Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee
for cancellation all Registrable Notes or portions thereof
so accepted for exchange by Holdings and issue, and cause
the Trustee to promptly authenticate and mail to each
Holder, an Exchange Note equal in principal amount to the
principal amount of the Registrable Notes surrendered by
such Holder.
Holdings and ICG shall use their best efforts to complete the
Exchange Offer as provided above and shall comply with the
applicable requirements of the 1933 Act, the 1934 Act and other
applicable laws and regulations in connection with the Exchange
Offer. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer does not violate
applicable law or any applicable interpretation of the Staff of
the SEC. Holdings shall inform the Placement Agent of the names
and addresses of the Holders to whom the Exchange Offer is made,
and the Placement Agent shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate
the tender of Registrable Notes in the Exchange Offer.
(b) In the event that (i) Holdings and ICG determine
that the Exchange Offer Registration provided for in Section 2(a)
above is not available or may not be consummated as soon as
practicable after the last Exchange Date because it would violate
applicable law or the applicable interpretations of the Staff of
the SEC, (ii) the Exchange Offer is not for any other reason
consummated on or prior to September 11, 1997 or (iii) in the
opinion of counsel for the Placement Agent a Registration
Statement must be filed and a Prospectus must be delivered by the
Placement Agent in connection with any offering or sale of
Registrable Notes, Holdings and ICG shall use their best efforts
to cause to be filed as soon as practicable after such
determination, date or notice of such opinion of counsel is given
to Holdings and ICG, as the case may be, a Shelf Registration
Statement providing for the sale by the Holders of all of the
Registrable Notes and to have such Shelf Registration Statement
declared effective by the SEC. In the event Holdings and ICG are
required to file a Shelf Registration Statement solely as a
result of the matters referred to in clause (iii) of the
preceding sentence, Holdings and ICG shall file and have declared
effective by the SEC both an Exchange Offer Registration
Statement pursuant to Section 2(a) with respect to all
Registrable Notes and a Shelf Registration Statement (which may
be a combined Registration Statement with the Exchange Offer
Registration Statement) with respect to offers and sales of
Registrable Notes held by the Placement Agent after completion of
the Exchange Offer. Holdings and ICG agree to use their best
efforts to keep the Shelf Registration Statement continuously
effective until the period referred to in Rule 144(k) or until
all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement. Holdings and ICG further agree to supplement or amend
the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form
used by Holdings and ICG for such Shelf Registration Statement or
by the 1933 Act or by any other rules and regulations thereunder
for shelf registration or if reasonably requested by a Holder
with respect to information relating to such Holder, and to use
their best efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable
as soon as practicable thereafter. Holdings and ICG agree 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.
(c) Holdings and ICG shall pay all Registration
Expenses in connection with the registration pursuant to Section
2(a) or Section 2(b). 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.
(d) An Exchange Offer Registration Statement pursuant
to Section 2(a) hereof or a Shelf Registration Statement pursuant
to Section 2(b) 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
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effective, the offering of 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 Registrable Notes pursuant to
such Registration Statement may legally resume. As provided for
in the Indenture, in the event the Exchange Offer is not
consummated and the Shelf Registration Statement is not declared
effective on or prior to September 11, 1997, interest (in
addition to the accrual of original issue discount during the
period ending March 15, 2002 and in addition to the interest
otherwise due on the Notes after such date) will accrue, at an
annual rate of 0.5% of Accreted Value on the preceding semiannual
payment date, on the Notes from September 11, 1997, payable in
cash semiannually in arrears on each March 15 and September 15,
commencing March 15, 1998; provided that if a Shelf Registration
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Statement is required solely by the matters referred to in clause
(iii) of the first sentence of Section 2(b), such increase in
interest rate shall be payable only to the Placement Agent, with
respect to Notes held by it, and only with respect to any period
(after September 11, 1997) during which such Shelf Registration
Statement is not effective.
(e) Without limiting the remedies available to the
Placement Agent and the Holders, Holdings and ICG acknowledge
that any failure by Holdings and ICG to comply with their
respective obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Placement Agent
or the Holders for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the
Placement Agent or any Holder may obtain such relief as may be
required to specifically enforce Holdings' and ICG's obligations
under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
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In connection with the obligations of Holdings and ICG
with respect to the Registration Statements pursuant to
Section 2(a) and Section 2(b) hereof, Holdings and ICG shall as
expeditiously as possible:
(a) prepare and file with the SEC a Registration
Statement on the appropriate form under the 1933 Act, which
form (x) shall be selected by Holdings and ICG and
(y) shall, in the case of a Shelf Registration, be available
for the sale of the Registrable Notes by the selling Holders
thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and
include all financial statements required by the SEC to be
filed therewith, and use their best efforts to cause such
Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as
may be necessary 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 under the 1933 Act; to keep each Prospectus current
during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Notes or
Exchange Notes;
(c) in the case of a Shelf Registration, furnish to
each Holder of Registrable Notes, to counsel for the
Placement Agent, to counsel for the Holders 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, in order
to facilitate the public sale or other disposition of the
Registrable Notes; and Holdings and ICG consent to the use
of such Prospectus and any amendment or supplement thereto
in accordance with applicable law by each of the selling
Holders of Registrable Notes and any such Underwriters in
connection with the offering and sale of the Registrable
Notes covered by and in the manner described in such
Prospectus or any amendment or supplement thereto in
accordance with applicable law;
(d) use their best efforts to register or qualify, by
the time the applicable Registration Statement is declared
effective by the SEC, 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 shall reasonably request in
writing, to cooperate with such Holder in connection with
any filings required to be made with the National
Association of Securities Dealers, Inc. and do any and all
other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable
Notes owned by such Holder; provided, however, that neither
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Holdings nor ICG shall 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), (ii) file any general
consent to service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so
subject;
(e) in the case of a Shelf Registration, notify each
Holder of Registrable Notes, counsel for the Holders and
counsel for the Placement Agent promptly and, if requested
by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become
effective and when any post-effective amendment thereto has
been filed and becomes effective, (ii) of any request by the
SEC or any state securities authority for amendments and
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) 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 Holdings and
ICG 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 or if Holdings and ICG receive any notification
with respect to the suspension of the qualification of the
Registrable Notes for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the
happening of any event 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 and (vi) of any determination by Holdings and ICG
that a post-effective amendment to a Registration Statement
would be appropriate;
(f) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment and
provide immediate notice to each Holder of the withdrawal of
any such order;
(g) in the case of a Shelf Registration, furnish to
each Holder of Registrable Notes, without charge, at least
one conformed copy of each Registration Statement and any
post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate
with the selling Holders of Registrable Notes to facilitate
the timely preparation and delivery of 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 may reasonably request at least two business days
prior to the closing of any sale of Registrable Notes;
(i) in the case of a Shelf Registration, upon the
occurrence of any event contemplated by Section 3(e)(v)
hereof, use their best efforts to prepare a supplement or
post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by
reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable
Notes, such Prospectus will not contain 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.
Holdings and ICG agree to notify the Holders to suspend use
of the Prospectus as promptly as practicable after the
occurrence of such an event, and the Holders hereby agree to
suspend use of the Prospectus until Holdings and ICG have
amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) within a reasonable time prior to the filing of
any Registration Statement, any Prospectus, any amendment to
a Registration Statement or amendment or supplement to a
Prospectus or any document which is to be incorporated by
reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide
copies of such document to the Placement Agent and its
counsel (and, in the case of a Shelf Registration Statement,
the Holders and their counsel) and make such representatives
of Holdings and ICG as shall be reasonably requested by the
Placement Agent or its counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel)
available for discussion of such document, and shall not at
any time file or make any amendment to the Registration
Statement, any Prospectus or any amendment of or supplement
to a Registration Statement or a Prospectus or any document
which is to be incorporated by reference into a Registration
Statement or a Prospectus, of which the Placement Agent and
its counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) shall not have
previously been advised and furnished a copy or to which the
Placement Agent or its counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) shall
object, except for any amendment or supplement or document
(a copy of which has been previously furnished to the
Placement Agent and its counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel))
which counsel to Holdings and ICG shall advise Holdings and
ICG, in the form of a written legal opinion, is required in
order to comply with applicable law; the Placement Agent
agrees that, if it receives timely notice and drafts under
this clause (j), it will not take actions or make objections
pursuant to this clause (j) such that Holdings and ICG are
unable to comply with their obligations under Section 2(a);
(k) obtain a CUSIP number and, if applicable, a CINS
number, for all Exchange Notes or Registrable Notes, as the
case may be, not later than the first effective date of a
Registration Statement;
(l) cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), in
connection with the registration of the Exchange Notes or
Registrable Notes, as the case may be, 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
execute, and use their best efforts to cause 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;
(m) in the case of a Shelf Registration, make
available for inspection by a representative of the Holders
of the Registrable Notes, any Underwriter participating in
any disposition pursuant to such Shelf Registration
Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all
financial and other records, pertinent documents and
properties of Holdings and ICG, and cause the respective
officers, directors and employees of Holdings and ICG to
supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in
connection with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, use their
best efforts to cause all Registrable Notes to be listed on
any securities exchange or any automated quotation system on
which similar securities issued by Holdings and ICG are then
listed if requested by the Majority Holders, to the extent
such Registrable Notes satisfy applicable listing
requirements;
(o) use their best efforts to cause the Exchange Notes
or Registrable Notes, as the case may be, to be rated by two
nationally recognized statistical rating organizations (as
such term is defined in Rule 436(g)(2) under the 1933 Act);
(p) if reasonably requested by any Holder of
Registrable Notes covered by a Registration Statement, (i)
promptly incorporate in a Prospectus supplement or post-
effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as
soon as Holdings and ICG have received notification of the
matters to be incorporated in such filing; and
(q) in the case of a Shelf Registration, enter into
such customary agreements and take all such other actions in
connection therewith (including those requested by the
Holders of a majority of the Registrable Notes being sold)
in order to expedite or facilitate the disposition of such
Registrable Notes including, but not limited to, an
Underwritten Offering and in such connection, (i) to the
extent possible, make such representations and warranties to
the Holders and any Underwriters of such Registrable Notes
with respect to the business of Holdings, ICG and their
subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated
by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to Holdings and
ICG (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Holders
and such Underwriters and their respective counsel)
addressed to each selling Holder and Underwriter of
Registrable Notes, covering the matters customarily covered
in opinions requested in underwritten offerings,
(iii) obtain "cold comfort" letters from the independent
certified public accountants of Holdings and ICG (and, if
applicable, any other certified public accountant of any
business acquired by Holdings or ICG for which financial
statements and financial data are or are required to be
included in the Registration Statement) addressed to each
selling Holder and Underwriter of Registrable Notes, such
letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in
connection with underwritten offerings, and (iv) deliver
such documents and certificates as may be reasonably
requested by the Holders of a majority in principal amount
of the Registrable Notes being sold or the Underwriters, and
which are customarily delivered in underwritten offerings,
to evidence the continued validity of the representations
and warranties of Holdings and ICG made pursuant to clause
(i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, Holdings
and ICG may require each Holder of Registrable Notes to furnish
to Holdings and ICG such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Notes as
Holdings and ICG 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 Holdings and
ICG of the happening of any event 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(i)
hereof, and, if so directed by Holdings and ICG, such Holder will
deliver to Holdings and ICG (at its expense) all copies in its
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. If Holdings
and ICG shall give any such notice to suspend the disposition of
Registrable Notes pursuant to a Registration Statement, Holdings
and ICG shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this
Agreement by the number of days during the period from and
including the date of the giving of such notice to and including
the date when the Holders shall have received copies of the
supplemented or amended Prospectus necessary to resume such
dispositions.
The Holders of Registrable Notes covered by a Shelf
Registration Statement who desire to do so may sell such
Registrable Notes in an Underwritten Offering. In any such
Underwritten Offering, the investment banker or investment
bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders
of the Registrable Notes included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
-------------------------------------------------
(a) The Staff of the SEC has taken the position that
any broker-dealer that receives Exchange Notes for its own
account in the Exchange Offer in exchange for Notes that were
acquired by such broker-dealer as a result of market-making or
other trading activities (a "Participating Broker-Dealer"), may
be deemed to be an "underwriter" within the meaning of the 1933
Act and must deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such Exchange Notes.
Holdings and ICG understand that it is the Staff's
position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing
a statement to the above effect and the means by which
Participating Broker-Dealers may resell the Exchange Notes,
without naming the Participating Broker-Dealers or specifying the
amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their
prospectus delivery obligation under the 1933 Act in connection
with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, Holdings and ICG agree that the
provisions of this Agreement as they relate to a Shelf
Registration shall also apply to an Exchange Offer Registration
to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by the Placement Agent or by one or
more Participating Broker-Dealers, in each case as provided in
clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Notes by Participating Broker-Dealers
consistent with the positions of the Staff recited in
Section 4(a) above; provided that:
--------
(i) Holdings and ICG shall not be required to amend or
supplement the Prospectus contained in the Exchange Offer
Registration Statement, as would otherwise be contemplated
by Section 3(i) of this Agreement, for a period exceeding 60
days after the last Exchange Date (as such period may be
extended pursuant to the penultimate paragraph of Section 3
of this Agreement) and Participating Broker-Dealers shall
not be authorized by Holdings and ICG to deliver and shall
not deliver such Prospectus after such period in connection
with the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration
procedures set forth in Section 3 of this Agreement to an
Exchange Offer Registration, to the extent not required by
the positions of the Staff of the SEC or the 1933 Act and
the rules and regulations thereunder, will be in conformity
with the reasonable request to Holdings and ICG by the
Placement Agent or with the reasonable request in writing to
Holdings and ICG by one or more broker-dealers who certify
to the Placement Agent, Holdings and ICG in writing that
they anticipate that they will be Participating Broker-
Dealers; and provided further that, in connection with such
-------- -------
application of the Shelf Registration procedures set forth
in Section 3 of this Agreement to an Exchange Offer
Registration, Holdings and ICG shall be obligated (x) to
deal only with one entity representing the Participating
Broker-Dealers, which shall be the Placement Agent unless it
elects not to act as such representative, (y) to pay the
fees and expenses of only one counsel representing the
Participating Broker-Dealers, which shall be counsel to the
Placement Agent unless such counsel elects not to so act and
(z) to cause to be delivered only one, if any, "cold
comfort" letter with respect to the Prospectus in the form
existing on the last Exchange Date and with respect to each
subsequent amendment or supplement, if any, effected during
the period specified in clause (i) above.
(c) The Placement Agent shall have no liability to
Holdings, ICG or any Holder with respect to any request that it
may make pursuant to Section 4(b) above.
5. Indemnification and Contribution.
--------------------------------
(a) Each of Holdings and ICG agrees, jointly and
severally, to indemnify and hold harmless the Placement Agent,
each Holder and each Person, if any, who controls the Placement
Agent or any Holder within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act, or is under common
control with, or is controlled by, the Placement Agent or any
Holder, from and against all losses, claims, damages and
liabilities (including, without limitation, any legal or other
expenses reasonably incurred by the Placement Agent, any Holder
or any such controlling or affiliated Person in connection with
defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment
thereto) pursuant to which Exchange Notes or Registrable Notes
were registered under the 1933 Act, including all documents
incorporated therein by reference, or caused by 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, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as
amended or supplemented if Holdings and ICG shall have furnished
any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to
make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Placement Agent
or any Holder furnished to Holdings and ICG in writing by the
Placement Agent or any selling Holder expressly for use therein.
In connection with any Underwritten Offering permitted by Section
3 of this Agreement, Holdings and ICG will also indemnify the
Underwriters, if any, selling brokers, dealers and similar
securities industry professionals participating in the
distribution, their officers and directors and each Person who
controls such Persons (within the meaning of the 1933 Act and the
1934 Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection
with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless Holdings, ICG, the Placement Agent
and the other selling Holders, and each of their respective
directors, officers who sign the Registration Statement and each
Person, if any, who controls Holdings, ICG, the Placement Agent
and any other selling Holder within the meaning of either Section
15 of the 1933 Act or Section 20 of the 1934 Act to the same
extent as the foregoing indemnity from Holdings and ICG to the
Placement Agent and the Holders, but only with reference to
information relating to such Holder furnished to Holdings and ICG
in writing by such Holder expressly for use in any Registration
Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in
respect of which indemnity may be sought pursuant to either
paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Placement Agent
and all Persons, if any, who control the Placement Agent within
the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act, (b) the fees and expenses of more than one separate
firm (in addition to any local counsel) for Holdings and ICG,
their directors, their officers who sign the Registration
Statement and each Person, if any, who controls Holdings or ICG
within the meaning of either such Section and (c) the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all Holders and all Persons, if any, who control any
Holders within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred.
In such case involving the Placement Agent and Persons who
control the Placement Agent, such firm shall be designated in
writing by the Placement Agent. In such case involving the
Holders and such Persons who control Holders, such firm shall be
designated in writing by the Majority Holders. In all other
cases, such firm shall be designated by ICG. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party for such fees and expenses of counsel in
accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in paragraph
(a) or paragraph (b) of this Section 4 is unavailable to an
indemnified party or insufficient in respect of any losses,
claims, damages or liabilities, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to
reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative
fault of Holdings, ICG and the Holders 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 Holdings and ICG or by the Holders and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section
5(d) are several in proportion to the respective principal amount
of Registrable Notes of such Holder that were registered pursuant
to a Registration Statement.
(e) Holdings, ICG and each Holder agree that it would
not be just or equitable if contribution pursuant to this Section
5 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 paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph
(d) above 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. Notwithstanding the
provisions of this Section 5, no Holder shall be required to
contribute any amount in excess of the amount by which the total
price at which Registrable Notes were sold by such Holder exceeds
the amount of any damages that such Holder has 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.
The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) Survival. The indemnity and contribution
--------
provisions contained in this Section 5 shall remain operative and
in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of
the Placement Agent, any Holder or any person controlling the
Placement Agent or any Holder, or by or on behalf of Holdings,
ICG, their officers or directors or any Person controlling
Holdings or ICG, (iii) acceptance of any of the Exchange Notes
and (iv) any sale of Registrable Notes pursuant to a Shelf
Registration Statement.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. Neither Holdings nor
--------------------------
ICG has entered into, and on or after the date of this Agreement
will not enter into, any agreement which is inconsistent with the
rights granted to the Holders of Registrable Notes 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 Holdings' or ICG's other issued and outstanding
securities under any such agreements.
(b) 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
Holdings and ICG have 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 consent; provided, however,
-------- -------
that no amendment, modification, supplement, waiver or consents
to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Notes unless
consented to in writing by such Holder.
(c) 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 (i) if to a Holder,
at the most current address given by such Holder to Holdings and
ICG by means of a notice given in accordance with the provisions
of this Section 6(c), which address initially is, with respect to
the Placement Agent, the address set forth in the Placement
Agreement; (ii) if to Holdings, initially at Holdings' address
set forth in the Indenture and thereafter at such other address,
notice of which is given in accordance with the provisions of
this Section 6(c); and if to ICG, initially at ICG's address set
forth in the Indenture and thereafter at such other address,
notice of which is given in accordance with the provisions of
this Section 6(c).
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 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, at the address specified in the
Indenture.
(d) Successors 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
Placement Agreement. 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 and such person shall be entitled to
receive the benefits hereof. The Placement Agent (solely in its
capacity as Placement Agent) shall have no liability or
obligation to Holdings or ICG with respect to any failure by a
Holder to comply with, or any breach by any Holder of, any of the
obligations of such Holder under this Agreement.
(e) Purchases and Sales of Notes. Holdings and ICG
----------------------------
shall not, and shall use their best efforts to cause their
affiliates (as defined in Rule 405 under the 1933 Act) not to,
purchase and then resell or otherwise transfer any Notes.
(f) Third Party Beneficiary. The Holders shall be
-----------------------
third party beneficiaries to the agreements made hereunder
between Holdings and ICG, on the one hand, and the Placement
Agent, on the other hand, and each Holder shall have the right to
enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed
------------
manually or by facsimile in any number of 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.
(h) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) Governing Law; Submission to Jurisdiction. The
-----------------------------------------
laws of the State of New York applicable to contracts to be
performed entirely in that state shall govern this Agreement.
Each of ICG and Holdings agrees to submit to the jurisdiction of
any federal or state court located in the City of New York in any
suit, action or proceeding with respect to this Agreement and for
actions brought under the U.S. federal or state securities laws
brought in any such court.
(j) 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.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
ICG HOLDINGS, INC.
By /s/ James D. Grenfell
----------------------------------
Name: James D. Grenfell
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
ICG COMMUNICATIONS, INC.
By /s/ James D. Grenfell
---------------------------------
Name: James D. Grenfell
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO.
INCORPORATED
By /s/ James B. Avery
------------------------------
Name: James B. Avery
Title: Vice President