Exhibit 4.2
Execution Copy
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REGISTRATION RIGHTS AGREEMENT
Dated December 26, 2002
among
QWEST SERVICES CORPORATION
and
THE GUARANTORS NAMED HEREIN,
as Issuers,
and
BANK ONE TRUST COMPANY, N.A.,
as Trustee
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights "Agreement (this "Agreement") is dated as of
December 26, 2002, among QWEST SERVICES CORPORATION, a Colorado corporation (the
"Company"), QWEST COMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation
("QCII"), and QWEST CAPITAL FUNDING INC., a Colorado corporation ("QCF", and,
together with QCII, the "Guarantors"), and Bank One Trust Company, N.A. (the
"Trustee"). The Company and the Guarantors are hereinafter collectively referred
to as the "Issuers".
This Agreement is made as contemplated by the Offering Memorandum dated
November 19, 2002 (the "Offering Memorandum") pursuant to which, among other
things, QSC has agreed to exchange (the "Private Exchange") three series of
newly issued senior subordinated notes: 13.00% Senior Subordinated Notes due
2007; 13.50% Senior Subordinated Notes due 2010; and 14.00% Senior Subordinated
Notes due 2017 (collectively with the guarantees endorsed thereon, the
"Securities") for various series of outstanding senior notes and debentures of
QCF as provided in the Offering Memorandum. In order to induce the Holders (as
defined below) to participate in the Private Exchange, the Issuers have agreed
to provide the registration rights set forth in this Agreement for the benefit
of the Holders. The execution of this Agreement is a condition to the closing of
the Private Exchange.
In consideration of the foregoing, the parties hereto agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the Securities:
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 amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Additional Interest" shall have the meaning set forth in Section 2(d)
hereof.
"Affiliate" shall mean with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person; for purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or otherwise.
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"Application" shall have the meaning set forth in Section 5(a) hereof.
"Broker-Dealer Representatives" means each of Banc of America
Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS
Warburg LLC.
"Closing Date" shall mean the consummation of the Private Exchange
pursuant to the Offering Memorandum.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors and assigns.
"Effectiveness Target Date" shall have the meaning set forth in Section
2(d)(i) hereof.
"Exchange Date" shall have the meaning set forth in Section 2(a)(ii)
hereof.
"Exchange Offer" shall mean the exchange offer by the Issuers of
Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) 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, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean securities, including guarantees
attached thereto, issued by the Issuers under the Indenture containing terms
identical to the Securities (except that the Exchange Securities will not
contain restrictions on transfer and Additional Interest) and to be offered to
Holders of Securities in exchange for Securities pursuant to the Exchange Offer.
"Guarantors" shall have the meaning set forth in the Preamble.
"Holder" shall mean a holder of Registrable Securities, for so long as
such holder owns any Registrable Securities, and each of such holder's
successors, assigns and direct and indirect transferees who become registered
owners of Registrable Securities under the Indenture or who become beneficial
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owners of Registrable Securities, so long as in the case of beneficial owners,
such owners have so notified the Issuers in writing; provided that for purposes
of Sections 4 and 5 of this Agreement, the term "Holder" shall include
Participating Broker-Dealers.
"Indenture" shall mean the Indenture relating to the Securities dated
as of December 26, 2002 among the Company, the Guarantors and the Trustee,
pursuant to which the Securities are being issued, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Issuers or any of their Affiliates shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage or
amount.
"Offering Memorandum" shall have the meaning set forth in the preamble.
"Participant" shall have the meaning set forth in Section 5(a) hereof.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 4(a) hereof.
"Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, a corporation, an association, a joint
stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in the preamble.
"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 a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities 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 Securities" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities (i) when, in the
case of a Holder of such Securities who was entitled to participate in the
Exchange Offer, an Exchange Offer Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act and either
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(a) such Securities shall have been exchanged pursuant to the Exchange Offer for
Exchange Securities or (b) such Securities were not tendered by the Holder
thereof in the Exchange Offer, (ii) when a Shelf Registration Statement with
respect to such Securities shall have been declared effective under the 1933 Act
and such Securities shall have been disposed of pursuant to such Shelf
Registration Statement, (iii) when such Securities 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 are eligible to be sold without restriction
thereunder or (iv) when such Securities shall have ceased to be outstanding.
"Registration Default" shall have the meaning set forth in Section 2(g)
hereof.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Issuers with this Agreement, including,
without limitation: (i) all SEC, New York 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 one counsel for all
underwriters or Holders as a group in connection with blue sky qualification of
any of the Exchange Securities or Registrable Securities) within the United
States (x) where the Holders are located, in the case of the Exchange
Securities, or (y) as provided in Section 3(d) hereof, in the case of
Registrable Securities to be sold by a Holder pursuant to a Shelf Registration
Statement, (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, (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 the Issuers 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 (viii) the fees and disbursements of
the independent public accountants of the Issuers, including the expenses of any
special audits, agreed-upon procedures 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
out-of-pocket expenses incurred by the Holders and transfer taxes, if any,
relating to the sale or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of any
Issuer that covers any of the Exchange Securities or Registrable Securities
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.
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"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuers pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders whose Registrable Securities are
covered by such Shelf Registration Statement and the Issuers' issued and
outstanding securities possessing registration rights, if any, as of the date
hereof ) 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.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustee" shall mean the trustee with respect to the Securities under
the Indenture.
"Underwriters" shall have the meaning set forth in Section 3 hereof.
"Underwritten Offering" shall mean a registration in which Registrable
Securities 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, the Issuers shall file an Exchange Offer
Registration Statement covering the offer by the Issuers to the Holders to
exchange all of the Registrable Securities for Exchange Securities in a like
aggregate principal amount and to use their reasonable best efforts to cause the
Exchange Offer Registration Statement to be declared effective and to have such
Registration Statement remain effective until the closing of the Exchange Offer.
The Issuers shall commence the Exchange Offer as promptly as practicable after
the Exchange Offer Registration Statement has been declared effective by the SEC
and use their best efforts to have the Exchange Offer consummated not later than
the earlier of (1) 180 days after QCII recommences the filing of its annual and
quarterly reports in the form required to be filed by a registrant under the
1934 Act and (2) 360 days after the Closing Date (the "Exchange Period").
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The Issuers 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
Registration Rights Agreement and that all Registrable Securities
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
Date");
(iii) that any Registrable Security not tendered by a Holder who was
eligible to participate in the Exchange Offer will remain outstanding
and continue to accrue interest, but will not retain any rights under
this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Security, 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 Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business, New York City time, on the 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 Securities
delivered for exchange and a statement that such Holder is withdrawing
his election to have such Securities exchanged.
As soon as practicable after the Exchange Date, the Issuers shall:
(vi) accept for exchange Registrable Securities or portions thereof
validly tendered and not properly withdrawn pursuant to the Exchange
Offer; and
(vii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Issuers and issue, and cause the Trustee to
promptly authenticate and mail to each Holder, an Exchange Security
equal in principal amount to the principal amount of the Registrable
Securities surrendered by such Holder; provided that, in the case of
any Registrable Securities held in global form by a depositary,
authentication and delivery to such depositary of one or more Exchange
Securities in global form in an equivalent principal amount thereto for
the account of such Holders in accordance with the Indenture shall
satisfy such authentication and delivery requirement.
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Each Holder (including, without limitation, each Participating
Broker-Dealer (as defined)) who participates in the Exchange Offer will be
required to represent to the Issuers, in writing (which may be contained in the
applicable letter of transmittal) that: (1) any Exchange Securities acquired in
exchange for Registrable Securities tendered are being acquired in the ordinary
course of business of the Person receiving such Exchange Securities, whether or
not such recipient is a Holder of Registrable Securities, (2) at the time of the
commencement of the Exchange Offer, neither such Holder nor, to the actual
knowledge of such Holder, any other Person receiving Exchange Securities from
such Holder has an arrangement or understanding with any Person to participate
in the distribution of the Exchange Securities in violation of the provisions of
the 1933 Act, (3) the Holder is not an Affiliate of any Issuer or, if it is an
Affiliate, it will comply with the registration and prospectus delivery
requirements of the 1933 Act to the extent applicable, (4) if such Holder is not
a Participating Broker-Dealer, that it has not engaged in, and does not intend
to engage in, the distribution of Exchange Securities, (5) if such Holder is a
Participating Broker-Dealer, such Holder acquired the Registrable Securities as
a result of market-making activities or other trading activities and that it
will comply with the applicable provisions of the 1933 Act with respect to
resale of any Exchange Securities and (6) such Holder has full power and
authority to transfer the Registrable Securities in exchange for the Exchange
Securities.
The Issuers 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 (1) that the Exchange Offer does not violate applicable law or any
applicable interpretation of the Staff of the SEC, (2) no action or proceeding
shall have been instituted or threatened in any court or by any governmental
agency with respect to the Exchange Offer and no material adverse development
shall have occurred with respect to any Issuer, (3) all governmental approvals
shall have been obtained, which approvals the Issuers deem necessary for the
consummation of the Exchange Offer, (4) the conditions precedent to the Issuers'
obligations under this Agreement shall have been fulfilled and (5) such other
conditions as shall be deemed necessary or appropriate by the Issuers in their
reasonable judgment.
(b) In the event that (i) the Issuers 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 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 during
the Exchange Period, (iii) any Holder of Securities notifies the Issuers after
the commencement of the Exchange Offer that due to a change in applicable law or
SEC policy it is not entitled to participate in the Exchange Offer, or (iv) if
any Holder that participates in the Exchange Offer (and tenders its Registrable
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Securities prior to the expiration thereof), does not receive Exchange
Securities on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the status of
such Holder as an Affiliate of any of the Issuers), the Issuers shall cause to
be filed as soon as practicable a Shelf Registration Statement providing for the
sale by the Holders of all of the Registrable Securities and shall use all their
reasonable best efforts to have such Shelf Registration Statement declared
effective by the SEC. In the event the Issuers are required to file a Shelf
Registration Statement solely as a result of the matters referred to in clause
(iii) of the preceding sentence, the Issuers shall file and use their reasonable
best efforts to have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all Registrable
Securities 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 Securities held by such other Holders
after completion of the Exchange Offer. The Issuers agree to use all their
reasonable best efforts to keep the Shelf Registration Statement continuously
effective until the expiration of the period referred to in Rule 144(k) (or any
successor rule that permits the Registrable Securities to be eligible for resale
without registration and without being subject to volume restrictions, but not
Rule 144A) with respect to the Registrable Securities or such shorter period
that will terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement. The Issuers 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 the Issuers 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 all their reasonable
best efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Issuers agree to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) The Issuers 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 registration of such Holder's Registrable Securities pursuant to
the Exchange Offer Registration Statement or 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 effective, the
offering of Registrable Securities 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
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will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities 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 as set forth below, then, the annual
interest rate on the Securities will be increased (the "Additional Interest") as
follows:
(i) subject to Sections 2(f) and 2(g) if (A) the Issuers have
not exchanged Exchange Securities for all Securities validly tendered
in accordance with the terms of the Exchange Offer on or prior to the
end of the Exchange Period, (B) if applicable, the Shelf Registration
Statement has not been declared effective by the SEC on or prior to the
date specified herein for such effectiveness (the "Effectiveness Target
Date") or (C) if applicable, the Shelf Registration Statement is filed
and declared effective prior to the Effectiveness Target Date but shall
thereafter cease to be effective or usable in connection with the
Exchange Offer (as a result of an order suspending the effectiveness of
the Shelf Registration Statement or otherwise) (each such event
referred to in clauses (A) through (C), a "Registration Default"), then
Additional Interest shall accrue on the principal amount of the
Registrable Securities at a rate of 0.25% per annum for the first 90
days commencing (x) at the end of the Exchange Period, in the case of
(A) above, (y) on the Effectiveness Target Date in the case of (B)
above, or (z) on the day such Shelf Registration Statement ceases to be
effective in the case of (C) above, and such Additional Interest rate
shall increase, by an additional 0.25% per annum with respect to each
subsequent 90-day period, up to a maximum amount of Additional Interest
of 0.50% per annum, from and including the date on which any such
Registration Default shall occur to, but excluding, the earlier of (1)
the date on which all Registration Defaults have been cured or (2) the
date on which all the Securities and Exchange Securities otherwise
become freely transferable by Holders other than Affiliates of the
Issuers without further registration under the 1933 Act (it being
understood and agreed that, notwithstanding any provision to the
contrary, so long as any Securities not registered under an Exchange
Offer Registration Statement are then covered by an effective Shelf
Registration Statement, no Additional Interest shall accrue on such
Securities);
provided, however, that upon the exchange of Exchange Securities for all
Securities tendered (in the case of clause (i)(A) above), upon the effectiveness
of the Shelf Registration Statement (in the case of clause (i)(B) above) or upon
the effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (i)(C) above), Additional Interest on the
Securities as a result of such clause (or the relevant subclause thereof), as
the case may be, shall cease to accrue; provided, further, however, that in the
case of clauses (i)(B) and (i)(C) above, it is expressly understood that
Additional Interest should be payable only with respect to the Registrable
Securities so requested to be registered pursuant to Section 2(b)(iii) hereof.
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Notwithstanding the foregoing, (1) the amount of Additional Interest payable
shall not increase because more than one Registration Default has occurred and
is pending and (2) a Holder of Registrable Securities or Exchange Securities who
is not entitled to the benefits of the Shelf Registration Statement (i.e., such
Holder has not elected to include information) shall not be entitled to
Additional Interest with respect to a Registration Default that pertains to the
Shelf Registration Statement.
(e) Without limiting the remedies available to the Holders, the
Issuers acknowledge that any failure by the Issuers to comply with their
obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to 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, any Holder may obtain such relief as may
be required to specifically enforce the Issuers' obligations under Section 2(a)
and Section 2(b) hereof.
(f) No Holder of Registrable Securities may include any of its
Registrable Securities in any Shelf Registration unless and until such Holder
furnishes to the Issuers, in writing within 15 days after receipt of a request
therefor, the information with respect to such Holder specified in Regulation
S-K under the 1933 Act and any other applicable rules, regulations or policies
of the SEC for use in connection with any Shelf Registration or Prospectus
included therein, on a form to be provided by the Issuers. No Holder of
Registrable Securities shall be entitled to Additional Interest pursuant to
Section 2(d) hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to furnish promptly to the Issuers
additional information to be disclosed so that the information previously
furnished to the Issuers by such Holder does not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(g) The Issuers may delay the filing or the effectiveness of an
Exchange Offer Registration Statement or a Shelf Registration Statement for a
period of up to 30 days during any 90 day period if (i) such Registration
Default under Section 2(d)(i)(C) hereof occurs because of the filing of a
post-effective amendment to such Registration Statement to incorporate annual
audited financial information with respect to the Issuers where such
post-effective amendment is not yet effective and needs to be declared effective
to permit Holders to use the related Prospectus, (ii) such Registration Default
occurs because of the occurrence of other material events or developments with
respect to the Issuers that would need to be described in such Registration
Statement or the related Prospectus, and the effectiveness of such Registration
Statement is reasonably required to be suspended while such Registration
Statement and related Prospectus are amended or supplemented to reflect such
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events or developments, (iii) such Registration Default results from the
suspension of the effectiveness of such Registration Statement because of the
existence of material events or developments with respect to the Issuers or any
of their Affiliates, the disclosure of which the Issuers determine in good faith
would have a material adverse effect on the business, operations or prospects of
the Issuers, or (iv) such Registration Default results from the suspension of
the effectiveness of such Registration Statement because the Issuers do not wish
to disclose publicly a pending material business transaction that has not yet
been publicly disclosed; provided, however, that any delay period with respect
to Registration Defaults arising under this Section 2(g) will not alter the
obligations of the Issuers to pay Additional Interest with respect to a
Registration Default.
(h) Additional Interest due on the Securities pursuant to Section
2(d) hereof will be payable in cash semiannually in arrears in the same interest
payment dates as the Securities, commencing with the first interest payment date
occurring after any such Additional Interest commences to accrue.
3. Registration Procedures.
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In connection with the obligations of the Issuers with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Issuers shall:
(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
the Issuers and (y) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Securities 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 commercially
reasonable 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, except for
such periods as to which Additional Interest does not accrue pursuant to
Section 2(g) hereof, cause each Prospectus to be supplemented by any
prospectus supplement required by applicable law 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 Securities or Exchange Securities;
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(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Holders and to each Underwriter
of an Underwritten Offering of Registrable Securities, 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
Securities; and the Issuers 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 Securities and any such Underwriters
in connection with the offering and sale of the Registrable Securities
covered by and in the manner described in such Prospectus or any amendment
or supplement thereto in accordance with applicable law;
(d) use their commercially reasonable efforts to register or qualify
the Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in writing by
the time the applicable Registration Statement is declared effective by the
SEC, to cooperate with such Holders in connection with any filings required
to be made with the New York Stock Exchange and 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 Securities
owned by such Holder; provided, however, that no Issuer 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 so
subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities and counsel for the Holders 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 Securities covered thereby, the representations and
warranties of the Issuers 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
the Issuers receive any notification with respect to the suspension of the
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qualification of the Registrable Securities 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 the Issuers that a post-effective amendment to a Registration Statement
would be appropriate except, in the case of clauses (iv), (v) and (vi),
with respect to any event, development or transaction permitted to be kept
confidential without the accrual of Additional Interest under Section 2(g)
hereof, the Issuers shall not be required to describe such event,
development or transaction in the written notice provided;
(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 Securities, 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 Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and enable such Registrable Securities
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 one business day prior to the closing of any
sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, as promptly as practicable
prepare and file with the SEC 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
Securities, 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; the Issuers 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 the Issuers have amended or supplemented the Prospectus to
correct such misstatement or omission and expressly agree to maintain the
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information contained in such notice confidential (except that such
information may be disclosed to its counsel) until it has been publicly
disclosed by the Issuers; notwithstanding the foregoing, the Issuers shall
not be required to amend or supplement a Registration Statement, any
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference if (i) an event occurs and is continuing
as a result of which the Shelf Registration, any related Prospectus or any
document incorporated or deemed to be incorporated therein by reference,
would, in the Issuers' good faith judgment, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading (with respect to such a Prospectus
only, in the light of the circumstances under which they were made), and
(ii) (a) the Issuers determine in their good faith judgment that the
disclosure of such event at such time would have a material adverse effect
on the business, operations or prospects of the Issuers, or (b) the
disclosure otherwise relates to a pending material business transaction
that has not yet been publicly disclosed;
(j) in the case of a Shelf Registration Statement, 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 Holders and
their counsel and make such of the representatives of the Issuers as shall
be reasonably requested by 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 Holders and their counsel shall not have
previously been advised and furnished a copy or to which the Holders or
their counsel shall reasonably object on a timely basis, except for any
Registration Statement or amendment thereto or related Prospectus or
supplement thereto (a copy of which has been previously furnished as
provided in the preceding sentence) which counsel to the Issuers has
advised the Issuers in writing is required to be filed in order to comply
with applicable law;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the 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 Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
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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
commercially reasonable 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 upon written request by a representative of the Holders of the
Registrable Securities, 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 pertinent financial and other records, pertinent
documents and properties of the Issuers as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and
cause the respective officers, directors and employees of the Issuers to
supply all information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with their due diligence
responsibilities under a Shelf Registration Statement; provided that each
such representative, Underwriter, attorney or accountant shall agree in
writing that it will keep such information confidential and that it will
not disclose any of the information that the Issuers determine, in good
faith, to be confidential and notifies them in writing are confidential
unless (i) the disclosure of such information is necessary to avoid or
correct a material misstatement or material omission in an effective
Registration Statement or Prospectus, (ii) the release of such information
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in has been made generally available
to the public other than by any of such persons or an Affiliate of any such
persons; provided, however, that prior notice shall be provided as soon as
practicable to the Issuers of the potential disclosure of any information
by such person pursuant to clause (i) or (ii) of this sentence in order to
permit the Issuers to obtain a protective order (or waive the provisions of
this paragraph (m);
(n) if reasonably requested by any Holder of Registrable Securities
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 the Issuers have received
notification of the matters to be incorporated in such filing;
(o) in the case of an Underwritten Offering pursuant to 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 Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities and
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in such connection, (i) to the extent possible, make such representations
and warranties to the Holders and any Underwriters of such Registrable
Securities with respect to the business of either of the Issuers 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 in writing
if and when requested, (ii) obtain opinions of counsel to the Issuers
(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 Securities, covering the matters customarily covered in
opinions requested in underwritten offerings, (iii) obtain "cold comfort"
letters from the independent certified public accountants of the Issuers
(and, if necessary, any other certified public accountant of any subsidiary
of the Issuers, or of any business acquired by any of the Issuers 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 Securities, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings, (iv) if an underwriting
agreement is entered into, include in such underwriting agreement
indemnification provisions and procedures no less favorable to the selling
Holders and underwriters, if any, than those set forth in Section 5 hereof
(or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Securities covered by
such Registration Statement and the underwriters (if any), and (v) deliver
such documents and certificates as may be reasonably requested by the
Underwriters, and which are customarily delivered in underwritten
offerings, to evidence the continued validity of the representations and
warranties of the Issuers made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in an underwriting
agreement; and
(p) in the case of a Shelf Registration pursuant to Section
2(b)(iii), cause to be delivered a "cold comfort" letter with respect to
the Prospectus in the form existing on the Exchange Date and with respect
to each subsequent amendment or supplement, if any, effected during the
period ending on the 180th day following the Exchange Date (as such period
may be extended pursuant to the penultimate paragraph of Section 3 of this
Agreement).
In the case of a Shelf Registration Statement, the Issuers may require
each Holder of Registrable Securities to furnish to the Issuers such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Issuers may from time to time reasonably request
in writing. The Issuers may exclude from such registration the Registrable
Securities of any seller so long as such seller fails to furnish such
information within a reasonable time after receiving such request. Each seller
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as to which any Shelf Registration is being effected agrees to furnish promptly
to the Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Issuers of the happening of any event of the
kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities 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 the Issuers, such
Holder will deliver to the Issuers (at their expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. If the Issuers shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement, the
Issuers 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 Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities 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 Securities 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 Securities for its own account in the
Exchange Offer in exchange for Securities 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 Securities.
The Issuers 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 Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities 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 Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.
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(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Issuers 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 one or more Participating Broker-Dealers as
provided in clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above;
provided that:
(i) the Issuers shall not be required to keep the Exchange Offer
Registration Statement effective, as would otherwise be contemplated by
Section 2(b) for a period exceeding 90 days after the date on which
such Exchange Offer Registration Statement is declared effective (as
such period may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement);
(ii) the Issuers 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), for a period exceeding
90 days after the date on which such Exchange Offer Registration
Statement is declared effective (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 the Issuers
to deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 4; and
(iii) 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 in writing to the Issuers by one
or more broker-dealers who certify to the Issuers 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 to an Exchange
Offer Registration, the Issuers shall be obligated (x) to deal only
with the Broker-Dealer Representatives and (y) to pay the fees and
expenses of only one counsel representing the Participating
Broker-Dealers.
5. Indemnification and Contribution.
--------------------------------
(a) Each of the Issuers, jointly and severally, hereby agree to
indemnify and hold harmless each Holder of Registrable Securities and each
Participating Broker-Dealer selling Exchange Securities during the applicable
period, and each Person, if any, who controls such Person or its affiliates
-18-
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
(each, a "Participant") from and against any and all losses, claims, damages,
liabilities or expenses (whether direct or indirect, in contract, tort or
otherwise) whatsoever, as incurred (including the cost of any investigation or
preparation) arising out of or based upon:
(i) any untrue statement or alleged untrue statement of a material
fact made by any Issuer contained in any application or any other
document or any amendment or supplement thereto executed by any Issuer
based upon written information furnished by or on behalf of any Issuer
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with the SEC or any
securities association or securities exchange (each, an "Application");
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if any of the Issuers shall
have furnished any amendments or supplements thereto) or any
preliminary prospectus; or
(iii) the omission or alleged omission to state, in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if any of the Issuers shall have furnished any amendments
or supplements thereto) or any preliminary prospectus or any
Application or any other document or any amendment or supplement
thereto, a material fact or necessary to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading;
provided, however, the Issuers will not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if any of the Issuers shall have
furnished any amendments or supplements thereto) or any preliminary prospectus
or any amendment or supplement thereto of a material fact necessary in order to
make the statements made therein, in the light of the circumstances under with
they were made, not misleading, if in any case such statement or omission
relates to such Participant and was made in reliance upon and in conformity with
information furnished in writing to the Issuers by such Participant expressly
for use therein. The indemnity provided for in this Section 5 will be in
addition to any liability that the Issuers may otherwise have to the indemnified
parties. No Issuer shall be liable under this Section 5 for any settlement of
any claim or action effected without its prior written consent, which shall not
be unreasonably withheld. No Participant shall, without the prior written
consent of an Issuer, effect any settlement or compromise of any pending or
threatened proceeding in respect of which such Issuer is or could have been a
party, or indemnity could have been sought hereunder by such Issuer, unless such
settlement (A) includes an unconditional release of such Issuer, from all
liability in any way related to or arising out of such litigation or proceeding
-20-
and (B) does not impose any actual or potential liability or any other
obligation upon any Issuer and does not contain any factual or legal admission
of fault, culpability or a failure to act by or with respect to any Issuer.
Each Participant, severally and not jointly, agrees to hold the Issuers
harmless and to indemnify the Issuers (including any of their respective
affiliated companies and any director, officer, agent or employee of the Issuers
or any such affiliated company) and any director, officer, or other person
controlling (within the meaning of Section 20(a) of the 1934 Act) the Issuers
(including any of the Issuers' affiliated companies) from and against any and
all losses, claims, damages, liabilities or expenses (whether direct or
indirect, in contract, tort or otherwise) whatsoever, as incurred (including the
cost of any investigation and preparation) arising out of or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus, or (ii) the omission or the alleged omission to
state therein a material fact necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission relates to such
Participant and was made in reliance upon and in conformity with information
furnished in writing by such Participant, expressly for use therein. The
indemnity provided for in this Section 5 will be in addition to any liability
that the Participants may otherwise have to the indemnified parties. The
Participants shall not be liable under this Section 5 for any settlement of any
claim or action effected without their consent, which shall not be unreasonably
withheld. The Issuers shall not, without the prior written consent of such
Participant, effect any settlement or compromise of any pending or threatened
proceeding in respect of which such Participant is or could have been a party,
or indemnity could have been sought hereunder by such Participant, unless such
settlement (A) includes an unconditional release of such Participant, from all
liability in any way related to or arising out of such litigation or proceeding
and (B) does not impose any actual or potential liability or any other
obligation upon any such Participant and does not contain any factual or legal
admission of fault, culpability or a failure to act by or with respect to any
such Participant.
If a claim is made against any indemnified party as to which such
indemnified party may seek indemnity under this Section 5, such indemnified
person shall notify the indemnifying party promptly after any written assertion
of such claim threatening to institute an action or proceeding with respect
thereto and shall notify the indemnifying party promptly of any action commenced
against such indemnified party within a reasonable time after such indemnified
party shall have been served with a summons or other first legal process giving
information as to the nature and basis of the claim. Failure to so notify the
indemnifying party shall not, however, relieve the indemnifying party from any
liability which it may have on account of the indemnity under this Section 5,
except to the extent such failure results in the forfeiture by the indemnifying
party of material rights and defenses. The indemnifying party shall have the
-21-
right to assume the defense of any such litigation or proceeding, including the
engagement of counsel reasonably satisfactory to the indemnified party. In any
such litigation or proceeding the defense of which the indemnifying party shall
have so assumed, any indemnified party shall have the right to participate in
such litigation or proceeding and 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 shall have failed promptly to assume the
defense thereof and employ counsel as provided above, or (ii) counsel to the
indemnified party reasonably determines that representation of such indemnified
party by the indemnifying party's counsel would present the indemnifying party's
counsel with a conflict of interest. It is understood that the indemnifying
party shall not, in connection with any litigation or proceeding or related
litigation or proceeding in the same jurisdiction, be liable under this
Agreement for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such separate firm shall
be designated by the indemnified party.
To the extent the indemnity provided for in the foregoing paragraphs of
this Section 5 is for any reason held unenforceable although otherwise
applicable in accordance with its terms with respect to an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party agrees to contribute to the amount paid or
payable by such indemnified person as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party, on the one hand, and by
such indemnified party, on the other, from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing clause (i), but also the relative
fault of the indemnifying party, on the one hand, and of such indemnified party,
on the other, in connection with the statements, actions or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Issuers, on the one hand, and by such Participant, on the other, shall be
deemed in the same proportion as the total proceeds from the offering (before
deducting expenses) of the Securities received by the Issuers bear to the total
net profit received by such Participant in connection with the sale of the
Securities. Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission or any other alleged
conduct relates to information provided by the Issuers or other conduct by the
Issuers (or their employees or other agents), on the one hand, or by such
Participants, on the other hand.
The parties agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of the previous paragraph.
Notwithstanding any other provision of the previous paragraph, no Participant
-22-
shall be obligated to make contributions hereunder that in the aggregate exceed
the total net profit received by such Participant in connection with the sale of
the Securities, less the aggregate amount of any damages that such Participant
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls a Participant within the meaning of Section 15
of 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Participants, and each director of any Issuer, each officer
of any Issuer and each person, if any, who controls any Issuer within the
meaning of Section 15 of 1933 Act or Section 20 of the 1934 Act, shall have the
same rights to contribution as the Issuers.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Issuers have not 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
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Issuers'
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 the Issuers have obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided, however, that no amendment, modification,
supplement, waiver or consent to any departure from the provisions of Section 5
hereof shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Securities may be given by Holders of at least a majority
in aggregate principal amount of the Registrable Securities being sold pursuant
to such Registration Statement.
(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
the Issuers by means of a notice given in accordance with the provisions of this
-23-
Section 6(c); (ii) if to the Issuers, initially at the Issuers' 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 (iii) if to
the Trustee, initially at the Trustee'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 Securities
in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof. The Trustee (in its capacity as
Trustee under the Indenture or acting on behalf of the Holders pursuant to this
Agreement) shall have no liability or obligation to either (i) the Issuers 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 or (ii) any
Holder with respect to any failure by the Issuers to comply with, or any breach
by the Issuers of, any of the obligations of the Issuers under this Agreement.
(e) Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes and replaces all other prior agreements, written or oral, among the
parties hereto with respect to the subject matter hereof.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuers, on the one
hand, and the Trustee, on the other hand, and 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.
-24-
(g) 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.
(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. The internal laws of the State of New York shall
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties hereto
without giving effect to conflicts of laws, rules or principles.
(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.
-25-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QWEST SERVICES CORPORATION
By: /s/ YASH A. RANA
-------------------------------------
Name: Yash A. Rana
Title: Vice President
QWEST COMMUNICATIONS INTERNATIONAL INC.
By: /s/ YASH A. RANA
-------------------------------------
Name: Yash A. Rana
Title: Vice President
QWEST CAPITAL FUNDING, INC.
By: /s/ YASH A. RANA
-------------------------------------
Name: Yash A. Rana
Title: Vice President
BANK ONE TRUST COMPANY, N.A.
By: /s/ SHARON MCGRATH
-------------------------------------
Name: Sharon McGrath
Title: Vice President