REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT")
which shall be effective as of September __, 1998, is made and entered into by
and among Communication Telesystems International d.b.a. WorldxChange
Communications, a California corporation (the "COMPANY"), and the investors
whose names and addresses are set forth on the signature pages hereto (the
"INVESTORS").
RECITALS
WHEREAS, the Company, Gold & Appel Transfer S.A., Roger B. Abbott,
Rosalind Abbott and Edward S. Soren are parties to that certain Stock Purchase
Agreement, dated of even date herewith, and the Company, Atocha, L.P., Roger B.
Abbott, Rosalind Abbott and Edward S. Soren are parties to a separate Stock
Purchase Agreement, also dated of even date herewith (together, the "PURCHASE
AGREEMENTS"), pursuant to which the Investors propose to purchase an aggregate
of 2,488,886 shares of the Common Stock of the Company (the "SECURITIES"); and
WHEREAS, in order to induce the Investors to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement with respect to the "REGISTRABLE SECURITIES" (as such term is
defined in Section 1);
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained, the parties, intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
(a) the term "BONA FIDE PUBLIC OFFERING" means an underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended ("1933 ACT") covering the offer and sale
of Common Stock of the Company in which aggregate proceeds to the Company
and the selling shareholders exceed $25,000,000;
(b) the term "COMMON STOCK" means the Company's authorized
voting common stock, no par value, and any class of securities issued in
exchange for the Common Stock or into which the Common Stock is
converted;
(c) the term "HOLDER" means any Investor or any permitted
transferee of Registrable Securities pursuant to the Purchase Agreement in
accordance with Section 10 hereof;
(d) the term "INITIATING HOLDERS" means the Holders of 30% or
more of the Registrable Securities then outstanding;
(e) the term "REGISTRABLE SECURITIES" means: (i) the Securities,
and (ii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of such Securities;
(f) the term "REGISTRATION EXPENSES" means all expenses incurred
by the Company in complying with Sections 2 and 3 hereof, including,
without limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel for the Company, accountants' fees and
expenses, and blue sky fees and expenses;
(g) the terms "REGISTER," "REGISTERED" and "REGISTRATION" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with 1933 Act, and the declaration or
ordering of the effectiveness of such registration statement or document by
the Securities and Exchange Commission;
(h) the term "SELLING EXPENSES" means all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities,
the fees and disbursements of any counsel engaged by the Holders and any
other expenses incurred by the Holders in connection with the registration
and sale of the Registrable Securities;
(i) the number of shares of Registrable Securities "THEN
OUTSTANDING" shall be the number of shares of Common Stock outstanding
which are, and the number of shares of Common Stock which upon issuance of
then exercisable or convertible securities will be, Registrable Securities;
and
(j) the term "THIRD PARTY HOLDER" means any person other than a
Holder with registration rights with respect to securities of the Company.
2. DEMAND REGISTRATION RIGHTS.
(a) If the Company shall receive, at any time during the
one-year period commencing three years after the date of this Agreement
(and in such additional years as may be required by Section 2(d)), a
written request from the Initiating Holders with respect to the
Registrable Securities that the Company file a registration statement
under the 1933 Act covering the registration of Registrable Securities
having an estimated aggregate initial public offering price of not less
than $5,000,000, provided that a Bona Fide Public Offering has not been
commenced by the Company, the Company shall promptly give written notice
of such request to all Holders and shall use reasonable efforts to effect
the registration under the 1933 Act of all such Registrable Securities
which the Initiating Holders request to be registered, together with all
of the Registrable Securities of any other Holder or Holders who so
request by notice to the Company which is given within 10 days after
receipt of the notice from the
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Company described above. Notwithstanding the foregoing, if the Company
shall furnish to the Initiating Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company for a
registration statement to be filed in the near future, then the Company's
obligation to use its reasonable efforts to file a registration statement
shall be deferred for a period not to exceed 90 days (provided, however,
that the Company may make only one such deferral with respect to each
demand registration). Securities of the Company to be sold by the Company
or by a Third Party Holder may be included in such registration statement,
subject to the provisions of Section 2(c) below.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request
made pursuant to this Section 2 and the Company shall include such
information in the written notice referred to in Section 2(a). In such
event, the right of any Holder to include its Registrable Securities in
such registration shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting (unless otherwise mutually agreed by a
majority in interest of the Initiating Holders, by the underwriter, by the
Company, and by such Holder) to the extent provided herein.
(c) All Holders and Third Party Holders proposing to distribute
their securities through such underwriting (together with the Company as
provided in Section 4(e)) shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Company, or if no underwriter is
selected by the Company, by a majority in interest of the Initiating
Holders and reasonably acceptable to the Company. Notwithstanding any other
provisions of this Section 2, if the underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, the Initiating Holders shall so advise
all Holders of Registrable Securities, and the number of shares of
Registrable Securities that may be included in the registration and
underwriting by the Holders shall be allocated among all Holders thereof,
all Third Party Holders, and the Company, pro rata based on the number of
shares for which registration was requested. No Registrable Securities
excluded from the underwriting by reason of the marketing limitation shall
be included in such registration. If any Holder of Registrable Securities
disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the underwriter and,
unless otherwise provided, the Initiating Holders.
(d) The Company is obligated to effect only one demand
registration for the Holders pursuant to this Section 2; provided, however,
that if any Registrable Securities of a Holder requested to be registered
(regardless of whether a Holder withdraws such Registrable Securities
pursuant to Section 2(c) or Section 6) are excluded by the underwriter in a
demand registration pursuant to
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Section 2(c) or in a "piggyback" registration pursuant to Section 6 (which
excluded Registrable Securities are referred to herein as the "EXCLUDED
SECURITIES"), then the Company, upon the demand of the Initiating Holders
three or more years after the date of this Agreement, shall be obligated to
effect one additional demand registration under this Section 2 each year
with respect to the Excluded Securities of such Holder, until such time as
(i) such Holder may freely (except as may be restricted by Rule 144 under
the 1933 Act) sell all of the Excluded Securities without registration
under the 1933 Act within the then following six months and (ii) the
Excluded Securities are listed on a securities exchange or qualified for
trading on an over-the-counter system selected by the Company.
(e) The demand registration rights provided by the Company to
any Holder pursuant to Section 2 of this Agreement shall immediately
terminate upon the closing of a Bona Fide Public Offering by the Company.
(f) A registration requested pursuant to this Section 2 shall
not be deemed to have been effected (a) unless a registration statement
with respect thereto has become effective or (b) if after it has become
effective, the effectiveness of such registration statement is terminated
or suspended by a stop order, injunction or other order of the SEC or other
governmental agency or court, unless such order, injunction or other order
is lifted or stayed within 30 days of the issuance of such stop order,
injunction or other order. The Company shall use its reasonable best
efforts to keep such registration statement effective for up to 60 days
after such registration statement has become effective.
3. PIGGY-BACK REGISTRATION RIGHTS. If at any time the Company proposes
to register (including for this purpose a registration effected by the Company
for shareholders other than the Holders) any of its securities under the 1933
Act in connection with the public offering of such securities solely for cash
(other than a registration form relating to: (a) a registration of a stock
option, stock purchase or compensation or incentive plan or of stock issued or
issuable pursuant to any such plan, or a dividend investment plan; (b) a
registration of securities proposed to be issued in exchange for securities or
assets of, or in connection with a merger or consolidation with, another
corporation; or (c) a registration of securities proposed to be issued in
exchange for other securities of the Company), the Company shall, each such
time, promptly give each Holder written notice of such registration together
with a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under applicable state securities laws. Upon the written
request of any Holder given within 30 days after receipt of such written notice
from the Company in accordance with Section 14, the Company shall (subject to
the provisions of Section 6 in the case of an underwritten offering) cause to be
registered under the 1933 Act all of the Registrable Securities that each such
Holder has requested to be registered; provided, however, in the event and to
the extent such a Holder may freely (except as may be restricted by Rule 144
under the 1933 Act) sell all of its Registrable Securities without registration
under the 1933 Act and the person acquiring the securities does not acquire
"restricted securities" within the meaning of Rule 144, the Company may elect
not to register such Registrable Securities.
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4. OBLIGATIONS OF THE COMPANY. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective;
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under the securities laws of such
jurisdictions as shall be necessary for the distribution of the securities
covered by the registration statement and such jurisdictions as the Holders
participating in the offering shall reasonably request, provided that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service
of process in any such jurisdiction, and further provided that (anything in
this Agreement to the contrary notwithstanding with respect to the bearing
of expenses) if any jurisdiction in which the securities shall be qualified
shall require that expenses incurred in connection with the qualification
of the securities in that jurisdiction be borne by selling shareholders,
such expenses shall be payable by the selling Holders pro rata, to the
extent required by such jurisdiction;
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement with
commercially reasonable and customary terms generally satisfactory to the
managing underwriter of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such
an agreement; and
(f) Use its reasonable best efforts to cause all such
Registrable Securities to be listed on a securities exchange or to qualify
such Registrable Securities for trading on an over-the-counter system
selected by the Company;
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(g) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement and thereafter maintain such a transfer agent and
registrar;
(h) In the event of any underwritten public offering, make
available for inspection, at reasonable times during normal business hours,
by any underwriter participating in such public offering and any attorney,
accountant or other agent retained by such underwriter, such financial and
other records, pertinent corporate documents and properties of the Company
as may be reasonably requested by such underwriter, and cause the Company's
officers, directors, employees and independent accountants to supply such
information as may be reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such public offering
(provided, however, that such inspection and supplying of records and
documents shall be subject to the execution by each requesting party of a
confidentiality and non-disclosure agreement in a form reasonably
acceptable to the Company);
(i) Permit any Holder participating in such registration, which
Holder, in such Holder's reasonable judgment, might be deemed to be an
underwriter or controlling person of the Company, to participate in the
preparation of the registration statement in connection with such
registration and to propose the insertion therein of material which in the
reasonable judgment of such Holder and its counsel should be included;
(j) In connection with underwritten offerings, make available
appropriate management personnel for participation in the preparation and
drafting of such registration or comparable statement, for due diligence
meetings and for "road show" meetings;
(k) In the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending
or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction, the Company will use its reasonable
best efforts promptly to obtain the withdrawal of such order, provided that
in the Company's opinion, in consultation with its counsel, there is a
good faith argument for the removal of such order;
(l) Obtain a cold comfort letter from the Company's independent
public accountants addressed to the selling Holders of Registrable
Securities in customary form and covering such matters of the type
customarily covered by cold comfort letters as the Holders of a majority of
the Registrable Securities being sold reasonably request; and
(m) Furnish, at the request of Holders of a majority of the
Registrable Securities participating in the registration, to each seller of
Registrable Securities a signed counterpart, addressed to such seller (and
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underwriters, if any) of an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if such registration
includes an underwritten public offering, dated the date of the closing
under the underwriting agreement), reasonably satisfactory in form and
substance to such Holder covering substantially the same matters with
respect to such registration (and the prospectus included therein) as are
customarily covered in opinions of issuer's counsel to underwriters in
underwritten public offerings.
5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities. In that connection, each selling Holder shall
be required to represent to the Company that all such information which is given
is both complete and accurate in all material respects.
6. UNDERWRITING REQUIREMENTS. The right of any Holder to "piggyback"
in an underwritten public offering of the Company's securities pursuant to
Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any other holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for underwriting by the Company. Notwithstanding any other
provision of Section 3 and this Section 6, if the underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, and (a) if such registration is the first registered offering of
the Company's securities to the public, the underwriter may exclude some or all
of the Registrable Securities from such registration and underwriting, provided
that the Holders are allowed to participate in the offering in the same
proportion (based on the total number of securities requested to be registered)
as any other shareholder of the Company participating in the offering, and (b)
if such registration is other than the first registered offering of the
Company's securities to the public, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting, provided that
all of the shares requested to be registered by shareholders other than Holders
and Third Party Holders shall first be excluded and thereafter, only to the
extent deemed necessary by the underwriter, shares requested to be registered
by Holders and Third Party Holders shall be reduced pro rata based on the number
of securities respectively requested by them to be registered. Any reduction in
the number of Registrable Securities included in such registration shall be
borne equally by the Holders and any Third Party Holders as a group pro rata
based on the number of shares for which registration was requested. If any
Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration. Third Party Holders "piggybacking" on a demand
registration demanded by the Initiating Holders under Section 2 above shall be
subject to the same conditions,
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requirements and limitations that are applicable to a Holder under this Section
6 in the event of an underwritten public offering.
7. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of shares so registered.
8. DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
9. INDEMNIFICATION. If any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors and partners of each
Holder, any underwriter (as defined in the 1933 Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the
meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended
(the "1934 ACT"), against any losses, claims, damages, or liabilities
(joint or several) to which they or any of them may become subject under
the 1933 Act, the 1934 Act or any other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect
thereof) arise from or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"): (i) any untrue
statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein
not misleading; and the Company will reimburse each such Holder, officer,
director or partner, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 9 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises from or is based upon a
violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any,
who
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controls the Company within the meaning of the 1933 Act, any underwriter
(within the meaning of the 1933 Act) for the Company, any person who
controls such underwriter, any other Holder selling securities in such
registration statement or any of its directors or officers or any person
who controls such Holder against any losses, claims, damages or liabilities
(joint or several) to which the Company or any such director, officer,
controlling person, or underwriter or other such Holder or director,
officer or controlling person may become subject, under the 1933 Act, the
1934 Act or any other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise from or are
based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or controlling person,
other Holder, officer, director or controlling person in connection with
investigation or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 9 shall not apply to amounts paid in settlement of any such loss,
claim damage, liability or action if such settlement is effected without
the consent of the Holder which consent shall not be unreasonably withheld.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9
is applicable but for any reason is held to be unavailable from the Company
or any Holder, the Company and the Holders participating in the
registration shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claims asserted) to which the Company and the
participating Holders may be subject in such proportion so that the
participating Holders are responsible for that portion of the foregoing
amount represented by the ratio of the proceeds received by the
participating Holders in the offering to the total proceeds received from
the offering by the Company and all selling shareholders (other than
participating Holders) and the Company shall be responsible for the portion
represented by the ratio of proceeds received by the Company to the total
proceeds received by the Company and all selling shareholders (other than
participating Holders); provided, however, that such portions shall be
adjusted as may be just and equitable to take into account the relative
fault of the participating Holders and the Company; provided further,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(c), each person, if any,
who controls the Company or any Holder within the meaning of the 1933 Act,
each officer of the Company who shall have signed the registration
statement and each director of the Company shall have the same rights to
contribution as the Company.
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(d) No settlement shall be effected without the prior written
consent of the Holders participating in a registration unless (i) the
obligations of the Company for indemnification or contribution pursuant to
this Agreement survive and are not extinguished by reason of the settlement
and remain in full force and effect under applicable federal and state
laws, rules, regulations and orders or (ii) all claims and actions against
the participating Holders and each person who controls a participating
holder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act are extinguished by the settlement and the indemnifying party
obtains a full release of all claims and actions against the participating
Holders and each such control person, which release shall be to the
reasonable satisfaction of the participating Holders.
(e) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 9,
notify the indemnifying party in writing of the commencement thereof and
the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to notify an indemnifying party
within a reasonable time of the commencement of any such action, to the
extent prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 9, but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 9.
(f) The obligations of the Company and the Holders under this
Section 9 shall survive through the completion of any offering of
Registrable Securities in a registration statement made under the terms of
this Agreement.
10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of a Holder under
this Agreement may be assigned by a Holder only to a permitted transferee of
such securities pursuant to Section 7.3 the Purchase Agreement, provided the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee and the securities with
respect to which such registration rights are being assigned; provided, however,
that no such assignment shall be effective if, immediately following the
transfer, the transferee is free to dispose of all of such securities without
regard to any restrictions imposed under the 1933 Act.
11. SUBSEQUENT REGISTRATION RIGHTS. The Company may grant
registration rights to parties other than the Holders; provided, however, that
in the event
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the Company shall grant any person registration rights containing terms more
favorable than the terms granted herein, the more favorable terms shall
automatically be deemed granted to the Holders and incorporated herein by
reference. Prior to the date of this Agreement, the Company has not granted
registration rights to any other person that are still in effect and that are on
terms more favorable than the terms granted herein.
12. "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that it
shall not, to the extent requested by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell or otherwise transfer or
dispose of any Registrable Securities in a market transaction during a period
deemed by the underwriter to be necessary or appropriate following the effective
date of a registration statement of the Company filed under the 1933 Act,
provided that Roger B. Abbott, Rosalind Abbott, and Edward S. Soren are subject
to such an agreement for the same period. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such period.
13. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a registration statement and which does not directly or indirectly
affect the rights of other holders of Registrable Securities may be given by the
holders of a majority of the Registrable Securities being sold; provided,
however, that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
14. NOTICES. All notices, demands and requests required by this
Agreement shall be in writing and shall be deemed to have been given for all
purposes (a) upon personal delivery, (b) one business day after being sent, when
sent by professional overnight courier service from and to locations within the
continental United States, or (c) five days after posting when sent by
registered or certified mail (return receipt requested), addressed to the
Company or an Investor at his, her or its address set forth on the signature
pages hereof. Any party hereto may from time to time by notice in writing served
upon the others as provided herein, designate a different mailing address or a
different person to which such notices or demands are thereafter to be
addressed, or delivered.
15. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed to be an original, and when
executed, separately or together, shall constitute a single original instrument,
effective in the same manner as if the parties hereto had executed one and the
same instrument.
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16. CAPTIONS. Captions are provided herein for convenience only and
they are not to serve as a basis for interpretation or construction of this
Agreement, nor as evidence of the intention of the parties hereto.
17. CROSS-REFERENCES. All cross-references in this Agreement, unless
specifically directed to another agreement or document, refer to provisions
within this Agreement.
18. GOVERNING LAW. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of California
applicable to agreements made and to be performed wholly within the State of
California. In the event a judicial or other proceeding is necessary to resolve
any dispute hereunder, the sole forum for resolving disputes arising under or
relating to this Agreement shall be the Municipal and Superior Courts for the
County of San Diego, State of California, or the federal district court for the
district of California associated with such county and all related appellate
courts and the parties hereby consent to the jurisdiction of such courts, and
that venue shall be in such county.
19. SEVERABILITY. The provisions of this Agreement are severable. The
invalidity, in whole or in part, of any provision of this Agreement shall not
affect the validity or enforceability of any other of its provisions. If one or
more provisions hereof shall be declared invalid or unenforceable, the remaining
provisions shall remain in full force and effect and shall be construed in the
broadest possible manner to effectuate the purposes hereof. The parties further
agree to replace such void or unenforceable provisions of this Agreement with
valid and enforceable provisions which will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provisions.
20. ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior written and oral agreements, understandings,
commitments and practices between the parties, including all prior agreements
with respect to registration rights.
21. CONSIDERATION FOR APPROVALS OR WAIVERS. No consideration shall be
paid to any Holder to obtain such Holder's approval for or waiver of any
amendment of this Agreement or any matter requiring the approval or consent of
the Holders hereunder unless such consideration is also offered to all Holders,
pro rata based upon the number of Registerable Securities held by the Holders.
22. REMEDIES. Subject to Section 8 (Delay of Registration), each
Holder of Registrable Securities, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement with the intent and agreement that the same shall be effective
as of the day and year first above written.
THE COMPANY:
Communication Telesystems International
d.b.a. WorldxChange Communications,
a California corporation
By: /s/ Roger B. Abbott
------------------------------
Title: CEO
------------------------------
Address: 9999 Willow Creek Road
San Diego, California 92131
Attn: Roger B. Abbott
Fax: (619) 625-0217
INVESTORS:
GOLD & APPEL TRANSFER, S.A.,
a British Virgin Islands Corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Title: Power of Attorney in Fact
-------------------------------
Address: P.O. Box 985
Wickhams Cay Road Twn
Tortula, British Virgin Islands
Attn: Rosa Restrepo
------------------------
Facsimile:
-------------------
ATOCHA, L.P.,
a Texas limited partnership
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: General Partner
---------------------------------
Address: 6429 Georgetown Pike
Mc Lean, VA 72101
------------------------------
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