Exhibit 4.01


 


REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 1, 2007,
between IBASIS, INC., a Delaware corporation (the “Company”), and KPN B.V., a private limited
liability company with its registered office at Maanplein 55, The Hague, and
incorporated under the laws of the Netherlands (“Purchaser”).


 


WHEREAS, the Company and Purchaser have
entered into a Share Purchase and Sale Agreement, dated as of June 21, 2006 as amended
on December 18, 2006, April 26, 2007 and August 1, 2007 (the “Purchase Agreement”), pursuant to which, among other things,
Purchaser will acquire from the Company newly issued shares of Common Stock (as
defined below), in exchange for (i) all the issued and outstanding shares
of a newly created subsidiary of Purchaser that, together with its subsidiaries
and WVS-I US, encompasses Purchaser’s international traffic trading business
and (ii) $55,000,000 in cash, upon the terms and subject to the conditions
set forth in the Purchase Agreement; and


 


WHEREAS, to induce Purchaser to execute and
deliver the Purchase Agreement, the Company has agreed to provide to Purchaser
and its direct and indirect transferees from time to time (each, a “Holder”) certain registration rights under
the Securities Act of 1933, as amended or any similar successor statute and the
rules and regulations promulgated thereunder (collectively, the “Securities Act”), and applicable state
securities laws.


 


NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the parties hereto agree as
follows. Terms used but not defined herein shall have the meaning set forth in
the Purchase Agreement.


 


ARTICLE
I


 


DEFINITIONS


 


SECTION 1.01.   Definitions.   As
used in this Agreement, the following terms shall have the meanings ascribed to
them below:


 


“Common
Stock” shall mean shares of common stock, par value $0.001 per
share, of the Company and other capital stock or securities into which such
common stock or other stock or securities are reclassified or changed,
including by reason of a merger, consolidation, share exchange, reorganization,
recapitalization or similar transaction.


 


“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended or
any similar successor statute and the rules and regulations promulgated thereunder.


 


“Person”
shall mean any individual, corporation (including any non-profit corporation),
general or limited partnership, cooperative, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity.


 


“Registrable
Securities” shall mean the Common Stock issued to Purchaser in
connection with the Transactions and any other shares of the Common Stock
acquired by Purchaser at any time. As to any particular Registrable Securities,
once issued, such securities shall cease to be Registrable Securities if
(i) such securities have been registered under the Securities Act, the
registration statement with respect to the sale of such securities has become
effective under the Securities Act and such securities have been disposed of
pursuant to such effective registration statement, (ii) such securities
have been sold and distributed pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, (iii) such securities
have been otherwise transferred, if new certificates or other evidences of
ownership for them not bearing a legend restricting further transfer and not
subject to any stop-transfer order or other restrictions on transfer have been
delivered by the Company and subsequent disposition of such securities does not
require registration or qualification of such securities under the Securities
Act or 


 


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any state securities laws then applicable, (iv) such securities
may be sold without restriction under Rule 144(k) (or any similar
provision then in force) under the Securities Act or (v) such securities
shall cease to be outstanding.


 


“Registration
Expenses” shall mean all expenses incident to the Company’s
performance of or compliance with Article II of this Agreement, including
all registration and filing fees and expenses (including SEC, stock exchange
and NASD fees), fees and expenses of compliance with state securities or “blue
sky” laws (including fees and disbursements of counsel for the underwriters in
connection with “blue sky” qualifications of the Registrable Securities),
printing expenses, messenger and delivery expenses, the fees and expenses
incurred in connection with the listing, if any, of the securities to be
registered on each securities exchange or national market system on which the
Common Stock is then listed, fees and disbursements of counsel for the Company
and of the independent registered public accounting firm of the Company
(including the expenses of any annual audit, special audit and “comfort”
letters required by or incident to such performance and compliance), the fees
and disbursements of one counsel for the Selling Holders, the fees and
disbursements of underwriters customarily paid by issuers or sellers of securities
(including, if applicable, the fees and expenses of any “qualified independent
underwriter” (and its counsel) that is required to be retained in accordance
with the rules and regulations of the NASD), the reasonable fees and expenses
of any special experts retained by the Company in connection with such
registration, and fees and expenses of other Persons retained by the Company
(but not including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Securities by holders of such
Registrable Securities).


 


“Required
Registration Statement” shall mean any Demand Registration Statement
or any Shelf Registration Statement, as applicable.


 


“SEC”
shall mean the Securities and Exchange Commission.


 


“Selling
Holder” shall mean any Holder who becomes a Selling Demand
Shareholder, Selling Incidental Shareholder or Shelf Shareholder, as
applicable.


 


“Shelf
Registration Statement” shall mean a “shelf” registration statement
filed by the Company pursuant to the provisions of Section 2.03 with the
SEC covering offers and sales in accordance with Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC (whether or
not the Company is then eligible to use Form S-3), that covers some or all
of the Registrable Securities, and any 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.


 


“Suspension
Period” shall mean any period during which the Company fails to keep
any Required Registration Statement effective and usable for resale of
Registrable Securities held by any Selling Holder.


 


“Time of
Sale” shall mean the time when sales of the Registrable Securities
are first made to investors pursuant to the registration rights granted under
this Agreement.


 


“Time of
Sale Information” shall mean any information, including but not
limited to the preliminary or the final prospectus each as supplemented and
amended and the final term sheet, if any, related to the Registrable
Securities, the offering of Registrable Securities or the Company that has been
provided to potential investors at or prior to the Time of Sale.


 


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ARTICLE
II


 


REGISTRATION
RIGHTS


 


SECTION 2.01. 
 Demand
Registration.   (a)  At any time and from time
to time, any Holder (each, a “Selling Demand
Shareholder”) shall have the right to request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
such Selling Demand Shareholder and the intended method of distribution
thereof) that the Company register any or all of such Selling Demand
Shareholder’s Registrable Securities with an anticipated aggregate offering
price to the public of not less than $10,000,000, unless the anticipated
aggregate offering price to the public of all Registrable Securities that
remain outstanding at that time is less than $10,000,000, in which case, any such
registration shall be for all of the remaining outstanding Registrable
Securities, by filing with the SEC a registration statement covering such
Registrable Securities (a “Demand
Registration Statement”). Upon the receipt of such a request, the
Company shall, not later than the 30th calendar day after the receipt of such a
request, cause to be filed a Demand Registration Statement providing for the
registration under the Securities Act of the Registrable Securities which the
Company has been so requested to register by such Selling Demand Shareholder to
the extent necessary to permit the disposition of such Registrable Securities
in accordance with the intended methods of distribution thereof specified in
such request. Promptly after receipt of such request from such Selling Demand
Shareholder, the Company shall give notice of such requested registration to
all other holders of Registrable Securities in accordance with
Section 2.02. The Company will then use its reasonable best efforts to
have the Demand Registration Statement covering the Registrable Securities
which the Company has been requested to register by such Selling Demand
Shareholder, together with all other Registrable Securities which the Company
has been requested to register pursuant to Section 2.02 or otherwise by
notice delivered to the Company within 20 days after the Company has given
the required notice of such requested registration (which request shall specify
the intended method of disposition of such Registrable Securities), declared
effective by the SEC as soon as practicable thereafter (but in no event later
than the 90th calendar day after the receipt of such a request) and to keep
such Demand Registration Statement continuously effective for a period of time
necessary following the date on which such Demand Registration Statement is
declared effective for the underwriters and Selling Demand Shareholders to sell
all the Registrable Securities covered by such Demand Registration Statement,
or such shorter period which will terminate when all of the Registrable
Securities covered by such Demand Registration Statement have been sold
pursuant thereto (including, if necessary, by filing with the SEC a
post-effective amendment or a supplement to the Demand Registration Statement
or the related prospectus or any document incorporated therein by reference or
by filing any other required document or otherwise supplementing or amending
the Demand Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Demand Registration Statement or by the Securities Act, any state securities or
“blue sky” laws, or any other rules and regulations thereunder); provided, that the 30 and 90 day
dates referenced above shall be extended to the extent that such Demand
Registration Statement is not filed or declared effective prior to such dates
due to circumstances outside of the Company’s control (e.g., the Company is
unable to obtain a required consent or audit report from an outside independent
accounting firm with respect to any business acquired by the Company), other
than as a result of such circumstances that could have been reasonably
anticipated and avoided by the Company, after (except in the case of the
preparation of any required financial statements for acquired businesses)
receipt of a notice by a Selling Demand Shareholder under this
Section 2.01, through the exercise of its reasonable best efforts prior to
such 30 or 90 day dates.


 


(b)   A Demand Registration Statement shall
be deemed not to have become effective (and the related registration shall be
deemed not to have been effected) unless it has been declared effective by the
SEC; provided, however, that if, after it has been
declared effective, the offering of any Registrable Securities pursuant to such
Demand Registration Statement is interfered with by any stop order, 


 


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injunction or other order or requirement of the SEC or any other
governmental agency or court (other than any such stop order or injunction
issued as a result of the inclusion in such Demand Registration Statement of
any information supplied to the Company for inclusion therein by a Selling
Demand Shareholder) that is not subsequently remedied, such Demand Registration
Statement shall be deemed not to have become effective; provided, further,
however, if any such stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court is subsequently remedied, such Demand Registration Statement
shall be deemed not to have been effective during the period of such
interference.


 


(c)   A
Suspension Period with respect to any Demand Registration Statement shall
commence on and include the date that the Company gives notice that any Demand
Registration Statement is no longer effective or usable for resale of
Registrable Securities of the Selling Demand Shareholder, including pursuant to
Section 2.06(e)(iv), and shall terminate on the day following the date on
which the Selling Demand Shareholder either receives the copies of the
supplemented or amended prospectus contemplated by Section 2.06(j) or is
advised in writing by the Company that the use of the prospectus may be
resumed.


 


(d)   If
at any time or from time to time any Selling Demand Shareholder intends to sell
Registrable Securities in an Underwritten Offering (as defined below) pursuant
to a Demand Registration Statement, such Selling Demand Shareholder shall so
advise the Company as part of its request made pursuant to Section 2.01(a)
hereof. The underwriters shall, in the case of an Underwritten Offering, be
selected by Purchaser in consultation with the Company.


 


(e)   The
Company shall not be obligated to effect, or to take any action to effect, any
registration of Registrable Securities pursuant to this Section 2.01 for
up to 180 days immediately following the effective date of any Demand
Registration Statement; provided,
that the registration obligations of the Company shall not be limited pursuant
to this Section 2.01(e) if the number of Registrable Shares underwritten
pursuant to any such Demand Registration Statement was limited in accordance
with Section 2.03(c).


 


SECTION 2.02.   Incidental
Registration.   (a)  If the Company proposes
to register under the Securities Act any shares of Common Stock for sale for
its own account (other than (i) any registration relating to any employee
benefit or similar plan, any dividend reinvestment plan, or any acquisition by
the Company or (ii) pursuant to a registration statement filed in
connection with an exchange offer), the Company shall give written notice to
each Holder at least 20 days prior to the initial filing of a registration
statement with the SEC pertaining thereto (an “Incidental
Registration Statement”) informing such Holder of its intent to file
such Incidental Registration Statement and of such Holder’s rights under this
Section 2.02 to request the registration of the Registrable Securities
held by such Holder. Upon the written request of any Holder (each, a “Selling Incidental Shareholder”) made
within 10 days after any such notice is given (which request shall specify
the Registrable Securities intended to be disposed of by such Selling
Incidental Shareholder and the intended method of distribution thereof), the
Company shall use reasonable best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by such Selling Incidental Shareholder, to the extent
required to permit the disposition of the Registrable Securities so requested
to be registered in accordance with the intended methods of distribution
thereof specified in the request, including, if necessary, by filing with the
SEC a post-effective amendment or a supplement to the Incidental Registration
Statement or the related prospectus or any document incorporated therein by
reference or by filing any other required document or otherwise supplementing
or amending the Incidental Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Incidental Registration Statement or by the Securities Act or
by any other rules and regulations thereunder.


 


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(b)   If
a Selling Demand Shareholder
has requested a Demand Registration Statement pursuant to Section 2.01,
the Company shall give written notice to each Holder (other than the Selling
Demand Shareholder) at least 20 days prior to the initial filing of such
Demand Registration Statement informing such Holder of its intent to file such
Demand Registration Statement and of such Holder’s rights under this
Section 2.02 to request the registration of the Registrable Securities
held by such Holder. Upon written request of any Holder made within
10 days after any such notice is given (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof), the Company shall use reasonable best
efforts to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by such Holder,
to the extent required to permit the disposition of the Registrable Securities
so requested to be registered in accordance with the intended methods of
distribution thereof specified in the request, including, if necessary, by
filing with the SEC a post-effective amendment or a supplement to the Demand
Registration Statement or the related prospectus or any document incorporated
therein by reference or by filing any other required document or otherwise
supplementing or amending the Demand Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Demand Registration Statement or by the Securities Act or
by any other rules and regulations thereunder.


 


(c)   If
a registration pursuant to Section 2.01 or this Section 2.02 involves an underwritten offering of
the securities being registered (an “Underwritten
Offering”), which securities are to be distributed on a firm
commitment basis by or through one or more underwriters of recognized standing
under underwriting terms appropriate for such transaction, the underwriters, as
the case may be, of such Underwritten Offering shall inform the Company and the
Holders requesting registration of Registrable Securities on or before the date
five days prior to the date then scheduled for such offering, that, in its
opinion, the amount of securities requested to be included in such registration
exceeds the amount which can be sold in (or during the time of) such offering
within a proposed price range without adversely affecting the distribution of
the securities being offered, then the Company will include in such
registration only the amount of Registrable Securities and other securities
that the Company is so advised can be sold in (or during the time of) such
offering within such price range; provided,
however, that, in the case of a
Demand Registration Statement, the Company shall be required to include in such
registration: first, all the
securities initially proposed to be sold pursuant to such Demand Registration
Statement by the Selling Demand Shareholders and second, the amount of Registrable Securities and other
securities requested to be included in such registration that the Company is so
advised can be sold in (or during the time of) such offering, allocated pro rata among the other Holders
requesting such registration on the basis of the number of Registrable
Securities requested to be included by all such other Holders; provided, further,
however, that, in the case of an
Incidental Registration Statement, the Company shall be required to include in
such required registration: first,
all the securities initially proposed to be sold pursuant to such Incidental
Registration Statement by the Company, and second,
the amount of Registrable Securities requested to be included in such
registration that the Company is so advised can be sold in (or during the time
of) such offering, allocated pro rata
among the Selling Incidental Shareholders requesting such registration on the
basis of the number of Registrable Securities requested to be included by all
such Selling Incidental Shareholders.


 


(d)   If
a Selling Incidental Shareholder requests to sell Registrable Securities in an
Underwritten Offering pursuant to a Demand Registration Statement, the
underwriters shall be selected by the Company in consultation with Purchaser
and the right of such Selling Incidental Shareholder to participate in such
Underwritten Offering shall be conditioned upon such Selling Incidental
Shareholder’s participation in the underwriting arrangements and the inclusion
of such Selling Incidental Shareholder’s Registrable Securities in the
underwriting. A Selling Incidental Shareholder proposing to distribute its
Registrable Securities through any such Underwritten Offering shall enter into
an underwriting agreement in customary form with the underwriters selected for
such 


 


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Underwritten Offering and shall execute all questionnaires, powers of
attorney, indemnities and other documents reasonably required under the terms
of such arrangements.


 


SECTION 2.03.   Shelf
Registration Statement.   (a)  At any time and from time
to time, any one or more of the Selling Demand Shareholders shall have the
right to request in writing (which request shall specify the Registrable
Securities intended to be disposed of by such Selling Demand Shareholder and
the intended method of distribution thereof) that the Company register any and
all of such Selling Demand Shareholder’s Registrable Securities with an
anticipated aggregate offering price to the public of not less than $5,000,000,
unless the anticipated aggregate offering price to the public of all
Registrable Securities that remain outstanding at that time is less than
$5,000,000, in which case, any such registration shall be for all of the
remaining outstanding Registrable Securities, by filing with the SEC a Shelf
Registration Statement covering such Registrable Securities. Upon the receipt
of such a request, the Company shall, not later than the 30th calendar day
after the receipt of such a request, cause to be filed a Shelf Registration Statement
providing for the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register by such Selling
Demand Shareholder to the extent necessary to permit the disposition of such
Registrable Securities in accordance with the intended methods of distribution
thereof specified in such request. Promptly after receipt of such request from
such Selling Demand Shareholder, the Company shall give notice of such
requested registration to all other holders of Registrable Securities in
accordance with Section 2.02. The Company will then use its reasonable
best efforts to have such Shelf Registration Statement covering the Registrable
Securities which the Company has been requested to register by such Selling Demand
Shareholder, together with all other Registrable Securities which the Company
has been requested to register pursuant to Section 2.02 or otherwise by
notice delivered to the Company within 20 days after the Company has given
the required notice of such requested registration (which request shall specify
the intended method of disposition of such Registrable Securities), declared
effective by the SEC as soon as practicable thereafter (but in no event later
than the 90th calendar day after the receipt of such a request) and all to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities which the Company
has been so requested to register, and to keep such Shelf Registration
Statement continuously effective during the period from the date a Shelf
Registration Statement is declared effective by the SEC until all Registrable
Securities of the Selling Demand Shareholder have been sold or can be sold
without restriction, including volume and manner of sale restrictions, under
the Securities Act; provided,
that the 30 and 90 day dates referenced above shall be extended to the
extent that such Shelf Registration Statement is not filed or declared
effective prior to such dates due to circumstances outside of the Company’s
control (e.g., the company is unable to obtain a required consent or audit
report from an outside independent accounting firm with respect to any business
acquired by the Company), other than as a result of such circumstances that
could have been reasonably anticipated and avoided by the Company, after
(except in the case of the preparation of any required financial statements for
acquired businesses) receipt of a notice by a Selling Demand Shareholder under
this Section 2.03, through the exercise of its reasonable best efforts
prior to such 30 or 90 day dates.


 


(b)   A Shelf Registration Statement shall be
deemed not to have become effective (and the related registration shall be
deemed not to have been effected) unless it has been declared effective by the
SEC; provided, however, that if, after it has been
declared effective, the offering of any Registrable Securities pursuant to such
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 (other than any such stop order or injunction issued as a result of the
inclusion in such Shelf Registration Statement of any information supplied to
the Company for inclusion therein by a Selling Demand Shareholder) that is not
subsequently remedied, such Shelf Registration Statement shall be deemed not to
have become effective; provided, further, however,
if any such stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court is subsequently remedied, such Shelf
Registration Statement shall be deemed not to have been effective during the
period of such interference.


 


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(c)   A Suspension Period with respect to any
Shelf Registration Statement shall commence on and include the date that the
Company gives notice that any Shelf Registration Statement is no longer
effective or usable for resale of Registrable Securities of the Selling Demand
Shareholder, including pursuant to Section 2.06(e)(iv), and shall
terminate on the day following the date on which each Selling Demand
Shareholder covered by such Shelf Registration Statement either receives the
copies of the supplemented or amended prospectus contemplated by
Section 2.06(j) or is advised in writing by the Company that the use of
the prospectus may be resumed.


 


(d)   If
a Selling Demand Shareholder has requested a Shelf Registration Statement, the
Company shall give written notice to each Holder at least 20 days prior to
the initial filing of such Registration Statement informing such Holder of its
intent to file such Shelf Registration Statement and of such Holder’s rights
under this Section 2.03 to request the registration of the Registrable Securities
held by such Holder. Upon written request of any Holder (a “Shelf Shareholder”) made within
10 days after any such notice is given (which request shall specify the
Registrable Securities intended to be included in the Shelf Registration
Statement by such Shelf Shareholder and the intended method of distribution
thereof), the Company shall use reasonable best efforts to effect the
registration in such Shelf Registration Statement of all Registrable Securities
which the Company has been so requested to register by such Shelf Shareholder,
to the extent required to permit the disposition of the Registrable Securities
so requested to be registered to be registered in accordance with the intended
methods of distribution thereof specified in the request, including, if
necessary, by filing with the SEC a post-effective amendment or a supplement to
the Shelf Registration Statement or the related prospectus or any document
incorporated therein by reference or by filing any other required document or
otherwise supplementing or amending the Shelf Registration Statement, if
required by the rules, regulations or instructions applicable to the Shelf
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder.


 


(e)   If
at any time or from time to time any Selling Demand Shareholder intends to sell
Registrable Securities in an Underwritten Offering pursuant to the Shelf
Registration Statement, such Selling Demand Shareholder shall so advise the
Company as part of its request made pursuant to Section 2.03(a) hereof.
The underwriters shall, in the case of an Underwritten Offering, be selected by
Purchaser in consultation with the Company. There shall be no obligation on the
part of a Selling Demand Shareholder or the underwriters to include any
Registrable Securities of any Shelf Shareholder in such Underwritten Offering.


 


(f)    If
a Shelf Shareholder requests to sell Registrable Securities in an Underwritten
Offering pursuant to a Shelf Registration Statement, the underwriters shall be
selected by the Company in consultation with Purchaser and the right of such
Shelf Shareholder to participate in such Underwritten Offering shall be
conditioned upon such Shelf Shareholder’s participation in the underwriting
arrangements and the inclusion of such Shelf Shareholder’s Registrable
Securities in the underwriting. A Shelf Shareholder proposing to distribute its
Registrable Securities through any such Underwritten Offering shall enter into
an underwriting agreement in customary form with the underwriters selected for
such Underwritten Offering and shall execute all questionnaires, powers of
attorney, indemnities and other documents reasonably required under the terms
of such arrangements.


 


SECTION 2.04. 
 Registration
Expenses.   The Company shall
pay all Registration Expenses in connection with each registration pursuant to
Sections 2.01, 2.02 and 2.03. Each Selling Holder shall pay all discounts and
commissions payable to underwriters, selling brokers, managers or other similar
Persons related to the sale or disposition of such Selling Holder’s Registrable
Securities pursuant to any Required Registration Statement or any Incidental
Registration Statement in proportion to the amount of such Selling Holder’s
shares of Common Stock included in any Required Registration Statement or any
Incidental Registration Statement. Each Selling Holder shall pay all discounts
and commissions payable to underwriters, selling brokers, managers or other
similar Persons related to the sale or disposition of its Registrable
Securities pursuant to any Shelf Registration Statement; provided that if 


 


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Registrable Securities of Shelf Shareholders and Selling Demand
Shareholders are included in any Underwritten Offering pursuant to a Shelf
Registration Statement, each such Selling Holder shall pay all discounts and
commissions related thereto in proportion to the amount of such Selling Holder’s
Registrable Securities included in such Underwritten Offering.


 


SECTION 2.05. 
 Restrictions
on Public Sale by Holders and the Company. 
 (a)  If
reasonably requested by an underwriter in any Underwritten Offering being
conducted on behalf of the Company or any other Person other than a Shelf
Shareholder of Common Stock or of any securities convertible into or
exchangeable for Common Stock, or of warrants or other securities entitling the
holder thereof to purchase Common Stock (other than (i) any registration
relating to any employee benefit or similar plan, any dividend reinvestment
plan, or any acquisition by the Company or (ii) pursuant to a registration
statement filed in connection with an exchange offer), each party hereto shall
agree not to effect any public sale or distribution of Common Stock during the
14 day period prior to, and during the 90 day period beginning on,
the date of sale of securities in connection with such Underwritten Offering
(other than as part of such Underwritten Offering).


 


(b)   If
requested by an underwriter in any Underwritten Offering being conducted on behalf
of a Selling Demand Shareholder pursuant to a Required Registration Statement,
(i) the Company shall agree not to effect any public sale or distribution
of Common Stock (or of any securities convertible into or exchangeable for
Common Stock) during the 14 day period prior to, and during the
90 day period beginning on, the date of sale of securities in connection
with such Underwritten Offering and (ii) each Holder of not less than 5%
of the Registrable Securities (a “Significant
Holder”) shall agree to enter into a customary lock-up agreement
with the underwriters pursuant to which such Significant Holder shall agree
that it will not, without the prior written consent of the underwriters during
the period beginning from the date the relevant Required Registration Statement
is declared effective by the SEC (the “Effective
Date”) to and including the date that is 90 days after the
Effective Date (x) lend, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares or securities
are then held by such Significant Holder or are thereafter acquired) held by it
immediately prior to the Effective Date or (y) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock held by it immediately
prior to the Effective Date; provided,
however, that the foregoing
restrictions shall not apply to (a) the transfer of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock
pursuant to any merger, consolidation, acquisition, disposition or similar
transaction or (b) the conversion or exercise or exchange of any security
for or into shares of Common Stock; provided,
further, however, that to the extent clauses
(x) and (y) above are more restrictive than the equivalent provisions
contained in any lock-up agreement the underwriters may reasonably require any
Significant Holder to enter into at the time of any such Underwritten Offering,
each Significant Holder shall only be required to comply with the less
restrictive provisions. The underwriters in connection with such Underwritten
Offering are intended third party beneficiaries of this Section 2.05(b)
and shall have the right, power and authority to enforce the provisions hereof
as though they were a party hereto. To enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to such securities
of each Significant Holder until the end of the lock-up period. Notwithstanding
anything to the contrary set forth in this Section 2.05(b),
sub-section (ii) shall not apply to the sale of any Common Stock by a
Significant Holder to an underwriter pursuant to an underwriting agreement.


 


SECTION 2.06.   Registration
Procedures.   In connection with the obligations
of the Company pursuant to Sections 2.01, 2.02 and 2.03, the Company shall use
its reasonable best efforts to effect or cause to be effected the registration
under the Securities Act of the Registrable Securities entitled to be included in
such registration in order to permit the sale of such Registrable Securities
(in accordance 


 


8

















 


with their intended method or methods of distribution, in the case of a
Required Registration Statement), and the Company shall:


 


(a)   (i) prepare
and file a Registration Statement with the SEC (within the time period
specified in Section 2.01 or 2.03, as applicable, in the case of a
Required Registration Statement) which Registration Statement (x) shall be
on a form selected by the Company for which the Company qualifies,
(y) shall be available for the sale or exchange of the Registrable
Securities in accordance with the intended method or methods of distribution,
in the case of a Required Registration Statement, 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,
(ii) use its reasonable best efforts to cause such Registration Statement
to become effective and remain effective in accordance with Section 2.01
or 2.03, as applicable, in the case of a Required Registration Statement,
(iii) use its reasonable best efforts to prevent the happening of any
event that would cause a Registration Statement to contain a material
misstatement or omission or to be not effective and usable for resale of the
Registrable Securities registered pursuant thereto (during the period that such
Registration Statement is required to be effective and usable) and (iv) cause
each Registration Statement and the related prospectus and any amendment or
supplement thereto, as of the effective date of such Registration Statement,
amendment or supplement (x) to comply in all material respects with any
requirements of the Securities Act and the rules and regulations of the SEC and
(y) not to contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading;


 


(b)   in
the case of a Required Registration Statement, and subject to
Section 2.06(j), prepare and file with the SEC such amendments and
post-effective amendments to each such Required Registration Statement as may
be necessary to keep such Required Registration Statement effective for the
applicable period; cause each prospectus forming part of such Required
Registration Statement to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by each
Required Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the applicable Selling
Holders, as set forth in such Registration Statement;


 


(c)   furnish
to each Selling Holder holding Registrable Securities covered by a Registration
Statement and to each underwriter of an Underwritten Offering of Registrable
Securities covered by a Registration Statement, if any, without charge, as many
copies of each prospectus forming part of such Registration Statement,
including each preliminary prospectus, and any amendment or supplement thereto
and such other documents as such Selling Holder or underwriter may reasonably
request in order to facilitate the public sale or other disposition of such
Registrable Securities; and the Company hereby consents to the use of such
prospectus, including each such preliminary prospectus, by each such Selling
Holder and underwriter, if any, in connection with the offering and sale of
such Registrable Securities;


 


(d)   (i) use
its reasonable best efforts to register or qualify the Registrable Securities
covered by a Registration Statement, no later than the time such Registration
Statement is declared effective by the SEC, under all applicable state
securities or “blue sky” laws of such jurisdictions as each underwriter, if
any, or any Selling Holder shall reasonably request; (ii) keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective (in the case of a Required
Registration Statement); and (iii) do any and all other acts and things
which may be reasonably necessary or advisable to enable each such underwriter,
if any, and Selling Holder to consummate the disposition in each such
jurisdiction of the Registrable Securities covered by such Registration
Statement; provided, however, that the Company shall not be
required to register or qualify any Registrable Securities in any jurisdiction
if registration or qualification in such jurisdiction would subject the Company
to unreasonable burden or expense or, in the case of an Underwritten Offering, 


 


9

















 


would unreasonably delay the commencement of such Underwritten
Offering; and provided, further, that the Company shall not be
obligated to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject or to consent to be subject to general service of process
(other than service of process in connection with such registration or
qualification or any sale of Registrable Securities in connection therewith) in
any such jurisdiction;


 


(e)   notify
each Selling Holder promptly, and, if requested by such Selling Holder, confirm
such advice in writing, (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order, injunction or other order or requirement suspending
the effectiveness of a Registration Statement or the initiation of any
proceeding for that purpose, (iii) if, between the effective date of a
Registration Statement and the closing of any sales of Registrable Securities
covered thereby pursuant to any agreement to which the Company is a party, the
representations and warranties of the Company contained in such agreement cease
to be true and correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of such
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and (iv) of the happening of any event during
the period a Registration Statement is required to be effective as a result of
which such Registration Statement, the related prospectus or any other Time of
Sale Information contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;


 


(f)    furnish
counsel for each underwriter, if any, and for the Selling Holders copies of any
request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement and prospectus or for additional
information;


 


(g)   make
every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible time;


 


(h)   upon
request, furnish to the underwriters of an Underwritten Offering of Registrable
Securities, if any, without charge, at least one signed copy of each
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits; and furnish to each Selling Holder, 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);


 


(i)    cooperate
with each Selling Holder and the underwriters of an Underwritten Offering of
Registrable Securities, if any, 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 governing
documents thereof) and registered in such names as each Selling Holder or the
underwriters of an Underwritten Offering of Registrable Securities, if any, may
reasonably request at least three business days prior to any sale of
Registrable Securities;


 


(j)    upon
the occurrence of any event contemplated by Section 2.06(e)(iv), during
the period in which a Registration Statement is required to be kept in effect,
use reasonable best efforts to prepare a supplement or post-effective amendment
to a Registration Statement or the related prospectus, or any document
incorporated therein as thereafter delivered to the purchasers of the
Registrable Securities covered by such Registration Statement, such that such
prospectus, as so supplement and amended, will 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, in the light of the
circumstances under which they were made, not misleading;


 


10

















 


(k)   enter
into customary agreements (including, in the case of an Underwritten Offering,
underwriting agreements in customary form, and including provisions with
respect to indemnification and contribution in customary form and consistent
with the provisions relating to indemnification and contribution contained in
Section 2.08 herein), including, if and to the extent customary at that
time, the following:


 


(i)    make such representations and warranties to
the Selling Holders and the underwriters, if any, in form, substance and scope
as are customarily made by issuers to underwriters in similar underwritten
offerings;


 


(ii)   obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the underwriters, if any, and the Selling
Holders) addressed to each Selling Holder and the underwriters, if any,
covering the matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may be
reasonably requested by such Selling Holders and underwriters;


 


(iii)  obtain “comfort” letters and updates thereof
from the Company’s independent registered public accounting firm addressed to
each Selling Holder and the underwriters, if any, which letters shall be
customary in form and shall cover matters of the type customarily covered in “comfort”
letters to underwriters in connection with primary underwritten offerings;


 


(iv)  enter into a securities sales agreement, which
shall be customary in form, substance and scope and shall contain customary
representations, warranties and covenants; and


 


(v)   deliver such customary documents and
certificates as may be reasonably requested by the Selling Holders or by the
underwriters, if any;


 


(l)    make
available for inspection by representatives of the Selling Holders and any
underwriters participating in any disposition pursuant to a Registration
Statement and any counsel or accountant retained by such Selling Holders or
underwriters all relevant financial and other records, pertinent corporate
documents and properties of the Company and cause the respective officers,
directors and employees of the Company to supply all information reasonably
requested by any such representative, underwriter, counsel or accountant in
connection with a Registration Statement;


 


(m)  (i) within
a reasonable time prior to the filing of any Registration Statement, any
related prospectus or the provision to the potential investors of any other
Time of Sale Information, any amendment to a Registration Statement or
amendment or supplement to a prospectus, provide copies of such document to the
Selling Holders and to counsel to such Selling Holders and to the underwriter
or underwriters of an Underwritten Offering of Registrable Securities, if any;
and, make such reasonable changes in any such document prior to or after the
filing thereof as counsel to the Selling Holders or the underwriter or
underwriters may request and make available such of the representatives of the
Company as shall be reasonably requested by the Selling Holders or any
underwriter for discussion of such document; and (ii) within a reasonable
time prior to the filing of any document which is to be incorporated by
reference into a Registration Statement or a related prospectus, provide copies
of such document to counsel for the Selling Holders; and make such reasonable
changes in such document prior to or after the filing thereof as counsel for
such Selling Holders or such underwriter shall request, provided, that such changes relate to
provisions describing the Selling Holders or the respective offering or purport
to correct material misstatements or omissions, or purport to correct other
errors for which the Selling Holders may have potential liability; and, make
available such of the representatives of the Company as shall be reasonably
requested by such counsel for discussion of such document;


 


11

















 


(n)   use
its reasonable best efforts to cause all Registrable Securities covered by a
Required Registration Statement to be listed on any securities exchange on
which the Common Stock is then listed if so requested by any applicable Selling
Holder;


 


(o)   provide
a CUSIP number for all Registrable Securities covered by a Registration
Statement, no later than the effective date of such Registration Statement;


 


(p)   otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and


 


(q)   cooperate
and assist in any filing required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including
any “qualified independent underwriter” that is required to be retained in
accordance with the rules and regulations of the NASD).


 


SECTION 2.07. Obligations of Selling Holders. (a)  Each Selling
Holder shall, as a condition to the registration obligations with respect to
such Selling Holder provided herein, furnish to the Company such information
regarding such Selling Holder, the ownership of Registrable Securities by such
Selling Holder and the proposed distribution by such Selling Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.


 


(b)   Upon
receipt of any notice of the Company of the happening of any event of the kind
described in Section 2.06(e)(iv), such Selling Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the affected
Registration Statement until such Selling Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.06(j), and,
if so directed by the Company, such Selling Holder shall deliver to the Company
(at the expense of the Company) all copies in its possession, other than
permanent file copies then in such Selling Holder’s possession, of the
prospectus covering such Registrable Securities which was current at the time
of receipt of such notice.


 


SECTION 2.08. Indemnification. (a)  The Company shall indemnify and
hold harmless each Selling Holder and its respective partners, directors,
officers and employees and each Person, if any, who controls any Selling Holder
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act as follows:


 


(i)      against any and all losses, liabilities,
claims, damages, judgments and reasonable expenses whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any of the Time of Sale Information or the Registration
Statement (or any amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any prospectus or other Time of Sale
Information (or any amendment or supplement thereto) including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;


 


(ii)     against any and all losses, liabilities,
claims, damages, judgments and reasonable expenses whatsoever, as incurred, to
the extent of the aggregate amount paid in settlement of any litigation,
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any other claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and


 


12

















 


(iii)    against any and all reasonable expense
whatsoever, as incurred (including, subject to Section 2.08(c), fees and
disbursements of counsel) incurred in investigating, preparing or defending
against any litigation, investigation or proceeding by any governmental agency
or body, commenced or threatened, in each case whether or not such Person is a
party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;


 


provided, however, that this indemnity agreement
does not apply to any Selling Holder (or its partners, directors, officers and
employees and each Person, if any, who controls any Selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) with respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Holder expressly for use in a Registration Statement (or any amendment
thereto), any related prospectus (or any amendment or supplement thereto) or
any other Time of Sale Information.


 


(b)   Indemnification by Selling Holders. Each
Selling Holder shall severally indemnify and hold harmless the Company and the
other Selling Holders, and each of their respective partners, directors,
officers and employees (including each officer of the Company who signed the
Registration Statement) and each Person, if any, who controls the Company or
any other Selling Holder within the meaning of Section 15 of the
Securities Act, against any and all losses, liabilities, claims, damages,
judgments and expenses described in the indemnity contained in
Section 2.08(a) (provided that any settlement of the type described
therein is effected with the written consent of such Selling Holder) as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in a Registration Statement (or any
amendment or supplement thereto) or any other Time of Sale Information in
reliance upon and in conformity with written information furnished to the
Company by such Selling Holder expressly for use in such Registration Statement
(or any amendment thereto), such prospectus (or any amendment or supplement
thereto) or any other Time of Sale Information; provided, however,
that an indemnifying Selling Holder shall not be required to provide
indemnification in any amount in excess of the amount by which (x) the
total price at which the Registrable Securities sold by such indemnifying
Selling Holder and its affiliated indemnifying Selling Holders and distributed
to the public were offered to the public exceeds (y) the amount of any
damages which such indemnifying Selling Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. The Company shall be entitled, to the extent customary, to receive
indemnification and contribution from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such Persons specifically for inclusion in any prospectus,
other Time of Sale Information or Registration Statement.


 


(c)   Conduct of Indemnification Proceedings. Each
indemnified party or parties shall give reasonably prompt notice to each
indemnifying party or parties of any action or proceeding commenced against it
in respect of which indemnity may be sought hereunder, but failure so to notify
an indemnifying party or parties shall not relieve it or them from any
liability which it or they may have under this indemnity agreement, except to
the extent that the indemnifying party is materially prejudiced by such failure
to give notice. If the indemnifying party or parties so elects within a
reasonable time after receipt of such notice, the indemnifying party or parties
may assume the defense of such action or proceeding at such indemnifying party’s
or parties’ expense with counsel chosen by the indemnifying party or parties
and approved by the indemnified party defendant in such action or proceeding,
which approval shall not be unreasonably withheld; provided, however,
that, if such indemnified party or parties reasonably determine that a conflict
of interest exists and that therefore it is advisable for such indemnified
party or parties to be represented by separate counsel or that, upon 


 


13

















 


advice of counsel, there may be legal defenses available to it or them
which are different from or in addition to those available to the indemnifying
party, then the indemnifying party or parties shall not be entitled to assume
such defense and the indemnified party or parties shall be entitled to separate
counsel (limited in each jurisdiction to one counsel for all other indemnified
parties under this Agreement) at the indemnifying party’s or parties’ expense.
If any indemnifying party or parties is not so entitled to assume the defense
of such action or does not assume such defense, after having received the
notice referred to in the first sentence of this paragraph, the indemnifying
party or parties will pay the reasonable fees and expenses of counsel for the
indemnified party or parties (limited in each jurisdiction to one counsel for
all indemnified parties under this Agreement). In such event, however, no
indemnifying party or parties will be liable for any settlement effected
without the written consent of such indemnifying party or parties (which
consent shall not be unreasonably withheld or delayed); provided, however,
that if at any time an indemnified party or parties shall have requested an
indemnifying party or parties to reimburse the indemnified party or parties for
fees and expenses of counsel as contemplated by this paragraph, the
indemnifying party or parties shall be liable for any settlement of any
proceeding effected without the written consent of such indemnifying party or
parties if (x) such settlement is entered into more than 15 business days
after receipt by such indemnifying party or parties of the aforesaid request
accompanied by supporting documents reasonably satisfactory to the indemnifying
party or parties and (y) such indemnifying party or parties shall not have
reimbursed the indemnified party or parties in accordance with such request
prior to the date of such settlement. If an indemnifying party is entitled to
assume, and assumes, the defense of such action or proceeding in accordance
with this paragraph, such indemnifying party or parties shall not, except as
otherwise provided in this Section 2.08(c), be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action or proceeding. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (A) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(B) does not include a statement as to, or an admission of, fault,
culpability or failure to act by or on behalf of any indemnified party. The
rights afforded to any indemnified party hereunder shall be in addition to any
rights that such indemnified party may have at common law, by separate
agreement or otherwise.


 


(d)   Contribution.       (i)    In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms in respect of any
losses, liabilities, claims, damages, judgments and expenses suffered by an
indemnified party referred to therein, each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
liabilities, claims, damages, judgments and expenses in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the liable Selling Holders (including, in each case, that of their respective
officers, directors, employees and agents) on the other in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages, judgments or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
liable Selling Holders (including, in each case, that of their respective
officers, directors, employees and agents) on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or by or on behalf of the Selling Holders, on the other, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, liabilities, claims, damages, judgments and expenses
referred


 


14

















 


to above shall be deemed to include, subject to the limitations set
forth in Section 2.08(c), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.


 


(ii)   The
Company and each Selling Holder agree that it would not be just and equitable
if contribution pursuant to this Section 2.08(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in sub-paragraph (i) above. Notwithstanding this
Section 2.08(d), in the case of distributions to the public, an
indemnifying Selling Holder shall not be required to contribute any amount in
excess of the amount by which (A) the total price at which the Registrable
Securities sold by such indemnifying Selling Holder and its affiliated
indemnifying Selling Holders and distributed to the public were offered to the
public exceeds (B) the amount of any damages which such indemnifying
Selling Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.


 


(iii)  For
purposes of this Section, each Person, if any, who controls a Selling Holder or
an Underwriter within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as such Selling Holder or
Underwriter; and each director of the Company, each officer of the Company who
signed the Registration Statement, and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, shall have
the same rights to contribution as the Company.


 


(e)   Indemnification of Underwriters.
In the event of any Underwritten Offering, the Company and the underwriters
involved in any such Underwritten Offering shall agree to customary underwriter
indemnification provisions in any underwriting agreement related to any such
Underwritten Offering.


 


SECTION 2.09. Certain Limitations. If the Company shall furnish to Holders
requesting a registration statement pursuant to Article II, a certificate
signed by the President or Chief Executive Officer of the Company stating that
in the good faith judgment of the Board of Directors of the Company, the
registration or the filing of the registration statement would materially
interfere in a way materially adverse to the Company with a significant
acquisition, merger, disposition, corporate reorganization or other similar
transaction involving the Company and that therefore it is in the reasonable
best interests of the Company to defer the registration and/or the filing of
such registration statement, then the Company shall have the right to defer
taking such action with respect to such registration and/or filing for a period
of not more than 90 days in any 12-month period after receipt of a request
for registration from a Holder in accordance with Article II. The Company
shall use its reasonable best efforts to resolve any deferral with respect to
any such registration and/or filing.


 


ARTICLE
III


 


REPORTS
UNDER THE EXCHANGE ACT


 


SECTION 3.01. Reports. With a view to making available to the Holders the
benefits of Rule 144 promulgated under the Securities Act or any other
similar rule or regulation of the SEC that may at any time permit the Holders
to sell Common Stock to the public without registration, the Company agrees to:


 


(a)   make
and keep public information available, as those terms are understood and
defined in Rule 144;


 


(b)   file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company
remains subject to


 


15

















 


such requirements and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and


 


(C)   furnish
to each Holder so long as such Holder owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied
with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Holder to sell such securities pursuant to Rule 144 without registration.


 


ARTICLE
IV


 


REPRESENTATIONS


 


Each party hereto represents and warrants to
each other party as follows:


 


SECTION 4.01. Authority; Execution and Delivery; Enforceability. Such
party has full power and authority to execute this Agreement and to perform its
obligations hereunder. In the case of any party that is a corporation, the
execution and delivery by such party of this Agreement and the performance of
its obligations hereunder have been duly authorized by all necessary corporate
or similar action. Such party has duly executed and delivered this Agreement,
and this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.


 


SECTION 4.02. No Conflicts; Consents. The execution and delivery by such
party of this Agreement do not, and the performance of its obligations
hereunder will not conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any person under, or result in the
creation of any mortgage, lien, security interest, charge, restrictions or
encumbrances of any kind (collectively, “Liens”)
upon any of the properties or assets of such party under, any provision of
(i) in the case of any party that is a corporation or other legal entity,
the certificate of incorporation, by-laws or similar organizational document of
such party, (ii) any material contract, lease, license, indenture,
agreement, commitment or other legally binding arrangement (a “Contract”) to which such party is a party
or by which any of its properties or assets is bound or (iii) any material
judgment, order or decree or material statute, law (including common law),
ordinance, rule or regulation applicable to such party or its properties or
assets. No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign is required to be obtained or made by or with respect to such party in
connection with the execution, delivery and performance of this Agreement.


 


16

















 


ARTICLE
V


 


MISCELLANEOUS


 


SECTION 5.01. Notices. All notices and other communications provided for
herein shall be dated and in writing and shall be given:


 


If to the Company, to it at the following
address:


 


	
   

  	
  iBasis, Inc.

  
	
   

  	
  20 Second Avenue

  
	
   

  	
  Burlington, Massachusetts 01803

  
	
   

  	
  USA

  
	
   

  	
   

  
	
   

  	
  Attention: Mark S. Flynn

  
	
   

  	
  Facsimile: (781) 505-7500

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Mintz, Levin, Cohn, Ferris, Glovsky and
  Popeo, P.C.

  
	
   

  	
  One Financial Center

  
	
   

  	
  Boston, Massachusetts 02111

  
	
   

  	
   

  
	
   

  	
  Attention: Michael L. Fantozzi, Esq.

  



 


If to Purchaser, to it at the following
address:


 


	
   

  	
  KPN B.V.

  
	
   

  	
   

  
	
   

  	
  Maanplein 55, 2516 CK

  
	
   

  	
  The Hague, The Netherlands

  
	
   

  	
   

  
	
   

  	
  Attention: Craig Allwright

  
	
   

  	
  Facsimile: +31 70 446 0675

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Cravath, Swaine & Moore LLP

  
	
   

  	
  CityPoint

  
	
   

  	
  One Ropemaker Street

  
	
   

  	
  London EC2Y 9HR

  
	
   

  	
   

  
	
   

  	
  Attention: Philip J. Boeckman, Esq.

  



 


or, in the case of any Holder or other Person, subject to
Section 5.02 below, to the address the party to whom notice is to be given
may provide in a written notice to the Company, a copy of which written notice
shall be on file with the Company’s Secretary. Notice shall be deemed to have
been duly given (a) five business days following sending by registered or
certified mail, postage prepaid, (b) when sent by facsimile, provided that
the facsimile transmission is promptly confirmed by telephone, (c) when
delivered, if delivered personally to the intended recipient, and (d) one
business day following sending by overnight delivery via a national courier
service.


 


SECTION 5.02. Representative of Holders. In the event that there shall be
at any time more than 50 individual Holders (excluding Purchaser and any of its
subsidiaries or affiliates), such Holders shall appoint a representative who
shall receive notices from the Company on the Holders’ behalf, forward such
notices to the individual Holders and coordinate related administrative matters
for such Holders. Without limiting any other provision of this Agreement, the
Company shall pay all reasonable out-of-pocket expenses of the Holder
representative, including the fees of outside counsel engaged by such
representative, if any.


 


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SECTION 5.03.   Applicable Law.   The laws
of the State of New York shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of the law that might be
applied under principles of conflicts of laws.


 


SECTION 5.04.   Integration.   This
Agreement and the documents referred to herein or delivered pursuant hereto
which form a part hereof contain the entire understanding of the parties
with respect to the subject matter hereof. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof.


 


SECTION 5.05.   Descriptive Headings.   The
descriptive headings of the several Articles and Sections of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.
All references herein to “Articles” and “Sections” shall be deemed to be
references to Articles or Sections hereof unless otherwise indicated.


 


SECTION 5.06.   Severability.   The
invalidity of any portion hereof shall not affect the validity, force or effect
of the remaining portions hereof. If it is ever held that a restriction
hereunder is too broad to permit enforcement of such restriction to its fullest
extent, each party agrees that a court of competent jurisdiction may enforce
such restriction to the maximum extent permitted by law, and each party hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such restriction.


 


SECTION 5.07.   Third Party Beneficiary.   Each
Holder shall be a third party beneficiary of the agreements made hereunder
between the Company and Purchaser, 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 hereunder.


 


SECTION 5.08.   Other Agreements.   Nothing
contained in this Agreement shall be deemed to be a waiver of, or release from,
any obligations any party hereto may have under, any other agreement, if any.


 


SECTION 5.09.   Successors, Assigns, Transferees.   The
provisions of this Agreement shall be binding upon and inure to the benefit of
the successors, assigns and transferees of Purchaser including, without
limitation and without the need for an express assignment, subsequent Holders.


 


SECTION 5.10.   Defaults.   A default by
any party to this Agreement in such party’s compliance with any of the
conditions or covenants hereof or performance of any of the obligations of such
party hereunder shall not constitute a default by any other party.


 


SECTION 5.11.   Amendments; Waivers.   This
Agreement may not be amended, modified or supplemented and no waivers of or
consents to departures from the provisions hereof may be given unless consented
to in writing by the Company and the Holders of Common Stock representing 66
2¤3% of
the Common Stock then held by all Holders.


 


SECTION 5.12.   Counterparts.   This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same Agreement, and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered,
in person, by facsimile or by electronic image scan.


 


SECTION 5.13.   Specific Performance.   Each
of the parties hereto acknowledges and agrees that in the event of any breach
of this Agreement, the non-breaching parties would be irreparably harmed and
could not be made whole by monetary damages. It is accordingly agreed that the
parties hereto will waive the defense in any action for specific performance
that a remedy at law would be adequate and that the parties hereto, in addition
to any other remedy to which they may be entitled at law or in equity, shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this


 


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Agreement and to enforce specifically the terms and provisions hereof
without the necessity of proving actual damages or securing or posting any bond
or providing prior notice.


 


SECTION 5.14.   Exclusive Jurisdiction; Waiver of Jury Trial.   (a) 
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of
(i) the Supreme Court of the State of New York, New York County, and
(ii) US District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of this Agreement,
any agreement entered into in connection with this Agreement or any transaction
contemplated hereby or thereby. Each of the parties hereto agrees to commence
any action, suit or proceeding relating hereto in the US District Court for the
Southern District of New York or, if such suit, action or other proceeding may
not be brought in such court for jurisdictional reasons, in the Supreme Court
of the State of New York, New York County. Each of the parties hereto further
agrees that service of any process, summons, notice or document by US registered
mail to such party’s respective address set forth above shall be effective
service of process for any action, suit or proceeding in New York with respect
to any matters to which it has submitted to jurisdiction in this clause. Each
of the parties hereto irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement, any agreement entered into in connection with this Agreement or the
transactions contemplated hereby or thereby in (x) the Supreme Court of
New York, New York County, or (y) the US District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.


 


(b)   Each
party waives, to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect of any litigation arising out of or
relating to this Agreement. Each party (i) certifies that no
representative, agent or attorney of another party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (ii) acknowledges that it has been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications set forth above in this Section 5.14(b).


 


SECTION 5.15.   Attorneys’ Fees.   In any
action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys’ fees in addition to
any other available remedy.


 


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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.


 


	
   

  	
  IBASIS, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  
	
   

  	
  /s/ Mark S. Flynn

  	
   

  
	
   

  	
  Name: Mark S. Flynn

  
	
   

  	
  Title: Chief Legal Officer

  
	
   

  	
   

  
	
   

  	
  KPN B.V.,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  
	
   

  	
  /s/ Leon Merkun

  	
   

  
	
   

  	
  Name: Leon Merkun

  
	
   

  	
  Title: Treasurer

  



 


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