-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PAsAQmEutlaVvDrKUzDIHZcMb9f/Q03W5wACl9S0/8Y0MXW+s1gi01H3IIR4sTLc qTUqe5QzcmA9K8gbgGOcMQ== 0000899140-98-000460.txt : 19981023 0000899140-98-000460.hdr.sgml : 19981023 ACCESSION NUMBER: 0000899140-98-000460 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981022 SROS: NASD GROUP MEMBERS: E.M. WARBURG, PINCUS & CO., LLC GROUP MEMBERS: WARBURG PINCUS VENTURES LP GROUP MEMBERS: WARBURG, PINCUS & CO. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ESPRIT TELECOM GROUP PLC CENTRAL INDEX KEY: 0001032142 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-50821 FILM NUMBER: 98728967 BUSINESS ADDRESS: STREET 1: MINERVA HOUSE VALPY STREET CITY: READING UNITED KINGD STATE: X0 ZIP: 00000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS VENTURES LP CENTRAL INDEX KEY: 0000942263 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133784037 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: E M WARBURG PINCUS & CO INC STREET 2: 466 LEXINGTON AVE 10TH FL CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: E M WARBURG PINCUS & CO INC STREET 2: 466 LEXINGTON AVE 10TH FL CITY: NEW YORK STATE: NY ZIP: 10017-3147 SC 13D 1 INITIAL FILING ON SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Esprit Telecom Group plc ------------------------------------------------------ (Name of Issuer) Ordinary Shares, nominal value (pound)0.01 each ------------------------------------------------------ (Title of Class of Securities) 29665W104 ------------------------------------------------------ (CUSIP Number of Class of Securities) Stephen Distler E.M. Warburg, Pincus & Co., LLC 466 Lexington Avenue New York, New York 10017 (212) 878-0600 ------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: William N. Dye Willkie Farr & Gallagher 35 Wilson Street London EC2M 2SJ England (011) 44-171-696-9060 October 12, 1998 ------------------------------------------------------ (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following: [ ] SCHEDULE 13D - ------------------------------------------- ------------------- CUSIP No. 29665W104 Page 2 of 14 Pages - ------------------------------------------- ------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warburg, Pincus Ventures, L.P. I.D. #13-3784037 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS * OO - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 Ordinary Shares ---------------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 15,442,150 Ordinary Shares OWNED BY EACH REPORTING PERSON WITH ---------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 Ordinary Shares ---------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES * [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON * PN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - ------------------------------------ ------------------------ CUSIP No. 29665W104 Page 3 of 14 Pages - ------------------------------------ ------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warburg, Pincus & Co. I.D. #13-6358475 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS * N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 Ordinary Shares ---------------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 15,442,150 Ordinary Shares OWNED BY EACH REPORTING PERSON WITH ---------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 Ordinary Shares ---------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES * [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON * PN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - ------------------------------------ ------------------------ CUSIP No. 29665W104 Page 4 of 14 Pages - ------------------------------------ ------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON E.M. Warburg, Pincus & Co., LLC I.D. #13-3536050 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS * N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 Ordinary Shares ---------------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 15,442,150 Ordinary Shares OWNED BY EACH REPORTING PERSON WITH ---------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 Ordinary Shares ---------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,442,150 Ordinary Shares - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES * [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON * OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. This Schedule 13D is being filed on behalf of Warburg, Pincus Ventures, L.P., a Delaware limited partnership ("Ventures"), Warburg, Pincus & Co., a New York general partnership ("WP"), and E.M. Warburg, Pincus & Co., LLC, a New York limited liability company ("EMW"), relating to the Ordinary Shares, nominal value (pound)0.01 each (the "Ordinary Shares"), of Esprit Telecom Group plc, a public limited company organized under the laws of England and Wales (the "Company"). Of the Reporting Entities (as defined below), only Ventures has acquired direct ownership of the Ordinary Shares. ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D relates to the Ordinary Shares, nominal value (pound)0.01 each, of the Company, and is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of the principal executive office of the Company is Minerva House, Valpy Street, Reading, RG1 1AR, United Kingdom. ITEM 2. IDENTITY AND BACKGROUND. (a) This statement is filed by Ventures, WP and EMW. The sole general partner of Ventures is WP. EMW manages Ventures. Lionel I. Pincus is the managing partner of WP and the managing member of EMW and may be deemed to control both WP and EMW. WP has a 15% interest in the profits of Ventures as the general partner, and also owns approximately 1.2% of the limited partnership interests in Ventures. Ventures, WP and EMW are hereinafter collectively referred to as the "Reporting Entities." The general partners of WP and the members of EMW are described in Schedule I hereto. The Reporting Entities and Apax Partners & Co. Ventures Ltd. ("Apax") may be deemed to be a "group" within the meaning of Section 13(d) of the Exchange Act. The filing of this Schedule 13D shall not be construed as an admission that any Reporting Entity is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any securities covered by this Schedule 13D other than the securities stated herein to be beneficially owned by such Reporting Entity. The Reporting Entities expressly disclaim beneficial ownership of any Ordinary Shares beneficially owned by Apax. Page 5 of 14 (b) The address of the principal business and principal office of each of the Reporting Entities is 466 Lexington Avenue, 10th Floor, New York, New York 10017. (c) The principal business of Ventures is that of a partnership engaged in making venture capital and related investments. The principal business of WP is acting as general partner of Ventures, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Ventures International, L.P., Warburg, Pincus Investors, L.P. and Warburg, Pincus Capital Company, L.P. The principal business of EMW is acting as manager of Ventures, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Ventures International, L.P., Warburg, Pincus Investors, L.P. and Warburg, Pincus Capital Company, L.P. (d) None of the Reporting Entities, nor, to the best of their knowledge, any of the directors, executive officers, general partners or members referred to in paragraph (a) has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Entities nor, to the best of their knowledge, any of the directors, executive officers, general partners or members referred to in paragraph (a) above has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Except as otherwise indicated on Schedule I hereto, each of the individuals referred to in paragraph (a) above is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The total amount of funds required by Ventures to purchase the 15,442,150 Ordinary Shares was $11,118,348, and was furnished from the working capital of Ventures. None of the Reporting Entities have acquired any other Ordinary Shares. The Reporting Entities and Apax may be deemed to have formed a Page 6 of 14 "group" within the meaning of Section 13(d) of the Exchange Act. The Reporting Entities expressly disclaim beneficial ownership of any Ordinary Shares beneficially owned by Apax. ITEM 4. PURPOSE OF TRANSACTION. On February 10, 1998, the Reporting Entities filed a Schedule 13G in respect of their beneficial ownership of 15,442,150 Ordinary Shares, then representing 12.5% of the Ordinary Shares. Dominic H. Shorthouse, who is a Managing Director and member of EMW, was elected to the Company's Board of Directors in January 1997. Mr. Shorthouse disclaims beneficial ownership of the Ordinary Shares owned by Ventures. Except with respect to the matters relating to the extraordinary general meeting of the Company's shareholders, as discussed below, the Reporting Entities presently expect to limit their involvement in the management of the Company to representation on the Board of Directors. Extraordinary General Meeting. On October 12, 1998, Ventures received a ----------------------------- copy of a notice addressed to the Company, dated the same date, that was served by Mr. Walter Anderson, in his personal capacity as a shareholder of the Company and as representative of Gold & Appel Transfer S.A., another shareholder of the Company. This notice required the Company to convene an extraordinary general meeting of its shareholders for the purpose of acting on resolutions to remove (i) David Oertle as Director and Chief Executive Officer of the Company; (ii) John McMonigall and Dominic Shorthouse as Directors; and (iii) Sir Robin Biggam as Director and Chairman. On October 12, 1998, Ventures and Apax Funds Nominees Limited (an entity that, based on information provided by Apax to the Reporting Entities, is the record holder of the Ordinary Shares beneficially owned by Apax, holding such Ordinary Shares solely as nominee) delivered to the Company a requisition to convene an extraordinary general meeting of the Company's shareholders, which included a special notice to the Company of their intention to move a resolution to remove Mr. Anderson as a Director. The text of this requisition is set forth as Exhibit 99.1 and is incorporated herein by reference. Page 7 of 14 In connection with the extraordinary general meeting of the Company's shareholders, Ventures expects to send shareholders of the Company a letter recommending that they vote in favor of the resolution proposed by Ventures and Apax Funds Nominees Limited and against the resolutions proposed by Mr. Anderson and Gold & Appel Transfer S.A., and expects Apax Funds Nominees Limited to join them in this letter. In addition, Ventures expects Dominic Shorthouse (in his capacity as Director) to send shareholders of the Company a letter summarizing his views in respect of the proposed resolutions, and expects John McMonigall (in his capacity as Director) to join him in this letter. Ventures expects to vote in favor of the resolution to remove Mr. Anderson as a Director and to vote against the resolutions proposed by Mr. Anderson and Gold & Appel Transfer S.A., and expects Apax Funds Nominees Limited to vote in the same way. As a result of the foregoing actions by Ventures and Apax Funds Nominees Limited, the Reporting Entities and Apax may be deemed to have formed a "group" within the meaning of Section 13(d) of the Exchange Act. Apax has informed the Reporting Entities that it intends to file a separate Schedule 13D. The filing of this Schedule 13D shall not be construed as an admission that any Reporting Entity is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any securities covered by this Schedule 13D other than the securities stated herein to be beneficially owned by such Reporting Entity. The Reporting Entities expressly disclaim beneficial ownership of any Ordinary Shares beneficially owned by Apax. The Reporting Entities, together, and Apax each have a representative on the Board of Directors of the Company. These Directors participate in Board and committee meetings and in such capacity discuss the business of the Company. In such capacity, on February 26, 1998, the Remuneration Committee of the Board of Directors (comprised of such Directors and David Oertle, the Chief Executive Officer of the Company) met and resolved to appoint recruitment consultants to identify two individuals to be recommended to the Board of Directors as independent non-executive Directors. Except as set forth herein, however, the Reporting Entities and Apax have no obligations to, or arrangements or understandings with, each other concerning the Company or the Ordinary Shares. * * * Page 8 of 14 Registration Rights. Pursuant to a Registration Rights Agreement (the --------------------- "Registration Rights Agreement"), dated as of February 27, 1997, between Ventures, the Company and certain other holders of Ordinary Shares of the Company, including Apax (the "Other Holders"), the Company has granted Ventures and the Other Holders certain rights to require the Company to register Ordinary Shares held by them under the Securities Act of 1933, as amended (the "Securities Act"). The Company has agreed that, upon request from any such holder, subject to certain conditions, the Company will file a registration statement under the Securities Act to register Ordinary Shares held by such holder, subject to a maximum of two requests per holder and a maximum of one request in any six-month period. Subject to certain conditions, the Company has also granted each such holder the right to include their Ordinary Shares in any registration statement covering offerings of Ordinary Shares by the Company or other holders. The Registration Rights Agreement will terminate with respect to each holder upon the earlier of February 27, 2007 and such time as such holder owns less than five percent of the outstanding Ordinary Shares if such holder can then sell Ordinary Shares in the United States public market pursuant to an exemption from the registration requirements of the Securities Act and without regard to holding period, volume or manner-of sale limitations. The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the Registration Rights Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The Reporting Entities may from time to time acquire additional Ordinary Shares or dispose of Ordinary Shares through open market or privately negotiated transactions or otherwise, depending on existing market conditions and other considerations discussed below. The Reporting Entities intend to review their investment in the Company on a continuing basis and, depending upon the price and availability of Ordinary Shares, subsequent developments affecting the Company, the Company's business and prospects, other investment and business Page 9 of 14 opportunities available to the Reporting Entities, general stock market and economic conditions, tax considerations and other factors considered relevant, may decide at any time not to increase, or to decrease, the size of their investment in the Company. Except as set forth herein or in Item 6, none of the Reporting Entities nor, to the best of their knowledge, any person listed in Schedule I hereto, has any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's Memorandum and Articles of Association or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) (i) As of October 20, 1998, Ventures beneficially owned 15,442,150 Ordinary Shares. By reason of their respective relationships with Ventures, each of the Reporting Entities may be deemed under Rule 13d-3 under the Exchange Act to own beneficially all of the Ordinary Shares which Ventures beneficially owns. As of October 20, 1998, 15,442,150 Page 10 of 14 Ordinary Shares represented approximately 12.3% of the Ordinary Shares, based on 125,614,075 Ordinary Shares outstanding as of such date, as reported to the Reporting Entities by the Company. (ii) Apax has informed the Reporting Entities that, as of October 20, 1998, Apax is the beneficial owner of 33,557,600 of the Ordinary Shares, representing approximately 26.7% of the Ordinary Shares. The Reporting Entities and Apax may be deemed to have formed a "group" within the meaning of Section 13(d) of the Exchange Act. Apax has informed the Reporting Entities that it intends to file a separate Schedule 13D. By virtue of the limited arrangements between the Reporting Entities and Apax Funds Nominees Limited described above, the Reporting Entities expressly disclaim beneficial ownership of any Ordinary Shares beneficially owned by Apax. The filing of this Schedule 13D shall not be construed as an admission that any Reporting Entity is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any securities covered by this Schedule 13D other than the securities stated herein to be beneficially owned by such Reporting Entity. (b) The Reporting Entities together share the power to vote or to direct the vote, and to dispose or to direct the disposition of the Ordinary Shares held by Ventures. (c) None of the Reporting Entities nor, to the best of their knowledge, any person listed in Schedule I hereto, has effected any transactions in the Ordinary Shares during the preceding 60 days. (d) Except as set forth in this Item 5, no person other than each respective record owner referred to herein of securities is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Pursuant to Rule 13d-1(f) promulgated under the Exchange Act, the Reporting Entities have entered into an agreement with Page 11 of 14 respect to the joint filing of this schedule, and any amendment or amendments hereto, which is being filed as Exhibit 99.2 to this Schedule 13D and is incorporated herein by reference. The information set forth in Item 4 above is incorporated herein by reference. Except as described herein and incorporated by reference to Item 4 above, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Company. By virtue of the relationships among the Reporting Entities as described in Item 2, the Reporting Entities may be deemed to be a "group" under the federal securities laws. Lionel I. Pincus disclaims any beneficial ownership of the Ordinary Shares reported herein as being beneficially owned by the Reporting Entities. Page 12 of 14 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 10.1 Registration Rights Agreement, dated as of February 27, 1997, by and among the Company, Ventures and certain other holders of the Company's Ordinary Shares. 99.1 Requisition of Extraordinary General Meeting, dated October 12, 1998, from Ventures and Apax Funds Nominees Limited. 99.2 Joint Filing Agreement, dated October 22, 1998, by and among the Reporting Entities. Page 13 of 14 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: October 22, 1998 WARBURG, PINCUS VENTURES, L.P. By: Warburg, Pincus & Co., General Partner By:/s/Stephen Distler ---------------------------- Stephen Distler Partner Dated: October 22, 1998 WARBURG, PINCUS & CO. By:/s/ Stephen Distler ---------------------------- Stephen Distler Partner Dated: October 22, 1998 E.M. WARBURG, PINCUS & CO., LLC By:/s/ Stephen Distler ---------------------------- Stephen Distler Member Page 14 of 14 SCHEDULE I Set forth below is the name, position and present principal occupation of each of the general partners of Warburg, Pincus & Co. ("WP") and each of the members of E.M. Warburg, Pincus & Co., LLC ("EMW"). The sole general partner of Warburg, Pincus Ventures, L.P. ("Ventures") is WP. WP, EMW and Ventures are hereinafter collectively referred to as the "Reporting Entities." Except as otherwise indicated, the business address of each of such persons is 466 Lexington Avenue, New York, New York 10017, and each of such persons is a citizen of the United States. General Partners of WP ---------------------- Present Principal Occupation in Addition to Position with WP, and Positions with the Name Reporting Entities - ---- -------------------------------- Joel Ackerman Managing Director and Member, EMW Susan Black Managing Director and Member, EMW Christopher W. Brody Managing Director and Member, EMW Harold Brown Senior Managing Director and Member, EMW Errol M. Cook Managing Director and Member, EMW W. Bowman Cutter Managing Director and Member, EMW Elizabeth B. Dater Managing Director and Member, EMW Stephen Distler Managing Director, Member and Treasurer, EMW Harold W. Ehrlich Managing Director and Member, EMW John L. Furth Vice Chairman of the Board and Member, EMW Stewart K.P. Gross Managing Director and Member, EMW Patrick T. Hackett Managing Director and Member, EMW Jeffrey A. Harris Managing Director and Member, EMW William H. Janeway Managing Director and Member, EMW Douglas M. Karp Managing Director and Member, EMW Charles R. Kaye Managing Director and Member, EMW Henry Kressel Managing Director and Member, EMW S-1 Joseph P. Landy Managing Director and Member, EMW Sidney Lapidus Managing Director and Member, EMW Kewsong Lee Managing Director and Member, EMW Reuben S. Leibowitz Managing Director and Member, EMW S. Joshua Lewis Managing Director and Member, EMW David E. Libowitz Managing Director and Member, EMW Brady T. Lipp Managing Director and Member, EMW Stephen J. Lurito Managing Director and Member, EMW Spencer S. Marsh III Managing Director and Member, EMW Lynn S. Martin Managing Director and Member, EMW Edward J. McKinley Managing Director and Member, EMW Rodman W. Moorhead III Senior Managing Director and Member, EMW Maryanne Mullarkey Managing Director and Member, EMW Howard H. Newman Managing Director and Member, EMW Gary D. Nusbaum Managing Director and Member, EMW Sharon B. Parente Managing Director and Member, EMW Dalip Pathak Managing Director and Member, EMW Daphne D. Philipson Managing Director and Member, EMW Lionel I. Pincus Chairman of the Board, CEO, and Managing Member, EMW; and Managing Partner, Pincus & Co. Eugene L. Podsiadlo Managing Director and Member, EMW Ernest H. Pomerantz Managing Director and Member, EMW Brian S. Posner Managing Director and Member, EMW Arnold M. Reichman Managing Director and Member, EMW Roger Reinlieb Managing Director and Member, EMW John D. Santoleri Managing Director and Member, EMW Steven G. Schneider Managing Director and Member, EMW Sheila N. Scott Managing Director and Member, EMW S-2 Harold Sharon Managing Director and Member, EMW Eugene J. Siembieda Managing Director and Member, EMW James E. Thomas Managing Director and Member, EMW John L. Vogelstein Vice Chairman of the Board and Member, EMW Elizabeth H. Weatherman Managing Director and Member, EMW John A. Zaro, III Managing Director and Member, EMW Pincus & Co.* NL & Co.** - --------------------- * New York limited partnership; its primary activity is ownership in WP and EMW. **New York limited partnership; its primary activity is ownership in WP. S-3 Members of EMW -------------- Present Principal Occupation in Addition to Position with EMW, and Positions with the Name Reporting Entities - ---- -------------------------------- Joel Ackerman Partner, WP Susan Black Partner, WP Christopher W. Brody Partner, WP Harold Brown Partner, WP Dale C. Christensen(1) Errol M. Cook Partner, WP W. Bowman Cutter Partner, WP Elizabeth B. Dater Partner, WP Stephen Distler Partner, WP P. Nicholas Edwards(2) Partner, WP Harold W. Ehrlich Partner, WP John L. Furth Partner, WP Stewart K.P. Gross Partner, WP Patrick T. Hackett Partner, WP Jeffrey A. Harris Partner, WP William H. Janeway Partner, WP Douglas M. Karp Partner, WP Charles R. Kaye Partner, WP Richard H. King(2) Henry Kressel Partner, WP Joseph P. Landy Partner, WP Sidney Lapidus Partner, WP Kewsong Lee Partner, WP Reuben S. Leibowitz Partner, WP S. Joshua Lewis Partner, WP S-4 David E. Libowitz Partner, WP Brady T. Lipp Partner, WP Stephen J. Lurito Partner, WP John W. MacIntosh(1) Spencer S. Marsh III Partner, WP Lynn S. Martin Partner, WP Edward J. McKinley Partner, WP Rodman W. Moorhead III Partner, WP Maryanne Mullarkey Partner, WP Howard H. Newman Partner, WP Gary D. Nusbaum Partner, WP Sharon B. Parente Partner, WP Dalip Pathak Partner, WP Daphne D. Philipson Partner, WP Lionel I. Pincus Managing Partner, WP; Chairman of the Board and CEO, EMW; Managing Partner, Pincus & Co. Eugene L. Podsiadlo Partner, WP Ernest H. Pomerantz Partner, WP Brian S. Posner Partner, WP Arnold M. Reichman Partner, WP Roger Reinlieb Partner, WP John D. Santoleri Partner, WP Steven G. Schneider Partner, WP Sheila N. Scott Partner, WP Harold Sharon Partner, WP Dominic H. Shorthouse(2) Eugene J. Siembieda Partner, WP Chang Q. Sun(3) James E. Thomas Partner, WP S-5 John L. Vogelstein Partner, WP Elizabeth H. Weathermen Partner, WP Jeremy S. Young(2) John A. Zaro, III Partner, WP Pincus & Co.* - --------------------- (1) Citizen of Canada (2) Citizen of United Kingdom (3) Citizen of People's Republic of China * New York limited partnership; its primary activity is ownership in WP. S-6 EXHIBIT INDEX EXHIBIT NO. TITLE 10.1 Registration Rights Agreement, dated as of February 27, 1997, by and among the Company, Ventures and certain other holders of the Company's Ordinary Shares. 99.1 Requisition of Extraordinary General Meeting, dated October 12, 1998, from Ventures and Apax Funds Nominees Limited. 99.2 Joint Filing Agreement, dated October 22, 1998, by and among the Reporting Entities. EX-10.1 2 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.1 ------------ REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of February 27, 1997 (this "Agreement"), among Esprit Telecom Group plc, a public limited company organized under the laws of England and Wales (the "Company"), Apax Partners & Co. Ventures Ltd. ("Apax Partners") as managers of Apax Ventures IV International Partners, L.P., Apax Ventures IV, Apax UK V-A, L.P., Apax UK V-B, Warburg, Pincus Ventures, L.P., a Delaware limited partnership ("Warburg, Pincus"), Hancock International Private Equity Partners II - Direct Fund L.P. ("Hancock"), Gold & Appel Transfer, S.A. ("Gold & Appel") and Abacus (C.I.) Limited ("Abacus"), as trustee of the Astro Trust. Each of Apax Partners, Warburg, Pincus, Hancock, Gold & Appel and Abacus is referred to herein as a "Shareholder." WHEREAS, the Company has determined that it is in the best interests of the Company to offer Ordinary Shares, nominal value 1p per share, of the Company (the "Ordinary Shares") in the form of American Depositary Shares ("ADSs") in the United States (the "Offering") pursuant to the filing of a Form F-1 Registration Statement under the United States Securities Act of 1933, as amended (the "Securities Act"); and WHEREAS, the Company has determined that it is in the best interests of the Company to enter into this Agreement with the Shareholders in connection with the Offering. NOW, THEREFORE, in consideration of the mutual promises, representations, warranties and conditions contained herein, the parties hereto agree as follows: ARTICLE I. DEFINITIONS SECTION 1.01. As used in this Agreement, the following terms shall have the following respective meanings: "Commission" shall mean the United States Securities and Exchange Commission, or any other United States federal agency at the time administering the Securities Act or the Exchange Act (defined below), as applicable, whichever is the relevant statute. "Exchange Act" shall mean the United States Securities Exchange Act of 1934, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be amended from time to time. "Holder" shall mean each Shareholder or any transferee or assignee thereof to whom the rights under this Agreement are assigned in accordance with the provisions of Section 4.06 hereof. "person" shall mean a corporation, association, partnership, organization, group (as such term is used in Rule 13d-5 under the Exchange Act), business, individual, government or political subdivision thereof, governmental agency or other entity. "Registrable Shares" shall mean all Ordinary Shares held by or on behalf of a Shareholder from time to time. For purposes of this Agreement, any Registrable Shares shall cease to be Registrable Shares when (x) a registration statement covering such Registrable Shares has been declared effective and such Registrable Shares have been disposed of pursuant to such effective registration statement or (y) such Registrable Shares are sold freely in the public market by a person in a transaction in which the rights under the provisions of this Agreement are not assigned. ARTICLE II. REPRESENTATIONS AND WARRANTIES SECTION 2.01. Representations and Warranties of the Shareholders. Each Shareholder severally and not jointly hereby represents and warrants to the Company that it has all requisite power and authority, and has received all requisite approvals to complete the transactions contemplated hereby; this Agreement has been duly authorized, executed and delivered by each Shareholder and constitutes a valid and binding agreement enforceable against it in accordance with its terms. SECTION 2.02. Representations and Warranties of the Company. The Company represents and warrants to each Shareholder that it has been duly incorporated as a public limited company under the laws of England and Wales and that (i) it has all requisite corporate power and authority, and has received all requisite approvals (including any necessary approval of its board of directors) to complete the transactions contemplated hereby and (ii) this Agreement has been duly authorized, executed and delivered by it and constitutes a valid and binding agreement enforceable by each Shareholder against it in accordance with its terms. ARTICLE III. AGREEMENTS IN RESPECT OF THE REGISTRABLE SHARES SECTION 3.01. Demand Registrations. Each Holder shall have the right (the "Demand Right") on two (2) occasions during the term of this Agreement with respect to such Holder to require the Company to file a registration statement under the Securities Act in respect of all or some of the Registrable Shares held by such Holder (but not less than a number of Registrable Shares that represents at least 25% of the total number of Registrable Shares held by such Holder at such time; provided, however, that if such Holder is exercising such Demand Right together with any other Holders, then such Demand Right may be exercised if the Registrable Shares subject to such Holder's Demand Right, together with all other shares demanded by other Holders, shall exceed 10% of the then outstanding Ordinary Shares of the Company). Subject to the provisions of subsection (b) below, as promptly as practicable, but in no event later than 45 days after the Company receives a written request from such Holder demanding that the Company so register the number of Registrable Shares specified in such request, the Company shall file with the Commission and thereafter use its best efforts to cause to be declared effective promptly a registration statement (a "Demand Registration") providing for the registration of all Registrable Shares as such Holder shall have demanded be registered. Holders may distribute the Registrable Shares covered by such Demand Registration either by means of a firm commitment underwriting or other than by means of an underwriting; provided that, in the event of a distribution other than by means of an underwriting, such distribution may only be made following the effective date of the registration statement relating to such Demand Registration and so long as the registration statement remains effective in accordance with the terms of Section 3.03(a) (iii) of this Agreement. All requests made pursuant to this Section 3.01(a) shall specify the amount of the Registrable Shares to be registered and the intended method of distribution of such Registrable Shares. -2- (b) Anything in this Agreement to the contrary notwithstanding, the Company shall be entitled to postpone and delay the filing of any Demand Registration until the earliest practicable time at which such Demand Registration can be reasonably effected if (i) the Company is conducting or about to conduct an underwritten public offering of securities in which the Holder is entitled to join pursuant to Section 3.02 hereof, (ii) the Company is subject to an existing contractual obligation not to engage in a public offering, (iii) the financial statements of the Company for the fiscal period most recently ended prior to such written request are not yet available, or (iv) the Company shall determine that any such filing or the offering of any Registrable Shares would (x) in the good faith judgment of the Board of Directors of the Company, impede, delay or otherwise interfere with any pending or contemplated acquisition, corporate reorganization or other similar transaction or financing related thereto involving the Company, (y) based upon advice from the Company's investment banker or financial advisor, adversely affect any pending or contemplated offering or sale of any class of securities by the Company, or (z) require disclosure of material nonpublic information which, if disclosed at such time, would be materially harmful to the interests of the Company and its shareholders. In the event of a decision by the Company to postpone or delay the filing of any Demand Registration pursuant to this Section 3.01(b), the Company shall notify all Holders (i) of such decision and (ii) upon the expiration of any such postponement or delay. After the expiration of any such postponement or delay and without any further request from a Holder, the Company shall effect the filing of the relevant Demand Registration and shall use its best efforts to cause any such Demand Registration to be declared effective as promptly as practicable unless such Holder shall have, prior to the effective date of such Demand Registration, withdrawn in writing its initial request, in which case such withdrawn request shall not constitute a Demand Registration for purposes of determining the number of Demand Registrations to which such Holder is entitled to hereunder. (c) Notwithstanding anything contained in this Section 3.01: (i) the Company shall not be required to file a registration statement within six (6) months of the effective date of a prior registration statement filed as a result of a request for a Demand Registration by such Holder or within six (6) months of the effective date of a prior registration statement registering Ordinary Shares; (ii) a Holder shall not be entitled to request a Demand Registration until after 180 days after the closing of the Offering; and (iii) no request for a Demand Registration may be made by a Holder during the pendency of any lock-up period imposed in connection with a public offering of securities of the Company, except with the consent of the underwriters controlling the applicable lock-up agreement. (d) Notwithstanding anything contained in this Section 3.01, if the lead underwriter of an offering involving a Demand Registration advises the Holders that have requested such registration that the total number of Registrable Shares that the Holders intend to include is such as (i) would materially and adversely affect the price of the Ordinary Shares to be offered or (ii) result in a greater number of Ordinary Shares being offered than the market could reasonably absorb, then the number of Registrable Shares to be registered in the Demand Registration shall be reduced to such number which, in the opinion of such underwriters, can be sold without (y) materially and adversely affecting the price of the Ordinary Shares to be offered or (z) resulting in a greater number of Ordinary Shares being registered than the market could absorb. Such Registrable Shares to be included in such registration -3- shall be allocated pro rata among all requesting Holders on the basis of the relative number of securities originally requested to be registered by each of them. (e) The Company shall be entitled to include newly issued Ordinary Shares in any Demand Registration; provided, however, that if the lead underwriter of an offering involving a Demand Registration advises the Holders that have requested such registration that the number of Ordinary Shares that the Company intends to include in addition to the total number of Registrable Shares that the Holders intend to include is such as (i) would materially and adversely affect the price of the Ordinary Shares to be offered or (ii) result in a greater number of Ordinary Shares being offered than the market could reasonably absorb, then the Holders will promptly so advise the Company and may require that the newly issued Ordinary Shares be reduced to such number which, in the opinion of such underwriters, when added to the number of Registrable Shares that the Holders intend to be included, can be sold without (y) materially and adversely affecting the price of the Ordinary Shares to be offered or (z) resulting in a greater number of Ordinary Shares being registered than the market could absorb. SECTION 3.02. Piggyback Registration. (a) If, at any time following the date of the Offering and during the term of the Agreement with respect to each Holder, the Company proposes to file a registration statement under the Securities Act with respect to an offering of its Ordinary Shares (i) for its own account (other than a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the Commission)) or (ii) for the account of any holders of its Ordinary Shares (including any pursuant to a Demand Registration), on a form and in a manner that would permit registration of Registrable Shares for sale to the public under the Securities Act, the Company shall give written notice of such proposed filing to each Holder as soon as practicable (but in any event not less than 30 days before the anticipated filing date), and such notice shall offer each Holder the opportunity to register such number of Registrable Shares as the Holder shall request. Upon the written direction of any Holder, given within 20 days following the receipt by such Holder of any such written notice (which direction shall specify the number of Registrable Shares intended to be disposed of by such Holder), the Company shall include in such registration statement (a "Piggyback Registration" and, collectively with a Demand Registration, a "Registration") such number of Registrable Shares as shall be set forth in such notice. (b) Notwithstanding anything contained in this Section 3.02, if the lead underwriter of an offering involving a Piggyback Registration advises the Company that the inclusion of such Registrable Shares (i) would materially and adversely affect the price of the Ordinary Shares to be offered or (ii) result in a greater amount of Ordinary Shares being offered than the market could reasonably absorb, then the number of Registrable Shares to be registered by each party requesting Piggyback Registration shall be reduced such that the total number of Registrable Shares being registered is not larger than such number which, in the opinion of such underwriters, can be sold without (y) materially and adversely affecting the price of the Ordinary Shares to be offered or (z) resulting in a greater number of Ordinary Shares being registered than the market could absorb. Such Registrable Shares to be included in such registration shall be allocated pro rata among all requesting Holders on the basis of the relative number of securities originally requested to be registered by each of them. Nothing contained herein shall require the Company to reduce the number of Ordinary Shares proposed to be issued by the Company. (c) No Piggyback Registration effected under this Section 3.02 shall be deemed to have been effected pursuant to Section 3.01 hereof or shall release the Company of its obligations to effect any Demand Registration upon request as provided under Section 3.01 hereof. -4- (d) The Company shall not be obligated to effect any registration of Registrable Shares under this Section 3.02 that is incidental to the registration of any of its securities in connection with any merger, acquisition, exchange offer, dividend reinvestment plan or stock option or other employee benefit plan. (e) Notwithstanding anything contained in this Section 3.02, if, at any time after giving notice of its intention to register any of its securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to the Holders participating in such registration and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration (but not from its obligation to pay expenses incurred in connection with such registration to the extent provided in Section 3.05). (f) No Holder may participate in any underwritten registration pursuant to Section 3.01 of this Agreement or this Section 3.02 unless such Holder (i) agrees to sell such Holder's Registrable Shares on the basis provided in any underwritten arrangements approved by the Company and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. SECTION 3.03. Registration Procedures. (a) In connection with each Registration, and in accordance with the intended method or methods of distribution of the Ordinary Shares as described in such Registration, the Company shall, as soon as reasonably practicable (and, in any event, subject to the terms of this Agreement, at or before the time required by applicable laws and regulations): (i) keep the Holders advised in writing as to the initiation of each Registration and as to the completion thereof; (ii) prepare and file with the Commission a registration statement on an appropriate form with respect to such Registrable Shares and use its best efforts to cause such registration statement to become effective and prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Shares covered by such registration statement; (iii) keep such Registration effective for a period of one hundred and twenty (120) days or until the Holders, as applicable, have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that (1) such 120-day period shall be extended for a period of time equal to the period during which the Holders refrain from selling any securities included in such Registration at the request of the Company and its underwriter; and (2) in the case of any registration of Registrable Shares on Form F-3 (or any applicable successor to such form) which are intended to be offered on a continuous or delayed basis, such 120-day period shall be extended until all such Registrable Shares are sold, provided that Rule 415 under the Securities Act, or any successor rule thereunder, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment which (y) includes any prospectus required by Section 10(a) of the Securities Act or (z) reflects facts or events representing a material or fundamental change in the information set forth in the registration -5- statement, the incorporation by reference of information required to be included in (y) and (z) above to be contained in periodic reports filed pursuant to Section 12 or 15(d) of the Exchange Act in the registration statement; (iv) furnish to each Holder participating in such registration such numbers of copies of the registration statement and the prospectus included therein (including each preliminary prospectus and any amendments or supplements thereto), in conformity with the requirements of the Securities Act and such other documents and information as each Holder may reasonably request in order to facilitate the sale or disposition of such Registrable Shares; (v) use its reasonable best efforts to register or qualify the Registrable Shares covered by such registration statement under such other securities or blue sky laws of such jurisdiction within the United States as shall be reasonably appropriate for the distribution of the Registrable Shares covered by the registration statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business in or to file a general consent to service of process in any jurisdiction wherein it would not but for the requirements of this paragraph (d) be obligated to do so; and provided, further, that the Company shall not be required to qualify such Registrable Shares in any jurisdiction in which the securities regulatory authority of such jurisdiction requires that a Holder participating in such registration submit any of its Registrable Shares to the terms, provisions and restrictions of any escrow, lockup or similar agreement(s) for consent to sell Registrable Shares in such jurisdiction unless such Holder agrees to do so; (vi) promptly notify each Holder participating in such registration, (1) when a prospectus or any prospectus supplement or amendment has been filed, and, with respect to a registration statement or any post-effective amendment to a registration statement, when the same has become effective, (2) of any request by the Commission for amendments or supplements to a registration statement or related prospectus or for additional information or any receipt of Commission comments, (3) of the issuance by the Commission of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for any such purpose, (4) of the receipt by the Company of any notification with respect to the suspension of the qualification of any of the Registrable Shares for sale in any jurisdiction or the initiation or threat of any proceedings for such purpose, and (5) at any time when a prospectus relating to the Registrable Shares is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an 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 in light of the circumstances under which they were made, and at the request of any such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made and shall otherwise comply in all material respects with applicable law; (vii) use its reasonable best efforts to furnish, at the request of any Holder requesting Registration, if the method of distribution is by means of an underwriting, on the date that the Registrable Shares are delivered to the underwriters for sale pursuant to such registration, or if such Registrable Shares are not being sold through underwriters, on the date -6- that the registration statement with respect to such Registrable Shares becomes effective, (1) a signed opinion, dated such date, of the independent legal counsel representing the Company for the purpose of such registration, addressed to the underwriters, if any, and if such Registrable Shares are not being sold through underwriters, then to the Holders participating in such Registration, as to such matters as such underwriters or the Holders may reasonably request, in form and substance as would customarily be given to underwriters in such a transaction and reasonably satisfactory to a majority-in-interest of Holders participating in such Registration; and (2) letters dated such date and the date the offering is priced, from the independent certified public accountants of the Company, addressed to the underwriters, if any, and if such Registrable Shares are not being sold through underwriters, then to the Holders participating in such Registration and, if such accountants refuse to deliver such letters to such Holders pursuant to applicable accounting standards, then to the Company (y) stating that they are independent certified public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements and other financial data of the Company included in the registration statement or the prospectus, or any amendment or supplement thereto, comply as to form in all material respects with the applicable accounting requirements of the Securities Act and (z) covering such other financial matters with respect to the registration in respect of which such letter is being given as such underwriters or the Holders, as the case may be, may reasonably request, in form and substance as would customarily be given to underwriters in such a transaction and reasonably satisfactory to a majority-in-interest of the Holders participating in such Registration; (viii) enter into customary agreements (including if the method of distribution is by means of an underwritten public offering, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Shares to be so included in the registration statement; (ix) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, but not later than fifteen (15) months after the effective date of the registration statement, an earning statement covering the period of at least twelve (12) months beginning with the first full month after the "effective date" (as defined in Rule 158 under the Securities Act) of the registration statement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (x) use its best efforts to list such securities on each securities exchange on which Ordinary Shares or ADSs are then listed, if such Registrable Shares are not already so listed and if such listing is then permitted under the rules of such exchange. (b) Each Holder requesting registration shall furnish to the Company in writing such information regarding such Holder and its intended method of distribution of the Registrable Shares as the Company may from time to time reasonably request in writing and as shall be required by law or by the Commission in connection therewith. Such Holder shall notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to the Company or of the occurrence of any event, in either case as a result of which any prospectus relating to the Registrable Shares contains or would contain an untrue statement of a material fact regarding such Holder or its intended method of distribution of such Registrable Shares or omits to state any material fact regarding such Holder or its intended method of distribution of such Registrable Shares -7- 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, and promptly furnish to the Company any additional information required to correct and update any previously furnished information, or required so that such prospectus shall not contain, with respect to such Holder or the intended method of distribution of the Registrable Shares, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and shall otherwise comply in all material respects with applicable law. (c) Each Holder participating in any registration pursuant to Section 3.01 or 3.02 shall enter into customary agreements (including if the method of distribution is by means of an underwritten public offering, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Shares to be so included in the registration statement. (d) Each Holder participating in any Registration shall, upon receipt of notice of the occurrence of any of the events specified in Section 3.03(a)(vi)(2)-(5) hereof, forthwith discontinue disposition of such Registrable Shares pursuant to the registration statement covering such Registrable Shares until such Holder's receipt of notice from the Company that the use of the applicable prospectus may be resumed or until such Holder's receipt of copies of an amended or supplemented prospectus. SECTION 3.04. Registration Expenses. (a) In the case of a registration proposed by the Company pursuant to which the Company is registering Ordinary Shares for its own account, all expenses, excluding underwriters' discounts and commissions and any stamp or transfer tax or duty, but including, without limitation, all registration, filing and qualification fees, word processing, duplicating, printers' and accounting fees (including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance), fees of the National Association of Securities Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and expenses of complying with state securities or blue sky laws, and fees and disbursements of counsel for the Company incurred in connection with each registration shall be paid by the Company. In the case of such a registration, each Holder participating in such registration shall bear and pay the underwriting commissions and discounts and any stamp or transfer tax or duty and the fees and disbursements of counsel for such Holder applicable to securities offered for its account in connection with such registration. (b) In the case of a Demand Registration, each Holder shall bear and pay the underwriting commissions and discounts and any stamp or transfer tax or duty and the fees and disbursements of counsel for such Holder applicable to securities offered for its account in connection with such registration. All other expenses, including without limitation all registration, filing and qualification fees, word processing, duplicating, printers' and accounting fees (including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance), fees of the National Association of Securities Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and expenses of complying with state securities or blue sky laws and fees and disbursements of counsel for the Company incurred in connection with each registration shall be paid by the Company and each Holder participating in such registration in proportion to the number of securities registered for the account of the Company and each Holder. SECTION 3.05. Indemnification; Contribution. (a) Indemnification by the Company. The Company shall, and it hereby agrees to, indemnify and hold harmless, in the case of any Registration -8- registering Registrable Shares of a Holder, such Holder, each of such Holder's officers, directors and partners, and each person controlling such Holder within the meaning of the Securities Act (each, a "Holder Indemnified Party"), and each person who participates as a placement or sales agent or as an underwriter and each person controlling such agent or underwriter within the meaning of the Securities Act, in any offering or sale of the Registrable Shares, from and against any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) joint or several to which such Holder Indemnified Party or such agent or underwriter or controlling person of such underwriter is or may become subject, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration statement, or any preliminary or final prospectus contained therein, or any amendment or supplement thereto, or any document incorporated by reference therein, or any other document incident thereto, including without limitation, documents relating to qualification or compliance with respect to the securities relating to the Registration (collectively, the "Registration Documents"), or arise out of or are based upon 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, or arise out of any violation by the Company of the Securities Act or the Exchange Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with such Registration (including, without limitation, any qualification or compliance); and the Company shall, and it hereby agrees to, reimburse each such Holder Indemnified Party or agent, underwriter or controlling person of such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability (or action or proceeding in respect thereof) as such expenses are incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such loss, claim, damage or liability (or action or proceeding in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such Registration Document, in reliance upon and in conformity with written information furnished to the Company by such Holder Indemnified Party or any agent, underwriter or controlling person of such underwriter or other representative of such Holder expressly for use therein, or by such Holder's failure to furnish the Company, upon request, with the information with respect to such Holder Indemnified Party or any agent, underwriter or controlling person of such underwriter or other representative of such Holder, or of such Holder's intended method of distribution, that is the subject of the untrue statement or omission or if the Company shall sustain the burden of proving that such Holder Indemnified Person or such agent, underwriter or controlling person of such underwriter sold securities to the person alleging such loss, claim, damage or liability (or action or proceeding in respect thereof) without sending or giving, at or prior to the written confirmation of such sale, a copy of the applicable prospectus (excluding any documents incorporated by reference therein) or of the applicable prospectus, as then amended or supplemented (excluding any documents incorporated by reference therein) if the Company had previously furnished copies thereof to such Holder or such agent or underwriter, and such prospectus corrected such untrue statement or alleged untrue statement or omission or alleged omission made in such Registration. The indemnification by the Company pursuant to this Section 3.05(a) shall not apply to the extent that such indemnification is prohibited by Section 151 of the U.K. Companies Act. (b) Indemnification by the Holder and Any Agent or Underwriters. Each Holder requesting or joining in a Registration, if Registrable Securities held by it are included in the Registration, severally and not jointly, shall indemnify and hold harmless (i) the Company, each of its directors and officers, each person, if any, who controls the Company within the meaning of the Securities Act (each, a "Company Indemnified Party"), (ii) each agent and any underwriter for the Company or controlling person of such underwriter (within the meaning of the Securities Act) and (iii) -9- each Holder Indemnified Party against any losses, claims, damages or liabilities (or actions or proceedings in respect thereof), joint or several, to which any such Company Indemnified Party, agent, underwriter, controlling person of such underwriter, or such other Holder Indemnified Party is or may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of any material fact contained in any such Registration Document, or arise out of or are based upon 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, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Registration Document, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder expressly for use therein; and each such Holder shall reimburse any legal or other expenses reasonably incurred by such Company Indemnified Party or any such agent, underwriter, controlling person of such underwriter, or such other Holder Indemnified Party in connection with investigating or defending any loss, claim, damage or liability (or actions or proceedings in respect thereof) as such expenses are incurred; provided, however, that (i) the obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds to such Holder of the securities sold in connection with such Registration and (ii) no Holder shall be liable to any such person in any such case to the extent of any such loss, claim, damage or liability (or action or proceeding in respect thereof), if such Holder shall sustain the burden of proving that such Company Indemnified Party, agent or underwriter or controlling person of such underwriter, or any other Holder Indemnified Party, as the case may be, sold securities to the person alleging such loss, claim, damage or liability (or action or proceeding in respect thereof), without sending or giving, at or prior to the written confirmation of such sale, a copy of the applicable prospectus (excluding any documents incorporated by reference therein) or the applicable prospectus, as then amended or supplemented (excluding any documents incorporated by reference therein), if such prospectus corrected such untrue statement or alleged untrue statement or omission or alleged omission made in such Registration. (c) Notice of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of, or as contemplated by, this Section 3.05, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than pursuant to such provisions unless the indemnifying party is materially prejudiced thereby. In case any such action or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be permitted to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (which shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation; provided, however, that an indemnified party may participate in such defense at such indemnified party's expense, unless the indemnified party shall have reasonably concluded that there may be a conflict of interest between the indemnifying party and such indemnified party in such action, in which case the fees and expenses of counsel shall be at the expense of the indemnifying party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one -10- counsel (in addition to local counsel) for each indemnified party with respect to such claim. The indemnifying party will not be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld or delayed. 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 unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or behalf of any indemnified party. (d) Contribution. Each Holder requesting or joining in a Registration, if Registrable Securities held by it are included in the Registration; and the Company agree that if, for any reason, the indemnification provisions contemplated by Section 3.05(a) or Section 3.05(b) hereof are unavailable to or are insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of, and benefits derived by, the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 3.05(d) were determined by pro rata allocation (even if the Holder or any agents for, or underwriters of, the Registrable Shares, or all of them, were treated as one entity for such purpose); or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 3.05(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above shall be deemed to include (subject to the limitations set forth in Section 3.05(c) hereof) any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. 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. Notwithstanding the foregoing, an indemnifying party shall not be required to contribute under this Section 3.05(d) except under such circumstances as such indemnifying party would have been liable pursuant to Section 3.05(a) or (b) had such indemnification been enforceable under applicable law. (e) Beneficiaries of Indemnification. The obligations of the Company under this Section 3.05 shall be in addition to any liability that it may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each Holder requesting or joining in a Registration, if Registrable Securities held by it are included in the Registration; and each agent and underwriter of the Registrable Shares and each person, if any, who controls such Holder or any such agent or underwriter within the meaning of the Securities Act; and the obligations of such Holder and any agents or underwriters contemplated by this Section 3.05 shall be in addition to any liability that such Holder or its respective agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act. -11- SECTION 3.06. Underwriters. If any of the Registrable Shares are to be sold pursuant to an underwritten offering, the investment banker or bankers and the managing underwriter or underwriters thereof shall be selected by the Company except in the case of a Demand Registration, in which case the managing underwriter or underwriters shall be selected by a majority-in-interest of the Holders requesting such Registration after consultation with the Company and taking into account the Company's reasonable requests, provided that such managing underwriter or underwriters must be of recognized international standing. SECTION 3.07. Lockups. (a) Each Holder participating in any Demand Registration pursuant to Section 3.01 or Section 3.02, or, in the event of any registration of the Company's securities in which a Holder could exercise its rights to a Piggyback Registration pursuant to Section 3.02 other than a Demand Registration, then all Holders, upon the request of the Company or the underwriters managing any underwritten offering of the Company's securities, shall agree in writing not to effect any sale, disposition or distribution of any Registrable Shares (other than that included in the Registration) without the prior written consent of the Company or the representatives of such underwriters, as the case may be, for such a period of time not to exceed 90 days from the effective date of such registration as the Company or the underwriters may specify; provided, however, in connection with any registration of the Company's securities other than a Demand Registration, no Holder shall be obligated to enter into any such lock-up agreement unless each of the directors and executive officers of the Company enter into a similar lock-up agreement; provided, further, that each Holder agrees not to effect any sale, disposition or distribution of any Registrable Shares for 180 days from the date of the prospectus relating to the Offering. (b) The Company shall, if so required by the managing underwriters in connection with an underwritten offering of Registrable Shares pursuant to Section 3.01 or 3.02, agree in writing not to effect any sale, disposition or distribution of any Ordinary Shares or securities convertible into or exchangeable or exercisable for Ordinary Shares (other than that included in the Registration) without the prior written consent of the representatives of such underwriters for such period of time not to exceed 180 days from the effective date of such registration as the underwriters may specify, except in connection with a stock option plan, stock purchase plan, savings or similar plan, or an acquisition, merger or exchange offer. SECTION 3.08. Over-allotment Options. It is understood that in any underwritten offering of Registrable Shares in addition to the shares (the "initial shares") the underwriters have committed to purchase, the underwriting agreement may grant the underwriters an option to purchase a number of additional shares (the "option shares") equal to up to 15% of the initial shares (or such other maximum amount as the National Association of Securities Dealers, Inc. may then permit), solely to cover over-allotments, if any. In the absence of agreement to the contrary, the number of initial shares and option shares to be sold by the Company and the Holders participating in such offering shall be allocated pro rata among such persons on the basis of the relative number of Registrable Shares each person has requested to be included in such registration. SECTION 3.09. Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement registering Registrable Shares under the Securities Act, the Company will give each Holder and its underwriters, if any, and its counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give it such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have issued a report on its -12- financial statements as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. SECTION 3.10. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may permit the sale of restricted securities 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(c) under the Securities Act, at all times from and after ninety (90) days following the effective date of the registration statement relating to the Offering; (b) use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and (c) so long as a Holder owns any Registrable Shares, furnish to such Holder upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the registration statement relating to the Offering, and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing the Holder to sell any such securities without registration. SECTION 3.11. Form F-3. Following the Offering, the Company shall use its best efforts to qualify for registration on Form F-3. ARTICLE IV. MISCELLANEOUS SECTION 4.01. Term of Agreement; Termination. The term of this Agreement shall commence on the date hereof and such term and this Agreement shall terminate with respect to a Holder on the earlier of: (i) ten (10) years from the date of this Agreement; and (ii) when the Registrable Shares held by such Holder no longer constitute at least 5% of the Company's then outstanding Ordinary Shares and if such Holder can then sell Ordinary Shares in the United States public market pursuant to an exemption from the registration requirements of the Securities Act and without regard to holding period, volume or manner-of-sale limitations. SECTION 4.02. Specific Performance and Other Equitable Rights. Each of the parties hereto recognizes and acknowledges that a breach by a party or by any assignee thereof of any covenants or other commitments contained in this Agreement will cause the other party to sustain injury for which it would not have an adequate remedy at law for money damages. Therefore, each of the parties hereto agrees that in the event of any such breach, the aggrieved party shall be entitled to the remedy of specific performance of such covenants or commitments and preliminary and permanent injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity, and the parties hereto hereby waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. -13- SECTION 4.03. Notices. All notices, requests, demands and other communications hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the party for whom it is intended or delivered by registered or certified mail, return receipt requested, or if sent by telecopier, upon receipt of oral confirmation that such transmission has been received, to the person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such person: (a) If to the Company, addressed as follows: Esprit Telecom Group PLC Minerva House Valpy Street, Reading RG1 1AR United Kingdom Attention: Roy Merritt Telecopier: 44-118-951-4000 with copies to: Shearman & Sterling 199 Bishopsgate London EC2M 3TY England Attention: Pamela M. Gibson Telecopier: 44-171-920-9000 Rowe & Maw 20 Black Friars Lane London EC4V 6HD England Attention: Andrew Sharples Telecopier: 44-171-782-8844 (b) If to Apax Partners & Co. Ventures Ltd., addressed as follows: Apax Partners & Co. Ventures Ltd. 15 Portland Place London W1N 3AA England Attention: Richard Wilson Telecopier: 44-171-636-6475 (c) If to Warburg, Pincus Ventures, L.P., addressed as follows: E.M. Warburg, Pincus Co. International L.T.D. Almack House 28 King Street London SW1Y 6QW England -14- Attention: Roberto Italia Telecopier: 44-171-321-0881 with a copy to: Wilkie Farr & Gallagher 35 Wilson Street London EC2M 2SJ Attention: William H. Gump Telecopier: 44-171-417-9191 (d) If to Hancock International Private Equity Partners II - Direct Fund L.P., addressed as follows: HVP Partners, L.L.C. One Financial Center 44th Floor Boston, MA 02311 USA Attention: William Johnston Telecopier: (617) 350-0305 (e) If to Gold and Appel Transfer, S.A. addressed as follows: c/o Walter Anderson 2000 L. Street N.W., Suite 200 Washington D.C. 20036 Telecopier: (202) 736-5065 (f) If to Abacus (C.I.) Limited, addressed as follows: La Motte Chambers Saint Helier Jersey Channel Islands JE1 1BJ Attention: Annette Cabral Telecopier: 44-1534 602002 or to such other address as the relevant party may from time to time advise by notice in writing given pursuant to this Section 4.03. The date of receipt of any such notice, request, consent, agreement or approval shall be deemed to be the date of delivery thereof (if delivered by hand), on the third business day following mailing (if delivered by mail), or when transmitted to the telecopier number specified in this Section 4.03 (if delivered by telecopier). SECTION 4.04. Survival. The several indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force -15- and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any party, any director, officer or partner of such party, or any controlling person of any of the foregoing, and shall survive the transfer of any Registrable Shares by each Shareholder, and the indemnification and contribution provisions set forth in Section 3.05 hereof shall survive termination of this Agreement. SECTION 4.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. SECTION 4.06. Transfer of Registration Rights. The registration rights of each Shareholder in this Agreement with respect to any Registrable Shares may be transferred to any person acquiring any of the Registrable Shares held by the Holder; provided, however, that the Company may deny the transfer of such registration rights in any such case if (i) such transfer relates to a sale or other transfer of all of the Registrable Shares to a person who is a competitor of the Company or its subsidiaries in the industry or (ii) any conditions in the following sentence are not met. Each such transfer is contingent on such Shareholder or the transferring person satisfying the following: (i) each Shareholder or transferring person shall have given the Company written notice at or prior to the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which the rights under this Agreement are being transferred; (ii) such transferee shall have agreed in writing, in form and substance reasonably satisfactory to the Company, to be bound by the provisions of this Agreement; and (iii) immediately following such transfer the further disposition of such securities by each transferee shall be restricted under the Securities Act. Notwithstanding the foregoing, (x ) the aggregate number of Demand Rights that can be exercised by any Shareholder, together with any subsequent Holder of Demand Rights that were initially held by such Shareholder, shall be limited to two; (y) the number of Demand Rights that may be transferred by a Shareholder or any subsequent Holder shall be reduced by one each time a Demand Right is exercised pursuant to Section 3.01 by such Shareholder or such subsequent Holder; and (z) a Shareholder or any subsequent Holder may not include any of its Registrable Shares in a Piggyback Registration pursuant to Section 3.02 if it has transferred all of its Demand Rights but may include its Registrable Shares in such a Piggyback Registration so long as such Shareholder or Holder (1) holds one or two Demand Rights or (2) has exercised a Demand Right pursuant to Section 3.01 of this Agreement. SECTION 4.07. Successors and Assigns. Except as otherwise expressly provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto. Except as expressly provided in this Agreement, nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement. SECTION 4.08. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. -16- SECTION 4.09. Entire Agreement; Amendments. This Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect is to its subject matter. This Agreement supersedes all prior agreements and understandings among the parties with respect to its subject matter. This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by each of the parties, which shall be binding on all of the parties. SECTION 4.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ESPRIT TELECOM GROUP PLC By: /s/ Michael Potter ------------------- Name: Michael Potter Title: Director WARBURG, PINCUS VENTURES, L.P. BY: Warburg, Pincus & Co. its general partner By: /s/ Dominic Shorthouse Name: Dominic Shorthouse Title: APAX VENTURES IV INTERNATIONAL PARTNERS, L.P. APAX VENTURES IV APAX UK V-A, L.P APAX UK V-B BY: APAX PARTNERS & CO. VENTURES LTD., as manager of Apax Ventures IV International Partners, L.P., Apax Ventures IV, Apax UK V-A, L.P. and Apax UK V-B -17- By: /s/ J.P. McMonigall Name: J.P. McMonigall Title: Director Apax Partners & Co. Ventures Ltd. is executing this Agreement solely as manager of Apax Ventures IV, Apax Ventures IV International Partners, L.P., Apax UK V-A, L.P. and Apax UK V-B and not as principal hereunder HANCOCK INTERNATIONAL PRIVATE EQUITY PARTNERS II - DIRECT FUND L.P. BY: BACK BAY PARTNERS XVI L.P., as general partner of Hancock International Private Equity Partners II - Direct Fund L.P. BY: HVP PARTNERS, L.L.C., as managing general partner of Back Bay Partners XVI L.P. By: /s/ William A. Johnston Name: William A. Johnston Title: Managing Director GOLD AND APPEL TRANSFER, S.A. By: /s/ Walter Anderson Name: Walter Anderson Title: Attorney-in-Fact and Secretary ABACUS (C.I.) LIMITED BY: Michael Allen Potter pursuant to a power of attorney granted by Abacus (C.I.) Limited By: /s/ Michael Allen Potter Name: Michael Allen Potter -18- EX-99.1 3 REQUISITION OF EXTRAORDINARY GENERAL MEETING EXHIBIT 99.1 ------------ [LETTERHEAD OF APAX FUNDS NOMINEES LIMITED AND WARBURG, PINCUS VENTURES, L.P.] The Directors Esprit Telecom Group PLC Minerva House Valpy Street Reading Berkshire RG1 1AR 12 October 1998 Dear Sirs Extraordinary General Meeting of Esprit Telecom Group PLC (the "Company") We, the undersigned, are each holders of Ordinary Shares of 1p each in the Company constituting, as at the date of deposit of this requisition at the registered office of the Company, not less than one-tenth of such of the paid-up capital of the Company as carries the right of voting at general meetings of the Company. We hereby require you pursuant to Section 368 of the Companies Act 1985 forthwith to proceed to duly convene an Extraordinary General Meeting of the Company with the object of considering and, if thought fit, approving the following resolution as an ordinary resolution, namely: RESOLUTION "THAT Walter Anderson be removed from office as a director of the Company with immediate effect." We hereby give you special notice of our intention to move this resolution at the relevant meeting. Yours faithfully, /s/ Apax Funds Nominees Limited Yours faithfully, /s/ Warburg, Pincus Ventures, L.P. EX-99.2 4 JOINT FILING AGREEMENT EXHIBIT 99.2 ------------ JOINT FILING AGREEMENT The undersigned hereby agree that the statement on Schedule 13D with respect to the Ordinary Shares of Esprit Telecom Group plc is, and any amendment thereto signed by each of the undersigned shall be, filed on behalf of each undersigned pursuant to and in accordance with the provisions of Rule 13d-1(f) of the Securities Exchange Act of 1934, as amended. Dated: October 22, 1998 WARBURG, PINCUS VENTURES, L.P. By: Warburg, Pincus & Co., General Partner By:/s/ Stephen Distler ---------------------------- Stephen Distler Partner WARBURG, PINCUS & CO. By:/s/ Stephen Distler ---------------------------- Stephen Distler Partner E.M. WARBURG, PINCUS & CO., LLC By:/s/ Stephen Distler ---------------------------- Stephen Distler Member -----END PRIVACY-ENHANCED MESSAGE-----