EXHIBIT 10.11
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of January
16, 2007, among Towerstream Corporation, a Delaware corporation (the "Company"),
and the entities listed on Schedule A hereto (each, a "Purchaser" and
collectively, the "Purchasers").
RECITALS
WHEREAS, the Company and the Purchasers are parties to a Securities
Purchase Agreement (the "Purchase Agreement") dated as of the date hereof;
WHEREAS, the Purchasers' obligations under the Purchase Agreement are
conditioned upon certain registration rights under the Securities Act of 1933,
as amended (the "Securities Act"), as described in the Purchase Agreement; and
WHEREAS, the Purchasers and the Company desire to provide for the rights of
registration under the Securities Act as are provided herein upon the execution
and delivery of this Agreement by such Purchasers and the Company.
NOW, THEREFORE, in consideration of the promises, covenants and conditions
set forth herein, the parties hereto hereby agree as follows:
1. Registration Rights.
1.1 Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "Commission" means the United States Securities and Exchange
Commission.
(b) "Common Stock" means the Company's common stock, par value $0.001
per share.
(c) "Debentures" shall have the meaning set forth in the Purchase
Agreement.
(d) "Effectiveness Date" means, with respect to the initial
Registration Statement required to be filed hereunder, the 130th calendar day
following the date hereof and, with respect to any additional Registration
Statements which may be required pursuant to Section 1.3(m), the 90th calendar
day following the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement is required hereunder;
provided, however, that in the event the Company is notified by the Commission
that one of the above Registration Statements will not be reviewed or is no
longer subject to further review and comments, the Effectiveness Date as to such
Registration Statement shall be the fifth
Trading Day following the date on which the Company is so notified if such date
precedes the dates required above.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(f) "Filing Date" means, with respect to the initial Registration
Statement required hereunder, the 70th calendar day following the date hereof
and, with respect to any additional Registration Statements which may be
required pursuant to Section 1.3(m), the 30th calendar day following the date on
which the Company first knows, or reasonably should have known, that such
additional Registration Statement is required hereunder.
(g) "Purchaser" means each original Purchaser signatory hereto,
together with any person owning Registrable Securities.
(h) "Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus
(i) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(j) "Registrable Securities" means (i) all of the shares of Common
Stock issuable upon conversion in full of the Debentures, (ii) all shares of
Common Stock issuable as interest on the Debentures assuming all permissible
interest payments are made in shares of Common Stock and the Debentures are held
until maturity, (iii) all Warrant Shares, (iv) any additional shares of Common
Stock issuable in connection with any anti-dilution provisions in the Debentures
or the Warrants (in each case, without giving effect to any limitations on
conversion set forth in the Debenture or limitations on exercise set forth in
the Warrant), (v) any other shares of Common Stock (and shares of Common Stock
underlying Common Stock Equivalents) held by a Purchaser and (vi) any securities
issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.
(k) "Rule 144" means Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(l) "Warrants" means the warrants to purchase Common Stock issued
pursuant to the Purchase Agreement.
1.2 Company Registration.
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(a) On or prior to each Filing Date the Company shall prepare and file
with the Commission a registration statement covering the Registrable Securities
for an offering to be made on a continuous basis pursuant to Rule 415. The
registration statement shall be on Form SB-2 or Form S-3 (except if the Company
is not then eligible to register for resale the Registrable Securities on Form
SB-2 or Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith) and shall contain (unless otherwise
directed by at least a majority in interest of the Purchasers) a "Plan of
Distribution" in a customary form that is reasonably acceptable to the Company
and the Majority Purchasers (as defined in Section 4.2 below). The Company shall
cause the registration statement to become effective and remain effective as
provided herein. The Company shall use its best efforts to cause the
registration statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date. The Company shall use its best efforts to keep the
registration statement continuously effective under the Securities Act until the
date which is the earliest to occur of: (i) the date that is 18 months after the
date such registration statement is declared effective by the Commission or (ii)
the date of which all Registrable Securities have been sold (the "Effectiveness
Period"). The Company shall promptly issue a press release to notify all holders
or Registrable Securities of the effectiveness of a Registration Statement
within one Trading Day that the Company receives notification of the
effectiveness of the Registration Statement from the Commission. The Company
shall, as soon as practicable after the Effective Date (as defined in the
Purchase Agreement), file a final Prospectus with the Commission as required by
Rule 424.
(b) Except in accordance with Section 1.9 hereof, if: (i) the
registration statement is not filed on or prior to the Filing Date; or (ii) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be "reviewed," or not subject to further review (provided the filed Registration
Statement otherwise complies with the Act); or (iii) a Registration Statement
filed or required to be filed hereunder is not declared effective by the
Commission by its Effectiveness Date; or (iv) after the Effectiveness Date, a
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities for which it is required to be effective, or the
Holders are otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than 10 consecutive calendar days or more
than an aggregate of 40 calendar days during any 12-month period (which need not
be consecutive calendar days), (any such failure or breach being referred to as
an "Event", and for purposes of clause (i) or (iii) the date on which such Event
occurs, or for purposes of clause (ii) the date on which such five Trading Day
period is exceeded, or for purposes of clause (vv) the date on which such 10 or
40 calendar day period, as applicable, is exceeded, each being referred being
referred to as "Event Date"), then, in addition to any other rights the
Purchasers may have hereunder or under applicable law, on each such Event Date
and on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Purchaser an amount in cash, as partial liquidated
damages and not as a penalty, an amount equal to 1.0% of the aggregate purchase
price paid by such Purchaser pursuant to the Purchase Agreement, up to a maximum
of 6.0%, during which such Event continues uncured. While such Event continues,
such liquidated damages shall be paid not less often than every thirty (30)
days. Any unpaid liquidated damages as of the date when an Event has been cured
by the Company shall be paid within three (3) business days following the date
on which such Event has been cured by
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the Company. The partial liquidated damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure of
an Event.
(c) The Company shall bear and pay all expenses incurred in connection
with any registration, filing or qualification of Registrable Securities with
respect to the registrations pursuant to this Section 1.2 for each Purchaser,
including (without limitation) all registration, filing and qualification fees,
printer's fees, accounting fees and fees and disbursements of counsel for the
Company, but excluding underwriting discounts and commissions relating to
Registrable Securities and fees and disbursements of counsel for the Purchasers.
1.3 Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Not less than five Trading Days prior to the filing of each
Registration Statement and not less than one Trading Day prior to the filing of
any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall (i) furnish to each Purchaser copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Purchasers and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to each Purchasers, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which all of the Purchasers shall reasonably object in
good faith, provided that the Company is notified of such objection in writing
no later than 5 Trading Days after the Purchasers have been so furnished copies
of a Registration Statement or 1 Trading Day after the Purchasers have been so
furnished copies of any related Prospectus or amendments or supplements thereto.
Each Purchaser agrees to furnish to the Company a completed questionnaire in the
form attached to this Agreement as Annex A (a "Selling Shareholder
Questionnaire") not less than two Trading Days prior to the Filing Date or by
the end of the fourth Trading Day following the date on which such Purchaser
receives draft materials in accordance with this Section;
(b) Prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective and, to keep such registration
statement continuously effective during the Effectiveness Period;
(c) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(d) Furnish to the Purchasers such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act,
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and such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them (provided that the
Company would not be required to print such prospectuses if readily available to
Purchasers from any electronic service, such as on the XXXXX filing database
maintained at xxx.xxx.xxx);
(e) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities'
or blue sky laws of such jurisdictions as shall be reasonably requested by the
Purchasers; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering (each Purchaser
participating in such underwriting shall also enter into and perform its
obligations under such an agreement);
(g) Notify the Purchaser of Registrable Securities to be sold (which
notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than one Trading Day prior to such filing) and (if requested by
any such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement; and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Purchaser until such information otherwise
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becomes public, unless disclosure by a Purchaser is required by law; provided,
further, that notwithstanding each Purchasers' agreement to keep such
information confidential, the Purchasers make no acknowledgement that any such
information is material, non-public information;
(h) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment;
(i) The Company shall effect a filing with respect to the public
offering contemplated by the Registration Statement (an "Issuer Filing") with
the National Association of Securities Dealers, Inc. ("NASD") Corporate
Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within one Trading
Day of the date that the Registration Statement is first filed with the
Commission and pay the filing fee required by such Issuer Filing. The Company
shall use commercially reasonable efforts to pursue the Issuer Filing until the
NASD issues a letter confirming that it does not object to the terms of the
offering contemplated by the Registration Statement. A copy of the Issuer Filing
and all related correspondence with respect thereto shall be provided to FWS;
(j) Upon the occurrence of any event contemplated by this Section 1.3,
as promptly as reasonably possible under the circumstances taking into account
the Company's good faith assessment of any adverse consequences to the Company
and its stockholders of the premature disclosure of such event, prepare a
supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither a Registration Statement nor
such Prospectus will contain 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 light of the circumstances under which they were made,
not misleading. If the Company notifies the Purchasers in accordance with
clauses (iii) through (vi) of Section 1.3(f) above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have been made, then
the Purchasers shall suspend use of such Prospectus. The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable;
(k) Cause all such Registrable Securities registered pursuant hereto
to be listed on each securities exchange or nationally recognized quotation
system on which similar securities issued by the Company are then listed;
(l) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration; and
(m) If during the Effectiveness Period, the number of Registrable
Securities at any time exceeds 100% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file as soon as
reasonably practicable, but in any
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case prior to the applicable Filing Date, an additional Registration Statement
covering the resale by the Purchasers of not less than the number of such
Registrable Securities.
1.4 Furnish Information. The Company may require each Purchaser to furnish
to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Purchaser and, if required by the Commission, the
natural persons thereof that have voting and dispositive control over the Common
Stock held by such Purchaser. During any periods that the Company is unable to
meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Purchaser fails to furnish such
information within three Trading Days of the Company's request, any liquidated
damages that are accruing at such time as to such Purchaser only shall be tolled
and any Event that may otherwise occur solely because of such delay shall be
suspended as to such Purchaser only, until such information is delivered to the
Company.
1.5 [RESERVED]
1.6 Indemnification.
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Purchaser, any underwriter (as defined in the Securities Act)
for such Purchaser and each person, if any, who controls such Purchaser or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject under the Securities Act, the
Exchange Act or other federal or state securities law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively, a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in a registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto (collectively, the "Filings"), (ii) the
omission or alleged omission to state in the Filings a material fact required to
be stated therein, or necessary to make the statements therein not misleading,
or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law; and the Company will pay any legal or other expenses reasonably incurred by
any person to be indemnified pursuant to this Section 1.6(a) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 1.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Purchaser,
underwriter or controlling person.
(b) To the extent permitted by law, each Purchaser, severally and not
jointly will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the
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meaning of the Securities Act or the Exchange Act, any underwriter, any other
Purchaser selling securities in such registration statement and any controlling
person of any such underwriter or other Purchaser, against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing persons
may become subject under the Securities Act, the Exchange Act or other federal
or state securities law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Purchaser expressly for use in connection with such registration; and each such
Purchaser will pay any legal or other expenses reasonably incurred by any person
to be indemnified pursuant to this Section 1.6(b) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 1.6(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Purchaser (which consent shall not be unreasonably withheld); provided, however,
in no event shall any indemnity under this subsection 1.6(b) exceed the net
proceeds from the offering received by such Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
1.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.6.
(d) If the indemnification provided for in Sections 1.6(a) and (b) is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage or expense referred to herein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in such
loss, liability, claim or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates to
information supplied by the indemnifying
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party or by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. In no event shall any Purchaser be required to contribute an amount in
excess of the net proceeds from the offering received by such Purchaser.
(e) The obligations of the Company and Purchasers under this Section
1.6 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.7 Reports Under Securities Exchange Act. With a view to making available
the benefits of certain rules and regulations of the Commission, including Rule
144, that may at any time permit a Purchaser to sell securities of the Company
to the public without registration or pursuant to a registration on Form SB-2,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after ninety (90) days after
the effective date of the registration statement;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the Exchange Act, as is necessary to enable the
Purchasers to utilize Form SB-2 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the registration statement is declared effective;
(c) 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;
and
(d) furnish to any Purchaser, so long as the Purchaser owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any
time after ninety (90) calendar days after the effective date of the
registration statement), the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form SB-2
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Purchaser of any rule or regulation of the Commission that permits
the selling of any such securities without registration or pursuant to such
form.
1.8 Transfer or Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
transferred or assigned, but only with all related obligations, by a Purchaser
to a transferee or assignee who (a) acquires at least 25,000 Registrable
Securities (subject to appropriate adjustment for stock splits, stock dividends
and combinations) from such transferring Purchaser or (b) holds Registrable
Securities immediately prior to such transfer or assignment; provided, that in
the case of (a), (i) prior to such transfer or assignment, the Company is
furnished with written notice stating the name and address of such transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned, (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement including,
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without limitation, the provisions of Section 1.9 hereof and (iii) such transfer
or assignment shall be effective only if immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act.
1.9 Market Stand-Off" Agreement. Each Purchaser hereby agrees that during
the Effectiveness Period it will not, without the prior written consent of the
Company and the managing underwriter (if a managing or lead underwriter is
appointed), during the period commencing on the date of the final prospectus
relating to a firm commitment underwritten public offering of the Company
offering a minimum of $20 million of securities and ending on the date specified
by the Company and the managing underwriter (such period not to exceed one
hundred eighty (180) calendar days) (i) lend, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any securities of the Company, including
(without limitation) shares of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock (whether now owned or hereafter
acquired) or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any securities of the Company, including (without limitation) shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether now owned or hereafter acquired), whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of securities, in cash or otherwise. The foregoing covenants shall not apply to
the sale of any shares by a Purchaser to an underwriter pursuant to an
underwriting agreement and shall only be applicable to the Purchasers if all the
Company's executive officers, directors and greater than five percent (5%)
stockholders enter into similar agreements. Each Purchaser agrees to execute an
agreement(s) reflecting (i) and (ii) above as may be requested by the managing
or lead underwriters at the time of the underwritten public offering, and
further agrees that the Company may impose stop transfer instructions with its
transfer agent in order to enforce the covenants in (i) and (ii) above. The
underwriters in connection with the Company's initial underwritten public
offering are intended third party beneficiaries of the covenants in this Section
1.9 and shall have the right, power and authority to enforce such covenants as
though they were a party hereto.
2. [RESERVED].
3. [RESERVED]
4. Miscellaneous.
4.1 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan for the adjudication of any dispute hereunder or in
connection
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herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law. The parties hereby waive
all rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
4.2 Waivers and Amendments. This Agreement may be terminated and any term
of this Agreement may be amended or waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Company and Purchasers holding at least a majority of the principal amount
of the Debentures then outstanding (the "Majority Purchasers"). Notwithstanding
the foregoing, additional parties may be added as Purchasers under this
Agreement with the written consent of the Company and the Majority Purchasers.
No such amendment or waiver shall reduce the aforesaid percentage of the
Registrable Securities, the holders of which are required to consent to any
termination, amendment or waiver without the consent of the record holders of
all of the Registrable Securities. Any termination, amendment or waiver effected
in accordance with this Section 4.2 shall be binding upon each holder of
Registrable Securities then outstanding, each future holder of all such
Registrable Securities and the Company.
4.3 No Piggyback on Registrations. Except for any registration rights
described in or as set forth in the Private Placement Memorandum, neither the
Company nor any of its security holders (other than the Purchasers in such
capacity pursuant hereto) may include securities of the Company in the
Registration Statements other than the Registrable Securities. The Company shall
not file any other registration statements until all Registrable Securities are
registered pursuant to a Registration Statement that is declared effective by
the Commission, provided that this Section 4.3 shall not prohibit the Company
from filing amendments to registration statements filed prior to the date of
this Agreement.
4.4 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
4.5 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof, and no party shall be liable or bound to any other party in any manner
by any warranties, representations or covenants except as specifically set forth
herein.
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4.6 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be delivered personally by
hand or by overnight courier, mailed by United States first-class mail, postage
prepaid, sent by facsimile or sent by electronic mail directed (a) if to a
Purchaser, at such Purchaser's address, facsimile number or electronic mail
address set forth in the Company's records, or at such other address, facsimile
number or electronic mail address as such Purchaser may designate by ten (10)
days' advance written notice to the other parties hereto or (b) if to the
Company, to its address, facsimile number or electronic mail address set forth
on its signature page to this Agreement and directed to the attention of the
Chief Executive Officer, or at such other address, facsimile number or
electronic mail address as the Company may designate by ten (10) days' advance
written notice to the other parties hereto. All such notices and other
communications shall be effective or deemed given upon delivery, on the date of
mailing, upon confirmation of facsimile transfer or upon confirmation of
electronic mail delivery.
4.7 Interpretation. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The titles and subtitles used in this Agreement are used for
convenience only and are not considered in construing or interpreting this
Agreement.
4.8 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement, and the balance of the Agreement shall be interpreted as if such
provision were so excluded, and shall be enforceable in accordance with its
terms.
4.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
4.10 Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic transmission device pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
4.11 Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit plans, then the Company shall send to each Purchaser a written notice of
such determination and, if within fifteen days after the date of such notice,
any such Purchaser shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable Securities such
Purchaser requests to be registered; provided, however, that the Company shall
not be required to register any Registrable
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Securities pursuant to this Section 4.11 that are eligible for resale pursuant
to Rule 144(k) promulgated under the Securities Act or that are the subject of a
then effective Registration Statement.
4.12 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day,
month and year first set forth above.
"Company"
TOWERSTREAM CORPORATION
By:
-------------------------------------
Name:
Title:
Address:
Towerstream Corporation
00 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
E-mail: xxxx@xxxxxxxxxxx.xxx
Attention: Chief Executive Officer
[COMPANY SIGNATURE PAGE TO REGISTATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement on the day,
month and year first set forth above.
"Purchaser"
________________________________________
By:
-------------------------------------
Name
Title:
Address:
________________________________________
________________________________________
________________________________________
Telephone:______________________________
Facsimile:______________________________
Email:__________________________________
[INVESTOR SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
