EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the 23rd day of April, 1999,
between Cambois Finance, Inc. ("Holder"), and AVTEL COMMUNICATIONS, INC., a
corporation incorporated under the laws of the State of Delaware, and having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxx Xxxxxxx, XX 00000 (the
"Company").
WHEREAS, simultaneously with the execution and delivery of this Agreement,
pursuant to a Private Equity Line of Credit Agreement dated the date hereof (the
"Purchase Agreement") the Holder has committed to purchase up to $13,500,000
worth of the Company's Common Stock (terms not defined herein shall have the
meanings ascribed to them in the Purchase Agreement); and
WHEREAS, the Company desires to grant to the Holder the registration rights
set forth herein with respect to the Put Shares and the Blackout Shares issuable
upon exercise of the Company's Put rights from time to time (hereinafter
referred to as the "Put Shares" or "Stock" or "Securities" of the Company).
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term "Registrable
Security" means the Securities until (i) all Put Shares have been disposed of
pursuant to the Registration Statement, (ii) all Put Shares have been sold under
circumstances under which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act ("Rule 144") are met,
(iii) all Put Shares have been otherwise transferred to persons who may trade
such Securities without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such Put
Shares not bearing a restrictive legend or (iv) such time as, in the opinion of
counsel to the Company, all Put Shares may be sold without any time, volume or
manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act. The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Common Stock, such adjustment shall be deemed to be made in the definition
of "Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Agreement.
Section 2. Restrictions on Transfer. The Holder acknowledges and
understands that in the absence of an effective Registration Statement
authorizing the resale of the Securities as provided herein, the Securities are
"restricted securities" as defined in Rule 144 promulgated under the Act. The
Holder understands that no disposition or transfer of the Securities may be made
by Holder in the absence of (i) an opinion of counsel to the Holder, in form and
substance reasonably satisfactory to the
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Company, that such transfer may be made without registration under the
Securities Act or (ii) such registration.
With a view to making available to the Holder the benefits of Rule 144
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Holder to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144; and
(b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or
15(d) under the Exchange Act; and, if at any time it is not required to
file such reports but in the past had been required to or did file such
reports, it will, upon the request of any Holder, make available other
information as required by, and so long as necessary to permit sales of,
its Registrable Securities pursuant to Rule 144.
Section 3. Registration Rights With Respect to the Securities.
(a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within sixty (60) days
after the date hereof, a registration statement (on Form S-3, or other
appropriate form of registration statement) under the Securities Act (the
"Registration Statement"), at the sole expense of the Company (except as
provided in Section 3(c) hereof), in respect of all permitted holders of
Securities, so as to permit a public offering and resale of the Securities
under the Act by Holder.
The Company shall use its best efforts to cause the Registration Statement
to become effective within ninety (90) days from the date hereof, or, if
earlier, within five (5) days of SEC clearance to request acceleration of
effectiveness. In the event that the SEC decides to review the Company's
Registration Statement, the Company shall have an additional thirty (30) days to
amend and cause such registration to become effective. If the Registration
Statement is not declared effective by October 31, 1999, this Agreement and the
Purchase Agreement shall terminate and the Company shall pay Holder the sum of
$25,000 as liquidated damages. The number of shares designated in the
Registration Statement to be registered shall be 2,103,939 and shall include
appropriate language regarding reliance upon Rule 416 to the extent permitted by
the Commission. The Company will notify Holder of the effectiveness of the
Registration Statement within one Trading Day of such event.
(b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 hereof effective under
the Securities Act until the earlier of (i) the date that none of the
Securities are or may become issued and outstanding, (ii) the date that all
of the Securities have been sold pursuant to the Registration Statement,
(iii) the date the holders thereof receive an opinion of counsel to the
Company, which counsel shall be reasonably acceptable to the Holder, that
the Securities may be sold under the provisions of Rule 144 without
limitation as to volume, (iv) all Securities have been otherwise
transferred to persons who may trade such shares without restriction under
the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive
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legend, or (v) all Securities may be sold without any time, volume or
manner limitations pursuant to Rule 144(k) or any similar provision then in
effect under the Securities Act in the opinion of counsel to the Company,
which counsel shall be reasonably acceptable to the Holder (the
"Effectiveness Period").
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of
the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The Holder
shall bear the cost of underwriting and/or brokerage discounts, fees and
commissions, if any, applicable to the Securities being registered and the
fees and expenses of its counsel. The Holder and its counsel shall have a
reasonable period, not to exceed ten (10) Trading Days, to review the
proposed Registration Statement or any amendment thereto, prior to filing
with the Commission, and the Company shall provide each Holder with copies
of any comment letters received from the Commission with respect thereto
within two (2) Trading Days of receipt thereof. The Company shall make
reasonably available for inspection by Holder, any underwriter
participating in any disposition pursuant to the Registration Statement,
and any attorney, accountant or other agent retained by such Holder or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by such Holder or any such underwriter,
attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence
examinations; provided, however, that all records, information and
documents that are designated in writing by the Company, in good faith, as
confidential, proprietary or containing any material non-public information
shall be kept confidential by such Holder and any such underwriter,
attorney, accountant or agent (pursuant to an appropriate confidentiality
agreement in the case of any such Holder or agent), unless such disclosure
is made pursuant to judicial process in a court proceeding (after first
giving the Company an opportunity promptly to seek a protective order or
otherwise limit the scope of the information sought to be disclosed) or is
required by law, or such records, information or documents become available
to the public generally or through a third party not in violation of an
accompanying obligation of confidentiality; and provided further that, if
the foregoing inspection and information gathering would otherwise disrupt
the Company's conduct of its business, such inspection and information
gathering shall, to the maximum extent possible, be coordinated on behalf
of the Holder and the other parties entitled thereto by one firm of counsel
designed by and on behalf of the majority in interest of Holder and other
parties. The Company shall qualify any of the securities for sale in such
states as such Holder reasonably designates and shall furnish
indemnification in the manner provided in Section 6 hereof. However, the
Company shall not be required to qualify in any state which will require an
escrow or other restriction relating to the Company and/or the sellers, or
which will require the Company to qualify to do business in such state or
require the Company to file therein any general consent to service of
process. The Company at its expense will supply the Holder with copies of
the Registration Statement and the prospectus included therein and other
related documents in such quantities as may be reasonably requested by the
Holder.
(d) The Company shall not be required by this Section 3 to include a
Holder's Securities in any Registration Statement which is to be filed if,
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in the opinion of counsel for both the Holder and the Company (or, should
they not agree, in the opinion of another counsel experienced in securities
law matters acceptable to counsel for the Holder and the Company) the
proposed offering or other transfer as to which such registration is
requested is exempt from applicable federal and state securities laws and
would result in all purchasers or transferees obtaining securities which
are not "restricted securities", as defined in Rule 144 under the
Securities Act.
(e) No provision contained herein shall preclude the Company from
selling securities pursuant to any Registration Statement in which it is
required to include Securities pursuant to this Section 3.
(f) If at any time or from time to time after the effective date of
the Registration Statement, the Company notifies the Holder in writing of
the existence of a Potential Material Event (as defined in Section 3(g)
below), the Holder shall not offer or sell any Securities or engage in any
other transaction involving or relating to Securities, from the time of the
giving of notice with respect to a Potential Material Event until such
Holder receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer
constitutes a Potential Material Event; provided, however, that if the
Company so suspends the right to such holders of Securities for more than
thirty (30) days in the aggregate during any twelve month period, during
the periods the Registration Statement is required to be in effect such
excess periods shall be a Registration Default. If a Potential Material
Event shall occur prior to the date the Registration Statement is filed,
then the Company's obligation to file the Registration Statement shall be
delayed without penalty for not more than thirty (30) days. The Company
must give Holder notice in writing at least two (2) Trading Days prior to
the first day of the blackout period, if lawful to do so.
(g) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information that is not ripe for
disclosure in a registration statement, as determined in good faith by the
Chief Executive Officer or the Board of Directors of the Company or that
disclosure of such information in the Registration Statement would be
detrimental to the business and affairs of the Company; or (b) any material
engagement or activity by the Company which would, in the good faith
determination of the Chief Executive Officer or the Board of Directors of
the Company, be adversely affected by disclosure in a registration
statement at such time, which determination shall be accompanied by a good
faith determination by the Chief Executive Officer or the Board of
Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information.
Section 4. Cooperation with Company. Holder will cooperate with the Company
in all respects in connection with this Agreement, including timely supplying
all information reasonably requested by the Company (which shall include all
information regarding the Holder and proposed manner of sale of the Registrable
Securities required to be disclosed in the Registration Statement) and executing
and returning all documents reasonably requested in connection with the
registration and sale of the Registrable Securities and entering into and
performing its obligations under any underwriting agreement, if the offering is
an underwritten offering, in usual and customary form, with the managing
underwriter or underwriters of such underwritten offering. The Holder shall, if
so requested in writing by the staff of the Commission, consent to be named as
an underwriter in the Registration Statement.
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Section 5. Registration Procedures. If and whenever the Company is required
by any of the provisions of this Agreement to effect the registration of any of
the Registrable Securities under the Act, the Company shall (except as otherwise
provided in this Agreement), as expeditiously as possible, subject to the
Holder's assistance and cooperation as reasonably required:
(a) (i) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of all securities covered by such
registration statement whenever the Holder of such Registrable Securities
shall desire to sell or otherwise dispose of the same (including prospectus
supplements with respect to the sales of securities from time to time in
connection with a registration statement pursuant to Rule 415 promulgated
under the Act) and (ii) take all lawful action such that each of (A) the
Registration Statement and any amendment thereto does not, when it becomes
effective, 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, not misleading and (B) the Prospectus forming part of
the Registration Statement, and any amendment or supplement thereto, does
not at any time during the Registration Period 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, in light of the
circumstances under which they were made, not misleading.
(b) (i) prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or
delivery of any prospectus (including any supplements thereto), provide
draft copies thereof to the Holders and reflect in such documents all such
comments as the Holders (and their counsel) reasonably may propose and (ii)
furnish to each Holder such numbers of copies of a prospectus including a
preliminary prospectus or any amendment or supplement to any prospectus, as
applicable, in conformity with the requirements of the Act, and such other
documents, as such Holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by such Holder;
(c) register and qualify the Registrable Securities covered by the
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Holder shall reasonably request (subject to the
limitations set forth in Section 3(d) above), and do any and all other acts
and things which may be necessary or advisable to enable each Holder to
consummate the public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not for any
such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process;
(d) list such Registrable Securities on the Primary Market, and any
other exchange on which the Common Stock of the Company is then listed, if
the listing of such Registrable Securities is then permitted under the
rules of such exchange or Nasdaq;
(e) notify each Holder at any time when a prospectus relating thereto
covered by the Registration Statement is required to be delivered under the
Act, of the happening of any event of which it has knowledge as a result of
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which the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and the Company shall prepare and file a curative amendment under
Section 5(a) as quickly as commercially possible;
(f) as promptly as practicable after becoming aware of such event,
notify each Holder who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the
issuance by the Commission or any state authority of any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time and take all lawful action to effect the withdrawal,
recession or removal of such stop order or other suspension;
(g) cooperate with the Holders to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case
may be, as the Holders reasonably may request and registered in such names
as the Holder may request; and, within three Trading Days after a
Registration Statement which includes Registrable Securities is declared
effective by the Commission, deliver and cause legal counsel selected by
the Company to deliver to the transfer agent for the Registrable Securities
(with copies to the Holders whose Registrable Securities are included in
such Registration Statement) an appropriate instruction and, to the extent
necessary, an opinion of such counsel;
(h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Holders of their Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the
circumstances;
(i) in the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree
should be included therein and to which the Company does not reasonably
object and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment; and
(j) maintain a transfer agent and registrar for its Common Stock.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Holder and
each person, if any, who controls the Holder within the meaning of the
Securities Act ("Distributing Holder") against any losses, claims, damages
or liabilities, joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense
and investigation and all reasonable attorneys' fees), to which the
Distributing Holder may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, or any related preliminary prospectus, final
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prospectus or amendment or supplement thereto, 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; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, preliminary prospectus, final prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Distributing Holder,
specifically for use in the preparation thereof. This Section 6(a) shall
not inure to the benefit of any Distributing Holder with respect to any
person asserting such loss, claim, damage or liability who purchased the
Registrable Securities which are the subject thereof if the Distributing
Holder failed to send or give (in violation of the Securities Act or the
rules and regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement to such person at or prior to the
written confirmation to such person of the sale of such Registrable
Securities, where the Distributing Holder was obligated to do so under the
Securities Act or the rules and regulations promulgated thereunder. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Distributing Holder agrees that it will indemnify and hold
harmless the Company, and each officer, director of the Company or person,
if any, who controls the Company within the meaning of the Securities Act,
against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees) to
which the Company or any such officer, director or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, or
any related preliminary prospectus, final prospectus or amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in
each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, final prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by such Distributing Holder,
specifically for use in the preparation thereof. This indemnity agreement
will be in addition to any liability which the Distributing Holder may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may have to any
indemnified party except to the extent of actual prejudice demonstrated by
the indemnifying party. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, assume the defense thereof, subject
to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
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party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation, unless the indemnifying party
shall not pursue the action to its final conclusion. The indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the indemnified party; provided that if the
indemnified party is the Distributing Holder, the fees and expenses of such
counsel shall be at the expense of the indemnifying party if (i) the
employment of such counsel has been specifically authorized in writing by
the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the Distributing Holder and
the indemnifying party and the Distributing Holder shall have been advised
by such counsel that there may be one or more legal defenses available to
the indemnifying party different from or in conflict with any legal
defenses which may be available to the Distributing Holder (in which case
the indemnifying party shall not have the right to assume the defense of
such action on behalf of the Distributing Holder, it being understood,
however, that the indemnifying party shall, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable only for the reasonable fees and expenses of one separate firm of
attorneys for the Distributing Holder, which firm shall be designated in
writing by the Distributing Holder). No settlement of any action against an
indemnified party shall be made without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld.
Section 7. Contribution. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Holder shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys' fees), in either such
case (after contribution from others) on the basis of relative fault as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the applicable Distributing Holder on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Distributing Holder
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 7. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
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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 any other provision of this Section 7, in no event shall any (i)
Holder be required to undertake liability to any person under this Section 7 for
any amounts in excess of the dollar amount of the net proceeds to be received by
such Holder from the sale of such Holder's Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) pursuant to
any Registration Statement under which such Registrable Securities are to be
registered under the Securities Act and (ii) underwriter be required to
undertake liability to any person hereunder for any amounts in excess of the
aggregate discount, commission or other compensation payable to such underwriter
with respect to the Registrable Securities underwritten by it and distributed
pursuant to the Registration Statement.
Section 8. Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company:
AvTel Communications, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to
(shall not constitute notice):
Seed, Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
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If to the Investor:
Cambois Finance, Inc.
c/o Xx. Xxxxxxxx & Partners
Xxxxxxxxxxx 00
XX-0000, Xxxxx, Xxxxxxxxxxxxx
Telephone: 011-
Fax: 011-
with a copy to: Xxxxxxx Xxxxxx & Green, P.C.
(shall not constitute notice) 000 Xxxx Xxxxxx.
Xxx Xxxx, Xxx Xxxx 00000
Attention Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Either party hereto may from time to time change its address or facsimile number
for notices under this Section 8 by giving at least ten (10) days' prior written
notice of such changed address or facsimile number to the other party hereto.
Section 9. Assignment. Neither this Agreement nor any rights of the Holder
or the Company hereunder may be assigned by either party to any other person.
Notwithstanding the foregoing, (a) the provisions of this Agreement shall inure
to the benefit of, and be enforceable by, any transferee of any of the Common
Stock purchased by the Investor pursuant to the Purchase Agreement, and (b) upon
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed in the case of an assignment to an affiliate of
the Holder, the Holder's interest in this Agreement may be assigned at any time,
in whole or in part, to any other person or entity (including any affiliate of
the Holder) who agrees to be bound hereby.
Section 10. Additional Covenants of the Company. The Company agrees that at
such time as it meets all the requirements for the use of Securities Act
Registration Statement on Form S-3 it shall file all reports and information
required to be filed by it with the Commission in a timely manner and take all
such other action so as to maintain such eligibility for the use of such form.
Section 11. Counterparts/Facsimile. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when together shall constitute but one and the same instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party. In lieu of the original, a facsimile
transmission or copy of the original shall be as effective and enforceable as
the original.
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Section 12. Remedies. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
Section 13. Conflicting Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the holders of Registrable Securities in this Agreement or otherwise
prevents the Company from complying with all of its obligations hereunder.
Section 14. Headings. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 15. Governing Law, Arbitration. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any dispute under this Agreement
shall be submitted to arbitration under the American Arbitration Association
(the "AAA") in New York City, New York, and shall be finally and conclusively
determined by the decision of a board of arbitration consisting of three (3)
members (hereinafter referred to as the "Board of Arbitration") selected as
according to the rules governing the AAA. The Board of Arbitration shall meet on
consecutive business days in New York City, New York, and shall reach and render
a decision in writing (concurred in by a majority of the members of the Board of
Arbitration) with respect to the amount, if any, which the losing party is
required to pay to the other party in respect of a claim filed. In connection
with rendering its decisions, the Board of Arbitration shall adopt and follow
the laws of the State of New York. To the extent practical, decisions of the
Board of Arbitration shall be rendered no more than thirty (30) calendar days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to all parties
involved in the dispute. The Board of Arbitration shall be authorized and is
directed to enter a default judgment against any party refusing to participate
in the arbitration proceeding with thirty days of any deadline for such
participation. Any decision made by the Board of Arbitration (either prior to or
after the expiration of such thirty (30) calendar day period) shall be final,
binding and conclusive on the parties to the dispute, and entitled to be
enforced to the fullest extent permitted by law and entered in any court of
competent jurisdiction. The non-prevailing party to any arbitration (as
determined by the Board of Arbitration) shall pay the expenses of the prevailing
party, including reasonable attorneys' fees, in connection with such
arbitration. Any party shall have the right to seek injunctive relief from any
court of competent jurisdiction in any case where such relief is available.
Section 16. Severability. If any provision of this Agreement shall for any
reason be held invalid or unenforceable, such invalidity or unenforceablity
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shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein. Terms not otherwise defined herein shall be defined in accordance with
the Agreement.
Section 17. Capitalized Terms. All capitalized terms not otherwise defined
herein shall have the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, on the day and year first above written.
AVTEL COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXX
-------------------------------
Xxxxxxx X. Xxxx,
Chief Executive Officer
CAMBOIS FINANCE, INC.
By: /s/ XXXX XXXXXXX
-------------------------------
Xxxx Xxxxxxx, Director
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