Exhibit 10.13
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made as of this 10th day
of March, 1997, by and between Paging Partners Corporation, a Delaware
corporation (the "Company"), and each of the purchasers which are signatories
hereto (collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the parties hereto are entering into a Common Stock Purchase
Agreement dated the date hereof (the "Stock Purchase Agreement"), pursuant to
which the Purchasers are purchasing 515,000 shares (the "Shares") of the
Company's Common Stock, par value $.01 per share;
WHEREAS, it is a condition to the execution and delivery of the Stock
Purchase Agreement that the parties thereto execute and deliver an agreement
granting the Purchasers certain registration rights with respect to the Shares,
upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions. As used herein, the following terms shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
"Holder" or "Holders" shall mean any holder of the Registrable
Securities.
The terms "register," "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean the Shares and any securities
issued in respect of the Shares upon any stock split, stock dividend, merger,
consolidation, recapitalization or similar event.
"Registration Expenses" shall mean all expenses incurred by the
Company in compliance with Sections 2 or 3 hereof, including, without
limitation, any registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
reasonable fees and expenses (not to exceed $5,000) of one counsel for all the
selling Holders and other holders of the Company's securities and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for any Holder (other than the fees and disbursements
of counsel included under Registration Expenses).
2. Registration. Promptly after the date hereof, the Company shall use
best efforts to effect, as promptly as practicable, the registration of the
Registrable Securities on Form S-3 (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) or, if
for any reason Form S-3 is not available, on such other Form as may be
appropriate for the registration of the Registrable Securities, provided that
such registration statement shall be filed with the Commission within 45 days of
the date hereof. The Company shall keep such Registration Statement effective,
or shall file such post-effective amendments or subsequent Registration
Statements as are necessary to enable the Holders to distribute the Registrable
Securities, until three years from the date hereof. The Company will be entitled
to impose limited blackout periods during which the Holders will not be able to
sell pursuant to Registration Statements, if it determines, in its reasonable
judgment after consultation with Company's counsel, that such sales would
require the premature announcement of any material financing, acquisition,
corporate reorganization or other material corporate transaction or development
involving the Company if, in the Company's reasonable determination, such
announcement would be materially detrimental to the interests of the Company and
its stockholders. The postponement or interruption will be for the minimum
period reasonably required to avoid such premature disclosure.
3. "Piggyback" Registration; Underwriting.
(a) If the Company shall determine to register any of its securities
either for its own account or the account of a securityholder or securityholders
exercising their respective demand registration rights (other than a
registration relating solely to employee benefit plans, a registration relating
solely to a Commission Rule 145 transaction or a registration on any
registration form which does not permit secondary sales), then the Company will:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other
state securities laws); and
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(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests, made by any Holder within thirty (30) days
after receipt of the written notice from the Company described in clause
(i) above, except as set forth in Section 3(b) below. Such written request
may specify all or a part of a Holder's Registrable Securities.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders by written notice. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company
distributing its securities for its own account through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected by the Company. Notwithstanding any other provision of
this Section 3, if the representative of the underwriters advises the Company in
writing that, in its opinion, inclusion of the Registrable Securities in the
underwriting would materially and adversely affect the underwriting, the
representative may (subject to the allocation priority set forth below), limit
the number of Registrable Securities to be included in the registration and
underwriting. The Company shall so advise all holders of securities requesting
registration, and the number of shares that are entitled to be included in the
registration and underwriting shall be allocated first to the Company for
securities being sold for its account and then in the following manner:
(i) the securities requested to be registered by other persons
(other than the Purchasers as defined in the Registration Rights Agreement
dated May 7, 1996 between the Company and such Purchasers) who by virtue
of agreements with the Company are entitled to include their securities in
any such registration (collectively, "Other Stockholders") shall be
excluded from such registration and underwriting to the extent required by
such limitation in proportion, as nearly as practicable, to the respective
amounts of securities which they had requested to be registered, and
(ii) if a limitation on the number of shares is still
required, the securities being sold for the account of the Holders shall
be excluded from such registration and underwriting to the extent required
by such limitation in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other securities which
they had requested to be included in such registration, it being
acknowledged that such shares shall be excluded prior to the exclusion of
shares requested to be registered by the parties to the May 7, 1996,
Registration Rights Agreement.
If any Holder of Registrable Securities or Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the other Holders. The securities so withdrawn
shall also be withdrawn from registration.
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(c) Notwithstanding the foregoing, in the event that the Company
gives the notice provided for in Section 3(a)(i) above and any Holder elects not
to participate in the offering described in such notice, or fails to provide the
notice of intent to participate within the time prescribed therefor, then such
Holder shall not sell, assign, mortgage, transfer, pledge, create a security
interest in or lien upon, encumber, give, place in trust, hypothecate or
otherwise in any manner dispose of any of the Registrable Securities then held
by such Holder for a period commencing on the date of the aforesaid notice from
the Company until thirty (30) days following the effectiveness of the
registration statement relating to the offering.
4. Expenses and Procedure of Registration.
(a) The Company shall bear all Registration Expenses and the selling
securityholders shall bear all Selling Expenses (in proportion, as nearly as
practicable, to the securities of each securityholder being registered) incurred
in connection with any registration, qualification or compliance pursuant to the
provisions of Section 2 or 3.
(b) In the case of each registration effected by the Company
pursuant to this Agreement (other than those effected pursuant to Section 2),
the Company will keep each Holder advised in writing as to the initiation of
each registration and as to the completion thereof. At its expense, the Company
will:
(i) Keep such registration effective for a period of six
months or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(ii) 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 securities covered by such registration statement;
(iii) Furnish such number of prospectuses and other documents
incident thereto, including any term sheet or any amendment of or
supplement to the prospectus, as a Holder from time to time may reasonably
request;
(iv) Cause all such Registrable Securities to be listed on
each, if any, securities exchange on which similar securities issued by
the Company are then listed; and
(v) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission.
5. Indemnification.
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(a) The Company will indemnify each Holder, each of its officers,
directors and partners, and each person controlling such Holder, with respect to
which registration, qualification or compliance has been effected pursuant to
this Section 5, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any 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 any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses as they are
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by such Holder
or underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other Holder and each of their officers, directors
and partners, and each person controlling such Holder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holders,
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice in writing to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably
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be withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 5. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 5 is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the shareholders offering securities in the
offering (the "Selling Shareholders") on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Selling Shareholders on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Selling Shareholders and the parties' relevant intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Selling Shareholders agree that it would not be
just and equitable if contribution pursuant to this Section 5(d) were based
solely upon the number of entities from whom contribution was requested or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 5(d). The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to above in this Section 5(d) 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
guilty of fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
6. Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may request in writing and
as shall be necessary or desirable in connection with any registration,
qualification or compliance referred to in this Agreement.
7. Transfer or Assignment of Registration Rights. The rights to cause the
Company to register securities granted to the Holders by the Company under
Sections 2 or 3 may be transferred or assigned, provided that the Company is
given written notice at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of said transferee or
assignee and identifying the Registrable Securities with respect to which such
registration rights are being transferred or assigned, and provided further that
the transferee or assignee of such rights assumes the obligations of the Holders
under this Agreement.
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8. Termination. The Company's obligations under Sections 2 and 3 of this
Agreement shall terminate on the third anniversary of the date hereof.
9. Entire Agreement; Amendment; Waiver. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof. No amendment, alteration or modification of this Agreement shall be
valid unless in each instance such amendment, alteration or modification is
expressed in a written instrument executed by the Company and the Holders of at
least majority of the Registrable Securities. No waiver of any provision of this
Agreement shall be valid unless it is expressed in a written instrument duly
executed by the party or parties making such waiver. The failure of any party to
insist, in any one or more instances, on performance of any of the terms and
conditions of this Agreement shall not be construed as a waiver or
relinquishment of any rights granted hereunder or of the future performance of
any such term, covenant or condition but the obligation of any party with
respect thereto shall continue in full force and effect.
10. Specific Performance. The parties hereby declare that it is impossible
to measure in money the damages which will accrue to a party hereto by reason of
a failure to perform any of the obligations under this Agreement. Therefore, all
parties hereto shall have the right to specific performance of the obligations
of the other parties under this Agreement, and if any party hereto shall
institute an action or proceeding to enforce the provisions hereof, any person
(including the Company) against whom such action or proceeding is brought hereby
waives the claim or defense therein that such party has an adequate remedy at
law, and such person shall not urge in any such action or proceeding the claim
or defense that such remedy at law exists.
11. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first-class mail, postage
prepaid, return receipt requested, or transmitted by facsimile (receipt
confirmed by telephone) or delivered either by hand, by messenger or by
nationally recognized overnight courier, addressed:
(a) if to the holders of the Registrable Securities, to such other
address as they shall have furnished to the Company in writing or, in the
case of Dolphin Offshore Partners, L.P.,
c/o Dolphin Management Inc.
2nd Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
Fax: (000) 000-0000
and
(b) if to the Company, to the following address, or at such other
address as the Company shall have furnished to the holders of the
Registrable Securities and each such other holder in writing,
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Paging Partners Corporation
Freehold Office Plaza
0000 Xxxxx 0 Xxxxx
Xxxxxxxx 0
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxx, Esq. or
Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
Alternatively, to such other address as a party hereto supplies to each
other party in writing.
12. Successors and Assigns. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective transferees, successors and assigns of the parties hereto, whether so
expressed or not.
13. Governing Law. This Agreement is to be governed by and interpreted
under the laws of the State of New York giving effect to the principles of
conflicts of laws thereof.
14. Titles and Subtitles. The titles of the sections of this Agreement are
for the convenience of reference only and are not to be considered in construing
this Agreement.
15. Severability. The invalidity or unenforceability of any provisions of
this Agreement shall not be deemed to affect the validity or enforceability of
any other provision of this Agreement.
16. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PAGING PARTNERS CORPORATION
By: ___________________________________________
Xxxxxxx Xxxxxxx; President
PURCHASERS
Dolphin Offshore Partners, L.P.
By: ___________________________________________
Name:
Title: ________________________________________
No. of Shares: 400,000
_______________________________________________
Name: Xxxxxx Xxxxxxxx
No. of Shares: 45,000
_______________________________________________
Name: Xxxxxxx Xxxx
No. of Shares: 45,000
_______________________________________________
Name: Xxxxx Xxxxxx
No. of Shares: 15,000
_______________________________________________
Name: Xxxxxxx Xxxxxxx
No. of Shares: 10,000
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