REGISTRATION RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and
entered into effective as of May 4, 2017, by and among Fusion
Connect, Inc., a Delaware corporation (the “Company”), BCHI Holdings,
LLC, a Georgia limited liability company (the “Initial Stockholder”),
and each Person (as defined below) that becomes a party to this
Agreement by delivering to the Company a duly executed joinder to
this Agreement in the form attached hereto as Exhibit A or such other form
approved by the Company having the same effect thereof pursuant to
Section 6.1 (together with Initial Stockholder, each, a
“Stockholder,” and,
collectively, the “Stockholders”).
RECITALS
A. The
Company is party to a Merger Agreement, dated as of August 26,
2017, by and among Birch Communications Holdings, Inc., Fusion BCHI
Acquisition LLC and the Company (the “Merger
Agreement”).
B.
Pursuant to the terms of the Merger Agreement, the Initial
Stockholder will acquire shares (the “Closing Shares”) of the
Company’s common stock, $0.01 par value per share (the
“Company Common
Stock”).
C. In
connection with the transactions contemplated by the Merger
Agreement, the Company has agreed to provide the registration
rights provided in this Agreement.
D. The
Company and the Stockholders are entering into this Agreement to
set forth the terms and conditions applicable to such registration
rights.
NOW,
THEREFORE, in consideration of the mutual agreements contained
herein, the Company and the Initial Stockholder agree as
follows:
ARTICLE I
DEFINITIONS
Capitalized terms
not otherwise defined herein have the meaning set forth in the
Merger Agreement. As used in this Agreement, the following terms
have the following meanings:
“Affiliate” of any
particular Person means any other Person controlling, controlled by
or under common control with such particular Person, where
“control” means the possession, directly or indirectly,
of the power to direct the management and policies of a Person
whether through the ownership of voting securities or
otherwise.
“Agreement” has the
meaning set forth in the preamble.
“Business Day” means any
day other than a weekend or public holiday.
“Closing Shares” has the
meaning set forth in the recitals.
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“Closing Shares Registration
Statement” means the Company’s Registration
Statement on Form S-1 or S-3 (or a successor form) that covers the
resale, to be made on a delayed or continuous basis, of Closing
Shares representing no greater than 25% of the total number of all
Closing Shares that constitute Registrable Securities (and may
include other Registrable Securities held by the other
Stockholders, as set forth herein), under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such Registration Statement,
including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
“Closing Shares Shelf
Expiration” has the meaning set forth in Section
2.1.
“Company” has the meaning
set forth in the preamble and shall include the Company’s
successors.
“Company Common Stock” has
the meaning set forth in the recitals.
“Controlling Person” has
the meaning set forth in Section 5.1.
“Demand Registration” has
the meaning set forth in Section 2.2.
“Demand
Registration Request” has the meaning set forth in
Section 2.2.
“Demand Registration
Statement” means a Registration Statement filed by the
Company with the SEC pursuant to Section 2.2 hereof, and all
amendments and supplements to such Registration Statement,
including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, as amended from time to
time.
“Immediate Family” means,
with respect to any individual, such individual’s spouse,
parents, parents-in-law, descendants, brothers, sisters,
brothers-in-law, sisters-in-law and children-in-law.
“Initiating Stockholder”
has the meaning set forth in Section 2.2.
“Merger Agreement” has the
meaning set forth in the recitals.
“NASDAQ” means The NASDAQ
Stock Market, LLC.
“Partner
Distribution” has the meaning set forth in
Section
2.2.
“Permitted
Interruption” has the meaning set forth in
Section 2.6(c).
“Permitted Transferee”
means, (a) with respect to any Stockholder that is an individual,
(i) members of the Immediate Family of such Stockholder or (ii) any
trust or partnership established solely for the benefit of the
Immediate Family Member of such Stockholder, or (b) with respect to
any Stockholder that is not an individual, an Affiliate (other than
any “portfolio company” described below) of such
Stockholder; provided, however, that in no event shall
any “portfolio company” (as such term is customarily
used among institutional investors) of any Stockholder or any
entity controlled by any portfolio company of any Stockholder
constitute a “Permitted Transferee” of such
Stockholder.
“Person” means an
individual, limited liability company, association, joint stock
company, partnership, corporation, trust, estate or unincorporated
organization.
“Piggyback Registration”
has the meaning set forth in Section 2.3.
“Piggyback Stockholders”
has the meaning set forth in Section 2.3.
“Registrable Securities”
means all shares of Company Common Stock held by the Stockholders
at any time, including the Closing Shares, and any shares of
Company Common Stock issued or issuable to any Stockholder with
respect thereto by way of stock dividend or distribution, stock
split, or in connection with any combination of shares,
recapitalization, merger, share exchange, conversion, consolidation
or similar transaction (including pursuant to Article I of the
Merger Agreement), whether now owned or acquired by Stockholders or
acquired at a later time; provided, however, that any such shares
of Company Common Stock shall cease to be Registrable Securities
(i) when they have been sold pursuant to a Registration Statement,
(ii) when they have been sold pursuant to Rule 144 of the
Securities Act, (iii) with respect to any Stockholder, at such time
as the entire amount of such Stockholder’s Registrable
Securities may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and such holder, each in their
reasonable judgment, without any limitation as to volume pursuant
to Rule 144 of the Securities Act, (iv) when they have been
transferred to any Person other than a Permitted Transferee to whom
registration rights are assigned in accordance with Section 6.1 hereof, or (v) when
they have ceased to be outstanding.
“Registration Expenses”
has the meaning set forth in Section 3.7.
“Registration Statement”
means the Closing Shares Registration Statement, a Demand
Registration Statement and any other registration statement
prepared and filed with the SEC pursuant to Article II hereof, and all
amendments and supplements to such Registration Statement,
including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
“Required Stockholders”
means the holders of at least a majority of the Registrable
Securities held by the Stockholders.
“SEC” means the Securities
and Exchange Commission.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as amended from time to time.
“Shelf Takedown” has the
meaning set forth in Section 2.1.
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“Stockholder(s)” has the
meaning set forth in the preamble, and such term shall include any
transferee to whom registration rights granted pursuant to this
Agreement are validly assigned pursuant to Section 6.1
hereof.
“Underwritten Offering”
means a registered underwritten offering in which securities of the
Company are sold to one or more underwriters for reoffering to the
public.
“WKSI” means a
“well-known seasoned issuer” as defined in Rule 405
promulgated by the SEC.
ARTICLE II
CLOSING
SHARES REGISTRATION STATEMENT;
Demand
and Piggyback Rights
Section
2.1 Closing Shares
Registration Statement. The
Company shall prepare the Closing Shares Registration Statement and
file it with the SEC, and shall use reasonable best efforts to
cause the Closing Shares Registration Statement to be declared
effective by the SEC no later than 120 days from the date hereof.
The Company shall use reasonable best efforts to cause the Closing
Shares Registration Statement to remain effective (subject
to Section
2.6(c)) until the earlier to
occur of (i) the date on which all Registrable Securities included
within the Closing Shares Registration Statement have been sold
(other than to a Permitted Transferee to whom registration rights
are effectively assigned in accordance with Section 6.1
hereof) or (ii) the fifth (5th)
anniversary of the date that the Closing Shares Registration
Statement is declared effective by the SEC (the end of such period,
the “Closing Shares Shelf
Expiration”). The
Stockholders who hold Registrable Securities each shall be
entitled, at any time and from time to time when the Closing Shares
Registration Statement is effective, to sell such Registrable
Securities pursuant to such Closing Shares Registration Statement
(a “Shelf
Takedown”). The resale of
shares of Registrable Securities pursuant to the Closing Shares
Registration Statement may from time to time from and after the
date the Closing Shares Registration Statement is declared
effective by the SEC and until the Closing Shelf Expiration, upon
the written request of any Stockholder that holds, together with
its Affiliates, at least a simple majority of the Registrable
Securities issued pursuant to the transactions contemplated by the
Merger Agreement to such Stockholder and its Affiliates and
included under the Closing Shares Registration Statement, be an
underwritten offering; provided,
however,
that the Company shall not be required to effect an underwritten
Shelf Takedown unless the gross proceeds from the sale of
Registrable Securities in such offering are reasonably expected to
be at least $10,000,000 (without regard to any underwriting
discount or commission); and provided,
further,
that the Company shall not be required to effect more than one (1)
underwritten Shelf Takedown in any 90-day period or more than three
(3) underwritten Shelf Takedowns in any 365-day period. In the
event that any Stockholder requests an underwritten Shelf Takedown
pursuant to this Section 2.1
(the “Requesting
Stockholder”), then the
other Stockholders, if any, in each of such Stockholder’s
discretion, shall have the right to participate in such
underwritten Shelf Takedown of Registrable Securities registered
under the Closing Shares Registration Statement, subject to
this Section
2.1, and (ii) the Company shall
promptly notify each of the Stockholders (other than the Requesting
Stockholder) of such underwritten Shelf Takedown, and such
Stockholders shall have five (5) Business Days after receipt of
such notice to request, by written notice to the Company and the
Requesting Stockholder, that Registrable Securities held by such
Stockholder and registered
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pursuant to the Closing Shares Registration Statement be sold
pursuant to such proposed underwritten Shelf Takedown. The Company
and the Stockholders shall use their reasonable best efforts to
cooperate in taking any customary actions necessary or appropriate,
including making necessary filings with the SEC, to permit any such
Stockholder to participate in such proposed underwritten Shelf
Takedown in such circumstances. If the Closing Shares Registration
Statement ceases to be effective for any reason at any time prior
to the Closing Shares Shelf Expiration, the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall
within 45 days of such cessation of effectiveness amend the Closing
Shares Registration Statement in a manner to obtain the withdrawal
of the order suspending the effectiveness thereof. In any
underwritten Shelf Takedown, the majority of the Stockholders
requesting such underwritten Shelf Takedown shall have the right to
select the plan of distribution, to select one counsel for the
selling Stockholders and to designate the lead managing underwriter
in connection with any underwritten Shelf Takedown pursuant to such
registration and each other managing underwriter for any such
underwritten Shelf Takedown; provided,
that in each case, each such underwriter is reasonably satisfactory
to the Company, which approval shall not be unreasonably withheld
or delayed. If the managing underwriters advise the Requesting
Stockholder and the Company that, in their opinion, the number of
shares of Common Stock requested to be included in such
underwritten Shelf Takedown exceeds the amount that can be sold in
such underwritten Shelf Takedown without adversely affecting the
distribution (including the timing and/or price at which the
Registrable Securities can be sold) of the shares of Company Common
Stock being offered, such underwritten offering will include only
the number of shares of Company Common Stock that the underwriters
advise can be sold in such underwritten offering without having an
adverse effect on the distribution (including the timing and/or
price at which the Registrable Securities can be sold) of the
shares of Company Common Stock being offered. The Company will
include in such underwritten Shelf Takedown pursuant to the Closing
Shares Registration Statement, to the extent of the number of
shares of Company Common Stock which the Requesting Stockholder and
the Company are so advised can be sold in such underwritten Shelf
Takedown, the Registrable Securities of the Stockholders,
pro
rata, on the basis of the
number of shares of Company Common Stock requested to be included
by such Stockholders.
Section
2.2 Demand Registration
Rights. As of and after the
Closing Shares Shelf Expiration, each Stockholder shall have the
right to require the Company to file one or more registration
statements under the Securities Act covering all or any part of its
and its Affiliates’ Registrable Securities (a
“Demand
Registration”) by
delivering a written request (the “Demand Registration
Request”) therefor to the
Company specifying the number of Registrable Securities to be
included in such registration and the intended method of
distribution thereof (each such Stockholder so requesting a Demand
Registration, an “Initiating
Stockholder”). Any Demand
Registration Request may request that the Company register
Registrable Securities on an appropriate form, including a
long-form registration statement on Form S-1 (or any similar
long-form registration statement), a shelf registration statement,
and, if the Company is a WKSI, an automatic shelf registration
statement; provided,
however,
that the Company shall only be obligated to register such
Registrable Securities if the sale of the Registrable Securities
requested to be registered by such Stockholder is reasonably
expected to result in aggregate gross cash proceeds of at least
$20,000,000 (without regard to any underwriting discount or
commission); and provided,
further,
that unless otherwise approved by the Board, the Company shall not
be obligated to file a Registration Statement relating to any
registration request under this Section 2.2
within a period of 180 days after the
effective date of any other Registration Statement. The Company
shall, as promptly as reasonably practicable (subject to
Section
2.6(c)), use its reasonable
best efforts to file with the SEC (no later than forty five (45)
days from the Company’s receipt of the applicable Demand
Request) and cause to be declared effective such registration under
the Securities Act of the Registrable Securities which the Company
has been so requested to register, for distribution in accordance
with such intended method of distribution, including a distribution
to, and resale by, the members or partners of the Initial
Stockholder (a “Partner
Distribution”), and (y)
if requested by the Stockholders, obtain acceleration of the
effective date of the registration statement relating to such
registration. The Company shall use reasonable best efforts to
cause any Registration Statement filed pursuant to this
Section
2.2 (subject to
Section
2.6(c) hereof) to remain
effective until the earlier of (i) the date on which all
Registrable Securities included within such Registration Statement
have been sold (other than to a Permitted Transferee to whom
registration rights are effectively assigned in accordance
with Section 6.1
hereof) and (ii) the expiration of 180
days (or, if such registration is a shelf-registration statement
that permits sales of Registrable Securities on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, one
(1) year) from the date such Registration Statement first becomes
effective (exclusive of any period during which the holders of
Registrable Securities are prohibited or impaired from disposition
of Registrable Securities by reason of the occurrence of a
Permitted Interruption), at which time the Company shall have the
right to deregister any of such securities that remain unsold. The
Company shall, at the request of any Stockholder (including to
effect a Partner Distribution), file any prospectus supplement or
post-effective amendments, or include in the initial Registration
Statement any disclosure or language, or include in any prospectus
supplement or post-effective amendment any disclosure or language,
and otherwise take any action, reasonably deemed necessary or
advisable by such Stockholder (including to effect a Partner
Distribution). Notwithstanding anything contained herein to the
contrary, the Company shall not be required to effect more than
five (5) Demand Registrations pursuant to this Section
2.2.
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Section
2.3 Piggyback Registration
Rights. If the Company at any
time proposes to register any securities (whether pursuant to the
exercise of Demand Registration rights by a Stockholder of the
Company or at the initiative of the Company) under the Securities
Act (other than the Closing Shares Registration Statement solely as
provided in Section
2.1) in connection with a
public offering of such securities for cash, whether for its own
account or for the account of other securityholders, and the form
of registration statement to be used may be used for the
registration of Registrable Securities held by the Stockholders,
the Company shall give prompt written notice of its intention to do
to each Stockholder at least fifteen (15) Business Days prior to
filing any registration statement, and the Stockholders
(“Piggyback
Stockholders”), may, by
written notice to the Company, request that any or all Registrable
Securities not otherwise registered pursuant to a Registration
Statement (other than the Closing Shares Registration Statement
solely as provided in Section
2.1) be included in such
proposed registration of securities by the Company under the
Securities Act (a “Piggyback
Registration”). Upon the
written request of any such Piggyback Stockholder, made within ten
(10) Business Days following the receipt of any such written notice
(which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such Piggyback Stockholder
and the intended method of distribution thereof), the Company
shall, subject to this Section
2.3, use its reasonable best
efforts to cause all such Registrable Securities, the Piggyback
Stockholders of which have so requested the registration thereof,
to be registered under the Securities Act with the securities which
the Company at the time proposes to register to permit the sale or
other disposition by the Piggyback Stockholders (in accordance with
the intended method of distribution thereof) of the Registrable
Securities to be so registered, including, if necessary, by filing
with the SEC a post-effective amendment or a supplement to the
registration statement filed by the Company or the prospectus
related thereto. There is no limitation on the number of such
Piggyback Registrations pursuant to the preceding sentence which
the Company is obligated to effect. No registration of Registrable
Securities effected under this Section 2.3
shall relieve the Company of its
obligations to effect Demand Registrations under
Section
2.2 hereof.
Section
2.4 Additional Demand
Registrations. If the Company
effects the registration of less than all of the Registrable
Securities requested to be included by the Initiating Stockholder
in a Demand Registration under Section
2.2, then the Stockholders
shall be entitled to request an additional Demand Registration with
respect to such Registrable Securities that were not so registered.
If the Company withdraws or suspends any Demand Registration
pursuant to Section 2.6(c)
before the expiration of such Demand
Registration pursuant to Section
2.2, and before all of the
Registrable Securities covered by such Demand Registration have
been sold pursuant thereto, the Initiating Stockholder shall be
entitled to request an additional Demand Registration with respect
to such Registrable Securities that were not so sold. Any such
additional Demand Registration shall be requested and effected in
the manner and subject to the procedures that applied with respect
to the Demand Registration that was the subject of the cutback
in Section
3.4.
Section
2.5 Effective Registration
Statement.
A Demand Registration pursuant
to Section 2.2
shall not be deemed to have been
effected unless (i) a Registration Statement with respect thereto
has become effective and, after it has become effective, such
Demand Registration is not interfered with by any stop order,
injunction or other order or requirement of the SEC or other
governmental agency or court for any reason, and (ii) the sale of
Registrable Securities contemplated thereby (if underwritten) has
been consummated.
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Section
2.6 Limitations
on Demand and Piggyback Rights.
(a) With
respect to any registrations requested pursuant to
Section
2.2 or Section
2.3, the Company may include in
such registration any other equity securities of the Company.
Notwithstanding anything in this Agreement to the contrary, the
Stockholders will not have piggyback or other registration rights
with respect to registered primary offerings by the Company (i)
covered by a Form S-8 Registration Statement (or a successor form)
applicable to employee benefit-related offers and sales, (ii) where
the securities are not being sold for cash, (iii) covered by a
registration statement on Form S-4 (or successor form) or (iv)
relating to a corporate reorganization pursuant to Rule 145
promulgated by the SEC.
(b) Any
demand for the filing of a Registration Statement will be subject
to the constraints of any customary and reasonable lockup
arrangements entered into by the Company in connection with a then
pending underwritten offering, and such demand must be deferred
until such lockup arrangements no longer apply. If a demand has
been made under this Article
II, no further demands may be
made so long as the related offering is still being pursued in good
faith.
(c) The
Company may postpone the filing of any Registration Statement or
suspend the effectiveness of any Registration Statement (including,
without limitation, the Closing Shares Registration Statement), any
amendment or post-effective amendment thereto or prospectus
supplement for a reasonable “blackout period” not in
excess of 60 days if the board of directors of the Company
determines in good faith that such registration, offering,
amendment or supplement (i) would materially interfere with a bona
fide business, financing or acquisition (including any merger,
reorganization, consolidation, tender offer or similar transaction)
transaction of the Company because it would be reasonably likely to
require premature disclosure of material, nonpublic information,
the premature disclosure of which the board of directors reasonably
determines in the exercise of its good faith judgment (and not for
the avoidance of its obligations under this Agreement) would not be
in the best interests of the Company, or (ii) could not be effected
by the Company in compliance with the applicable financial
statement requirements under the Securities Act or Exchange Act
(such event described in this Section 2.6(c)
during which the Company is not
required to make such filing, amendment or supplement is herein
referred to as a “Permitted
Interruption”);
provided,
however,
that the Company shall not postpone the filing of a demanded
Registration Statement or suspend the effectiveness of any
Registration Statement pursuant to this Section 2.6
more than once in any 90-day period.
If a Permitted Interruption affects a Registration Statement during
the period such Registration Statement remains effective, the
Company agrees to notify each of the Stockholders so affected by a
Permitted Interruption in writing as promptly as practicable upon
each of the commencement and the termination of each Permitted
Interruption. The Company shall not be required in such notice of a
Permitted Interruption to disclose the cause for such Permitted
Interruption, and each Stockholder agrees, subject to applicable
law, that it will not disclose receipt of such notice of Permitted
Interruption to any Person. Each Stockholder agrees that, upon
receipt of any such notice from the Company, such Stockholder will
forthwith discontinue disposition of Registrable Securities
pursuant to the applicable Registration Statement until the earlier
of (i) such Stockholder’s receipt of the Company’s
notice as to the termination of the Permitted Interruption and (ii)
90 days after receipt of the original notice of a Permitted
Interruption. In the event of a Permitted Interruption, the
duration of the applicable period in which a Registration Statement
is to remain effective shall be extended by the number of days of
such period. The Company shall reimburse each holder of Registrable
Securities for all reasonable and documented out-of pocket costs
and expenses incurred by such Stockholder in connection with the
postponement or withdrawal of such a filing.
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ARTICLE III
Notices,
Cutbacks and Other Matters
Section
3.1 Notifications
Regarding Registration Statements. In order for one or more Initiating Stockholders
to exercise their right to demand that a Registration Statement be
filed, they must so notify the Company in writing indicating the
number of shares sought to be registered. The Company will keep the
Stockholders contemporaneously apprised of all pertinent aspects of
its pursuit of any registration, whether pursuant to a Demand
Registration or otherwise, with respect to which a Piggyback
Registration opportunity is available. Pending any required public
disclosure and subject to applicable legal requirements, the
parties will maintain the confidentiality of these
discussions.
Section
3.2 Notifications
Regarding Registration Piggyback Rights. Subject to Section
2.3, in the event that any sale
of shares pursuant to a Registration Statement is underwritten, the
Company shall promptly notify each Piggyback Stockholder of such
development and the Piggyback Stockholders shall have fifteen (15)
days after receipt of such notice to request the registration by
the Company under the Securities Act of Registrable Securities not
otherwise registered pursuant to a Registration Statement (other
than the Closing Shares Registration Statement) in connection with
such proposed registration of securities.
Section
3.3 Plan of Distribution;
Underwriters. In connection
with any Demand Registration, the majority of the Initiating
Stockholders participating in such Demand Registration shall have
the right to select the plan of distribution, to select one counsel
for the selling Stockholders and to designate the lead managing
underwriter in connection with any underwritten offering pursuant
to such registration and each other managing underwriter for any
such underwritten offering; provided,
that in each case, each such underwriter is reasonably satisfactory
to the Company, which approval shall not be unreasonably withheld
or delayed.
Section
3.4 Cutbacks.
If the managing underwriters advise the Company and the selling
Stockholders that, in their opinion, the number of shares requested
to be included in an underwritten offering (other than any resale
of Registrable Securities pursuant to the Closing Shares
Registration Statement that is an underwritten offering, which
shall be subject to Section
2.1) exceeds the amount that
can be sold in such offering without adversely affecting the
distribution (including the timing and/or price at which the
Registrable Securities can be sold) of the shares being offered,
such offering will include only the number of shares that the
underwriters advise can be sold in such offering without having an
adverse effect on the distribution (including the timing and/or
price at which the Registrable Securities can be sold) of the
shares being offered. The Company will include in such Registration
Statement (other than any resale of Registrable Securities pursuant
to the Closing Shares Registration Statement that is an
underwritten offering, which shall be subject to
Section
2.1), to the extent of the
number which the Company is so advised can be sold in such
offering, first,
all securities proposed by the Company, if any, to be sold for its
own account; second,
Registrable Securities requested by the Stockholders to be included
in such Registration Statement, pro rata, on the basis of the number of shares of Company
Common Stock requested to be included in such Registration
Statement.
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Section
3.5 Withdrawals.
Even if shares held by a Stockholder have been part of a registered
underwritten offering, such Stockholder may, no later than the time
at which the public offering price and underwriters’ discount
are determined with the managing underwriter, decline to sell all
or any portion of the shares being offered for its account. In the
event of such a withdrawal, the Company and any Stockholder having
the right to participate in such offering may, in their discretion,
include additional shares in such offering in replacement of any
shares so withdrawn without requiring any further notice or
piggyback registration rights with respect to the Stockholder that
has withdrawn its shares.
Section
3.6 Lockups.
In connection with any underwritten offering of Registrable
Securities, (a) the Company (and each of its executive officers and
directors) and (b) each Stockholder which is selling shares of
Company Common Stock pursuant to its rights hereunder will agree to
be bound by the underwriting agreement’s lockup restrictions
(which must apply, and continue to apply, in like manner to each of
the Company (and each of its executive officers and directors) and
Stockholders participating in the underwritten offering) that are
agreed to (i) by the Company (if a majority of the shares being
sold in such underwritten offering are being sold for its account)
or (ii) by Stockholders holding a majority of shares being sold by
all Stockholders in such underwritten offering (if a majority of
the shares being sold in such underwritten offering are being sold
by Stockholders), as applicable.
Section
3.7 Expenses.
All costs and expenses incurred in connection with any Registration
Statement or registered offering that includes shares held by
Stockholders, whether or not a Registration Statement becomes
effective or the offering is consummated, including all
registration and filing fees, printing expenses, reasonable fees
and disbursements of counsel (including the fees and disbursements
of one outside counsel for the Stockholders (selected by the
holders of the majority of the Registrable Securities to be
included in such Registration Statement) and of the independent
certified public accountants), and the expense of qualifying such
shares under state blue sky laws (all such expenses, the
“Registration
Expenses”), will be borne
by the Company. However, any underwriters’, brokers’
and dealers’ discounts and commissions, or similar fees of
securities industry professionals, and applicable transfer taxes,
if any, in each case relating to shares sold for the account of a
Stockholder will be borne by such Stockholder. Notwithstanding
anything herein to the contrary, the Company shall not be required
to pay fees and disbursements of any outside counsel retained by
any Stockholder or by any underwriter in connection with any
Registration Statement or registered offering, except as expressly
set forth above in this Section
3.7.
ARTICLE IV
FACILITATING
REGISTRATIONS AND OFFERINGS
Section
4.1 General.
If the Company becomes obligated under this Agreement to facilitate
a registration and offering of shares on behalf of Stockholders,
the Company will do so with the same degree of care and dispatch as
would reasonably be expected in the case of a registration and
offering by the Company of shares for its own account. Without
limiting this general obligation, the Company will fulfill its
specific obligations as described in this Article
IV.
-8-
Section
4.2 Registration
Statements. In connection with
each Registration Statement (including the Closing Shares
Registration Statement and any other Registration Statement that is
demanded by Stockholders or as to which piggyback rights otherwise
apply), the Company will:
(a) prepare
and file with the SEC a Registration Statement (or an amendment or
supplement to the Closing Shares Registration Statement) covering
the applicable shares, (ii) file amendments thereto as warranted,
(iii) seek the effectiveness thereof, and (iv) file with the SEC
prospectuses and prospectus supplements as may be required, all in
consultation with the Stockholders and as reasonably necessary in
order to permit the offer and sale of such shares in accordance
with the applicable plan of distribution;
(b) within
a reasonable time prior to the filing of any Registration
Statement, any prospectus, any amendment to a Registration
Statement, amendment or supplement to a prospectus or any free
writing prospectus, provide copies of such documents to the selling
Stockholders and to the underwriter or underwriters of an
underwritten offering, if applicable, and to their respective
counsel; fairly consider such reasonable changes in any such
documents prior to or after the filing thereof as the counsel to
the Stockholders or the underwriter or the underwriters may
request; and make such of the representatives of the Company as
shall be reasonably requested by the selling Stockholders or any
underwriter available for discussion of such
documents;
(i) within
a reasonable time prior to the filing of any document which is to
be incorporated by reference into a Registration Statement or a
prospectus, provide copies of such document to counsel for the
Stockholders and underwriters; fairly consider such reasonable
changes in such document prior to or after the filing thereof as
counsel for such Stockholders or such underwriter shall request;
and make such of the representatives of the Company as shall be
reasonably requested by such counsel available for discussion of
such document;
(c) cause
each Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of such
Registration Statement, amendment or supplement and during the
distribution of the registered shares (x) to comply in all material
respects with the requirements of the Securities Act and the rules
and regulations of the SEC and (y) not to contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(d) notify
each Stockholder promptly, and, if requested by such Stockholder,
confirm such advice in writing, (i) when a Registration Statement
has become effective and when any post-effective amendments and
supplements thereto become effective if such Registration Statement
or post-effective amendment is not automatically effective upon
filing pursuant to Rule 462 promulgated by the Securities Act, (ii)
of the issuance by the SEC or any state securities authority of any
stop order, injunction or other order or requirement suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iii) if, between the effective date
of a Registration Statement and the closing of any sale of
securities covered thereby pursuant to any agreement to which the
Company is a party, the representations and warranties of the
Company contained in such agreement cease to be true and correct in
all material respects or if the Company receives any notification
with respect to the suspension of the qualification of the shares
for sale in any jurisdiction or the initiation of any proceeding
for such purpose, and (iv) of the happening of any event during the
period a Registration Statement is effective as a result of which
such Registration Statement or the related prospectus contains any
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading;
-9-
(e) promptly
furnish to counsel for each underwriter, if any, and for the
respective Stockholders copies of any correspondence with the SEC
or any state securities authority relating to the Registration
Statement or prospectus;
(f) otherwise
comply with all applicable rules and regulations of the SEC,
including making available to its security holders an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar provision then in force);
and
(g) use
all reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the
earliest possible time.
Section
4.3 Due
Diligence. In connection with
each registration and offering of shares to be sold by
Stockholders, the Company will, in accordance with customary
practice, make available for inspection by representatives of the
Stockholders and underwriters and any counsel or accountant
retained by such Stockholder or underwriters all relevant financial
and other records, pertinent corporate documents and properties of
the Company and cause appropriate officers, managers and employees
of the Company to supply all information reasonably requested by
any such representative, underwriter, counsel or accountant in
connection with their due diligence exercise.
Section
4.4 Information from
Stockholders. Each Stockholder
that holds shares covered by any Registration Statement will
furnish to the Company such information regarding itself as is
required to be included in the Registration Statement, the
ownership of shares by such Stockholder and the proposed
distribution by such Stockholder of such shares, and make such
customary representations to the Company, as the Company may from
time to time reasonably request in writing. Each Stockholder
authorizes the Company to include such information in the
applicable Registration Statement or other documents prepared or
filed in connection therewith. Each Stockholder further agrees to
promptly notify the Company of any inaccuracies or changes in the
information provided to the Company that it becomes aware of that
may occur subsequent to the date hereof at any time while a
Registration Statement including shares owned by such Stockholder
remains effective. Each Stockholder agrees to distribute
Registrable Securities included in the Registration Statement only
in the manner described in the applicable Registration
Statement.
Section
4.5 Additional
Agreements of Stockholders.
(a) Each
Stockholder agrees to, following such time that such Stockholder
becomes aware, as expeditiously as possible, notify the Company of
the occurrence of any event that makes any statement made in any
Registration Statement or any related prospectus regarding such
Stockholder untrue in any material respect or that requires the
making of any changes in either a Registration Statement or
prospectus regarding such Stockholder.
-10-
(b) Each
Stockholder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described
in Section
4.2(d)(ii) or
Section
4.2(d)(iv) hereof, such
Stockholder will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement until such
Stockholder’s receipt of the copies of any necessary
supplements or amendments to such Registration Statement or
applicable prospectus, and, if so directed by the Company, such
Stockholder will deliver to the Company all copies in its
possession, other than permanent file copies then in such
Stockholder’s possession, of the Registration Statement or
applicable prospectus covering such Registrable Securities at the
time of receipt of such notice. Each Stockholder agrees that in the
event it receives any notice from the Company under
Section
4.2(d)(ii) or
Section
4.2(d)(iv), it will not
disclose such fact to any person.
Section
4.6 Non-Closing Shares
Registration Statements. In
connection with any non-shelf registered offering or shelf
registration that is demanded by Stockholders in accordance
with Section 2.2
or as to which piggyback rights apply
pursuant to Section
2.3, the Company
will:
(a) cooperate
with the Stockholders selling shares and the sole underwriter or
managing underwriter of an underwritten offering shares, if any, to
facilitate the timely preparation and delivery of certificates
representing the shares to be sold and not bearing any restrictive
legends; and enable such shares to be in such denominations
(consistent with the provisions of the governing documents thereof)
and registered in such names as the selling Stockholders or the
sole underwriter or managing underwriter of an underwritten
offering of shares, if any, may reasonably request at least five
(5) Business Days prior to any sale of such shares;
(b) furnish
to each Stockholder and to each underwriter, if any, participating
in the relevant offering, without charge, as many copies of the
applicable prospectus, including each preliminary prospectus, and
any amendment or supplement thereto and such other documents as
such Stockholder or underwriter may reasonably request in order to
facilitate the public sale or other disposition of the shares; the
Company hereby consents to the use of the prospectus, including
each preliminary prospectus, by each such Stockholder and
underwriter in connection with the offering and sale of the shares
covered by the prospectus or the preliminary
prospectus;
(c)
(i) use all reasonable efforts to register or
qualify the shares being offered and sold, no later than the time
the applicable registration statement becomes effective, under all
applicable state securities or “blue sky” laws of such
jurisdictions as each underwriter, if any, or any Stockholder
holding shares covered by a registration statement, shall
reasonably request; (ii) use all reasonable efforts to keep each
such registration or qualification effective during the period such
registration statement is required to be kept effective; and (iii)
do any and all other acts and things which may be reasonably
necessary or advisable to enable each such underwriter, if any, and
Stockholder to consummate the disposition in each such jurisdiction
of such shares owned by such Stockholder; provided,
however,
that the Company shall not be obligated to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to consent to be subject to general
service of process (other than service of process in connection
with such registration or qualification or any sale of shares in
connection therewith) in any such jurisdiction;
-11-
(d) use
all reasonable efforts to cause all shares being sold to be
qualified for inclusion in or listed on NASDAQ or any other U.S.
securities exchange on which shares issued by the Company are then
so qualified or listed if so requested by the Stockholders, or if
so requested by the underwriter or underwriters of an underwritten
offering of shares, if any;
(e) cooperate
and assist in any filings required to be made with Financial
Industry Regulatory Authority and in the performance of any due
diligence investigation by any underwriter in an underwritten
offering;
(f) use
all reasonable efforts to facilitate the distribution and sale of
any shares being offered, including by making road show
presentations, holding meetings with and making calls to potential
investors and taking such other actions as shall be requested by
the lead managing underwriter of an underwritten offering;
and
(g) enter
into customary agreements (including, in the case of an
underwritten offering, underwriting agreements in customary form,
and including provisions with respect to indemnification and
contribution in customary form and consistent with the provisions
relating to indemnification and contribution contained herein) and
take all other customary and appropriate actions in order to
expedite or facilitate the disposition of such shares and in
connection therewith:
(i) make
such representations and warranties to the selling Stockholders and
the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten
offerings;
(ii) obtain
opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the lead managing underwriter, if any)
addressed to each selling Stockholder and the underwriters, if any,
covering the matters customarily covered in opinions requested in
sales of securities or underwritten offerings and such other
matters as may be reasonably requested by such Stockholders and
underwriters;
(iii) obtain
“cold comfort” letters and updates thereof from the
Company’s independent certified public accountants addressed
to the selling Stockholders, if permissible, and the underwriters,
if any, which letters shall be customary in form and shall cover
matters of the type customarily covered in “cold
comfort” letters to underwriters in connection with primary
underwritten offerings;
(iv) to
the extent requested and customary for the relevant transaction,
enter into a securities sales agreement with the Stockholders
providing for, among other things, the appointment of such
representative as agent for the selling Stockholders for the
purpose of soliciting purchases of shares, which agreement shall be
customary in form, substance and scope and shall contain customary
representations, warranties and covenants
The
above shall be done at such times as customarily occur in similar
non-shelf registered offerings or shelf registrations, as
applicable.
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ARTICLE V
INDEMNIFICATION
Section
5.1 Indemnification by the
Company. In the event of any
registration under the Securities Act by any Registration
Statement, pursuant to rights granted in this Agreement, of shares
held by Stockholders, the Company will hold harmless Stockholders,
each director, officer, employee and Affiliate of the Stockholders
and each other person, if any, who controls any Stockholder within
the meaning of the Securities Act (each, a
“Controlling
Person”), against any
losses, claims, damages, or liabilities (including legal fees and
costs of court), joint or several, to which Stockholders or such
Controlling Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities
(or any actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material
fact (a) contained, on its effective date, in any Registration
Statement under which such securities were registered under the
Securities Act or any amendment or supplement to any of the
foregoing, or which arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading
or (b) contained in any preliminary prospectus, if used prior to
the effective date of such Registration Statement, or in the final
prospectus (as amended or supplemented if the Company shall have
filed with the SEC any amendment or supplement to the final
prospectus), or which arise out of or are based upon the omission
or alleged omission (if so used) to state a material fact required
to be stated in such prospectus or necessary to make the statements
in such prospectus not misleading; and will reimburse Stockholders
and each such Controlling Person for any legal or any other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, or
liability; provided,
however,
that the Company shall not be liable to any Stockholder or
Controlling Persons 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 such Registration Statement or such amendment or
supplement, solely in reliance upon and in conformity with
information furnished to the Company through a written instrument
duly executed by such Stockholder specifically for use in the
preparation thereof. In connection with any underwritten public
offering effected under a Registration Statement, the Company will
agree to indemnify the underwriters on terms and conditions
customary for such an offering. This indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of an indemnified party, and shall survive the transfer (in
accordance with the terms hereof) of such Registrable Securities by
the seller thereof.
Section
5.2 Indemnification by
Stockholders. Each Stockholder
will, severally and not jointly, indemnify and hold harmless (in
the same manner and to the same extent as set forth in
Section
5.1) the Company, each
director, officer, employee and Affiliate of the Company and any
Person who controls the Company within the meaning of the
Securities Act with respect to any statement or omission from such
Registration Statement, or any amendment or supplement to it, if
such statement or omission was made solely in reliance upon and in
conformity with information furnished to the Company through a
written instrument duly executed by such Stockholder specifically
regarding such Stockholder for use in the preparation of such
Registration Statement or amendment or supplement;
provided,
however,
that such Stockholder shall not be liable in any such case to the
extent that prior to the filing of any such Registration Statement
amendment or supplement, such Stockholder has furnished in writing
to the Company information expressly for use in such Registration
Statement or prospectus or any amendment or supplement which
corrected or made not misleading information previously furnished
to the Company. This indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the
Company, its directors, officers or controlling Persons, and shall
survive the transfer of such Registrable Securities by the seller
thereof. Notwithstanding the foregoing, the liability of any such
Stockholder shall not exceed an amount equal to the net proceeds
realized by such Stockholder from the sale of Registrable
Securities pursuant to such Registration
Statement.
-13-
Section
5.3 Indemnification
Procedures. Promptly after
receipt by an indemnified party of notice of the commencement of
any action involving a claim referred to in the preceding Sections
of this Article
V, the indemnified party will,
if a resulting claim is to be made or may be made against and
indemnifying party, give written notice to the indemnifying party
of the commencement of the action. The failure of any indemnified
party to give notice shall not relieve the indemnifying party of
its obligations in this Article
V, except to the extent that
the indemnifying party is actually prejudiced by the failure to
give notice. If any such action is brought against an indemnified
party, the indemnifying party will be entitled to participate in
and to assume the defense of the action with counsel reasonably
satisfactory to the indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to
assume defense of the action, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses
incurred by the latter in connection with the action’s
defense. An indemnified party shall have the right to employ
separate counsel in any action or proceeding and participate in the
defense thereof, but the fees and expenses of such counsel shall be
at such indemnified party’s expense unless (a) the employment
of such counsel has been specifically authorized in writing by the
indemnifying party, which authorization shall not be unreasonably
withheld, (b) the indemnifying party has not assumed the defense
and employed counsel reasonably satisfactory to the indemnified
party within 60 days after notice of any such action or proceeding,
or (c) the named parties to any such action or proceeding
(including any impleaded parties) include the indemnified party and
the indemnifying party and the indemnified party shall have been
advised by such counsel that there may be one or more legal
defenses available to the indemnified party that are different from
or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to
assume the defense of such action or proceeding on behalf of the
indemnified party), it being understood, however, that the
indemnifying party shall not, 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 for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to all local
counsel which is necessary, in the good faith opinion of both
counsel for the indemnifying party and counsel for the indemnified
party in order to adequately represent the indemnified parties) for
the indemnified party and that all such fees and expenses shall be
reimbursed as they are incurred upon written request and
presentation of invoices. Whether or not a defense is assumed by
the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent. No
indemnifying party will consent to entry of any judgment or enter
into any settlement which (i) does not include as an unconditional
term the giving by the claimant or plaintiff, to the indemnified
party, of a release from all liability in respect of such claim or
litigation or (ii) involves the imposition of equitable remedies or
the imposition of any non-financial obligations on the indemnified
party.
-14-
Section
5.4 Contribution.
If the indemnification required by this Article V
from the indemnifying party is
unavailable to or insufficient to hold harmless an indemnified
party in respect of any indemnifiable losses, claims, damages,
liabilities, or expenses, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party
as a result of such losses, claims, damages, liabilities, or
expenses in such proportion as is appropriate to reflect (a) the
relative benefit of the indemnifying and indemnified parties and
(b) if the allocation in clause (a) is not permitted by applicable
law, in such proportion as is appropriate to reflect the relative
benefit referred to in clause (a) and also the relative fault of
the indemnified and indemnifying parties, in connection with the
actions which resulted in such losses, claims, damages,
liabilities, or expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and
the indemnified party shall be determined by reference to, among
other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact, has been made by,
or relates to information supplied by, such indemnifying party or
parties, and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such action.
The amount paid or payable by a party as a result of the losses,
claims, damage, liabilities, and expenses referred to above shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding. The Company and Stockholders agree that it would not be
just and equitable if contribution pursuant to this
Section
5.4 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 the prior provisions of this
Section
5.4. Notwithstanding the
provisions of this Section
5.4, no indemnifying or
contributing party shall be required to contribute any amount in
excess of the amount by which the total price at which the
securities were offered to the public by such party exceeds the
amount of any damages which such party has otherwise been required
to pay by reason of an untrue statement or omission. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such a
fraudulent misrepresentation.
ARTICLE VI
OTHER
AGREEMENTS
Section
6.1 Transfer
of Rights.
(a) This
Agreement is personal to the parties hereto and not assignable or
transferable; provided,
however,
that notwithstanding the foregoing, a Stockholder may assign and
transfer its rights and obligations under this Agreement to a
Permitted Transferee in connection with a transfer or sale of
Registrable Securities to such Person, which assignment or transfer
shall only be effective upon receipt by the Company of a duly
executed commitment by such Permitted Transferee to be bound by the
terms of this Agreement, in the form attached hereto as
Exhibit
A, in which case this Agreement
shall be assigned to, and may be enforced by, such Permitted
Transferee, and such Permitted Transferee shall thereupon have all
of the rights and obligations of its transferor
hereunder.
-15-
(b) In
the event the Company engages in a merger or consolidation in which
the Registrable Securities are converted into securities of another
company, and which securities are not tradable without registration
under the Securities Act, appropriate arrangements will be made so
that the registration rights provided under this Agreement continue
to be provided to Stockholders by the issuer of such securities. To
the extent such new issuer, or any other company acquired by the
Company in a merger or consolidation, was bound by registration
rights obligations that would conflict with the provisions of this
Agreement, the Company will, unless the Required Stockholders
otherwise agree, use its best efforts to modify any such
“inherited” registration rights obligations so as not
to interfere in any material respects with the rights provided
under this Agreement.
Section
6.2 Limited
Liability. Notwithstanding any
other provision of this Agreement, neither the members, general
partners, limited partners or managing directors, or any directors
or officers of any members, general or limited partner, advisory
director, nor any future members, general partners, limited
partners, advisory directors, or managing directors, if any, of any
Stockholder shall have any personal liability for performance of
any obligation of such Stockholder under this Agreement in excess
of the respective capital contributions of such members, general
partners, limited partners, advisory directors or managing
directors to such Stockholder.
Section
6.3 Rule
144. If the Company is subject
to the requirements of Section 13, 14 or 15(d) of the Exchange Act,
the Company covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act (or, if
the Company is subject to the requirements of Section 13, 14 or
15(d) of the Exchange Act but is not required to file such reports,
it will, upon the request of any Stockholder, make such information
available) and it will take such further action as any Stockholder
may reasonably request, so as to enable such Stockholder to sell
Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Stockholder, the Company will
deliver to such Stockholder a written statement as to whether it
has complied with such requirements.
Section
6.4 In-Kind
Distributions. If any
Stockholder seeks to effectuate an in-kind distribution of all or
part of its Registrable Securities to its direct or indirect
equityholders, the Company will work with such Stockholder and the
Company’s transfer agent to facilitate such in-kind
distribution in the manner reasonably requested by such
Stockholder.
Section
6.5 No Inconsistent
Agreements. The Company has not
entered into, and on or after the date of this Agreement will not
enter into, any agreement that conflicts with the provisions
hereof.
-16-
ARTICLE VII
MISCELLANEOUS
Section
7.1 Notices.
All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) on the date
so given, if delivered personally, (ii) on the date sent, if
delivered by facsimile with telephone confirmation of receipt,
(iii) on the second Business Day following the date deposited in
the mail if mailed via an internationally recognized overnight
courier and (iv) on the fourth (4th) Business Day following the
date deposited in the mail if mailed via registered or certified
mail, return receipt requested, postage prepaid, in each case, to
the other party at the following addresses:
if to
any Stockholder, to the address listed on Annex A, with copies (which
shall not constitute notice) to the respective persons listed on
Annex
A.
if to
the Company, to:
000
Xxxxxxxxx Xxxxxx, Xxxxx 00
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X.
Xxxxxxxx, Xx., Executive Vice President and General
Counsel
Email:
xxxxxxxxx@xxxxxxxxxxxxx.xxx
Section
7.2 Section
Headings. The article and
section headings in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this
Agreement. References in this Agreement to a designated
“Article” or “Section” refer to an Article
or Section of this Agreement unless otherwise specifically
indicated.
Section
7.3 Use of
Terms. Whenever required by the
context, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice
versa. Whenever the words “include”,
“included” or “including” are used in this
Agreement, they are deemed to be followed by the words
“without limitation”. Reference to any agreement,
document or instrument means such agreement, document or instrument
as amended or otherwise modified from time to time in accordance
with the terms thereof. When used in this Agreement, words such as
“herein”, “hereinafter”,
“hereof”, “hereto”, and
“hereunder” shall refer to this Agreement as a whole,
unless the context clearly requires otherwise. The use of the words
“or,” “either” and “any” shall
not be exclusive. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
Section
7.4 Governing
Law. This Agreement will be
governed and construed in accordance with the internal Laws of the
State of Delaware, without regard to any applicable conflict of
laws principles (whether of the State of Delaware or any other
jurisdiction).
-17-
Section
7.5 Consent to
Jurisdiction and Service of Process. Each of the parties to this Agreement hereby
irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction and venue of the Chancery
Court of the State of Delaware and, in the absence of such
jurisdiction, the United States District Court for the District of
Delaware, and, in the absence of such federal jurisdiction, the
parties consent to be subject to the exclusive jurisdiction of any
Delaware state court sitting in New Castle County (together, the
“Chosen Courts”), in any action or proceeding arising
out of or relating to this Agreement or the Transactions or for
recognition or enforcement of any judgment relating thereto, and
each of the Parties hereby irrevocably and unconditionally (i)
agrees not to commence any such action or proceeding except in the
Chosen Courts, (ii) agrees that any claim in respect of any such
action or proceeding may be heard and determined in the Chosen
Courts, and any appellate court hearing actions or proceedings
therefrom, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have
to the laying of venue of any such action or proceeding in the
Chosen Courts, and (iv) waives, to the fullest extent it may
legally and effectively do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding in the Chosen
Courts. Each of the parties to this Agreement agrees that a final
judgment in any such action or proceeding will be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
Section
7.6 WAIVER OF JURY
TRIAL. EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
7.6.
Section
7.7 Amendments;
Termination. This Agreement may
be amended or modified only by an instrument in writing executed by
the Company and the Required Stockholders. Any such amendment and
modification will apply to all Stockholders equally, without
distinguishing between them. This Agreement will terminate as to
any Stockholder when it no longer holds any Registrable Securities.
This Agreement will no longer be applicable to Registrable
Securities that are registered in a public offering on NASDAQ or
any other U.S. securities exchange on which Registrable Securities
issued by the Company are then so qualified or
listed.
Section
7.8 Entire
Agreement. This Agreement
constitutes the entire agreement and understanding of the parties
with respect to the transactions contemplated hereby and thereby.
The registration rights granted under this Agreement supersede any
registration, qualification or similar rights with respect to any
of the shares of Company Common Stock granted under any other
agreement to the parties hereto.
-18-
Section
7.9 Severability.
The invalidity or unenforceability of any specific provision of
this Agreement shall not invalidate or render unenforceable any of
its other provisions. Any provision of this Agreement held invalid
or unenforceable shall be deemed reformed, if practicable, to the
extent necessary to render it valid and enforceable and to the
extent permitted by law and consistent with the intent of the
parties to this Agreement.
Section
7.10 Counterparts.
This Agreement may be executed in multiple counterparts, including
by means of facsimile, each of which shall be deemed an original,
but all of which together shall constitute the same
instrument.
[Remainder
of page intentionally blank]
-19-
IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the date first written
above.
By:
/s/ Xxxxx X. Xxxxxxxx, Xx.
Name:
Xxxxx X. Xxxxxxxx, Xx.
Title:
Executive Vice President and
General
Counsel
[Signature
Page to Registration Rights Agreement]
-20-
BCHI
HOLDINGS, LLC
By:
/s/ Xxxxxxxx X. Xxxxx, Xx.
Name:
Xxxxxxxx X. Xxxxx, Xx.
Title:
Manager
Notices:
[Signature
Page to Registration Rights Agreement]
-21-
EXHIBIT A
FORM OF JOINDER TO
This
JOINDER to the Registration Rights Agreement, dated as of
__________, 2017 (the “Registration Rights
Agreement”), of Fusion Connect, Inc., a Delaware
corporation (the “Company”), is executed on
behalf of the undersigned (“Stockholder”), effective
as of the date set forth on the signature page below, with
reference to the following facts:
A.
Capitalized terms used herein but not otherwise defined shall have
the meanings set forth in the Registration Rights
Agreement.
B.
Stockholder has acquired Registrable Securities from a Stockholder
(in this instance, as defined in the Registration Rights Agreement)
(the “Original
Stockholder”), is the Permitted Transferee of the
Original Stockholder and, in connection with such transfer, the
registration rights of such Original Stockholder are being assigned
to Stockholder in accordance with the terms of Section 6.1 of the Registration
Rights Agreement, and the Registration Rights Agreement requires
Stockholder to become a party thereto if Stockholder desires to
avail itself of the registration rights therein, and Stockholder
agrees to do so in accordance with the terms thereof.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby agrees as follows:
1.
Agreement to be
Bound. Stockholder hereby agrees that upon execution of this
Joinder, Stockholder shall become a party to the Registration
Rights Agreement as a “Stockholder” and shall be fully
bound by, and subject to, all of the covenants, terms and
conditions of the Registration Rights Agreement applicable to
Stockholder and the Registrable Securities held by Stockholder as
though an original party thereto.
2.
Counterparts. This
Joinder may be executed in separate counterparts each of which
shall be an original and all of which taken together shall
constitute one and the same agreement.
3.
Notices. For
purposes of Section
7.1 of the Registration Rights Agreement, all notices,
demands or other communications to Stockholder shall be directed to
Stockholder’s address set forth below Stockholder’s
signature below.
[Signature Page Follows]
-22-
IN WITNESS WHEREOF, Stockholder has
executed this Joinder effective as of the date set forth
below.
STOCKHOLDER:
By:
_________________________
Name:
Title:
ADDRESS:
Date:
-23-
