EXHIBIT 10.60
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated November 12, 1996 (this
"Registration Agreement"), is between EqualNet Holding Corp., a Texas
corporation ("EqualNet"), and Creative Communications International, Inc., a
Texas corporation ("Creative").
WITNESSETH:
WHEREAS, under an Asset Purchase Agreement by and between EqualNet and
Creative dated November , 1996 (the "Asset Purchase Agreement"), EqualNet is
this date issuing to Creative: (i) 150,000 shares (the "Shares") of the common
stock of EqualNet, $.01 par value per share (the "Common Stock"); and (ii) a
Warrant (the "Warrant") for the purchase of 100,000 shares of the Common Stock
(subject to adjustment as provided in the Warrant); and
WHEREAS, the Asset Purchase Agreement requires that this Registration
Agreement be entered into between EqualNet and Creative upon the issuance to
Creative of the Shares and the Warrant to purchase the Common Stock.
NOW, THEREFORE, EqualNet and Creative (collectively, the "Parties") agree
that:
ARTICLE I
DEFINITIONS
1.1 Definitions. In this Registration Agreement:
"Affiliate" when used to indicate a relationship with any Person, means:
(i) any corporation or organization of which such Person is an officer, director
or partner or is directly or indirectly the beneficial owner of at least 10% of
the outstanding shares of any class of equity securities or financial interest
therein; (ii) any trust or other estate in which such Person has a beneficial
interest or as to which such Person serves as trustee or in any similar
fiduciary capacity; (iii) the mother, father, brother, sister, child or spouse
of such Person, or of such Person's spouse; (iv) any Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, or is acting as agent on behalf of, or as an
officer or director of, such Person; (v) any Person who is the payee of a
promissory note to such Person or (vi) any Person who is a creditor of such
Person on the date hereof As used in the definition of Affiliate, the term
"control" (including the terms "controlling," "controlled by" or "under common
control with") means the possession, direct or indirect, of the power to direct,
cause the direction of or influence the management and policies of a Person,
whether through the ownership of voting securities, by contract, through the
holding of a position as a director or officer of such Person, or otherwise.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated under such Act.
"Registrable Shares" means (i) any of the Shares; (ii) any shares of Common
Stock issued to Creative upon any exercise or exercises of the Warrant, and (ii)
any shares of Common Stock issued to Creative in connection with any stock
dividend on, or any stock split or reclassification of, shares of Common Stock.
"Person" means an individual, corporation, limited liability EqualNet,
partnership, limited partnership, joint venture, joint stock EqualNet, firm,
company, syndicate, trust, estate, association, governmental authority,
business, organization or any other incorporated or unincorporated entity.
"SEC" means the United States Securities and Exchange Commission or any
successor agency.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated under such Act.
ARTICLE II
REGISTRATION RIGHTS
2.1. Shelf Registration. Prior to February 15, 1996, EqualNet shall cause
to be filed at its own expense as provided in Section 4.1, pursuant to Rule 415
under the Securities Act a shelf registration statement (the "Shelf Registration
Statement") registering the resale of the Registrable Shares. EqualNet shall use
commercially reasonable efforts to have such Shelf Registration Statement
declared effective as soon as reasonably practicable after such filing, but in
no event shall such Shelf Registration Statement be declared effective later
than April 15, 1996. EqualNet shall also use commercially reasonable efforts to
keep such Shelf Registration Statement continuously effective (and to take any
and all other actions necessary in order to maintain the registration of the
resale of the Registrable Shares including, without limitation, the filing of
any additional registration statements that may be required) for three years
following the date on which such Shelf Registration Statement becomes effective
under the Securities Act; provided, however, that EqualNet may voluntarily
suspend the effectiveness of such Shelf Registration Statement for a limited
time, which in no event shall be longer than 90 days, if EqualNet has been
advised by counsel that the offering of the Registrable Shares pursuant to the
Shelf Registration Statement would adversely affect a proposed financing,
reorganization, recapitalization, merger, consolidation or similar transaction
involving EqualNet, in which case EqualNet shall be required to keep such Shelf
Registration Statement effective for an additional period of time beyond three
years following the date of the effectiveness thereof equal to the number of
days the effectiveness thereof is suspended pursuant to this Section 2.1. Upon
the occurrence of any event that would cause the Shelf Registration Statement
(i) to contain an untrue statement of material fact or to omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances in which they were made, not misleading or (ii) not to be
effective and usable for Registrable Shares during the period that such Shelf
Registration Statement is required to be effective and usable, EqualNet shall
promptly file an
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amendment to the Shelf Registration Statement, in the case of clause (i),
correcting any such misstatement or omission, and in the case of either clause
(i) or (ii), use commercially reasonable efforts to cause such amendment to be
declared effective and such Shelf Registration Statement to become usable as
soon as practicable thereafter.
2.2. "Piggyback" Rights. If at any time or from time to time, prior to the
effective date of the Shelf Registration Statement EqualNet proposes to file
with the SEC a registration statement (whether on Form X-0, X-0, or S-3, or any
equivalent form then in effect) for the registration under the Securities Act of
any shares of Common Stock for sale to the public by EqualNet or on behalf of
one or more shareholders of EqualNet (excluding any sale of securities
convertible into or exercisable for Common Stock, and any shares of Common Stock
issuable by EqualNet upon the exercise of employee stock options, or to any
employee stock ownership plan, or in connection with the merger or consolidation
of EqualNet with one or more other corporations if EqualNet is the surviving
corporation), EqualNet shall give Creative at least 15 days prior written notice
of the proposed filing. On the written request of Creative received by EqualNet
within 5 days after the date of EqualNet's delivery to Creative of the notice of
intended registration, EqualNet shall, under the terms and subject to the
conditions of this Article II, and at its own expense as provided in
Section 4.1, include in the coverage of such registration statement and qualify
for sale under the blue sky or securities laws of the various states, the number
of Registrable Shares (herein called the "Specified Shares") which Creative
requests to be registered.
If the managing underwriter for EqualNet indicates its reasonable belief
that including all or part of the Specified Shares in the coverage of such
registration statement will materially and adversely affect the sale of shares
of Common Stock proposed to be sold by EqualNet (which statement of the managing
underwriter shall also state the maximum number of shares, if any, which can be
sold by Creative requesting registration under this Section 2.2 without
materially adversely affecting the sale of the shares proposed to be sold by
EqualNet), then the number of Specified Shares which Creative shall have the
right to include in such registration statement shall be reduced to the maximum
number of shares specified by the managing underwriter. In such a case, priority
shall be afforded to shares of Common Stock covered by a registration statement
filed in response to the exercise of a demand registration right by another
holder of Common Stock. As to all other proposed selling shareholders of Common
Stock, including Creative requesting to include Registrable Shares in the
inclusion of such a registration statement, any such reduction in the number of
shares of Common Stock proposed to be sold by the selling shareholders shall be
effected on a pro rata basis in accordance with the relationship which the
number of shares of Common Stock proposed to be sold by each selling shareholder
bears to the number of shares of Common Stock proposed to be sold by all selling
shareholders.
EqualNet shall have the right to select any underwriters, including the
managing underwriter, of any public offering of shares of Common Stock subject
to this Section 2.2. Nothing in this Section 2.2 shall create any liability on
the part of EqualNet to Creative if EqualNet for any reason decides not to file
a registration statement.
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2.3. Registration Conditions. Notwithstanding any other provision of this
Registration Agreement, EqualNet shall not be required to effect a registration
of any Common Stock under this Article II, or file any post-effective amendment
to such a registration:
(a) unless Creative agrees to (x) sell and distribute a portion or all
of its Registrable Shares in accordance with the plan or plans of
distribution adopted by and through underwriters, if any, acting for
EqualNet, and (y) bear a pro rata share of underwriter's discounts and
commissions;
(b) if a registration requested under Section 2.1, or any post-
effective amendment to such a registration, requires, under applicable
statutes and rules, a special audit (other than a normal fiscal year-end
audit) of the financial statements of EqualNet, unless Creative agrees to
pay its proportionate share (determined by the number of shares to be sold
by Creative in the offering in proportion to the total number of shares to
be sold by all other participants in such offering) of the reasonable fees
and expenses of accountants incurred in connection with the special audit
and which would otherwise not be incurred;
(c) if, in the case of a request for registration under Section 2.1 or
2.2, in the opinion of counsel for EqualNet and counsel for Creative
requesting registration (x) the Registrable Shares for which registration
has been requested may be disposed of within a comparable time frame
without registration under the Securities Act and (y) upon such disposition
all legends on certificates representing such shares which restrict their
transfer under the Securities Act and applicable state securities laws may
be removed;
(d) if, in the case of a request for registration under Section 2.1,
(x) the effectiveness of any registration statement covering Common Stock
regarding which Creative could have exercised registration rights under
Section 2.2 of this Registration Agreement was suspended under the
Securities Act within six months following the date of such request, or (y)
EqualNet has given notice under Section 2.2 of its intention to file a
registration statement under the Securities Act and has not completed or
abandoned the proposed offering; and
(e) unless EqualNet has received from Creative all information
EqualNet has reasonably requested concerning Creative and its method of
distribution of its Registrable Shares, so as to enable EqualNet to include
in the registration statement all material facts required to be disclosed
in it.
2.4. Covenants and Procedures. If EqualNet becomes obligated under this
Article II to effect a registration of Registrable Shares on behalf of Creative
(hereinafter called a "Selling Shareholder" then:
(a) EqualNet, at its expense as provided in Section 4.1, shall
prepare and file with the SEC a registration statement covering such
Registrable Shares and shall cause the registration statement to become
effective. EqualNet will also file such post-effective
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amendments to the registration statement to be filed pursuant to
Section 2.1 (and use reasonable efforts to cause them to become effective)
and such supplements as are necessary so that current prospectuses are at
all times available for a period of at least 120 days after the effective
date of the registration statement or for such longer period, not to exceed
180 days, as may be required under the plan or plans of distribution set
forth in the registration statement. Each Selling Shareholder shall
promptly provide EqualNet with such information with respect to such
Selling Shareholder's Registrable Shares to be so registered and, if
applicable, the proposed terms of their offering, as is required for the
registration. If the Registrable Shares to be covered by the registration
statement are not to be sold to or through underwriters acting for
EqualNet, EqualNet shall:
(i) deliver to each Selling Shareholder, as promptly as
practicable, as many copies of preliminary prospectuses as each
Selling Shareholder may reasonably request (in which case each Selling
Shareholder shall keep a written record of the distribution of the
preliminary prospectuses and shall refrain from delivery of the
preliminary prospectuses in any manner or under any circumstances
which would violate the Securities Act or the securities laws of any
other jurisdiction, including the various states of the United
States);
(ii) deliver to each Selling Shareholder, as soon as practicable
after the effective date of the registration statement, (and from time
to time thereafter during such 120-day or longer period), as many
copies of the relevant prospectuses as such Selling Shareholder may
reasonably request; and
(iii) in case of the happening, after the effective date of the
registration statement and prior to completion of the offering covered
by such registration statement, of any event or occurrence which would
be set forth in an amendment of or supplement to the prospectus in
order to make any statements in it not misleading, give each Selling
Shareholder written notice of the event or occurrence and prepare and
furnish to each Selling Shareholder, in such quantities as it may
reasonably request, copies of the amended prospectus or supplement to
be attached to the prospectus in order that the prospectus, as so
amended or supplemented, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) On or before the date on which the registration statement is
declared effective, EqualNet shall use its reasonable efforts to:
(i) register or qualify (and cooperate with each Selling
Shareholder, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of) the
Common Stock covered by the registration
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statement for offer and sale under the securities or blue sky laws of
each state and other jurisdiction as any Selling Shareholder or
underwriter reasonably requests;
(ii) use its reasonable efforts to keep each such registration
or qualification effective, including through new filings, or
amendments or renewals, during the period the registration statement
is required to be kept effective; and
(iii) do any and all other acts or things necessary or advisable
to enable the disposition in all such jurisdictions of the Common
Stock covered by the applicable registration statement, provided that
EqualNet will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified.
(c) EqualNet shall use its reasonable efforts to cause all
Registrable Shares of a Selling Shareholder included in the registration
statement to be listed, by the date of the first sale of such shares
pursuant to such registration statement, on each securities exchange on
which the Common Stock is then listed or proposed to be listed, if any.
(d) EqualNet shall make generally available to each Selling
Shareholder and any underwriter participating in the offering conducted
pursuant to the registration statement an earnings statement satisfying
Section 11(a) of the Securities Act no later than 45 days after the end of
the 12-month period beginning with the first day of EqualNet's first fiscal
quarter commencing after the effective date of the registration statement.
The earnings statement shall cover such 12-month period. This requirement
will be deemed to be satisfied if EqualNet timely files complete and
accurate information on Forms 10-Q, 10-Y, and 8-K under the Exchange Act,
and otherwise complies with Rule 158 under the Securities Act as soon as
feasible.
(e) Upon consummation of the offering covered by the registration
statement, EqualNet shall cooperate with each Selling Shareholder and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Shares
sold under the registration statement, and to enable such securities to be
in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or the Selling Shareholder, may
request, subject to the underwriters' obligation to return any certificates
representing unsold securities.
(f) EqualNet shall use its reasonable efforts to cause Registrable
Shares covered by the registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Selling Shareholder or the underwriter or
underwriters, if any, to consummate the disposition of such Common Stock.
(g) EqualNet shall, during normal business hours and upon reasonable
notice, make available for inspection by each Selling Shareholder, any
underwriter participating in any offering pursuant to the registration
statement, and any attorney, accountant or other
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agent retained by a Selling Shareholder or any such underwriter
(collectively, the "Inspectors"), all nonconfidential financial and other
records, pertinent corporate documents, and properties of EqualNet, as
shall be reasonably necessary to enable the Inspectors to exercise their
due diligence responsibilities. EqualNet shall also cause its officers,
directors, and employees to supply all nonconfidential information
reasonably requested by any Inspector in connection with the registration
statement.
ARTICLE III
INDEMNIFICATION
3.1. Indemnification by EqualNet. In the event of any registration under
the Securities Act and this Registration Agreement of Registrable Shares held by
Creative in the capacity of a Selling Shareholder, EqualNet will hold harmless
Creative and each other person, if any, who controls Creative, against any
losses, claims, damages, or liabilities (including legal fees and costs of
court), joint or several, to which Creative 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 contained, on its effective date, in any registration statement
under which such Registrable Shares were registered under the Securities Act,
any related preliminary or final prospectus, or any amendment or supplement to
it, 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, in light of the circumstances in which they
were made, and will reimburse Creative 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 EqualNet shall not be liable to Creative or such 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,
preliminary or final prospectus, or such amendment or supplement, in reliance
upon and in conformity with information furnished to EqualNet through a written
instrument duly executed by Creative or such underwriter specifically for use in
the preparation thereof, and provided, further that the foregoing indemnity with
respect to any untrue statement contained in or omission from a registration
statement or in any amendment thereof or in a preliminary or final prospectus,
or any amendment or supplement to it, shall not inure to the benefit of Creative
from whom the person is asserting such losses, claims damages or liabilities
purchased any of the Registrable Shares which are the subject thereof if
Creative did not send or give a copy of the prospectus (or any amendment or
supplement thereto) at or prior to the written confirmation of the sale of such
Registrable Shares to such person in any case required by the Securities Act and
the untrue statement contained in or omission from such preliminary or final
prospectus was corrected in the final prospectus or any amendment or supplement
thereto, unless such failure to deliver the final prospectus or any amendment or
supplement thereto, as the case may be, was the result of noncompliance by
EqualNet of Section 2.4(a)(i) of this Agreement.
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3.2. Indemnification by Creative shall indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 3.1) EqualNet, each
director of EqualNet, each officer of EqualNet who shall sign the registration
statement, and any person who controls EqualNet within the meaning of the
Securities Act, (i) with respect to any statement or omission from such
registration statement, any related preliminary or final prospectus, or any
amendment or supplement to it, if such statement or omission was made in
reliance upon and in conformity with information furnished to EqualNet through a
written instrument duly executed by Creative specifically for use in the
preparation of such registration statement, preliminary or final prospectus, or
amendment or supplement, and (ii) with respect to compliance by Creative with
applicable laws in effecting the sale or other disposition of the shares of
Common Stock covered by such registration statement.
3.3. 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 III, the indemnified party will, if a
resulting claim is to be made or may be made against an indemnifying party, give
written notice to the indemnifying party of the commencement of the action. 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 t o 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, (ii) the indemnifying party
has not assumed the defense and employed counsel reasonably satisfactory to the
indemnified party within 30 days after notice of any such action or proceeding,
or (iii) 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 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.
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3.4. Contribution. If the indemnification required by this Article III from
the indemnifying party is unavailable to an indemnified party in respect of any
indemnifiable losses, claims, damages, liabilities, or expenses, then the
indemnifying party, in lieu of indemnifying the indemnified 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 (i) the relative fault and (ii) the relative benefit of
the indemnifying and indemnified 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. EqualNet and
Creative agree that it would not be just and equitable if contribution pursuant
to this Section 3.4 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 3.4.
Notwithstanding the provisions of this Section 3.4, no indemnifying party
shall be required to contribute any amount in excess of the amount by which the
total price at which the Common Stock was offered to the public by the
indemnifying party exceeds the amount of any damages which the indemnifying
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 IV
OTHER AGREEMENTS
4.1. Expenses. All expenses incurred by EqualNet in connection with any
registration statement covering Registrable Shares offered by Creative,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel (except for the fees
and disbursements of counsel for Creative) and of the independent certified
public accountants (except, in the case of any special audits, if required in
connection with any such registration, Creative's proportionate share of their
expense as provided in Section 2.3), and the expense of qualifying such shares
under state blue sky laws, shall be borne by EqualNet. However, all underwriting
expenses incurred by Creative, including underwriter's discounts and
commissions, shall be borne by Creative.
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4.2. Transfers of Registration Rights. The rights granted to Creative under
this Registration Agreement may be transferred or succeeded to only by: (i) an
Affiliate of Creative who agrees to and becomes party to this Registration
Agreement and who executes an investment letter for the benefit of EqualNet in
substantially the same form as Exhibit A attached hereto; or (ii) a transferee
who agrees to and becomes party to this Registration Agreement and who acquires
at least 25% of the Registrable Shares acquired by Creative on the date of this
Registration Agreement; provided, however, that EqualNet is given written notice
prior to or promptly following such transfer stating the name and address of the
transferee and identifying the securities with respect to which such rights are
being assigned. Such notice shall include or be accompanied by a written
undertaking by the transferee to comply with the obligations imposed on Creative
under this Registration Agreement. In the event any registration rights are
transferred in accordance with the terms hereof, any actions required to be
taken by Creative will be taken with the approval of the holders of such
registration rights who hold the Shares or the holders of a majority of the
Warrants, whose action shall bind all such holders of registration rights.
ARTICLE V
MISCELLANEOUS
5.1. Notices. All notices or other communications which are required or may
be given under this Registration Agreement shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by
telecopier (with receipt confirmed) to a party at the address or telecopy
number, as applicable, set forth below (as any such address or telecopier number
may be changed from time to time by notice similarly given):
(a) if to Creative, to: Attn: Xxx X. Xxxxxxx
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
With copy to: Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
Facsimile #:713/228-1331
(b) if to EqualNet, to: EqualNet Holding Corp.
EqualNet Plaza
0000 Xxxx Xxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx
Attn: Xxxxx X. Xxxxxxxxxx
Facsimile #: 281/529-4760
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With copy to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Xx.
Facsimile #: 713/651-5246
5.2. Section Headlines. The article and section headings in this
Registration Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Registration Agreement. References in this
Registration Agreement to a designated "Article" or "Section" refer to an
Article or Section of this Registration Agreement unless otherwise specifically
indicated.
5.3. Governing Law. This Registration Agreement shall be construed and
enforced in accordance with and governed by the law of Texas.
5.4. Amendments and Waivers. Except as otherwise provided in this
Registration Agreement the terms and provisions of this Registration Agreement
may not be modified or amended except in a writing executed by EqualNet and the
holders in interest of in excess of the majority of the then outstanding
Registrable Shares, provided, however, that the effect of such modification or
amendment will be such that all holders of Registrable Shares will be treated
equally. Waivers and exceptions to the requirements and limitations of the
provisions of Article II hereof and the other provisions hereof may be given,
and shall be effective if given, in writing by the holders in interest of in
excess of a majority of the then outstanding Registrable Shares, provided,
however, that the effect of such waiver or exception will be such that all
holders of Registrable Shares will be treated equally. Notice of all waivers and
amendments shall be promptly provided to all holders of Registrable Shares and
to EqualNet. No waivers of or exceptions to any term, condition or provision of
this Registration Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
5.5. Entire Agreement. This Registration Agreement, the Asset Purchase
Agreement and the Warrant Agreement constitute the entire agreement between its
Parties concerning the subject matter.
5.6. Severability. The invalidity or unenforceability of any specific
provision of this Registration Agreement shall not invalidate or render
unenforceable any of its other provisions. Any provision of this Registration
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 Registration Agreement.
5.7. Counterparts. This Registration Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Registration Agreement
as of the date first above written.
EQUALNET HOLDING CORP.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Senior Vice President
and Chief Operating Officer
CREATIVE COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxxxxx, President
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EXHIBIT A
---------
INVESTMENT LETTER
CREATIVE COMMUNICATIONS INTERNATIONAL, INC.
EqualNet Holding Corp.
0000 Xxxx Xxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
In connection with the proposed issuance to the undersigned person (the
"Purchaser") by EqualNet Holding Corp., a Texas corporation ("EqualNet"), of
shares of its common stock, $.01 par value per share (the "Shares"), the
Purchaser understands that the Shares will not be registered under the
Securities Act of 1933 (the "Act") or registered or qualified under Texas
securities laws or any other applicable state securities laws (together, the
"Blue Sky Laws") pursuant to exemptions from the registration provisions of the
Act and the Blue Sky Laws, the availability of which depends in part on the
accuracy of the following representations and on compliance with the following
agreements.
1. Representations. The Purchaser hereby represents that it is acquiring
the Shares for its own account for investment and not with a view to the
distribution thereof. The Purchaser further represents that it is an "accredited
investor" as such term is defined in Rule 501(a) promulgated under the Act.
2. Acknowledgment of Information. The Purchaser acknowledges that
EqualNet has furnished it with such financial and other data relating to
EqualNet as to enable it to make an informed decision concerning its acquisition
of the Shares. The Purchaser further represents and acknowledges that it has had
the opportunity to obtain additional information to verify the accuracy of the
information supplied by EqualNet and to evaluate the merits of such decision.
3. Economic Risk. The Purchaser represents and warrants that it realizes
that its purchase of the Shares will be a highly speculative investment and that
it is able, without impairing its financial condition, to hold the Shares for an
indefinite period of time and to suffer a complete loss of its investment.
4. Restrictions on Transfer of the Shares. With respect to any
disposition of the Shares in the future, the Purchaser represents and
acknowledges that the Shares have not been registered under the Act or any Blue
Sky Laws and that, consequently, the Shares must be held indefinitely
unless subsequently registered under the Act and such Blue Sky Laws for sale or
disposition or unless a sale or disposition may be made without registration
under the Act and such Blue Sky Laws. The Purchaser hereby agrees that the
Shares shall not be sold, transferred, pledged or hypothecated unless there is
furnished an opinion in form and substance satisfactory to EqualNet of counsel
satisfactory to EqualNet that registration of such Shares under the Act and such
Blue Sky Laws is not required, and that the certificate evidencing such Shares
shall bear a legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND NO INTEREST THEREIN
MAY BE SOLD OR OTHERWISE TRANSFERRED IN ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT AN OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED."
In addition, the Purchaser hereby agrees that, if EqualNet maintains its own
transfer records relating to the Shares, a notation consistent with such legend
may be made in such transfer records restricting any such sale, transfer, pledge
or hypothecation or, if such transfer records are maintained by a transfer
agent, EqualNet may issue stop transfer instructions to such transfer agent. The
foregoing restrictions and related legend provisions shall remain in effect
until, in the opinion of counsel satisfactory to EqualNet, they are no longer
required.
5. Principal Residence. The Purchaser represents and warrants that its
principal residence or place of business is within the State of Texas.
Dated as of November , 1996.
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Very truly yours,
PURCHASER
By:
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Name:
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Title:
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