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EXHIBIT 4.3.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of this 19th day of February, 1998 by and among State Communications, Inc.
("SCI") and Seruus Telecom Fund, L.P. ("Seruus").
WHEREAS Seruus, through the date hereof, has purchased 375,000 shares
of SCI's common stock, par value $.001 per share (the "Securities"); WHEREAS SCI
desires to grant to Seruus the registration rights set forth herein; NOW,
THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement, except as
otherwise specifically provided herein, the following capitalized terms (in
their singular and plural forms as applicable) shall have the meanings set forth
below:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Majority in Interest" means Seruus, their successors and assigns
holding a majority of the then outstanding Securities.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing the filing of a registration statement in
compliance with the Securities Act, and the declaration or order by the
Commission of the effectiveness of such registration statement.
"Registrable Securities" means the shares of SCI Common Stock entitled
to the registration provisions hereof. Notwithstanding anything to the contrary
herein, no securities otherwise entitled to the benefits hereof shall be
considered "Registrable Securities" (a) when a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of thereunder, (b)
when such securities shall have been disposed of pursuant to Rule 144 (or any
successor provision to such Rule) under the Securities Act, or (c) when such
securities shall have been disposed of to a person other than one who meets the
conditions for assignment under Section 2(h) hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Shareholder" means each holder of record of the Securities.
"Underwritten Public Offering" means a public offering of Common Stock
for cash which is offered and sold in a registered transaction pursuant to an
agreement between SCI and one or more underwriters.
SECTION 2. REGISTRATION RIGHTS. (a) Demand Registration Rights. At any
time, on one (1) occasion, a Majority in Interest may request the registration
of all or at least 30% of the Registrable Securities outstanding and held by all
Shareholders, provided that SCI shall not be obligated to accept such demand
unless SCI has previously effected a registration of its shares of Common Stock
under the Securities Act, or unless SCI at the time of such demand is otherwise
a company reporting to the Commission under the Securities Exchange 1934 Act.
Upon receipt of notice of such demand (and, as applicable, a determination that
the proposed offering may reasonably meet such minimum criteria), SCI agrees to:
(i) promptly give written notice of the proposed registration
to all other Shareholders; and
(ii) use its best efforts to effect, as soon as practicable,
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualifications under
the applicable blue sky or other state securities laws and appropriate
compliance with exemptive regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of
such requesting Shareholders' Registrable Securities as is specified in the
request by the Shareholder to SCI, together with all or such portion of the
Securities of any other Shareholders joining in such request as is specified in
further requests received by SCI within thirty (30) days after such written
notice is given; and
(iii) SCI shall use its best efforts to prepare and file a
registration statement covering the Registrable Securities so requested to be
registered within ninety (90) days after the initial request is received.
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(b) Registration Rights of SCI. SCI shall be entitled to include in any
registration statement referred to in Section 2(a) for sale in accordance with
the method of disposition specified by the requesting holders, shares of Common
Stock to be sold by SCI for its own account, except as and to the extent that,
in the opinion of the managing underwriter or underwriters (if such method of
disposition shall be an Underwritten Public Offering), such inclusion would
result in more than fifty percent (50%) of the Registrable Securities proposed
to be sold by requesting Shareholder being excluded from the offering or would
materially adversely affect the marketing of such Registrable Securities
proposed to be sold.
(c) Piggyback Registration. If at any time or from time to time after
the date hereof, SCI shall register any shares of Common Stock, other than
pursuant to Section 2(a) or pursuant to a registration statement on Form S-4 or
S-8 (or similar form), or pursuant to any dividend or interest reinvestment
plan, it shall promptly give to each Shareholder written notice thereof (which
shall include, to the extent available, a list of the jurisdictions in which SCI
intends to attempt to qualify the offer and sale of such securities under the
applicable blue sky or other state securities laws) and shall use its reasonable
efforts to include in such registration (and any related qualification under
blue sky laws or other compliance), and in any Underwritten Public Offering
associated therewith, all the Registrable Securities specified in any written
request or requests by any Shareholders received by SCI within thirty (30) days
after such written notice is given. If at any time prior to the effective date
of any Registration Statement filed pursuant to this subsection 2(c), the Issuer
shall determine for any reason not to proceed with such registration, the Issuer
may, at its election, may delay or withdraw such registration and without
liability to the Shareholders.
(d) Registration Expenses. All expenses of any registrations permitted
pursuant to this Agreement and of all other offerings by SCI (including, but not
limited to, the expenses of any interim audit required by any underwriters in
the event of an offering requested pursuant to Section 2(a) or 2(c) hereof, any
qualifications under the blue sky or other state securities laws, compliance
with governmental requirements of preparing and filing any post-effective
amendments required for the lawful distribution of any securities to the public
in connection with registration, of supplying prospectuses, offering circular or
other documents but excluding fees of any special counsel retained by the
Shareholders and underwriting fees and discounts and selling commissions
applicable to the sale of the Registrable Securities) will be paid by SCI.
(e) Registration Procedures. In the case of such registration,
qualification or compliance effected by SCI pursuant to this Agreement in which
any Shareholder's Registrable Securities are included pursuant to this
Agreement, SCI will, at its expense:
(i) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become and remain effective for such
period as may be reasonably necessary to effect the sale of the Registrable
Securities, not to exceed nine (9) months;
(ii) prepare and file with the Commission such amendments to
such registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such Registrable
Securities, not to exceed nine (9) months;
(iii) furnish to the Shareholders participating in such
registration and to the underwriters of Registrable Securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
Registrable Securities;
(iv) use its diligent good faith efforts to register or
qualify the Registrable Securities covered by such registration statement under
such state securities or blue sky laws of such jurisdictions as such
participating Shareholders may reasonably request in writing within twenty (20)
days following the original filing of such registration statement; provided,
however, that in the case of an Underwritten Public Offering, the managing
underwriter or underwriters shall advise SCI with respect to blue sky
qualification and related matters;
(v) notify counsel for the Shareholders participating in such
registration, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(vi) notify counsel for such Shareholders promptly of any
request by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(vii) prepare and file with the Commission, promptly upon the
request of any Shareholders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such Shareholders
(and concurred in by counsel for SCI), is required under the Securities Act or
the rules and regulations thereunder in connection with the distribution of the
Common Stock other than an amendment
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or supplement required solely as a result of a change by such Shareholder in the
method of distribution of the Registrable Securities; and (viii) prepare and
promptly file with the Commission and promptly notify counsel for such
Shareholders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such Registrable
Securities is required to be delivered under the Securities Act, any event other
than a change in the method of distribution of the Registrable Securities
selected by the Shareholders shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading.
(f) Related Registration Matters. SCI will use its best efforts to
enter into an underwriting agreement in connection with any registration subject
to the provisions of Section 2(a) in which any Registrable Securities are
included, which agreement shall be with an underwriter or underwriters
acceptable to a Majority in Interest and contain such terms, provisions and
agreements which are customary and appropriate for such registration. In
connection with any Underwritten Public Offering in which any Registrable
Securities are included, to the extent not provided in the underwriting
agreement related to such offering, SCI shall use its reasonable efforts to:
(i) list the shares of Common Stock included in such offering
on any national securities exchange on which the Common Stock has previously
been approved for listing;
(ii) engage a bank or other company to act as transfer agent
and registrar for the Common Stock, unless SCI has already engaged a transfer
agent and registrar;
(iii) cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by representatives
of SCI; and
(iv) as soon as practicable after the effective date of the
registration statement, and, in any event, within sixteen (16) months
thereafter, make "generally available to its securities holders" (within the
meaning of Rule 158 under the Securities Act) an earnings statement (which need
not be audited) complying with Section 11(a) of the Securities Act and covering
a period of at least twelve (12) consecutive months beginning after the
effective date of the registration statement.
(g) Information by Shareholders. Each Shareholder requesting to be
included in any registration shall furnish to SCI such information regarding
such Shareholder and the distribution proposed by such Shareholder as SCI may
reasonably require in connection with any registration, qualification or
compliance referred to in Section 2.
(h) Transfer of Registration Rights. The rights to cause SCI to
register Registrable Securities under this Section 2 may be assigned in tandem
with any direct or successive transfer of the Securities, provided that SCI is
notified of such assignment. Upon any such assignment and the agreement of the
holder of the Securities so assigned to be bound by this Agreement, such holder
shall become a Shareholder for purposes of this Agreement; provided, however,
that unless such assignee is a partner of Seruus, such assignee shall not become
a Shareholder for purposes of this Agreement unless such assignee holds more
than 5% of the original Securities.
(i) Notice Requirements. Any notice from a holder of Registrable
Securities requesting registration of some or all of such Registrable Securities
pursuant to Sections 2(a) and 2(c) shall (A) specify the number of shares of
Registrable Securities intended to be included in such registration; (B)
describe the nature and method of the proposed offering and sale; (C) include an
undertaking to provide all information and materials concerning such holder and
the method of distribution and to take any other actions reasonably requested by
SCI to enable SCI to comply with the Securities Act, any state securities law
and/or the applicable requirements of the Commission or any state securities
commissioner or similar agency or official; and (D) if such holder is not a
party to this Agreement, include such holder's agreement to be bound by the
provisions of this Agreement applicable to holders of the Registrable
Securities.
(j) Conversion. In the event that a Shareholder elects to register and
sell Registrable Securities which will result from the conversion of Securities,
it may make such election but, to the extent possible, delay conversion or
exercise until registration is effected and the sale occurs.
SECTION 3. IMPLEMENTATION. (a) Effect of Sale. Any Shareholder who
sells all of its Securities pursuant to the terms of this Agreement shall cease
to have any further rights under this Agreement.
(b) Priority. SCI shall not grant registration rights which are
superior to the registration rights set
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forth in Section 2(c) hereof except upon the consent of Seruus. SCI shall not
grant registration rights to its executive officers which are equal to the
registration rights set forth in Section 2(c) hereof except upon the consent of
Seruus.
(c) Amendment and Waiver. The provisions of this Agreement may be
amended from time to time by an instrument in writing signed by SCI and a
Majority in Interest. Any receipt of benefit of the Shareholders hereunder may
be waived by a Majority in Interest.
(d) Lockup Agreement. In consideration for SCI agreeing to its
obligations under this Agreement, each Shareholder agrees in connection with any
registration of SCI's common equity securities (whether or not such Shareholder
is participating in such registration) upon the request of SCI and the
underwriters managing any underwritten offering of SCI's equity securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of SCI or such underwriters,
as the case may be, for such period of time from the effective date of such
registration as SCI and the underwriters may specify, so long as all executive
officers of SCI are bound by a comparable obligation. Notwithstanding the
foregoing, Seruus shall not be required to refrain from sales as contemplated
under this paragraph if it is not allowed to sell at least $750,000 in such
offering.
(e) Adjustments. In the event SCI shall declare a stock split, stock
dividend or other distribution of capital stock in respect of, or issue capital
stock in replacement of or exchange for, any Securities, such Securities shall
be subject to this Agreement and the provisions of this Agreement providing for
calculations based on the number of shares of Securities shall be adjusted
accordingly to account for the shares issued in respect of the Securities.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STATE COMMUNICATIONS, INC.
By:
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Xxxxxx X. Xxxxxx, CEO
SERUUS TELECOM FUND, L.P.
By: Seruus Capital Partners, LLC,
Its General Partner
By:
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Xxxxx X. Xxxxx, Manager
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