REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("AGREEMENT"), is made and entered
into as of the 28th day of July, 1999, by and among TELECOM WIRELESS
CORPORATION, a Utah corporation (the "COMPANY"), and the Persons listed on
the Purchaser Signature Pages hereto (each of whom is individually referred
to as a "PURCHASER" and all of whom collectively are referred to as the
"PURCHASERS"). Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
BACKGROUND
In connection with the consummation of the transactions contemplated
by that certain Common Stock Purchase Agreement (the "PURCHASE AGREEMENT") of
even date herewith by and among the Company and the Purchasers in connection
with Part B of the Company's Rule 506 offering, the Company has agreed, upon
the terms and subject to the conditions of the Purchase Agreement, to issue
and sell to the Purchasers from time to time up to 200,000 shares of Common
Stock (the "PURCHASED COMMON SHARES") and to issue to all Purchasers of the
Purchased Common Shares accompanying Repricing Warrants (the "REPRICING
WARRANTS"), and to issue to Agent a Placement Agent Warrant (collectively,
the "PLACEMENT AGENT WARRANTS). Collectively, the Purchased Common Shares,
the Repricing Warrants, and the Placement Agent Warrants are hereinafter
collectively referred to as the "PURCHASED SECURITIES". The Repricing
Warrants and the Placement Agent Warrants are exercisable for shares of the
Company's common stock, $.001 par value per share (the "COMMON STOCK"). The
Common Stock issuable upon exercise of the Repricing Warrants is hereinafter
called the "REPRICING WARRANT SHARES," and the Common Stock issuable upon
exercise of the Placement Agent Warrants is hereinafter called the "PLACEMENT
WARRANT SHARES" (the Repricing Warrant Shares that may be issuable from time
to time and the Placement Warrant Shares are sometimes collectively referred
to as the "WARRANT SHARES"). To induce Purchasers to execute and deliver the
Purchase Agreement, the Company has agreed to file a Registration Statement
covering the Purchased Common Shares and the Warrant Shares under the
Securities Act of 1933, as amended, and the rules and regulations thereunder,
or any similar successor statute (collectively, the "1933 ACT"), and
applicable state securities laws.
AGREEMENT
For and in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following
capitalized terms are used with the meanings there after ascribed:
(a) "INVESTOR" means any Purchaser and any transferee or
assignee thereof to whom any Purchaser assigns its rights under this
Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.
(b) "PERSON" means a corporation, a limited liability company,
an association, a partnership, an organization, a business, an
individual, a governmental or political subdivision thereof, or a
governmental agency.
(c) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by
-1-
preparing and filing one or more Registration Statements in compliance
with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis
("RULE 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange
Commission (the "SEC").
(d) "REGISTRABLE SECURITIES" means the Purchased Common Shares,
the Repricing Warrant Shares, the Placement Warrant Shares, and any
shares of capital stock issued or issuable with respect to the Purchased
Securities, the Purchased Common Shares, the Repricing Warrant Shares, or
the Placement Warrant Shares, as a result of any stock split, stock
dividend, recapitalization, exchange, or similar event.
(e) "REGISTRATION STATEMENT" means a registration statement of
the Company filed under the 1933 Act.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Purchase Agreement.
SECTION 2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and file
with the SEC a Registration Statement or Registration Statements (as is
necessary) on Form S-3 (or, if such form is unavailable for such a
registration, on such other form as is available for such a registration,
subject to the consent of each Purchaser and the provisions of Section
2(e), which consent will not be unreasonably withheld), covering the
resale of all of the Registrable Securities, within thirty (30) days
after the first to occur of (1) the issuance, sale, and delivery of
200,000 shares of the Company's Common Stock, or (2) the date the Company
receives written notice from Augsback & Associates, Inc. of termination
of further offers of the Purchased Common Shares, or (3) but in any event
not later than August 31, 1999 (the "FILING DEADLINE"). The Registration
Statement(s) shall state that, in accordance with Rule 416 promulgated
under the 1933 Act, such Registration Statement(s) also covers such
indeterminate number of additional shares of Common Stock as may become
issuable by reason of the Repricing Warrants in accordance with the terms
thereof. Such Registration Statement shall initially register for resale
at least 100% of the Purchased Common Shares and the Warrant Shares,
subject to adjustment as provided in Section 3(b) hereof, and such
registered shares of Common Stock shall be allocated among the Investors
pro rata based on the total number of Registrable Securities issued or
issuable as of each date that a Registration Statement, as amended,
relating to the resale of the Registrable Securities is declared
effective by the SEC. The Company shall use its best efforts to have the
Registration Statement declared effective by the SEC within ninety (90)
days after the Filing Deadline (the "REGISTRATION DEADLINE"). The
Company shall permit the registration statement to become effective
within five (5) business days after receipt of a "no review" notice from
the SEC. Such Registration Statement shall be kept current and effective
for a period of twelve (12) months from the Closing Date. If a
Registration Statement with respect to the Purchased Common Shares and
the Warrant Shares is not effective on the Registration Deadline date,
the Company agrees to and shall pay to all Investors hereunder a cash
penalty equal to two percent (2%) per month of the final amount of the
completed offering under the Purchase Agreement, payable monthly and
pro-rated for partial months until the Registration Statement is
effective.
(b) UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement
-2-
pursuant to Section 2(a) involves an underwritten offering, the
Purchasers shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer
their interest in the offering, which investment banker or bankers or
manager or managers shall be reasonably satisfactory to the Company.
(c) PIGGY-BACK REGISTRATIONS. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the
Company proposes to file with the SEC a Registration Statement relating
to an offering for its own account or the account of others under the
1933 Act of any of its securities (other than on Form S-4 or Form S-8 or
their then equivalents relating to securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee
benefit plans) the Company shall promptly send to each Investor who is
entitled to registration rights under this Section 2(c) written notice of
the Company's intention to file a Registration Statement and of such
Investor's rights under this Section 2(c) and, if within twenty (20) days
after receipt of such notice, such Investor shall so request in writing,
the Company shall include in such Registration Statement all or any part
of the Registrable Securities such Investor requests to be registered,
subject to the priorities set forth in Section 2(d) below. No right to
registration of Registrable Securities under this Section 2(c) shall be
construed to limit any registration required under Section 2(a) hereof.
The obligations of the Company under this Section 2(c) may be waived by
each individual Investor holding Registrable Securities, in their sole
discretion, without effect to any other Investor. If an offering in
connection with which an Investor is entitled to registration under this
Section 2(c) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall,
unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the
same terms and conditions as other shares of Common Stock included in
such underwritten offering.
(d) PRIORITY IN PIGGY-BACK REGISTRATION RIGHTS IN CONNECTION
WITH REGISTRATIONS FOR COMPANY ACCOUNT. If the registration referred to
in Section 2(c) is to be an underwritten public offering for the account
of the Company and the managing underwriter(s) advise the Company in
writing, that in their reasonable good faith opinion, marketing or other
factors dictate that a limitation on the number of shares of Common Stock
which may be included in the Registration Statement is necessary to
facilitate and not adversely affect the proposed offering, then the
Company shall include in such registration: (i) first, all securities the
Company proposes to sell for its own account, (ii) second, up to the full
number of securities proposed to be registered for the account of the
holders of securities entitled to inclusion of their securities in the
Registration Statement by reason of demand registration rights, and (iii)
third, the securities requested to be registered by the Investors and
other holders of securities entitled to participate in the registration,
drawn from them pro rata based on the number each has requested to be
included in such registration.
(e) ELIGIBILITY FOR FORM S-3. The Company represents, warrants
covenants that it has filed and shall file all reports required to be
filed by the Company with the SEC in a timely manner so as to obtain and
maintain such eligibility for the use of Form S-3. In the event that
Form S-3 is not available for sale by the Investors of the Registrable
Securities, then (i) the Company, with the consent of each Investor
pursuant to Section 2(a), shall register the sale of the Registrable
Securities on another appropriate form, such as Form SB-2 and (ii) the
Company shall undertake to register the Registrable Securities on
Form S-3 as soon as such form is
-3-
available.
SECTION 3. RELATED OBLIGATIONS. Whenever an Investor has requested
that any Registrable Securities be registered pursuant to Section 2(c)
hereof, or at such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2(a) hereof, the Company will use
its best efforts to effect the registration of the Registrable Securities in
accordance with the respective method of disposition thereof as required by
such provisions and, pursuant thereto, the Company shall have the following
obligations:
(a) The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities (on or
prior to the Filing Deadline), for the registration of Registrable
Securities pursuant to Section 2(a) or Section 2(c), if applicable, and
use its best efforts to cause such Registration Statement(s) relating to
Registrable Securities to become effective as soon as possible after such
filing and in any event by the Registration Deadline, and keep the
Registration Statement(s) effective pursuant to Rule 415 at all times
until the later of (i) the date as of which the Investors may sell all of
the Registrable Securities without restriction pursuant to Rule 144(k)
promulgated under the 1933 Act (or successor thereto) or (ii) the date on
which (A) the Investors shall have sold all the Registrable Securities
and (B) none of the Purchased Common Shares are owned by any Purchaser
(the "REGISTRATION PERIOD"), which Registration Statement(s) (including
any amendments or supplements thereto and prospectuses contained therein)
shall not 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, in light of the circumstances in which they were
made, not misleading. The provisions of this Section 3(a)
notwithstanding, nothing in this Section 3(a) shall limit the Company's
obligation to keep current and effective such a Registration Statement
with respect to the Registrable Securities for the time period set forth
in Section 2(a), above.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement(s) and the prospectus (es) used in connection with
the Registration Statement(s), which prospectus (es) are to be filed
pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep the Registration Statement(s) effective at all times during the
Registration Period, and, during such period, comply with the provisions
of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by the Registration Statement(s) until
such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement(s). In the
event the number of shares available under a Registration Statement filed
pursuant to this Agreement is insufficient to cover all of the
Registrable Securities, the Company shall amend the Registration
Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any
event within fifteen (15) days after the necessity therefor arises (based
on the market price of the Common Stock and other relevant factors on
which the Company reasonably elects to rely) or upon reasonable request
therefor by any Investor. The Company shall use its best efforts to
cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For
purposes of the foregoing provision, the number of shares available under
a Registration Statement shall be deemed "insufficient to cover all of
the Registrable Securities" if at any time the number of Registrable
Securities issued or issuable is at least equal to the greater of (i) the
number of Purchased Common Shares PLUS the number of Registrable
Securities issued or issuable upon
-4-
exercise of the Repricing Warrants OR (ii) the quotient determined by
dividing (A) the number of shares of Common Stock available for resale
under such Registration Statement by (B) 1.0. For purposes of the
calculation set forth in the foregoing sentence, any restrictions on the
convertibility or exercise of the Repricing Warrants shall be disregarded
and such calculation shall assume that the Repricing Warrants are
exercised at the then current exercise price.
(c) The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement(s) and
its legal counsel, without charge, (i) promptly after the same is
prepared and filed with the SEC at least one copy of the Registration
Statement and any amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference, and all
exhibits, the prospectus(es) included in such Registration Statement(s)
(including each preliminary prospectus) and all correspondence by or on
behalf of the Company to the SEC or the staff of the SEC and all
correspondence from the SEC or the staff of the SEC to the Company or its
representatives, related to such Registration Statement(s), (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request), and (iii) such other documents, including any
preliminary prospectus, as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.
(d) The Company shall (i) register and qualify the Registrable
Securities covered by the Registration Statement(s) under such other
securities or "blue sky" laws of such jurisdictions in the United States
as any Investor reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such
jurisdictions. The Company shall promptly notify each Investor who holds
Registrable Securities of the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of
any of the Registrable Securities for sale under the securities or "blue
sky" laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.
(e) In the event Investors who hold a majority of the
Registrable Securities being offered in the offering select underwriters
for the offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.
(f) As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor in writing of the happening
of any event, of which the Company has knowledge, as a result of which,
the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and promptly prepare a supplement or amendment to
the Registration Statement to correct such untrue statement or omission,
and deliver ten (10) copies of such supplement or amendment to each
Investor (or such other number of copies as such Investor may reasonably
request). The Company shall also promptly notify each Investor
-5-
in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to each Investor
by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, and
(iii) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.
(g) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of
the Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or
suspension at the earliest possible moment, and to notify each Investor
who holds Registrable Securities being sold (and, in the event of an
underwritten offering, the managing underwriters) of the issuance of such
order and the resolution thereof, or its receipt of actual notice of the
initiation, or threatened initiation of any proceeding for such purpose.
(h) The Company shall permit each Investor a single firm of
counsel or such other counsel as thereafter designated as selling
stockholders' counsel by the Investors who hold a majority of the
Registrable Securities being sold, to review and comment upon the
Registration Statement(s) and all amendments and supplements thereto at
least seven (7) days prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of a
Registration Statement(s) or any amendment or supplement thereto without
the prior approval of such counsel, which consent shall not be
unreasonably withheld.
(i) At the request of the Investors who hold a majority of the
Registrable Securities being sold, the Company shall furnish, on the date
that Registrable Securities are delivered to an underwriter, if any, for
sale in connection with the Registration Statement (i) if required by an
underwriter, a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, and (ii) an
opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope, and substance as
is customarily given in an underwritten public offering, addressed to the
underwriters and the Investors.
(j) The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant
to a Registration Statement, (iii) one firm of attorneys and one firm of
accountants or other agents retained by the Investors, and (iv) one firm
of attorneys retained by all such underwriters (collectively, the
"INSPECTORS") all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector to
enable each Inspector to exercise its due diligence responsibility, and
cause the Company's officers, directors, and employees to supply all
information which any Inspector may reasonably request for purposes of
such due diligence; PROVIDED HOWEVER, that each Inspector shall hold in
strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (A) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is
-6-
otherwise required under the 1933 Act, (B) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (C) the
information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other
agreement. Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.
(k) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court
or governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by disclosure
in violation of this or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such
Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(l) The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by a Registration Statement to be
listed on each national securities exchange on which securities of the
same class or series issued by the Company are then listed, if the
listing of such Registrable Securities is then permitted under the rules
of such exchange, (ii) to secure designation and quotation of all the
Registrable Securities covered by the Registration Statement on the
Nasdaq National Market, (iii) if, despite the Company's best efforts to
satisfy the preceding clause (i) or (ii), the Company is unsuccessful in
satisfying the preceding clause (i) or (ii) to secure the inclusion for
quotation on the Nasdaq National Market for such Registrable Securities
or, (iv) if, despite the Company's best efforts to satisfy the preceding
clause (iii), the Company is unsuccessful in satisfying the preceding
clause (iii), to secure the inclusion for quotation on the
over-the-counter market for such Registrable Securities, and, without
limiting the generality of the foregoing, in the case of clause (iii) or
(iv), to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with
respect to such Registrable Securities. The Company shall pay all fees
and expenses in connection with satisfying its obligation under this
Section 3(1).
(m) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, any
managing underwriter or underwriters, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to
a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as any managing underwriter
or underwriters or the Investors may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the
Investors may request. Not later than the date on which any Registration
Statement registering the resale of Registrable Securities is declared
effective, the Company shall deliver to its transfer agent instructions,
accompanied by any reasonably required opinion of counsel, that permit
sales of unlegended securities in a timely fashion that complies with
then mandated securities settlement procedures
-7-
for regular way market transactions.
(n) The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement.
(o) The Company shall provide a transfer agent and registrar of
all such Registrable Securities not later than the effective date of such
Registration Statement.
(p) If requested by the managing underwriters or an Investor,
the Company shall immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters
and the Investors agree should be included therein relating to the sale
and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable
Securities being sold to such underwriters, the purchase price being paid
therefor by such underwriters, and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of
the matters to be incorporated in such prospectus supplement or
post-effective amendment; and supplement or make amendments to any
Registration Statement if requested by a shareholder or any underwriter
of such Registrable Securities.
(q) The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
(r) The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
SECTION 4. OBLIGATIONS OF THE INVESTORS.
(a) At least seven (7) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Investor in writing of the information the Company requires from each
such Investor if such Investor elects to have any of such Investor's
Registrable Securities included in the Registration Statement. It shall
be a condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to
effect the registration of such Registrable Securities, and shall execute
such documents in connection with such registration as the Company may
reasonably request.
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of
the Registration Statement(s) hereunder, unless such Investor has
notified the Company in writing of such Investor's election to exclude
all of such Investor's Registrable Securities from the Registration
Statement.
(c) In the event Investors holding a majority of the
Registrable Securities being registered determine to engage the services
of an underwriter, each Investor agrees to enter into
-8-
and perform such Investor's obligations under an underwriting agreement,
in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of
the Registrable Securities, unless such Investor notifies the Company in
writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement(s).
(d) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement(s) covering such Registrable Securities until
such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or the first sentence of 3(f)
and, if so directed by the Company, such Investor shall deliver to the
Company (at the expense of the Company) or destroy all copies in such
Investor's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.
(e) No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Investors entitled hereunder to
approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements,
and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of
all underwriting discounts and commissions.
SECTION 5. EXPENSES OF REGISTRATION. All expenses incurred in
connection with registrations, filings, or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and printing fees, accounting fees, and fees and
disbursements of counsel for the Company and fees and disbursements of one
counsel for the Investors, shall be borne by the Company.
SECTION 6. INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless, and defend each Investor who
holds such Registrable Securities, the directors, officers, partners,
employees, agents, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the Securities Exchange Act of
1934, as amended (the "1934 ACT"), and any underwriter (as defined in the
0000 Xxx) for the Investors, and the directors and officers of, and each
Person, if any, who controls, any such underwriter within the meaning of
the 1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any
losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys' fees, amounts paid in settlement or expenses,
joint or several (collectively, "CLAIMS") incurred in investigating,
preparing, or defending any action, claim, suit, inquiry, proceeding,
investigation, or appeal taken from the foregoing by or before any court
or governmental, administrative, or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of
them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any
post-effective amendment
-9-
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any
jurisdiction in which Registrable Securities are offered
("BLUE SKY FILING"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which the
statements therein were made, not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein,
in light of the circumstances under which the statements therein were
made, not misleading, or, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities
pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "VIOLATIONS"). Subject to
the restrictions set forth in Section 6(d) with respect to the number of
legal counsel, the Company shall reimburse the Investors and each such
underwriter or controlling person, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not
apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to
the Company by any Indemnified Person or underwriter for such Indemnified
Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c); (ii) with respect to any preliminary
prospectus, shall not inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any person controlling
such person) if the untrue statement or mission of material fact
contained in the preliminary prospectus was corrected in the prospectus,
as then amended or supplemented, if such prospectus was timely made
available by the Company pursuant to Section 3(c), and the Indemnified
Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used (iii) shall not be
available to the extent such Claim is based on a failure of the Investor
to deliver or to cause to be delivered the prospectus made available by
the Company, and (iv) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9.
(b) The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers, and similar securities
industry professionals participating in any distribution, to the same
extent as provided above, with respect to information such persons so
furnished in writing expressly for inclusion in the Registration
Statement.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of
any action or proceeding (including any governmental action or
proceeding) involving a Claim such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this
-10-
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party,
as the case may be; PROVIDED HOWEVER, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel with the
fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in
such proceeding. The Company shall pay reasonable fees for only one
separate legal counsel for the Investors, and such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to which
the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to
the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent,
PROVIDED HOWEVER, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall,
without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such
claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of
the Indemnified Party or Indemnified Person with respect to all third
parties, firms, or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action.
(d) The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
(e) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
SECTION 7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; PROVIDED HOWEVER, that: (i) no contribution shall be made under
circumstances where the party against whom indemnification is otherwise sought
would not have been liable for indemnification under the fault standards set
forth in Section 6; (ii) no seller of Registrable Securities
-11-
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 0000 Xxx) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation,
and (iii) contribution by any seller of Registrable Securities shall be
limited in amount to the net amount of proceeds received by such seller from
the sale of such Registrable Securities.
SECTION 8. REPORTS UNDER THE 1934 ACT. With a view to making
available to the Investors the benefits of Rule 144 promulgated under the 1933
Act or any other similar rule or regulation of the SEC that may at any time
permit the investors to sell securities of the Company to the public without
registration ("RULE 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations
under Section 4.5 of the Purchase Agreement) and the filing of such
reports and other documents is required for the applicable provisions of
Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule
144, the 1933 Act, and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as
may be reasonably requested to permit the investors to sell such
securities pursuant to Rule 144 without registration.
-12-
SECTION 9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assignable by the Investors to any transferee of all or any
portion of Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (A) the name and address of such transferee or
assignee, and (B) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; (v) such
transfer shall have been made in accordance with the applicable requirements of
the Purchase Agreement; (vi) such transferee shall be an "accredited investor"
as that term is defined in Rule 501 of Regulation D promulgated under the 1933
Act; and (vii) in the event the assignment occurs subsequent to the date of
effectiveness of the Registration Statement required to be filed pursuant to
Section 2(a), the transferee agrees to pay all reasonable expenses of amending
or supplementing such Registration Statement to reflect such assignment.
SECTION 10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold two-thirds of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.
SECTION 11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices,
or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice, or election received from the registered owner of
such Registrable Securities.
(b) Any notices consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile,
provided a copy is mailed by U.S. certified mail, return receipt
requested; (iii) three (3) days after being sent by U.S. certified mall,
return receipt requested, or (iv) one (1) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company:
Telecom Wireless Corporation
0000 XXX Xxxxxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-13-
with a copy (which shall not constitute notice) to:
Xxxx X. Xxxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Purchaser, to its address and facsimile number on the Schedule of
Purchasers, with copies to such Purchaser's counsel as set forth on the Schedule
of Purchasers. Each party shall provide five (5) days prior written notice to
the other party of any change in address or facsimile number.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Colorado without regard to the
principles of conflict of laws. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
(e) This Agreement and the Purchase Agreement constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises,
warranties, or undertakings, other than those set forth or referred to
herein and therein. This Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof.
(f) Subject to the requirements of Section 9, this Agreement
shall inure to the benefit and of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(h) This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature
of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments, and
documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
-14-
[Remainder of page intentionally left blank; signatures begin on next page]
-15-
COMPANY SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
TELECOM WIRELESS CORPORATION
By:
-----------------------------------
Xxxxx X. Xxxxxxx, President
[Purchasers Signatures on Following Pages]
-16-
PURCHASER SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
PURCHASER:
[PURCHASER NAME]
By:
--------------------------
Name:
------------------------
Title:
-----------------------
===============================================================================
PURCHASER NAME
("PURCHASER")
ADDRESS AND
FACSIMILE NUMBER
-------------------------------------------------------------------------------
SECURITIES PURCHASED
-------------------------------------------------------------------------------
PURCHASE PRICE
-------------------------------------------------------------------------------
PURCHASER'S LEGAL COUNSEL
ADDRESS AND
FACSIMILE NUMBER
-------------------------------------------------------------------------------
===============================================================================
-17-
PURCHASER SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
PURCHASER:
------------------------------
[Individual Purchaser Name]
===============================================================================
PURCHASER NAME
("PURCHASER")
ADDRESS AND
FACSIMILE NUMBER
-------------------------------------------------------------------------------
SECURITIES PURCHASED $_____________
-------------------------------------------------------------------------------
PURCHASE PRICE ____________________________________________
-------------------------------------------------------------------------------
PURCHASER'S LEGAL COUNSEL ____________________________________________
ADDRESS AND
FACSIMILE NUMBER ____________________________________________
____________________________________________
-------------------------------------------------------------------------------
===============================================================================
-18-
Schedule to Registration Rights Agreement
Identifying Other Registration Rights Agreements
to Which Telecom Wireless Is a Party
That Are Substantially Identical And
Material Details in Which Such Agreements
Differ from Filed Agreement
Section 2(a) of the Registration Rights Agreement between Telecom
Wireless and the following individuals provides that the Company is obligated
to file a registration statement covering the resale of all Registrable
Securities within 30 days after the first to occur of (1) the issuance, sale
and delivery of 300,000 shares of the Company's common stock, or (2) the date
the Company receives written notice from Augsback & Associates of termination
of further offers of the Purchased Common Shares:
Purchaser No. of Shares
--------- -------------
Anglo Irish Nominees (Trusts) Ltd. A/C GRC241 10,000
Xxxxxx Xxx 35,000
Chelverton Fund Ltd. 15,000
Thomson Kernaghan & Co., Ltd., As Agent 180,000
Xxxxxxx X. Xxxxxxxxx 2,000
Xxxxxx X. Xxxxx 6,000
Xxxxxx X. Xxxxx 2,000
Xxxx X. Xxxxx, Xx. 2,000
Arab Commerce Bank Ltd. 14,285
Xxxxx Xxxx 1,000
Xxxxxx X. Xxxxxx 1,000
Xxxxxxx X. Xxxxxxxxx, Xx. 7,000
Xxxx Xxxxxxxx 5,000
Xxxxxxx Xxxxxxxx 5,000
Xxxxxx Xxxxxxxx 2,000
Xxxxxx X. XxXxxx 6,000
Purchaser No. of Shares
--------- -------------
Xxxxx Family Trust 3,500
Xxxxx and Xxxxxx Xxxxxx 1,000
Section 2(a) of the Registration Rights Agreement between Telecom
Wireless and the following individuals provides that the Company is obligated
to file a registration statement covering the resale of all Registrable
Securities within 30 days after the first to occur of (1) the issuance, sale
and delivery of 200,000 shares of the Company's common stock, or (2) the date
the Company receives written notice from Augsback & Associates of termination
of further offers of the Purchased Common Shares, but in any event not later
than August 31, 1999:
Purchaser No. of Shares
--------- -------------
Xxxxxx Xxx 22,000
Caribbean Investors Group, Ltd. 14,285
Princeton Insurance 2,000
Xxxxx Xxxxxxxxx 1,000
Xxxxx Xxxxx Xxxxxxxx 13,000
JHS Assoc., Ltd. Retirement Account 53,000
Section 2(a) of the Registration Rights Agreement between Telecom
Wireless and the following individuals provides that the Company is obligated
to file a registration statement covering the resale of all Registrable
Securities within 30 days after the first to occur of (1) the issuance, sale
and delivery of 500,000 shares of the Company's common stock, or (2) the date
the Company receives written notice from Augsback & Associates of termination
of further offers of the Purchased Common Shares, but in any event not later
than September 15, 1999:
Purchaser No. of Shares
--------- -------------
SovCap Equity Partners Ltd. 57,143
Xxxx Xxxxx 6,750
SovCap Equity Partners Ltd. 33,334
