Exhibit 10.22
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made effective as of
_______ by and among FirstLink Communications, Inc., an Oregon corporation
having its principal place of business at 000 Xxxxxxxx, Xxxxxxxx, Xxxxxx 00000
(the "Company"), and each of the individuals and entities listed on Exhibit A to
this Agreement (the "Investors").
RECITALS
A. Each investor listed in Exhibit A has subscribed for securities of the
Company consisting of units ("Units"), each Unit consisting of one share
("Share") of the Company's Common Stock ("Common Stock") and one Common Stock
Purchase Warrant ("Warrant") pursuant to a non-public offering of such
securities by the Company.
B. Each Warrant entitles its holder to purchase one share of Common
Stock. As partial consideration for purchase of the Units by the Investors, the
Company has offered to provide the Investors with certain registration rights as
set forth herein.
C. Each Investor, concurrent with entering this Agreement, has also
entered into a Subscription Agreement, a Lock Up Agreement, and a Custody
Agreement, each of which are exhibits tot he Private Placement Memorandum for
the Private Offering.
In consideration of the foregoing and the promises and covenants contained
herein, the parties agree as follows:
SECTION 1
DEFINITIONS
As used in this Agreement the following terms shall have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition on, "control," when used with
respect to any Person, means the possession, direct or indirect of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
Oregon generally are authorized or required by law or other governmental actions
to close.
"CLOSING DATE" shall mean the date by which the first sale in the Private
Placement is accepted by the Company, as defined in the Memorandum.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's Common Stock, no par value per share.
"EFFECTIVE DATE" means the date on which the Registration Statement is
declared effective.
"EFFECTIVE PERIOD" means the period beginning on the Effective Date and
ending on the earlier of (i) the date all of the Registered Securities have been
sold, or (ii) three years after the Effective Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE WARRANTS" means the warrants to purchase shares of the Company's
Common Stock which will be issued in exchange for the Private Warrants, as
described herein.
"HOLDER" or HOLDERS" means the holder or Holders, as the case may be, from
time to time of Registrable Securities.
"LOCK-UP AGREEMENT" means the Lock-Up Agreement to be entered into between
the Company and the Purchaser concurrently herewith.
"PERSON" mans an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, Limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PRIVATE PLACEMENT" means the offering of securities of the Company made
pursuant to the Memorandum dated February 13, 1998, through Bathgate XxXxxxxx
Capital Group, LLC as the Placement Agent.
"PRIVATE WARRANTS" means the warrants to purchase shares of the Company's
Common stock which are issued with the Company's other securities in the Private
Placement.
"PROCEEDING" means an action, claim, suit, investigation or proceeding
(including without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and an other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the Exchange Warrants and the Warrant
Shares. Any Registrable Securities previously sold to the public pursuant to a
registered public offering or Rule 144 of the Securities Act shall cease to be
Registrable Securities. For the purpose of determining the number of
Registrable Securities held by any Investor, Holder or permitted transferee, or
any combination thereof, the Private Warrants and the Exchange Warrants shall be
counted on the basis of the number of shares of Common Stock and the Warrant
Shares, respectively, that are issuable upon exercise thereof.
"REGISTRATION EXPENSES" shall mean all expenses described in Section 4
hereof.
"REGISTRATION STATEMENT" means the registration statement contemplated by
Section 2 of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting documents and selling
commissions applicable to the sale and all fees and disbursements of special
counsel for any Holder (except those expenses that are Registration Expenses).
"UNDERWRITTEN OFFERING" means an offering in connection with which
securities of the Company are sold to an underwriter for reoffering to the
public pursuant to an effective Registration Statement.
"WARRANT SHARES" means the shares of Common Stock that are receivable by a
holder upon exercise of an Exchange Warrant.
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SECTION 2
REGISTRATION RIGHTS
2.1 PIGGYBACK REGISTRATION RIGHTS. The Company will cause to be
registered, on the first Registration Statement filed by the Company after the
date of this Agreement, all of the Registrable Securities, and to use its best
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as practicable after its filing. The Registration
Statement shall be on Form SB-2, Form X-0, Xxxx X-0, or such other form as is
appropriate in order to register securities with the Commission pursuant to
Section 5 of the Securities Act. The Company covenants to maintain the
Registration Statement continually effective under the Securities Act for the
Effective Period. An offering of Registrable Securities pursuant to the
Registration Statement may be effected in the form of an Underwritten Offering.
2.2 In connection with the Registration Statement, if and when it is filed
hereunder, the Company shall:
(a) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective for the Effective Period.
(b) Cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended, cause it
to be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act.
(c) Respond as promptly as practicable to any comments received from
the Commission with respect to the Registration Statement or any amendment
thereto.
(d) Notify the Holders of Registrable Securities as to (i) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed and, with respect to the
Registration Statement or any post-effective amendment, when the same has
become effective; (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iii) if at any time any of the representations and
warranties of the Company contained in any agreement contemplated hereby
ceases to be true and correct in all material respects; (iv) the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose; and (v) the occurrence of any event
that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that, in the
case of the Registration Statement or the Prospectus, as the case may be,
it 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 light of the circumstances under which they were
made, not misleading.
(e) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(f) Furnish to Bathgate XxXxxxxx Capital Group, LLC ("BMCG"), as
agent for each Holder, without charge, at least one copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent required
by such Person (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the Commission.
(g) Promptly deliver to BMCG, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such
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persons may reasonably request. The Company hereby consents to the use of
each Prospectus and each amendment or supplement thereto by each of the
selling Holders and any underwriters in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to keep each such registration or qualification (or exemption
therefrom) effective during the Effective Period and to do any and all
other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action that would subject it to
general service of process in any such jurisdiction where it is not then so
subject or subject the Company to any material tax in any such jurisdiction
where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold, which certificates shall be free of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and
registered in such names as any such Holders may request at least two
Business Days prior to any sale of Registrable Securities.
(j) As promptly as practicable, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration
Statement nor such Prospectus will contain an untrue statement of a
material factor omit 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.
(k) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on each securities exchange or
market, if any, on which similar securities issued by the Company are then
listed.
(l) Comply with all applicable rules and regulations of the
Commission.
(m) Provide a CUSIP number for all Registrable Securities as soon as
practicable but prior to the effective date of the Registration Statement.
(n) The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration
Statement and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish
such information within a reasonable time after receiving such request.
(o) If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (i) the inclusion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect
that the ownership by such Holder of such securities is not to be construed
as a recommendation by such Holder of the investment quality of the
Company's securities covered thereby and that such ownership does not imply
that such Holder will assist in meeting any future financial requirements
of the Company, or (ii) if such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar federal
statute then in force, the deletion of the reference to such Holder in any
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
2.3 "MARKET STAND-OFF" AGREEMENT. The Investor in the Units understands
that an Underwritten Offering requires that the Underwriter in such Underwritten
Offering obtain approval of terms of the offering from the Corporate Financing
Department of NASD Regulation, Inc. In addition, in order to list the Company's
securities on the Nasdaq Stock Market, terms of the offering must be approved by
The Nasdaq Stock Market, Inc. In the past
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such entities have imposed conditions on owners of securities of issuers who
purchase securities prior to the Company's initial public offering, including
that such persons agree not to sell or otherwise transfer their securities for a
period of time (a "Lock-Up"). As additional consideration for the Company
accepting the Investors subscription in the Private Offering, the Investor
agrees that he will not sell or otherwise transfer or dispose of any of the
Shares, the Exchange Warrants, or the Warrant Shares for a period required by
NASDR or Nasdaq not to exceed one year following the effective date of the
Registration Statement. Such agreement shall be confirmed in writing in a form
satisfactory to the Company and such Underwriter. The Company may impose
stop-transfer instructions with respect to the Shares, the Exchange Warrants,
and/or the Warrant Shares subject to the foregoing restriction until the end of
such period. The Company agrees to use its best efforts, and to cause the
Underwriter to use its best efforts, to limit the securities that must be the
subject of the Lock-Up and/or the length of such Lock-Up.
2.4. TERMINATION OF REGISTRATION RIGHTS. The rights granted pursuant to
this Agreement shall terminate as to each Investor (and permitted transferee
under Section 2.5 below) upon the occurrence of any of the following:
(a) Following the Company's first registered offering to the public, at
such time as all Registrable Securities held by such Investor or
permitted transferee can be sold pursuant to Rule 144 (or its
successor provision);
(b) At such time as all Registrable Securities held by such Holder can be
sold under Rule 144(k) (or its successor provision); or
(c) Three (3) years from the effective date of the Company's first
Registration Statement.
2.5 ASSIGNMENT OF REGISTRATION RIGHTS. The rights granted each Investor
under this Agreement may not be assigned except: (i) to a purchaser of more than
5,000 Registrable Securities (as appropriately adjusted for stock dividends,
stock splits, stock combinations, recapitalizations, consolidations and the
like); (ii) to a successor entity to an Investor pursuant to a reorganization
or recapitalization of an Investor; (iii) to an Affiliate of an Investor; or
(iv) to the partners of an Investor or to the estate or heirs of such a partner
or to a trust for the benefit of such a partner, his or her spouse or
descendants; provided, that the Company receives notice within twenty (20) days
following such assignment.
SECTION 3
PURCHASER COVENANTS
3.1 Each Purchaser covenants and agrees that (i) he will not offer or sell
any Registrable Securities under the Registration Statement until he has
received copies of the Prospectus as then amended or supplemented as
contemplated in this Agreement and notice from the Company that such
Registration statement and any post-effective amendments thereto have become
effective as contemplated in this Agreement, and (ii) the Purchaser and its
officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Registration Statement.
3.2 Each Purchaser agrees by its acquisition of such Registrable
Securities that upon receipt of a notice from the Company of the occurrence of
any event of the kind which renders the current Prospectus misleading, such
Purchaser will forthwith discontinue disposition of such Registrable Securities
until such Purchaser's receipt of the copies of the supplemented Prospectus
and/or amended Registration Statement, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
3.3 Each Purchaser agrees to sell its Registrable Securities on the basis
provided in the Prospectus and in accordance with the terms of the Lock-Up
Agreement.
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SECTION 4
REGISTRATION EXPENSES
All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company, whether or not the
Registration Statement becomes effective and whether or not all Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall not include any fees or
expenses incurred by the Holders, but shall include, without limitation, (i) all
registration and filing fees (A) with respect to filings required to be made
with NASDR and (B) in compliance with state securities or Blue Sky laws for the
Holders in connection with Blue Sky qualifications of the Registrable Securities
and determination of the eligibility of the Registrable Securities for
investment under the laws of such jurisdictions as the managing underwriters, if
any, or Holders of a majority of Registrable Securities may designate, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company but not for the
Holders, (v) fees and disbursements of all independent certified public
accountants for the Company (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Company so desires
such insurance, and (vii) fees and EXPENSES of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of Registrable Securities on any
securities exchange or on the Nasdaq Stock Market.
SECTION 5
MISCELLANEOUS
5.1 RULE 144. After the Effective Date, the Company shall file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, they will, upon the request of any Holder, make publicly available
other information so long as necessary to permit sales of its securities
pursuant to Rule 144. The Company further covenants that it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within limitation of the exemptions
provided by Rule 144.
5.2 REMEDIES. In the event of a breach by the Company or by a Holder of
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this agreement, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The Company and
each Holder agree that monetary damages would not provide adequate compensation
any losses incurred by reason of breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
5.3 NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, nor shall the Company on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.
5.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement together with the
Exhibits hereto, the Subscription Agreement, the Lock Up Agreement, and the
Custody Agreement, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters.
5.5 AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of at least a majority of the then outstanding Registrable Securities;
provided, however, that, for the purposes of this sentence, Registrable
Securities that are owned, directly or indirectly, by the Company or an
Affiliate of the
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Company are not deemed outstanding. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
5.6 NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The address for such
communications shall be:
If to the Company:
FirstLink Communications, Inc.
000 XX Xxxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: President
With copies to:
Xxxxx X. Xxxxxxx
Xxxxxx & Xxxxxxx, LLC
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
If to the Purchaser: To the address of such Purchaser that appears in the stock
transfer books of the Company.
5.7 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. The company may not assign its
rights or obligations hereunder without the prior written consent of each
Holder.
5.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
5.9 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Oregon, without regard to principles of conflicts of law. The Company
hereby irrevocably submits to the jurisdiction of any state or federal court
sitting in Multnomah County, Oregon (collectively, the "Courts") in respect of
any Proceeding arising out of or in relation to this Agreement, and irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the Courts. The Company irrevocably waives to
the fullest extent it may effectively do so under applicable law any objection
that it may now or hereafter have to the laying of the venue of any such
proceeding brought in any Court and any claim that any such Proceeding brought
in any Court has been brought in an inconvenient forum.
5.10 CUMULATIVE REMEDIES. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
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5.11 SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by, such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
hereafter be declared invalid, illegal, void or unenforceable.
5.12 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PURCHASER: COMPANY:
See Attached List FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A. XXXXX XXXXX
---------------------------
A. Xxxxx Xxxxx, President
See Attached List
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