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EXHIBIT 2.9
REGISTRATION RIGHTS AGREEMENT
May 23, 2000
To ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Stockholder")
RECITALS
WHEREAS: The Stockholder will receive from AppliedTheory Corporation shares of
common stock, par value $.01 per share, of the Parent pursuant to
that certain Agreement and Plan of Merger, dated as of May 15, 2000,
by and among the Parent and the Stockholder, among others; and
WHEREAS: As a condition to the Closing of the merger contemplated by the
Merger Agreement, the Parent has agreed to grant to the Stockholder
certain registration rights in accordance with this Registration
Rights Agreement (the "Agreement") with respect to certain securities
of the Parent held by the Stockholder.
AGREEMENT
NOW, THEREFORE, it is agreed as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Authorized Transferee" shall mean a relative or spouse of
the Stockholder, or a relative of such Stockholder's spouse if such
relative shares a home with the Stockholder.
"Common Stock" shall mean all shares of Common Stock, par
value $.01 per share of the Parent.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at
the time.
"Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of May ___, 2000 by and among the Parent, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, and certain other parties.
"Parent" shall mean AppliedTheory Corporation.
"Registrable Stock" shall mean those shares of Common Stock
that are issued to the Stockholder in connection with the Closing of the
Merger, as of the
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applicable time are held by the Stockholder and as of such time are not
held in the Escrow Fund.
"Registration Expenses" shall mean the expenses so
described in Section 5 of this Agreement.
"SEC" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses described in
Section 5.
"Stockholder" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and, subject to
section 8(a) hereof, any Authorized Transferee.
"Unregistered Common Stock" shall mean all shares of Common
Stock which are beneficially owned by the Stockholder as of the date
hereof and have not been registered under the Securities Act.
All other capitalized terms used herein shall, unless defined,
have the respective meanings set forth herein or, in the absence of such a
definition, in the Merger Agreement.
2. Restrictive Legend. Each certificate representing Common Stock
shall, except as otherwise provided in this Section 2, be stamped or otherwise
imprinted with a legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
IT HAS BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Parent the securities being sold thereby may be publicly
sold without registration under the Securities Act.
3. Incidental Registration.
(a) Beginning on the Closing and until 365 days following the
Closing, if the Parent proposes to register under the Securities Act any
of its securities for its own account (except with respect to registration
statements on Forms ▇-▇, ▇-▇ or another form not available for registering
the Registrable Stock for sale to the public), each such time it will give
written notice to the Stockholder of its intention so to do. Upon the
written request of the Stockholder, received by the Parent within 15 days
after the giving of any
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such notice by the Parent, to register any of his Registrable Stock (which
request shall state the intended method of disposition thereof), the
Parent will use its best efforts to cause the Registrable Stock as to
which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be
filed by the Parent, all to the extent requisite to permit the
registration by the Stockholder (in accordance with his written request)
of such Registrable Stock. In the event that any registration pursuant to
this Section 3 shall be, in whole or in part, an underwritten public
offering of Common Stock, the number of shares of Registrable Stock to be
included in such an underwriting may be reduced if and to the extent that
the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Parent
therein; provided, that in the event of such a reduction, the Parent will
include shares of Common Stock in such a registration in accordance with
the following priorities:
(i) first, the Parent will register all shares of Common Stock
proposed to be registered on such registration statement by the
Parent for its own account;
(ii) second, the Parent will register all shares of Common Stock
requested to be registered on such registration statement by
holders of Common Stock who effect such a request pursuant to
that certain Registration Rights Agreement, dated as of January
5, 2000, between, among others, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and the Parent,
or pursuant to that certain Registration Rights Agreement,
dated as of August 4, 1998, by and among IXC Internet Services,
Inc., Grumman Hill Investments III, L.P., the Parent and
certain other parties;
(iii) third, the Parent will register, pro rata, all shares of Common
Stock that are requested to be registered by the Stockholder
hereunder and any other shares of Common Stock that are
proposed to be included in such registration by any parties
whose shares are not subject to the foregoing paragraphs (i)
and (ii), based upon the proportion of shares of Common Stock
that each such party proposes to register.
(b) Notwithstanding the foregoing provisions, the Parent may
withdraw any registration statement referred to in this Section 3 without
thereby incurring any liability to the holders of Registrable Stock except
that, subject to Section 5 hereof, the Parent will bear the obligation to
pay any registration expenses incurred in relation to such a withdrawn
registrations.
(c) Notwithstanding the foregoing provisions, the Merger
Consideration held by the Stockholder will be subject to the restrictions
on sale described in Section 5.8 of the Merger Agreement.
4. Registration Procedures. With respect to the registration
arising under Section 3 hereof, the Parent will, as expeditiously as possible:
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(a) prepare and file with the SEC a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period of
the distribution contemplated thereby (determined as hereinafter
provided);
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the period specified in paragraph (a) above and comply with
the provisions of the Securities Act with respect to the disposition of
all Registrable Stock covered by such registration statement in accordance
with the Stockholder's intended method of disposition as set forth in such
registration statement for such period;
(c) furnish the Stockholder and any applicable underwriter with such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such parties reasonably
may request in order to facilitate the public sale or other disposition of
the Registrable Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Registrable
Stock covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the Stockholder or, in the case of an
underwritten public offering, the managing underwriter reasonably shall
request; provided, however, that the Parent shall not for any such purpose
be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent
to general service of process in any such jurisdiction; and
(e) immediately notify the Stockholder and any applicable
underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Parent has
knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.
In connection with each registration hereunder, the Stockholder will
furnish to the Parent in writing such information with respect to themselves
and the proposed distribution by them as reasonably shall be necessary in order
to assure compliance with federal and applicable state securities laws.
In connection with each registration pursuant to Section 3 covering
an underwritten public offering, the Parent and the Stockholder agree to enter
into a written agreement with the managing underwriter selected by the Parent
in such form and containing such provisions as are customary in the securities
business for such an arrangement between such underwriter and companies of the
Parent's size and investment stature.
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5. Expenses. All expenses incurred by the Parent in complying with
Section 3, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Parent, fees and expenses (including counsel fees)
incurred, in respect of the Parent's obligations under this Agreement or of the
rights under this Agreement of the Stockholder, in connection with complying
with state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and costs of insurance, but excluding any Selling Expenses, are
called "Registration Expenses". All underwriting discounts and selling
commissions applicable to the sale of Registrable Stock and any fees and
disbursements of counsel to the Stockholder are called "Selling Expenses".
The Parent will pay all Registration Expenses in connection with each
registration statement under Section 3. All Selling Expenses in connection with
each registration statement under Section 3 shall be borne by the participating
sellers in proportion to the number of shares sold by each, or by such
participating sellers other than the Parent (except to the extent the Parent
shall be a seller) as they may agree.
6. Indemnification and Contribution.
(a) In the event of a registration of any of the Registrable Stock
under the Securities Act pursuant to Section 3, the Parent will indemnify
and hold harmless the Stockholder, if he shall have included shares for
sale thereunder, each underwriter of such Registrable Stock thereunder and
each other person, if any, who controls such seller or underwriter within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registrable Stock was
registered under the Securities Act pursuant to Section 3, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse each such seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Parent will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use
in such registration statement or prospectus.
(b) In the event of a registration of any of the Registrable Stock
under the Securities Act pursuant to Section 3, each seller of such
Registrable Stock thereunder, severally and not jointly, will indemnify
and hold harmless the Parent, each person, if any, who controls the Parent
within the meaning of the Securities Act, each officer of the Parent who
signs the registration statement, each director of the Parent, each
underwriter
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and each person who controls any underwriter within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint
or several, to which the Parent or such officer, director, underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Stock was
registered under the Securities Act pursuant to Section 3, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Parent and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in reliance upon and in conformity with information pertaining to such
seller, as such, furnished in writing to the Parent by such seller
specifically for use in such registration statement or prospectus;
provided, further, that the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the public offering price of
the shares sold by such seller under such registration statement bears to
the total public offering price of all securities sold thereunder, but not
in any event to exceed the net proceeds received by such seller from the
sale of Registrable Stock covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under
this Section 6 and shall only relieve it from any liability which it may
have to such indemnified party under this Section 6 if and to the extent
the indemnifying party is prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 6 for any legal
expenses subsequently incurred by such indemnified party in connection
with the defense thereof; provided, however, that, if the defendants in
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be reasonable defenses available to it which are different from or
additional to those available to the indemnifying party or if the
interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall
have the right to select a separate counsel
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and to assume such legal defenses and otherwise to participate in the
defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed
by the indemnifying party as incurred. No indemnifying party, in defense
of any such action, shall, except with the consent of each indemnified
party, consent to the entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving, by the
claimant or plaintiff, to such indemnified party of a release from all
liability in respect to such action.
(d) In order to provide just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) the
Stockholder as a party exercising rights under this Agreement, or any
controlling person of the Stockholder, makes a claim for indemnification
pursuant to this Section 6 but it is judicially determined (by the entry
of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding
the fact that this Section 6 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of
any such selling holder or any such controlling person in circumstances
for which indemnification is provided under this Section 6; then, each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or actions in such
proportion as appropriate to reflect the relative fault of the Parent, on
the one hand, and the holders of such Registrable Stock, as the case may
be, on the other, in connection with the statements and omissions which
resulted in such losses, claims, damages, liabilities or actions as well
as any other relevant equitable considerations, including, without
limitation, the failure to give any notice under the third paragraph of
this Section 6. The relative fault shall be determined by reference to,
among other things, whether the untrue and alleged untrue statement of a
material fact relates to information supplied by the Parent, on the one
hand, or the sellers of such Registrable Stock, as the case may be, on the
other and to the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Parent and the sellers of Registrable Stock agree that it
would not be just and equitable if contributions pursuant to this
paragraph (d) of Section 6 were determined by pro rata allocation (even if
all of the sellers of such Registrable Stock, as the case may be, were
treated as one entity for such purpose) or by any other method of
allocation which did not take account of the equitable considerations
referred to above in this paragraph (d) of Section 6. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities or action in respect thereof, referred to above in
this paragraph (d) of Section 6, shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim; provided,
however, that, in any such case, (A) no such holder will be required to
contribute any amount in excess of the public offering price of all such
Registrable Stock offered by it pursuant to such registration statement;
and (B) no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 12(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
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7. Changes in Common Stock. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock
as so changed.
8. Miscellaneous.
(a) All representations, warranties, covenants and agreements of the
Parent contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors
and assigns of the Parent, whether so expressed or not and the Stockholder
hereby covenants and agrees that any such successor or assign of Parent
shall be entitled to rely upon and enforce all representations,
warranties, covenants and agreements of the Stockholder.
(b) In the event that a Stockholder shall transfer any shares of
Registrable Stock, the registration rights conferred herein shall not
inure to the benefit of the transferee who receives such Registrable Stock
unless such transferee is an Authorized Transferee who shall not have
delivered consideration in exchange for such shares, in which case the
Authorized Transferee must execute this Agreement and agree to be bound by
the terms hereof in order to have the benefit of any registration rights
conferred herein. In the event that the foregoing conditions shall have
been satisfied, such Authorized Transferee shall then be considered a
Stockholder for purposes of this Agreement.
(c) Subject to the foregoing paragraphs (a) and (b) of this Section
8, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall otherwise bind the respective
successors and assigns of such parties (including, without limitation,
transferees of any Registrable Stock), whether so expressed or not.
(d) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by certified or
registered mail, return receipt requested, postage pre-paid, or telexed,
in the case of non-U.S. residents, addressed as follows:
if to the Parent or Stockholder, at the address of such party as
set forth in the Merger Agreement;
if to any subsequent holder of Registrable Shares, to it at such
address as may have been furnished to the Parent in writing by such
holder;
or, in any case, at such other address or addresses as shall
have been furnished in writing to the Parent (in the case of a holder of
Registrable Stock) or to the holders of Registrable Stock (in the case of
the Parent) in accordance with the provisions of this paragraph.
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(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(f) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(g) The obligations of the Parent to register shares of Registrable
Stock under Section 3 shall terminate one year after the Closing, unless
such obligations terminate earlier in accordance with the terms of this
Agreement.
(h) Whenever used herein, the singular shall include the plural, the
plural the singular and the use of any gender shall be applicable to all
genders.
(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or
render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(j) Neither this Agreement nor any provision hereof can be modified,
changed, discharged or terminated except upon the written agreement of all
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be effective as of this 23rd day of May, 2000.
AppliedTheory Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Corporate Development
STOCKHOLDER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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