Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of this 13th day of August, 1998, by and among ALLIN
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company") and those
persons whose names appear on the signature page hereof (collectively, the
"Subscribers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, concurrently with the execution of this Agreement, Subscribers
have agreed to purchase from the Company, and the Company has agreed to sell and
issue to Subscribers, shares of Series B Redeemable Preferred Stock, par value
$.01 per share, of the Company (the "Series B Preferred Stock") and warrants
(the "Warrants") to purchase shares of common stock, par value $.01 per share,
of the Company (the "Common Stock"); and
WHEREAS, the Series B Preferred Stock and the Warrants will be issued to
the Subscribers without registration under the Securities Act of 1933, as
amended, and applicable state securities laws, and the Company and the
Subscribers desire to provide hereunder for compliance therewith and for the
possible registration of the shares of Common Stock issuable upon conversion of
the Series B Preferred Stock and/or upon exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
independent covenants contained herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following capitalized
-----------
terms have the meanings set forth below:
Applicable Period - In the case of a Shelf Registration Statement, the
-----------------
period referred to in Section 2.1(a)(ii), and in the case of any other
Registration Statement, nine months or such shorter period as is necessary
to complete the distribution of the Registrable Securities covered thereby.
Conversion Shares - The shares of Common Stock (i) issued to Qualified
-----------------
Holders upon conversion of shares of Series B Preferred Stock into shares
of Common Stock, (ii) issued to Qualified Holders upon exercise of the
Warrants and (iii) any shares of Common Stock issued as a stock dividend or
in a stock split or in connection with any
other stock combination or division in respect of the Conversion Shares
issued upon such conversion and/or exercise.
Demand - As defined in Section 2.1(a)(i) hereof.
------
Exchange Act - The Securities Exchange Act of 1934, as amended, or
------------
similar federal statute then in effect, and a reference to a particular
section thereof or regulation thereunder shall be deemed to include a
reference to the comparable section, if any, of, or regulation, if any,
under, any such similar federal statute.
Majority Holders - Qualified Holders holding a majority of the
----------------
Registrable Securities included in a Shelf Registration Statement.
Notice of Demand - As defined in Section 2.1(a)(i) hereof.
----------------
Person - An individual, partnership, joint venture, corporation,
------
trust, unincorporated organization or government or any department or
agency thereof.
Piggy-back Registration - A registration of Conversion Shares pursuant
-----------------------
to Section 2.1(b) hereof.
Qualified Holder - Each Subscriber so long as it or he holds any of
----------------
the Conversion Shares and each Person to whom a Subscriber or a Qualified
Holder transfers such Conversion Shares.
Prospectus - The prospectus included in a Registration Statement,
----------
including any preliminary prospectus, and any such Prospectus 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 a
Registration Statement, and by all other amendments and supplements to such
Prospectus, including post-effective amendments, and in each case including
all exhibits thereto and all material incorporated by reference therein.
Registrable Securities - Any Conversion Shares issued to, and held by,
----------------------
a Qualified Holder. As to any Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement or, if earlier,
when the Applicable Period shall have expired with respect to such
securities; (ii) they shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act; (iii) new
certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the
Securities Act or any similar state law then in force; or (iv) they shall
have ceased to be outstanding.
-2-
Registration Statement - The Shelf Registration Statement, any
----------------------
registration statement registering shares held by Qualified Holders
pursuant to Section 2.1(b) hereof and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
SEC - The Securities and Exchange Commission.
---
Securities Act - The Securities Act of 1933, as amended, or similar
--------------
federal statute then in effect, and a reference to a particular section
thereof or regulation thereunder shall be deemed to include a reference to
the comparable section, if any, of, or regulation, if any, under, such
similar federal statute.
Seller - As defined in Section 2.1(g) hereof.
------
Shelf Registration - A registration required to be effected pursuant
------------------
to Section 2.1(a).
Shelf Registration Statement - A "shelf" registration statement of the
----------------------------
Company pursuant to the provisions of Section 2.1(a) of this Agreement
which covers Registrable Securities and is filed on Form S-3 under Rule 415
under the Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
Underwriter - A person who acts as an underwriter with respect to any
-----------
registration of securities pursuant to this Agreement.
Underwritten Offering - A sale of securities of the Company to an
---------------------
Underwriter or Underwriters for reoffering to the public.
ARTICLE II
REGISTRATION RIGHTS
2.1 Registration.
------------
(a) Shelf Registration.
------------------
(i) At any time from the date on which any Conversion Shares may
be issued until the fifth anniversary of the initial issuance of the
Series B Preferred Stock and the Warrants, one or more Qualified
Holders holding in the
-3-
aggregate at least the number of Conversion Shares equal to ten
percent of the Conversion Shares that may or have been issued (as
adjusted for stock splits, stock dividends, reverse stock splits or
any other combination or division of the Conversion Shares) will be
entitled to deliver to the Company, on one occasion, a written notice
(a "Demand") requesting a Shelf Registration. Upon receipt of a
Demand, the Company will deliver to each Qualified Holder a written
notice (the "Notice of Demand") which shall include a copy of the
Demand together with a statement to the effect that the Company will
include all Registrable Securities in a Shelf Registration pursuant to
this Section 2.1(a) unless the Company receives, by a date specified
in the Notice of Demand (which shall be no less than 20 days following
the delivery of such Notice of Demand), a notice from a Qualified
Holder to exclude all or a portion of such Qualified Holder's
Registrable Securities from such Shelf Registration. Following
receipt of a Demand, the Company shall, as expeditiously as reasonably
possible, use its best efforts to effect a Shelf Registration of all
Registrable Securities except those which a Qualified Holder has on a
timely basis requested to be excluded from such Shelf Registration and
those of any Qualified Holder who does not provide information
reasonably requested by the Company in connection with the Shelf
Registration Statement. The Company may, at its option, include in
such Shelf Registration Statement shares held by any shareholder other
than the Qualified Holders having rights similar to those contained in
this Section 2.1(a).
(ii) The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for a period of two
years following the date on which such Shelf Registration Statement is
initially declared effective or such shorter period which will
terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Company further agrees, if necessary, to
supplement or amend the Shelf Registration Statement, if required by
the rules, regulations or instructions applicable to the registration
form used by the Company for such Shelf Registration Statement or by
the Securities Act or by any other rules and regulations thereunder
for shelf registration.
(iii) On one occasion, the Majority Holders of the Registrable
Securities covered by a Shelf Registration Statement may elect to have
such Registrable Securities sold in an Underwritten Offering. In such
event, the Company shall be entitled to engage an investment banking
firm selected by the Company to serve as Underwriter.
-4-
(b) Piggy-back Registration.
-----------------------
(i) If the Company at any time prior to the seventh anniversary
of the original issuance of the Series B Preferred Stock and the
Warrants proposes to register any of its securities for an
Underwritten Offering under the Securities Act (other than pursuant to
a Shelf Registration), whether or not for sale for its own account,
and if the registration form proposed to be used may be used for the
registration of Registrable Securities, the Company will each such
time give prompt written notice to all Qualified Holders of its
intention to do so. Upon the written request of any such Qualified
Holder made within 30 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be
disposed of by such Qualified Holder), the Company will use its best
efforts to cause all such Registrable Securities as to which Qualified
Holders requested registration to be registered under the Securities
Act (with the securities which the Company at the time proposes to
register), so as to permit the sale or other disposition by such
Qualified Holders of such Registrable Securities.
(ii) No registration effected pursuant to this Section 2.1(b)
shall be deemed to have been effected pursuant to Section 2.1(a)
hereof.
(iii) Notwithstanding anything to the contrary in this Section
2.1(b), the Company shall have the right to discontinue any Piggy-back
Registration at any time prior to the effective date of such Piggy-
back Registration if the registration of other securities giving rise
to such Piggy-back Registration is discontinued; but no such
discontinuation shall preclude an immediate or subsequent request for
a Shelf Registration.
(c) Registration Procedures. If the Company is required by the
-----------------------
provisions of this Section 2.1 to use its best efforts to effect or cause
the registration of any Registrable Securities under the Securities Act as
provided in this Section, the Company will, as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities and use its best efforts to
cause such registration statement to become and remain effective
during the Applicable Period; in the case of a Shelf Registration
Statement, such Registration Statement shall be (A) reasonably
acceptable to special counsel for the Qualified Holders and (B)
available for the sale of Registrable Securities in accordance with
the intended method or methods of distribution of the selling
Qualified Holders (subject to the limitation set forth in Section
2.1(a)(iii) hereof);
(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement as may be necessary to keep
such Registration Statement effective for the Applicable Period and to
comply with the provisions
-5-
of the Securities Act with respect to the sale or other disposition of
all securities covered by such Registration Statement during the
Applicable Period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
Registration Statement;
(iii) furnish to each seller of such Registrable Securities and,
in the case of an Underwritten Offering, each Underwriter of the
securities being sold by such seller, such number of copies of such
Registration Statement, such number of copies of the Prospectus
included in such Registration Statement and such other documents as
such seller and Underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities owned by such seller (including any Prospectus amended or
supplemented as set forth in Section 2.1(c)(vi));
(iv) use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as any seller and
each Underwriter of the securities being sold by such seller shall
reasonably request, and do any and all other acts and things which may
be necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of such Registrable
Securities owned by such seller; provided, the Company shall not for
any such purpose be required to (A) qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but
for the requirements of this Section 2.1(c)(iv) be obligated to be
qualified, (B) subject itself to taxation in any such jurisdiction,
(C) to consent to general service of process in any such
jurisdictions, or (D) register or qualify such Registrable Securities
in more than ten states;
(v) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) notify each seller of any such Registrable Securities
covered by such Registration Statement (i) of the issuance by the SEC
or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (ii) of receipt of notification with
respect to the suspension of the qualification of the Registrable
Securities for offer or sale in any jurisdiction or the initiation of
any proceeding for such purpose, (iii) at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act,
of the Company's becoming aware that the Prospectus included in such
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in
-6-
the light of the circumstances then existing (other than a fact
relating to such seller), and promptly use its best efforts to prepare
a Prospectus supplemented or amended so that, as thereafter delivered
to the purchasers of such Registrable Securities, such Prospectus
shall not include an 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 not misleading in the light of the
circumstances then existing;
(vii) otherwise use its best efforts to comply with federal and
state laws and all applicable rules and regulations of the SEC, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act;
(viii) use its best efforts (A) to cause all such Registrable
Securities covered by such Registration Statement to be listed on each
securities exchange on which similar securities issued by the Company
are then listed, if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (B) to secure
designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 under the Exchange Act or, failing
that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to such
Registrable Securities with the National Association of Securities
Dealers;
(ix) provide a transfer agent and registrar for all such
Registrable Securities covered by such registration statement not
later than the effective date of such registration statement;
(x) in the case of an Underwritten Offering, enter into an
underwriting agreement in customary form and take such other actions
as Majority Holders shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(xi) in the case of an Underwritten Offering, use its best
efforts to obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by such opinions and "cold comfort" letters;
(xii) make available for inspection by any seller of such
Registrable Securities covered by such Registration Statement, by any
Underwriter participating in any disposition to be effected pursuant
to such Registration Statement and by any attorney, accountant or
other agent retained by any such
-7-
seller or any such Underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company,
and cause all of the Company's officers, directors and employees to
supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement; provided, however, that all such persons shall
agree to standard confidentiality provisions regarding all such
records, documents and information; and
(xiii) permit any holder of Registrable Securities which holder,
in the sole and exclusive judgment, exercised in good faith, of such
holder, might be deemed to be a controlling person of the Company, to
participate in the preparation of such registration or comparable
statement.
Each Qualified Holder shall be deemed to have agreed by including
Registrable Securities in a Registration Statement that upon receipt of any
notice from the Company of the happening of any event of the kind described
in Section 2.1(c)(vi) hereof, such Qualified Holder will forthwith
discontinue such Qualified Holder's disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Qualified Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.1(c)(vi) hereof and, if so
directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such
Qualified Holder's possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the Applicable Period shall be extended
by the number of days during the period from and including the date of the
giving of such notice to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated
by Section 2.1(c)(vi) hereof.
If any Registration Statement, Prospectus or comparable statement
refers to any holder by name or otherwise as the holder of any securities
of the Company, then (whether or not, in the sole and exclusive judgment,
exercised in good faith, of such holder, such holder is or might be deemed
to be a controlling person of the Company) such holder shall have the right
to require (i) the insertion therein of language, in form and substance
reasonably satisfactory to such holder and presented to the Company in
writing, to the effect that the holding of 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 holding
does not imply that such holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to
such holder by name or otherwise is not required by the Securities Act or
any similar federal or state statute then in force, the deletion of the
reference to such holder. Each seller shall provide to the Company in
writing information concerning itself required by law to be included in any
Registration Statement registering shares held by such seller.
-8-
(d) Registration Expenses. The Company shall, whether or not any Shelf
---------------------
Registration or Piggy-back Registration shall become effective, pay all
expenses incident to its performance of or compliance with this Section in
connection with a Shelf Registration or Piggy-back Registration, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (subject to the limitation set
forth in Section 2.1(c)(iv) hereof), printing expenses, messenger and
delivery expenses, fees and disbursements of counsel for the Company and
all independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and other persons retained by the Company and
reasonable fees and disbursements of one counsel or firm of counsel chosen
by the Majority Holders, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (excluding
underwriting commissions and discounts). In all cases, any allocation of
Company personnel or other general overhead expenses of the Company or
other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business
shall be borne by the Company.
(e) Indemnification and Contribution. The Company hereby indemnifies,
--------------------------------
to the extent permitted by law, each Qualified Holder, its officers and
directors, if any, and each Person, if any, who controls such Qualified
Holder within the meaning of Section 15 of the Securities Act, against all
losses, claims, damages, liabilities (or proceedings in respect thereof)
and expenses (under the Securities Act or common law or otherwise), joint
or several, caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities (or proceedings in respect thereof) or
expenses are caused by any untrue statement or alleged untrue statement
contained in or by any omission or alleged omission from information
respecting such Qualified Holder furnished in writing to the Company by
such Qualified Holder expressly for use therein. If the offering pursuant
to any Registration Statement provided for under this Section is made
through Underwriters, the Company agrees to enter into an underwriting
agreement in customary form with such Underwriters and to indemnify such
Underwriters, their officers and directors, if any, and each Person, if
any, who controls such Underwriters within the meaning of Section 15 of the
Securities Act, against all losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses (under the Securities Act or
common law or otherwise), joint or several, caused by any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
(or proceedings in respect thereof) or expenses are caused by any untrue
statement or alleged untrue statement contained in or by any omission or
alleged omission
-9-
from information respecting such Underwriters or the participating
Qualified Holders furnished in writing to the Company by such Underwriters
or the participating Qualified Holders expressly for use therein. In
connection with any Registration Statement with respect to Registrable
Securities held by a Qualified Holder, each such Qualified Holder will
furnish to the Company in writing such information respecting such
Qualified Holder as shall be reasonably requested by the Company for use in
any such Registration Statement or Prospectus and will indemnify, to the
extent permitted by law, the Company, its officers and directors and each
Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, against any losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses resulting from any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the
Registration Statement or Prospectus or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement
is contained in or such omission is from information so furnished in
writing by such Qualified Holder expressly for use therein. If the
offering pursuant to any such Registration Statement is made through
Underwriters, each such Qualified Holder agrees to enter into an
underwriting agreement in customary form with such Underwriters, and to
indemnify such Underwriters, their officers and directors, if any, and each
Person, if any, who controls such Underwriters within the meaning of
Section 15 of the Securities Act to the same extent as hereinbefore
provided with respect to indemnification by such Qualified Holder of the
Company. Any Person entitled to indemnification under the provisions of
this Section 2.1(e) shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of
such claim, permit such indemnifying party to assume the defense of such
claim, with counsel reasonably satisfactory to the indemnified party; and
if such defense is so assumed, such indemnifying party shall not enter into
any settlement without the consent of the indemnified party if such
settlement attributes liability to the indemnified party and such
indemnifying party shall not be subject to any liability for any such
settlement made without its consent (which consent shall not be
unreasonably withheld); and any underwriting agreement entered into with
respect to any Registration Statement provided for under this Section shall
so provide. In the event an indemnifying party shall not be entitled, or
elects not, to assume the defense of a claim, such indemnifying party shall
not be obligated to pay the fees and expenses of more than one counsel or
firm of counsel for all parties indemnified by such indemnifying party in
respect of such claim, unless in the reasonable judgment of any such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties in respect to such claim.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating Qualified Holder, its
officers, directors or any Person, if any, who controls such Qualified
Holder as aforesaid, and shall survive the transfer of such securities by
such Qualified Holder.
-10-
If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(x) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on the other or (y) if the allocation provided by clause (x) above is
not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
but also the relative fault of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations.
Contributions required to be made by an Underwriter, if any, shall be
governed by the terms of the underwriting agreement. Notwithstanding the
foregoing, no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Certain Limitations on Registration Rights.
------------------------------------------
(i) In the case of an Underwritten Offering under a Shelf
Registration, if the Majority Holders determine to enter into an
underwriting agreement in connection therewith, or, in the case of a
Piggy-back Registration, if the Company or holders of securities
initially requesting or demanding such registration have determined to
enter into an underwriting agreement in connection therewith, all
Registrable Securities to be included in such registration shall be
subject to such underwriting agreement, and no Person may participate
in such registration unless such Person agrees to sell such Person's
securities on the basis provided in the underwriting arrangements
approved by the Company or such holders and completes and/or executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements and other reasonable documents which must be executed under
the terms of such underwriting arrangements.
(ii) Notwithstanding anything to the contrary in this Section
2.1, if the Company shall previously have received a request for
registration under this or any other registration rights agreement,
and if such previous registrations shall not have been withdrawn or
abandoned, the Company will not effect any registration of any of its
securities under the Securities Act (other than a registration on Form
S-4 or S-8 (or any similar form) or other publicly registered offering
pursuant to the Securities Act pertaining to the issuance of
securities under any benefit plan, employee compensation plan, or
employee or director stock purchase plan or in connection with an
offer of securities solely to existing security holders) whether or
not for sale for its own account, until a period of three months shall
have elapsed from the effective date of such previous
-11-
registration; and the Company shall so provide in any registration
rights agreements hereafter entered into with respect to any of its
securities.
(g) Allocation of Securities Included in Registration Statement. In
-----------------------------------------------------------
the case of an Underwritten Offering, if the Company's managing Underwriter
shall advise the Company and the Qualified Holders in writing that the
inclusion in any registration pursuant to this Section of some or all of
the Registrable Securities sought to be registered by the holders
requesting such registration creates a substantial risk that the proceeds
or price per unit the Sellers (as defined below) will derive from such
registration will be reduced or that the number of securities to be
registered (including those sought to be registered at the instance of the
Company and any other party entitled to participate in such registration as
well as those sought to be registered by the Qualified Holders) is too
large a number to be reasonably sold, then the number of Registrable
Securities sought to be registered by each Seller shall be reduced pro rata
in proportion to the number of securities sought to be registered by all
Sellers to the extent necessary to reduce the number of securities to be
registered to the number recommended by the managing underwriter.
For purposes of this Section 2.1(g) the term "Seller" shall mean and
include the Company and each holder of securities (including, but not
limited to, Registrable Securities) entitled to participate in the subject
registration.
(h) Limitations on Sale or Distribution of Other Securities. Each
-------------------------------------------------------
holder of Registrable Securities shall be deemed to have agreed by the
inclusion of Registrable Securities in a Registration Statement not to
effect any public sale or distribution, including (if requested by the
Underwriter) any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities, and to use such holder's best efforts not to effect
any public sale or distribution of any other equity security of the Company
or of any security convertible into or exchangeable or exercisable for any
equity security of the Company (other than as part of such underwritten
public offering) within 7 days before or 90 days (or such other period to
which the Underwriters of such offering may consent) after the effective
date of any Registration Statement filed by the Company pursuant to this
Article II or other agreement providing for registration rights.
2.2 Rule 144. The Company covenants that it will timely file the
--------
reports required to be filed by it under the Securities Act or the Exchange Act
(including but not limited to the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(l) of Rule 144 adopted by the SEC
under the Securities Act) and the rules and regulations adopted by the SEC
thereunder (or, if the Company is not required to file such reports, will, upon
the request of any Qualified Holder, make publicly available such information),
and will take such further action as any Qualified Holder may reasonably
request, all to the extent required from time to time to enable such Qualified
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or
-12-
regulation hereafter adopted by the SEC. Upon the request of any Qualified
Holder, the Company will deliver to such Qualified Holder a written statement as
to whether it has complied with such requirements.
ARTICLE III
MISCELLANEOUS
3.1 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 Company has obtained the written consent of the
Majority Holders; provided, however, that no amendment, modification or
-------- -------
supplement or waiver or consent to the departure with respect to the provisions
of Sections 2.1(a) or 2.1(e) hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities.
3.2 Successors, Assigns and Transferees. This Agreement shall be
-----------------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective representatives, administrators, heirs, successors and assigns, as
applicable, including, without limitation and without the need for an express
assignment, subsequent Qualified Holders. If any successor, assignee or
transferee of any Qualified Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be entitled to receive the
benefits hereof and shall be conclusively deemed to have agreed to be bound by
all of the terms and provisions hereof.
3.3 Notices. All notices and other communications provided for
-------
hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
if to the Company, to:
Allin Communications Corporation
000 Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
FAX: (000) 000-0000
if to a Qualified Holder, to:
the most recent address of such Qualified Holder on the books of
the Company
-13-
All such notices and communications shall be deemed to have been given or
made (i) when delivered by hand, (ii) two business days after being
deposited in the mail, postage prepaid, (iii) when telexed, answer-back
received or (iv) when telecopied, receipt acknowledged.
3.4 Descriptive Headings. The headings in this Agreement are for
--------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
3.5 Severability. In the event that any one or more of the
------------
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause, phrase or sentence in
every other respect and of the remaining provisions, paragraphs, words, clauses,
phrases or sentences hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
3.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
3.7 Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of Delaware, without
regard to the conflicts of laws rules thereof.
[signatures appear on next page]
-14-
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
ALLIN COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Title: Chairman and Chief Executive Officer
--------------------------------------
SUBSCRIBERS
/s/ Xxxxx Xxxxxx, Xx.
-------------------------------------------
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
/s/ Xxxxxxx X. Xxxxx
-------------------------------------------
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
-15-
