EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of July 1999 (this
"AGREEMENT"), is made by and among FirstCom Corporation, a Florida corporation
(the "COMPANY"), and the persons named on the signature page hereto
(collectively, the "INVESTOR").
W I T N E S S E T H:
WHEREAS, in connection with the Agreement Amendment, of even date
herewith between the Investor and the Company (the "AMENDMENT"), the Company has
agreed, upon the terms and subject to the conditions of the Amendment, to issue
and sell to the Investor five hundred thousand (500,000) shares (the "SHARES")
of Common Stock (as defined below) of the Company;
WHEREAS, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "SECURITIES
ACT"), and applicable state securities laws with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement
or Statements on Form S-3 or another form acceptable to Investor in
compliance with the Securities Act and pursuant to Rule 415 under the
Securities Act or any successor rule providing for offering securities
on a continuous basis ("RULE 415") and the declaration or ordering of
effectiveness of such Registration Statement by the United States
Securities and Exchange Commission ("SEC").
(ii) "REGISTRATION STATEMENT" means a registration statement
under the Securities Act and includes any information incorporated by
reference therein.
(iii) "COMMON STOCK" shall mean the common stock of the
Company, par value $.001 per share.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Subscription Agreement.
2. REGISTRATION.
(a) The Company shall prepare and file with the SEC, a registration
statement on an appropriate form covering all of the Shares.
(b) If the Company uses Form S-3, then the Company represents and
warrants that it meets the requirements for the use of Form S-3 for registration
of the sale by the Investor of the Registerable Securities and the Company shall
file all reports required to be filed by the Company with the SEC in a timely
manner so as to maintain such eligibility for the use of Form S-3.
(c) Notwithstanding the registration of the resale of Common Stock in
accordance with Section 2, if at any time of offer and sale of such Common Stock
such securities can be sold pursuant to Rule 144 promulgated under the
Securities Act ("RULE 144") in the manner, amount and on such terms as the
Investor
wishes to offer and sell such securities, the Investor may endeavor to
offer and sell such securities pursuant to Rule 144.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Shares, the Company shall:
(a) Prepare and file with the SEC promptly a Registration Statement or
Statements in accordance with the terms and conditions of the Amendment
Agreement dated of even date herewith among the parties hereto, and to keep the
Registration Statement, if the Registration Statement utilizes Rule 415,
effective at all times until the earlier of (i) the date that all the Shares are
sold or (ii) such time as the Investor is permitted to dispose of the Shares
pursuant to Rule 144. In any case, the Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) filed by
the Company shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective for the time periods set
forth in Section 3(a);
(c) Furnish to the Investor (i) promptly after the same is prepared and
publicly distributed, filed with the SEC or received by the Company, one copy of
the Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto and (ii) such
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as the Investor may
reasonably request in order to facilitate the disposition of the Shares.
(d) Use reasonable efforts to (i) register and qualify the Shares
covered by the Registration Statement under such other securities or blue sky
laws of such jurisdictions as the Investor may reasonably request, (ii) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times that
the Registration Statement is required to be effective under Section 2, hereof
and (iv) take all other actions reasonably necessary or advisable to qualify the
Common Stock for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (I)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3, (II) subject itself to general
taxation in any such jurisdiction, (III) file a general consent to service of
process in any such jurisdiction, (IV) provide any undertakings that cause more
than nominal expense or burden to the Company or (V) make any change in its
charter or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders;
(e) As promptly as practicable after becoming aware of such event,
notify the Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the 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, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to the
Investor as the Investor may reasonably request;
(f) As promptly as practicable after becoming aware of such event,
notify the Investor of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement at the earliest
possible time;
(g) Permit a single firm of counsel designated as selling stockholders'
counsel by the Investor to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time prior to their filing with
the SEC, and shall not file any document in a form to which such counsel
reasonably objects;
(h) Use its best efforts either to (i) cause all the Shares covered by
the Registration Statement to be listed on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") or other national
securities exchange and on each additional national securities exchange on which
similar securities issued by the Company are then listed, if any, if the listing
of such Common Stock is then permitted under the rules of such exchange or (ii)
secure designation of all the Common Stock covered by the Registration Statement
as Nasdaq "national market system security" within the meaning of Rule 11Aa2-1
of the SEC under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and the quotation of the Shares on the Nasdaq National Market System; or,
if, despite the Company's best efforts to satisfy the preceding clause (i) or
(ii), the Company is unsuccessful in satisfying the preceding clause (i) or
(ii), to arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to such
Common Stock;
(i) Provide a transfer agent and registrar, which may be a single
entity, for the Shares not later than the effective date of the Registration
Statement; and
(j) Cooperate with the Investor to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) or the
delivery to DTC for the account of the Investor of an electronic certificate
representing the Shares to be sold pursuant to the denominations or amounts as
the case may be, and registered in such names as the Investor may reasonably
request.
4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of
the Common Stock, the Investor shall have the following obligations:
(a) The Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder.
(b) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e)or
3(f), the Investor will immediately discontinue disposition of Common Stock
pursuant to the Registration Statement until such Investor's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 3(e)or
3(f) and, if so directed by the Company, the Investor shall deliver to the
Company (at the expense of the Company) or destroy all copies in the Investor's
possession, of the prospectus covering such Shares current at the time of
receipt of such notice.
5. BLACK-OUT PERIODS. Notwithstanding anything herein to the contrary,
after January 4, 2000 (i) the Company shall have the right from time to time to
require the Investor not to sell any Shares pursuant to the Registration
Statement or to suspend the effectiveness thereof during the period starting
with the date 30 days prior to the Company's good faith estimate, as certified
in writing by an executive officer of the Company to the Investor, of the
proposed date of filing of a registration statement or a preliminary prospectus
supplement relating to an underwritten public offering of equity securities of
the Company for the account of the Company, and ending on the date that is 90
days following the delivery of such estimate if such estimate is accompanied by
a notice from the managing underwriter of such offering that the sale by the
Investor of Shares during such period would have an adverse impact upon the
proposed public offering and (ii) the Company shall be entitled to require the
holders of Shares not to sell Shares pursuant to the Registration Statement or
to suspend the effectiveness thereof until the earlier of the expiration of a
90-day period or the date on which the Company is required to file either (i)
its next 10-KSB or 10-QSB or (ii) a form 8-K with respect to the transaction in
question, but only if the Company determines, based upon an opinion of legal
counsel, that the sale of Shares or the continued effectiveness of the
Registration Statement would interfere with any material financing, acquisition,
disposition, corporate reorganization or other
material transaction involving the Company because public disclosure thereof
would be required prior to the time that such disclosure would otherwise be
required. In any event, the Company shall not be entitled to exercise its rights
under this Section 5 more than once in any one-year period.
6. EXPENSES OF REGISTRATION. All expenses (other than brokerage
commissions or discounts) incurred in connection with registrations, filings or
qualifications pursuant to Section 2, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees and
the fees and disbursements of counsel for the Company, shall be borne by the
Company; provided, however, that the Investor shall bear the fees and
out-of-pocket expenses of the one legal counsel selected by the Investor
pursuant to Section 3(g) hereof.
7. INDEMNIFICATION.
(a) BY THE COMPANY. To the extent permitted by law, the Company will
indemnify and hold harmless the Investor, any underwriter (as defined in the
Securities Act) for the Investor, the directors, if any, of such underwriter and
the officers, if any, of such underwriter, and each person, if any, who controls
any such underwriter within the meaning of the Securities Act or the Exchange
Act (each, an "INDEMNIFIED PERSON"), against any losses, claims, damages,
expenses or liabilities (joint or several) (collectively "CLAIMS") to which any
of them become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or 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, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act or any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively, "VIOLATIONS"). Subject
to the restrictions set forth in Section 3(g) with respect to the number of
legal counsel, the Company shall reimburse the Investor and each such
underwriters or controlling person, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 7 shall not apply to a Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person or
underwriter for such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto.
(b) BY THE INVESTOR. In connection with any Registration Statement in
which an Investor is participating, the Investor agrees to indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 7(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act (collectively and together
with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim to which
any of them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by the Investor expressly for use in connection with such Registration
Statement. The Investor will promptly reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in
this Section 7(b) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Investor,
which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 7 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 7, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying parties and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable written opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party or other party represented by such
counsel in such proceeding. The Company shall pay for only one separate legal
counsel for the Investor. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 7, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. The indemnification required by this Section 7 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
(d) CONTRIBUTION. To the extent any indemnification provided for herein
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 7 to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 7, (ii) no seller of Shares guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Shares who was not guilty
of such fraudulent misrepresentation and (iii) contribution by any seller of
Shares shall be limited in amount to the net amount of proceeds received by such
seller from the sale of such Shares.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investor the benefits of Rule 144 or any other similar rule or regulation of the
SEC that may at any time permit the Investor to sell securities of the Company
to the public without Registration, until such time as the Investor has sold all
the Shares pursuant to a Registration Statement or Rule 144, the Company agrees
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Investor so long as the Investor owns Shares,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested to permit the Investor to
sell such securities pursuant to Rule 144 without Registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the
Company register Shares pursuant to this Agreement may not be assigned unless
the Company agrees to the assignment in writing.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investor. Any amendment of waiver effected in
accordance with this Section 10 shall be binding upon the Investor and the
Company.
11. MISCELLANEOUS.
(a) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or when sent by registered mail, return receipt requested, addressed (i) if to
the Company, at FIRSTCOM CORPORATION, 000 XXXXXXXX XXXXXX, XXXXX 000, XXXXX
XXXXXX, XXXXXXX 00000, ATTN.: XXXX XXXXX, FAX NO.: (000)000-0000 and (ii) if to
the INVESTOR, AT XXXXX XXXXXX & ASOCIADOS, XXXXX XXXXXX, XXXXXXX 0 XX. 00-00,
XXXX, XXXXX XX XX XXXXXX, X.X., FAX NO.: (000) 000-0000, or at such other
address as each such party furnishes by notice given in accordance with this
Section 11(a), and shall be effective, when personally delivered, upon receipt,
and when so sent by certified mail, four business days after deposit with the
United States Postal Service.
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(c) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Florida applicable to the agreements
made and to be performed entirely within such state, without giving effect to
rules governing the conflict of laws. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
hereof.
(d) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(e) This Agreement shall inure to the benefit of and be binding upon
the sucessor and assigns of each of the parties hereto.
(f) The headings in the Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(g) 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 agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
*****
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FIRSTCOM CORPORATION
By:
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Its:
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INVESTOR
XXXXX INTERNATIONAL LIMITED
By:
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Its:
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ZELBORD PROPERTIES LIMITED
By:
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Its:
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