EXHIBIT 10.27
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the date set
forth below (the "Effective Date") between iLinc Communications, Inc., a
Delaware corporation (the "COMPANY"), and the purchasers of its Common Stock (as
defined below) pursuant to a Securities Purchase Agreement dated as of the date
hereof (each in "Investor" and, collectively, the "Investors"). Capitalized
terms used and not defined herein shall have the respective meanings ascribed to
them in the Securities Purchase Agreement.
RECITALS
WHEREAS, the Company has sold 5,405,405 shares (the "SHARES") of its
common stock, $0.001 par value per share, (the "COMMON STOCK"), to certain
investors in a private placement (the "OFFERING"); and
WHEREAS, the execution and delivery of this Agreement by the Company is
a condition to the completion of the Offering.
NOW, THEREFORE, the parties hereto agree as follows:
1. REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) subject to receipt of necessary information from
the Investors, prepare and file with the Securities and Exchange Commission
("SEC"), within thirty (30) days after the Closing Date (the "REQUIRED FILING
DATE"), a Registration Statement on Form S-3 to enable the resale of the Shares
by the Investors from time to time;
(b) subject to receipt of necessary information from
the Investors, to cause the Registration Statement to become effective as soon
as practicable, but in no event later than ninety (90) days after the Required
Filing Date (the "REQUIRED EFFECTIVE DATE"). If the Registration Statement (i)
has not been filed by the Required Filing Date or (ii) has not been declared
effective by the SEC on or before the Required Effective Date, then the Company
shall, immediately following the Required Filing Date (if not then so filed) and
the Required Effective Date (if not then so effective), and on each 30th day
anniversary thereafter, make a payment to the Investor as compensation for such
delay (the "LATE REGISTRATION PAYMENTS") an amount equal to one percent (1%) of
the Purchase Price paid for the Shares purchased by the Investor, until the
Registration Statement is filed or declared effective by the SEC.
Notwithstanding the foregoing, in no event shall the total of all Late
Registration Payments exceed in the aggregate ten percent (10%) of such Purchase
Price. Late Registration Payments, if any, will be prorated on a daily basis and
will be paid to Investor by wire transfer or check within five (5) Business Days
after the date that each payment is due;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement current and effective for a period ending on
the earlier of (i) the second anniversary of the Closing Date, (ii) the date on
which the Investor may sell Shares pursuant to paragraph (k) of Rule 144 under
the Securities Act or any successor rule ("RULE 144") or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant to a
registration statement or Rule 144, and to notify each Investor promptly upon
the Registration Statement and each post-effective amendment thereto, being
declared effective by the SEC;
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(d) furnish to the Investor such number of copies (in
paper or electronic version) of the Registration Statement and the Prospectus
(including supplemental prospectuses), as the Investor may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Shares by the Investor;
(e) file documents required of the Company for normal
blue sky clearance in states specified in writing by the Investor; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(f) bear all expenses (other than underwriting
discounts and commissions, if any) in connection with the procedures in
paragraph (a) through (e) of this Section 1 and the registration of the Shares
pursuant to the Registration Statement;
(g) advise the Investors, promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued; and
(h) with a view to making available to the Investor
the benefits of Rule 144 or other rule that may permit the Investor to sell
Shares without registration, the Company agrees to use its commercially
reasonable efforts to: (i) make and keep public information available, as those
terms are understood and defined in Rule 144, until the earlier of (A) such date
as all of the Investor's Shares may be resold pursuant to Rule 144(k) or (B)
such date as all of the Investor's Shares shall have been sold; (ii) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Exchange Act; and (iii) furnish
to the Investor upon request a written statement that the Company has complied
with the reporting requirements of the Securities Act and the Exchange Act, a
copy (in paper or electronic version) of the Company's most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as
may be reasonably requested that permits the selling of any such Shares without
registration.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 that the Investor shall furnish to
the Company such information and representations regarding Investor, the Shares
to be sold by Investor, and the intended method of disposition of such
securities as shall be required to effect the registration of the Shares and/or
sale under Rule 144.
The Company understands that the Investor disclaims being an
underwriter, but acknowledges that a determination by the SEC that the Investor
is deemed an underwriter shall not relieve the Company of any obligations it has
hereunder.
2. TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
(a) The Investor agrees that it will not effect any
disposition or other transfer of the Shares or its right to purchase the Shares
that would constitute a sale within the meaning of the Securities Act other than
transactions exempt from the registration requirements of the Securities Act, as
contemplated in the Registration Statement and as described below, and that it
will promptly notify the Company of any material changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
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(b) Except in the event that paragraph (c) below
applies, the Company shall: (i) if deemed necessary by the Company, prepare and
file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain 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, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain 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, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor with either copies of any
documents filed pursuant to Section 2(b)(i) or access to such documents
electronically; and (iii) upon request, inform each Investor who so requests
that the Company has complied with its obligations in Section 2(b)(i) (or that,
if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its best efforts to secure the effectiveness
of such post-effective amendment as promptly as possible and will promptly
notify the Investor pursuant to Section 2(b)(i) hereof when the amendment has
become effective).
(c) Subject to paragraph (d) below, in the event: (i)
of any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Shares for sale in any jurisdiction or the initiation of any proceeding for
such purpose; or (iv) of any event or circumstance which necessitates the making
of any material changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will 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 not misleading, and
that in the case of the Prospectus, it will 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 the light of the circumstances
under which they were made, not misleading; then the Company shall promptly
deliver a certificate in writing or electronically to the Investor (the
"SUSPENSION NOTICE") to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Investor will refrain from selling any Shares pursuant to
the Registration Statement (a "SUSPENSION") until the Investors are advised in
writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable best efforts to cause the use of
the Prospectus so suspended to be resumed as soon as reasonably practicable
after delivery of a Suspension Notice to the Investors. In addition to and
without limiting any other remedies (including, without limitation, at law or at
equity) available to the Investor, the Investor shall be entitled to specific
performance in the event that the Company fails to comply with the provisions of
this Section 2(c). The Investor covenants that from the date hereof it will
maintain in confidence the receipt and content of any Suspension Notice provided
in accordance with this paragraph (c) in accordance with and subject to Section
4.6 of Annex I to the Securities Purchase Agreement.
(d) If a Suspension is not then in effect, the
Investor may sell Shares under the Registration Statement, provided that it
complies with any applicable prospectus delivery requirements. Upon receipt of a
request therefor, the Company will provide an adequate number of current
Prospectuses to the Investor and to any other parties requiring such
Prospectuses.
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(e) In the event of a sale of Shares by the Investor,
unless such requirement is waived by the Company in writing, the Investor must
also deliver to the Company's transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit A, so that the Shares may be properly transferred.
(f) The Company agrees that it shall, immediately
prior to the Registration Statement being declared effective, deliver to its
transfer agent an opinion letter of counsel, opining that at any time the
Registration Statement is effective, the transfer agent shall issue, in
connection with the sale of the Shares, certificates representing such Shares
without restrictive legend, provided the Shares are to be sold pursuant to the
Prospectus contained in the Registration Statement and the transfer agent
receives a Certificate of Subsequent Sale in the form attached hereto as Exhibit
"A." Upon receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the Investor, that no further opinion of counsel is
required at the time of transfer in order to issue such Shares without
restrictive legend.
The Company shall cause its transfer agent to issue a certificate without any
restrictive legend to a purchaser of any Shares from the Investor at Investor's
expense and upon request of Investor, if (a) the sale of such Shares is
registered under the Registration Statement (including registration pursuant to
Rule 415 under the Securities Act) and the Investor has delivered a Certificate
of Subsequent Sale to the Transfer Agent; (b) the holder has provided the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Shares may be made without registration under the Securities
Act; or (c) such Shares are sold in compliance with Rule 144 under the
Securities Act. In addition, the Company shall, at the Investors expense and
upon request of the Investor, remove the restrictive legend from any Shares held
by the Investor following the expiration of the holding period required by Rule
144(k) under the Securities Act (or any successor rule).
3. INDEMNIFICATION. For the purpose of this Section 3:
(a) the term "SELLING SHAREHOLDER" shall mean the
Investor and each person, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act;
(b) the term "REGISTRATION STATEMENT" shall mean the
final Prospectus, supplement or amendment thereto (or deemed to be a part
thereof) referred to in Section 1; and
(c) the term "UNTRUE STATEMENT" shall mean any
material untrue statement, or any material omission of a statement of a material
fact required to be made therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading.
(d) (i) The Company agrees to indemnify and hold
harmless each Selling Shareholder from and against any losses, or damages to
which such Selling Shareholder may incur (under the Securities Act or otherwise)
insofar as such losses or damages arise out of (i) any untrue statement of a
material fact contained in the Registration Statement, or (ii) any inaccuracy in
the representations of the Company contained in this Agreement. The Company will
reimburse such Selling Shareholder for any reasonable legal expense incurred or
any out of pocket expenses reasonably incurred in defending any such claim or
action; provided, however, that the Company shall not be liable in any such case
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to the extent that such loss or damage arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder for use in preparation of the Registration Statement,
or any inaccuracy in representations made by such Selling Shareholder in the
Investor Questionnaire or the failure of such Selling Shareholder to comply with
its covenants and agreements contained in Sections in this Agreement or
contained in the Securities Purchase Agreement or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder. The obligation to indemnify shall be limited to the net amount of
the proceeds received by the Company from the Investor as a result of the
Offering.
(ii) The Investor agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses or damage to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such loss or damage (or actions or proceedings in respect
thereof) arise out of, or are based upon, (i) any failure to comply with the
covenants and agreements contained in this Agreement or of the Securities
Purchase Agreement or (ii) any untrue statement of a material fact contained in
the Registration Statement if, and only if, such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the Registration
Statement. The Investor will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any reasonable legal expense or
other actual accountable out-of-pocket expenses reasonably incurred in defending
any such claim, action or proceeding. The obligation to indemnify shall be
limited to the net amount of the proceeds received by the Investor from the sale
of the Shares pursuant to the Registration Statement.
(iii) Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 3, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, but the omission to so notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party under this Section
3 (except to the extent that such omission materially and adversely affects the
indemnifying party's ability to defend such action) or from any liability
otherwise than under this Section 3. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof (unless it has
failed to assume the defense thereof and appoint counsel reasonably satisfactory
to the indemnified party), such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the reasonable opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
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withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could reasonably
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding.
(iv) If the indemnification provided for in
this Section 3 is unavailable to or insufficient to hold harmless an indemnified
party under paragraphs 3(d)(i) or 3(d)(ii) above in respect of any loss or
damage (or actions or proceedings in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such loss or damage (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor on the other in connection with the
statements or omissions or other matters which resulted in such loss or damage
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement. The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investors were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the loss or damage (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
reasonable legal fees incurred by such indemnified party in connection with
defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in
excess of the amount by which the gross amount received by the Investor from the
sale of the Shares to which such loss relates exceeds the amount of any damages
which the Investor has otherwise been required to pay by reason of such untrue
statement. 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. The
Investors' obligations in this subsection to contribute are several in
proportion to their sales of Shares to which such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge
that they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 3, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.
4. Additonal Piggyback Registration Rights.
(a) At any time within two (2) years following the
Effective Date, unless the registration statement pursuant to Section 1 above is
filed, if the Company proposes to register any Common Stock for its own or
others' account under the Securities Act of 1933, (other than the registration
required by Section 1 above) (an "Alternative Registration"), then the Company
shall give each Investor prompt written notice of its intent to register such
securities (the "Registration Notice") at least thirty (30) days prior to the
filing of the Alternative Registration statement with the SEC. The Registration
Notice shall specify the approximate date on which the Company proposes to file
such Alternative Registration statement and shall contain a statement that each
Investor is entitled to participate in such Alternative Registration, and shall
set forth the number of shares of Common Stock that may be registered as a part
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of the Alternative Registration. Each Investor desiring to participate in such
Alternative Registration shall notify the Company no later than twenty (20) days
following receipt of the Registration Notice of the aggregate number of shares
of Common Stock that such Investor then desires to sell in the offering. This
piggy back registration provision shall be merely supplemental to, and shall not
in any way otherwise diminish, the obligation to file the registration statement
described in Section 1 above.
5. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4 of the Securities Purchase Agreement or this Agreement upon
the transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
6. INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish (or, to the extent such information is available electronically through
the Company's filings with the SEC, the Company will make available) to the
Investor:
(a) as soon as practicable after it is available, one
copy of (i) its Annual Report to Shareholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants) and (ii) if not
included in substance in the Annual Report to Shareholders, its Annual Report on
Form 10-K (the foregoing, in each case, excluding exhibits); and,
(b) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses either in printed or electronic form.
7. LIMITS ON ADDITIONAL ISSUANCES. Except for the issuance of stock
options under the Company's stock option plan, the issuance of warrants to
purchase the Company's common stock, or the issuance of common stock under the
Company's employee stock purchase plan or upon exercise of outstanding options
and warrants and the offering contemplated hereby, the Company will not, for a
period of three (3) months following the Closing Date, offer for sale or sell
any securities unless, in the opinion of the Company's counsel, such offer or
sale does not jeopardize the availability of exemptions from the registration
and qualification requirements under applicable securities laws with respect to
the Offering. The foregoing shall not apply to securities issued in connection
with any acquisition, including by way of merger, or purchase of stock or all or
substantially all of the assets of any third party. The foregoing provisions
shall not prevent the Company from filing a "shelf" registration statement
pursuant to Rule 415 under the Securities Act, but the foregoing provisions
shall apply to any sale of securities thereunder.
8. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered (A) if within the United
States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if from
outside the United States, by International Federal Express (or comparable
service) or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified mail domestic, upon the Business Day received, (ii) if
delivered by nationally recognized overnight carrier, one (1) Business Day after
timely delivery to such carrier, (iii) if delivered by International Federal
Express (or comparable service), two (2) Business Days after timely delivery to
such carrier, (iv) if delivered by facsimile, upon electric confirmation of
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receipt and shall be addressed as follows, or to such other address or addresses
as may have been furnished in writing by a party to another party pursuant to
this paragraph:
(a) if to the Company, to:
iLinc Communications, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Xx.
General Counsel
Telephone: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx III
Telephone: (000) 000-0000
(b) if to the Investor, at its address on the
signature page to the Stock Purchase Agreement.
9. AMENDMENTS; WAIVER. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Investor. Any waiver of a provision of this Agreement must be in writing and
executed by the party against whom enforcement of such waiver is sought.
10. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
11. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written relating to the
subject matter hereof. If any provision contained in this Agreement is
determined to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
DATED AS OF: June 15, 2006
Herald Investment Management Limited
on behalf of Herald Investment Trust, PLC
-----------------------------------------
[INVESTOR NAME]
By: /s/ Fraser Elms
-------------------------------------
Name: Fraser Elms
Title: Fund Manager
Herald Investment Management Ltd.
Address: 00 -00 Xxxxxxxxxxxx Xxxxxx
--------------------------------
Xxxxxx XX0X 0XX
-----------------------------------------
AGREED AND ACCEPTED:
iLinc Communications, Inc.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President
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EXHIBIT A
ILINC COMMUNICATIONS, INC.
CERTIFICATE OF SUBSEQUENT SALE
[Transfer Agent]
______________________________
______________________________
RE: Sale of Shares of Common Stock of iLinc Communications, Inc.
(the "Company") pursuant to the Company's Prospectus dated
_______________, 2005 (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares
of Common Stock of the Company included in the table of Selling Shareholders in
the Prospectus, that the undersigned has sold the Shares pursuant to the
Prospectus and in a manner described under the caption "Plan of Distribution" in
the Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner): ___________________________
Record Holder (e.g., if held in name of nominee): _____________________
Restricted Stock Certificate No.(s): __________________________________
Number of Shares Sold: ________________________________________________
Date of Sale: _________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Dated: ______________________ Very truly yours,
By: _________________________________
Print Name: _________________________
Title: ______________________________
A-1
Registration Rights Agreement Page 10 of 10
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the date set
forth below (the "Effective Date") between iLinc Communications, Inc., a
Delaware corporation (the "COMPANY"), and the purchasers of its Common Stock (as
defined below) pursuant to a Securities Purchase Agreement dated as of the date
hereof (each in "Investor" and, collectively, the "Investors"). Capitalized
terms used and not defined herein shall have the respective meanings ascribed to
them in the Securities Purchase Agreement.
RECITALS
WHEREAS, the Company has sold 5,405,405 shares (the "SHARES") of its
common stock, $0.001 par value per share, (the "COMMON STOCK"), to certain
investors in a private placement (the "OFFERING"); and
WHEREAS, the execution and delivery of this Agreement by the Company is
a condition to the completion of the Offering.
NOW, THEREFORE, the parties hereto agree as follows:
1. REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) subject to receipt of necessary information from
the Investors, prepare and file with the Securities and Exchange Commission
("SEC"), within thirty (30) days after the Closing Date (the "REQUIRED FILING
DATE"), a Registration Statement on Form S-3 to enable the resale of the Shares
by the Investors from time to time;
(b) subject to receipt of necessary information from
the Investors, to cause the Registration Statement to become effective as soon
as practicable, but in no event later than ninety (90) days after the Required
Filing Date (the "REQUIRED EFFECTIVE DATE"). If the Registration Statement (i)
has not been filed by the Required Filing Date or (ii) has not been declared
effective by the SEC on or before the Required Effective Date, then the Company
shall, immediately following the Required Filing Date (if not then so filed) and
the Required Effective Date (if not then so effective), and on each 30th day
anniversary thereafter, make a payment to the Investor as compensation for such
delay (the "LATE REGISTRATION PAYMENTS") an amount equal to one percent (1%) of
the Purchase Price paid for the Shares purchased by the Investor, until the
Registration Statement is filed or declared effective by the SEC.
Notwithstanding the foregoing, in no event shall the total of all Late
Registration Payments exceed in the aggregate ten percent (10%) of such Purchase
Price. Late Registration Payments, if any, will be prorated on a daily basis and
will be paid to Investor by wire transfer or check within five (5) Business Days
after the date that each payment is due;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement current and effective for a period ending on
the earlier of (i) the second anniversary of the Closing Date, (ii) the date on
which the Investor may sell Shares pursuant to paragraph (k) of Rule 144 under
the Securities Act or any successor rule ("RULE 144") or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant to a
registration statement or Rule 144, and to notify each Investor promptly upon
the Registration Statement and each post-effective amendment thereto, being
declared effective by the SEC;
Registration Rights Agreement Page 1 of 10
(d) furnish to the Investor such number of copies (in
paper or electronic version) of the Registration Statement and the Prospectus
(including supplemental prospectuses), as the Investor may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Shares by the Investor;
(e) file documents required of the Company for normal
blue sky clearance in states specified in writing by the Investor; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(f) bear all expenses (other than underwriting
discounts and commissions, if any) in connection with the procedures in
paragraph (a) through (e) of this Section 1 and the registration of the Shares
pursuant to the Registration Statement;
(g) advise the Investors, promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued; and
(h) with a view to making available to the Investor
the benefits of Rule 144 or other rule that may permit the Investor to sell
Shares without registration, the Company agrees to use its commercially
reasonable efforts to: (i) make and keep public information available, as those
terms are understood and defined in Rule 144, until the earlier of (A) such date
as all of the Investor's Shares may be resold pursuant to Rule 144(k) or (B)
such date as all of the Investor's Shares shall have been sold; (ii) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Exchange Act; and (iii) furnish
to the Investor upon request a written statement that the Company has complied
with the reporting requirements of the Securities Act and the Exchange Act, a
copy (in paper or electronic version) of the Company's most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as
may be reasonably requested that permits the selling of any such Shares without
registration.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 that the Investor shall furnish to
the Company such information and representations regarding Investor, the Shares
to be sold by Investor, and the intended method of disposition of such
securities as shall be required to effect the registration of the Shares and/or
sale under Rule 144.
The Company understands that the Investor disclaims being an
underwriter, but acknowledges that a determination by the SEC that the Investor
is deemed an underwriter shall not relieve the Company of any obligations it has
hereunder.
2. TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
(a) The Investor agrees that it will not effect any
disposition or other transfer of the Shares or its right to purchase the Shares
that would constitute a sale within the meaning of the Securities Act other than
transactions exempt from the registration requirements of the Securities Act, as
contemplated in the Registration Statement and as described below, and that it
will promptly notify the Company of any material changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
Registration Rights Agreement Page 2 of 10
(b) Except in the event that paragraph (c) below
applies, the Company shall: (i) if deemed necessary by the Company, prepare and
file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain 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, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain 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, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor with either copies of any
documents filed pursuant to Section 2(b)(i) or access to such documents
electronically; and (iii) upon request, inform each Investor who so requests
that the Company has complied with its obligations in Section 2(b)(i) (or that,
if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its best efforts to secure the effectiveness
of such post-effective amendment as promptly as possible and will promptly
notify the Investor pursuant to Section 2(b)(i) hereof when the amendment has
become effective).
(c) Subject to paragraph (d) below, in the event: (i)
of any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Shares for sale in any jurisdiction or the initiation of any proceeding for
such purpose; or (iv) of any event or circumstance which necessitates the making
of any material changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will 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 not misleading, and
that in the case of the Prospectus, it will 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 the light of the circumstances
under which they were made, not misleading; then the Company shall promptly
deliver a certificate in writing or electronically to the Investor (the
"SUSPENSION NOTICE") to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Investor will refrain from selling any Shares pursuant to
the Registration Statement (a "SUSPENSION") until the Investors are advised in
writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable best efforts to cause the use of
the Prospectus so suspended to be resumed as soon as reasonably practicable
after delivery of a Suspension Notice to the Investors. In addition to and
without limiting any other remedies (including, without limitation, at law or at
equity) available to the Investor, the Investor shall be entitled to specific
performance in the event that the Company fails to comply with the provisions of
this Section 2(c). The Investor covenants that from the date hereof it will
maintain in confidence the receipt and content of any Suspension Notice provided
in accordance with this paragraph (c) in accordance with and subject to Section
4.6 of Annex I to the Securities Purchase Agreement.
(d) If a Suspension is not then in effect, the
Investor may sell Shares under the Registration Statement, provided that it
complies with any applicable prospectus delivery requirements. Upon receipt of a
request therefor, the Company will provide an adequate number of current
Prospectuses to the Investor and to any other parties requiring such
Prospectuses.
Registration Rights Agreement Page 3 of 10
(e) In the event of a sale of Shares by the Investor,
unless such requirement is waived by the Company in writing, the Investor must
also deliver to the Company's transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit A, so that the Shares may be properly transferred.
(f) The Company agrees that it shall, immediately
prior to the Registration Statement being declared effective, deliver to its
transfer agent an opinion letter of counsel, opining that at any time the
Registration Statement is effective, the transfer agent shall issue, in
connection with the sale of the Shares, certificates representing such Shares
without restrictive legend, provided the Shares are to be sold pursuant to the
Prospectus contained in the Registration Statement and the transfer agent
receives a Certificate of Subsequent Sale in the form attached hereto as Exhibit
"A." Upon receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the Investor, that no further opinion of counsel is
required at the time of transfer in order to issue such Shares without
restrictive legend.
The Company shall cause its transfer agent to issue a certificate without any
restrictive legend to a purchaser of any Shares from the Investor at Investor's
expense and upon request of Investor, if (a) the sale of such Shares is
registered under the Registration Statement (including registration pursuant to
Rule 415 under the Securities Act) and the Investor has delivered a Certificate
of Subsequent Sale to the Transfer Agent; (b) the holder has provided the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Shares may be made without registration under the Securities
Act; or (c) such Shares are sold in compliance with Rule 144 under the
Securities Act. In addition, the Company shall, at the Investors expense and
upon request of the Investor, remove the restrictive legend from any Shares held
by the Investor following the expiration of the holding period required by Rule
144(k) under the Securities Act (or any successor rule).
3. INDEMNIFICATION. For the purpose of this Section 3:
(a) the term "SELLING SHAREHOLDER" shall mean the
Investor and each person, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act;
(b) the term "REGISTRATION STATEMENT" shall mean the
final Prospectus, supplement or amendment thereto (or deemed to be a part
thereof) referred to in Section 1; and
(c) the term "UNTRUE STATEMENT" shall mean any
material untrue statement, or any material omission of a statement of a material
fact required to be made therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading.
(d) (i) The Company agrees to indemnify and hold
harmless each Selling Shareholder from and against any losses, or damages to
which such Selling Shareholder may incur (under the Securities Act or otherwise)
insofar as such losses or damages arise out of (i) any untrue statement of a
material fact contained in the Registration Statement, or (ii) any inaccuracy in
the representations of the Company contained in this Agreement. The Company will
reimburse such Selling Shareholder for any reasonable legal expense incurred or
any out of pocket expenses reasonably incurred in defending any such claim or
action; provided, however, that the Company shall not be liable in any such case
Registration Rights Agreement Page 4 of 10
to the extent that such loss or damage arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder for use in preparation of the Registration Statement,
or any inaccuracy in representations made by such Selling Shareholder in the
Investor Questionnaire or the failure of such Selling Shareholder to comply with
its covenants and agreements contained in Sections in this Agreement or
contained in the Securities Purchase Agreement or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder. The obligation to indemnify shall be limited to the net amount of
the proceeds received by the Company from the Investor as a result of the
Offering.
(ii) The Investor agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses or damage to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such loss or damage (or actions or proceedings in respect
thereof) arise out of, or are based upon, (i) any failure to comply with the
covenants and agreements contained in this Agreement or of the Securities
Purchase Agreement or (ii) any untrue statement of a material fact contained in
the Registration Statement if, and only if, such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the Registration
Statement. The Investor will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any reasonable legal expense or
other actual accountable out-of-pocket expenses reasonably incurred in defending
any such claim, action or proceeding. The obligation to indemnify shall be
limited to the net amount of the proceeds received by the Investor from the sale
of the Shares pursuant to the Registration Statement.
(iii) Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 3, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, but the omission to so notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party under this Section
3 (except to the extent that such omission materially and adversely affects the
indemnifying party's ability to defend such action) or from any liability
otherwise than under this Section 3. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof (unless it has
failed to assume the defense thereof and appoint counsel reasonably satisfactory
to the indemnified party), such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the reasonable opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
Registration Rights Agreement Page 5 of 10
withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could reasonably
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding.
(iv) If the indemnification provided for in
this Section 3 is unavailable to or insufficient to hold harmless an indemnified
party under paragraphs 3(d)(i) or 3(d)(ii) above in respect of any loss or
damage (or actions or proceedings in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such loss or damage (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor on the other in connection with the
statements or omissions or other matters which resulted in such loss or damage
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement. The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investors were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the loss or damage (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
reasonable legal fees incurred by such indemnified party in connection with
defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in
excess of the amount by which the gross amount received by the Investor from the
sale of the Shares to which such loss relates exceeds the amount of any damages
which the Investor has otherwise been required to pay by reason of such untrue
statement. 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. The
Investors' obligations in this subsection to contribute are several in
proportion to their sales of Shares to which such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge
that they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 3, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.
4. Additonal Piggyback Registration Rights.
(a) At any time within two (2) years following the
Effective Date, unless the registration statement pursuant to Section 1 above is
filed, if the Company proposes to register any Common Stock for its own or
others' account under the Securities Act of 1933, (other than the registration
required by Section 1 above) (an "Alternative Registration"), then the Company
shall give each Investor prompt written notice of its intent to register such
securities (the "Registration Notice") at least thirty (30) days prior to the
filing of the Alternative Registration statement with the SEC. The Registration
Notice shall specify the approximate date on which the Company proposes to file
such Alternative Registration statement and shall contain a statement that each
Investor is entitled to participate in such Alternative Registration, and shall
set forth the number of shares of Common Stock that may be registered as a part
Registration Rights Agreement Page 6 of 10
of the Alternative Registration. Each Investor desiring to participate in such
Alternative Registration shall notify the Company no later than twenty (20) days
following receipt of the Registration Notice of the aggregate number of shares
of Common Stock that such Investor then desires to sell in the offering. This
piggy back registration provision shall be merely supplemental to, and shall not
in any way otherwise diminish, the obligation to file the registration statement
described in Section 1 above.
5. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4 of the Securities Purchase Agreement or this Agreement upon
the transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
6. INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish (or, to the extent such information is available electronically through
the Company's filings with the SEC, the Company will make available) to the
Investor:
(a) as soon as practicable after it is available, one
copy of (i) its Annual Report to Shareholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants) and (ii) if not
included in substance in the Annual Report to Shareholders, its Annual Report on
Form 10-K (the foregoing, in each case, excluding exhibits); and,
(b) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses either in printed or electronic form.
7. LIMITS ON ADDITIONAL ISSUANCES. Except for the issuance of stock
options under the Company's stock option plan, the issuance of warrants to
purchase the Company's common stock, or the issuance of common stock under the
Company's employee stock purchase plan or upon exercise of outstanding options
and warrants and the offering contemplated hereby, the Company will not, for a
period of three (3) months following the Closing Date, offer for sale or sell
any securities unless, in the opinion of the Company's counsel, such offer or
sale does not jeopardize the availability of exemptions from the registration
and qualification requirements under applicable securities laws with respect to
the Offering. The foregoing shall not apply to securities issued in connection
with any acquisition, including by way of merger, or purchase of stock or all or
substantially all of the assets of any third party. The foregoing provisions
shall not prevent the Company from filing a "shelf" registration statement
pursuant to Rule 415 under the Securities Act, but the foregoing provisions
shall apply to any sale of securities thereunder.
8. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered (A) if within the United
States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if from
outside the United States, by International Federal Express (or comparable
service) or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified mail domestic, upon the Business Day received, (ii) if
delivered by nationally recognized overnight carrier, one (1) Business Day after
timely delivery to such carrier, (iii) if delivered by International Federal
Express (or comparable service), two (2) Business Days after timely delivery to
such carrier, (iv) if delivered by facsimile, upon electric confirmation of
Registration Rights Agreement Page 7 of 10
receipt and shall be addressed as follows, or to such other address or addresses
as may have been furnished in writing by a party to another party pursuant to
this paragraph:
(a) if to the Company, to:
iLinc Communications, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Xx.
General Counsel
Telephone: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx III
Telephone: (000) 000-0000
(b) if to the Investor, at its address on the
signature page to the Stock Purchase Agreement.
9. AMENDMENTS; WAIVER. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Investor. Any waiver of a provision of this Agreement must be in writing and
executed by the party against whom enforcement of such waiver is sought.
10. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
11. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written relating to the
subject matter hereof. If any provision contained in this Agreement is
determined to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Registration Rights Agreement Page 8 of 10
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
DATED AS OF: June 9, 2006
Sophrosyne Technology Fund, Ltd.
-----------------------------------------------
[INVESTOR NAME]
By: /s/ Xxxxxxxx Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxxx Xxxxx Xxxxxx
Title: Director
Address: Ogier Fiduciary Services (Cayman) Ltd.
--------------------------------------
Xxxxxxxxxx Xxxxx, Xxxxx Xxxxxx Xx.
-----------------------------------------------
P.O. Box 1234 GT, Grand Cayman
-----------------------------------------------
AGREED AND ACCEPTED:
iLinc Communications, Inc.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President
Registration Rights Agreement Page 9 of 10
EXHIBIT A
ILINC COMMUNICATIONS, INC.
CERTIFICATE OF SUBSEQUENT SALE
[Transfer Agent]
______________________________
______________________________
RE: Sale of Shares of Common Stock of iLinc Communications, Inc.
(the "Company") pursuant to the Company's Prospectus dated
_______________, 2005 (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares
of Common Stock of the Company included in the table of Selling Shareholders in
the Prospectus, that the undersigned has sold the Shares pursuant to the
Prospectus and in a manner described under the caption "Plan of Distribution" in
the Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner): ___________________________
Record Holder (e.g., if held in name of nominee): _____________________
Restricted Stock Certificate No.(s): __________________________________
Number of Shares Sold: ________________________________________________
Date of Sale: _________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Dated: ______________________ Very truly yours,
By: _________________________________
Print Name: _________________________
Title: ______________________________
A-1
Registration Rights Agreement Page 10 of 10
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the date set
forth below (the "Effective Date") between iLinc Communications, Inc., a
Delaware corporation (the "COMPANY"), and the purchasers of its Common Stock (as
defined below) pursuant to a Securities Purchase Agreement dated as of the date
hereof (each in "Investor" and, collectively, the "Investors"). Capitalized
terms used and not defined herein shall have the respective meanings ascribed to
them in the Securities Purchase Agreement.
RECITALS
WHEREAS, the Company has sold 5,405,405 shares (the "SHARES") of its
common stock, $0.001 par value per share, (the "COMMON STOCK"), to certain
investors in a private placement (the "OFFERING"); and
WHEREAS, the execution and delivery of this Agreement by the Company is
a condition to the completion of the Offering.
NOW, THEREFORE, the parties hereto agree as follows:
1. REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) subject to receipt of necessary information from
the Investors, prepare and file with the Securities and Exchange Commission
("SEC"), within thirty (30) days after the Closing Date (the "REQUIRED FILING
DATE"), a Registration Statement on Form S-3 to enable the resale of the Shares
by the Investors from time to time;
(b) subject to receipt of necessary information from
the Investors, to cause the Registration Statement to become effective as soon
as practicable, but in no event later than ninety (90) days after the Required
Filing Date (the "REQUIRED EFFECTIVE DATE"). If the Registration Statement (i)
has not been filed by the Required Filing Date or (ii) has not been declared
effective by the SEC on or before the Required Effective Date, then the Company
shall, immediately following the Required Filing Date (if not then so filed) and
the Required Effective Date (if not then so effective), and on each 30th day
anniversary thereafter, make a payment to the Investor as compensation for such
delay (the "LATE REGISTRATION PAYMENTS") an amount equal to one percent (1%) of
the Purchase Price paid for the Shares purchased by the Investor, until the
Registration Statement is filed or declared effective by the SEC.
Notwithstanding the foregoing, in no event shall the total of all Late
Registration Payments exceed in the aggregate ten percent (10%) of such Purchase
Price. Late Registration Payments, if any, will be prorated on a daily basis and
will be paid to Investor by wire transfer or check within five (5) Business Days
after the date that each payment is due;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement current and effective for a period ending on
the earlier of (i) the second anniversary of the Closing Date, (ii) the date on
which the Investor may sell Shares pursuant to paragraph (k) of Rule 144 under
the Securities Act or any successor rule ("RULE 144") or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant to a
registration statement or Rule 144, and to notify each Investor promptly upon
the Registration Statement and each post-effective amendment thereto, being
declared effective by the SEC;
Registration Rights Agreement Page 1 of 10
(d) furnish to the Investor such number of copies (in
paper or electronic version) of the Registration Statement and the Prospectus
(including supplemental prospectuses), as the Investor may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Shares by the Investor;
(e) file documents required of the Company for normal
blue sky clearance in states specified in writing by the Investor; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(f) bear all expenses (other than underwriting
discounts and commissions, if any) in connection with the procedures in
paragraph (a) through (e) of this Section 1 and the registration of the Shares
pursuant to the Registration Statement;
(g) advise the Investors, promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued; and
(h) with a view to making available to the Investor
the benefits of Rule 144 or other rule that may permit the Investor to sell
Shares without registration, the Company agrees to use its commercially
reasonable efforts to: (i) make and keep public information available, as those
terms are understood and defined in Rule 144, until the earlier of (A) such date
as all of the Investor's Shares may be resold pursuant to Rule 144(k) or (B)
such date as all of the Investor's Shares shall have been sold; (ii) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Exchange Act; and (iii) furnish
to the Investor upon request a written statement that the Company has complied
with the reporting requirements of the Securities Act and the Exchange Act, a
copy (in paper or electronic version) of the Company's most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as
may be reasonably requested that permits the selling of any such Shares without
registration.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 that the Investor shall furnish to
the Company such information and representations regarding Investor, the Shares
to be sold by Investor, and the intended method of disposition of such
securities as shall be required to effect the registration of the Shares and/or
sale under Rule 144.
The Company understands that the Investor disclaims being an
underwriter, but acknowledges that a determination by the SEC that the Investor
is deemed an underwriter shall not relieve the Company of any obligations it has
hereunder.
2. TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
(a) The Investor agrees that it will not effect any
disposition or other transfer of the Shares or its right to purchase the Shares
that would constitute a sale within the meaning of the Securities Act other than
transactions exempt from the registration requirements of the Securities Act, as
contemplated in the Registration Statement and as described below, and that it
will promptly notify the Company of any material changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
Registration Rights Agreement Page 2 of 10
(b) Except in the event that paragraph (c) below
applies, the Company shall: (i) if deemed necessary by the Company, prepare and
file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain 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, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain 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, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor with either copies of any
documents filed pursuant to Section 2(b)(i) or access to such documents
electronically; and (iii) upon request, inform each Investor who so requests
that the Company has complied with its obligations in Section 2(b)(i) (or that,
if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its best efforts to secure the effectiveness
of such post-effective amendment as promptly as possible and will promptly
notify the Investor pursuant to Section 2(b)(i) hereof when the amendment has
become effective).
(c) Subject to paragraph (d) below, in the event: (i)
of any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Shares for sale in any jurisdiction or the initiation of any proceeding for
such purpose; or (iv) of any event or circumstance which necessitates the making
of any material changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will 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 not misleading, and
that in the case of the Prospectus, it will 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 the light of the circumstances
under which they were made, not misleading; then the Company shall promptly
deliver a certificate in writing or electronically to the Investor (the
"SUSPENSION NOTICE") to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Investor will refrain from selling any Shares pursuant to
the Registration Statement (a "SUSPENSION") until the Investors are advised in
writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable best efforts to cause the use of
the Prospectus so suspended to be resumed as soon as reasonably practicable
after delivery of a Suspension Notice to the Investors. In addition to and
without limiting any other remedies (including, without limitation, at law or at
equity) available to the Investor, the Investor shall be entitled to specific
performance in the event that the Company fails to comply with the provisions of
this Section 2(c). The Investor covenants that from the date hereof it will
maintain in confidence the receipt and content of any Suspension Notice provided
in accordance with this paragraph (c) in accordance with and subject to Section
4.6 of Annex I to the Securities Purchase Agreement.
(d) If a Suspension is not then in effect, the
Investor may sell Shares under the Registration Statement, provided that it
complies with any applicable prospectus delivery requirements. Upon receipt of a
request therefor, the Company will provide an adequate number of current
Prospectuses to the Investor and to any other parties requiring such
Prospectuses.
Registration Rights Agreement Page 3 of 10
(e) In the event of a sale of Shares by the Investor,
unless such requirement is waived by the Company in writing, the Investor must
also deliver to the Company's transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit A, so that the Shares may be properly transferred.
(f) The Company agrees that it shall, immediately
prior to the Registration Statement being declared effective, deliver to its
transfer agent an opinion letter of counsel, opining that at any time the
Registration Statement is effective, the transfer agent shall issue, in
connection with the sale of the Shares, certificates representing such Shares
without restrictive legend, provided the Shares are to be sold pursuant to the
Prospectus contained in the Registration Statement and the transfer agent
receives a Certificate of Subsequent Sale in the form attached hereto as Exhibit
"A." Upon receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the Investor, that no further opinion of counsel is
required at the time of transfer in order to issue such Shares without
restrictive legend.
The Company shall cause its transfer agent to issue a certificate without any
restrictive legend to a purchaser of any Shares from the Investor at Investor's
expense and upon request of Investor, if (a) the sale of such Shares is
registered under the Registration Statement (including registration pursuant to
Rule 415 under the Securities Act) and the Investor has delivered a Certificate
of Subsequent Sale to the Transfer Agent; (b) the holder has provided the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Shares may be made without registration under the Securities
Act; or (c) such Shares are sold in compliance with Rule 144 under the
Securities Act. In addition, the Company shall, at the Investors expense and
upon request of the Investor, remove the restrictive legend from any Shares held
by the Investor following the expiration of the holding period required by Rule
144(k) under the Securities Act (or any successor rule).
3. INDEMNIFICATION. For the purpose of this Section 3:
(a) the term "SELLING SHAREHOLDER" shall mean the
Investor and each person, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act;
(b) the term "REGISTRATION STATEMENT" shall mean the
final Prospectus, supplement or amendment thereto (or deemed to be a part
thereof) referred to in Section 1; and
(c) the term "UNTRUE STATEMENT" shall mean any
material untrue statement, or any material omission of a statement of a material
fact required to be made therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading.
(d) (i) The Company agrees to indemnify and hold
harmless each Selling Shareholder from and against any losses, or damages to
which such Selling Shareholder may incur (under the Securities Act or otherwise)
insofar as such losses or damages arise out of (i) any untrue statement of a
material fact contained in the Registration Statement, or (ii) any inaccuracy in
the representations of the Company contained in this Agreement. The Company will
reimburse such Selling Shareholder for any reasonable legal expense incurred or
any out of pocket expenses reasonably incurred in defending any such claim or
action; provided, however, that the Company shall not be liable in any such case
Registration Rights Agreement Page 4 of 10
to the extent that such loss or damage arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder for use in preparation of the Registration Statement,
or any inaccuracy in representations made by such Selling Shareholder in the
Investor Questionnaire or the failure of such Selling Shareholder to comply with
its covenants and agreements contained in Sections in this Agreement or
contained in the Securities Purchase Agreement or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder. The obligation to indemnify shall be limited to the net amount of
the proceeds received by the Company from the Investor as a result of the
Offering.
(ii) The Investor agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses or damage to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such loss or damage (or actions or proceedings in respect
thereof) arise out of, or are based upon, (i) any failure to comply with the
covenants and agreements contained in this Agreement or of the Securities
Purchase Agreement or (ii) any untrue statement of a material fact contained in
the Registration Statement if, and only if, such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the Registration
Statement. The Investor will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any reasonable legal expense or
other actual accountable out-of-pocket expenses reasonably incurred in defending
any such claim, action or proceeding. The obligation to indemnify shall be
limited to the net amount of the proceeds received by the Investor from the sale
of the Shares pursuant to the Registration Statement.
(iii) Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 3, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, but the omission to so notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party under this Section
3 (except to the extent that such omission materially and adversely affects the
indemnifying party's ability to defend such action) or from any liability
otherwise than under this Section 3. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof (unless it has
failed to assume the defense thereof and appoint counsel reasonably satisfactory
to the indemnified party), such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the reasonable opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
Registration Rights Agreement Page 5 of 10
withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could reasonably
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding.
(iv) If the indemnification provided for in
this Section 3 is unavailable to or insufficient to hold harmless an indemnified
party under paragraphs 3(d)(i) or 3(d)(ii) above in respect of any loss or
damage (or actions or proceedings in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such loss or damage (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor on the other in connection with the
statements or omissions or other matters which resulted in such loss or damage
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement. The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investors were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the loss or damage (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
reasonable legal fees incurred by such indemnified party in connection with
defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in
excess of the amount by which the gross amount received by the Investor from the
sale of the Shares to which such loss relates exceeds the amount of any damages
which the Investor has otherwise been required to pay by reason of such untrue
statement. 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. The
Investors' obligations in this subsection to contribute are several in
proportion to their sales of Shares to which such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge
that they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 3, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.
4. Additonal Piggyback Registration Rights.
(a) At any time within two (2) years following the
Effective Date, unless the registration statement pursuant to Section 1 above is
filed, if the Company proposes to register any Common Stock for its own or
others' account under the Securities Act of 1933, (other than the registration
required by Section 1 above) (an "Alternative Registration"), then the Company
shall give each Investor prompt written notice of its intent to register such
securities (the "Registration Notice") at least thirty (30) days prior to the
filing of the Alternative Registration statement with the SEC. The Registration
Notice shall specify the approximate date on which the Company proposes to file
such Alternative Registration statement and shall contain a statement that each
Investor is entitled to participate in such Alternative Registration, and shall
set forth the number of shares of Common Stock that may be registered as a part
Registration Rights Agreement Page 6 of 10
of the Alternative Registration. Each Investor desiring to participate in such
Alternative Registration shall notify the Company no later than twenty (20) days
following receipt of the Registration Notice of the aggregate number of shares
of Common Stock that such Investor then desires to sell in the offering. This
piggy back registration provision shall be merely supplemental to, and shall not
in any way otherwise diminish, the obligation to file the registration statement
described in Section 1 above.
5. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4 of the Securities Purchase Agreement or this Agreement upon
the transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
6. INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish (or, to the extent such information is available electronically through
the Company's filings with the SEC, the Company will make available) to the
Investor:
(a) as soon as practicable after it is available, one
copy of (i) its Annual Report to Shareholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants) and (ii) if not
included in substance in the Annual Report to Shareholders, its Annual Report on
Form 10-K (the foregoing, in each case, excluding exhibits); and,
(b) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses either in printed or electronic form.
7. LIMITS ON ADDITIONAL ISSUANCES. Except for the issuance of stock
options under the Company's stock option plan, the issuance of warrants to
purchase the Company's common stock, or the issuance of common stock under the
Company's employee stock purchase plan or upon exercise of outstanding options
and warrants and the offering contemplated hereby, the Company will not, for a
period of three (3) months following the Closing Date, offer for sale or sell
any securities unless, in the opinion of the Company's counsel, such offer or
sale does not jeopardize the availability of exemptions from the registration
and qualification requirements under applicable securities laws with respect to
the Offering. The foregoing shall not apply to securities issued in connection
with any acquisition, including by way of merger, or purchase of stock or all or
substantially all of the assets of any third party. The foregoing provisions
shall not prevent the Company from filing a "shelf" registration statement
pursuant to Rule 415 under the Securities Act, but the foregoing provisions
shall apply to any sale of securities thereunder.
8. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered (A) if within the United
States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if from
outside the United States, by International Federal Express (or comparable
service) or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified mail domestic, upon the Business Day received, (ii) if
delivered by nationally recognized overnight carrier, one (1) Business Day after
timely delivery to such carrier, (iii) if delivered by International Federal
Express (or comparable service), two (2) Business Days after timely delivery to
such carrier, (iv) if delivered by facsimile, upon electric confirmation of
Registration Rights Agreement Page 7 of 10
receipt and shall be addressed as follows, or to such other address or addresses
as may have been furnished in writing by a party to another party pursuant to
this paragraph:
(a) if to the Company, to:
iLinc Communications, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Xx.
General Counsel
Telephone: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx III
Telephone: (000) 000-0000
(b) if to the Investor, at its address on the
signature page to the Stock Purchase Agreement.
9. AMENDMENTS; WAIVER. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Investor. Any waiver of a provision of this Agreement must be in writing and
executed by the party against whom enforcement of such waiver is sought.
10. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
11. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written relating to the
subject matter hereof. If any provision contained in this Agreement is
determined to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Registration Rights Agreement Page 8 of 10
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
DATED AS OF: June 9, 2006
Xxxxxxxx Xxxxx Xxxxxx and Xxxxx Xxxx Xxxxx
------------------------------------------
[INVESTOR NAME]
By: /s/ Xxxxxxxx Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxx Xxxxxx
By: /s/ Xxxxx Xxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxx Xxxxx
Address: 00 X. Xxxxxxxxx Xxxxxx
--------------------------------
Xxxxxxxxx, XX 00000
-----------------------------------------
AGREED AND ACCEPTED:
iLinc Communications, Inc.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President
Registration Rights Agreement Page 9 of 10
EXHIBIT A
ILINC COMMUNICATIONS, INC.
CERTIFICATE OF SUBSEQUENT SALE
[Transfer Agent]
______________________________
______________________________
RE: Sale of Shares of Common Stock of iLinc Communications, Inc.
(the "Company") pursuant to the Company's Prospectus dated
_______________, 2005 (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares
of Common Stock of the Company included in the table of Selling Shareholders in
the Prospectus, that the undersigned has sold the Shares pursuant to the
Prospectus and in a manner described under the caption "Plan of Distribution" in
the Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner): ___________________________
Record Holder (e.g., if held in name of nominee): _____________________
Restricted Stock Certificate No.(s): __________________________________
Number of Shares Sold: ________________________________________________
Date of Sale: _________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Dated: ______________________ Very truly yours,
By: _________________________________
Print Name: _________________________
Title: ______________________________
A-1
Registration Rights Agreement Page 10 of 10
