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EXHIBIT 4.6
AMENDED AND RESTATED
REGISTRATION AND INFORMATIONAL RIGHTS AGREEMENT
This Amended and Restated Registration and Informational Rights
Agreement (the "Agreement") is made and entered into as of June 30, 1999, by and
between UNIVERSAL ACCESS, INC., a Delaware corporation (the "Company"), and the
persons executing this Agreement in the space provided on the signature page
hereto (each, a "Holder" and collectively, the "Holders").
WITNESSETH:
A. Certain of the Holders (the "Original Holders") and the Company
entered into Registration and Informational Rights Agreements (the "Original
Registration Rights Agreements"), each dated February 8, 1999, in connection
with the Original Holders' purchase of the Company's Series B Cumulative
Convertible Preferred Stock (the "Series B Preferred Shares").
B. Pursuant to a Stock Purchase Agreement dated as of the date hereof
between the Company and each Holder, each Holder has agreed to purchase shares
of Series D Cumulative Convertible Preferred Stock of the Company (the "Series D
Preferred Shares") convertible into shares of common stock of the Company, $.01
par value per share (the "Common Stock").
C. As additional consideration for the purchase of the Series D
Preferred Shares by the Holder, the Company desires to grant to each Holder
registration and informational rights with respect to the Common Stock and the
Company and the Original Holders desire to amend and restate the Original
Registration Rights Agreements in their entirety.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows, and the Company and
the Original Holders agree that the Original Registration Rights Agreements are
amended and restated in their entirety to read as follows:
1. (a) Piggyback Registration. If the Company files a registration
statement (other than a registration statement on Form X-0, Xxxx X-0, or on any
other form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities (as hereinafter defined)) with the Securities and
Exchange Commission (the "Commission") while any Registrable Securities are
outstanding, the Company shall give each Holder at least 30 days' prior written
notice of the filing of such registration statement. If requested by a Holder in
writing within 20 days after receipt of any such notice, the Company shall
register all or, at such Holder's option, any portion of such Holder's
Registrable Securities concurrently with the registration of such other
securities, all to the extent requisite to permit the public offering and sale
of the Registrable Securities through the facilities of all appropriate
securities exchanges, if any, on which the Company's Common Stock is being sold
or on the over-the-counter
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market, and will use its best efforts through its officers, directors, auditors,
and counsel to cause such registration statement to become effective as promptly
as practicable.
As used herein, "Registrable Securities" shall mean (i) the shares of
Common Stock acquired or to be acquired by a Holder pursuant to the conversion
of the Series B Preferred Shares or the Series D Preferred Shares (together with
the Series B Preferred Shares, collectively, the "Preferred Shares") or any
warrants (the "Warrants") to acquire Series B Preferred Shares which have not
been previously sold pursuant to a registration statement or Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and (ii) any Common Stock issued (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued) by way of a stock split,
stock dividend, recapitalization, merger or other distribution with respect to,
or in exchange for, or in replacement of, the Preferred Shares, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which its rights under this Section 1 are not assigned.
(b) S-3 Registration Rights. If, and only if, the Company is eligible
to file a Registration Statement on Form S-3 (or any equivalent successor form)
and the Company shall receive from Holders of at least 20% of the then
outstanding Registrable Securities a written request or requests that the
Company prepare and file a Registration Statement on Form S-3 (or any equivalent
successor form) and any related qualification or compliance with respect to all
or a part of the Registrable Securities owned by such Holder or Holders, the
Company will (i) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders, and (ii) as soon
as practicable, use its best efforts to effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1(b) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than One
Million Dollars ($1,000,000).
Subject to the foregoing, the Company shall file and use its best
efforts to prepare and file a registration statement covering the Registrable
Securities and other securities so requested to be registered, and to cause the
registration statement to become effective, as soon as practicable after receipt
of the request or requests of the Holders.
(c) Demand Registration. If, at any time during (x) the three-year
period commencing after the closing of a firmly underwritten public offering of
the Company's common stock resulting in net proceeds to the Company of at least
$15,000,000 at a per share price of at least $5.00 (as adjusted for any stock
split, combination, recapitalization or exchange) (a "Qualified Public
Offering") by the Company or (y) the five-year period commencing February 5,
2002 and ending February 5, 2007, the Company shall receive a written request
from Holders who in the aggregate
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own at least 50% of the total number of Preferred Shares to register the sale of
all or part of such Registrable Securities, the Company shall, as promptly as
practicable, and in any event not later than 45 days after such request, prepare
and file with the Commission a registration statement sufficient to permit the
public offering and sale of the Registrable Securities and will use its best
efforts through its officers, directors, auditors, and counsel to cause such
registration statement to become effective as promptly as practicable; provided,
however, that the Company shall only be obligated to prepare, file and use its
best efforts to cause to become effective, two such registration statements. The
Company shall not be obligated to effect any registration of its securities
pursuant to this Section within nine months after the effective date of a
previous registration statement. Within three business days after receiving any
request contemplated by this Section, the Company shall give written notice to
all the other Holders, advising each of them that the Company is proceeding with
such registration and offering to include therein all or any portion of any such
other Holder's Registrable Securities, provided that the Company receives a
written request to do so from such Holder within 30 days after receipt.
(d) Underwriting. If a registration pursuant to Section 1 is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the notice given pursuant hereto. The Company
shall (together with all Holders proposing to distribute their securities
through such underwriting), if requested by the underwriter, enter into an
underwriting agreement in customary form with a managing underwriter selected
for such underwriting by the Company and, in the case of a registration pursuant
to Section 1(c) only, reasonably acceptable to a majority of the Holders
proposing to distribute securities through such underwriting. The underwriting
agreement shall also satisfy the conditions described in Section 1(n) below.
Notwithstanding any other provision of this Section 1, if the managing
underwriter advises the Company in writing that market factors require exclusion
of shares to be sold by selling stockholders, or a limitation of the number of
shares to be so sold, then the Company shall so advise all Holders of
Registrable Securities and the number of shares of Registrable Securities that
may be included in the registration and underwriting shall be allocated among
all Holders thereof and including any holders of Common Stock (the "Series A
Registrable Securities") acquired upon conversion of Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") entitled to
participate in the registration (the "Series A Holders") (except those Holders
or Series A Holders who have indicated to the Company their decision not to
distribute any of their Registrable Securities or Series A Registrable
Securities through such underwriting) in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities or Series A Registrable
Securities held by such Holders or Series A Holders at the time of filing the
registration statement. No Registrable Securities or Series A Registrable
Securities excluded from the underwriting by reason of the underwriter market
limitation shall be included in such registration.
Notwithstanding anything to the contrary herein, (a) no reduction shall
be made with respect to securities offered by the Company for its own account in
connection with the Company's initial registered public offering, (b) in any
subsequent offering, the securities registered by the Holders owning Preferred
Shares for their own account pursuant to such offering, together with securities
registered by any Series A Holder, may not be reduced below twenty percent (20%)
of the shares
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included in such offering, and (c) in any offering undertaken pursuant to
Section 1 hereof, no reduction in the securities to be registered by any Holder
shall occur until all other securities, other than those offered by the Company
or by the Series A Holders, have been excluded from such offering. If any Holder
of Registrable Securities disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the
managing underwriter and the other Holders. In such event, the Registrable
Securities and/or other securities held by such Holder affected shall be
withdrawn from registration. However, if such withdrawal is made, the
registration will be deemed to have been completed with respect to the
withdrawing Holder for purposes of determining whether the Company has satisfied
its registration obligations under this Section 1.
If the managing underwriter of any underwritten offering pursuant to
Section 1(a) shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Registrable Securities requested to be
included in the registration concurrently with the securities being registered
by the Company would materially adversely affect the distribution of such
securities by the Company for its own account, then the Holders shall delay the
offering and sale of the Registrable Securities (or the portions thereof so
designated by such managing underwriter) for such period, not to exceed [90]
days (the "Delay Period"), as the managing underwriter shall request, provided
that no such delay shall be required as to any Registrable Securities if any
securities of the Company are included in such registration statement and
eligible for sale during the Delay Period for the account of any person other
than the Company and the Holders unless the securities included in such
registration statement and eligible for sale during the Delay Period for such
other person shall have been reduced pro rata to the reduction of the
Registrable Securities which were requested to be included and eligible for sale
during the Delay Period in such registration.
(e) Definition of Expenses.
(i) "Registration Expenses" shall mean all expenses
incurred by the Company in complying with Section 1 hereof, including,
without limitation, all registration, filing and qualification fees,
underwriters expense allowances, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses
(but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
(ii) "Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of the
Registrable Securities in the registration and all fees and
disbursements of any special counsel (other than the Company's regular
counsel) for any Holder (but excluding the compensation of regular
employees of the Company which shall be paid in any event by the
Company).
(f) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 1(a) and 1(b) shall be borne by the Company. All Registration Expenses
incurred in connection with any registration pursuant
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to Section 1(c), and all Selling Expenses incurred in connection with any
registration pursuant to Section 1, shall be borne by the Holders of the
securities so registered, pro rata on the basis of the number of shares so
registered (provided that each Holder shall bear the full amount of the fees and
disbursements of any counsel retained by it).
(g) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holders may reasonably
request; provided, however, that the Company shall not be required to qualify to
do business in any state by reason of this Section 1(g) in which it is not
otherwise required to qualify to do business.
(h) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall prepare and file with the Commission a registration
statement with respect to the Registrable Securities requested to be registered
and use its best efforts to cause such registration statement to become
effective, and shall keep effective any registration or qualification
contemplated by this Section 1 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of time as
shall be required to permit the Holders to complete the offer and sale of the
Registrable Securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of 24 months from the date on which the Holders are first free to sell
all such Registrable Securities; provided, however, that, if the Company is
required to keep any such registration or qualification in effect with respect
to securities other than the Registrable Securities beyond such period, the
Company shall keep such registration or qualification in effect as it relates to
the Registrable Securities for so long as such registration or qualification
remains or is required to remain in effect in respect of such other securities.
(i) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall promptly furnish to the Holders such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents, as the Holders may reasonably request to
facilitate the disposition of the Registrable Securities included in such
registration.
(j) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall promptly furnish the Holders with an opinion of its
counsel to the effect that (i) the registration statement has become effective
under the Securities Act and no order suspending the effectiveness of the
registration statement, preventing or suspending the use of the registration
statement, any preliminary prospectus, any final prospectus, or any amendment or
supplement thereto has been issued, nor has the Commission or any securities or
blue sky authority of any jurisdiction instituted or threatened to institute any
proceedings with respect to such an order, (ii) the registration
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statement and each prospectus forming a part thereof (including each preliminary
prospectus), and any amendment or supplement thereto, comply as to form with the
Securities Act and the rules and regulations thereunder, and (iii) such counsel
has no knowledge of any material misstatement or omission in such registration
statement or any prospectus, as amended or supplemented. The opinions described
in clauses (ii) and (iii) of the preceding sentence shall be delivered only if
the registration is made pursuant to an underwritten public offering and the
underwriter requires similar opinions to be delivered by Company counsel as a
closing condition. In such an underwritten offering, if required by the
underwriter, the opinion also shall state the jurisdictions in which the
Registrable Securities have been registered or qualified for sale pursuant to
the provisions of Section 1(g).
(k) The Company agrees that until all the Registrable Securities
have been sold under a registration statement or pursuant to Rule 144 under the
Securities Act, the Company agrees to:
(i) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144
promulgated under the Securities Act, at all times after 90 days after
the effective date of the first registration statement filed by the
Company;
(ii) at any time when the Company is eligible to file a
registration statement on Form S-3 (or any successor form), take such
action, including the voluntary registration of its Common Stock under
Section 12 of the Exchange Act of 1934, as amended (the "Exchange Act"),
as is necessary to enable the Holders to utilize Form S-3 for the sale
of their Registrable Securities, such action to be taken as soon as
practicable after the end of the fiscal year in which the first
registration statement filed by the Company for the offering of its
securities to the general public is declared effective or such earlier
date as may be required by any stock exchange or quotation system upon
which the Common Stock may be traded;
(iii) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and
the Exchange Act; and
(iv) furnish to any Holder, so long as the Holder owns any
Registrable Securities, promptly upon request: (i) a written statement
by the Company that it has used its best efforts to make and keep public
information available, as those terms are understood and defined in Rule
144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company), complied in all material
respects with the reporting requirements of the Exchange Act (at any
time after it has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies); (ii) a copy of
the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company; and (iii) such other
information as may be reasonably requested in order to permit any Holder
to avail itself of any
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rule or regulation of the Commission or any state securities authority
which permits the selling of any such securities without registration or
pursuant to such form.
(l) The Company shall notify the Holders promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.
(m) The Company shall promptly notify the Holders at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and at the reasonable request of the
Holders prepare and furnish to it such number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities or securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
(n) If requested by the underwriter for any underwritten offering of
Registrable Securities on behalf of the Holders, the Company and the Holders
will enter into an underwriting agreement with such underwriter for such
offering, which shall be reasonably satisfactory in substance and form to the
Company, and the Company's counsel, the Holders and the underwriter, and such
agreement shall contain such representations and warranties by the Company and
the Holders and such other terms and provisions as are customarily contained in
an underwriting agreement with respect to secondary distributions solely by
selling stockholders, including, without limitation, indemnities substantially
to the effect and to the extent (but in no event greater than those) provided in
Section 2 hereof.
2. Indemnification. (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless each Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act, from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever (which shall include,
for all purposes of this Section 2, but not be limited to, attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing,
or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Registrable Securities or
(B) in any application or other document or communication (in this Section 2
collectively called an "application") executed by or on behalf of the Company or
based upon written information furnished
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by or on behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Registrable Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Holder by or on behalf
of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Agreement. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
(a) If any action is brought against a Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (the failure to notify the Company within a
reasonable time of the commencement of any such action, to the extent
prejudicial to the Company's ability to defend such action, shall relieve the
Company of liability to the indemnified party pursuant to this Section 2(a), but
the failure so to notify shall not relieve the Company from any liability other
than pursuant to this Section 2(a)) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties), provided that the
indemnified party shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless the employment of such counsel shall
have been authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall be
borne by the Company and the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties. Anything
in this Section 2 to the contrary notwithstanding, the Company shall not be
liable for any settlement of any such claim or action effected without its
written consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of each indemnified party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, in respective of which indemnity may
be sought hereunder (whether or not any indemnified party is a party thereto),
unless such settlement, compromise, consent, or termination includes an
unconditional release of each indemnified party from all liability in respect of
such action. The Company agrees promptly to notify such Holder of the
commencement of any litigation or proceedings against the Company or any of it
officers or directors in connection with the sale of any Registrable Securities
or any preliminary prospectus, prospectus, registration statement, or amendment
or supplement thereto, or any application relating to any sale of any
Registrable Securities.
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(b) Each Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
such Holder, each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
or their respective counsel, to the same extent as the foregoing indemnify from
the Company to the Holder in Section 2(a), but only with respect to statements
or omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Holder by or on behalf of the Holder, expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or
final prospectus or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against the Holder pursuant to
this Section 2(b), the Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
2(a). Notwithstanding the foregoing, the liability of each Holder under this
Section 2 shall be limited to an amount equal to the proceeds to such Holder of
Registrable Securities sold as contemplated herein.
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 2(a) or
2(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such cases, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise, then
the Company (including for this purpose any contribution made by or on behalf of
any director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company, and its or their
respective counsel), as one entity, and each Holder as a second entity, shall
contribute to the losses, liabilities, claims, damages, and expenses whatsoever
to which any of them may be subject, (after contribution from others) on the
basis of relevant equitable considerations such as the relative fault of the
Company and such Holder in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission, or alleged
omission shall be determined by, among other things, whether such statement,
alleged statement, omission, or alleged omission relates to information supplied
by the Company or by such Holder, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission.
The Company and the Holders agree that it would be unjust and
inequitable if the respective obligations of the Company and the Holders for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses (even if the
Holders and the other indemnified parties were treated as one entity for such
purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 2(c).
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Notwithstanding anything to the contrary contained herein, the liability of each
Holder under this Section 2(c) shall be limited to an amount equal to the
proceeds to such Holder of Registrable Securities as contemplated herein. No
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. For purposes of this
Section 2(c), each person, if any, who controls any Holder within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent, and counsel of any Holder or
control person shall have the same rights to contribution as such Holder or
control person and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed any such registration
statement, each director of the Company, and its or their respective counsel
shall have the same rights to contribution as the Company, subject in each case
to the provisions of this Section 2(c). Anything in this Section 2(c) to the
contrary notwithstanding, no party shall be liable for contribution with respect
to the settlement of any claim or action effected without its written consent.
This Section 2(c) is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
3. Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned by a
Holder to a transferee or assignee of such securities: (i) if such transferee or
assignee was a Holder of Registrable Securities hereunder prior to such
transfer, (ii) if such transfer is made in connection with the transfer of all
Registrable Securities held by the transferor, (iii) if such transferee or
assignee acquires at least 600,000 shares (as adjusted for any stock split,
combination, recapitalization or exchange) of the then outstanding Registrable
Securities; or (iv) in connection with a distribution by such Holder, to any
partner, former partner, member, former member, stockholder or former
stockholder, or the estate of any such person, provided the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; provided, however, that such
assignment shall be effective only if immediately following such transfer the
transferee is bound by the terms and conditions of this Agreement and such
transfer of any Registrable Securities is lawful under all applicable securities
laws.
4. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of at least a majority of the Preferred Shares and the Series A
Preferred Stock then outstanding, voting together as a single class, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would: (i) allow such holder or prospective holder to include such
securities in any registration filed by the Company, unless under the terms of
such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that this inclusion of such holder
securities will not reduce the amount of the Registrable Securities of Holders
which is included; (ii) permit such holder or prospective holder to require the
Company to initiate any registration of any securities of the Company; or (iii)
otherwise be in conflict with the terms hereof.
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5. Market Stand-off Agreement. Each Holder agrees that, in connection
with the Company's initial underwritten public offering of Common Stock, upon
request of the Company or the underwriters managing such underwritten offering
of Common Stock, not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Common Stock (other than Common
Stock included in the registration) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the underwriters and as is agreed to by each
beneficial owner of 1% or more of the outstanding Common Stock and each officer
and director of the Company.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares of securities of every other person subject to the
foregoing restriction) until the end of such period.
6. Information Rights
(a) Financial Information. The Company will provide financial
information to (i) each Holder of Preferred Shares and (ii) any previous Holder
of Preferred Shares who after converting the Preferred Shares owns 5% or more of
the Company's Common Stock into which the Preferred Shares are convertible or
have been converted. The financial information requirements are (i) unaudited
quarterly financial statements delivered within 60 days of the end of the
quarter; (ii) annual audited financial statements (commencing with the fiscal
year ending December 31, 1999) delivered within 120 days of the end of the
fiscal year; (iii) as soon as practicable (and in any event within ten (10)
days), copies of any reports or communications delivered to any class of the
Company's security holders; (iv) within 20 days after the end of each month, an
unaudited balance sheet, statement of operations and of cash flows and
comparison to prior year results and budget for and as of the end of such month;
(v) as soon as practicable, but in any event 30 days prior to the end of each
fiscal year, a budget and business plan for the next fiscal year, prepared on a
monthly basis, including balance sheets and sources and applications of funds
statements for such months and, as soon as prepared, any other budgets or
revised budgets prepared by the Company; and (vi) within 30 days after the end
of each fiscal quarter, a report on operational highlights with respect to such
quarter.
(b) Inspection Rights. Each Holder owning at least 400,000 Preferred
Shares shall have the right to visit and inspect any of the properties of the
Company or any of its subsidiaries, and to discuss the affairs, finances and
accounts of the Company or any of its subsidiaries with its officers, and to
review such information as is reasonably requested all at such reasonable times;
provided, however, that the Company shall not be obligated to grant inspection
rights under this Section 6(b) to a Holder who is a competitor of the Company or
with respect to information which the Company determines in good faith is
confidential; and provided further that the Company shall be obligated to
disclose confidential information to a Holder only if the Holder enters into
such confidentiality agreements as are reasonably requested by the Company.
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(c) Termination of Information Covenants. The covenants set forth in
this Section 6 shall terminate and be of no further force or effect immediately
upon the closing of a Qualified Public Offering.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, the Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.
(b) Agreements and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.
(c) Notices. Except as otherwise specified herein, any notice, demand
or request required or permitted to be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with a hard copy to follow)
on or before 5:00 p.m., central time, on a business day or, if the day is not a
business day, on the next succeeding business day, (ii) on the next business day
after timely delivery to an overnight courier and (iii) on the third business
day after deposit in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed as follows:
If to the Company:
Universal Access, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
Phone: 000-000-0000
Fax: 000-000-0000
and if to a Holder, at its address as shown on the stock records of the Company;
or such other address as any such party shall deliver to the Company.
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(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation transferees or assignees of the Registrable Shares
subject to Section 3.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
references only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without reference to its
conflicts of law provisions.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application hereof in any circumstance is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any such
provisions contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of this agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are not restrictions, promises
warranties or undertakings, other than those set forth or referred to herein,
concerning the registration rights granted by the Company pursuant to this
Agreement.
(j) Future Purchasers. The Company shall not grant to holders of any
of its equity securities registration rights superior to those granted to the
Holders hereunder unless the Company (i) obtains the prior written consent of
the holders of a majority of the Registrable Securities or (ii) grants equal
rights to the Holders. The Company shall not grant registration rights with
respect to the Common Stock outstanding at the closing of the Preferred Shares.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
UNIVERSAL ACCESS, INC.
By: /s/ XXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
HOLDERS:
COMMUNICATIONS VENTURES III, L.P.
By:
-------------------------------------
Name: Xxxxxx X. Van der Meer
Title: Managing Member
COMMUNICATIONS VENTURES III CEO &
ENTREPRENEURS' FUND, L.P.
By:
-------------------------------------
Name: Xxxxxx X. Van der Meer
Title: Managing Member
INTERNET CAPITAL GROUP, INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
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SOUTHERN CROSS INDUSTRIES L.L.C.
By: /s/ Signature Illegible
-------------------------------------
Name: Nienke X. Xxxxxxxxx
Title: Managing Member
By:
-------------------------------------
Name:
Title:
STRATEGIC TIMING INVESTORS
CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxx
Title: President
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